EXHIBIT 4
SECURITIZED ASSET BACKED RECEIVABLES LLC,
Depositor,
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
Servicer,
NC CAPITAL CORPORATION,
Responsible Party,
OFFICETIGER GLOBAL REAL ESTATE SERVICES INC.,
Loan Performance Advisor,
U.S. BANK NATIONAL ASSOCIATION,
Trustee
and
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
Securities Administrator and Custodian
--------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of April 1, 2006
--------------------------------------------
SECURITIZED ASSET BACKED RECEIVABLES LLC TRUST 2006-NC1
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2006-NC1
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, Warranties and Covenants of the
Responsible Party and the Servicer; Remedies for
Breaches of Representations and Warranties with Respect
to the Mortgage Loans.......................................
Section 2.04 [Reserved]...................................................
Section 2.05 Execution and Delivery of Certificates.......................
Section 2.06 REMIC Matters................................................
Section 2.07 Representations and Warranties of the Depositor..............
Section 2.08 Rights of the NIM Insurer....................................
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans...........................
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers................................................
Section 3.03 Successor Subservicers.......................................
Section 3.04 Liability of the Servicer....................................
Section 3.05 No Contractual Relationship between Subservicers and the
Trustee, the Securities Administrator or the NIM Insurer....
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee.....................................................
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 Account...........................................
Section 3.11 Withdrawals from the Collection Account......................
Section 3.12 Investment of Funds in the Collection Account, Escrow
Accounts and the Distribution Account.......................
Section 3.13 Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage.......................................
Section 3.14 Enforcement of Due-On-Sale Clauses; Assumption Agreements....
Section 3.15 Realization upon Defaulted Mortgage Loans....................
Section 3.16 Release of Mortgage Files....................................
Section 3.17 Title, Conservation and Disposition of REO Property..........
Section 3.18 Notification of Adjustments..................................
Section 3.19 Access to Certain Documentation and Information Regarding
the Mortgage Loans..........................................
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Securities Administrator........
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 Trustee to Act as Servicer...................................
Section 3.25 Compensating Interest........................................
Section 3.26 Credit Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.....................
Section 3.27 Pool Policy; Claims Under the Pool Policy....................
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances.....................................................
Section 4.02 Priorities of Distribution...................................
Section 4.03 Monthly Statements to Certificateholders.....................
Section 4.04 Certain Matters Relating to the Determination of LIBOR.......
Section 4.05 Allocation of Applied Realized Loss Amounts..................
Section 4.06 Swap Account.................................................
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, THE SERVICER
AND THE LOAN PERFORMANCE ADVISOR
Section 6.01 Respective Liabilities of the Depositor and the Servicer.....
Section 6.02 Merger or Consolidation of the Depositor or the Servicer.....
Section 6.03 Limitation on Liability of the Depositor, the Servicer
and Others..................................................
Section 6.04 Limitation on Resignation of the Servicer....................
Section 6.05 Additional Indemnification by the Servicer; Third Party
Claims......................................................
Section 6.06 Duties of the Loan Performance Advisor.......................
Section 6.07 Loan Performance Advisor's Fees..............................
ARTICLE VII
DEFAULT
Section 7.01 Events of Default............................................
Section 7.02 Trustee 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 Classification of the Excess Reserve Fund Account,
the Swap Account, the Interest Rate Swap Agreement and
the Cap Agreements..........................................
ARTICLE IX
CONCERNING THE SECURITIES ADMINISTRATOR
Section 9.01 Duties of Securities Administrator...........................
Section 9.02 Certain Matters Affecting the Securities Administrator.......
Section 9.03 Securities Administrator Not Liable for Certificates or
Mortgage Loans..............................................
Section 9.04 Securities Administrator May Own Certificates................
Section 9.05 Securities Administrator's Fees and Expenses.................
Section 9.06 Eligibility Requirements for Securities Administrator........
Section 9.07 Resignation and Removal of Securities Administrator..........
Section 9.08 Successor Securities Administrator...........................
Section 9.09 Merger or Consolidation of Securities Administrator..........
Section 9.10 Assignment or Delegation of Duties by the Securities
Administrator...............................................
ARTICLE X
TERMINATION
Section 10.01 Termination upon Liquidation or Purchase of the Mortgage
Loans.......................................................
Section 10.02 Final Distribution on the Certificates.......................
Section 10.03 Additional Termination Requirements..........................
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment....................................................
Section 11.02 Recordation of Agreement; Counterparts.......................
Section 11.03 Governing Law................................................
Section 11.04 Intention of Parties.........................................
Section 11.05 Notices......................................................
Section 11.06 Severability of Provisions...................................
Section 11.07 Assignment...................................................
Section 11.08 Limitation on Rights of Certificateholders...................
Section 11.09 Inspection and Audit Rights..................................
Section 11.10 Certificates Nonassessable and Fully Paid....................
Section 11.11 Assignment; Sales; Advance Facilities........................
Section 11.12 Rule of Construction.........................................
Section 11.13 Waiver of Jury Trial.........................................
Section 11.14 Rights of the Swap Provider..................................
Section 11.15 Regulation AB Compliance; Intent of the Parties;
Reasonableness..............................................
Section 11.16 Third Party Rights...........................................
