EXHIBIT 4
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.,
Depositor,
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
Master Servicer and Securities Administrator,
SAXON MORTGAGE SERVICES, INC.,
Servicer,
COUNTRYWIDE HOME LOANS SERVICING LP,
Servicer,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
-----------------------
POOLING AND SERVICING AGREEMENT
Dated as of April 1, 2007
-----------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC. TRUST 2007-NC2
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2007-NC2
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 Servicers to Service Mortgage Loans...............................
Section 3.02 Subservicing Agreements between a Servicer and
Subservicers......................................................
Section 3.03 Successor Subservicers............................................
Section 3.04 Liability of the Servicers........................................
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
Servicers 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; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act..........................
Section 3.27 Optional Purchase of Delinquent Mortgage Loans....................
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
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......................................................
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...................................
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective Liabilities of the Depositor and the Servicers.........
Section 6.02 Merger or Consolidation of the Depositor or a Servicer............
Section 6.03 Limitation on Liability of the Depositor, the Servicers
and Others........................................................
Section 6.04 Limitation on Resignation of a Servicer...........................
Section 6.05 Additional Indemnification by the Servicers; 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....................................................
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc. as to the Mortgage Loans
Schedule IV [Reserved]
Schedule V [Reserved]
Schedule VI [Reserved]
Schedule VII [Reserved]
Schedule VIII Representations and Warranties of Countrywide Servicing, as
Servicer
Schedule IX [Reserved]
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 [Reserved]
Exhibit P [Reserved]
Exhibit Q [Reserved]
Exhibit R Form of Servicer Power of Attorney
Exhibit S Servicing Criteria To Be Addressed in Assessment of
Compliance
Exhibit T Additional Form 10-D Disclosure
Exhibit U Additional Form 10-K Disclosure
Exhibit V Form 8-K Disclosure Information
Exhibit W Interest Rate Swap Agreement
Exhibit X-1 Form of Saxon Servicer Reports
Exhibit X-2 Form of Countrywide Servicing Servicer Reports
Exhibit Y Saxon Standard File Layout - Delinquency Reporting
Exhibit Z Countrywide Servicing Standard File Layout - Delinquency
Reporting
Exhibit AA Form of Additional Disclosure Notification
Exhibit BB Countrywide Amendment Regulation AB
Exhibit CC Representations and Warranties Agreement
Exhibit DD Interest Rate Cap Agreement
THIS POOLING AND SERVICING AGREEMENT, dated as of April 1, 2007 among
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC., a Delaware corporation, as depositor (the
"Depositor"), ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, a national banking
association ("▇▇▇▇▇ Fargo"), as master servicer (in such capacity, the "Master
Servicer") and securities administrator (in such capacity, the "Securities
Administrator"), SAXON MORTGAGE SERVICES, INC., a Texas corporation, as a
servicer ("Saxon"), COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited
partnership, as a servicer ("Countrywide Servicing" and, together with Saxon,
the "Servicers"), 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 and the Interest Rate Cap Agreement,
(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 and
the Interest Rate Cap Agreement, (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
Interest Rate Cap Agreement, 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 Pooling-Tier REMIC-1 Initial Pooling-Tier REMIC-1
REMIC-1 Interest Interest Rate Principal Amount
---------------- -------------------- ----------------------------
Class PT1-I-1 (1) $ 57,563,547.66
Class PT1-I-2A (2) $ 1,538,618.70
Class PT1-I-2B (3) $ 1,538,618.70
Class PT1-I-3A (2) $ 1,472,962.99
Class PT1-I-3B (3) $ 1,472,962.99
Class PT1-I-4A (2) $ 1,410,128.66
Class PT1-I-4B (3) $ 1,410,128.66
Class PT1-I-5A (2) $ 1,349,993.74
Class PT1-I-5B (3) $ 1,349,993.74
Class PT1-I-6A (2) $ 1,292,441.54
Class PT1-I-6B (3) $ 1,292,441.54
Class PT1-I-7A (2) $ 1,239,719.20
Class PT1-I-7B (3) $ 1,239,719.20
Class PT1-I-8A (2) $ 1,186,485.40
Class PT1-I-8B (3) $ 1,186,485.40
Class PT1-I-9A (2) $ 6,541,057.78
Class PT1-I-9B (3) $ 6,541,057.78
Class PT1-I-10A (2) $ 1,215,694.42
Class PT1-I-10B (3) $ 1,215,694.42
Class PT1-I-11A (2) $ 795,329.32
Class PT1-I-11B (3) $ 795,329.32
Class PT1-I-12A (2) $ 757,369.91
Class PT1-I-12B (3) $ 757,369.91
Class PT1-I-13A (2) $ 728,102.29
Class PT1-I-13B (3) $ 728,102.29
Class PT1-I-14A (2) $ 697,259.94
Class PT1-I-14B (3) $ 697,259.94
Class PT1-I-15A (2) $ 6,148,881.00
Class PT1-I-15B (3) $ 6,148,881.00
Class PT1-I-16A (2) $ 772,443.29
Class PT1-I-16B (3) $ 772,443.29
Class PT1-I-17A (2) $ 365,818.76
Class PT1-I-17B (3) $ 365,818.76
Class PT1-I-18A (2) $ 349,141.51
Class PT1-I-18B (3) $ 349,141.51
Class PT1-I-19A (2) $ 333,994.15
Class PT1-I-19B (3) $ 333,994.15
Class PT1-I-20A (2) $ 324,968.69
Class PT1-I-20B (3) $ 324,968.69
Class PT1-I-21A (2) $ 3,643,609.86
Class PT1-I-21B (3) $ 3,643,609.86
Class PT1-I-22A (2) $ 534,448.75
Class PT1-I-22B (3) $ 534,448.75
Class PT1-I-23A (2) $ 127,442.54
Class PT1-I-23B (3) $ 127,442.54
Class PT1-I-24A (2) $ 121,484.92
Class PT1-I-24B (3) $ 121,484.92
Class PT1-I-25A (2) $ 114,755.68
Class PT1-I-25B (3) $ 114,755.68
Class PT1-I-26A (2) $ 115,481.31
Class PT1-I-26B (3) $ 115,481.31
Class PT1-I-27A (2) $ 319,157.33
Class PT1-I-27B (3) $ 319,157.33
Class PT1-I-28A (2) $ 269,046.34
Class PT1-I-28B (3) $ 269,046.34
Class PT1-I-29A (2) $ 84,869.60
Class PT1-I-29B (3) $ 84,869.60
Class PT1-I-30A (2) $ 82,078.41
Class PT1-I-30B (3) $ 82,078.41
Class PT1-I-31A (2) $ 77,989.22
Class PT1-I-31B (3) $ 77,989.22
Class PT1-I-32A (2) $ 78,153.15
Class PT1-I-32B (3) $ 78,153.15
Class PT1-I-33A (2) $ 194,129.31
Class PT1-I-33B (3) $ 194,129.31
Class PT1-I-34A (2) $ 165,250.59
Class PT1-I-34B (3) $ 165,250.59
Class PT1-I-35A (2) $ 59,952.52
Class PT1-I-35B (3) $ 59,952.52
Class PT1-I-36A (2) $ 57,241.17
Class PT1-I-36B (3) $ 57,241.17
Class PT1-I-37A (2) $ 55,567.30
Class PT1-I-37B (3) $ 55,567.30
Class PT1-I-38A (2) $ 53,936.80
Class PT1-I-38B (3) $ 53,936.80
Class PT1-I-39A (2) $ 52,348.84
Class PT1-I-39B (3) $ 52,348.84
Class PT1-I-40A (2) $ 50,802.59
Class PT1-I-40B (3) $ 50,802.59
Class PT1-I-41A (2) $ 49,297.65
Class PT1-I-41B (3) $ 49,297.65
Class PT1-I-42A (2) $ 47,832.30
Class PT1-I-42B (3) $ 47,832.30
Class PT1-I-43A (2) $ 46,406.17
Class PT1-I-43B (3) $ 46,406.17
Class PT1-I-44A (2) $ 45,018.44
Class PT1-I-44B (3) $ 45,018.44
Class PT1-I-45A (2) $ 43,719.43
Class PT1-I-45B (3) $ 43,719.43
Class PT1-I-46A (2) $ 42,355.09
Class PT1-I-46B (3) $ 42,355.09
Class PT1-I-47A (2) $ 41,768.68
Class PT1-I-47B (3) $ 41,768.68
Class PT1-I-48A (2) $ 39,785.62
Class PT1-I-48B (3) $ 39,785.62
Class PT1-I-49A (2) $ 38,581.31
Class PT1-I-49B (3) $ 38,581.31
Class PT1-I-50A (2) $ 37,410.32
Class PT1-I-50B (3) $ 37,410.32
Class PT1-I-51A (2) $ 36,271.90
Class PT1-I-51B (3) $ 36,271.90
Class PT1-I-52A (2) $ 35,165.30
Class PT1-I-52B (3) $ 35,165.30
Class PT1-I-53A (2) $ 34,807.21
Class PT1-I-53B (3) $ 34,807.21
Class PT1-I-54A (2) $ 33,012.05
Class PT1-I-54B (3) $ 33,012.05
Class PT1-I-55A (2) $ 31,997.92
Class PT1-I-55B (3) $ 31,997.92
Class PT1-I-56A (2) $ 31,012.61
Class PT1-I-56B (3) $ 31,012.61
Class PT1-I-57A (2) $ 30,055.41
Class PT1-I-57B (3) $ 30,055.41
Class PT1-I-58A (2) $ 29,125.64
Class PT1-I-58B (3) $ 29,125.64
Class PT1-I-59A (2) $ 28,630.68
Class PT1-I-59B (3) $ 28,630.68
Class PT1-I-60A (2) $ 27,327.29
Class PT1-I-60B (3) $ 27,327.29
Class PT1-I-61A (2) $ 812,729.44
Class PT1-I-61B (3) $ 812,729.44
Class PT1-II-1 (4) $ 420,172,806.06
Class PT1-II-2A (5) $ 11,230,818.15
Class PT1-II-2B (6) $ 11,230,818.15
Class PT1-II-3A (5) $ 10,751,578.34
Class PT1-II-3B (6) $ 10,751,578.34
Class PT1-II-4A (5) $ 10,292,932.62
Class PT1-II-4B (6) $ 10,292,932.62
Class PT1-II-5A (5) $ 9,853,990.61
Class PT1-II-5B (6) $ 9,853,990.61
Class PT1-II-6A (5) $ 9,433,900.59
Class PT1-II-6B (6) $ 9,433,900.59
Class PT1-II-7A (5) $ 9,049,065.17
Class PT1-II-7B (6) $ 9,049,065.17
Class PT1-II-8A (5) $ 8,660,496.47
Class PT1-II-8B (6) $ 8,660,496.47
Class PT1-II-9A (5) $ 47,745,052.48
Class PT1-II-9B (6) $ 47,745,052.48
Class PT1-II-10A (5) $ 8,873,701.42
Class PT1-II-10B (6) $ 8,873,701.42
Class PT1-II-11A (5) $ 5,805,336.31
Class PT1-II-11B (6) $ 5,805,336.31
Class PT1-II-12A (5) $ 5,528,259.69
Class PT1-II-12B (6) $ 5,528,259.69
Class PT1-II-13A (5) $ 5,314,626.98
Class PT1-II-13B (6) $ 5,314,626.98
Class PT1-II-14A (5) $ 5,089,499.82
Class PT1-II-14B (6) $ 5,089,499.82
Class PT1-II-15A (5) $ 44,882,441.87
Class PT1-II-15B (6) $ 44,882,441.87
Class PT1-II-16A (5) $ 5,638,284.59
Class PT1-II-16B (6) $ 5,638,284.59
Class PT1-II-17A (5) $ 2,670,215.83
Class PT1-II-17B (6) $ 2,670,215.83
Class PT1-II-18A (5) $ 2,548,483.79
Class PT1-II-18B (6) $ 2,548,483.79
Class PT1-II-19A (5) $ 2,437,918.86
Class PT1-II-19B (6) $ 2,437,918.86
Class PT1-II-20A (5) $ 2,372,039.44
Class PT1-II-20B (6) $ 2,372,039.44
Class PT1-II-21A (5) $ 26,595,750.95
Class PT1-II-21B (6) $ 26,595,750.95
Class PT1-II-22A (5) $ 3,901,094.38
Class PT1-II-22B (6) $ 3,901,094.38
Class PT1-II-23A (5) $ 930,239.53
Class PT1-II-23B (6) $ 930,239.53
Class PT1-II-24A (5) $ 886,753.19
Class PT1-II-24B (6) $ 886,753.19
Class PT1-II-25A (5) $ 837,634.58
Class PT1-II-25B (6) $ 837,634.58
Class PT1-II-26A (5) $ 842,931.09
Class PT1-II-26B (6) $ 842,931.09
Class PT1-II-27A (5) $ 2,329,620.66
Class PT1-II-27B (6) $ 2,329,620.66
Class PT1-II-28A (5) $ 1,963,846.23
Class PT1-II-28B (6) $ 1,963,846.23
Class PT1-II-29A (5) $ 619,487.46
Class PT1-II-29B (6) $ 619,487.46
Class PT1-II-30A (5) $ 599,113.77
Class PT1-II-30B (6) $ 599,113.77
Class PT1-II-31A (5) $ 569,265.65
Class PT1-II-31B (6) $ 569,265.65
Class PT1-II-32A (5) $ 570,462.17
Class PT1-II-32B (6) $ 570,462.17
Class PT1-II-33A (5) $ 1,417,005.38
Class PT1-II-33B (6) $ 1,417,005.38
Class PT1-II-34A (5) $ 1,206,211.31
Class PT1-II-34B (6) $ 1,206,211.31
Class PT1-II-35A (5) $ 437,610.58
Class PT1-II-35B (6) $ 437,610.58
Class PT1-II-36A (5) $ 417,819.67
Class PT1-II-36B (6) $ 417,819.67
Class PT1-II-37A (5) $ 405,601.62
Class PT1-II-37B (6) $ 405,601.62
Class PT1-II-38A (5) $ 393,700.14
Class PT1-II-38B (6) $ 393,700.14
Class PT1-II-39A (5) $ 382,109.17
Class PT1-II-39B (6) $ 382,109.17
Class PT1-II-40A (5) $ 370,822.64
Class PT1-II-40B (6) $ 370,822.64
Class PT1-II-41A (5) $ 359,837.68
Class PT1-II-41B (6) $ 359,837.68
Class PT1-II-42A (5) $ 349,141.66
Class PT1-II-42B (6) $ 349,141.66
Class PT1-II-43A (5) $ 338,731.92
Class PT1-II-43B (6) $ 338,731.92
Class PT1-II-44A (5) $ 328,602.45
Class PT1-II-44B (6) $ 328,602.45
Class PT1-II-45A (5) $ 319,120.66
Class PT1-II-45B (6) $ 319,120.66
Class PT1-II-46A (5) $ 309,161.91
Class PT1-II-46B (6) $ 309,161.91
Class PT1-II-47A (5) $ 304,881.57
Class PT1-II-47B (6) $ 304,881.57
Class PT1-II-48A (5) $ 290,406.66
Class PT1-II-48B (6) $ 290,406.66
Class PT1-II-49A (5) $ 281,615.99
Class PT1-II-49B (6) $ 281,615.99
Class PT1-II-50A (5) $ 273,068.63
Class PT1-II-50B (6) $ 273,068.63
Class PT1-II-51A (5) $ 264,759.01
Class PT1-II-51B (6) $ 264,759.01
Class PT1-II-52A (5) $ 256,681.59
Class PT1-II-52B (6) $ 256,681.59
Class PT1-II-53A (5) $ 254,067.78
Class PT1-II-53B (6) $ 254,067.78
Class PT1-II-54A (5) $ 240,964.42
Class PT1-II-54B (6) $ 240,964.42
Class PT1-II-55A (5) $ 233,561.97
Class PT1-II-55B (6) $ 233,561.97
Class PT1-II-56A (5) $ 226,369.88
Class PT1-II-56B (6) $ 226,369.88
Class PT1-II-57A (5) $ 219,383.05
Class PT1-II-57B (6) $ 219,383.05
Class PT1-II-58A (5) $ 212,596.41
Class PT1-II-58B (6) $ 212,596.41
Class PT1-II-59A (5) $ 208,983.52
Class PT1-II-59B (6) $ 208,983.52
Class PT1-II-60A (5) $ 199,469.75
Class PT1-II-60B (6) $ 199,469.75
Class PT1-II-61A (5) $ 5,932,344.74
Class PT1-II-61B (6) $ 5,932,344.74
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 9.50%.
(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) 9.50%.
(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 9.50%.
(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) 9.50 %.
(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 Corresponding
Tier Pooling Tier Corresponding Scheduled
REMIC-2 REMIC-2 Pooling-Tier Corresponding Crossover
Pooling-Tier Interest Initial Principal REMIC-2 IO Pooling-Tier REMIC-1 Distribution
REMIC-2 Interest Rate Amount Interest Regular Interest Date
------------------ -------- ----------------- ---------------- --------------- --------------
Class PT2-I-1 (1) $ 57,563,547.66 N/A N/A N/A
Class PT2-I-2A (2) $ 1,538,618.70 Class PT2-I-IO-2 N/A N/A
Class PT2-I-2B (3) $ 1,538,618.70 N/A N/A N/A
Class PT2-I-3A (2) $ 1,472,962.99 Class PT2-I-IO-3 N/A N/A
Class PT2-I-3B (3) $ 1,472,962.99 N/A N/A N/A
Class PT2-I-4A (2) $ 1,410,128.66 Class PT2-I-IO-4 N/A N/A
Class PT2-I-4B (3) $ 1,410,128.66 N/A N/A N/A
Class PT2-I-5A (2) $ 1,349,993.74 Class PT2-I-IO-5 N/A N/A
Class PT2-I-5B (3) $ 1,349,993.74 N/A N/A N/A
Class PT2-I-6A (2) $ 1,292,441.54 Class PT2-I-IO-6 N/A N/A
Class PT2-I-6B (3) $ 1,292,441.54 N/A N/A N/A
Class PT2-I-7A (2) $ 1,239,719.20 Class PT2-I-IO-7 N/A N/A
Class PT2-I-7B (3) $ 1,239,719.20 N/A N/A N/A
Class PT2-I-8A (2) $ 1,186,485.40 Class PT2-I-IO-8 N/A N/A
Class PT2-I-8B (3) $ 1,186,485.40 N/A N/A N/A
Class PT2-I-9A (2) $ 6,541,057.78 Class PT2-I-IO-9 N/A N/A
Class PT2-I-9B (3) $ 6,541,057.78 N/A N/A N/A
Class PT2-I-10A (2) $ 1,215,694.42 Class PT2-I-IO-10 N/A N/A
Class PT2-I-10B (3) $ 1,215,694.42 N/A N/A N/A
Class PT2-I-11A (2) $ 795,329.32 Class PT2-I-IO-11 N/A N/A
Class PT2-I-11B (3) $ 795,329.32 N/A N/A N/A
Class PT2-I-12A (2) $ 757,369.91 Class PT2-I-IO-12 N/A N/A
Class PT2-I-12B (3) $ 757,369.91 N/A N/A N/A
Class PT2-I-13A (2) $ 728,102.29 Class PT2-I-IO-13 N/A N/A
Class PT2-I-13B (3) $ 728,102.29 N/A N/A N/A
Class PT2-I-14A (2) $ 697,259.94 Class PT2-I-IO-14 N/A N/A
Class PT2-I-14B (3) $ 697,259.94 N/A N/A N/A
Class PT2-I-15A (2) $ 6,148,881.00 Class PT2-I-IO-15 N/A N/A
Class PT2-I-15B (3) $ 6,148,881.00 N/A N/A N/A
Class PT2-I-16A (2) $ 772,443.29 Class PT2-I-IO-16 N/A N/A
Class PT2-I-16B (3) $ 772,443.29 N/A N/A N/A
Class PT2-I-17A (2) $ 365,818.76 Class PT2-I-IO-17 N/A N/A
Class PT2-I-17B (3) $ 365,818.76 N/A N/A N/A
Class PT2-I-18A (2) $ 349,141.51 Class PT2-I-IO-18 N/A N/A
Class PT2-I-18B (3) $ 349,141.51 N/A N/A N/A
Class PT2-I-19A (2) $ 333,994.15 Class PT2-I-IO-19 N/A N/A
Class PT2-I-19B (3) $ 333,994.15 N/A N/A N/A
Class PT2-I-20A (2) $ 324,968.69 Class PT2-I-IO-20 N/A N/A
Class PT2-I-20B (3) $ 324,968.69 N/A N/A N/A
Class PT2-I-21A (2) $ 3,643,609.86 Class PT2-I-IO-21 N/A N/A
Class PT2-I-21B (3) $ 3,643,609.86 N/A N/A N/A
Class PT2-I-22A (2) $ 534,448.75 Class PT2-I-IO-22 N/A N/A
Class PT2-I-22B (3) $ 534,448.75 N/A N/A N/A
Class PT2-I-23A (2) $ 127,442.54 Class PT2-I-IO-23 N/A N/A
Class PT2-I-23B (3) $ 127,442.54 N/A N/A N/A
Class PT2-I-24A (2) $ 121,484.92 Class PT2-I-IO-24 N/A N/A
Class PT2-I-24B (3) $ 121,484.92 N/A N/A N/A
Class PT2-I-25A (2) $ 114,755.68 Class PT2-I-IO-25 N/A N/A
Class PT2-I-25B (3) $ 114,755.68 N/A N/A N/A
Class PT2-I-26A (2) $ 115,481.31 Class PT2-I-IO-26 N/A N/A
Class PT2-I-26B (3) $ 115,481.31 N/A N/A N/A
Class PT2-I-27A (2) $ 319,157.33 Class PT2-I-IO-27 N/A N/A
Class PT2-I-27B (3) $ 319,157.33 N/A N/A N/A
Class PT2-I-28A (2) $ 269,046.34 Class PT2-I-IO-28 N/A N/A
Class PT2-I-28B (3) $ 269,046.34 N/A N/A N/A
Class PT2-I-29A (2) $ 84,869.60 Class PT2-I-IO-29 N/A N/A
Class PT2-I-29B (3) $ 84,869.60 N/A N/A N/A
Class PT2-I-30A (2) $ 82,078.41 Class PT2-I-IO-30 N/A N/A
Class PT2-I-30B (3) $ 82,078.41 N/A N/A N/A
Class PT2-I-31A (2) $ 77,989.22 Class PT2-I-IO-31 N/A N/A
Class PT2-I-31B (3) $ 77,989.22 N/A N/A N/A
Class PT2-I-32A (2) $ 78,153.15 Class PT2-I-IO-32 N/A N/A
Class PT2-I-32B (3) $ 78,153.15 N/A N/A N/A
Class PT2-I-33A (2) $ 194,129.31 Class PT2-I-IO-33 N/A N/A
Class PT2-I-33B (3) $ 194,129.31 N/A N/A N/A
Class PT2-I-34A (2) $ 165,250.59 Class PT2-I-IO-34 N/A N/A
Class PT2-I-34B (3) $ 165,250.59 N/A N/A N/A
Class PT2-I-35A (2) $ 59,952.52 Class PT2-I-IO-35 N/A N/A
Class PT2-I-35B (3) $ 59,952.52 N/A N/A N/A
Class PT2-I-36A (2) $ 57,241.17 Class PT2-I-IO-36 N/A N/A
Class PT2-I-36B (3) $ 57,241.17 N/A N/A N/A
Class PT2-I-37A (2) $ 55,567.30 Class PT2-I-IO-37 N/A N/A
Class PT2-I-37B (3) $ 55,567.30 N/A N/A N/A
Class PT2-I-38A (2) $ 53,936.80 Class PT2-I-IO-38 N/A N/A
Class PT2-I-38B (3) $ 53,936.80 N/A N/A N/A
Class PT2-I-39A (2) $ 52,348.84 Class PT2-I-IO-39 N/A N/A
Class PT2-I-39B (3) $ 52,348.84 N/A N/A N/A
Class PT2-I-40A (2) $ 50,802.59 Class PT2-I-IO-40 N/A N/A
Class PT2-I-40B (3) $ 50,802.59 N/A N/A N/A
Class PT2-I-41A (2) $ 49,297.65 Class PT2-I-IO-41 N/A N/A
Class PT2-I-41B (3) $ 49,297.65 N/A N/A N/A
Class PT2-I-42A (2) $ 47,832.30 Class PT2-I-IO-42 N/A N/A
Class PT2-I-42B (3) $ 47,832.30 N/A N/A N/A
Class PT2-I-43A (2) $ 46,406.17 Class PT2-I-IO-43 N/A N/A
Class PT2-I-43B (3) $ 46,406.17 N/A N/A N/A
Class PT2-I-44A (2) $ 45,018.44 Class PT2-I-IO-44 N/A N/A
Class PT2-I-44B (3) $ 45,018.44 N/A N/A N/A
Class PT2-I-45A (2) $ 43,719.43 Class PT2-I-IO-45 N/A N/A
Class PT2-I-45B (3) $ 43,719.43 N/A N/A N/A
Class PT2-I-46A (2) $ 42,355.09 Class PT2-I-IO-46 N/A N/A
Class PT2-I-46B (3) $ 42,355.09 N/A N/A N/A
Class PT2-I-47A (2) $ 41,768.68 Class PT2-I-IO-47 N/A N/A
Class PT2-I-47B (3) $ 41,768.68 N/A N/A N/A
Class PT2-I-48A (2) $ 39,785.62 Class PT2-I-IO-48 N/A N/A
Class PT2-I-48B (3) $ 39,785.62 N/A N/A N/A
Class PT2-I-49A (2) $ 38,581.31 Class PT2-I-IO-49 N/A N/A
Class PT2-I-49B (3) $ 38,581.31 N/A N/A N/A
Class PT2-I-50A (2) $ 37,410.32 Class PT2-I-IO-50 N/A N/A
Class PT2-I-50B (3) $ 37,410.32 N/A N/A N/A
Class PT2-I-51A (2) $ 36,271.90 Class PT2-I-IO-51 N/A N/A
Class PT2-I-51B (3) $ 36,271.90 N/A N/A N/A
Class PT2-I-52A (2) $ 35,165.30 Class PT2-I-IO-52 N/A N/A
Class PT2-I-52B (3) $ 35,165.30 N/A N/A N/A
Class PT2-I-53A (2) $ 34,807.21 Class PT2-I-IO-53 N/A N/A
Class PT2-I-53B (3) $ 34,807.21 N/A N/A N/A
Class PT2-I-54A (2) $ 33,012.05 Class PT2-I-IO-54 N/A N/A
Class PT2-I-54B (3) $ 33,012.05 N/A N/A N/A
Class PT2-I-55A (2) $ 31,997.92 Class PT2-I-IO-55 N/A N/A
Class PT2-I-55B (3) $ 31,997.92 N/A N/A N/A
Class PT2-I-56A (2) $ 31,012.61 Class PT2-I-IO-56 N/A N/A
Class PT2-I-56B (3) $ 31,012.61 N/A N/A N/A
Class PT2-I-57A (2) $ 30,055.41 Class PT2-I-IO-57 N/A N/A
Class PT2-I-57B (3) $ 30,055.41 N/A N/A N/A
Class PT2-I-58A (2) $ 29,125.64 Class PT2-I-IO-58 N/A N/A
Class PT2-I-58B (3) $ 29,125.64 N/A N/A N/A
Class PT2-I-59A (2) $ 28,630.68 Class PT2-I-IO-59 N/A N/A
Class PT2-I-59B (3) $ 28,630.68 N/A N/A N/A
Class PT2-I-60A (2) $ 27,327.29 Class PT2-I-IO-60 N/A N/A
Class PT2-I-60B (3) $ 27,327.29 N/A N/A N/A
Class PT2-I-61A (2) $ 812,729.44 Class PT2-I-IO-61 N/A N/A
Class PT2-I-61B (3) $ 812,729.44 N/A N/A N/A
Class PT2-I-IO-2 (4) (4) N/A Class PT1-I-2A April 2008
Class PT2-I-IO-3 (4) (4) N/A Class PT1-I-3A May 2008
Class PT2-I-IO-4 (4) (4) N/A Class PT1-I-4A June 2008
Class PT2-I-IO-5 (4) (4) N/A Class PT1-I-5A July 2008
Class PT2-I-IO-6 (4) (4) N/A Class PT1-I-6A August 2008
Class PT2-I-IO-7 (4) (4) N/A Class PT1-I-7A September 2008
Class PT2-I-IO-8 (4) (4) N/A Class PT1-I-8A October 2008
Class PT2-I-IO-9 (4) (4) N/A Class PT1-I-9A November 2008
Class PT2-I-IO-10 (4) (4) N/A Class PT1-I-10A December 2008
Class PT2-I-IO-11 (4) (4) N/A Class PT1-I-11A January 2009
Class PT2-I-IO-12 (4) (4) N/A Class PT1-I-12A February 2009
Class PT2-I-IO-13 (4) (4) N/A Class PT1-I-13A March 2009
Class PT2-I-IO-14 (4) (4) N/A Class PT1-I-14A April 2009
Class PT2-I-IO-15 (4) (4) N/A Class PT1-I-15A May 2009
Class PT2-I-IO-16 (4) (4) N/A Class PT1-I-16A June 2009
Class PT2-I-IO-17 (4) (4) N/A Class PT1-I-17A July 2009
Class PT2-I-IO-18 (4) (4) N/A Class PT1-I-18A August 2009
Class PT2-I-IO-19 (4) (4) N/A Class PT1-I-19A September 2009
Class PT2-I-IO-20 (4) (4) N/A Class PT1-I-20A October 2009
Class PT2-I-IO-21 (4) (4) N/A Class PT1-I-21A November 2009
Class PT2-I-IO-22 (4) (4) N/A Class PT1-I-22A December 2009
Class PT2-I-IO-23 (4) (4) N/A Class PT1-I-23A January 2010
Class PT2-I-IO-24 (4) (4) N/A Class PT1-I-24A February 2010
Class PT2-I-IO-25 (4) (4) N/A Class PT1-I-25A March 2010
Class PT2-I-IO-26 (4) (4) N/A Class PT1-I-26A April 2010
Class PT2-I-IO-27 (4) (4) N/A Class PT1-I-27A May 2010
Class PT2-I-IO-28 (4) (4) N/A Class PT1-I-28A June 2010
Class PT2-I-IO-29 (4) (4) N/A Class PT1-I-29A July 2010
Class PT2-I-IO-30 (4) (4) N/A Class PT1-I-30A August 2010
Class PT2-I-IO-31 (4) (4) N/A Class PT1-I-31A September 2010
Class PT2-I-IO-32 (4) (4) N/A Class PT1-I-32A October 2010
Class PT2-I-IO-33 (4) (4) N/A Class PT1-I-33A November 2010
Class PT2-I-IO-34 (4) (4) N/A Class PT1-I-34A December 2010
Class PT2-I-IO-35 (4) (4) N/A Class PT1-I-35A January 2011
Class PT2-I-IO-36 (4) (4) N/A Class PT1-I-36A February 2011
Class PT2-I-IO-37 (4) (4) N/A Class PT1-I-37A March 2011
Class PT2-I-IO-38 (4) (4) N/A Class PT1-I-38A April 2011
Class PT2-I-IO-39 (4) (4) N/A Class PT1-I-39A May 2011
Class PT2-I-IO-40 (4) (4) N/A Class PT1-I-40A June 2011
Class PT2-I-IO-41 (4) (4) N/A Class PT1-I-41A July 2011
Class PT2-I-IO-42 (4) (4) N/A Class PT1-I-42A August 2011
Class PT2-I-IO-43 (4) (4) N/A Class PT1-I-43A September 2011
Class PT2-I-IO-44 (4) (4) N/A Class PT1-I-44A October 2011
Class PT2-I-IO-45 (4) (4) N/A Class PT1-I-45A November 2011
Class PT2-I-IO-46 (4) (4) N/A Class PT1-I-46A December 2011
Class PT2-I-IO-47 (4) (4) N/A Class PT1-I-47A January 2012
Class PT2-I-IO-48 (4) (4) N/A Class PT1-I-48A February 2012
Class PT2-I-IO-49 (4) (4) N/A Class PT1-I-49A March 2012
Class PT2-I-IO-50 (4) (4) N/A Class PT1-I-50A April 2012
Class PT2-I-IO-51 (4) (4) N/A Class PT1-I-51A May 2012
Class PT2-I-IO-52 (4) (4) N/A Class PT1-I-52A June 2012
Class PT2-I-IO-53 (4) (4) N/A Class PT1-I-53A July 2012
Class PT2-I-IO-54 (4) (4) N/A Class PT1-I-54A August 2012
Class PT2-I-IO-55 (4) (4) N/A Class PT1-I-55A September 2012
Class PT2-I-IO-56 (4) (4) N/A Class PT1-I-56A October 2012
Class PT2-I-IO-57 (4) (4) N/A Class PT1-I-57A November 2012
Class PT2-I-IO-58 (4) (4) N/A Class PT1-I-58A December 2012
Class PT2-I-IO-59 (4) (4) N/A Class PT1-I-59A January 2013
Class PT2-I-IO-60 (4) (4) N/A Class PT1-I-60A February 2013
Class PT2-I-IO-61 (4) (4) N/A Class PT1-I-61A March 2013
Class PT2-II-1 (5) $ 420,172,806.06 N/A N/A N/A
Class PT2-II-2A (6) $ 11,230,818.15 Class PT2-II-IO-2 N/A N/A
Class PT2-II-2B (7) $ 11,230,818.15 N/A N/A N/A
Class PT2-II-3A (6) $ 10,751,578.34 Class PT2-II-IO-3 N/A N/A
Class PT2-II-3B (7) $ 10,751,578.34 N/A N/A N/A
Class PT2-II-4A (6) $ 10,292,932.62 Class PT2-II-IO-4 N/A N/A
Class PT2-II-4B (7) $ 10,292,932.62 N/A N/A N/A
Class PT2-II-5A (6) $ 9,853,990.61 Class PT2-II-IO-5 N/A N/A
Class PT2-II-5B (7) $ 9,853,990.61 N/A N/A N/A
Class PT2-II-6A (6) $ 9,433,900.59 Class PT2-II-IO-6 N/A N/A
Class PT2-II-6B (7) $ 9,433,900.59 N/A N/A N/A
Class PT2-II-7A (6) $ 9,049,065.17 Class PT2-II-IO-7 N/A N/A
Class PT2-II-7B (7) $ 9,049,065.17 N/A N/A N/A
Class PT2-II-8A (6) $ 8,660,496.47 Class PT2-II-IO-8 N/A N/A
Class PT2-II-8B (7) $ 8,660,496.47 N/A N/A N/A
Class PT2-II-9A (6) $ 47,745,052.48 Class PT2-II-IO-9 N/A N/A
Class PT2-II-9B (7) $ 47,745,052.48 N/A N/A N/A
Class PT2-II-10A (6) $ 8,873,701.42 Class PT2-II-IO-10 N/A N/A
Class PT2-II-10B (7) $ 8,873,701.42 N/A N/A N/A
Class PT2-II-11A (6) $ 5,805,336.31 Class PT2-II-IO-11 N/A N/A
Class PT2-II-11B (7) $ 5,805,336.31 N/A N/A N/A
Class PT2-II-12A (6) $ 5,528,259.69 Class PT2-II-IO-12 N/A N/A
Class PT2-II-12B (7) $ 5,528,259.69 N/A N/A N/A
Class PT2-II-13A (6) $ 5,314,626.98 Class PT2-II-IO-13 N/A N/A
Class PT2-II-13B (7) $ 5,314,626.98 N/A N/A N/A
Class PT2-II-14A (6) $ 5,089,499.82 Class PT2-II-IO-14 N/A N/A
Class PT2-II-14B (7) $ 5,089,499.82 N/A N/A N/A
Class PT2-II-15A (6) $ 44,882,441.87 Class PT2-II-IO-15 N/A N/A
Class PT2-II-15B (7) $ 44,882,441.87 N/A N/A N/A
Class PT2-II-16A (6) $ 5,638,284.59 Class PT2-II-IO-16 N/A N/A
Class PT2-II-16B (7) $ 5,638,284.59 N/A N/A N/A
Class PT2-II-17A (6) $ 2,670,215.83 Class PT2-II-IO-17 N/A N/A
Class PT2-II-17B (7) $ 2,670,215.83 N/A N/A N/A
Class PT2-II-18A (6) $ 2,548,483.79 Class PT2-II-IO-18 N/A N/A
Class PT2-II-18B (7) $ 2,548,483.79 N/A N/A N/A
Class PT2-II-19A (6) $ 2,437,918.86 Class PT2-II-IO-19 N/A N/A
Class PT2-II-19B (7) $ 2,437,918.86 N/A N/A N/A
Class PT2-II-20A (6) $ 2,372,039.44 Class PT2-II-IO-20 N/A N/A
Class PT2-II-20B (7) $ 2,372,039.44 N/A N/A N/A