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of ▇▇▇▇▇ Fargo
Schedule III Representations and Warranties of the Responsible Party as
to the Mortgage Loans
Schedule IV Representations and Warranties as to the Responsible Party
Schedule V Representations and Warranties of the Depositor as to the
Mortgage Loans
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificates
Exhibit B Form of Class P Certificate
Exhibit C Form of Class R Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Custodian
Exhibit F Form of Document Certification and Exception Report of
Custodian
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A 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 Securities Administrator's Certification to be
provided to Depositor
Exhibit N Form of Servicer's Certification to be provided to Depositor
Exhibit O Servicing Criteria
Exhibit P Additional Form 10-D Disclosure
Exhibit Q Additional Form 10-K Disclosure
Exhibit R Form 8-K Disclosure Information
Exhibit S Interest Rate Swap Agreement
Exhibit T Class M Cap Agreement
Exhibit U Class B Cap Agreement
Exhibit V Servicer Remittance Report Format
Exhibit W Additional Disclosure Notification
Exhibit X Pool Policy
THIS POOLING AND SERVICING AGREEMENT, dated as of April 1, 2006,
among SECURITIZED ASSET BACKED RECEIVABLES LLC, a Delaware limited liability
company, as depositor (the "Depositor"), ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
a national banking association, as servicer (the "Servicer"), NC CAPITAL
CORPORATION, as responsible party (the "Responsible Party"), OFFICETIGER GLOBAL
REAL ESTATE SERVICES INC., as loan performance advisor (the "Loan Performance
Advisor"), U.S. BANK NATIONAL ASSOCIATION, a national banking association, as
trustee (the "Trustee"), and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, a national
banking association, as securities administrator and custodian.
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 shall elect that four segregated asset
pools within the Trust Fund (exclusive of (i) the Prepayment Charges, (ii) the
Interest Rate Swap Agreement and the Cap Agreements, (iii) the Swap Account,
(iv) the Excess Reserve Fund Account, and (v) the right of the LIBOR
Certificates to receive Upper Tier Carry Forward Amounts and, without
duplication, Basis Risk Carry Forward Amounts and the obligation to pay Class IO
Shortfalls) be treated for federal income tax purposes as comprising four REMICs
(each, a "Trust REMIC" or, in the alternative, Pooling Tier REMIC-1, Pooling
Tier REMIC-2, the Lower Tier REMIC and the Upper Tier REMIC, respectively). Each
Class of Certificates (other than the Class P and Class R Certificates), other
than the right of each Class of LIBOR Certificates to receive Upper Tier Carry
Forward Amounts and, without duplication, Basis Risk Carry Forward Amounts and
the obligation to pay Class IO Shortfalls and the right of the Class X
Certificates to receive payments from the Interest Rate Swap Agreement, the Cap
Agreements and the Class IO Shortfalls, represents ownership of a regular
interest in the Upper Tier 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 Startup Day for each
Trust REMIC is the Closing Date. The latest possible maturity date for each
regular interest is the latest date referenced in Section 2.06.
The Upper Tier REMIC shall hold as assets the several classes of
uncertificated Lower Tier REMIC 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 Interest Rate Swap Agreement and the Cap
Agreements, (iii) the Swap Account, (iv) the Excess Reserve Fund Account, and
(v) the right of the LIBOR Certificates to receive Upper Tier Carry Forward
Amounts and, without duplication, Basis Risk Carry Forward Amounts and the
obligation to pay Class IO Shortfalls).
For federal income tax purposes, the Class P Certificates represent
beneficial ownership of the Prepayment Charges, each Class of LIBOR Certificates
represents beneficial ownership of a regular interest in the Upper Tier REMIC
and the right to receive Upper Tier Carry Forward Amounts and, without
duplication, Basis Risk Carry Forward Amounts, and the Class X Certificates
represent beneficial ownership of two regular interests in the Upper Tier REMIC
and the right to receive payments from the Class IO Shortfalls, the Excess
Reserve Fund Account, the Swap Account, the Interest Rate Swap Agreement and the
Cap Agreements, which portions of the Trust Fund shall be treated as a 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 shall also issue the Class PT1-R Interest, which shall be
represented by the Class R Certificates. The Class PT1-R Interest is hereby
designated as the sole class of residual interest in Pooling Tier REMIC-1.
Pooling Tier Initial Pooling Tier
Pooling Tier REMIC-1 REMIC-1 Interest REMIC-1
Interest Rate Principal Amount
-------------------- ---------------- --------------------
Class PT1-1 (1) $ 26,883,743.00
Class PT1-2A (2) $ 12,777,926.50
Class PT1-2B (3) $ 12,777,926.50
Class PT1-3A (2) $ 12,502,406.00
Class PT1-3B (3) $ 12,502,406.00
Class PT1-4A (2) $ 12,241,491.50
Class PT1-4B (3) $ 12,241,491.50
Class PT1-5A (2) $ 11,993,399.00
Class PT1-5B (3) $ 11,993,399.00
Class PT1-6A (2) $ 11,756,368.50
Class PT1-6B (3) $ 11,756,368.50
Class PT1-7A (2) $ 11,528,665.50
Class PT1-7B (3) $ 11,528,665.50
Class PT1-8A (2) $ 11,308,599.00
Class PT1-8B (3) $ 11,308,599.00
Class PT1-9A (2) $ 11,094,524.50
Class PT1-9B (3) $ 11,094,524.50
Class PT1-10A (2) $ 10,884,551.50
Class PT1-10B (3) $ 10,884,551.50
Class PT1-11A (2) $ 10,676,525.00
Class PT1-11B (3) $ 10,676,525.00
Class PT1-12A (2) $ 10,346,104.00
Class PT1-12B (3) $ 10,346,104.00
Class PT1-13A (2) $ 9,969,075.50
Class PT1-13B (3) $ 9,969,075.50
Class PT1-14A (2) $ 9,591,021.00
Class PT1-14B (3) $ 9,591,021.00
Class PT1-15A (2) $ 9,227,298.50
Class PT1-15B (3) $ 9,227,298.50
Class PT1-16A (2) $ 8,877,363.50
Class PT1-16B (3) $ 8,877,363.50
Class PT1-17A (2) $ 8,540,693.50
Class PT1-17B (3) $ 8,540,693.50
Class PT1-18A (2) $ 8,216,785.50
Class PT1-18B (3) $ 8,216,785.50
Class PT1-19A (2) $ 7,905,155.00
Class PT1-19B (3) $ 7,905,155.00
Class PT1-20A (2) $ 7,605,339.00
Class PT1-20B (3) $ 7,605,339.00
Class PT1-21A (2) $ 7,316,887.00
Class PT1-21B (3) $ 7,316,887.00
Class PT1-22A (2) $ 7,039,144.00
Class PT1-22B (3) $ 7,039,144.00
Class PT1-23A (2) $ 6,758,265.00
Class PT1-23B (3) $ 6,758,265.00
Class PT1-24A (2) $ 6,502,426.50
Class PT1-24B (3) $ 6,502,426.50
Class PT1-25A (2) $ 6,256,268.50
Class PT1-25B (3) $ 6,256,268.50
Class PT1-26A (2) $ 6,019,424.50
Class PT1-26B (3) $ 6,019,424.50
Class PT1-27A (2) $ 5,791,543.00
Class PT1-27B (3) $ 5,791,543.00
Class PT1-28A (2) $ 5,572,154.00
Class PT1-28B (3) $ 5,572,154.00
Class PT1-29A (2) $ 5,353,044.00
Class PT1-29B (3) $ 5,353,044.00
Class PT1-30A (2) $ 5,150,663.50
Class PT1-30B (3) $ 5,150,663.50
Class PT1-31A (2) $ 4,955,302.50
Class PT1-31B (3) $ 4,955,302.50
Class PT1-32A (2) $ 4,767,957.50
Class PT1-32B (3) $ 4,767,957.50
Class PT1-33A (2) $ 4,587,711.00
Class PT1-33B (3) $ 4,587,711.00
Class PT1-34A (2) $ 4,413,931.00
Class PT1-34B (3) $ 4,413,931.00
Class PT1-35A (2) $ 4,245,377.00
Class PT1-35B (3) $ 4,245,377.00
Class PT1-36A (2) $ 4,084,946.50
Class PT1-36B (3) $ 4,084,946.50
Class PT1-37A (2) $ 3,930,172.50
Class PT1-37B (3) $ 3,930,172.50
Class PT1-38A (2) $ 3,781,651.00
Class PT1-38B (3) $ 3,781,651.00
Class PT1-39A (2) $ 3,638,750.50
Class PT1-39B (3) $ 3,638,750.50
Class PT1-40A (2) $ 3,501,063.00
Class PT1-40B (3) $ 3,501,063.00
Class PT1-41A (2) $ 3,368,652.50
Class PT1-41B (3) $ 3,368,652.50
Class PT1-42A (2) $ 3,241,360.00
Class PT1-42B (3) $ 3,241,360.00
Class PT1-43A (2) $ 3,118,685.50
Class PT1-43B (3) $ 3,118,685.50
Class PT1-44A (2) $ 3,000,834.00
Class PT1-44B (3) $ 3,000,834.00
Class PT1-45A (2) $ 2,887,439.50
Class PT1-45B (3) $ 2,887,439.50
Class PT1-46A (2) $ 2,778,253.00
Class PT1-46B (3) $ 2,778,253.00
Class PT1-47A (2) $ 2,673,225.00
Class PT1-47B (3) $ 2,673,225.00
Class PT1-48A (2) $ 2,572,206.00
Class PT1-48B (3) $ 2,572,206.00
Class PT1-49A (2) $ 2,475,003.00
Class PT1-49B (3) $ 2,475,003.00
Class PT1-50A (2) $ 2,381,469.00
Class PT1-50B (3) $ 2,381,469.00
Class PT1-51A (2) $ 2,291,467.50
Class PT1-51B (3) $ 2,291,467.50
Class PT1-52A (2) $ 2,204,860.00
Class PT1-52B (3) $ 2,204,860.00
Class PT1-53A (2) $ 2,121,528.50
Class PT1-53B (3) $ 2,121,528.50
Class PT1-54A (2) $ 2,027,844.00
Class PT1-54B (3) $ 2,027,844.00
Class PT1-55A (2) $ 1,977,688.00
Class PT1-55B (3) $ 1,977,688.00
Class PT1-56A (3) $ 1,889,962.00
Class PT1-56B (4) $ 1,889,962.00
Class PT1-57A (3) $ 48,025,047.50
Class PT1-57B (4) $ 48,025,047.50
Class PT1-R (4) N/A
------------
(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 Net 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 Net WAC Rate,
subject to a maximum rate of 10.66%.