Class PT2-II-21A (6) $ 26,595,750.95 Class PT2-II-IO-21 N/A N/A
Class PT2-II-21B (7) $ 26,595,750.95 N/A N/A N/A
Class PT2-II-22A (6) $ 3,901,094.38 Class PT2-II-IO-22 N/A N/A
Class PT2-II-22B (7) $ 3,901,094.38 N/A N/A N/A
Class PT2-II-23A (6) $ 930,239.53 Class PT2-II-IO-23 N/A N/A
Class PT2-II-23B (7) $ 930,239.53 N/A N/A N/A
Class PT2-II-24A (6) $ 886,753.19 Class PT2-II-IO-24 N/A N/A
Class PT2-II-24B (7) $ 886,753.19 N/A N/A N/A
Class PT2-II-25A (6) $ 837,634.58 Class PT2-II-IO-25 N/A N/A
Class PT2-II-25B (7) $ 837,634.58 N/A N/A N/A
Class PT2-II-26A (6) $ 842,931.09 Class PT2-II-IO-26 N/A N/A
Class PT2-II-26B (7) $ 842,931.09 N/A N/A N/A
Class PT2-II-27A (6) $ 2,329,620.66 Class PT2-II-IO-27 N/A N/A
Class PT2-II-27B (7) $ 2,329,620.66 N/A N/A N/A
Class PT2-II-28A (6) $ 1,963,846.23 Class PT2-II-IO-28 N/A N/A
Class PT2-II-28B (7) $ 1,963,846.23 N/A N/A N/A
Class PT2-II-29A (6) $ 619,487.46 Class PT2-II-IO-29 N/A N/A
Class PT2-II-29B (7) $ 619,487.46 N/A N/A N/A
Class PT2-II-30A (6) $ 599,113.77 Class PT2-II-IO-30 N/A N/A
Class PT2-II-30B (7) $ 599,113.77 N/A N/A N/A
Class PT2-II-31A (6) $ 569,265.65 Class PT2-II-IO-31 N/A N/A
Class PT2-II-31B (7) $ 569,265.65 N/A N/A N/A
Class PT2-II-32A (6) $ 570,462.17 Class PT2-II-IO-32 N/A N/A
Class PT2-II-32B (7) $ 570,462.17 N/A N/A N/A
Class PT2-II-33A (6) $ 1,417,005.38 Class PT2-II-IO-33 N/A N/A
Class PT2-II-33B (7) $ 1,417,005.38 N/A N/A N/A
Class PT2-II-34A (6) $ 1,206,211.31 Class PT2-II-IO-34 N/A N/A
Class PT2-II-34B (7) $ 1,206,211.31 N/A N/A N/A
Class PT2-II-35A (6) $ 437,610.58 Class PT2-II-IO-35 N/A N/A
Class PT2-II-35B (7) $ 437,610.58 N/A N/A N/A
Class PT2-II-36A (6) $ 417,819.67 Class PT2-II-IO-36 N/A N/A
Class PT2-II-36B (7) $ 417,819.67 N/A N/A N/A
Class PT2-II-37A (6) $ 405,601.62 Class PT2-II-IO-37 N/A N/A
Class PT2-II-37B (7) $ 405,601.62 N/A N/A N/A
Class PT2-II-38A (6) $ 393,700.14 Class PT2-II-IO-38 N/A N/A
Class PT2-II-38B (7) $ 393,700.14 N/A N/A N/A
Class PT2-II-39A (6) $ 382,109.17 Class PT2-II-IO-39 N/A N/A
Class PT2-II-39B (7) $ 382,109.17 N/A N/A N/A
Class PT2-II-40A (6) $ 370,822.64 Class PT2-II-IO-40 N/A N/A
Class PT2-II-40B (7) $ 370,822.64 N/A N/A N/A
Class PT2-II-41A (6) $ 359,837.68 Class PT2-II-IO-41 N/A N/A
Class PT2-II-41B (7) $ 359,837.68 N/A N/A N/A
Class PT2-II-42A (6) $ 349,141.66 Class PT2-II-IO-42 N/A N/A
Class PT2-II-42B (7) $ 349,141.66 N/A N/A N/A
Class PT2-II-43A (6) $ 338,731.92 Class PT2-II-IO-43 N/A N/A
Class PT2-II-43B (7) $ 338,731.92 N/A N/A N/A
Class PT2-II-44A (6) $ 328,602.45 Class PT2-II-IO-44 N/A N/A
Class PT2-II-44B (7) $ 328,602.45 N/A N/A N/A
Class PT2-II-45A (6) $ 319,120.66 Class PT2-II-IO-45 N/A N/A
Class PT2-II-45B (7) $ 319,120.66 N/A N/A N/A
Class PT2-II-46A (6) $ 309,161.91 Class PT2-II-IO-46 N/A N/A
Class PT2-II-46B (7) $ 309,161.91 N/A N/A N/A
Class PT2-II-47A (6) $ 304,881.57 Class PT2-II-IO-47 N/A N/A
Class PT2-II-47B (7) $ 304,881.57 N/A N/A N/A
Class PT2-II-48A (6) $ 290,406.66 Class PT2-II-IO-48 N/A N/A
Class PT2-II-48B (7) $ 290,406.66 N/A N/A N/A
Class PT2-II-49A (6) $ 281,615.99 Class PT2-II-IO-49 N/A N/A
Class PT2-II-49B (7) $ 281,615.99 N/A N/A N/A
Class PT2-II-50A (6) $ 273,068.63 Class PT2-II-IO-50 N/A N/A
Class PT2-II-50B (7) $ 273,068.63 N/A N/A N/A
Class PT2-II-51A (6) $ 264,759.01 Class PT2-II-IO-51 N/A N/A
Class PT2-II-51B (7) $ 264,759.01 N/A N/A N/A
Class PT2-II-52A (6) $ 256,681.59 Class PT2-II-IO-52 N/A N/A
Class PT2-II-52B (7) $ 256,681.59 N/A N/A N/A
Class PT2-II-53A (6) $ 254,067.78 Class PT2-II-IO-53 N/A N/A
Class PT2-II-53B (7) $ 254,067.78 N/A N/A N/A
Class PT2-II-54A (6) $ 240,964.42 Class PT2-II-IO-54 N/A N/A
Class PT2-II-54B (7) $ 240,964.42 N/A N/A N/A
Class PT2-II-55A (6) $ 233,561.97 Class PT2-II-IO-55 N/A N/A
Class PT2-II-55B (7) $ 233,561.97 N/A N/A N/A
Class PT2-II-56A (6) $ 226,369.88 Class PT2-II-IO-56 N/A N/A
Class PT2-II-56B (7) $ 226,369.88 N/A N/A N/A
Class PT2-II-57A (6) $ 219,383.05 Class PT2-II-IO-57 N/A N/A
Class PT2-II-57B (7) $ 219,383.05 N/A N/A N/A
Class PT2-II-58A (6) $ 212,596.41 Class PT2-II-IO-58 N/A N/A
Class PT2-II-58B (7) $ 212,596.41 N/A N/A N/A
Class PT2-II-59A (6) $ 208,983.52 Class PT2-II-IO-59 N/A N/A
Class PT2-II-59B (7) $ 208,983.52 N/A N/A N/A
Class PT2-II-60A (6) $ 199,469.75 Class PT2-II-IO-60 N/A N/A
Class PT2-II-60B (7) $ 199,469.75 N/A N/A N/A
Class PT2-II-61A (6) $ 5,932,344.74 Class PT2-II-IO-61 N/A N/A
Class PT2-II-61B (7) $ 5,932,344.74 N/A N/A N/A
Class PT2-II-IO-2 (4) (4) N/A Class PT1-II-2A April 2008
Class PT2-II-IO-3 (4) (4) N/A Class PT1-II-3A May 2008
Class PT2-II-IO-4 (4) (4) N/A Class PT1-II-4A June 2008
Class PT2-II-IO-5 (4) (4) N/A Class PT1-II-5A July 2008
Class PT2-II-IO-6 (4) (4) N/A Class PT1-II-6A August 2008
Class PT2-II-IO-7 (4) (4) N/A Class PT1-II-7A September 2008
Class PT2-II-IO-8 (4) (4) N/A Class PT1-II-8A October 2008
Class PT2-II-IO-9 (4) (4) N/A Class PT1-II-9A November 2008
Class PT2-II-IO-10 (4) (4) N/A Class PT1-II-10A December 2008
Class PT2-II-IO-11 (4) (4) N/A Class PT1-II-11A January 2009
Class PT2-II-IO-12 (4) (4) N/A Class PT1-II-12A February 2009
Class PT2-II-IO-13 (4) (4) N/A Class PT1-II-13A March 2009
Class PT2-II-IO-14 (4) (4) N/A Class PT1-II-14A April 2009
Class PT2-II-IO-15 (4) (4) N/A Class PT1-II-15A May 2009
Class PT2-II-IO-16 (4) (4) N/A Class PT1-II-16A June 2009
Class PT2-II-IO-17 (4) (4) N/A Class PT1-II-17A July 2009
Class PT2-II-IO-18 (4) (4) N/A Class PT1-II-18A August 2009
Class PT2-II-IO-19 (4) (4) N/A Class PT1-II-19A September 2009
Class PT2-II-IO-20 (4) (4) N/A Class PT1-II-20A October 2009
Class PT2-II-IO-21 (4) (4) N/A Class PT1-II-21A November 2009
Class PT2-II-IO-22 (4) (4) N/A Class PT1-II-22A December 2009
Class PT2-II-IO-23 (4) (4) N/A Class PT1-II-23A January 2010
Class PT2-II-IO-24 (4) (4) N/A Class PT1-II-24A February 2010
Class PT2-II-IO-25 (4) (4) N/A Class PT1-II-25A March 2010
Class PT2-II-IO-26 (4) (4) N/A Class PT1-II-26A April 2010
Class PT2-II-IO-27 (4) (4) N/A Class PT1-II-27A May 2010
Class PT2-II-IO-28 (4) (4) N/A Class PT1-II-28A June 2010
Class PT2-II-IO-29 (4) (4) N/A Class PT1-II-29A July 2010
Class PT2-II-IO-30 (4) (4) N/A Class PT1-II-30A August 2010
Class PT2-II-IO-31 (4) (4) N/A Class PT1-II-31A September 2010
Class PT2-II-IO-32 (4) (4) N/A Class PT1-II-32A October 2010
Class PT2-II-IO-33 (4) (4) N/A Class PT1-II-33A November 2010
Class PT2-II-IO-34 (4) (4) N/A Class PT1-II-34A December 2010
Class PT2-II-IO-35 (4) (4) N/A Class PT1-II-35A January 2011
Class PT2-II-IO-36 (4) (4) N/A Class PT1-II-36A February 2011
Class PT2-II-IO-37 (4) (4) N/A Class PT1-II-37A March 2011
Class PT2-II-IO-38 (4) (4) N/A Class PT1-II-38A April 2011
Class PT2-II-IO-39 (4) (4) N/A Class PT1-II-39A May 2011
Class PT2-II-IO-40 (4) (4) N/A Class PT1-II-40A June 2011
Class PT2-II-IO-41 (4) (4) N/A Class PT1-II-41A July 2011
Class PT2-II-IO-42 (4) (4) N/A Class PT1-II-42A August 2011
Class PT2-II-IO-43 (4) (4) N/A Class PT1-II-43A September 2011
Class PT2-II-IO-44 (4) (4) N/A Class PT1-II-44A October 2011
Class PT2-II-IO-45 (4) (4) N/A Class PT1-II-45A November 2011
Class PT2-II-IO-46 (4) (4) N/A Class PT1-II-46A December 2011
Class PT2-II-IO-47 (4) (4) N/A Class PT1-II-47A January 2012
Class PT2-II-IO-48 (4) (4) N/A Class PT1-II-48A February 2012
Class PT2-II-IO-49 (4) (4) N/A Class PT1-II-49A March 2012
Class PT2-II-IO-50 (4) (4) N/A Class PT1-II-50A April 2012
Class PT2-II-IO-51 (4) (4) N/A Class PT1-II-51A May 2012
Class PT2-II-IO-52 (4) (4) N/A Class PT1-II-52A June 2012
Class PT2-II-IO-53 (4) (4) N/A Class PT1-II-53A July 2012
Class PT2-II-IO-54 (4) (4) N/A Class PT1-II-54A August 2012
Class PT2-II-IO-55 (4) (4) N/A Class PT1-II-55A September 2012
Class PT2-II-IO-56 (4) (4) N/A Class PT1-II-56A October 2012
Class PT2-II-IO-57 (4) (4) N/A Class PT1-II-57A November 2012
Class PT2-II-IO-58 (4) (4) N/A Class PT1-II-58A December 2012
Class PT2-II-IO-59 (4) (4) N/A Class PT1-II-59A January 2013
Class PT2-II-IO-60 (4) (4) N/A Class PT1-II-60A February 2013
Class PT2-II-IO-61 (4) (4) N/A Class PT1-II-61A March 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 (which, for the avoidance of doubt, shall not include any
Distribution Date prior to the Distribution Date in May, 2008), 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 Distribution
Date in March 2008, 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) the Pooling Tier REMIC-1
Interest Rate for the Corresponding Pooling-Tier REMIC-1 Regular Interest.
From and including the Distribution Date in April 2008 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 the 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
Upper-Tier
Lower-Tier Lower-Tier Initial Lower-Tier REMIC Regular
REMIC Interest Interest Rate Principal Amount Interest
------------------ ------------- ------------------------------------------------------ --------------
Class LT-A-1 (1) 1/2 initial Class Certificate Balance of Corresponding A-1
Upper-Tier Regular Interest
Class LT-A-2fpt (1) 1/2 initial Class Certificate Balance of Corresponding A-2fpt
Upper-Tier Regular Interest
Class LT-A-2a (1) 1/2 initial Class Certificate Balance of Corresponding A-2a
Upper-Tier Regular Interest
Class LT-A-2b (1) 1/2 initial Class Certificate Balance of Corresponding A-2b
Upper-Tier Regular Interest
Class LT-A-2c (1) 1/2 initial Class Certificate Balance of Corresponding A-2c
Upper-Tier Regular Interest
Class LT-A-2d (1) 1/2 initial Class Certificate Balance of Corresponding A-2d
Upper-Tier Regular Interest
Class LT-M-1 (1) 1/2 initial Class Certificate Balance of Corresponding M-1
Upper-Tier Regular Interest
Class LT-M-2 (1) 1/2 initial Class Certificate Balance of Corresponding M-2
Upper-Tier Regular Interest
Class LT-M-3 (1) 1/2 initial Class Certificate Balance of Corresponding M-3
Upper-Tier Regular Interest
Class LT-M-4 (1) 1/2 initial Class Certificate Balance of Corresponding M-4
Upper-Tier Regular Interest
Class LT-M-5 (1) 1/2 initial Class Certificate Balance of Corresponding M-5
Upper-Tier Regular Interest
Class LT-M-6 (1) 1/2 initial Class Certificate Balance of Corresponding M-6
Upper-Tier Regular Interest
Class LT-B-1 (1) 1/2 initial Class Certificate Balance of Corresponding B-1
Upper-Tier Regular Interest
Class LT-B-2 (1) 1/2 initial Class Certificate Balance of Corresponding B-2
Upper-Tier Regular Interest
Class LT-B-3 (1) 1/2 initial Class Certificate Balance of Corresponding B-3
Upper-Tier Regular Interest
Class LT-Accrual (1) 1/2 Pool Stated Principal Balance plus 1/2 Subordinated N/A
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 Balance of Group I N/A
Mortgage Loans(4)
Class LT-Group II (3) 0.001% aggregate Stated Principal Balance of Group II N/A
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-2fpt, 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-M-3, Class LT-M-4, Class LT-M-5, Class LT-M-6, Class LT-B-1,
Class LT-B-2 and Class LT-B-3 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) 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, 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 REMIC Upper-Tier Initial Principal Corresponding Class
Interest Interest Rate Upper-Tier Amount of Certificates
---------------- ------------- ----------------- -------------------
Class A-1 (1) $ 96,707,000 Class A-1
Class A-2fpt (2) $ 200,000,000 Class A-2fpt
Class A-2a (2) $ 227,615,000 Class A-2a
Class A-2b (2) $ 59,395,000 Class A-2b
Class A-2c (2) $ 146,350,000 Class A-2c
Class A-2d (2) $ 72,528,000 Class A-2d
Class M-1 (3) $ 47,020,000 Class M-1
Class M-2 (3) $ 47,021,000 Class M-2
Class M-3 (3) $ 22,159,000 Class M-3
Class M-4 (3) $ 19,997,000 Class M-4
Class M-5 (3) $ 19,457,000 Class M-5
Class M-6 (3) $ 17,835,000 Class M-6
Class B-1 (3) $ 18,376,000 Class B-1
Class B-2 (3) $ 15,133,000 Class B-2
Class B-3 (3) $ 15,674,000 Class B-3
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 (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 $55,669,238.53
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. 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) $ 96,707,000
Class A-2fpt(11) (2) $ 200,000,000
Class A-2a(11) (3) $ 227,615,000
Class A-2b(11) (4) $ 59,395,000
Class A-2c(11) (5) $ 146,350,000
Class A-2d(11) (6) $ 72,528,000
Class M-1(11) (7) $ 47,020,000
Class M-2(11) (7) $ 47,021,000
Class M-3(11) (7) $ 22,159,000
Class M-4(11) (7) $ 19,997,000
Class M-5(11) (7) $ 19,457,000
Class M-6(11) (7) $ 17,835,000
Class B-1(11) (7) $ 18,376,000
Class B-2(11) (7) $ 15,133,000
Class B-3(11) (7) $ 15,674,000
Class X (8) $ 0(8)
Class R (9) $ 0(9)
Class RX (10) (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-2fpt 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-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.
(4) 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.
(5) 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.
(6) 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.
(7) The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class B-1, Class B-2 and Class B-3 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.
(8) The Class X Certificates will represent beneficial ownership of the Class
X Interest, the Class IO Interest, the Interest Rate Swap Agreement, the
Interest Rate Cap 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.
(9) The Class R Certificates do not have an interest rate or a principal
balance.
(10) The Class RX Certificates do not have an interest rate or a principal
balance.
(11) 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-2fpt, Class A-2a,
Class A-2b, Class A-2c and Class A-2d
Certificates.
Class B Certificates........... Class B-1, Class B-2 and Class B-3 Certificates.
Class M Certificates........... Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5 and Class M-6 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................ ▇▇▇▇▇'▇ and Standard & Poor's.
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 Accounts, the Distribution Account, any
Escrow Account, the Excess Reserve Fund Account or the Swap Account. Each
Account shall be an Eligible Account and shall be non-interest bearing.
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
AA.
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.
Adjustment Date: As to any Adjustable Rate Mortgage Loan, the first Due
Date on which the related Mortgage Rate adjusts as set forth in the related
Mortgage Note and each Due Date thereafter on which the Mortgage Rate adjusts as
set forth in the related Mortgage Note.
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 any 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 Servicers 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 Servicers
during the related Prepayment Period (in each case, net of unreimbursed expenses
incurred in connection with a liquidation or foreclosure and unreimbursed
Advances, if any); (iii) all partial or full prepayments on the Mortgage Loans
received by the Servicers during the related Prepayment Period together with all
Compensating Interest, 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 Servicers, 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 any 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.
Cap Provider: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc., a Delaware
corporation, and its successors in interest.
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 Certificates, reduced by any Applied Realized Loss Amounts allocated to
such Class of Certificates pursuant to Section 4.05; provided, however, that
immediately following the Distribution Date on which a Subsequent Recovery is
distributed, the Class Certificate Balances of any Class or Classes of
Certificates that have been previously reduced by Applied Realized Loss Amounts
will be increased, in order of seniority, by the amount of 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 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) 48.50% 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
$5,404,681.
Class A-1 Certificates: All Certificates bearing the class designation of
"Class A-1".
Class A-2fpt Certificates: All Certificates bearing the class designation
of "Class A-2fpt".
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), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date) and (H) the Class
Certificate Balance of the Class B-1 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 84.00% 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 $5,404,681.
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 M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) 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 (I) the Class Certificate Balance of the Class B-2
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 86.80% 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
$5,404,681.
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 M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) 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), (I) 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 (J) the Class
Certificate Balance of the Class B-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 89.70% 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 $5,404,681.
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 Enhancement Percentage: With respect to any Distribution Date,
the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balances of the Class M and Class B Certificates (other than the
Class M-1 Certificates) and (ii) the Subordinated Amount, in each case after
taking into account the distributions of the related Principal Distribution
Amount and 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.
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) 57.20% 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 $5,404,681.
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) 65.90% 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
$5,404,681.
Class M-3 Certificates: All Certificates bearing the class designation of
"Class M-3".
Class M-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) and (D) the Class
Certificate Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 70.00% 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 $5,404,681.
Class M-4 Certificates: All Certificates bearing the class designation of
"Class M-4".
Class M-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 M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), and (E) the Class Certificate Balance of the Class M-4
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 73.70% 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
$5,404,681.
Class M-5 Certificates: All Certificates bearing the class designation of
"Class M-5".
Class M-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 M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date) and (F) the Class
Certificate Balance of the Class M-5 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 77.30% 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 $5,404,681.
Class M-6 Certificates: All Certificates bearing the class designation of
"Class M-6".
Class M-6 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 M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date) and (G) the Class Certificate Balance of the Class M-6
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 80.60% 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
$5,404,681.
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: May 3, 2007.
Closing Date Deposit Amount: $128.80 (all of which is allocable to
principal) deposited by the Depositor into the Distribution Account on the
Closing Date. $113.85 of the Closing Date Deposit Amount shall be attributable
to the Group I Mortgage Loans and $14.95 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 as
determined pursuant to the Underwriting Guidelines 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 each 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 such
Servicer and (b) the amount of the aggregate Servicing Fee paid to or retained
by such 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 ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Client Manager MSAC 2007-NC2 (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 ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Trust Administration-MS07C2, 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-2fpt Class A-2fpt Class A-2fpt
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-M-3 Class M-3 Class M-3
Class LT-M-4 Class M-4 Class M-4
Class LT-M-5 Class M-5 Class M-5
Class LT-M-6 Class M-6 Class M-6
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
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.
Countrywide Amendment Regulation AB: The Amendment Regulation AB, dated as
of January 26, 2006, by and among Countrywide Servicing, Countrywide Home Loans,
Inc. and the Sponsor, a copy of which is attached hereto as Exhibit BB.
Countrywide Serviced Mortgage Loans: The Mortgage Loans purchased by the
Sponsor pursuant to the Purchase Agreement for which Countrywide Servicing is
identified as the Servicer on the Mortgage Loan Schedule.
Countrywide Servicing: Countrywide Home Loans Servicing LP, a Texas
limited partnership, and its successors in 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 quotient (expressed as a percentage)
of (x) the aggregate amount of Realized Losses incurred since the Cut-off Date
through the last day of the related Prepayment Period divided by (y) the Cut-off
Date Pool Principal Balance exceeds the applicable cumulative loss percentages
set forth below with respect to such Distribution Date:
Distribution Date Occurring In Cumulative Loss Percentage
----------------------------------- ------------------------------------------------------------------------
May 2009 through April 2010 1.650% for the first month, plus an additional 1/12th of 2.050% for each
month thereafter (e.g., 2.675% in November 2009)
May 2010 through April 2011 3.700% for the first month, plus an additional 1/12th of 2.100% for each
month thereafter (e.g., 4.750% in November 2010)
May 2011 through April 2012 5.800% for the first month, plus an additional 1/12th of 1.700% for each
month thereafter (e.g., 6.650% in November 2011)
May 2012 through April 2013 7.500% for the first month, plus an additional 1/12th of 0.900% for each
month thereafter (e.g., 7.950% in November 2012)
May 2013 through April 2014 8.400% for the first month, plus an additional 1/12th of 0.050% for each
month thereafter (e.g., 8.425% in November 2013)
May 2014 and thereafter 8.450%
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: April 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).
Data Tape Information: The information provided by the Original Loan
Seller as of the Cut-off Date to the Depositor or the Sponsor setting forth the
following information with respect to each Mortgage Loan: (1) the Mortgagor's
name; (2) as to each Mortgage Loan, the Scheduled Principal Balance as of the
Cut-off Date; (3) the Mortgage Rate Cap; (4) the Index; (5) a code indicating
whether the Mortgaged Property is owner occupied; (6) the type of Mortgaged
Property; (7) the first date on which the Scheduled Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due Date currently in
effect, such Due Date; (8) the "paid through date" based on payments received
from the related Mortgagor; (9) the original principal amount of the Mortgage
Loan; (10) with respect to Adjustable Rate Mortgage Loans, the Maximum Mortgage
Rate; (11) the type of Mortgage Loan (i.e., Fixed Rate or Adjustable Rate
Mortgage Loan, First Lien Mortgage Loan or Second Lien Mortgage Loan); (12) a
code indicating the purpose of the loan (i.e., purchase, rate and term
refinance, equity take out refinance); (13) a code indicating the documentation
style (i.e., full, asset verification, income verification and no
documentation); (14) the credit risk score (FICO score); (15) the loan credit
grade classification (as described in the underwriting guidelines); (16) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate; (17)
the Mortgage Rate at origination; (18) with respect to each Adjustable Rate
Mortgage Loan, the first Adjustment Date immediately following the Cut-off Date;
(19) the value of the Mortgaged Property; (20) a code indicating the type of
Prepayment Charges applicable to such Mortgage Loan (including any prepayment
penalty term), if any; (21) with respect to each Adjustable Rate Mortgage Loan,
the Periodic Mortgage Rate Cap; (22) 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; and (23) if such Mortgage Loan is covered by a
primary mortgage insurance policy or a lender-paid primary mortgage insurance
policy, the primary mortgage insurance rate. With respect to the Mortgage Loans
in the aggregate, the Data Tape Information shall set forth the following
information, as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the
current aggregate outstanding principal balance of the Mortgage Loans; (3) the
weighted average Mortgage Rate of the Mortgage Loans; and (4) the weighted
average maturity of the Mortgage Loans.