(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 Net WAC Rate over (B) 10.66%.
(4) The Class PT1-R Interest shall not have a principal balance and
shall not bear interest.
On each Distribution Date, the Securities Administrator shall first
pay from the Trust Fund and charge as an expense of Pooling Tier REMIC-1 all
expenses of the Trust for such Distribution Date. Such expense, other than
Servicing Fees, Loan Performance Advisor Fees and Securities Administrator Fees,
shall be allocated in the same manner as Realized Losses.
On each Distribution Date, the interest distributable in respect of
the Mortgage Loans 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 Mortgage Loans (including, for the
first Distribution Date only, the Closing Date Deposit Amount) shall be
allocated to the outstanding Pooling Tier REMIC-1 Regular Interest with the
lowest numerical denomination until the Pooling Tier REMIC-1 Principal Amount of
such interest or interests, as the case may be, is reduced to zero, provided
that, with respect to Pooling Tier REMIC-1 Regular Interests with the same
numerical denomination, such Realized Losses and payments of principal shall be
allocated pro rata between such Pooling Tier REMIC-1 Regular Interests.
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. The Class PT2-R
Interest is hereby designated as the sole class of residual interest in Pooling
Tier REMIC-2 and shall be represented by the Class R Certificates.
Pooling Tier Pooling Tier Corresponding Corresponding Corresponding
Pooling Tier REMIC-2 REMIC-2 REMIC-2 Initial Pooling Tier REMIC-2 Pooling Tier REMIC-1 Scheduled Crossover
Interest Interest Rate Principal Amount IO Interest Regular Interest Distribution Date
-------------------- ------------- ---------------- -------------------- -------------------- -------------------
Class PT2-1 (1) $ 26,883,743.00 N/A N/A N/A
Class PT2-2A (2) $ 12,777,926.50 Class PT2-IO-2 N/A N/A
Class PT2-2B (3) $ 12,777,926.50 N/A N/A N/A
Class PT2-3A (2) $ 12,502,406.00 Class PT2-IO-3 N/A N/A
Class PT2-3B (3) $ 12,502,406.00 N/A N/A N/A
Class PT2-4A (2) $ 12,241,491.50 Class PT2-IO-4 N/A N/A
Class PT2-4B (3) $ 12,241,491.50 N/A N/A N/A
Class PT2-5A (2) $ 11,993,399.00 Class PT2-IO-5 N/A N/A
Class PT2-5B (3) $ 11,993,399.00 N/A N/A N/A
Class PT2-6A (2) $ 11,756,368.50 Class PT2-IO-6 N/A N/A
Class PT2-6B (3) $ 11,756,368.50 N/A N/A N/A
Class PT2-7A (2) $ 11,528,665.50 Class PT2-IO-7 N/A N/A
Class PT2-7B (3) $ 11,528,665.50 N/A N/A N/A
Class PT2-8A (2) $ 11,308,599.00 Class PT2-IO-8 N/A N/A
Class PT2-8B (3) $ 11,308,599.00 N/A N/A N/A
Class PT2-9A (2) $ 11,094,524.50 Class PT2-IO-9 N/A N/A
Class PT2-9B (3) $ 11,094,524.50 N/A N/A N/A
Class PT2-10A (2) $ 10,884,551.50 Class PT2-IO-10 N/A N/A
Class PT2-10B (3) $ 10,884,551.50 N/A N/A N/A
Class PT2-11A (2) $ 10,676,525.00 Class PT2-IO-11 N/A N/A
Class PT2-11B (3) $ 10,676,525.00 N/A N/A N/A
Class PT2-12A (2) $ 10,346,104.00 Class PT2-IO-12 N/A N/A
Class PT2-12B (3) $ 10,346,104.00 N/A N/A N/A
Class PT2-13A (2) $ 9,969,075.50 Class PT2-IO-13 N/A N/A
Class PT2-13B (3) $ 9,969,075.50 N/A N/A N/A
Class PT2-14A (2) $ 9,591,021.00 Class PT2-IO-14 N/A N/A
Class PT2-14B (3) $ 9,591,021.00 N/A N/A N/A
Class PT2-15A (2) $ 9,227,298.50 Class PT2-IO-15 N/A N/A
Class PT2-15B (3) $ 9,227,298.50 N/A N/A N/A
Class PT2-16A (2) $ 8,877,363.50 Class PT2-IO-16 N/A N/A
Class PT2-16B (3) $ 8,877,363.50 N/A N/A N/A
Class PT2-17A (2) $ 8,540,693.50 Class PT2-IO-17 N/A N/A
Class PT2-17B (3) $ 8,540,693.50 N/A N/A N/A
Class PT2-18A (2) $ 8,216,785.50 Class PT2-IO-18 N/A N/A
Class PT2-18B (3) $ 8,216,785.50 N/A N/A N/A
Class PT2-19A (2) $ 7,905,155.00 Class PT2-IO-19 N/A N/A
Class PT2-19B (3) $ 7,905,155.00 N/A N/A N/A
Class PT2-20A (2) $ 7,605,339.00 Class PT2-IO-20 N/A N/A
Class PT2-20B (3) $ 7,605,339.00 N/A N/A N/A
Class PT2-21A (2) $ 7,316,887.00 Class PT2-IO-21 N/A N/A
Class PT2-21B (3) $ 7,316,887.00 N/A N/A N/A
Class PT2-22A (2) $ 7,039,144.00 Class PT2-IO-22 N/A N/A
Class PT2-22B (3) $ 7,039,144.00 N/A N/A N/A
Class PT2-23A (2) $ 6,758,265.00 Class PT2-IO-23 N/A N/A
Class PT2-23B (3) $ 6,758,265.00 N/A N/A N/A
Class PT2-24A (2) $ 6,502,426.50 Class PT2-IO-24 N/A N/A
Class PT2-24B (3) $ 6,502,426.50 N/A N/A N/A
Class PT2-25A (2) $ 6,256,268.50 Class PT2-IO-25 N/A N/A
Class PT2-25B (3) $ 6,256,268.50 N/A N/A N/A
Class PT2-26A (2) $ 6,019,424.50 Class PT2-IO-26 N/A N/A
Class PT2-26B (3) $ 6,019,424.50 N/A N/A N/A
Class PT2-27A (2) $ 5,791,543.00 Class PT2-IO-27 N/A N/A
Class PT2-27B (3) $ 5,791,543.00 N/A N/A N/A
Class PT2-28A (2) $ 5,572,154.00 Class PT2-IO-28 N/A N/A
Class PT2-28B (3) $ 5,572,154.00 N/A N/A N/A
Class PT2-29A (2) $ 5,353,044.00 Class PT2-IO-29 N/A N/A
Class PT2-29B (3) $ 5,353,044.00 N/A N/A N/A
Class PT2-30A (2) $ 5,150,663.50 Class PT2-IO-30 N/A N/A
Class PT2-30B (3) $ 5,150,663.50 N/A N/A N/A
Class PT2-31A (2) $ 4,955,302.50 Class PT2-IO-31 N/A N/A
Class PT2-31B (3) $ 4,955,302.50 N/A N/A N/A
Class PT2-32A (2) $ 4,767,957.50 Class PT2-IO-32 N/A N/A
Class PT2-32B (3) $ 4,767,957.50 N/A N/A N/A
Class PT2-33A (2) $ 4,587,711.00 Class PT2-IO-33 N/A N/A
Class PT2-33B (3) $ 4,587,711.00 N/A N/A N/A
Class PT2-34A (2) $ 4,413,931.00 Class PT2-IO-34 N/A N/A
Class PT2-34B (3) $ 4,413,931.00 N/A N/A N/A
Class PT2-35A (2) $ 4,245,377.00 Class PT2-IO-35 N/A N/A
Class PT2-35B (3) $ 4,245,377.00 N/A N/A N/A
Class PT2-36A (2) $ 4,084,946.50 Class PT2-IO-36 N/A N/A
Class PT2-36B (3) $ 4,084,946.50 N/A N/A N/A
Class PT2-37A (2) $ 3,930,172.50 Class PT2-IO-37 N/A N/A
Class PT2-37B (3) $ 3,930,172.50 N/A N/A N/A
Class PT2-38A (2) $ 3,781,651.00 Class PT2-IO-38 N/A N/A
Class PT2-38B (3) $ 3,781,651.00 N/A N/A N/A
Class PT2-39A (2) $ 3,638,750.50 Class PT2-IO-39 N/A N/A
Class PT2-39B (3) $ 3,638,750.50 N/A N/A N/A
Class PT2-40A (2) $ 3,501,063.00 Class PT2-IO-40 N/A N/A
Class PT2-40B (3) $ 3,501,063.00 N/A N/A N/A
Class PT2-41A (2) $ 3,368,652.50 Class PT2-IO-41 N/A N/A
Class PT2-41B (3) $ 3,368,652.50 N/A N/A N/A
Class PT2-42A (2) $ 3,241,360.00 Class PT2-IO-42 N/A N/A
Class PT2-42B (3) $ 3,241,360.00 N/A N/A N/A
Class PT2-43A (2) $ 3,118,685.50 Class PT2-IO-43 N/A N/A
Class PT2-43B (3) $ 3,118,685.50 N/A N/A N/A
Class PT2-44A (2) $ 3,000,834.00 Class PT2-IO-44 N/A N/A
Class PT2-44B (3) $ 3,000,834.00 N/A N/A N/A
Class PT2-45A (2) $ 2,887,439.50 Class PT2-IO-45 N/A N/A
Class PT2-45B (3) $ 2,887,439.50 N/A N/A N/A
Class PT2-46A (2) $ 2,778,253.00 Class PT2-IO-46 N/A N/A
Class PT2-46B (3) $ 2,778,253.00 N/A N/A N/A
Class PT2-47A (2) $ 2,673,225.00 Class PT2-IO-47 N/A N/A
Class PT2-47B (3) $ 2,673,225.00 N/A N/A N/A
Class PT2-48A (2) $ 2,572,206.00 Class PT2-IO-48 N/A N/A
Class PT2-48B (3) $ 2,572,206.00 N/A N/A N/A
Class PT2-49A (2) $ 2,475,003.00 Class PT2-IO-49 N/A N/A
Class PT2-49B (3) $ 2,475,003.00 N/A N/A N/A
Class PT2-50A (2) $ 2,381,469.00 Class PT2-IO-50 N/A N/A
Class PT2-50B (3) $ 2,381,469.00 N/A N/A N/A
Class PT2-51A (2) $ 2,291,467.50 Class PT2-IO-51 N/A N/A
Class PT2-51B (3) $ 2,291,467.50 N/A N/A N/A
Class PT2-52A (2) $ 2,204,860.00 Class PT2-IO-52 N/A N/A
Class PT2-52B (3) $ 2,204,860.00 N/A N/A N/A
Class PT2-53A (2) $ 2,121,528.50 Class PT2-IO-53 N/A N/A
Class PT2-53B (3) $ 2,121,528.50 N/A N/A N/A
Class PT2-54A (2) $ 2,027,844.00 Class PT2-IO-54 N/A N/A