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 the then outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the United States Bankruptcy
Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
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 for such Distribution Date equals
or exceeds 31.00% of the prior period's Senior Enhancement Percentage and (2)
after the aggregate Class Certificate Balance of the Class A Certificates have
been reduced to zero, the aggregate unpaid principal balance of the Mortgage
Loans for such Distribution Date equals or exceeds 37.38% of the prior period's
Class M-1 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: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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 18th day
(or if such day is not a Business Day, the immediately preceding Business Day)
in the case of Countrywide Servicing, and the 15th day (or if such day is not a
Business Day, the immediately preceding Business Day) in the case of Saxon, 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
designated "▇▇▇▇▇ Fargo Bank, National Association in trust for registered
Holders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2 Mortgage
Pass-Through Certificates, Series 2007-NC2." Funds in the Distribution Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date, 12:00 noon
New York City time on the second Business Day immediately preceding such
Distribution Date.
Distribution Date: The 25th day of each calendar month, or if such day is
not a Business Day, the next succeeding Business Day, commencing in May 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, (ii) an account maintained with the
corporate trust department of a federal depository institution or
state-chartered depository institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the U.S. Code of Federal
Regulation Section 9.10(b), which, in either case, has corporate trust powers
and is acting in its fiduciary capacity or (iii) any other account acceptable to
each Rating Agency. Eligible Accounts may bear interest, and may include, if
otherwise qualified under this definition, accounts maintained with the
Securities Administrator. 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 Servicers 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") 2002-41, 67 Fed. Reg. 54487 (2002) (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary Statement.
Escrow Account: 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 "▇▇▇▇▇ Fargo Bank, National
Association, in trust for registered Holders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc. Trust 2007-NC2, Mortgage Pass-Through Certificates, Series 2007-NC2." 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.
▇▇▇▇▇▇ Mae: The Federal National Mortgage Association, or any successor
thereto.
▇▇▇▇▇▇ ▇▇▇ Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ ▇▇▇
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 applicable Servicer that all Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds and other payments or recoveries
which the applicable Servicer, in its reasonable good faith judgment, expects to
be finally recoverable in respect thereof have been so recovered. Each 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 February 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., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: MBS Monitoring - ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc. Trust 2007-NC2, or such other address as Fitch may hereafter
furnish to the Depositor, the Securities Administrator, the Trustee and the
Servicers.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
▇▇▇▇▇▇▇ 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-2fpt 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 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.
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 Cap Agreement: The interest rate cap agreement relating to
the LIBOR Certificates, dated as of the Closing Date, between the Cap Provider
and the Securities Administrator (a copy of which is attached hereto as Exhibit
DD).
Interest Rate Cap Payment: With respect to the Distribution Date, the
payment, if any, required to be made by the Cap Provider under the Interest Rate
Cap Agreement with respect to such Distribution Date.
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 W).
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 Servicers, 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.
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 (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 applicable Servicer has certified to the Securities
Administrator that it has received all amounts it expects to receive in
connection with the liquidation of such Mortgage Loan including the final
disposition of an REO Property, 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 applicable 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, 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, 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-2fpt,
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-M-3, Class LT-M-4, Class LT-M-5, Class LT-M-6, Class LT-B-1,
Class LT-B-2, Class LT-B-3, 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: ▇▇▇▇▇ 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 0.01%.
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 Data Tape Information 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.
MERS: Mortgage Electronic Registration System, Inc.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the Original
Loan Seller have designated or will designate MERS as, and have 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 have 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 Data Tape Information 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: ▇▇▇▇▇'▇ Investors Service, Inc., and its successors in interest.
If ▇▇▇▇▇'▇ 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
▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
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 Servicers.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, 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 the
following information with respect to each Mortgage Loan: (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 sold by the Original Loan Seller to
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 applicable 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 any Servicer
or Subservicer with responsibility for the servicing of the Mortgage Loans
required to be serviced by such Servicer or Subservicer and listed on a list
delivered to the Master Servicer pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be in-house
counsel for a Servicer or a Subservicer, reasonably acceptable to the Trustee
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 such Servicer of the Mortgage Loans,
(ii) does not have any material direct or indirect financial interest in such
Servicer of the Mortgage Loans or in an Affiliate thereof and (iii) is not
connected with such 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: NC Capital Corporation, a California corporation,
and its 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 applicable 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, 0.1300%; Class A-2fpt Certificates, 0.1500%; Class A-2a
Certificates, 0.1100%; Class A-2b Certificates, 0.2000%; Class A-2c
Certificates, 0.2600%; Class A-2d Certificates, 0.3300%; Class M-1 Certificates,
0.3700%; Class M-2 Certificates, 0.4200%; Class M-3 Certificates, 0.5500%; Class
M-4 Certificates, 1.0000%; Class M-5 Certificates, 1.2000%; Class M-6
Certificates, 1.7500%; Class B-1 Certificates, 2.0000%; Class B-2 Certificates,
2.0000%; and Class B-3 Certificates, 2.0000%. On the first Distribution Date
after the Optional Termination Date, the Pass-Through Margins shall increase to:
Class A-1 Certificates, 0.2600%; Class A-2fpt Certificates, 0.3000%; Class A-2a
Certificates, 0.2200%; Class A-2b Certificates, 0.4000%; Class A-2c
Certificates, 0.5200%; Class A-2d Certificates, 0.6600%; Class M-1 Certificates,
0.5550%; Class M-2 Certificates, 0.6300%; Class M-3 Certificates, 0.8250%; Class
M-4 Certificates, 1.5000%; Class M-5 Certificates, 1.8000%; Class M-6
Certificates, 2.6250%; Class B-1 Certificates, 3.0000%; Class B-2 Certificates,
3.0000%; and Class B-3 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 any 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 ▇▇▇▇▇▇▇ Mac, a majority
of its board of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Pool Stated Principal Balance: As to any Distribution Date, the aggregate
of the Stated Principal Balances of the Mortgage Loans for such Distribution
Date that were Outstanding Mortgage Loans on the Due Date in the related Due
Period.
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.
Prepayment Charge: Any prepayment premium, penalty or charge collected by
any 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 a Servicer with respect to any Mortgage Loan serviced by
such 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 applicable 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 any 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 applicable 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 applicable Servicer
on or prior to the related Determination Date or advanced by the applicable
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 applicable 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
May 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 May 1, 2007,
relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
Purchase Agreement: The Sixth Amended and Restated Mortgage Loan Purchase
and Warranties Agreement, dated as of May 1, 2006, between the Original Loan
Seller and the Sponsor.
Rating Agency: Each of the Rating Agencies specified in the Preliminary
Statement. If such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, as is designated by the Depositor,
notice of which designation shall be given to the 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 Servicers.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect thereto net
of the expenses incurred by the applicable Servicer in connection with the
liquidation of such Liquidated Mortgage Loan and net of the amount of
unreimbursed Servicing Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, 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.
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 second
Business Day immediately preceding such Distribution Date with respect to
Countrywide Servicing and 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 with respect to Saxon.
REO Disposition: The final sale by the applicable 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 applicable 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 May 3, 2007, between the Depositor and the
Sponsor, a copy of which is attached hereto as Exhibit CC.
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 applicable
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: ▇▇▇▇▇ 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,
51.50%.
Servicer: Countrywide Servicing or 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 applicable 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, with respect to
Saxon, 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
applicable 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 S hereto. With
respect to Countrywide Servicing, "servicing criteria" shall have the meaning
set forth in the Countrywide Amendment Regulation AB.
Servicing Fee: With respect to each Servicer, each Mortgage Loan serviced
by such 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 such 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 applicable 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 any 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 such 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 applicable 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 5.15% of the Cut-off Date Pool Principal Balance. On and after the Stepdown
Date, an amount equal to 10.30% 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: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., a New York corporation, and
its successors in interest, as purchaser of the Mortgage Loans under the
Purchase Agreement.
Standard & Poor's: Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ 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, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Residential Mortgage Surveillance Group - ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
Trust 2007-NC2, or such other address as Standard & Poor's may hereafter furnish
to the Depositor, the Securities Administrator, the Trustee and the Servicers.
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 related Servicer on or prior to the
related Determination Date or advanced by the related Servicer for the related
Remittance Date and any unscheduled principal payments and other unscheduled
principal collections received during the related Prepayment Period, and the
Stated Principal Balance of any Mortgage Loan that has prepaid in full or has
become a Liquidated Mortgage Loan during the related Prepayment Period shall be
zero.
Stepdown Date: The later to occur of (i) the earlier to occur of (a) the
Distribution Date in May 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 a 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. With
respect to Countrywide Servicing, "Subcontractor" shall have the meaning set
forth in the Countrywide Amendment Regulation AB.
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 a
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 a Servicer under
this Agreement, with respect to some or all of the Mortgage Loans, that are
identified in Item 1122(d) of Regulation AB. With respect to Countrywide
Servicing, "Subservicer" shall have the meaning set forth in the Countrywide
Amendment 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: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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
Servicers on or prior to the related Determination Date (other than Prepayment
Interest Excesses) or advanced by the Servicers for the related Remittance Date
(net of Expense Fees) over (ii) the sum of (A) the amounts payable to the
Certificates pursuant to Section 4.02(a)(i) on such Distribution Date, (B) any
Net Swap Payments to the Swap Provider and (C) any Swap Termination Payment
(other than a Defaulted Swap Termination Payment) payable to the Swap Provider
from Available Funds.
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; (vii) the Interest Rate Cap Agreement; and (viii) 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.
Underwriting Guidelines: The underwriting guidelines attached to the
Purchase Agreement.
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, 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, 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.
▇▇▇▇▇ Fargo: ▇▇▇▇▇ 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, 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. On the Closing Date, the Depositor shall pay,
without any right of reimbursement from the Trust, to the Cap Provider the
"Fixed Amount" (as defined in the Interest Rate Cap Agreement) due and payable
to the Cap Provider pursuant to the terms of the Interest Rate Cap Agreement.
(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 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 Original Loan Seller
or 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 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
Original Loan Seller's or 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 originals 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 Depositor or the Original Loan Seller, 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 Original Loan Seller's or 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 applicable 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 applicable 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 applicable 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 applicable Servicer
of the complete recording information for a Mortgage, the applicable 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, or the
applicable Servicer, 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 and each Rating Agency have received an Opinion
of Counsel, satisfactory in form and substance to the Trustee and each Rating
Agency to the effect that the recordation of such Assignments of Mortgage in any
specific jurisdiction is not necessary to protect the 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; 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 applicable Servicer does not have prior knowledge of the act or
omission that causes such loss. Unless the Depositor gives the Servicers notice
to the contrary, the Depositor is deemed to have given the Servicers 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
applicable Servicer shall record such Assignment of Mortgage at the expense of
the Depositor (and at no expense to such 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 April 1, 2007, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2." 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 sold by
the Original Loan Seller to 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, a copy of the Data Tape Information in an electronic, machine readable
medium in a form acceptable to the Depositor and the Trustee.
(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 "▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL
I INC. TRUST 2007-NC2" 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 and the Interest Rate Cap Agreement.
(e) The Depositor shall use reasonable effort 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. 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 and the Servicers 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 and the
Servicers, 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 and items
(1), (9) and (17) of the Data Tape Information 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 applicable 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 such 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
applicable 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
applicable 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 such Servicer
from time to time.
The Depositor shall use reasonable efforts to cause the Sponsor to deliver
to the applicable 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 applicable Servicer and in no event shall such 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
and the Trustee as of the dates set forth in such Schedules. Countrywide
Servicing in its capacity as Servicer hereby makes the representations and
warranties set forth in Schedule VIII hereto to the Depositor, the Master
Servicer, the Securities Administrator and the Trustee as of the dates set forth
in such Schedule.
(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, 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 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 or the Certificateholders therein, the party discovering such breach
shall give prompt written notice to the other parties.
(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 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 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 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 applicable 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 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 applicable 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 applicable 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
applicable 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 related Servicer by the Sponsor or the Depositor or
the Sponsor, 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 applicable 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 applicable Servicer in the
applicable Collection Account of the related 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 applicable Servicer, and
the Trustee shall execute and deliver at such Person's direction such
instruments of transfer or assignment prepared by such Person, in each case
without recourse, 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 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.
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 March 2027,
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 or the Cap 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 and the Servicers 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, 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 all 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, if the Trustee has received written notice from the Depositor directing
the Trustee to pursue such remedies.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans. (a) For and on behalf of
the Certificateholders, each 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 such Servicer, any Subservicer or any Affiliate
of such Servicer or any Subservicer may have with the related Mortgagor;
(ii) the ownership or non-ownership of any Certificate by such Servicer or
any Affiliate of such Servicer;
(iii) such Servicer's obligation to make P&I Advances or Servicing
Advances; or
(iv) such 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, each 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, each 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, each Servicer in
its own name or in the name of a Subservicer is hereby authorized and empowered
by the Trustee when the applicable 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. Each 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.
Each Servicer covenants that its computer and other systems used in servicing
the Mortgage Loans operate in a manner such that the applicable Servicer can
service the Mortgage Loans in accordance with the terms of this Pooling and
Servicing Agreement. Each 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 a Servicer, and furnish to such Servicer and
any Subservicer such documents provided to the Trustee as are necessary or
appropriate to enable such Servicer or any Subservicer to carry out its
servicing and administrative duties hereunder, and the Trustee hereby grants to
each 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 R 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 each Servicer for the purposes described herein to the extent necessary
or desirable to enable each Servicer to perform its duties hereunder. The
Trustee shall not be liable for the actions of any Servicer or any Subservicers
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 such 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, each 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 a 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, a 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 none of the
Servicers shall (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
applicable 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 such
Servicer, a default is reasonably foreseeable, and only to the extent such
Servicer determines that such action is not materially adverse to the interests
of the Certificateholders (taking into account any estimated Realized Loss that
might result absent such action).
(d) Each Servicer may delegate its responsibilities under this Agreement;
provided, however, that no such delegation shall release such 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
applicable 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.
(f) Notwithstanding anything to the contrary contained in Sections
3.02(a), 3.02(d), 3.02(e), 3.03, 3.22, 3.23, 4.03(e), 6.02, 8.12 and 12.14, the
obligations of Countrywide Servicing with respect to Regulation AB and the
Countrywide Serviced Mortgage Loans shall be solely as set forth in the
Countrywide Amendment Regulation AB with respect to the servicing of the
Countrywide Serviced Mortgage Loans; provided that Countrywide Servicing hereby
agrees to provide to the Master Servicer any statements of compliance,
assessments of compliance, accountants reports on assessment of compliance and
any Sarbanes Certifications (as defined in the Countrywide Amendment Regulation
AB) that Countrywide Servicing is required to deliver to the Depositor pursuant
to the Countrywide Amendment Regulation AB, Sections 2(d), (e) and (f), at the
time such documents are provided to the Depositor.
Section 3.02 Subservicing Agreements between a Servicer and Subservicers.
(a) Each Servicer may enter into subservicing agreements with Subservicers for
the servicing and administration of the Mortgage Loans ("Subservicing
Agreements"). Each 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 applicable Servicer shall give notice to the
Depositor 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 ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ 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.
Each 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.
Each 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,
without the consent of the Trustee. Any variation without the consent of the
Trustee 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 such Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. Each Servicer shall deliver to the
Trustee, the Master Servicer and the Depositor copies of all Subservicing
Agreements, and any amendments or modifications thereof, promptly upon such
Servicer's execution and delivery of such instruments.
(c) As part of its servicing activities hereunder, each 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 such 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 such Servicer, in its good
faith business judgment, would require were it the owner of the related Mortgage
Loans. Each 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) Each Servicer shall cause any Subservicer engaged by such 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 such Servicer, and to provide the information required with
respect to such Subservicer under Section 8.12 of this Agreement. Such 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), each
Servicer and any Subservicer engaged by such Servicer is permitted to utilize
one or more Subcontractors to perform certain of its obligations hereunder. Such
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 such
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
such 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, such Servicer shall cause any such Subcontractor used by such
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 such Servicer.
Such 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 a Servicer engages a Subcontractor in
connection with the performance of any of its duties under this Agreement, such
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 a 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 such
Servicer shall comply with Section 3.02(d) with respect thereto.
Section 3.03 Successor Subservicers. Each Servicer shall be entitled to
terminate any Subservicing Agreement to which such 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 and the Master Servicer 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 applicable Servicer party to the related Subservicing
Agreement without any act or deed on the part of such Subservicer or such
Servicer, and such 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 a Servicer (including termination due to an Event of
Default).
Section 3.04 Liability of the Servicers. Notwithstanding any Subservicing
Agreement, any of the provisions of this Agreement relating to agreements or
arrangements between a Servicer and a Subservicer or reference to actions taken
through a Subservicer or otherwise, such 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 such
Servicer alone were servicing and administering such Mortgage Loans. Each
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of such 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 related Servicer alone, and neither the Trustee nor the
Master Servicer (or any other successor to such 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.
Each Servicer shall be solely liable for all fees owed by it to any Subservicer,
irrespective of whether such 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 a Servicer at any time shall for any reason no
longer be a 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 such Servicer under each Subservicing Agreement that
such 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 such Servicer's interest therein and to
have replaced such 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) such Servicer
shall not thereby be relieved of any liability or obligations under any such
Subservicing Agreement that arose before it ceased to be a Servicer and (ii)
none of the Depositor, the Master Servicer, the Trustee, their designees or any
successor to such Servicer shall be deemed to have assumed any liability or
obligation of such Servicer that arose before it ceased to be a Servicer.
Each 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) Each
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, each 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 applicable 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 such Servicer shall not be required to make any such advances
that are Nonrecoverable P&I Advances. Notwithstanding anything in this Agreement
to the contrary, a 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 such Servicer, maximize recovery of total
proceeds taking into account the value of such Prepayment Charge and the related
Mortgage Loan; provided, however, that the applicable 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 applicable
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 applicable 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 any Interest Rate Cap 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 and any Interest Rate Cap 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)(S), 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)-(R)) 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)(T) and (U).
(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)(T) and (W).
(d) The Securities Administrator shall establish and maintain the
Distribution Account on behalf of the Certificateholders. 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 Servicers to the Master Servicer
pursuant to Section 3.11;
(ii) any amounts deposited by the Servicers 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 any 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.
Each Servicer shall direct the Master Servicer to instruct the Securities
Administrator to withdraw from the Distribution Account and to remit to such
Servicer no less than monthly, all income and gain realized from the investment
of the portion of funds deposited in the Distribution Account by such 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) Each Servicer shall give notice to the Master Servicer, and the Master
Servicer shall give notice to each Rating Agency 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 related 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 applicable Servicer or remit
such proceeds to such Servicer for deposit in the related Collection Account of
such Servicer not later than two Business Days after the deposit of such amounts
in the Subservicing Account. For purposes of this Agreement, such 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) Each 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 such
Servicer. Each Tax Service Contract shall be assigned to the Master Servicer, or
a successor Servicer at the applicable Servicer's expense in the event that a
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, each Servicer undertakes to perform such functions with
respect to the Mortgage Loans serviced by such Servicer. To the extent the
related Mortgage provides for Escrow Payments, the related 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.
Each 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 such 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 such 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 such 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, each 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 applicable 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 applicable
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, each
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, each 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 such
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 such 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 such 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 each Servicer in the related Collection Account and shall, upon
collection, belong to the applicable Servicer as additional compensation for its
servicing activities. In the event a Servicer shall deposit in the related
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from 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. Each
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) Each Servicer
shall, from time to time, make withdrawals from the related Collection Account
for any of the following purposes or as described in Section 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 applicable Servicer during the
related Prepayment Period;
(ii) to reimburse such 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
(such Servicer's right for recovery or reimbursement has priority over the
Trust as stated in the definition of "Available Funds");
(iii) to pay such Servicer or any Subservicer (a) any unpaid Servicing
Fees or (b) any unreimbursed Servicing Advances with respect to each Mortgage
Loan serviced by such 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 such Servicer from a
Mortgagor, or otherwise received with respect to such Mortgage Loan (or the
related REO Property) (such Servicer's right for recovery or reimbursement
has priority over the Trust as stated in the definition of "Available
Funds");
(iv) to pay to such 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 such Servicer for (A) any P&I Advance or Servicing
Advance previously made which such 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)
(such 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 such Servicer for advances in respect of,
expenses incurred in connection with any Mortgage Loan serviced by such
Servicer pursuant to Section 3.15 (such Servicer's right for recovery or
reimbursement has priority over the Trust);
(viii) to reimburse the Master Servicer, such Servicer or the Depositor
for expenses incurred by or reimbursable to the Master Servicer, such
Servicer or the Depositor, as the case may be, pursuant to Section 6.03 (such
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, such 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 (such 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 such Servicer for ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ 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 a Servicer does not timely make the remittance
referred to in clause (i) above, such 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) Each Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the related Collection Account, to the extent held by or on
behalf of it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii)
and (ix) above. Each 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) Each Servicer shall be responsible for reviewing and reconciling the
applicable Collection Account in accordance with Accepted Servicing Practices.
Each Servicer shall act promptly to resolve any discrepancies.
Section 3.12 Investment of Funds in the Collection Accounts and the
Distribution Account. (a) Each 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 a Servicer, shall (except during the
Master Servicer Float Period) invest such funds in the Distribution Account at
the direction of such Servicer in the ▇▇▇▇▇ 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 a 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 applicable Servicer. The applicable 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 applicable 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 applicable 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 applicable 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
related Servicer, shall be for the benefit of such Servicer and shall be subject
to its withdrawal in the manner set forth in Section 3.11. Such 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 a Servicer and held by the
Securities Administrator, shall be for the benefit of such 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). Each 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) Each Servicer shall cause to be maintained for each
Mortgage Loan serviced by such 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. Each Servicer shall also cause to be maintained fire insurance with
extended coverage on each REO Property serviced by such 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. Each Servicer will comply in the performance of this Agreement with
all reasonable rules and requirements of each insurer under any such hazard
policies. Any amounts to be collected by any 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 such 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
any 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 applicable 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 any Servicer shall obtain and maintain a blanket policy
with an insurer either (i) acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ 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 such 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, each
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) Each Servicer shall keep in force during the term of this Agreement a
policy or policies of insurance covering errors and omissions for failure in the
performance of such Servicer's obligations under this Agreement, which policy or
policies shall be in such form and amount that would meet the requirements of
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac if it were the purchaser of the Mortgage Loans, unless
such Servicer has obtained a waiver of such requirements from ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac. Each Servicer shall also maintain a fidelity bond in the form and
amount that would meet the requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, unless
such Servicer has obtained a waiver of such requirements from ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac. Each Servicer shall provide the Master Servicer upon request with
copies of any such insurance policies and fidelity bond. Each Servicer shall be
deemed to have complied with this provision if an Affiliate of the applicable
Servicer has such errors and omissions and fidelity bond coverage and, by the
terms of such insurance policy or fidelity bond, the coverage afforded
thereunder extends to such Servicer. Any such errors and omissions policy and
fidelity bond shall by its terms not be cancelable without thirty days" prior
written notice to the Trustee and the Master Servicer. Each 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.
Each 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, such 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 a 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, such 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. Each 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 such Servicer and such
substitution is in the best interest of the Certificateholders as determined by
such Servicer. In connection with any assumption, modification or substitution,
such 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 a Servicer in respect of an
assumption or substitution of liability agreement will be retained by such
Servicer as additional servicing compensation. In connection with any such
assumption, no material term of the Mortgage Note (including but not limited to
the related Mortgage Rate and the amount of the Scheduled Payment) may be
amended or modified, except as otherwise required pursuant to the terms thereof.
Each 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, a 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 such 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. Each 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. Each 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 applicable 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, a 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 such Servicer through Insurance Proceeds, Condemnation Proceeds
or Liquidation Proceeds from the related Mortgaged Property, as contemplated in
Section 3.11. Each 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 applicable
Servicer or any Subservicer for any related unreimbursed Servicing Advances,
pursuant to Section 3.11 or 3.17; second, to reimburse the applicable Servicer
for any related ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ 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
applicable 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 applicable 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
a 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, such
Servicer shall cause an environmental inspection or review of such Mortgaged
Property to be conducted by a qualified inspector. Upon completion of the
inspection, such Servicer shall promptly provide the Trustee, the Master
Servicer and the Depositor with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the applicable
Servicer shall determine consistent with Accepted Servicing Practices how such
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 applicable
Servicer determines, consistent with Accepted Servicing Practices, to proceed
with foreclosure or acceptance of a deed in lieu of foreclosure, such 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 such Servicer, such
Servicer shall be entitled to be reimbursed from amounts in the related
Collection Account pursuant to Section 3.11. In the event the applicable
Servicer determines not to proceed with foreclosure or acceptance of a deed in
lieu of foreclosure, such 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 applicable Servicer
pursuant to this paragraph or otherwise.
In the event Saxon or Countrywide Servicing 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 or
Countrywide Servicing, as applicable, 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 or
Countrywide Servicing, as applicable, 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 or Countrywide Servicing elects to
charge off a Second Lien Mortgage Loan 180 days or more delinquent pursuant to
this Section 3.15, Saxon or Countrywide Servicing, as applicable, shall notify
the Master Servicer of such election, which notice may be provided in a 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 applicable 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 such 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 a Servicer and delivery to the Trustee of a Request for Release in written or
electronic form, release the related Custodial File to such Servicer, and the
Trustee shall, at the direction of such Servicer, execute such documents as
shall be necessary to the prosecution of any such proceedings and such Servicer
shall retain the Mortgage File in trust for the benefit of the Trustee. Such
Request for Release shall obligate the applicable Servicer to return each and
every document previously requested from the Custodial File to the Trustee when
the need therefor by such 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 such 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 applicable 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 a 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 applicable 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 such Servicer a power of attorney
sufficient to authorize such 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
applicable 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 applicable Servicer, the Trustee shall provide such Servicer with
a power of attorney prepared by such Servicer with respect to such REO Property
in the form of Exhibit R.
(b) Each Servicer shall manage, conserve, protect and operate each related
REO Property for the Trustee solely for the purpose of its prompt disposition
and sale. Each Servicer, either itself or through an agent selected by such
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. Each 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
such 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) Each Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall deposit such funds in the
related Collection Account.
(d) Each Servicer shall deposit net of reimbursement to such 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 such 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) Each 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 applicable Servicer as additional servicing compensation.
(g) Each 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 such 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) such 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) such Servicer obtains an Opinion of Counsel, addressed to the Depositor,
the Trustee, the Master Servicer and such 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. Each Servicer shall manage, conserve, protect and operate each
REO Property serviced by such 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 applicable Servicer shall either itself or through an
agent selected by such 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 such 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 applicable Servicer shall adjust the Mortgage Rate on
the related 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
related Servicer shall select a comparable alternative index over which it has
no direct control and which is readily verifiable. Each 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. Each 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 a Servicer or
the receipt of notice from the Master Servicer that a Servicer has failed to
adjust a Mortgage Rate or Scheduled Payment in accordance with the terms of the
related Mortgage Note, such 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 applicable Servicer shall provide, or cause any Subservicer
to provide, to the Depositor 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 applicable 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 Servicers
to Be Held for the Trustee. Each Servicer shall account fully to the Master
Servicer for any funds received by such Servicer or which otherwise are
collected by such Servicer as Liquidation Proceeds, Condemnation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan serviced by such Servicer.
All Mortgage Files and funds collected or held by, or under the control of, a
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
such 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. Each 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 such Servicer shall be entitled to set off against and deduct from any such
funds any amounts that are properly due and payable to such Servicer under this
Agreement.
Section 3.21 Servicing Compensation. (a) As compensation for its
activities hereunder, each 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, each 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 a Servicer's responsibilities and
obligations under this Agreement; provided, however, that each 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 a
Servicer only to the extent such fees or charges are received by such Servicer.
Each 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 applicable 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. Each 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. Each 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 such Servicer.
(c) Each 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 such 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. Each Servicer, the
Securities Administrator and the Master Servicer shall deliver or cause to be
delivered, and shall cause each Subservicer engaged by such 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 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, such
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, such 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 applicable Servicer or Subservicer as to the nature of any
defaults by the Securities Administrator, the Master Servicer, the applicable
Servicer or any related Subservicer in the fulfillment of any of the Securities
Administrator's, the Master Servicer's, such Servicer's or any related
Subservicer's obligations. The obligations of the Securities Administrator, the
Master Servicer, each Servicer and each Subservicer under this Section 3.22
apply to the Securities Administrator, the Master Servicer, each Servicer and
each Subservicer that serviced a Mortgage Loan during the applicable period,
whether or not the Securities Administrator, the Master Servicer, such Servicer
or such Subservicer is acting as Securities Administrator, Master Servicer, a
Servicer or a Subservicer at the time such Officer's Certificate is required to
be delivered. None of the Servicers 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, each Servicer shall deliver, and shall cause
each Subservicer engaged by such Servicer to deliver, and the Securities
Administrator, the Master Servicer and the Trustee, as applicable, shall deliver
or otherwise make available, and each Servicer, the Securities Administrator,
the Master Servicer and the Trustee, as applicable, shall cause each
Subcontractor utilized by such Servicer (or by any such Subservicer), the
Securities Administrator, the Master Servicer or the Trustee, as applicable, and
determined by such 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 and the Depositor 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 S hereto, or as
set forth in the notification furnished to the Depositor and the Securities
Administrator pursuant to Section 3.23(c). The Servicers, 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 S 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 applicable 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 applicable
Servicer, such Subservicer, the Securities Administrator, the Master Servicer or
the Trustee, as applicable), as the case may be. None of the Servicers, 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, each Servicer, the Securities Administrator,
the Master Servicer and the Trustee, as applicable, shall cause, and such
Servicer shall cause each Subservicer engaged by such Servicer, and such
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 such Servicer, as applicable
(or by any Subservicer engaged by such 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 applicable Servicer, the Master Servicer,
the Securities Administrator or the Trustee, as applicable, as to the nature of
any defaults by the applicable Servicer, the Securities Administrator, the
Master Servicer or the Trustee (and each Subservicer or Servicing Function
Participant engaged or utilized by any Servicer, the Securities Administrator,
the Master Servicer or the Trustee, as applicable, or by any Subservicer engaged
by a 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 Servicers, 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, each Servicer shall
notify the Securities Administrator and the Depositor as to the name of each
Subservicer engaged by such Servicer and each Servicing Function Participant
utilized by such Servicer and by each Subservicer engaged by such 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 a Servicer, the Securities
Administrator or the Master Servicer submits its assessment pursuant to Section
3.23(a), such 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, each Servicer or Subservicer under this Section 3.23 apply to the
Securities Administrator, the Master Servicer, the Trustee and each Servicer and
Subservicer that serviced a Mortgage Loan during the applicable period, whether
or not the Securities Administrator, the Master Servicer, the Trustee, such
Servicer or Subservicer is acting as Securities Administrator, Master Servicer,
Trustee, a 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 any Servicer shall for any reason no longer be a
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 such 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 such Servicer hereunder. Any such assumption
shall be subject to Section 7.02.