Class PT2-54B (3) $ 2,027,844.00 N/A N/A N/A
Class PT2-55A (2) $ 1,977,688.00 Class PT2-IO-55 N/A N/A
Class PT2-55B (3) $ 1,977,688.00 N/A N/A N/A
Class PT2-56A (2) $ 1,889,962.00 Class PT2-IO-56 N/A N/A
Class PT2-56B (3) $ 1,889,962.00 N/A N/A N/A
Class PT2-57A (2) $ 48,025,047.50 Class PT2-IO-56 N/A N/A
Class PT2-57B (3) $ 48,025,047.50 N/A N/A N/A
Class PT2-IO-2 (4) (4) N/A Class PT1-2A May 2006
Class PT2-IO-3 (4) (4) N/A Class PT1-3A June 2006
Class PT2-IO-4 (4) (4) N/A Class PT1-4A July 2006
Class PT2-IO-5 (4) (4) N/A Class PT1-5A August 2006
Class PT2-IO-6 (4) (4) N/A Class PT1-6A September 2006
Class PT2-IO-7 (4) (4) N/A Class PT1-7A October 2006
Class PT2-IO-8 (4) (4) N/A Class PT1-8A November 2006
Class PT2-IO-9 (4) (4) N/A Class PT1-9A December 2006
Class PT2-IO-10 (4) (4) N/A Class PT1-10A January 2007
Class PT2-IO-11 (4) (4) N/A Class PT1-11A February 2007
Class PT2-IO-12 (4) (4) N/A Class PT1-12A March 2007
Class PT2-IO-13 (4) (4) N/A Class PT1-13A April 2007
Class PT2-IO-14 (4) (4) N/A Class PT1-14A May 2007
Class PT2-IO-15 (4) (4) N/A Class PT1-15A June 2007
Class PT2-IO-16 (4) (4) N/A Class PT1-16A July 2007
Class PT2-IO-17 (4) (4) N/A Class PT1-17A August 2007
Class PT2-IO-18 (4) (4) N/A Class PT1-18A September 2007
Class PT2-IO-19 (4) (4) N/A Class PT1-19A October 2007
Class PT2-IO-20 (4) (4) N/A Class PT1-20A November 2007
Class PT2-IO-21 (4) (4) N/A Class PT1-21A December 2007
Class PT2-IO-22 (4) (4) N/A Class PT1-22A January 2008
Class PT2-IO-23 (4) (4) N/A Class PT1-23A February 2008
Class PT2-IO-24 (4) (4) N/A Class PT1-24A March 2008
Class PT2-IO-25 (4) (4) N/A Class PT1-25A April 2008
Class PT2-IO-26 (4) (4) N/A Class PT1-26A May 2008
Class PT2-IO-27 (4) (4) N/A Class PT1-27A June 2008
Class PT2-IO-28 (4) (4) N/A Class PT1-28A July 2008
Class PT2-IO-29 (4) (4) N/A Class PT1-29A August 2008
Class PT2-IO-30 (4) (4) N/A Class PT1-30A September 2008
Class PT2-IO-31 (4) (4) N/A Class PT1-31A October 2008
Class PT2-IO-32 (4) (4) N/A Class PT1-32A November 2008
Class PT2-IO-33 (4) (4) N/A Class PT1-33A December 2008
Class PT2-IO-34 (4) (4) N/A Class PT1-34A January 2009
Class PT2-IO-35 (4) (4) N/A Class PT1-35A February 2009
Class PT2-IO-36 (4) (4) N/A Class PT1-36A March 2009
Class PT2-IO-37 (4) (4) N/A Class PT1-37A April 2009
Class PT2-IO-38 (4) (4) N/A Class PT1-38A May 2009
Class PT2-IO-39 (4) (4) N/A Class PT1-39A June 2009
Class PT2-IO-40 (4) (4) N/A Class PT1-40A July 2009
Class PT2-IO-41 (4) (4) N/A Class PT1-41A August 2009
Class PT2-IO-42 (4) (4) N/A Class PT1-42A September 2009
Class PT2-IO-43 (4) (4) N/A Class PT1-43A October 2009
Class PT2-IO-44 (4) (4) N/A Class PT1-44A November 2009
Class PT2-IO-45 (4) (4) N/A Class PT1-45A December 2009
Class PT2-IO-46 (4) (4) N/A Class PT1-46A January 2010
Class PT2-IO-47 (4) (4) N/A Class PT1-47A February 2010
Class PT2-IO-48 (4) (4) N/A Class PT1-48A March 2010
Class PT2-IO-49 (4) (4) N/A Class PT1-49A April 2010
Class PT2-IO-50 (4) (4) N/A Class PT1-50A May 2010
Class PT2-IO-51 (4) (4) N/A Class PT1-51A June 2010
Class PT2-IO-52 (4) (4) N/A Class PT1-52A July 2010
Class PT2-IO-53 (4) (4) N/A Class PT1-53A August 2010
Class PT2-IO-54 (4) (4) N/A Class PT1-54A September 2010
Class PT2-IO-55 (4) (4) N/A Class PT1-55A October 2010
Class PT2-IO-56 (4) (4) N/A Class PT1-56A November 2010
Class PT2-IO-57 (4) (4) N/A Class PT1-57A December 2010
Class PT2-R (5) (5) 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 Net 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 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
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 and having a "B" in their
class designation.