(b) Every Subservicing Agreement entered into by a 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 any Servicer shall for any reason no longer be a 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
such 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 such Servicer thereunder; and such 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 applicable Servicer shall, upon request of the Master Servicer,
but at the expense of such 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. Each Servicer shall remit to the
Master Servicer on each Remittance Date for deposit in the Distribution Account
an amount from such Servicer's own funds equal to the Compensating Interest
payable by such Servicer for the related Distribution Date.
Section 3.26 Credit Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act. (a) With respect to
each Mortgage Loan, each 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) Each Servicer shall comply with Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ 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 applicable 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 applicable 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 applicable Servicer shall provide
to the Trustee a Request for Release (with a copy to the Trustee) and the
Trustee shall promptly release to such 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.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01 Advances. (a) The amount of P&I Advances to be made by each
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 such 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
applicable 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 such 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, each 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 such 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, such 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 such 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 such Servicer with respect to such Mortgage
Loans and REO Properties. Any Amounts Held for Future Distribution and so used
shall be appropriately reflected in such Servicer's records and replaced by such
Servicer by deposit in the related Collection Account on or before any future
Remittance Date to the extent required.
(c) The obligation of each 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 any 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 any Servicer
that it has made a Nonrecoverable P&I Advance or a Nonrecoverable Servicing
Advance or that any proposed P&I Advance or Servicing Advance, if made, would
constitute a Nonrecoverable P&I Advance or a Nonrecoverable Servicing Advance,
respectively, shall be evidenced by an Officer's Certificate of such Servicer
delivered to the Master Servicer.
(e) Except as otherwise provided herein, the applicable 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 Servicers 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 any 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 Servicers 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 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 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);
(C) 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;
(D) 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;
(E) from any remaining Interest Remittance Amounts, to the Class M-3
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-4
Certificates, the Accrued Certificate Interest Distribution Amount for
such Class on such Distribution Date;
(G) from any remaining Interest Remittance Amounts, to the Class M-5
Certificates, the Accrued Certificate Interest Distribution Amount for
such Class on such Distribution Date;
(H) from any remaining Interest Remittance Amounts, to the Class M-6
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-1
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-2
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-3
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, 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 Class A Certificates, allocated as described in Section
4.02(c), until the respective Class Certificate Balances thereof are
reduced to zero; and
(2) sequentially to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4,
Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 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, 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 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;
(2) 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)(a) above and (y) the
Class M-1 Principal Distribution Amount, until the Class Certificate
Balance thereof has been reduced
to zero;
(3) 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)(a) above and to the Class
M-1 Certificates in clause (ii)(B)(b) above and (y) the Class M-2
Principal Distribution Amount, until the Class Certificate Balance thereof
has been reduced to zero;
(4) to the Class M-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)(a) above, to the Class
M-1 Certificates in clause (ii)(B)(b) above and to the Class M-2
Certificates in clause (ii)(B)(c) above and (y) the Class M-3 Principal
Distribution Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(5) to the Class M-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)(a) above, to the Class
M-1 Certificates in clause (ii)(B)(b) above, to the Class M-2 Certificates
in clause (ii)(B)(c) above and to the Class M-3 Certificates in clause
(ii)(B)(d) above and (y) the Class M-4 Principal Distribution Amount,
until the Class Certificate Balance thereof has been reduced to zero;
(6) to the Class M-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)(a) above, to the Class
M-1 Certificates in clause (ii)(B)(b) above, to the Class M-2 Certificates
in clause (ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above and to the Class M-4 Certificates in clause (ii)(B)(e)
above and (y) the Class M-5 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(7) to the Class M-6 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)(a) above, to the Class
M-1 Certificates in clause (ii)(B)(b) above, to the Class M-2 Certificates
in clause (ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class M-4 Certificates in clause (ii)(B)(e) above
and to the Class M-5 Certificates in clause (ii)(B)(f) above and (y) the
Class M-6 Principal Distribution Amount, until the Class Certificate
Balance thereof has been reduced to zero;
(8) 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)(a) above, to the Class
M-1 Certificates in clause (ii)(B)(b) above, to the Class M-2 Certificates
in clause (ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class M-4 Certificates in clause (ii)(B)(e)
above, to the Class M-5 Certificates in clause (ii)(B)(f) above and to the
Class M-6 Certificates in clause (ii)(B)(g) above and (y) the Class B-1
Principal Distribution Amount, until the Class Certificate Balance thereof
has been reduced to zero;
(9) 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)(a) above, to the Class
M-1 Certificates in clause (ii)(B)(b) above, to the Class M-2 Certificates
in clause (ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class M-4 Certificates in clause (ii)(B)(e)
above, to the Class M-5 Certificates in clause (ii)(B)(f) above, to the
Class M-6 Certificates in clause (ii)(B)(g) above and to the Class B-1
Certificates in clause (ii)(B)(h) above and (y) the Class B-2 Principal
Distribution Amount, until the Class Certificate Balance thereof has been
reduced to zero; and
(10) 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)(a) above, to the Class
M-1 Certificates in clause (ii)(B)(b) above, to the Class M-2 Certificates
in clause (ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class M-4 Certificates in clause (ii)(B)(e)
above, to the Class M-5 Certificates in clause (ii)(B)(f) above, to the
Class M-6 Certificates in clause (ii)(B)(g) above, to the Class B-1
Certificates in clause (ii)(B)(h) above and to the Class B-2 Certificates
in clause (ii)(B)(i) above and (y) the Class B-3 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 Class M-1 Certificates, any Unpaid Interest Amount for
such Class;
(B) to the Class M-1 Certificates, any Unpaid Realized Loss Amount
for such Class;
(C) to the Class M-2 Certificates, any Unpaid Interest Amount for
such Class;
(D) to the Class M-2 Certificates, any Unpaid Realized Loss Amount
for such Class;
(E) to the Class M-3 Certificates, any Unpaid Interest Amount for
such Class;
(F) to the Class M-3 Certificates, any Unpaid Realized Loss Amount
for such Class;
(G) to the Class M-4 Certificates, any Unpaid Interest Amount for
such Class;
(H) to the Class M-4 Certificates, any Unpaid Realized Loss Amount
for such Class;
(I) to the Class M-5 Certificates, any Unpaid Interest Amount for
such Class;
(J) to the Class M-5 Certificates, any Unpaid Realized Loss Amount
for such Class;
(K) to the Class M-6 Certificates, any Unpaid Interest Amount for
such Class;
(L) to the Class M-6 Certificates, any Unpaid Realized Loss Amount
for such Class;
(M) to the Class B-1 Certificates, any Unpaid Interest Amount for
such Class;
(N) to the Class B-1 Certificates, any Unpaid Realized Loss Amount
for such Class;
(O) to the Class B-2 Certificates, any Unpaid Interest Amount for
such Class;
(P) to the Class B-2 Certificates, any Unpaid Realized Loss Amount
for such Class;
(Q) to the Class B-3 Certificates, any Unpaid Interest Amount for
such Class;
(R) to the Class B-3 Certificates, any Unpaid Realized Loss Amount
for such Class;
(S) to the Excess Reserve Fund Account, the amount of any Basis Risk
Payment for such Distribution Date;
(T) from any Interest Rate Cap Payment on deposit in the Excess
Reserve Fund Account with respect to that Distribution Date, an amount
equal to any unpaid Basis Risk CarryForward Amount with respect to the
LIBOR Certificates for that Distribution Date, allocated (a) first, among
those Classes of Certificates, pro rata, based upon their respective Class
Certificate Balances and (b) second, any remaining amounts to those
Classes of Certificates, pro rata, based on any Basis Risk CarryForward
Amounts remaining unpaid, in order to reimburse such unpaid amounts;
(U) from funds on deposit in the Excess Reserve Fund Account (not
including any Interest Rate Cap Payment included in that account) with
respect to such Distribution Date, 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;
(V) to the Swap Account, the amount of any Defaulted Swap
Termination Payment owed to the Swap Provider;
(W) to the Class X Certificates, the remainder of the Class X
Distributable Amount not distributed pursuant to Sections
4.02(a)(iii)(A)-(V) (including any remaining Interest Rate Cap Payments on
deposit in such account);
(X) 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
(Y) 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-2fpt, 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)(B) 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.
(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-2fpt, 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)(B) to such
Classes of Certificates), the Accrued Certificate Interest Distribution
Amount and any Unpaid Interest Amount for the Class A-2fpt, 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 Trustee 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 first, concurrently on a pro rata basis (based
on (i) the Class Certificate Balance of the Class A-2fpt Certificates, on the
one hand, and (ii) the aggregate Class Certificate Balance of the Class A-2a and
Class A-2b Certificates on the other hand) to (A) the Class A-2fpt Certificates
until their Class Certificate Balance has been reduced to zero and (B)
sequentially to the Class A-2a and Class A-2b Certificates, in that order, until
their respective Class Certificate Balances have been reduced to zero, and
second, sequentially, to the Class A-2c and Class A-2d Certificates, in that
order, until their respective 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 the
Interest Rate Cap 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 Servicers, the Depositor, the Master Servicer 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 Servicers
and the Securities Administrator and the Master Servicer (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 Servicers (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 Servicers;
(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 Interest Rate Cap Payment, if any, for such Distribution Date.
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 any Servicer, such 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, 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 Servicers, 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 ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇.▇▇▇ 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 applicable Servicer, if such
discrepancy results from or arises out of any information provided by the
applicable 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), each 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 X-1 attached hereto
in the case of Saxon, or Exhibit X-2 attached hereto in the case of Countrywide
Servicing, or in such other format or containing such other data fields mutually
agreed upon by the applicable 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.
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 such Servicer
during the current distribution period;
(iv) the individual and aggregate Stated Principal Balance of the Mortgage
Loans;
(v) the aggregate expenses reimbursed to such 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 Servicers 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. Each Servicer hereby represents and warrants to the Depositor that such
Servicer is not subject to any delinquency recognition policy established by the
primary safety and soundness regulator, if any, of such 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 (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 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;
(iv) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4,
Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 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;
(v) 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;
(vi) 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);
(vii) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4,
Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 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);
(viii) 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;
(ix) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4,
Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay
any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment
owed to the Swap Provider for that Distribution Date; and
(xi) 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, 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, any 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the
guarantor of the Swap Provider's obligations under the guarantee of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ relating to the Interest Rate Swap Agreement, make any and all payments
then required to be made by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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.
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 Servicers 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 each 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 Servicers, 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 Servicers 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 Servicers, the Depositor or the Securities
Administrator shall be liable for any delay in delivery of such instruction and
each may conclusively rely on, and shall be protected in relying on, such
instructions. The Depositor shall provide the Securities Administrator with an
adequate inventory of Certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Securities
Administrator, to the extent applicable with respect to such Definitive
Certificates and the Securities Administrator shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; provided that the
Securities Administrator shall not by virtue of its assumption of such
obligations become liable to any party for any act or failure to act of the
Depository.
(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
and the Cap Provider located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: NY ISD SPV Team, Fax: (▇▇▇) ▇▇▇-▇▇▇▇. 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 Servicers, the Master Servicer 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 Servicers, the Master Servicer,
the Securities Administrator, the Trustee, the Depositor, and any agent of a
Servicer, the Master Servicer, the Securities Administrator, the Depositor 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 Servicers, the Master Servicer, the Securities Administrator, the Trustee,
the Depositor, or any agent of a Servicer, the Master Servicer, the Securities
Administrator, the Depositor 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 a 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, such 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 ▇▇▇▇▇ Fargo Center, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services - MSAC
2007-NC2. The Securities Administrator shall give prompt written notice to the
Certificateholders of any change in such location of any such office or agency.
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective Liabilities of the Depositor and the Servicers.
The Depositor and each of the Servicers 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 a Servicer. The
Depositor and each of the Servicers 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 a Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or a Servicer, shall be a party, or any person succeeding to the
business of the Depositor or a Servicer (including through the acquisition of
substantially all of the assets of a Servicer), shall be the successor of the
Depositor or such 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 a Servicer shall be required to assume all of such
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 such Servicer shall be qualified to
service mortgage loans on behalf of, ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. As a condition
to the succession to any Servicer under this Agreement by any Person (i) into
which a Servicer may be merged or consolidated or whom succeeds to the business
of a Servicer, or (ii) which may be appointed as a successor to a Servicer, such
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 Servicers and
Others. Neither the Depositor, the Servicers 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
Servicers or any such Person against any breach of representations or warranties
made by it herein or protect the Depositor, the Servicers 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, each Servicer and any director,
officer, employee or agent of the Depositor and each 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, each Servicer and any director, officer, employee or
agent of the Depositor, the Sponsor or each 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 any 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 each 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 applicable Servicer shall be entitled to be reimbursed
therefor out of the applicable Collection Account.
Section 6.04 Limitation on Resignation of a Servicer. Subject to Sections
7.01 and 10.07, no Servicer shall assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the
applicable Servicer, the Depositor 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 such Servicer without the incurrence of
unreasonable expense. Any such determination permitting the resignation of a
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Depositor, the Master Servicer and the Trustee which Opinion of Counsel
shall be in form and substance acceptable to the Depositor, the Master Servicer
and the Trustee. No such resignation shall become effective until a successor
shall have assumed such Servicer's responsibilities and obligations hereunder.
Notwithstanding the provisions of Section 6.04 herein to the contrary, in
the event that a Servicer determines that it will no longer engage in the
business of servicing mortgage loans, such 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 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) such Servicer shall
be liable for all costs and expenses associated with the transfer of servicing,
provided, further, that such Servicer shall indemnify and hold each of the Trust
Fund, the Master Servicer, the Securities Administrator, the Trustee, the
Depositor, the other Servicers hereunder, 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 such
Servicer shall become effective until a successor Servicer acceptable to the
Depositor and the Master Servicer shall have assumed in writing such 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 applicable 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 Servicers; Third-Party
Claims. (a) Each Servicer, severally and not jointly, shall indemnify the
Depositor, the Master Servicer, the Securities Administrator, the Sponsor, the
Trustee and any director, officer, employee or agent of the Depositor, the
Master Servicer, the Securities Administrator, the Sponsor 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 such 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 such Servicer or (iii) the failure of
such 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 applicable Servicer immediately shall notify the Master Servicer,
the Securities Administrator, the Depositor 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,
and the Securities Administrator 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 or the Trustee in respect of such claim.
(b) Notwithstanding anything to the contrary contained in this Agreement,
each Servicer shall indemnify the Depositor, the Master Servicer, the Securities
Administrator, the Sponsor, the Trustee and any director, officer, employee or
agent of the Depositor, the Master Servicer, the Securities Administrator, the
Sponsor 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 such Servicer or
any Subservicer engaged by such Servicer or any Subcontractor utilized by such
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 such 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 such 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
such Servicer, on the other, in connection with such 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 each Servicer.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default", wherever used herein,
means, with respect to each Servicer individually, any one of the following
events:
(a) any failure by a 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 such
Servicer by the Depositor, the Securities Administrator, the Master Servicer or
to such Servicer, the Depositor, the Securities Administrator, the Master
Servicer and the Trustee by Certificateholders entitled to at least 25% of the
Voting Rights in the Certificates; or
(b) any failure on the part of a Servicer duly to observe or perform in
any material respect any other of the covenants or agreements on the part of
such 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) such number of days shall
be ten (10) in the case of a failure of Countrywide Servicing to observe or
perform any of its obligations under the provisions of the Countrywide Amendment
Regulation AB incorporated by reference into this Agreement pursuant to Section
3.01(f) which are equivalent to a Servicer's obligations under Sections 3.02,
3.22 and 3.23 of this Agreement, zero (0) with respect to Saxon, 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 such Servicer by the Depositor,
the Securities Administrator or the Master Servicer, or to such Servicer, the
Securities Administrator, the Master Servicer, the Depositor, and the Trustee by
Certificateholders entitled to at least 25% of the Voting Rights in the
Certificates and (ii) actual knowledge of such failure by a Servicing Officer of
such 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 a Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of sixty
days; or
(d) a 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 a
Servicer or of or relating to all or substantially all of its property; or
(e) a 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 a Servicer referred to
in Section 2.03(a), which materially and adversely affects the interests of the
Certificateholders and which continues unremedied for a period of thirty days
after the date upon which written notice of such breach is given to such
Servicer by the Securities Administrator, the Master Servicer or the Depositor,
or to such Servicer, the Securities Administrator, the Master Servicer, the
Trustee and the Depositor by Certificateholders entitled to at least 25% of the
Voting Rights in 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.
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 a majority of the Voting Rights, the Master Servicer shall, by
notice in writing to the applicable Servicer (with a copy to the Securities
Administrator and each Rating Agency), terminate all of the rights and
obligations of such Servicer under this Agreement and in and to the Mortgage
Loans serviced by such 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 such 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 applicable 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 such 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
such Servicer of such written notice, all authority and power of such 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
such 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 such Servicer to pay
amounts owed pursuant to Article VIII. Such Servicer agrees to cooperate with
the Master Servicer in effecting the termination of such 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 a Servicer hereunder,
such 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 a 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 such 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 such
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 such Servicer would have been entitled to charge to its
Collection Account if such Servicer had continued to act hereunder including, if
such 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 such Servicer would be entitled to receive. Notwithstanding the
foregoing, if the Master Servicer has become the successor to such 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, appoint, or petition a
court of competent jurisdiction to appoint, any established mortgage loan
servicing institution the appointment of which does not adversely affect the
then current rating of the Certificates by each Rating Agency, as the successor
to such servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of such servicer hereunder. Any
successor to such servicer shall be an institution which is a ▇▇▇▇▇▇ ▇▇▇ and
▇▇▇▇▇▇▇ 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 such
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 in effect immediately prior to such assignment and
delegation will not be qualified or reduced, as a result of such assignment and
delegation. Pending appointment of a successor to a servicer 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 a 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 a 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 each Servicer is
required to maintain pursuant to Section 3.13.
Section 7.03 Notification to Certificateholders. (a) Upon any termination
of or appointment of a successor to a Servicer, the Securities Administrator
shall give prompt written notice thereof to Certificateholders 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 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 of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement.
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 a Servicer of any funds paid to the Depositor, the Master Servicer, the
Securities Administrator or a 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 a
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 any Servicer's obligations in connection with this
Agreement for which the related 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 Servicers and their Affiliates;
provided, however, that such entity cannot be an Affiliate of the Depositor or a
Servicer other than the Trustee in its role as successor to the Master Servicer.
Section 8.07 Resignation and Removal of the Trustee. The Trustee may at
any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Depositor, the Securities Administrator,
the Master Servicer, the Servicers 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 each Servicer and one copy to the
successor trustee.
The Holders of Certificates entitled to a majority of the Voting Rights
may 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 each Servicer, one complete set to the Trustee so
removed and one complete set to the successor so appointed. The successor
trustee shall notify each Rating Agency of any removal of the Trustee.
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 Servicers 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
Servicers 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 the 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 applicable 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
applicable Servicer and the Trustee may consider appropriate. If any Servicer
shall not have joined in such appointment within 15 days after the receipt by
such 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 each
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 the Interest Rate Cap 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 the Cap Provider 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 the Interest Rate Cap Agreement, and, if requested by the Swap
Provider or the Cap 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 applicable 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 Servicers, 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 applicable Servicer and the
Depositor, jointly, in the case of any such minimum tax, and the applicable
Servicer if such tax arises out of or results from a breach by such 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
applicable 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 each 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 ▇▇▇▇▇) 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 T 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 T 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 ▇▇▇▇▇-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 AA 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 ▇▇▇▇▇-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 each Servicer, the Depositor and any other Person obligated to
provide Additional Form 10-D Disclosure as set forth on Exhibit T 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, each Servicer and each Subservicer engaged
by any 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, each Servicer, each Subservicer
engaged by any Servicer and each Servicing Function Participant utilized by a
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, each
Servicer, the Trustee, each Subservicer engaged by a Servicer and each Servicing
Function Participant utilized by a 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 U 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 U hereto, no later than March 1st of each year
(or, in the case of each Servicer, March 5th (or March 15th in the case of
Saxon) 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
▇▇▇▇▇-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 ▇▇▇▇▇-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 each Servicer (and any Subservicer or Servicing Function Participant
engaged by a Servicer) and the Depositor and any other Person obligated to
provide Additional Form 10-K Disclosure as set forth on Exhibit U 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 each
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) 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
▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ or by facsimile at ▇▇▇-▇▇▇-▇▇▇▇. 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, a 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
T, Item 1117 and Item 1119 of Exhibit U or Item 6.02 (Change of Securities
Administrator) of Exhibit V (collectively, the "Securities Administrator
Information"), or the Securities Administrator's negligence, bad faith or
willful misconduct in connection therewith, (ii) each 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 such Servicer's obligations under this Section 8.12(d) or any
material misstatement or material omission, negligence, bad faith or willful
misconduct of such 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) each
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 such Servicer, on the other hand, in connection with a breach of such
Servicer's obligations under this Section 8.12(d) or any material misstatement
or material omission, negligence, bad faith or willful misconduct of such
Servicer in connection therewith.
The obligations of the Securities Administrator, the Master Servicer, each
Servicer and each Servicing Function Participant and Servicing under this
Section 8.12(d) shall apply to the Securities Administrator, the Master
Servicer, each Servicer and each Servicing Function Participant that serviced a
Mortgage Loan during the applicable period, whether or not such Securities
Administrator, the Master Servicer, such Servicer or such Servicing Function
Participant is acting as Securities Administrator, Master Servicer, a 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 applicable 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 Servicers. In the case of Form 10-D and 10-K, the
Depositor, the Servicers 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 Servicers, 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 Servicers 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 V
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 V 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 ▇▇▇▇▇-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 ▇▇▇▇▇-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 each Servicer, the Depositor and any other Person obligated to provide Form
8-K Disclosure Information as set forth on Exhibit V 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 (including the Interest Rate Cap Agreement),
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 and the Certificateholders, shall monitor the
performance of each Servicer's obligations under this Agreement, and (except as
set forth below) shall use its reasonable good faith efforts to cause such
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) a Servicer reports a delinquency on a monthly report and (ii) such
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 related 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 related 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 Servicers as
required hereunder (including costs associated with (i) termination of any
Servicer, (ii) the appointment of a successor Servicer or (iii) the transfer to
and assumption of, the servicing by the Master Servicer) 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 any Servicer it replaces or for any errors or omissions of such
Servicer.
(d) Neither the Depositor nor the Securities Administrator shall consent
to the assignment by any Servicer, 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 servicers or
trustees.
Section 9.03 Representations and Warranties of the Master Servicer. (a)
The Master Servicer hereby represents and warrants to the Servicers, the
Depositor, the Securities Administrator 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 Servicers, the Depositor, the
Securities Administrator, the Trustee and the Trust and hold them harmless
against any loss, damages, penalties, fines, forfeitures, reasonable legal fees
and related costs, judgments, and other reasonable costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a material breach of the Master Servicer's representations and
warranties contained in Section 9.03(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 Servicers, the Depositor, the Securities
Administrator, the Trustee and the Trust constitutes the sole remedy of the
Servicers, the Depositor, the Securities Administrator, the Trustee 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 Servicers, Depositor, the
Master Servicer, Securities Administrator or the Trustee 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 a 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 a Holders of Certificates evidencing at least a majority of the
Voting Rights 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 ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved servicer in good standing and
acceptable to the Depositor 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 ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac (provided further that a successor
Master Servicer that satisfies subclause (i) through an Affiliate agrees to
service the Mortgage Loans in accordance with all applicable ▇▇▇▇▇▇ Mae and
▇▇▇▇▇▇▇ Mac guidelines) and (ii) have a net worth of not less than $25,000,000.
Section 9.09 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, ▇▇▇▇▇ 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 ▇▇▇▇▇ 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 (which shall not be
unreasonably withheld or delayed), and upon delivery to the Trustee and the
Depositor of a letter from each Rating Agency to the effect that such action
shall not result in a downgrade of the ratings assigned to any of the
Certificates, to delegate or assign to or subcontract with or authorize or
appoint any qualified Person to perform and carry out any duties, covenants or
obligations to be performed and carried out by the 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 Servicers 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 any
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 Servicers as required under this Agreement.
Section 9.12 Indemnification; Third Party Claims. The Master Servicer
agrees to indemnify the Servicers, Depositor, the Sponsor, the Securities
Administrator, the Trustee 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 Servicers,
Depositor, the Sponsor, the Securities Administrator, the Trustee 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, each Servicer and the Trustee shall immediately notify the Master
Servicer if a claim is made by a third party with respect to this Agreement or
the Mortgage Loans which would entitle the Depositor, the Securities
Administrator, each Servicer, the Trustee 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 applicable Servicer's obligations in connection
with this Agreement for which such 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 of Certificates relating to the time,
method and place of conducting any proceeding for any remedy available to the
Securities Administrator, or exercising or omitting to exercise any trust or
power conferred upon the Securities Administrator under this Agreement; and
(iv) the Securities Administrator shall not be accountable, shall have no
liability and makes no representation as to any acts or omissions hereunder
of the Servicers 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 any
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, the Interest
Rate Cap 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 any Servicer of any
funds paid to the Depositor or any Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from the Collection Account by the Depositor or any
Servicer.
The Securities Administrator executes the Interest Rate Swap Agreement,
the Interest Rate Cap 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, the Interest Rate Cap 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 or the Interest Rate Cap 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 ▇▇▇▇▇'▇. 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 and the Trustee and each Rating
Agency not less than 60 days before the date specified in such notice when,
subject to Section 10.08, such resignation is to take effect, and acceptance by
a successor Securities Administrator in accordance with Section 10.08 meeting
the qualifications set forth in Section 10.06. If no successor Securities
Administrator meeting such qualifications shall have been so appointed by the
Depositor and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Securities
Administrator.
If at any time the Securities Administrator shall cease to be eligible in
accordance with the provisions of Section 10.06 hereof and shall fail to resign
after written request thereto by the Depositor, or if at any time the Securities
Administrator shall become incapable of acting, or shall be adjudged as bankrupt
or insolvent, or a receiver of the Securities Administrator or of its property
shall be appointed, or any public officer shall take charge or control of the
Securities Administrator or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Securities Administrator or the Trust
Fund is located and the imposition of such tax would be avoided by the
appointment of a different Securities Administrator, then the Depositor may
remove the Securities Administrator and appoint a successor Securities
Administrator by written instrument, in triplicate, one copy of which instrument
shall be delivered to the Securities Administrator so removed, one copy of which
shall be delivered to the Master Servicer and one copy to the successor
Securities Administrator.
The Holders of Certificates entitled to at least a majority of the Voting
Rights may at any time remove the Securities Administrator and appoint a
successor Securities Administrator by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys in fact duly authorized,
one complete set of which instruments shall be delivered by the successor
Securities Administrator to the Trustee, one complete set to the Securities
Administrator so removed and one complete set to the successor so appointed.
Notice of any removal of the Securities Administrator shall be given to each
Rating Agency by the successor Securities Administrator.
Any resignation or removal of the Securities Administrator and appointment
of a successor Securities Administrator pursuant to any of the provisions of
this Section 10.07 shall become effective upon acceptance by the successor
Securities Administrator of appointment as provided in Section 10.08 hereof.
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 the 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 (which shall not be unreasonably withheld or delayed), and upon
delivery to the Trustee and the Depositor of a letter from each Rating Agency to
the effect that such action shall not result in a downgrade of the ratings
assigned to any of the Certificates, to delegate or assign to or subcontract
with or authorize or appoint any qualified Person to perform and carry out any
duties, covenants or obligations to be performed and carried out by the
Securities Administrator hereunder. Notice of such permitted assignment shall be
given promptly by the Securities Administrator to the Depositor, 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 Servicers, 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 or Countrywide Servicing, individually or together,
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 or Countrywide Servicing, individually
or together, at the expense of Saxon or Countrywide Servicing, individually or
together, 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 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
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.
Section 11.02 Final Distribution on the Certificates. If on any Remittance
Date, the Servicers 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 or Countrywide Servicing, individually or together,
shall direct the Securities Administrator promptly to send a Notice of Final
Distribution to each Certificateholder and the Swap Provider. If Saxon or
Countrywide Servicing individually elects to terminate the Trust Fund pursuant
to clause (a) of Section 11.01, such Servicer shall notify the other Servicer of
such election by the 15th day of the month preceding the month of the final
distribution and the other Servicer shall have 5 days to elect, by notice to the
other Servicer, to purchase the Mortgage Loans it services. If Saxon or
Countrywide Servicing, individually or together, so elect 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, such Servicer or Servicers shall
notify the Depositor, the Master Servicer and the Securities Administrator of
the date such Servicer or Servicers intend 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, each 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 applicable 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 Servicers, the Master
Servicer, the Securities Administrator, the Depositor 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 the
applicable Servicer or both Servicers exercise their 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 the
applicable Servicer or all of the Servicers, as the case may be, 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 the applicable Servicer 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 the applicable Servicer or Servicers, as the
case may be.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment. This Agreement may be amended from time to time
by the Depositor, the Servicers, the Master Servicer, the Securities
Administrator and the Trustee without the consent of any of the
Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct any
defective provision herein or to supplement any provision herein which may be
inconsistent with any other provision herein, (iii) to add to the duties of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee or the
Servicers, (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 Servicers 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
Servicers, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Holders of Certificates evidencing Percentage Interests
aggregating not less than 66(2)/3% of each Class of Certificates affected
thereby for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments required to be distributed on any Certificate without the consent
of the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner other than
as described in clause (i), without the consent of the Holders of Certificates
of such Class evidencing, as to such Class, Percentage Interests aggregating not
less than 66(2)/3%, or (iii) reduce the aforesaid percentages of Certificates
the Holders of which are required to consent to any such amendment, without the
consent of the Holders of all such Certificates then Outstanding; 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
applicable 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 a 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, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. (1) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - SPG Finance,
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; (2) ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ - Servicing Oversight, ▇▇▇▇ ▇-▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇; (3) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - Whole Loan Operations, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇; (4) ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - RFPG, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; and (5) in the case of a
direction or demand, notification to the following email addresses:
▇▇▇▇.▇▇▇▇▇▇▇▇@ ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇,
▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ and ▇▇▇▇.▇▇▇▇▇▇▇▇@ ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇; or such
other address as may be hereafter furnished to the other parties hereto by the
Depositor in writing; (b) in the case of Countrywide Servicing in its capacity
as Servicer, to Countrywide Home Loans Servicing LP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Fax: ▇▇▇-▇▇▇-▇▇▇▇, Email:
lupe_montero@ ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇; (c) in the case of Saxon, to Saxon Mortgage
Services, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇
▇▇▇▇, President, with a copy to Saxon Capital, Inc., ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Legal Department, or such other address
as may be hereafter furnished to the parties in writing; (d) in the case of
▇▇▇▇▇ Fargo in its capacity as Securities Administrator and Master Servicer,
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or such other address as
may be hereafter furnished to the other parties hereto and the Swap Provider and
the Cap Provider by ▇▇▇▇▇ Fargo in writing or, in the case of Mortgage Loan
document release requests and other document inquiries to ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: MSAC 2007-NC2 or such
other address as the Securities Administrator may hereafter furnish to the other
parties hereto and the Swap Provider and the Cap 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 ▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇; (e) in the case of the
Trustee, to Deutsche Bank National Trust Company, ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Trust Administration-MS07C2 or such
other address as the Trustee may hereafter furnish to the other parties hereto
and the Swap Provider and the Cap Provider by the Trustee in writing; (f) in the
case of the Swap Provider and the Cap Provider, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services
Inc., Transaction Management Group, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Chief Legal Officer, Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇, or
such other address as may be hereafter furnished to the other parties hereto by
the Swap Provider and the Cap Provider in writing; 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 any Servicer without the prior written
consent of the Trustee and the Depositor; provided, however, each Servicer is
hereby authorized to enter into an Advance Facility under which (l) such
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 such Servicer pursuant to this
Agreement. No consent of the Trustee, Certificateholders or any other party is
required before a 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 a Servicer's behalf, such
Servicer shall remain obligated pursuant to this Agreement to make P&I Advances
and Servicing Advances pursuant to and as required by this Agreement, and shall
not be relieved of such obligations by virtue of such Advance Facility.