(4) Each 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-1 Principal Amount of the Corresponding Pooling Tier
REMIC-1 Regular Interest. From the Closing Date through and
including the Corresponding Scheduled Crossover Distribution Date,
each 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
related Corresponding Scheduled Crossover Distribution Date, the
Pooling Tier REMIC-2 IO Interest shall not accrue interest.
(5) 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 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 Mortgage Loans (including, for the
first Distribution Date only, the Closing Date Deposit Amount) shall be
allocated to the then outstanding Pooling Tier REMIC-2 Regular Interests (other
than the Pooling Tier REMIC-2 IO Interests) with the lowest numerical
denomination until the Pooling Tier REMIC-2 Principal Amount of such interest or
interests, as the case may be, is reduced to zero, provided that, for Pooling
Tier REMIC-2 Regular Interests 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.
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.
Lower Tier Corresponding
Lower Tier REMIC REMIC Interest Initial Lower Tier Upper Tier REMIC
Class Designation Rate REMIC Principal Amount Regular Interest
----------------- -------------- ---------------------------------- ----------------
Class LT-A-1 (1) 1/2 Corresponding Upper Tier REMIC A-1
Regular Interest initial
Class Principal Balance
Class LT-A-2 (1) 1/2 Corresponding Upper Tier REMIC A-2
Regular Interest initial
Class Principal Balance
Class LT-A-3 (1) 1/2 Corresponding Upper Tier REMIC A-3
Regular Interest initial
Class Principal Balance
Class LT-M-1 (1) 1/2 Corresponding Upper Tier REMIC M-1
Regular Interest initial
Class Principal Balance
Class LT-M-2 (1) 1/2 Corresponding Upper Tier REMIC M-2
Regular Interest initial
Class Principal Balance
Class LT-M-3 (1) 1/2 Corresponding Upper Tier REMIC M-3
Regular Interest initial
Class Principal Balance
Class LT-B-1 (1) 1/2 Corresponding Upper Tier REMIC B-1
Regular Interest initial
Class Principal Balance
Class LT-B-2 (1) 1/2 Corresponding Upper Tier REMIC B-2
Regular Interest initial
Class Principal Balance
Class LT-B-3 (1) 1/2 Corresponding Upper Tier REMIC B-3
Regular Interest initial
Class Principal Balance
Class LT-Accrual (1) 1/2 Pool Stated Principal Balance N/A
plus 1/2 Subordinated Amount
Class LT-IO (2) (2) N/A
Class LT-R (3) (3) N/A
------------------------------
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the Lower Tier REMIC Net
WAC Rate.
(2) This Lower Tier Regular Interest is an interest-only interest and does not
have a Lower Tier REMIC 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.
(3) 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 REMIC Regular Interest is hereby designated as a
regular interest in the Lower Tier REMIC. The Class LT-A-1, Class LT-A-2, Class
LT-A-3, Class LT-M-1, Class LT-M-2, Class LT-M-3, 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 REMIC 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 REMIC
Principal Amount of the Class LT-Accrual Interest. On each Distribution Date,
the increase in the Lower Tier REMIC Principal Amount of the Class LT-Accrual
Interest may not exceed interest accruals for such Distribution Date for the
Class LT-Accrual Interest. All payments of scheduled principal and prepayments
of principal generated by the Mortgage Loans (including, for the first
Distribution Date only, the Closing Date Deposit Amount) and all Subsequent
Recoveries allocable to principal shall be allocated (i) 50% to the Class
LT-Accrual Interest 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).
Reductions to Lower Tier REMIC Principal Amounts as a result of
Realized Losses and increases in Lower Tier REMIC Principal Amounts as a result
of Subsequent Recoveries shall be applied so that after all distributions have
been made on each Distribution Date (i) the Lower Tier REMIC Principal Amount of
each LT Accretion Directed Class is equal to 50% of the Class Certificate
Balance of its Corresponding Class and (ii) the Class LT-Accrual Interest is
equal to 50% of the aggregate Stated Principal Balance of the Mortgage Loans
plus 50% of the Subordinated Amount.
Upper Tier REMIC
The Upper Tier REMIC shall issue the following classes of Upper Tier
REMIC Regular 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.
Initial Upper Corresponding
Upper Tier REMIC Upper Tier REMIC Tier REMIC Class of
Class Designation Interest Rate Principal Amount Certificates
----------------- ---------------- ---------------- -------------
Class A-1 (1) $ 360,025,000 Class A-1
Class A-2 (1) $ 158,409,000 Class A-2
Class A-3 (1) $ 171,822,000 Class A-3
Class M-1 (1) $ 49,996,000 Class M-1
Class M-2 (1) $ 37,496,000 Class M-2
Class M-3 (1) $ 10,483,000 Class M-3
Class B-1 (1) $ 5,644,000 Class B-1
Class B-2 (1) $ 4,435,000 Class B-2
Class B-3 (1) $ 4,032,000 Class B-3
Class IO (2) (4)
Class X (3) $ 4,032,743 Class X (3)
Class UT-R (4) $ 0 Class R
------------
(1) 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 Net WAC Rate Cap) for the Corresponding
Class of Certificates and (ii) the Upper Tier REMIC Net WAC Rate.