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 a Servicer would be permitted to reimburse itself in accordance with this
Agreement, assuming such Servicer had made the related P&I Advance(s) and/or
Servicing Advance(s).
The applicable 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 ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ 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 applicable 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
applicable 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 such 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, may be entered into by the
Trustee, the Depositor, the Master Servicer, the Securities Administrator and
the Servicers 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. Prior to
entering into an Advance Facility, the applicable 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 such 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) such
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 applicable 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. Each Servicer agrees that, on 5
Business Days prior notice, it will permit any representative of the Depositor,
the Master Servicer 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 each
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 a Servicer incident
to the exercise by the Depositor, the Master Servicer or the Trustee of any
right under this Section 12.09 shall be borne by such 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. Each of the Swap Provider, the
Cap Provider 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, each 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 each 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.
[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.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.,
as Depositor
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
SAXON MORTGAGE SERVICES, INC.,
as Servicer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: CEO and President
COUNTRYWIDE HOME LOANS SERVICING LP,
as Servicer
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: 1st Vice President
▇▇▇▇▇ FARGO BANK NATIONAL ASSOCIATION,
as Master Servicer and Securities
Administrator
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its
individual capacity
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Authorized Signer
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2
Mortgage Pass-Through Certificates,
Series 2007-NC2
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 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 ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
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
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2
Mortgage Pass-Through Certificates,
Series 2007-NC2
Representations and Warranties of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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 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.
(2) The original principal balance of each Group I Mortgage Loan was within
▇▇▇▇▇▇▇ Mac's and ▇▇▇▇▇▇ Mae'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 ▇▇▇▇▇▇▇ Mac's and ▇▇▇▇▇▇ Mae'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.
(3) None of the Group I Mortgage Loans originated on or after October 1, 2002
has a prepayment premium period at origination in excess of three years.
(4) 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 ▇▇▇▇▇▇▇ Mac's and ▇▇▇▇▇▇ Mae's
dollar amount limits for first lien mortgage loans for that property type.
SCHEDULE IV
[Reserved]
SCHEDULE V
[Reserved]
SCHEDULE VI
[Reserved]
SCHEDULE VII
[Reserved]
SCHEDULE VIII
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2
Mortgage Pass-Through Certificates,
Series 2007-NC2
Representations and Warranties of Countrywide Servicing, as Servicer
Countrywide Servicing hereby makes the representations and warranties set
forth in this Schedule VIII to the Depositor, the Master Servicer, the
Securities Administrator and the Trustee as of the Closing Date.
(i) Due Organization and Authority. The Servicer is validly existing, and
in good standing under the laws of its jurisdiction of incorporation or
formation and has all licenses necessary to carry on its business as now
being conducted and is licensed, qualified and in good standing in the states
where the Mortgaged Property is located if the laws of such state require
licensing or qualification in order to conduct business of the type conducted
by the Servicer. The Seller has the power and authority to execute and
deliver this Pooling and Servicing Agreement and to perform its obligations
hereunder; the execution, delivery and performance of this Pooling and
Servicing Agreement (including all instruments of transfer to be delivered
pursuant to this Pooling and Servicing Agreement) by the Servicer and the
consummation of the transactions contemplated hereby have been duly and
validly authorized; this Pooling and Servicing Agreement has been duly
executed and delivered and constitutes the valid, legal, binding and
enforceable obligation of the Servicer, except as enforceability may be
limited by (i) bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the rights
of creditors and (ii) general principles of equity, whether enforcement is
sought in a proceeding in equity or at law. All requisite action has been
taken by the Servicer to make this Pooling and Servicing Agreement valid and
binding upon the Servicer in accordance with its terms;
(ii) No Consent Required. No consent, approval, authorization or order is
required for the transactions contemplated by this Pooling and Servicing
Agreement from any court, governmental agency or body, or federal or state
regulatory authority having jurisdiction over the Servicer is required or, if
required, such consent, approval, authorization or order has been or will,
prior to the related Closing Date, be obtained;
(iii) Ordinary Course of Business. The consummation of the transactions
contemplated by this Pooling and Servicing Agreement are in the ordinary
course of business of the Servicer;
(iv) No Conflicts. Neither the execution and delivery of this Pooling and
Servicing Agreement by the Servicer, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Pooling and Servicing Agreement, will conflict with or
result in a breach of any of the terms, conditions or provisions of the
Servicer's partnership agreement or any legal restriction or any agreement or
instrument to which the Servicer is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing,
or result in the violation of any law, rule, regulation, order, judgment or
decree to which the Servicer or its property is subject, or result in the
creation or imposition of any lien, charge or encumbrance that would have an
adverse effect upon any of its properties pursuant to the terms of any
mortgage, contract, deed of trust or other instrument, or impair the ability
of the Trustee to realize on the Mortgage Loans, impair the value of the
Mortgage Loans, or impair the ability of the Trustee to realize the full
amount of any insurance benefits accruing pursuant to this Pooling and
Servicing Agreement;
(v) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to best of knowledge of the Servicer, 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 result in any material adverse change in
the business, operations, financial condition, 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;
(vi) Ability to Perform; Solvency. The Servicer does not believe, nor does
it have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Pooling and Servicing Agreement. The Servicer is
solvent;
(vii) Servicer's Ability to Service. The Servicer is an approved
seller/servicer for ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac in good standing and is a
mortgagee approved by the Secretary of HUD. No event has occurred, including
a change in insurance coverage, which would make the Servicer unable to
comply with ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or HUD eligibility requirements;
(viii) Reasonable Servicing Fee. The Servicer acknowledges and agrees that
the Servicing Fee represents reasonable compensation for performing such
services and that the entire Servicing Fee shall be treated by the Servicer,
for accounting and tax purposes, as compensation for the servicing and
administration of the Mortgage Loans pursuant to this Pooling and Servicing
Agreement;
(ix) No Untrue Information. Neither this Pooling and Servicing Agreement
nor any information, statement, tape, diskette, report, form, or other
document furnished or to be furnished pursuant to this Pooling and Servicing
Agreement or any Reconstitution Agreement or in connection with the
transactions contemplated hereby (including any Pass-Through Transfer or
Whole Loan Transfer) contains or will contain any untrue statement of fact or
omits or will omit to state a fact necessary to make the statements contained
herein or therein not misleading;
SCHEDULE IX
[Reserved]
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") ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇▇ ▇▇ ▇▇▇▇ 96-23
OR A COMPARABLE EXEMPTION AVAILABLE UNDER SIMILAR LAW.
Certificate No. : A-1-[ ]
A-2fpt-[ ]
A-2a-[ ]
A-2b-[ ]
A-2c-[ ]
A-2d-[ ]
M-1-[ ]
M-2- [ ]
M-3-[ ]
M-4-[ ]
M-5-[ ]
M-6-[ ]
B-1-[ ]
B-2-[ ]
B-3-[ ]
Cut-off Date : April 1, 2007
First Distribution Date : May 25, 2007
Initial Certificate Balance of this
Certificate ("Denomination") : $[ ]
Initial Certificate Balances of all
Certificates of this Class :
[A-1] $ [_______]
[A-2fpt]
[A-2a] $ [_______]
[A-2b] $ [_______]
[A-2c] $ [_______]
[A-2d] $ [_______]
[M-1] $ [_______]
[M-2] $ [_______]
[M-3] $ [_______]
[M-4] $ [_______]
[M-5] $ [_______]
[M-6] $ [_______]
[B-1] $ [_______]
[B-2] $ [_______]
[B-3] $ [_______]
CUSIP : [A-1] [_______]
[A-2fpt]
[A-2a] [_______]
[A-2b] [_______]
[A-2c] [_______]
[A-2d] [_______]
[M-1] [_______]
[M-2] [_______]
[M-3] [_______]
[M-4] [_______]
[M-5] [_______]
[M-6] [_______]
[B-1] [_______]
[B-2] [_______]
[B-3] [_______]
ISIN : [A-1] [_______]
[A-2fpt]
[A-2a] [_______]
[A-2b] [_______]
[A-2c] [_______]
[A-2d] [_______]
[M-1] [_______]
[M-2] [_______]
[M-3] [_______]
[M-4] [_______]
[M-5] [_______]
[M-6] [_______]
[B-1] [_______]
[B-2] [_______]
[B-3] [_______]
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2
Mortgage Pass-Through Certificates, Series 2007-NC2
[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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as
depositor (the "Depositor"), ▇▇▇▇▇ Fargo Bank, National Association, as master
servicer (the "Master Servicer") and as securities administrator (the
"Securities Administrator"), Saxon Mortgage Services, Inc., as a servicer,
Countrywide Home Loans Servicing LP, as a servicer and Deutsche Bank National
Trust Company, as 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:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:
-------------------------------------
Authenticated:
By
-------------------------------------
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2 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. or Countrywide Home Loans
Servicing LP, individually or together, 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 AND THE
CAP 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 AND THE CAP 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 : April 1, 2007
First Distribution Date : May 25, 2007
Percentage Interest of this
Certificate ("Denomination") : [___]%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2
Mortgage Pass-Through Certificates, Series 2007-NC2
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc., as depositor (the "Depositor"), ▇▇▇▇▇ Fargo Bank, National Association,
as master servicer (the "Master Servicer") and securities administrator (the
"Securities Administrator"), Saxon Mortgage Services, Inc., as a servicer,
Countrywide Home Loans Servicing LP, as a servicer, and Deutsche Bank National
Trust Company, as 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:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:
-------------------------------------
Authenticated:
By
-------------------------------------
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2 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. or Countrywide Home Loans
Servicing LP, individually or together, 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 : April 1, 2007
First Distribution Date : May 25, 2007
Percentage Interest of this : 100%
Certificate ("Denomination")
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2
Mortgage Pass-Through Certificates, Series 2007-NC2
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc., as depositor (the "Depositor"), ▇▇▇▇▇ Fargo Bank, National
Association, as master servicer (the "Master Servicer") and securities
administrator (the "Securities Administrator"), Saxon Mortgage Services, Inc.,
as a servicer, Countrywide Home Loans Servicing LP, as a servicer, and Deutsche
Bank National Trust Company, as 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 Servicers, 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.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:
-------------------------------------
Authenticated:
By
-------------------------------------
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2 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. or Countrywide Home Loans
Servicing LP, individually or together, 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 : April 1, 2007
First Distribution Date : May 25, 2007
Percentage Interest of this : 100%
Certificate ("Denomination")
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2
Mortgage Pass-Through Certificates, Series 2007-NC2
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc., as depositor (the "Depositor"), ▇▇▇▇▇ Fargo Bank, National
Association, as master servicer (the "Master Servicer") and securities
administrator (the "Securities Administrator"), Saxon Mortgage Services, Inc.,
as a servicer, Countrywide Home Loans Servicing LP, as a servicer, and Deutsche
Bank National Trust Company, as 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 Servicers, 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.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:
-------------------------------------
Authenticated:
By
-------------------------------------
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2 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. or Countrywide Home Loans
Servicing LP, individually or together, 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
SERVICERS 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 AND THE
CAP 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 AND THE CAP 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 : April 1, 2007
First Distribution Date : May 25, 2007
Percentage Interest of this
Certificate ("Denomination") : [___]%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2
Mortgage Pass-Through Certificates, Series 2007-NC2
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc., as depositor (the "Depositor"), ▇▇▇▇▇ Fargo Bank, National Association,
as master servicer (the "Master Servicer") and securities administrator (the
"Securities Administrator"), Saxon Mortgage Services, Inc., as a servicer,
Countrywide Home Loans Servicing LP, as a servicer, and Deutsche Bank National
Trust Company, as 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 Servicers 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 Servicers 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.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:
-------------------------------------
Authenticated:
By
-------------------------------------
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2 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. or Countrywide Home Loans
Servicing LP, individually or together, 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
May 3, 2007
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Saxon Mortgage Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: MSAC 2007-NC2
Countrywide Home Loans Servicing LP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Trust Administration MSAC 2007-NC2
Re: Pooling and Servicing Agreement, dated as of April 1, 2007, among
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor, ▇▇▇▇▇ Fargo Bank,
National Association, as Master Servicer and Securities
Administrator, Saxon Mortgage Services, Inc., as a Servicer,
Countrywide Home Loans Servicing LP, as a Servicer, and Deutsche
Bank National Trust Company, as Trustee, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc. Trust, Series 2007-NC2
-------------------------------------------------------------------
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]
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Saxon Mortgage Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: MSAC 2007-NC2
Countrywide Home Loans Servicing LP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Trust Administration MSAC 2007-NC2
Re: Pooling and Servicing Agreement, dated as of April 1, 2007, among
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor, ▇▇▇▇▇ Fargo Bank,
National Association, as Master Servicer and Securities
Administrator, Saxon Mortgage Services, Inc., as a Servicer,
Countrywide Home Loans Servicing LP, as a Servicer, and Deutsche
Bank National Trust Company, as Trustee, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc. Trust, Series 2007-NC2
-------------------------------------------------------------------
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 and items (1), (9) and (17) of the Data Tape
Information 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
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust, Series 2007-NC2,
Mortgage Pass-Through Certificates,
Series 2007-NC2
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc., as Depositor, ▇▇▇▇▇ Fargo Bank, National Association ("▇▇▇▇▇
Fargo"), as Securities Administrator and Master Servicer, Saxon
Mortgage Services, Inc., as a Servicer, Countrywide Home Loans
Servicing LP, as a 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__
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [__]
▇▇▇▇▇ Fargo Bank, National Association
as Securities Administrator
▇▇▇▇▇ Fargo Center
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: MSAC 2007-NC2
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust, Series 2007-NC2, Mortgage
Pass-Through Certificates, Series 2007-NC2, 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__
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.,
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [______]
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc.,
as Swap Provider and Cap Provider
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: NY ISD SPV Team
▇▇▇▇▇ Fargo Bank, National Association
as Securities Administrator
▇▇▇▇▇ Fargo Center
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: MSAC 2007-NC2
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust, Series 2007-NC2, Mortgage
Pass-Through Certificates, Series 2007-NC2, 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 A-1, Class
A-2fpt, Class A-2a, Class A-2b, Class A-2c, Class A-2d, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 or Class B-3
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-NC2 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-NC2 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 and the Cap 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.
----------
(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.
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:___________________________________
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 April 1, 2007,
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor, ▇▇▇▇▇ Fargo
Bank, National Association, as Master Servicer and Securities
Administrator, Saxon Mortgage Services, Inc., as a Servicer,
Countrywide Home Loans Servicing LP, as a Servicer, and Deutsche
Bank National Trust Company, as Trustee, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc. Trust, Series 2007-NC2
-------------------------------------------------------------------
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:
[COUNTRYWIDE HOME LOANS SERVICING LP,
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 applicable 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 Original Loan Seller (pursuant to the
applicable Purchase Agreement) that state law does not so allow;
(b) the original of any guaranty executed in connection with the
Mortgage Note;
(c) the original Mortgage 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 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 Original Loan Seller's or 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 (except with respect to MERS Designated Mortgage Loans);
(f) the originals 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 to be a true and complete copy
of such intervening assignment and shall forward to the Trustee,
such original recorded intervening assignment within 14 days
following the Original Loan Seller's or 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 or, in the event such
original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true
and complete by 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: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-NC2, issued pursuant
to the Pooling and Servicing Agreement, dated as of April 1, 2007,
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor, ▇▇▇▇▇ Fargo
Bank, National Association, as Master Servicer and Securities
Administrator, Saxon Mortgage Services, Inc., as a Servicer,
Countrywide Home Loans Servicing LP, as a Servicer, and Deutsche
Bank National Trust Company, as Trustee, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc. Trust, Series 2007-NC2
--------------------------------------------------------------------
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 Servicers 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 Servicers.
Date: __________________________________
_____________________________________
[Signature]
[Title]
EXHIBIT M
FORM OF ANNUAL CERTIFICATION TO BE
PROVIDED TO THE MASTER SERVICER
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-NC2, issued pursuant
to the Pooling and Servicing Agreement, dated as of April 1, 2007,
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor, ▇▇▇▇▇ Fargo
Bank, National Association, as Master Servicer and Securities
Administrator, Saxon Mortgage Services, Inc., as a Servicer,
Countrywide Home Loans Servicing LP, as a Servicer, and Deutsche
Bank National Trust Company, as Trustee, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc. Trust, Series 2007-NC2
--------------------------------------------------------------------
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 ▇▇▇▇▇ 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 ▇▇▇▇▇ 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 ▇▇▇▇▇
Fargo. Any material instances of noncompliance described in such reports
have been disclosed to ▇▇▇▇▇ 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: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-NC2, issued pursuant
to the Pooling and Servicing Agreement, dated as of April 1, 2007,
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor, ▇▇▇▇▇ Fargo
Bank, National Association, as Master Servicer and Securities
Administrator, Saxon Mortgage Services, Inc., as a Servicer,
Countrywide Home Loans Servicing LP, as a Servicer, and Deutsche
Bank National Trust Company, as Trustee, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc. Trust, Series 2007-NC2
--------------------------------------------------------------------
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:
▇. ▇▇▇▇▇ 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 Subservicers, 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
[Reserved]
EXHIBIT P
[Reserved]
EXHIBIT Q
[Reserved]
EXHIBIT R
FORM OF SERVICER POWER OF ATTORNEY
When Recorded Mail To:
[Saxon Mortgage Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇]
[Countrywide Home Loans Servicing LP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇]
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 ▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Trust Administration MSAC
2007-NC2, as Trustee (the "Trustee"), pursuant to that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc. Trust 2007-NC2 Pooling and Servicing Agreement, dated as of April
1, 2007, among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as depositor (the
"Depositor"), ▇▇▇▇▇ Fargo Bank, National Association ("▇▇▇▇▇ Fargo"), as master
servicer (the "Master Servicer") and securities administrator (the "Securities
Administrator"), Saxon Mortgage Services, Inc., as a servicer ("Saxon"),
Countrywide Home Loans Servicing LP, as a servicer ("Countrywide Servicing"),
and the Trustee, hereby constitutes and appoints [Saxon] [Countrywide Servicing]
by and through [Saxon] [Countrywide Servicing]'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]
[Countrywide Servicing] 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]
[Countrywide Servicing] 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;
▇. ▇▇▇▇▇/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 May 3, 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] [Countrywide Servicing] to the Trustee under
the Agreement, or (ii) be construed to grant [Saxon] [Countrywide Servicing] 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] [Countrywide
Servicing] receives any notice of suit, litigation or proceeding in the name of
the Trustee, then [Saxon] [Countrywide Servicing] 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] [Countrywide Servicing] under the Agreement or to allow
[Saxon] [Countrywide Servicing] to take any action with respect to Mortgages,
Deeds of Trust or Mortgage Notes not authorized by the Agreement.
[Saxon] [Countrywide Servicing] 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] [Countrywide Servicing] 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.]
[Countrywide Home Loans Servicing LP]
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc. Trust 2007-NC2, 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 S
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Trustee], [the Securities
Administrator], [Master Servicer], [the Servicer], [each Subservicer] and [each
Subcontractor] shall address, at a minimum, the criteria identified as below as
"Applicable Servicing Criteria":
------------------------------------------------------------------------------------------------------------------------------------
APPLICABLE
SERVICING CRITERIA SERVICING CRITERIA
------------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
------------------------------------------------------------------------------------------------------------------------------------
General Servicing Considerations
------------------------------------------------------------------------------------------------------------------------------------
Policies and procedures are instituted to monitor any performance or Securities
other triggers and events of default in accordance with the transaction Administrator/Servicer
1122(d)(1)(i) agreements.
------------------------------------------------------------------------------------------------------------------------------------
If any material servicing activities are outsourced to third parties, Securities
policies and procedures are instituted to monitor the third party's Administrator/Servicer
1122(d)(1)(ii) performance and compliance with such servicing activities.
------------------------------------------------------------------------------------------------------------------------------------
Any requirements in the transaction agreements to maintain a back-up N/A
1122(d)(1)(iii) servicer for the mortgage loans are maintained.
------------------------------------------------------------------------------------------------------------------------------------
A fidelity bond and errors and omissions policy is in effect on the party Servicer/Master Servicer
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.
------------------------------------------------------------------------------------------------------------------------------------
Cash Collection and Administration
------------------------------------------------------------------------------------------------------------------------------------
Payments on mortgage loans are deposited into the appropriate custodial Servicer/Master Servicer
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.
------------------------------------------------------------------------------------------------------------------------------------
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 Servicer/Master Servicer
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.
------------------------------------------------------------------------------------------------------------------------------------
The related accounts for the transaction, such as cash reserve accounts Servicer/Securities
or accounts established as a form of overcollateralization, are Administrator/Master Servicer
separately maintained (e.g., with respect to commingling of cash) as set
1122(d)(2)(iv) forth in the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Each custodial account is maintained at a federally insured depository Servicer/Securities
institution as set forth in the transaction agreements. For purposes of Administrator/Master Servicer
this criterion, "federally insured depository institution" with respect
to a foreign financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the Securities
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 Servicer/Securities
securities related bank accounts, including custodial accounts and Administrator/Master Servicer
related bank clearing accounts. These reconciliations are (A)
mathematically accurate; (B) prepared within 30 calendar days after the
bank statement cutoff date, or such other number of days specified in the
transaction agreements; (C) reviewed and approved by someone other than
the person who prepared the reconciliation; and (D) contain explanations
for reconciling items. These reconciling items are resolved within 90
calendar days of their original identification, or such other number of
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, Servicer/Securities
are maintained in accordance with the transaction agreements and Administrator/Master Servicer
applicable Commission requirements. Specifically, such reports (A) are
prepared in accordance with timeframes and other terms set forth in the
transaction agreements; (B) provide information calculated in accordance
with the terms specified in the transaction agreements; (C) are filed
with the Commission as required by its rules and regulations; and (D)
agree with investors' or the trustee's records as to the total unpaid
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 Servicer/Securities
timeframes, distribution priority and other terms set forth in the Administrator/Master Servicer
1122(d)(3)(ii) transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Disbursements made to an investor are posted within two business days to Servicer/Securities
the Servicer's investor records, or such other number of days specified Administrator/Master Servicer
1122(d)(3)(iii) in the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
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 Trustee/Servicer/
1122(d)(4)(i) the transaction agreements or related mortgage loan documents.
------------------------------------------------------------------------------------------------------------------------------------
Mortgage loan and related documents are safeguarded as required by the Trustee/Servicer/
1122(d)(4)(ii) transaction agreements
------------------------------------------------------------------------------------------------------------------------------------
Any additions, removals or substitutions to the asset pool are made, Securities
reviewed and approved in accordance with any conditions or requirements Administrator/Servicer
1122(d)(4)(iii) in the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Payments on mortgage loans, including any payoffs, made in accordance Servicer
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
1122(d)(4)(iv) accordance with the related mortgage loan documents.
------------------------------------------------------------------------------------------------------------------------------------
The Servicer's records regarding the mortgage loans agree with the Servicer
1122(d)(4)(v) Servicer's records with respect to an obligor's unpaid principal balance.
------------------------------------------------------------------------------------------------------------------------------------
Changes with respect to the terms or status of an obligor's mortgage Servicer
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.
------------------------------------------------------------------------------------------------------------------------------------
Loss mitigation or recovery actions (e.g., forbearance plans, Servicer
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
1122(d)(4)(vii) transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Records documenting collection efforts are maintained during the period a Servicer
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
1122(d)(4)(viii) unemployment).
------------------------------------------------------------------------------------------------------------------------------------
Adjustments to interest rates or rates of return for mortgage loans with Servicer
1122(d)(4)(ix) variable rates are computed based on the related mortgage loan documents.
------------------------------------------------------------------------------------------------------------------------------------
Regarding any funds held in trust for an obligor (such as escrow Servicer
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
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) Servicer
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
1122(d)(4)(xi) transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Any late payment penalties in connection with any payment to be made on Servicer
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.
------------------------------------------------------------------------------------------------------------------------------------
Disbursements made on behalf of an obligor are posted within two business Servicer
days to the obligor's records maintained by the servicer, or such other
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) Securities Administrator
through (3) or Item 1115 of Regulation AB, is maintained as set forth in
1122(d)(4)(xv) the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
EXHIBIT T
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 Servicers/
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/Servicers
-------------------------------------------------------------------------------------------------------
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 Servicers
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 721 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 Depositor/Securities Administrator
of 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 Depositor
(including 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 Depositor
(including any required accountants' consent to the
use thereof) or effecting incorporation by reference
-------------------------------------------------------------------------------------------------------
*This information need only be reported on
the Form 10-D for the distribution period in which
updated information is required pursuant to the Items.
-------------------------------------------------------------------------------------------------------
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 U
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
Disclose any information required to be reported on Form 8-K 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 any Depositor
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/Servicers 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 (other than the Depositor
Original Loan Seller)
------------------------------------------------------------------------------------------------------------------------------
o Any Item 1108(a)(2) of Regulation AB Servicer (other than Servicers
the Master Servicer or Securities Administrator)
------------------------------------------------------------------------------------------------------------------------------
o Any other party contemplated by Item 1100(d)(1) of Depositor
Regulation AB
------------------------------------------------------------------------------------------------------------------------------
Item 1119 of Regulation AB: Affiliations and Relationships
------------------------------------------------------------------------------------------------------------------------------
Whether (a) the Sponsor, Depositor or Issuing Entity is an Depositor as to (a)
affiliate of the following parties, and (b) to the extent Sponsor (if a party to this Agreement) as to (a)
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 Servicers
------------------------------------------------------------------------------------------------------------------------------
o Any Item 1115 of Regulation AB Derivate Counterparty Depositor/Sponsor (if a party to this Agreement)
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 business Depositor as to (a)
arrangements" other than would be obtained in an arm's length Sponsor as to (a) (if a party to this Agreement)
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 Servicers
------------------------------------------------------------------------------------------------------------------------------
o Original Loan Seller Depositor
------------------------------------------------------------------------------------------------------------------------------
o Any Item 1110 of Regulation AB Originator (other than the Depositor/Sponsor (if a party to this Agreement)
Original Loan Seller)
------------------------------------------------------------------------------------------------------------------------------
o Any Item 1115 of Regulation AB Derivate Counterparty Depositor/Sponsor (if a party to this Agreement)
Provider
------------------------------------------------------------------------------------------------------------------------------
o Any other Item 1101(d)(1) of Regulation AB material party Depositor/Sponsor (if a party to this Agreement)
------------------------------------------------------------------------------------------------------------------------------
Whether there are any specific relationships involving the Depositor as to (a)
transaction or the pool assets between (a) the Sponsor, Sponsor as to (a) (if a party to this Agreement)
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 the Depositor/Sponsor (if a party to this Agreement)
Original Loan Seller)
------------------------------------------------------------------------------------------------------------------------------
o Any Item 1115 of Regulation AB Derivate Counterparty Depositor/Sponsor (if a party to this Agreement)
Provider
------------------------------------------------------------------------------------------------------------------------------
o Any other Item 1101(d)(1) of Regulation AB material party Depositor/Sponsor (if a party to this Agreement)
------------------------------------------------------------------------------------------------------------------------------
EXHIBIT V
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 Agreement The party to this Agreement entering into such 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 Definitive Agreement The party to this Agreement requesting 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 applicable Servicer
------------------------------------------------------------------------------------------------------------------------------
o Other Servicer servicing 20% or more of the pool assets at The applicable Servicer
the time of the report
------------------------------------------------------------------------------------------------------------------------------
o Other material servicers Servicers
------------------------------------------------------------------------------------------------------------------------------
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 or Increase a Master Servicer/Securities Administrator/Depositor
Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement
Includes an early amortization, performance trigger or other
event, including event of default, that would materially
alter the payment priority/distribution of cash
flows/amortization schedule.
Disclosure will be made of events other than waterfall
triggers which are disclosed in the monthly statements to the
certificateholders.
------------------------------------------------------------------------------------------------------------------------------
Item 3.03- Material Modification to Rights of Security Holders Securities Administrator/Depositor
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 or Bylaws; Depositor
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 Material Depositor
------------------------------------------------------------------------------------------------------------------------------
Item 6.02- Change of Servicer or Securities Administrator Master Servicer/Securities Administrator/Depositor/
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 servicer or master applicable successor Servicer/applicable successor Master
servicer is also required. Servicers/Depositor
------------------------------------------------------------------------------------------------------------------------------
Regulation AB disclosure about any new Trustee is also applicable successor Trustee
required.
------------------------------------------------------------------------------------------------------------------------------
Item 6.03- Change in Credit Enhancement or External Support Depositor/Securities Administrator
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 provider Depositor
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 required to be Depositor
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 W
INTEREST RATE SWAP AGREEMENT
(Multicurrency--Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of May 3, 2007
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC. and ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not individually, but
solely as Securities Administrator
for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc. Trust 2007-NC2, Mortgage
Pass-Through Certificates, Series
2007-NC2
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:
Interpretation
1. Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
2. 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.
3. 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.
Obligations
1. General Conditions.
(a) 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.
(b) 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.
(c) 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.
(d) 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.
(e) 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.
(f) 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)).
(g) 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
o-f 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.
2. 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 lull
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, reorganization, 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.
3. 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 an 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.
4. 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.
5. 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.
6. 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.
7. 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.
8. 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 be entered into as soon as practicable
and may be 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.
9. 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.
10. 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.
11. 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.
12. 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 ▇▇▇ ▇▇▇▇ 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.
13. 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 ease 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)(l) 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 a 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 determination 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) its 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 ease) 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.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC. ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not individually, but solely as
Securities Administrator for ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. Trust
2007-NC2, Mortgage Pass-Through
Certificates, Series 2007-NC2
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------- ------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory Title: Vice President
Date: May 3, 2007 Date: May 3, 2007
ISDA(R) 1992
SCHEDULE
TO THE
1992 ISDA MASTER AGREEMENT
dated as of May 3, 2007
between
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC.
a Delaware corporation
("Party A")
and
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
a national banking association, not individually,
but solely as Securities Administrator for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
Trust 2007-NC2 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-NC2
("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 Transaction Not Applicable Not Applicable
(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 Assumption Applicable Applicable
provided, however, that with respect to:
(i) 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."
(ii) 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).
(iii) 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 set forth Applicable (as set forth
in Part 1(g) below) in Part 1(g) 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 ▇▇▇▇▇'▇ 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 (i), the Securities
executed IRS Form W-9 (or any Administrator shall apply for the employer
successor thereto) that eliminates identification number of the Trust promptly
U.S. federal withholding and backup upon entering into this Agreement and
withholding tax on payments under deliver the related correct, complete and
this Agreement, (ii) if requested by duly executed IRS Form W-9 promptly upon
Party A, a correct, complete and duly receipt, and in any event, no later than the
executed Form W-8IMY, and (iii) a first Payment Date of this Transaction; (b)
complete and executed IRS Form W-9, in the case of a W-8ECI, W-8IMY, and ▇-▇▇▇▇
▇-▇▇▇▇, ▇-▇▇▇▇, or W-8IMY (with that does not include a U.S. taxpayer
attachments) (as appropriate) from identification number in line 6, before
each Certificateholder that is not an December 31 of each third succeeding
"exempt recipient" as that term is calendar year, (c) promptly upon reasonable
defined in Treasury regulations demand by Party A, and (d) promptly upon
section 1.6049-4(c)(ii), that actual knowledge that any such Form
eliminates U.S. federal withholding previously provided by Party B has become
and backup withholding tax on obsolete or incorrect.
payments under this Agreement.
(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 April 1, 2007, among ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc., as
Depositor, ▇▇▇▇▇ Fargo Bank, National
Association, as Master Servicer and
Securities Administrator, Saxon
Mortgage Services, Inc., as Servicer,
Countrywide Home Loans Servicing LP,
as Servicer, 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:-
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC.
Transaction Management Group
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: CHIEF LEGAL OFFICER
Fax No: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
(ii) Address for notices or communications to Party B:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Client Manager - MSAC 2007-NC2
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
(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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and (b) with respect to Party B,
the Credit Support Annex.
(h) Credit Support Provider means in relation to Party A: ▇▇▇▇▇▇
▇▇▇▇▇▇▇, 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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 ▇▇-▇▇, ▇▇-▇,
▇▇-▇▇, ▇▇-▇▇ ▇▇ ▇▇-▇▇ ▇▇ (▇▇) 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 ▇▇▇▇▇'▇ and Rating Agency Confirmation from S&P is
obtained.
(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 ▇▇▇▇▇'▇ has been given prior written
notice of such designation.
(iii) Party B may, with the prior written consent of Party A and
subject prior written notice to ▇▇▇▇▇'▇ 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 ▇▇▇▇▇'▇ 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) ▇▇▇▇▇'▇ First Tier Downgrade. In the event the Relevant Entity
is downgraded below the ▇▇▇▇▇'▇ First Tier Required Swap
Counterparty Ratings (a "▇▇▇▇▇'▇ First Tier Downgrade Event")
then, within 30 Business Days after the occurrence of such
▇▇▇▇▇'▇ 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 ▇▇▇▇▇'▇ 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 ▇▇▇▇▇'▇ First Tier Required Swap
Counterparty Rating; or
(C) Transfer Eligible Credit Support to Party B pursuant to
the Credit Support Annex.
(ii) ▇▇▇▇▇'▇ Second Tier Downgrade. (1) In the event that no
Relevant Entity has the ▇▇▇▇▇'▇ Second Tier Required Swap
Counterparty Rating (a "▇▇▇▇▇'▇ 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 ▇▇▇▇▇'▇ 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 ▇▇▇▇▇'▇ 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 ▇▇▇▇▇'▇ 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 ▇▇▇▇▇'▇ 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. In the event the Relevant Entity is
downgraded below the S&P First Tier Required Swap Counterparty
Rating (an "S&P First Tier Downgrade Event") then, within 30
calendar days after the occurrence of such S&P First Tier
Downgrade Event, Party A shall, subject to Rating Agency
Confirmation, 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 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) 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) transfer Eligible Credit Support to Party B pursuant to
the Credit Support Annex; or
(D) 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.
(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, within 10
calendar days after such S&P Second Tier Downgrade Event,
Party A shall, subject to Rating Agency Confirmation, 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; provided that if such Eligible
Replacement or its Credit Support Provider, as
applicable, 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) 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.
(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 immediately upon the occurrence of an
S&P Second Tier Downgrade Event.
(v) 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.
(vi) 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,
"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 ▇▇▇▇▇'▇
First Tier Required Swap Counterparty Ratings and/or the
▇▇▇▇▇'▇ 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, and (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; 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).
"Firm Offer" means an offer which, when made, was capable of
becoming legally binding upon acceptance.
"Moody's" means ▇▇▇▇▇'▇ 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 ▇▇▇▇▇'▇.
"Rating Agencies" means Moody's and S&P.
"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 ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and any
successor to its rating business.
"S&P First Tier Required Swap Counterparty Rating" means (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.
"S&P Second Tier Required Swap Counterparty Rating" means a
Short-Term Rating of at least "A-3" by S&P and a Long-Term
Rating of at least "BBB-" 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 ▇▇▇▇▇ 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 ▇▇▇▇▇-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 ▇▇▇▇▇-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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
"▇▇▇▇▇" 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 ▇▇▇▇▇ Fargo Bank, National Association (i) this
Agreement is executed and delivered by ▇▇▇▇▇ 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 ▇▇▇▇▇ 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:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC. ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not individually, but solely as
Securities Administrator for ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. Trust
2007-NC2, Mortgage Pass-Through
Certificates, Series 2007-NC2
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------- ------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory Title: Vice President
Date: May 3, 2007 Date: May 3, 2007
EXHIBIT A
Credit Support Annex
(Bilateral Form) (ISDA Agreements Subject to New York Law Only)
ISDA(R)
International Swaps and Derivatives Association, Inc.
CREDIT SUPPORT ANNEX
to the Schedule to the
ISDA MASTER AGREEMENT
dated as of May 3, 2007
between
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
SERVICES INC. not individually, but solely as
Securities Administrator for ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. Trust
2007-NC2, Mortgage Pass-Through
Certificates, Series 2007-NC2
("Party A") ("Party B")
This Annex supplements, forms part of, and is subject to, the above-referenced
Agreement, is part of its Schedule and is a Credit Support Document under this
Agreement with respect to each party.
Accordingly, the parties agree as follows:--
Paragraph 1. Interpretation
(a) Definitions and Inconsistency. Capitalized terms not otherwise defined
herein or elsewhere in this Agreement have the meanings specified pursuant to
Paragraph 12, and all references in this Annex to Paragraphs are to Paragraphs
of this Annex. In the event of any inconsistency between this Annex and the
other provisions of this Schedule, this Annex will prevail, and in the event of
any inconsistency between Paragraph 13 and the other provisions of this Annex,
Paragraph 13 will prevail.
(b) Secured Party and Pledgor. All references in this Annex to the "Secured
Party" will be to either party when acting in that capacity and all
corresponding references to the "Pledgor" will be to the other party when acting
in that capacity; provided, however, that if Other Posted Support is held by a
party to this Annex, all references herein to that party as the Secured Party
with respect to that Other Posted Support will be to that party as the
beneficiary thereof and will not subject that support or that party as the
beneficiary thereof to provisions of law generally relating to security
interests and secured parties.
Paragraph 2. Security Interest
Each party, as the Pledgor, hereby pledges to the other party, as the Secured
Party, as security for its Obligations, and grants to the Secured Party a first
priority continuing security interest in, lien on and right of Set-off against
all Posted Collateral Transferred to or received by the Secured Party hereunder.
Upon the Transfer by the Secured Party to the Pledgor of Posted Collateral, the
security interest and lien granted hereunder on that Posted Collateral will be
released immediately and, to the extent possible, without any further action by
either party.
Paragraph 3. Credit Support Obligations
(a) Delivery Amount. Subject to Paragraphs 4 and 5, upon demand made by the
Secured Party on or promptly following a Valuation Date, if the Delivery Amount
for that Valuation Date equals or exceeds the Pledgor's Minimum Transfer Amount,
then the Pledgor will Transfer to the Secured Party Eligible Credit Support
having a Value as of the date of Transfer at least equal to the applicable
Delivery Amount (rounded pursuant to Paragraph 13). Unless otherwise specified
in Paragraph 13, the "Delivery Amount" applicable to the Pledgor for any
Valuation Date will equal the amount by which:
(i) the Credit Support Amount
exceeds
(ii) the Value as of that Valuation Date of all Posted Credit Support
held by the Secured Party.
(b) Return Amount. Subject to Paragraphs 4 and 5, upon a demand made by the
Pledgor on or promptly following a Valuation Date, if the Return Amount for that
Valuation Date equals or exceeds Secured Party's Minimum Transfer Amount, then
the Secured Party will Transfer to the Pledgor Posted Credit Support specified
by the Pledgor in that demand having a Value as of the date of Transfer as close
as practicable to the applicable Return Amount (rounded pursuant to Paragraph
13). Unless otherwise specified in Paragraph 13, the "Return Amount" applicable
to the Secured Party for any Valuation Date will equal the amount by which:
(i) the Value as of that Valuation Date of all Posted Credit Support
held by the Secured Party
exceeds
(ii) the Credit Support Amount.
"Credit Support Amount" means, unless otherwise specified in Paragraph 13, for
any Valuation Date (i) the Secured Party's Exposure for that Valuation Date plus
(ii) the aggregate of all Independent Amounts applicable to the Pledgor, if any,
minus (iii) all Independent Amounts applicable to the Secured Party, if any,
minus (iv) the Pledgor's Threshold; provided, however, that the Credit Support
Amount will be deemed to be zero whenever the calculation of Credit Support
Amount yields a number less than zero.
Paragraph 4. Conditions Precedent, Transfer Timing, Calculations and
Substitutions
(a) Conditions Precedent. Each Transfer obligation of the Pledgor under
Paragraphs 3 and 5 and of the Secured Party under Paragraphs 3, 4(d)(ii), 5 and
6(d) is subject to the conditions precedent that:
(i) no Event of Default, Potential Event of Default or Specified Condition
has occurred and is continuing with respect to the other party; and
(ii) no Early Termination Date for which any unsatisfied payment
obligations exist has occurred or been designated as the result of an
Event of Default or Specified Condition with respect to the other party.
(b) Transfer Timing. Subject to Paragraphs 4(a) and 5 and unless otherwise
specified, if a demand for the Transfer of Eligible Credit Support or Posted
Credit Support is made by the Notification Time, then the relevant Transfer will
be made not later than the close of business on the next Local Business Day; if
a demand is made after the Notification Time, then the relevant Transfer will be
made not later than the close of business on the second Local Business Day
thereafter.
(c) Calculations. All calculations of Value and Exposure for purposes of
Paragraphs 3 and 6(d) will be made by the Valuation Agent as of the Valuation
Time. The Valuation Agent will notify each party (or the other party, if the
Valuation Agent is a party) of its calculations not later than the Notification
Time on the Local Business Day following the applicable Valuation Date (or in
the case of Paragraph 6(d), following the date of calculation).
(d) Substitutions.
(i) Unless otherwise specified in Paragraph 13, upon notice to the Secured
Party specifying the items of Posted Credit Support to be exchanged, the
Pledgor may, on any Local Business Day, Transfer to the Secured Party
substitute Eligible Credit Support (the "Substitute Credit Support"); and
(ii) subject to Paragraph 4(a), the Secured Party will Transfer to the
Pledgor the items of Posted Credit Support specified by the Pledgor in its
notice not later than the Local Business Day following the date on which
the Secured Party receives the Substitute Credit Support, unless otherwise
specified in Paragraph 13 (the "Substitution Date"); provided that the
Secured Party will only be obligated to Transfer Posted Credit Support
with a Value as of the date of Transfer of that Posted Credit Support
equal to the Value as of that date of the Substitute Credit Support.
Paragraph 5. Dispute Resolution
If a party (a "Disputing Party") disputes (I) the Valuation Agent's calculation
of a Delivery Amount or a Return Amount or (II) the Value of any Transfer of
Eligible Credit Support or Posted Credit Support, then (1) the Disputing Party
will notify the other party and the Valuation Agent (if the Valuation Agent is
not the other party) not later than the close of business on the Local Business
Day following (X) the date that the demand is made under Paragraph 3 in case of
(I) above or (Y) the date of Transfer in the case of (II) above, (2) subject to
Paragraph 4(a), the appropriate party will Transfer the undisputed amount to the
other party not later than the close of business on the Local Business Day
following (X) the date that the demand is made under Paragraph 3 in the case of
(I) above or (Y) the date of Transfer in the case of (II) above, (3) the parties
will consult with each other in an attempt to resolve the dispute and (4) if
they fail to resolve the dispute by the Resolution Time, then:
(i) In the case of a dispute involving a Delivery Amount or Return Amount,
unless otherwise specified in Paragraph 13, the Valuation Agent will
recalculate the Exposure and the Value as of the Recalculation Date by:
(A) utilizing any calculations of Exposure for the Transactions (or
Swap Transactions) that the parties have agreed are not in dispute;
(B) calculating the Exposure for the Transactions (or Swap
Transactions) in dispute by seeking four actual quotations at
mid-market from Reference Market-makers for purposes of calculating
Market Quotation, and taking the arithmetic average of those
obtained; provided that if four quotations are not available for a
particular Transaction (or Swap Transaction), then fewer than four
quotations may be used for that Transaction (or Swap Transaction);
and if no quotations are available for a particular Transaction (or
Swap Transaction), then the Valuation Agent's original calculations
will be used for that Transaction (or Swap Transaction); and
(C) utilizing the procedures specified in Paragraph 13 for
calculating the Value, if disputed, of Posted Credit Support.
(ii) In the case of a dispute involving the Value of any Transfer of
Eligible Credit Support or Posted Credit Support, the Valuation Agent will
recalculate the Value as of the date of Transfer pursuant to Paragraph 13.
Following a recalculation pursuant to this Paragraph, the Valuation Agent will
notify each party (or the other party, if the Valuation Agent is a party) not
later than the Notification Time on the Local Business Day following the
Resolution Time. The appropriate party will, upon demand following that notice
by the Valuation Agent or a resolution pursuant to (3) above and subject to
Paragraphs 4(a) and 4(b), make the appropriate Transfer.
Paragraph 6. Holding and Using Posted Collateral
(a) Care of Posted Collateral. Without limiting the Secured Party's rights under
Paragraph 6(c), the Secured Party will exercise reasonable care to assure the
safe custody of all Posted Collateral to the extent required by applicable law,
and in any event the Secured Party will be deemed to have exercised reasonable
care if it exercises at least the same degree of care as it would exercise with
respect to its own property. Except as specified in the preceding sentence, the
Secured Party will have no duty with respect to Posted Collateral, including,
without limitation, any duty to collect any Distributions, or enforce or
preserve any rights pertaining thereto.
(b) Eligibility to Hold Posted Collateral; Custodians.
(i) General. Subject to the satisfaction of any conditions specified in
Paragraph 13 for holding Posted Collateral, the Secured Party will be
entitled to hold Posted Collateral or to appoint an agent (a "Custodian")
to hold Posted Collateral for the Secured Party. Upon notice by the
Secured Party to the Pledgor of the appointment of a Custodian, the
Pledgor's obligations to make any Transfer will be discharged by making
the Transfer to that Custodian. The holding of Posted Collateral by a
Custodian will be deemed to be the holding of that Posted Collateral by
the Secured Party for which the Custodian is acting.
(ii) Failure to Satisfy Conditions. If the Secured Party or its Custodian
fails to satisfy any conditions for holding Posted Collateral, then upon a
demand made by the Pledgor, the Secured Party will, not later than five
Local Business Days after the demand, Transfer or cause its Custodian to
Transfer all Posted Collateral held by it to a Custodian that satisfies
those conditions or to the Secured Party if it satisfies those conditions.
(iii) Liability. The Secured Party will be liable for the acts or
omissions of its Custodian to the same extent that the Secured Party would
be liable hereunder for its own acts or omissions.
(c) Use of Posted Collateral. Unless otherwise specified in Paragraph 13 and
without limiting the rights and obligations of the parties under Paragraphs 3,
4(d)(ii), 5, 6(d) and 8, if the Secured Party is not a Defaulting Party or an
Affected Party with respect to a Specified Condition and no Early Termination
Date has occurred or been designated as the result of an Event of Default or
Specified Condition with respect to the Secured Party, then the Secured Party
will, notwithstanding Section 9-207 of the New York Uniform Commercial Code,
have the right to:
(i) sell, pledge, rehypothecate, assign, invest, use, commingle or
otherwise dispose of, or otherwise use in its business any Posted
Collateral it holds, free from any claim or right of any nature whatsoever
of the Pledgor, including any equity or right of redemption by the
Pledgor; and
(ii) register any Posted Collateral in the name of the Secured Party, its
Custodian or a nominee for either.
For purposes of the obligation to Transfer Eligible Credit Support or Posted
Credit Support pursuant to Paragraphs 3 and 5 and any rights or remedies
authorized under this Agreement, the Secured Party will be deemed to continue to
hold all Posted Collateral and to receive Distributions made thereon, regardless
of whether the Secured Party has exercised any rights with respect to any Posted
Collateral pursuant to (i) or (ii) above.
(d) Distributions and Interest Amount.
(i) Distributions. Subject to Paragraph 4(a), if the Secured Party
receives or is deemed to receive Distributions on a Local Business Day, it
will Transfer to the Pledgor not later than the following Local Business
Day any Distributions it receives or is deemed to receive to the extent
that a Delivery Amount would not be created or increased by that Transfer,
as calculated by the Valuation Agent (and the date of calculation will be
deemed to be a Valuation Date for this purpose).
(ii) Interest Amount. Unless otherwise specified in Paragraph 13 and
subject to Paragraph 4(a), in lieu of any interest, dividends or other
amounts paid or deemed to have been paid with respect to Posted Collateral
in the form of Cash (all of which may be retained by the Secured Party),
the Secured Party will Transfer to the Pledgor at the times specified in
Paragraph 13 the Interest Amount to the extent that a Delivery Amount
would not be created or increased by that Transfer, as calculated by the
Valuation Agent (and the date of calculation will be deemed to be a
Valuation Date for this purpose). The Interest Amount or portion thereof
not Transferred pursuant to this Paragraph will constitute Posted
Collateral in the form of Cash and will be subject to the security
interest granted under Paragraph 2.
Paragraph 7. Events of Default
For purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default will
exist with respect to a party if:
(i) that party fails (or fails to cause its Custodian) to make, when due,
any Transfer of Eligible Collateral, Posted Collateral or the Interest
Amount, as applicable, required to be made by it and that failure
continues for two Local Business Days after notice of that failure is
given to that party;
(ii) that party fails to comply with any restriction or prohibition
specified in this Annex with respect to any of the rights specified in
Paragraph 6(c) and that failure continues for five Local Business Days
after notice of that failure is given to that party; or
(iii) that party fails to comply with or perform any agreement or
obligation other than those specified in Paragraphs 7(i) and 7(ii) and
that failure continues for 30 days after notice of that failure is given
to that party.
Paragraph 8. Certain Rights and Remedies
(a) Secured Party's Rights and Remedies. If at any time (1) an Event of Default
or Specified Condition with respect to the Pledgor has occurred and is
continuing or (2) an Early Termination Date has occurred or been designated as
the result of an Event of Default or Specified Condition with respect to the
Pledgor, then, unless the Pledgor has paid in full all of its Obligations that
are then due, the Secured Party may exercise one or more of the following rights
and remedies:
(i) all rights and remedies available to a secured party under applicable
law with respect to Posted Collateral held by the Secured Party;
(ii) any other rights and remedies available to the Secured Party under
the terms of Other Posted Support, if any;
(iii) the right to Set-off any amounts payable by the Pledgor with respect
to any Obligations against any Posted Collateral or the Cash equivalent of
any Posted Collateral held by the Secured Party (or any obligation of the
Secured Party to Transfer that Posted Collateral); and
(iv) the right to liquidate any Posted Collateral held by the Secured
Party through one or more public or private sales or other dispositions
with such notice, if any, as may be required under applicable law, free
from any claim or right of any nature whatsoever of the Pledgor, including
any equity or right of redemption by the Pledgor (with the Secured Party
having the right to purchase any or all of the Posted Collateral to be
sold) and to apply the proceeds (or the Cash equivalent thereof) from the
liquidation of the Posted Collateral to any amounts payable by the Pledgor
with respect to any Obligations in that order as the Secured Party may
elect.
Each party acknowledges and agrees that Posted Collateral in the form of
securities may decline speedily in value and is of a type customarily sold on a
recognized market, and, accordingly, the Pledgor is not entitled to prior notice
of any sale of that Posted Collateral by the Secured Party, except any notice
that is required under applicable law and cannot be waived.
(b) Pledgor's Rights and Remedies. If at any time an Early Termination Date has
occurred or been designated as the result of an Event of Default or Specified
Condition with respect to the Secured Party, then (except in the case of an
Early Termination Date relating to less than all Transactions (or Swap
Transactions) where the Secured Party has paid in full all of its obligations
that are then due under Section 6(e) of this Agreement):
(i) the Pledgor may exercise all rights and remedies available to a
Pledgor under applicable law with respect to Posted Collateral held by the
Secured Party;
(ii) the Pledgor may exercise any other rights and remedies available to
the Pledgor under the terms of Other Posted Support, if any;
(iii) the Secured Party will be obligated immediately to Transfer all
Posted Collateral and the Interest Amount to the Pledgor; and
(iv) to the extent that Posted Collateral or the Interest Amount is not so
Transferred pursuant to (iii) above, the Pledgor may:
(A) Set-off any amounts payable by the Pledgor with respect to any
Obligations against any Posted Collateral or the Cash equivalent of
any Posted Collateral held by the Secured Party (or any obligation
of the Secured Party to Transfer that Posted Collateral); and
(B) to the extent that the Pledgor does not Set-off under (iv)(A)
above, withhold payment of any remaining amounts payable by the
Pledgor with respect to any Obligations, up to the Value of any
remaining Posted Collateral held by the Secured Party, until that
Posted Collateral is Transferred to the Pledgor.
(c) Deficiencies and Excess Proceeds. The Secured Party will Transfer to the
Pledgor any proceeds and Posted Credit Support remaining after liquidation,
Set-off and/or application under Paragraphs 8(a) and 8(b) after satisfaction in
full of all amounts payable by the Pledgor with respect to any Obligations; the
Pledgor in all events will remain liable for any amounts remaining unpaid after
any liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b).
(d) Final Returns. When no amounts are or thereafter may become payable by the
Pledgor with respect to any Obligations (except for any potential liability
under Section 2(d) of this Agreement), the Secured Party will Transfer to the
Pledgor all Posted Credit Support and the Interest Amount, if any.
Paragraph 9. Representations
Each party represents to the other party (which representations will be deemed
to be repeated as of each date on which it, as the Pledgor, Transfers Eligible
Collateral) that:
(i) it has the power to grant a security interest in and lien on any
Eligible Collateral it Transfers as the Pledgor and has taken all
necessary actions to authorize the granting of that security interest and
lien;
(ii) it is the sole owner of or otherwise has the right to Transfer all
Eligible Collateral it Transfers to the Secured Party hereunder, free and
clear of any security interest, lien, encumbrance or other restrictions
other than the security interest and lien granted under Paragraph 2;
(iii) upon the Transfer of any Eligible Collateral to the Secured Party
under the terms of this Annex, the Secured Party will have a valid and
perfected first priority security interest therein (assuming that any
central clearing corporation or any third-party financial intermediary or
other entity not within the control of the Pledgor involved in the
Transfer of that Eligible Collateral gives the notices and takes the
action required of it under applicable law for perfection of that
interest); and
(iv) the performance by it of its obligations under this Annex will not
result in the creation of any security interest, lien or other encumbrance
on any Posted Collateral other than the security interest and lien granted
under Paragraph 2.
Paragraph 10. Expenses
(a) General. Except as otherwise provided in Paragraphs 10(b) and 10(c), each
party will pay its own costs and expenses in connection with performing its
obligations under this Annex and neither party will be liable for any costs and
expenses incurred by the other party in connection herewith.
(b) Posted Credit Support. The Pledgor will promptly pay when due all taxes,
assessments or charges of any nature that are imposed with respect to Posted
Credit Support held by the Secured Party upon becoming aware of the same,
regardless of whether any portion of that Posted Credit Support is subsequently
disposed of under Paragraph 6(c), except for those taxes, assessments and
charges that result from the exercise of the Secured Party's rights under
Paragraph 6(c).
(c) Liquidation/Application of Posted Credit Support. All reasonable costs and
expenses incurred by or on behalf of the Secured Party or the Pledgor in
connection with the liquidation and/or application of any Posted Credit Support
under Paragraph 8 will be payable, on demand and pursuant to the Expenses
Section of this Agreement, by the Defaulting Party or, if there is no Defaulting
Party, equally by the parties.
Paragraph 11. Miscellaneous
(a) Default Interest. A Secured Party that fails to make, when due, any Transfer
of Posted Collateral or the Interest Amount will be obliged to pay the Pledgor
(to the extent permitted under applicable law) an amount equal to interest at
the Default Rate multiplied by the Value of the items of property that were
required to be Transferred, from (and including) the date that the Posted
Collateral or Interest Amount was required to be Transferred to (but excluding)
the date of Transfer of that Posted Collateral or Interest Amount. This interest
will be calculated on the basis of daily compounding and the actual number of
days elapsed.
(b) Further Assurances. Promptly following a demand made by a party, the other
party will execute, deliver, file and record any financing statement, specific
assignment or other document and take any other action that may be necessary or
desirable and reasonably requested by that party to create, preserve, perfect or
validate any security interest or lien granted under Paragraph 2, to enable that
party to exercise or enforce its rights under this Annex with respect to Posted
Credit Support or an Interest Amount or to effect or document a release of a
security interest on Posted Collateral or an Interest Amount.
(c) Further Protection. The Pledgor will promptly give notice to the Secured
Party of, and defend against, any suit, action, proceeding or lien that involves
Posted Credit Support Transferred by the Pledgor or that could adversely affect
the security interest and lien granted by it under Paragraph 2, unless that
suit, action, proceeding or lien results from the exercise of the Secured
Party's rights under Paragraph 6(c).
(d) Good Faith and Commercially Reasonable Manner. Performance of all
obligations under this Annex, including, but not limited to, all calculations,
valuations and determinations made by either party, will be made in good faith
and in a commercially reasonable manner.
(e) Demands and Notices. All demands and notices made by a party under this
Annex will be made as specified in the Notices Section of this Agreement, except
as otherwise provided in Paragraph 13.
(f) Specifications of Certain Matters. Anything referred to in this Annex as
being specified in Paragraph 13 also may be specified in one or more
Confirmations or other documents and this Annex will be construed accordingly.
Paragraph 12. Definitions
As used in this Annex:--
"Cash" means the lawful currency of the United States of America.
"Credit Support Amount" has the meaning specified in Paragraph 3.
"Custodian" has the meaning specified in Paragraphs 6(b)(i) and 13.
"Delivery Amount" has the meaning specified in Paragraph 3(a).
"Disputing Party" has the meaning specified in Paragraph 5.
"Distributions" means with respect to Posted Collateral other than Cash, all
principal, interest and other payments and distributions of cash or other
property with respect thereto, regardless of whether the Secured Party has
disposed of that Posted Collateral under Paragraph 6(c). Distributions will not
include any item of property acquired by the Secured Party upon any disposition
or liquidation of Posted Collateral or, with respect to any Posted Collateral in
the form of Cash, any distributions on that collateral, unless otherwise
specified herein.
"Eligible Collateral" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.
"Eligible Credit Support" means Eligible Collateral and Other Eligible Support.
"Exposure" means for any Valuation Date or other date for which Exposure is
calculated and subject to Paragraph 5 in the case of a dispute, the amount, if
any, that would be payable to a party that is the Secured Party by the other
party (expressed as a positive number) or by a party that is the Secured Party
to the other party (expressed as a negative number) pursuant to Section
6(e)(ii)(2)(A) of this Agreement as if all Transactions (or Swap Transactions)
were being terminated as of the relevant Valuation Time; provided that Market
Quotation will be determined by the Valuation Agent using its estimates at
mid-market of the amounts that would be paid for Replacement Transactions (as
that term is defined in the definition of "Market Quotation").
"Independent Amount" means, with respect to a party, the amount specified as
such for that party in Paragraph 13; if no amount is specified, zero.
"Interest Amount" means, with respect to an Interest Period, the aggregate sum
of the amounts of interest calculated for each day in that Interest Period on
the principal amount of Posted Collateral in the form of Cash held by the
Secured Party on that day, determined by the Secured Party for each such day as
follows:
(x) the amount of Cash on that day; multiplied by
(y) the Interest Rate in effect for that day; divided by
(z) 360.
"Interest Period" means the period from (and including) the last Local Business
Day on which an Interest Amount was Transferred (or, if no Interest Amount has
yet been Transferred, the Local Business Day on which Posted Collateral in the
form of Cash was Transferred to or received by the Secured Party) to (but
excluding) the Local Business Day on which the current Interest Amount is to be
Transferred.
"Interest Rate" means the rate specified in Paragraph 13.
"Local Business Day", unless otherwise specified in Paragraph 13, has the
meaning specified in the Definitions Section of this Agreement, except that
references to a payment in clause (b) thereof will be deemed to include a
Transfer under this Annex.
"Minimum Transfer Amount" means, with respect to a party, the amount specified
as such for that party in Paragraph 13; if no amount is specified, zero.
"Notification Time" has the meaning specified in Paragraph 13.
"Obligations" means, with respect to a party, all present and future obligations
of that party under this Agreement and any additional obligations specified for
that party in Paragraph 13.
"Other Eligible Support" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.
"Other Posted Support" means all Other Eligible Support Transferred to the
Secured Party that remains in effect for the benefit of that Secured Party.
"Pledgor" means either party, when that party (i) receives a demand for or is
required to Transfer Eligible Credit Support under Paragraph 3(a) or (ii) has
Transferred Eligible Credit Support under Paragraph 3(a).
"Posted Collateral" means all Eligible Collateral, other property,
Distributions, and all proceeds thereof that have been Transferred to or
received by the Secured Party under this Annex and not Transferred to the
Pledgor pursuant to Paragraph 3(b), 4(d)(ii) or 6(d)(i) or released by the
Secured Party under Paragraph 8. Any Interest Amount or portion thereof not
Transferred pursuant to Paragraph 6(d)(ii) will constitute Posted Collateral in
the form of Cash.
"Posted Credit Support" means Posted Collateral and Other Posted Support.
"Recalculation Date" means the Valuation Date that gives rise to the dispute
under Paragraph 5; provided, however, that if a subsequent Valuation Date occurs
under Paragraph 3 prior to the resolution of the dispute, then the
"Recalculation Date" means the most recent Valuation Date under Paragraph 3.
"Resolution Time" has the meaning specified in Paragraph 13.
"Return Amount" has the meaning specified in Paragraph 3(b).
"Secured Party" means either party, when that party (i) makes a demand for or is
entitled to receive Eligible Credit Support under Paragraph 3(a) or (ii) holds
or is deemed to hold Posted Credit Support.
"Specified Condition" means, with respect to a party, any event specified as
such for that party in Paragraph 13.
"Substitute Credit Support" has the meaning specified in Paragraph 4(d)(i).
"Substitution Date" has the meaning specified in Paragraph 4(d)(ii).
"Threshold" means, with respect to a party, the amount specified as such for
that party in Paragraph 13; if no amount is specified, zero.
"Transfer" means, with respect to any Eligible Credit Support, Posted Credit
Support or Interest Amount, and in accordance with the instructions of the
Secured Party, Pledgor or Custodian, as applicable:
(i) in the case of Cash, payment or delivery by wire transfer into one or
more bank accounts specified by the recipient;
(ii) in the case of certificated securities that cannot be paid or
delivered by book-entry, payment or delivery in appropriate physical form
to the recipient or its account accompanied by any duly executed
instruments of transfer, assignments in blank, transfer tax stamps and any
other documents necessary to constitute a legally valid transfer to the
recipient;
(iii) in the case of securities that can be paid or delivered by
book-entry, the giving of written instructions to the relevant depository
institution or other entity specified by the recipient, together with a
written copy thereof to the recipient, sufficient if complied with to
result in a legally effective transfer of the relevant interest to the
recipient; and
(iv) in the case of Other Eligible Support or Other Posted Support, as
specified in Paragraph 13.
"Valuation Agent" has the meaning specified in Paragraph 13.
"Valuation Date" means each date specified in or otherwise determined pursuant
to Paragraph 13.
"Valuation Percentage" means, for any item of Eligible Collateral, the
percentage specified in Paragraph 13.
"Valuation Time" has the meaning specified in Paragraph 13.
"Value" means for any Valuation Date or other date for which Value is calculated
and subject to Paragraph 5 in the case of a dispute, with respect to:
(i) Eligible Collateral or Posted Collateral that is:
(A) Cash, the amount thereof; and
(B) a security, the bid price obtained by the Valuation Agent
multiplied by the applicable Valuation Percentage, if any;
(ii) Posted Collateral that consists of items that are not specified as
Eligible Collateral, zero; and
(iii) Other Eligible Support and Other Posted Support, as specified in
Paragraph 13.
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 ▇▇▇▇▇'▇, (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. "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) or (iv) of the Schedule due to a
ratings downgrade or withdrawal by S&P, "Credit Support
Amount" shall have the meaning specified in Table 1 attached
hereto; and
(B) in the event Party A elects to post collateral pursuant to
Part 5(f)(i) of the Schedule due to a ratings downgrade by
▇▇▇▇▇'▇ below the ▇▇▇▇▇'▇ First Tier Required Swap
Counterparty Rating, "Credit Support Amount" shall have the
meaning specified in Table 2A or Table 2B, as applicable,
attached hereto; and
(C) 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 ▇▇▇▇▇'▇ below the ▇▇▇▇▇'▇ Second Tier Required
Swap Counterparty Rating, "Credit Support Amount" shall have
the meaning specified in Table 3A or 3B, as applicable,
attached hereto.
In the event Party A or its Credit Support Provider does not have a
Long-Term Rating of at least "BBB+" from S&P, the Valuation Agent
shall verify its calculation of the Secured Party's Exposure on a
quarterly basis by seeking two quotations from Reference
Market-makers. If two Reference Market-makers are not available to
provide a quotation, then fewer than two Reference Market-makers may
be used for such purpose. If no Reference Market-makers are
available, then the Valuation Agent's estimates at mid-market will
be used. The Valuation Agent may not obtain the quotations referred
to above from the same person in excess of four times during any 12
month period. Where more than one quotation is obtained, the
quotation representing the greatest amount of Exposure shall be used
by the Valuation Agent. In the event the verification procedures set
forth above indicate that there is a deficiency in the amount of
Eligible Collateral that has been Transferred to the Secured Party,
the Pledgor shall Transfer the amount of Eligible Collateral
necessary to cure such deficiency to the Secured Party within three
Local Business Days. The Valuation Agent shall provide to S&P its
calculations of the Secured Party's Exposure for that Valuation
Date. The Valuation Agent shall also provide to S&P any external
marks received pursuant to this paragraph.
(ii) Eligible Collateral.
(A) 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, the items specified in Table 4
attached hereto will qualify as "Eligible Collateral" for
Party A.
(B) In the event Party A elects to post collateral pursuant to
Part 5(f)(i) of the Schedule due to a ratings downgrade by
▇▇▇▇▇'▇ below the ▇▇▇▇▇'▇ First Tier Required Swap
Counterparty Rating, the items specified in Table 5 attached
hereto will qualify as "Eligible Collateral" for Party A.
(C) 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 ▇▇▇▇▇'▇ below the ▇▇▇▇▇'▇ 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, 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 ▇▇▇▇▇'▇.
"Independent Amount" means, with respect to Party B, zero.
(B) "Threshold" means with, respect to Party A, 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 ▇▇▇▇▇'▇.
"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.
Initially, the Custodian for Party B is the Trustee.
(ii) Use of Posted Collateral. The provisions of Paragraph 6(c) will
apply.
(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:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: FID Collateral Manager
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
and all demands, specifications and notices to Party B under this Annex
will be to:
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Client Manager - MSAC 2007-HE4
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
; 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/▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated
ABA No.: ▇▇▇▇▇▇▇▇▇
Other Forms of Eligible Collateral: As provided by Party A.
Party B:
Cash: ▇▇▇▇▇ Fargo Bank, N.A.
ABA No.: 121 000 248
Account No.: ▇▇▇▇▇▇▇▇▇▇
Account Name: SAS Clearing
FFC: 50996501, MSAC 2007-HE4
(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 ▇▇▇▇▇'▇ 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) Trustee Capacity. It is expressly understood and agreed by the parties
hereto that insofar as this Annex is executed by ▇▇▇▇▇ Fargo Bank,
National Association (i) this Annex is executed and delivered by ▇▇▇▇▇
Fargo Bank, National Association not in its individual capacity but solely
as Trustee under the PSA in the exercise of the powers and authority
conferred and invested in it as Trustee 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 Trustee
but is made and intended for the purpose of binding only the Trust, and
(iii) under no circumstances shall ▇▇▇▇▇ 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.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
Date: May 3, 2007
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not individually, but
solely as Trustee for ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. Trust
2007-HE4, Mortgage Pass-Through
Certificates, Series 2007-HE4
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Date: May 3, 2007
TABLE 1
CREDIT SUPPORT AMOUNT
DOWNGRADE BY S&P
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:
"Credit Support Amount" means, with respect to a Valuation Date, an amount equal
to the greater of (1) the sum of (a) the MTM and (b) the Volatility Buffer
multiplied by the Notional Amount * 10 and (2) zero.
"MTM" means the Secured Party's Exposure for that Valuation Date.
"Volatility Buffer" means (a) if, on the date of determination, Party A has a
short-term credit rating of "A-2" by S&P and the Termination Date of the
Transaction will occur in less than 5 years, 3.25%, (b) if, on the date of
determination, Party A has a short-term credit rating of "A-2" by S&P and the
Termination Date of the Transaction will occur in less than 10 years but more
than 5 years, 4.00%, (c) if, on the date of determination, Party A has a
short-term credit rating of "A-3" by S&P and the Termination Date of the
Transaction will occur in less than 5 years, 4.00%, (d) if, on the date of
determination, Party A has a short-term credit rating of "A-3" by S&P and the
Termination Date of the Transaction will occur in less than 10 years but more
than 5 years, 5.00%, (e) if, on the date of determination, Party A has a
long-term credit rating of "BB+" or lower by S&P and the Termination Date of the
Transaction will occur in less than 5 years, 4.50%, or (f) if, on the date of
determination, Party A has a long-term credit rating of "BB+" or lower by S&P
and the Termination Date of the Transaction will occur in less than 10 years but
more than 5 years, 6.75%.
TABLE 2A
CREDIT SUPPORT AMOUNT
DOWNGRADE BY ▇▇▇▇▇'▇ BELOW ▇▇▇▇▇'▇ 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 ▇▇▇▇▇'▇ below the ▇▇▇▇▇'▇ 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 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 0.25%
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 3A
CREDIT SUPPORT AMOUNT
DOWNGRADE BY ▇▇▇▇▇'▇ BELOW ▇▇▇▇▇'▇ 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 ▇▇▇▇▇'▇ below the ▇▇▇▇▇'▇ 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 3B
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 3B
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 4
ELIGIBLE COLLATERAL
S&P
Valuation
Eligible Collateral Party A Percentage
------------------- ------- ----------
(A) Cash X 100.0%
(B) Treasury Securities with a remaining maturity X 98.5%
of 52 weeks or less
(C) Treasury Securities with a remaining maturity X 93.6%
of more than 52 weeks but no more than 5 years
(D) Treasury Securities with a remaining maturity X 89.9%
of more than 5 years but no more than 10 years
(E) Treasury Securities with a remaining maturity X 83.9%
of more than 10 years but no more than 30 years
(F) Agency Notes with a remaining maturity of no X 81.3%
more than 15 years
(G) Agency Notes with a remaining maturity of more X 74.8%
than 15 years but no more than 30 years
(H) Commercial Paper rated "A-1+" by S&P and "P-1" X 98.0%
by ▇▇▇▇▇'▇, with a remaining maturity of 180
days or less
(I) Commercial Paper rated "A-1" by S&P and P-1 by X 97.0%
▇▇▇▇▇'▇, with a remaining maturity of 180 days
or less
(J) Commercial Paper rated "A-1" by S&P and "P-1" X 94.0%
by ▇▇▇▇▇'▇, 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.
TABLE 5
ELIGIBLE COLLATERAL
DOWNGRADE BY ▇▇▇▇▇'▇ BELOW ▇▇▇▇▇'▇ 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 6
ELIGIBLE COLLATERAL
DOWNGRADE BY ▇▇▇▇▇'▇ BELOW ▇▇▇▇▇'▇ 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%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
DATE: May 3, 2007
TO: ▇▇▇▇▇ Fargo Bank, National Association, not individually,
but solely as Securities Administrator for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
ABS Capital I Inc. Trust 2007-NC2, Mortgage Pass-Through
Certificates, Series 2007-NC2
ATTENTION: Client Manager - MSAC 2007-NC2
TELEPHONE: (▇▇▇) ▇▇▇-▇▇▇▇
FACSIMILE: (▇▇▇) ▇▇▇-▇▇▇▇
FROM: New York Derivative Client Services Group
TELEPHONE: (▇▇▇) ▇▇▇-▇▇▇▇
FACSIMILE: (▇▇▇) ▇▇▇-▇▇▇▇
SUBJECT: Fixed Income Derivatives Confirmation
REFERENCE NUMBER: HRBHU
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc.
("Party A") and ▇▇▇▇▇ 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 April 1, 2007, among
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor, ▇▇▇▇▇ Fargo Bank, National
Association, as Master Servicer and Securities Administrator, Saxon Mortgage
Services, Inc., as Servicer, Countrywide Home Loans Servicing LP, as Servicer,
and Deutsche Bank National Trust Company, as Trustee (the "PSA") for the ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2, Mortgage Pass-Through Certificates,
Series 2007-NC2 ("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 May 3, 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:........................ April 26, 2007
Effective Date:.................... ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ Date:.................. March 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
Payment Dates:............. The 24th calendar day of each month
during the Term of this Transaction,
commencing April 24, 2008, subject to
adjustment in accordance with the
Preceding Business Day Convention.
Fixed Rate Payer Period
End Dates:................. The 25th calendar day of each month
during the Term of this Transaction,
commencing April 25, 2008, subject to
No Adjustment.
Fixed Rate:.................. 4.75%
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
Payment Dates:............. The 24th calendar day of each month
during the Term of this Transaction,
commencing April 24, 2008, subject to
adjustment in accordance with the
Preceding Business Day Convention.
Floating Rate Payer
Period End Dates:.......... The 25th calendar day of each month
during the Term of this Transaction,
commencing April 25, 2008, 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: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc.
Payments to Party B:
▇▇▇▇▇ Fargo Bank ,National Association
ABA No.: 121 000 248
Account No: ▇▇▇▇▇▇▇▇▇▇
Acct Name: SAS Clearing
Ref: FFC: 53148301, MSAC ▇▇▇▇-▇▇▇ (▇▇▇▇)
3. Securities Administrator Capacity. It is expressly understood and agreed
by the parties hereto that insofar as this Confirmation is executed by
▇▇▇▇▇ Fargo Bank, National Association (i) this Confirmation is executed
and delivered by ▇▇▇▇▇ 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 ▇▇▇▇▇ 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,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
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.
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not individually, but
solely as Securities Administrator
for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc. Trust 2007-NC2, Mortgage
Pass-Through Certificates, Series
2007-NC2
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------------------------------------------
SCHEDULE I
--------------------------------------------------------------------------------
Calculation
Line Period Notional Amount ($) Multiplier
--------------------------------------------------------------------------------
1 Effective Date 4/25/2008 60,319,988.48 10
2 4/25/2008 5/25/2008 57,766,101.11 10
3 5/25/2008 6/25/2008 55,321,192.85 10
4 6/25/2008 7/25/2008 52,980,580.59 10
5 7/25/2008 8/25/2008 50,739,783.72 10
6 8/25/2008 9/25/2008 48,594,515.30 10
7 9/25/2008 10/25/2008 46,536,758.42 10
8 10/25/2008 11/25/2008 44,567,362.05 10
9 11/25/2008 12/25/2008 33,710,139.99 10
10 12/25/2008 1/25/2009 31,692,260.83 10
11 1/25/2009 2/25/2009 30,372,127.70 10
12 2/25/2009 3/25/2009 29,115,001.78 10
13 3/25/2009 4/25/2009 27,906,455.92 10
14 4/25/2009 5/25/2009 26,749,103.97 10
15 5/25/2009 6/25/2009 16,542,839.40 10
16 6/25/2009 7/25/2009 15,260,693.82 10
17 7/25/2009 8/25/2009 14,653,486.91 10
18 8/25/2009 9/25/2009 14,073,961.85 10
19 9/25/2009 10/25/2009 13,519,579.25 10
20 10/25/2009 11/25/2009 12,980,177.62 10
21 11/25/2009 12/25/2009 6,932,305.46 10
22 12/25/2009 1/25/2010 6,045,196.83 10
23 1/25/2010 2/25/2010 5,833,660.42 10
24 2/25/2010 3/25/2010 5,632,012.79 10
25 3/25/2010 4/25/2010 5,441,534.74 10
26 4/25/2010 5/25/2010 5,249,852.26 10
27 5/25/2010 6/25/2010 4,720,096.66 10
28 6/25/2010 7/25/2010 4,273,518.15 10
29 7/25/2010 8/25/2010 4,132,646.74 10
30 8/25/2010 9/25/2010 3,996,408.30 10
31 9/25/2010 10/25/2010 3,866,957.33 10
32 10/25/2010 11/25/2010 3,737,234.26 10
33 11/25/2010 12/25/2010 3,415,007.33 10
34 12/25/2010 1/25/2011 3,140,714.95 10
35 1/25/2011 2/25/2011 3,041,202.33 10
36 2/25/2011 3/25/2011 2,946,190.16 10
37 3/25/2011 4/25/2011 2,853,956.38 10
38 4/25/2011 5/25/2011 2,764,428.99 10
39 5/25/2011 6/25/2011 2,677,537.39 10
40 6/25/2011 7/25/2011 2,593,212.34 10
41 7/25/2011 8/25/2011 2,511,385.27 10
42 8/25/2011 9/25/2011 2,431,990.48 10
43 9/25/2011 10/25/2011 2,354,962.86 10
44 10/25/2011 11/25/2011 2,280,238.69 10
45 11/25/2011 12/25/2011 2,207,670.67 10
46 12/25/2011 1/25/2012 2,137,367.27 10
47 1/25/2012 2/25/2012 2,068,037.22 10
48 2/25/2012 3/25/2012 2,001,998.76 10
49 3/25/2012 4/25/2012 1,937,959.30 10
50 4/25/2012 5/25/2012 1,875,863.51 10
51 5/25/2012 6/25/2012 1,815,657.33 10
52 6/25/2012 7/25/2012 1,757,287.95 10
53 7/25/2012 8/25/2012 1,699,512.96 10
54 8/25/2012 9/25/2012 1,644,717.66 10
55 9/25/2012 10/25/2012 1,591,605.68 10
56 10/25/2012 11/25/2012 1,540,129.19 10
57 11/25/2012 12/25/2012 1,490,241.50 10
58 12/25/2012 1/25/2013 1,441,897.08 10
59 1/25/2013 2/25/2013 1,394,374.25 10
60 2/25/2013 Termination Date 1,349,014.84 10
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ [logo]
May 3, 2007
▇▇▇▇▇ Fargo Bank, National Association, a national banking
association, not individually, but solely as Security Administrator
for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-NC2
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
In consideration of that certain ISDA Master Agreement dated as of
May 3, 2007 between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc., a Delaware corporation
(hereinafter "MSCS") and ▇▇▇▇▇ Fargo Bank, National Association, a national
banking association, not individually, but solely as Security Administrator for
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2 (the "Trust"), Mortgage
Pass-Through Certificates, Series 2007-NC2 (hereinafter "Counterparty") (such
ISDA Master Agreement, together with each Confirmation exchanged between the
parties pursuant thereto, hereinafter the "Agreement"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, 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.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Treasurer
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
SECRETARY'S CERTIFICATE
-----------------------
I, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, a duly elected and acting Assistant Secretary of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a corporation organized and existing under the laws of the State
of Delaware (the "Corporation"), certify as follows:
(1) ▇▇▇▇▇ ▇. ▇▇▇▇ is the duly elected Treasurer and ▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 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, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇
▇. ▇▇▇▇ 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 1st day of March, 2007.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Secretary
[SEAL]
EXHIBIT
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------
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.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Delegation of Authority
-----------------------
I, ▇▇▇▇▇ ▇. ▇▇▇▇, the Treasurer of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the
"Corporation"), hereby delegate to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇, each of
whom is an officer of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & 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 ___ day of
April, 2006.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
Treasurer
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Specimen Signatures
▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
EXHIBIT X-1
FORM OF SAXON SERVICER REPORTS
Standard Loan Level File Layout - Master Servicing
Exhibit 1: Layout
-------------------------------------------------------------------------------------------------------------------------------
Column Name Description Decimal Format Comment Max
Size
-------------------------------------------------------------------------------------------------------------------------------
Each file requires the
following fields:
-------------------------------------------------------------------------------------------------------------------------------
SER_INVESTOR_NBR A value assigned by the Servicer to Text up to 20 digits
define a group of loans. 20
-------------------------------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to Text up to 10 digits
each loan by the investor. 10
-------------------------------------------------------------------------------------------------------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan Text up to 10 digits
by the Servicer. This may be 10
different than the LOAN_NBR.
-------------------------------------------------------------------------------------------------------------------------------
SCHED_PAY_AMT Scheduled monthly principal and 2 No commas(,) or dollar signs ($)
scheduled interest payment that a 11
borrower is expected to pay, P&I
constant.
-------------------------------------------------------------------------------------------------------------------------------
NOTE_INT_RATE The loan interest rate as reported 4 Max length of 6
by the Servicer. 6
-------------------------------------------------------------------------------------------------------------------------------
NET_INT_RATE The loan gross interest rate less 4 Max length of 6
the service fee rate as reported by 6
the Servicer.
-------------------------------------------------------------------------------------------------------------------------------
SERV_FEE_RATE The servicer's fee rate for a loan 4 Max length of 6
as reported by the Servicer. 6
-------------------------------------------------------------------------------------------------------------------------------
SERV_FEE_AMT The servicer's fee amount for a 2 No commas(,) or dollar signs ($)
loan as reported by the Servicer. 11
-------------------------------------------------------------------------------------------------------------------------------
NEW_PAY_AMT The new loan payment amount as 2 No commas(,) or dollar signs ($)
reported by the Servicer. 11
-------------------------------------------------------------------------------------------------------------------------------
NEW_LOAN_RATE The new loan rate as reported by 4 Max length of 6
the Servicer. 6
-------------------------------------------------------------------------------------------------------------------------------
ARM_INDEX_RATE The index the Servicer is using to 4 Max length of 6
calculate a forecasted rate. 6
-------------------------------------------------------------------------------------------------------------------------------
ACTL_BEG_PRIN_BAL The borrower's actual principal 2 No commas(,) or dollar signs ($)
balance at the beginning of the 11
processing cycle.
-------------------------------------------------------------------------------------------------------------------------------
ACTL_END_PRIN_BAL The borrower's actual principal 2 No commas(,) or dollar signs ($)
balance at the end of the 11
processing cycle.
-------------------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE The date at the end of processing MM/DD/YYYY
cycle that the borrower's next 10
payment is due to the Servicer, as
reported by Servicer.
-------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_1 The first curtailment amount to be 2 No commas(,) or dollar signs ($)
applied. 11
-------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_1 The curtailment date associated MM/DD/YYYY
with the first curtailment amount. 10
-------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_1 The curtailment interest on the 2 No commas(,) or dollar signs ($)
first curtailment amount, if 11
applicable.
-------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_2 The second curtailment amount to be 2 No commas(,) or dollar signs ($)
applied. 11
-------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_2 The curtailment date associated MM/DD/YYYY
with the second curtailment amount. 10
-------------------------------------------------------------------------------------------------------------------------------
Standard Loan Level File Layout
-------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_2 The curtailment interest on the 2 No commas(,) or dollar signs ($)
second curtailment amount, if 11
applicable.
-------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_3 The third curtailment amount to be 2 No commas(,) or dollar signs ($)
applied. 11
-------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_3 The curtailment date associated MM/DD/YYYY
with the third curtailment amount. 10
-------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_AMT_3 The curtailment interest on the 2 No commas(,) or dollar signs ($)
third curtailment amount, if 11
applicable.
-------------------------------------------------------------------------------------------------------------------------------
PIF_AMT The loan "paid in full" amount as 2 No commas(,) or dollar signs ($)
reported by the Servicer. 11
-------------------------------------------------------------------------------------------------------------------------------
PIF_DATE The paid in full date as reported MM/DD/YYYY
by the Servicer. 10
-------------------------------------------------------------------------------------------------------------------------------
ACTION_CODE The standard FNMA numeric code used Action Code Key: 15=Bankruptcy, 30=Foreclosure,
to indicate the default/delinquent 60=PIF, 63=Substitution, 65=Repurchase,72=REO 2
status of a particular loan.
-------------------------------------------------------------------------------------------------------------------------------
INT_ADJ_AMT The amount of the interest 2 No commas(,) or dollar signs ($)
adjustment as reported by the 11
Servicer.
-------------------------------------------------------------------------------------------------------------------------------
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment 2 No commas(,) or dollar signs ($)
amount, if applicable. 11
-------------------------------------------------------------------------------------------------------------------------------
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if 2 No commas(,) or dollar signs ($)
applicable. 11
-------------------------------------------------------------------------------------------------------------------------------
LOAN_LOSS_AMT The amount the Servicer is passing 2 No commas(,) or dollar signs ($)
as a loss, if applicable. 11
-------------------------------------------------------------------------------------------------------------------------------
Plus the following
applicable fields:
-------------------------------------------------------------------------------------------------------------------------------
SCHED_BEG_PRIN_BAL The scheduled outstanding principal 2 No commas(,) or dollar signs ($)
amount due at the beginning of the 11
cycle date to be passed through to
investors.
-------------------------------------------------------------------------------------------------------------------------------
SCHED_END_PRIN_BAL The scheduled principal balance due 2 No commas(,) or dollar signs ($)
to investors at the end of a 11
processing cycle.
-------------------------------------------------------------------------------------------------------------------------------
SCHED_PRIN_AMT The scheduled principal amount as 2 No commas(,) or dollar signs ($)
reported by the Servicer for the 11
current cycle -- only applicable
for Scheduled/Scheduled Loans.
-------------------------------------------------------------------------------------------------------------------------------
SCHED_NET_INT The scheduled gross interest amount 2 No commas(,) or dollar signs ($)
less the service fee amount for the 11
current cycle as reported by the
Servicer -- only applicable for
Scheduled/Scheduled Loans.
-------------------------------------------------------------------------------------------------------------------------------
ACTL_PRIN_AMT The actual principal amount 2 No commas(,) or dollar signs ($)
collected by the Servicer for the 11
current reporting cycle -- only
applicable for Actual/Actual Loans.
-------------------------------------------------------------------------------------------------------------------------------
ACTL_NET_INT The actual gross interest amount 2 No commas(,) or dollar signs ($)
less the service fee amount for the 11
current reporting cycle as reported
by the Servicer -- only applicable
for Actual/Actual Loans.
-------------------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ AMT The penalty amount received when a 2 No commas(,) or dollar signs ($)
borrower prepays on his loan as 11
reported by the Servicer.
-------------------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ WAIVED The prepayment penalty amount for 2 No commas(,) or dollar signs ($)
the loan waived by the servicer. 11
-------------------------------------------------------------------------------------------------------------------------------
MOD_DATE The Effective Payment Date of the MM/DD/YYYY
Modification for the loan. 10
-------------------------------------------------------------------------------------------------------------------------------
MOD_TYPE The Modification Type. Varchar - value can be alpha or numeric
30
-------------------------------------------------------------------------------------------------------------------------------
DELINQ_P&I_ADVANCE_AMT The current outstanding principal 2 No commas(,) or dollar signs ($)
and interest advances made by 11
Servicer.
-------------------------------------------------------------------------------------------------------------------------------
BREACH_FLAG Flag to indicate if the repurchase Y=Breach
of a loan is due to a breach of N=NO Breach 1
Representations and Warranties Let blank if N/A
-------------------------------------------------------------------------------------------------------------------------------
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. 90 or In Real Estate Total Dollar
of of 30- 60- 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 ▇▇ ▇▇▇▇▇▇ LOAN COUNT BALANCE
PREPAYMENT PENALTY AMT 0 $0.00
PREPAYMENT PENALTY AMT WAIVED 0 $0.00
DELINQUENCY P&I AMOUNT 0 $0.00
EXHIBIT X-2
FORM OF COUNTRYWIDE SERVICING SERVICER REPORTS
Standard File Layout - Scheduled/Scheduled
----------------------------------------------------------------------------------------------------------------------
Column Name Description Decimal Format Comment
----------------------------------------------------------------------------------------------------------------------
SER_INVESTOR_NBR A value assigned by the Servicer to define a Text up to 10 digits
group of loans.
----------------------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to each loan by Text up to 10 digits
the investor.
----------------------------------------------------------------------------------------------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Text up to 10 digits
Servicer. This may be different than the
LOAN_NBR.
----------------------------------------------------------------------------------------------------------------------
BORROWER_NAME The borrower name as received in the file. Maximum length of 30 (Last,
It is not separated by first and last name. First)
----------------------------------------------------------------------------------------------------------------------
SCHED_PAY_AMT Scheduled monthly principal and scheduled 2 No commas(,) or dollar signs ($)
interest payment that a borrower is expected
to pay, P&I constant.
----------------------------------------------------------------------------------------------------------------------
NOTE_INT_RATE The loan interest rate as reported by the 4 Max length of 6
Servicer.
----------------------------------------------------------------------------------------------------------------------
NET_INT_RATE The loan gross interest rate less the 4 Max length of 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
reported by the Servicer.
----------------------------------------------------------------------------------------------------------------------
SERV_FEE_AMT The servicer's fee amount for a loan as 2 No commas(,) or dollar signs ($)
reported by the Servicer.
----------------------------------------------------------------------------------------------------------------------
NEW_PAY_AMT The new loan payment amount as reported by 2 No commas(,) or dollar signs ($)
the Servicer.
----------------------------------------------------------------------------------------------------------------------
NEW_LOAN_RATE The new loan rate as reported by the 4 Max length of 6
Servicer.
----------------------------------------------------------------------------------------------------------------------
ARM_INDEX_RATE The index the Servicer is using to calculate 4 Max length of 6
a forecasted rate.
----------------------------------------------------------------------------------------------------------------------
ACTL_BEG_PRIN_BAL The borrower's actual principal balance at 2 No commas(,) or dollar signs ($)
the beginning of the processing cycle.
----------------------------------------------------------------------------------------------------------------------
ACTL_END_PRIN_BAL The borrower's actual principal balance at 2 No commas(,) or dollar signs ($)
the end of the processing cycle.
----------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE The date at the end of processing cycle that MM/DD/YYYY
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 dollar signs ($)
----------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_1 The curtailment date associated with the MM/DD/YYYY
first curtailment amount.
----------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_1 The curtailment interest on the first 2 No commas(,) or dollar signs ($)
curtailment amount, if applicable.
----------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_2 The second curtailment amount to be applied. 2 No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_2 The curtailment date associated with the MM/DD/YYYY
second curtailment amount.
----------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_2 The curtailment interest on the second 2 No commas(,) or dollar signs ($)
curtailment amount, if applicable.
----------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_3 The third curtailment amount to be applied. 2 No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_3 The curtailment date associated with the MM/DD/YYYY
third curtailment amount.
----------------------------------------------------------------------------------------------------------------------
CURT_ADJ_AMT_3 The curtailment interest on the third 2 No commas(,) or dollar signs ($)
curtailment amount, if applicable.
----------------------------------------------------------------------------------------------------------------------
PIF_AMT The loan "paid in full" amount as reported 2 No commas(,) or dollar signs ($)
by the Servicer.
----------------------------------------------------------------------------------------------------------------------
PIF_DATE The paid in full date as reported by the MM/DD/YYYY
Servicer.
----------------------------------------------------------------------------------------------------------------------
Action Code Key: 15=Bankruptcy,
30=Foreclosure, 60=PIF,
63=Substitution,
65=Repurchase,70=REO
----------------------------------------------------------------------------------------------------------------------
ACTION_CODE The standard FNMA numeric code used to
indicate the default/delinquent status of
a particular loan.
----------------------------------------------------------------------------------------------------------------------
INT_ADJ_AMT The amount of the interest adjustment as 2 No commas(,) or dollar signs ($)
reported by the Servicer.
----------------------------------------------------------------------------------------------------------------------
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment amount, if 2 No commas(,) or dollar signs ($)
applicable.
----------------------------------------------------------------------------------------------------------------------
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if 2 No commas(,) or dollar signs ($)
applicable.
----------------------------------------------------------------------------------------------------------------------
LOAN_LOSS_AMT The amount the Servicer is passing as a 2 No commas(,) or dollar signs ($)
loss, if applicable.
----------------------------------------------------------------------------------------------------------------------
SCHED_BEG_PRIN_BAL The scheduled outstanding principal amount 2 No commas(,) or dollar signs ($)
due at the beginning of the cycle date to be
passed through to investors.
----------------------------------------------------------------------------------------------------------------------
SCHED_END_PRIN_BAL The scheduled principal balance due to 2 No commas(,) or dollar signs ($)
investors at the end of a processing cycle.
----------------------------------------------------------------------------------------------------------------------
SCHED_PRIN_AMT The scheduled principal amount as reported 2 No commas(,) or dollar signs ($)
by the Servicer for the current cycle --
only applicable for Scheduled/Scheduled
Loans.
----------------------------------------------------------------------------------------------------------------------
SCHED_NET_INT The scheduled gross interest amount less the 2 No commas(,) or dollar signs ($)
service fee amount for the current cycle as
reported by the Servicer -- only applicable
for Scheduled/Scheduled Loans.
----------------------------------------------------------------------------------------------------------------------
ACTL_PRIN_AMT The actual principal amount collected by the 2 No commas(,) or dollar signs ($)
Servicer for the current reporting cycle
-- only applicable for Actual/Actual Loans.
----------------------------------------------------------------------------------------------------------------------
ACTL_NET_INT The actual gross interest amount less the 2 No commas(,) or dollar signs ($)
service fee amount for the current reporting
cycleas reported by the Servicer -- only
applicable for Actual/Actual Loans.
----------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ AMT The penalty amount received when a borrower 2 No commas(,) or dollar signs ($)
prepays on his loan as reported by the
Servicer.
----------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ WAIVED The prepayment penalty amount for the loan 2 No commas(,) or dollar signs ($)
waived by the servicer.
----------------------------------------------------------------------------------------------------------------------
MOD_DATE The Effective Payment Date of the MM/DD/YYYY
Modification for the loan.
----------------------------------------------------------------------------------------------------------------------
MOD_TYPE The Modification Type. Varchar - value can be alpha or
numeric
----------------------------------------------------------------------------------------------------------------------
DELINQ_P&I_ADVANCE_AMT The current outstanding principal and 2 No commas(,) or dollar signs ($)
interest advances made by Servicer.
----------------------------------------------------------------------------------------------------------------------
EXHIBIT Y
Saxon Standard File Layout - Delinquency Reporting
------------------------------------------------------------------------------------------------------------------
Column/Header Name Description Decimal Format Comment
------------------------------------------------------------------------------------------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Servicer.
This may be different than the LOAN_NBR
------------------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to each loan by the
originator.
------------------------------------------------------------------------------------------------------------------
CLIENT_NBR Servicer Client Number
------------------------------------------------------------------------------------------------------------------
SERV_INVESTOR_NBR Contains a unique number as assigned
by an external servicer to identify a
group of loans in their system.
------------------------------------------------------------------------------------------------------------------
BORROWER_FIRST_NAME First Name of the Borrower.
------------------------------------------------------------------------------------------------------------------
BORROWER_LAST_NAME Last name of the borrower.
------------------------------------------------------------------------------------------------------------------
PROP_ADDRESS Street Name and Number of Property
------------------------------------------------------------------------------------------------------------------
PROP_STATE The state where the property located.
------------------------------------------------------------------------------------------------------------------
PROP_ZIP Zip code where the property is located.
------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE The date that the borrower's next MM/DD/YYYY
payment is due to the
servicer at the end of processing
cycle, as reported by Servicer.
------------------------------------------------------------------------------------------------------------------
LOAN_TYPE Loan Type (i.e. FHA, VA, Conv)
------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_FILED_DATE The date a particular bankruptcy claim was filed. MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CHAPTER_CODE The chapter under which the bankruptcy was filed.
------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CASE_NBR The case number assigned by the court to the
bankruptcy filing.
------------------------------------------------------------------------------------------------------------------
POST_PETITION_DUE_DATE The payment due date once the bankruptcy has been MM/DD/YYYY
approved by the courts
------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_DCHRG_DISM_DATE The Date The Loan Is Removed From Bankruptcy. Either MM/DD/YYYY
by Dismissal, Discharged and/or a Motion For Relief
Was Granted.
------------------------------------------------------------------------------------------------------------------
LOSS_MIT_APPR_DATE The Date The Loss Mitigation Was Approved By The MM/DD/YYYY
Servicer
------------------------------------------------------------------------------------------------------------------
LOSS_MIT_TYPE The Type Of Loss Mitigation Approved For A Loan Such
As;
------------------------------------------------------------------------------------------------------------------
LOSS_MIT_EST_COMP_DATE The Date The Loss Mitigation /Plan Is Scheduled To MM/DD/YYYY
End/Close
------------------------------------------------------------------------------------------------------------------
LOSS_MIT_ACT_COMP_DATE The Date The Loss Mitigation Is Actually Completed MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
FRCLSR_APPROVED_DATE The date DA Admin sends a letter to the servicer with MM/DD/YYYY
instructions to begin foreclosure proceedings.
------------------------------------------------------------------------------------------------------------------
ATTORNEY_REFERRAL_DATE Date File Was Referred To Attorney to Pursue MM/DD/YYYY
Foreclosure
------------------------------------------------------------------------------------------------------------------
FIRST_LEGAL_DATE Notice of 1st legal filed by an Attorney in a MM/DD/YYYY
Foreclosure Action
------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_EXPECTED_DATE The date by which a foreclosure sale is expected to MM/DD/YYYY
occur.
------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_DATE The actual date of the foreclosure sale. MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_AMT The amount a property sold for at the foreclosure sale. 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
EVICTION_START_DATE The date the servicer initiates eviction of the MM/DD/YYYY
borrower.
------------------------------------------------------------------------------------------------------------------
EVICTION_COMPLETED_DATE The date the court revokes legal MM/DD/YYYY
possession of the property
from the borrower.
------------------------------------------------------------------------------------------------------------------
LIST_PRICE The price at which an REO property is marketed. 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
LIST_DATE The date an REO property is listed at a particular MM/DD/YYYY
price.
------------------------------------------------------------------------------------------------------------------
OFFER_AMT The dollar value of an offer for an REO property. 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
OFFER_DATE_TIME The date an offer is received by DA Admin or by the MM/DD/YYYY
Servicer.
------------------------------------------------------------------------------------------------------------------
REO_CLOSING_DATE The date the REO sale of the property is scheduled to MM/DD/YYYY
close.
------------------------------------------------------------------------------------------------------------------
REO_ACTUAL_CLOSING_DATE Actual Date Of REO Sale MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
OCCUPANT_CODE Classification of how the property is occupied.
------------------------------------------------------------------------------------------------------------------
PROP_CONDITION_CODE A code that indicates the condition of the property.
------------------------------------------------------------------------------------------------------------------
PROP_INSPECTION_DATE The date a property inspection is performed. MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
APPRAISAL_DATE The date the appraisal was done. MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
CURR_PROP_VAL The current "as is" value of the property based on 2
brokers price opinion or appraisal.
------------------------------------------------------------------------------------------------------------------
REPAIRED_PROP_VAL The amount the property would be worth if repairs are 2
completed pursuant to a broker's price opinion or
appraisal.
------------------------------------------------------------------------------------------------------------------
If applicable:
------------------------------------------------------------------------------------------------------------------
DELINQ_STATUS_CODE FNMA Code Describing Status of Loan
------------------------------------------------------------------------------------------------------------------
DELINQ_REASON_CODE The circumstances which caused a borrower to stop
paying on a loan. Code indicates the reason why the
loan is in default for this cycle.
------------------------------------------------------------------------------------------------------------------
MI_CLAIM_FILED_DATE Date Mortgage Insurance Claim Was Filed With Mortgage MM/DD/YYYY
Insurance Company.
------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT Amount of Mortgage Insurance Claim Filed No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
MI_CLAIM_PAID_DATE Date Mortgage Insurance Company Disbursed Claim Payment MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT_PAID Amount Mortgage Insurance Company Paid On Claim 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_FILED_DATE Date Claim Was Filed With Pool Insurance Company MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT Amount of Claim Filed With Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_PAID_DATE Date Claim Was Settled and The Check Was Issued By The MM/DD/YYYY
Pool Insurer
------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT_PAID Amount Paid On Claim By Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_FILED_DATE Date FHA Part A Claim Was Filed With HUD MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_AMT Amount of FHA Part A Claim Filed 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_DATE Date HUD Disbursed Part A Claim Payment MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_AMT Amount HUD Paid on Part A Claim 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_FILED_DATE Date FHA Part B Claim Was Filed With HUD MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_AMT Amount of FHA Part B Claim Filed 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_DATE Date HUD Disbursed Part B Claim Payment MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_AMT Amount HUD Paid on Part B Claim 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
VA_CLAIM_FILED_DATE Date VA Claim Was Filed With the Veterans Admin MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_DATE Date Veterans Admin. Disbursed VA Claim Payment MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_AMT Amount Veterans Admin. Paid on VA Claim 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
MOTION_FOR_RELIEF_DATE The date the Motion for Relief was filed 10 MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
FRCLSR_BID_AMT The foreclosure sale bid amount No commas(,)
or dollar
11 signs ($)
------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_TYPE The foreclosure sales results: REO, Third Party,
Conveyance to HUD/VA
------------------------------------------------------------------------------------------------------------------
REO_PROCEEDS The net proceeds from the sale of the REO property. No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
BPO_DATE The date the BPO was done.
------------------------------------------------------------------------------------------------------------------
CURRENT_FICO The current FICO score
------------------------------------------------------------------------------------------------------------------
HAZARD_CLAIM_FILED_DATE The date the Hazard Claim was filed with the Hazard MM/DD/YYYY
Insurance Company. 10
------------------------------------------------------------------------------------------------------------------
HAZARD_CLAIM_AMT The amount of the Hazard Insurance Claim filed. No commas(,)
or dollar
11 signs ($)
------------------------------------------------------------------------------------------------------------------
HAZARD_CLAIM_PAID_DATE The date the Hazard Insurance Company disbursed the MM/DD/YYYY
claim payment. 10
------------------------------------------------------------------------------------------------------------------
HAZARD_CLAIM_PAID_AMT The amount the Hazard Insurance Company paid on the No commas(,)
claim. or dollar
11 signs ($)
------------------------------------------------------------------------------------------------------------------
ACTION_CODE Indicates loan status Number
------------------------------------------------------------------------------------------------------------------
NOD_DATE MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
NOI_DATE MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
ACTUAL_PAYMENT_PLAN_START_DATE MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
ACTUAL_PAYMENT_ PLAN_END_DATE
------------------------------------------------------------------------------------------------------------------
ACTUAL_REO_START_DATE MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
REO_SALES_PRICE Number
------------------------------------------------------------------------------------------------------------------
REALIZED_LOSS/GAIN As defined in the Servicing Agreement 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: ▇▇▇▇▇ 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 ▇▇▇▇▇
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
----------------- ------------- ----------------
▇▇▇▇▇ 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 Base
(Tax /Ins.) Date Paid Coverage Total Paid Amount Penalties Interest
----------- --------- -------- ---------- ------ --------- --------
EXHIBIT Z
COUNTRYWIDE SERVICING STANDARD FILE LAYOUT - DELINQUENCY REPORTING
REPORTING DATA FOR DEFAULTED LOANS
Data must be submitted to ▇▇▇▇▇ Fargo Bank in an Excel spreadsheet format with
fixed field names and data type. The Excel spreadsheet should be used as a
template consistently every month when submitting data.
Table: Delinquency
Name Type Size
----------------------------------------------------------------------------
Servicer Loan # Number 8
(Double)
Investor Loan # Number 8
(Double)
Borrower Name Text 20
Address Text 30
State Text 2
Due Date Date/Time 8
Action Code Text 2
FC Received Date/Time 8
File Referred to Atty Date/Time 8
NOD Date/Time 8
Complaint Filed Date/Time 8
Sale Published Date/Time 8
Target Sale Date Date/Time 8
Actual Sale Date Date/Time 8
Loss Mit Approval Date Date/Time 8
Loss Mit Type Text 5
Loss Mit Estimated Completion Date Date/Time 8
Loss Mit Actual Completion Date Date/Time 8
Loss Mit Broken Plan Date Date/Time 8
BK Chapter Text 6
BK Filed Date Date/Time 8
Post Petition Due Date/Time 8
Motion for Relief Date/Time 8
Lift of Stay Date/Time 8
RFD Text 10
Occupant Code Text 10
Eviction Start Date Date/Time 8
Eviction Completed Date Date/Time 8
List Price Currency 8
List Date Date/Time 8
Accepted Offer Price Currency 8
Accepted Offer Date Date/Time 8
Estimated REO Closing Date Date/Time 8
Actual REO Sale Date Date/Time 8
o Items in bold are MANDATORY FIELDS. We must receive information in those
fields every month in order for your file to be accepted.
The Action Code Field should show the applicable numeric code to indicate that a
special action is being taken. The Action Codes are the following:
12-Relief Provisions
15-Bankruptcy/Litigation
20-Referred for Deed-in-Lieu
30-Referred fore Foreclosure
▇▇-▇▇▇▇▇▇
▇▇-▇▇▇▇▇▇▇▇▇▇
▇▇-▇▇▇-▇▇▇▇ for Sale
71-Third Party Sale/Condemnation
72-REO-Pending Conveyance-Pool Insurance claim filed
▇▇▇▇▇ Fargo Bank will accept alternative Action Codes to those above, provided
that the Codes are consistent with industry standards. If Action Codes other
than those above are used, the Servicer must supply ▇▇▇▇▇ Fargo Bank with a
description of each of the Action Codes prior to sending the file.
Description of Action Codes:
Action Code 12 - To report a Mortgage Loan for which the Borrower has been
granted relief for curing a delinquency. The Action Date is the date the relief
is expected to end. For military indulgence, it will be three months after the
Borrower's discharge from military service.
Action Code 15 - To report the Borrower's filing for bankruptcy or instituting
some other type of litigation that will prevent or delay liquidation of the
Mortgage Loan. The Action Date will be either the date that any repayment plan
(or forbearance) instituted by the bankruptcy court will expire or an additional
date by which the litigation should be resolved.
Action Code 20 - To report that the Borrower has agreed to a deed-in-lieu or an
assignment of the property. The Action Date is the date the Servicer decided to
pursue a deed-in-lieu or the assignment.
Action Code 30 - To report that the decision has been made to foreclose the
Mortgage Loan. The Action Date is the date the Servicer referred the case to the
foreclosure attorney.
Action Code 60 - To report that a Mortgage Loan has been paid in full either at,
or prior to, maturity. The Action Date is the date the pay-off funds were
remitted to the Master Servicer.
Action Code 65 - To report that the Servicer is repurchasing the Mortgage Loan.
The Action Date is the date the repurchase proceeds were remitted to the Master
Servicer.
Action Code 70 - To report that a Mortgage Loan has been foreclosed or a
deed-in-lieu of foreclosure has been accepted, and the Servicer, on behalf of
the owner of the Mortgage Loan, has acquired the property and may dispose of it.
The Action Date is the date of the foreclosure sale or, for deeds-in-lieu, the
date the deed is recorded on behalf of the owner of the Mortgage Loan.
Action Code 71 - To report that a Mortgage Loan has been foreclosed and a third
party acquired the property, or a total condemnation of the property has
occurred. The Action Date is the date of the foreclosure sale or the date the
condemnation award was received.
Action Code 72 - To report that a Mortgage Loan has been foreclosed, or a
deed-in-lieu has been accepted, and the property may be conveyed to the mortgage
insurer and the pool insurance claim has been filed. The Action Date is the date
of the foreclosure sale, or, for deeds-in-lieu, the date of the deed for
conventional mortgages.
The Loss Mit Type field should show the approved Loss Mitigation arrangement.
The following are acceptable:
ASUM-Approved Assumption
BAP- Borrower Assistance Program
CO- Charge Off
DIL- Deed-in-Lieu
FFA- Formal Forbearance Agreement
MOD- Loan Modification
PRE- Pre-Sale
SS- Short Sale
MISC-Anything else approved by the PMI or Pool Insurer
▇▇▇▇▇ 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 ▇▇▇▇▇ 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. The
acceptable codes are:
Mortgagor
Tenant
Unknown
Vacant
REALIZED LOSS CALCULATION INFORMATION
▇▇▇▇▇ FARGO BANK, N.A. Form 332
Calculation of Realized Loss
Purpose
To provide the Servicer with a form for the calculation of any Realized Loss (or
gain) as a result of a Mortgage Loan having been foreclosed and Liquidated.
Distribution
The Servicer will prepare the form in duplicate and send the original together
with evidence of conveyance of title and appropriate supporting documentation to
the Master Servicer with the Monthly Accounting Reports which supports the
Mortgage Loan's removal from the Mortgage Loan Activity Report. The Servicer
will retain the duplicate for its own records.
Due Date
With respect to any liquidated Mortgage Loan, the form will be submitted to the
Master Servicer no later than the date on which statements are due to the Master
Servicer under Section 4.02 of this Agreement (the "Statement Date") in the
month following receipt of final liquidation proceeds and supporting
documentation relating to such liquidated Mortgage Loan; provided, that if such
Statement Date is not at least 30 days after receipt of final liquidation
proceeds and supporting documentation relating to such liquidated Mortgage Loan,
then the form will be submitted on the first Statement Date occurring after the
30th day following receipt of final liquidation proceeds and supporting
documentation.
Preparation Instructions
The numbers on the form correspond with the numbers listed below.
1. The actual Unpaid Principal Balance of the Mortgage Loan.
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.
3-7. Complete as necessary. All line entries must be supported by copies of
appropriate statements, vouchers, receipts, canceled checks, etc., to
document the expense. Entries not properly documented will not be
reimbursed to the Servicer.
8. Accrued Servicing Fees based upon the Scheduled Principal Balance of the
Mortgage Loan as calculated on a monthly basis.
10. The total of lines 1 through 9.
Credits
11-17.Complete as necessary. All line entries must be supported by copies of
the appropriate claims forms, statements, payment checks, etc. to document
the credit. If the Mortgage Loan is subject to a Bankruptcy Deficiency,
the difference between the Unpaid Principal Balance of the Note prior to
the Bankruptcy Deficiency and the Unpaid Principal Balance as reduced by
the Bankruptcy Deficiency should be input on line 16.
18. The total of lines 11 through 17.
Total Realized Loss (or Amount of Any Gain)
19. The total derived from subtracting line 18 from 10. If the amount
represents a realized gain, show the amount in parenthesis ( ).
▇▇▇▇▇ FARGO BANK, N.A.
CALCULATION OF REALIZED LOSS
▇▇▇▇▇ FARGO BANK, N.A. Trust: ___________________________
Prepared by: __________________ Date: _______________
Phone: ______________________
Servicer Loan No. Servicer Name Servicer Address
▇▇▇▇▇ FARGO BANK, N.A.
Loan No._____________________________
Borrower's Name:________________________________________________________
Property
Address:________________________________________________________________
Liquidation and Acquisition Expenses:
Actual Unpaid Principal Balance of Mortgage Loan $ _______________(1)
Interest accrued at Net Rate ________________(2)
Attorney's Fees ________________(3)
Taxes ________________(4)
Property Maintenance ________________(5)
MI/Hazard Insurance Premiums ________________(6)
Hazard Loss Expenses ________________(7)
Accrued Servicing Fees ________________(8)
Other (itemize) ________________(9)
$__________________
Total Expenses $ ______________(10)
Credits:
Escrow Balance $ ______________(11)
HIP Refund ________________(12)
Rental Receipts ________________(13)
Hazard Loss Proceeds ________________(14)
Primary Mortgage Insurance Proceeds ________________(15)
Proceeds from Sale of Acquired Property ________________(16)
Other (itemize) ________________(17)
____________________
____________________
Total Credits $________________(18)
Total Realized Loss (or Amount of Gain) $________________
EXHIBIT AA
FORM OF ADDITIONAL DISCLOSURE NOTIFICATION
**SEND VIA EMAIL TO ▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ AND VIA OVERNIGHT
MAIL TO THE ADDRESS IMMEDIATELY BELOW
▇▇▇▇▇ Fargo Bank, National Association, as Securities Administrator
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn.: Corporate Trust Services - MSAC 2007-HE5 - 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 April 1, 2007, among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc., as depositor, ▇▇▇▇▇ Fargo Bank, National Association, as master servicer,
securities administrator, and a custodian, Saxon Mortgage Services, Inc., as a
servicer, Countrywide Home Loans Servicing LP, as a servicer, WMC Mortgage
Corp., as a responsible party, Decision One Mortgage Company, LLC, as a
responsible party, Deutsche Bank National Trust Company, as trustee, and LaSalle
Bank National Association, as a custodian, 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
▇▇▇▇▇-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 BB
COUNTRYWIDE AMENDMENT REGULATION AB
Capitalized terms used in this Exhibit BB but not defined in this
Exhibit BB shall have the meanings given to such terms in this Agreement, except
the term "Mortgage Loan" shall mean the "Countrywide Serviced Mortgage Loans" as
defined in this Agreement.
EXHIBIT CC
REPRESENTATIONS AND WARRANTIES AGREEMENT
This REPRESENTATIONS AND WARRANTIES AGREEMENT (this "Agreement"),
dated as of May 3, 2007 (the "Closing Date"), is between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE
CAPITAL INC. (the "Sponsor") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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") from NC Capital Corporation ("New Century")
pursuant to that certain Sixth Amended and Restated Mortgage Loan Purchase and
Warranties Agreement, dated as of May 1, 2006 (the "New Century Purchase
Agreement"), between the Sponsor and New Century;
WHEREAS, pursuant to that certain ▇▇▇▇ 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 April 1, 2007 (the "Pooling and Servicing Agreement"), among the
Depositor, Saxon Mortgage Services, Inc., as a servicer ("Saxon"), Countrywide
Home Loans Servicing LP, as a servicer (together with Saxon, the "Servicers"),
▇▇▇▇▇ Fargo Bank, National Association ("▇▇▇▇▇ Fargo"), as securities
administrator and master servicer, and Deutsche Bank National Trust Company, as
trustee (the "Trustee"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2 (the
"Trust") shall issue its Mortgage Pass-Through Certificates, Series 2007-NC2
(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 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. Assignment and Assumption of EPD Provision.
(a) The Sponsor hereby assigns, conveys, transfers and sets over to
the Depositor all of the Sponsor's right, title and interest (except as
otherwise set forth in Section 3(b) below) in, to and under the Sponsor's rights
to require New Century to repurchase a Mortgage Loan as a result of a scheduled
payment of principal and interest not being made during the period of time
specified in the early payment default provision (the "EPD Provision") specified
on Schedule II attached hereto in the related letter agreement or in the related
mortgage loan purchase and warranties agreement, as applicable, listed on
Schedule II attached hereto (each a "Purchase Price and Terms Agreement"), each
between the Sponsor and New Century, but only to the extent such provision
relates to any Mortgage Loans that are the subject of this Agreement.
(b) Notwithstanding the foregoing set forth in Section 3(a), the
Sponsor specifically reserves and does not assign to the Depositor any and all
right, title and interest in, to and under the right to receive as part of the
repurchase price for any such Mortgage Loan repurchased pursuant to any EPD
Provision the excess (the "Repurchase Premium") of the Purchase Price Percentage
(as defined in the applicable Purchase Price and Terms Agreement) over 100%
multiplied by the unpaid principal balance of such Mortgage Loan. In the event
any Mortgage Loan is required to be repurchased by New Century pursuant to the
provisions of the applicable Purchase Price and Terms Agreement specified in
Section 3(a) above, the Depositor shall require New Century to repurchase such
Mortgage Loan at the Repurchase Price (as defined in such Purchase Price and
Terms Agreement), and the Depositor shall cause New Century to pay such
Repurchase Premium to the Sponsor or its designee as instructed by the Sponsor.
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 therein (or which materially and adversely affects the value of
the applicable Mortgage Loan or the interest of the Depositor 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), (p), (s), (x), (y) and
(z) 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. With respect to the representation and warranty contained in clause
(g) of on Part A of Exhibit I hereof that is made to the Sponsor's knowledge, if
it is discovered that the substance of such representation and warranty was
inaccurate as of the Closing Date and such inaccuracy materially and adversely
affect the value of the related Mortgage Loan, then notwithstanding the
Sponsor's lack of knowledge with respect to the inaccuracy at the time the
representation or warranty was made, such inaccuracy shall be deemed a breach of
the such representation or warranty. Any repurchase of a Mortgage Loan or
Mortgage Loans pursuant to the foregoing provisions of this Section 3 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), (p), (s), (x), (y) and (z) 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 3 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 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 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.
[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.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By:
--------------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
By:
--------------------------------------
Name:
Title:
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,
"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 any person, including without
limitation, the 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 ▇▇▇▇▇▇ ▇▇▇
or ▇▇▇▇▇▇▇ 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 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) [Reserved];
(p) 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;
(q) 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;
(r) 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;
(s) 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;
(t) 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;
(u) 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;
(v) 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 ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ 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.
(w) LTV. No Mortgage Loan has an LTV greater than 100%.
(x) Prepayment Charge. None of the Mortgage Loans has a prepayment
charge period at origination in excess of three years;
(y) 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 Mortgage Loan. No proceeds from any
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;
(z) No Arbitration. No Mortgage Loan originated on or after July 1,
2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
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) ▇▇▇▇▇▇▇ Mac Loan Limits. The original principal balance of each
Group I Mortgage Loan was within ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ 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) ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇
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; and
(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.
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)
SCHEDULE II
List of Purchase Price and Terms Agreements and EPD Provisions
--------------------------------------------------------------
Purchase Price and Terms Agreements EPD Provision
---------------------------------------------------------------------- ----------------------------------------------------
1. Purchase Price and Terms Agreement, dated as of March 17, 2006, Third full paragraph of Section 6 (titled "Purchase
between New Century and the Sponsor. Agreements").
2. Purchase Price and Terms Agreement, dated as of August 25, 2006, Third full paragraph of Section 6 (titled "Purchase
between New Century and the Sponsor. Agreements").
3. Purchase Price and Terms Agreement, dated as of May 24, 2006, Third full paragraph of Section 6 (titled "Purchase
between New Century and the Sponsor. Agreements").
4. Purchase Price and Terms Agreement, dated as of July 24, 2006, Third full paragraph of Section 6 (titled "Purchase
between New Century and the Sponsor. Agreements").
5. Purchase Price and Terms Agreement, dated as of September 22, Third full paragraph of Section 6 (titled "Purchase
2006, between New Century and the Sponsor. Agreements").
6. Purchase Price and Terms Agreement, dated as of November 7, Third full paragraph of Section 6 (titled "Purchase
2006, between New Century and the Sponsor. Agreements").
EXHIBIT DD
INTEREST RATE CAP AGREEMENT
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
DATE: May 3, 2007
TO: ▇▇▇▇▇ Fargo Bank, National Association, not
individually, but solely as Securities Administrator
for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2,
Mortgage Pass-Through Certificates, Series 2007-NC2
ATTENTION: Client Manager - MSAC 2007-NC2
TELEPHONE: (▇▇▇) ▇▇▇-▇▇▇▇
FACSIMILE: (▇▇▇) ▇▇▇-▇▇▇▇
FROM: New York Derivative Client Services Group
TELEPHONE: (▇▇▇) ▇▇▇-▇▇▇▇
FACSIMILE: (▇▇▇) ▇▇▇-▇▇▇▇
SUBJECT: Fixed Income Derivatives Confirmation
REFERENCE NUMBER: HRBHA
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc.
("Party A") and ▇▇▇▇▇ 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 April 1, 2007, among
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor, ▇▇▇▇▇ Fargo Bank, National
Association, as Master Servicer and Securities Administrator, Saxon Mortgage
Services, Inc., as Servicer, Countrywide Home Loans Servicing LP, as Servicer,
and Deutsche Bank National Trust Company, as Trustee (the "PSA") for the ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-NC2, Mortgage Pass-Through Certificates,
Series 2007-NC2 ("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 May 3, 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:........................ April 26, 2007
Effective Date:.................... May 3, 2007
Termination Date:.................. March 25, 2008
Fixed Amounts:
Fixed Rate Payer:............ Party B
Fixed Rate Payer
Payment Dates: May 3, 2007
Fixed Amount:................ None
Floating Amounts:
Floating Rate Payer:......... Party A
Cap Rate:.................... 7.250%
Floating Rate Payer
Payment
Dates:..................... Early Payment--For each Calculation
Period, the first Business Day prior
to each Floating Rate Payer Period End
Date.
Floating Rate Payer
Period End
Dates:..................... The 25th calendar day of each month
during the Term of this Transaction,
commencing May 25, 2007, subject to
adjustment in accordance with the
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
Business Day Convention:........... Following
2. Account Details and Settlement Information:
Payment to Party A:
Citibank, New York
ABA No.: 021 000 089
Account No.: 4072-4601
Account Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc.
Payments to Party B:
▇▇▇▇▇ Fargo Bank ,National Association
ABA No.: 121 000 248
Account No: ▇▇▇▇▇▇▇▇▇▇
Acct Name: SAS Clearing
Ref: FFC: 53148301, ▇▇▇▇ ▇▇▇▇-▇▇▇ (▇▇▇)
3. Securities Administrator Capacity. It is expressly understood and agreed
by the parties hereto that insofar as this Confirmation is executed by
▇▇▇▇▇ Fargo Bank, National Association (i) this Confirmation is executed
and delivered by ▇▇▇▇▇ 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 ▇▇▇▇▇ 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.
4. Modifications to the Agreement. For purposes of this Transaction only, the
Agreement is modified as follows: Part 1(f)(ii), Part 1(h)(A) and Part
5(f) of the Schedule to the ISDA Master Agreement are hereby deleted in
their entirety.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
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,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
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.
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not individually, but
solely as Securities Administrator
for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc. Trust 2007-NC2, Mortgage
Pass-Through Certificates, Series
2007-NC2
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
SCHEDULE I
------------------------------------------------------------------------------
Notional Amount
Line Calculation Period ($) Multiplier
---------- ----------------------------------- --------------- ----------
1 Effective Date 5/25/2007 94,581,920.87 10
2 5/25/2007 6/25/2007 90,952,960.02 10
3 6/25/2007 7/25/2007 87,441,490.02 10
4 7/25/2007 8/25/2007 84,041,709.99 10
5 8/25/2007 9/25/2007 80,748,284.86 10
6 9/25/2007 10/25/2007 77,556,329.61 10
7 10/25/2007 11/25/2007 74,461,392.52 10
8 11/25/2007 12/25/2007 71,459,446.89 10
9 12/25/2007 1/25/2008 68,546,853.22 10
10 1/25/2008 2/25/2008 65,720,349.73 10
11 2/25/2008 Termination Date 62,977,775.89 10