(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 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.
(3) The Class X Interest has an initial principal balance of $4,032,743 but it
will not accrue interest on such balance but will accrue interest on a
notional principal balance. As of any Distribution Date, the Class X
Interest shall have a notional principal balance equal to the aggregate of
the Lower Tier Principal Amounts of the Lower Tier REMIC 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 Lower Tier REMIC Net WAC Rate over the product of (i) 2 and
(ii) the weighted average Lower Tier REMIC Interest Rate of the Lower Tier
REMIC Regular Interests (other than Class LT-IO Interest), where the Lower
Tier REMIC Interest Rate on the Class LT-Accrual 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 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.
(4) 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 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.
Certificates
Class Pass-Through Class Certificate
Class Designation Rate Balance
----------------- ------------------ -----------------
Class A-1 (5) (1) $ 360,025,000
Class A-2 (5) (1) $ 158,409,000
Class A-3 (5) (1) $ 171,822,000
Class M-1 (5) (2) $ 49,996,000
Class M-2 (5) (2) $ 37,496,000
Class M-3 (5) (2) $ 10,483,000
Class B-1 (5) (2) $ 5,644,000
Class B-2 (5) (2) $ 4,435,000
Class B-3 (5) (2) $ 4,032,000
Class X (3) (3)
Class R (4) $ 0
------------
(1) The Class A-1, Class A-2 and Class A-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
Net WAC Rate Cap.
(2) The Class M-1, Class M-2, Class M-3, 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 Net WAC Rate Cap.
(3) The Class X Certificates will represent beneficial ownership of the Class
X Interest, the Class IO Interest, the right to receive Class IO
Shortfalls, the Cap Agreements, amounts in the Swap Account, subject to
the obligation to pay Net Swap Payments to the Swap Provider and Upper
Tier Carry Forward Amounts to the LIBOR Certificates and, without
duplication, Basis Risk Carry Forward Amounts to the LIBOR Certificates
and amounts in the Excess Reserve Fund Account, subject to the obligation
to make payments from the Excess Reserve Fund Account in respect of Basis
Risk Carry Forward Amounts to the LIBOR Certificates. For federal income
tax purposes, the Securities Administrator will treat a Class X
Certificateholder's obligation to make payments of Basis Risk Carry
Forward Amounts and, without duplication, Upper Tier Carry Forward Amounts
to the LIBOR Certificates from the Excess Reserve Fund Account and the
Swap Account to the LIBOR Certificateholders as payments made pursuant to
an interest rate cap contract written by the Class X Certificateholders in
favor of each Class of LIBOR Certificates. Such rights of the Class X
Certificateholders and LIBOR Certificateholders shall be treated as held
in a portion of the Trust Fund that is treated as a grantor trust under
subpart E, Part I of subchapter J of the Code. The Class X Certificates do
not have a Class Certificate Balance.
(4) The Class R Certificates do not have a principal balance or an interest
rate.
(5) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper Tier REMIC Regular Interest but also the
right to receive payments from the Excess Reserve Fund Account and Swap
Account in respect of any Basis Risk Carry Forward Amounts and, without
duplication, from the Swap Account in respect of Upper Tier Carry Forward
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
Corresponding Class of 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 and Swap Account as
payments made pursuant to an interest rate cap contract written by the
Class X Certificateholders.
The minimum denomination for each Class of Certificates, other than
the Class P, Class R and the Class X Certificates, will be $25,000 with integral
multiples of $1 in excess thereof except that one Certificate in each Class may
be issued in a different amount. The minimum denomination for each of the Class
P and Class X Certificates will be a 1% Percentage Interest in such Class, and
the minimum denomination for the Class R Certificates shall be 100% Percentage
Interest in such Class.
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-2 and Class A-3 Certificates.
Class B Certificates......... Class B-1, Class B-2 and Class B-3 Certificates.
Class M Certificates......... Class M-1, Class M-2 and Class M-3 Certificates.
Delay Certificates........... None.
ERISA-Restricted
Certificates............... Class R, Class P and Class X Certificates; any
certificate with a rating below the lowest
applicable permitted rating under the
Underwriters' Exemption.
LIBOR Certificates........... Class A and Subordinated Certificates.
Non-Delay Certificates....... Class A, Class X and Subordinated Certificates.
Offered Certificates......... All Classes of Certificates other than the Private
Certificates.
Physical Certificates........ Class P, Class X and Class R Certificates.
Private Certificates......... Class P, Class X and Class R Certificates.
Rating Agencies.............. Moody's and Standard & Poor's.
Regular Certificates......... All Classes of Certificates other than the Class P
and Class R Certificates.
Residual Certificates........ Class R 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:
10-K Filing Deadline: As defined in Section 8.12(c).
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices set forth in Section 3.01(a) of this
Agreement.
Account: Any of the Collection Account, the Distribution Account,
any Escrow Account, the Swap Account or the Excess Reserve Fund Account. Each
Account shall be an Eligible Account.
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' 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: As defined in Section 8.12(c).
Additional Form 10-D Disclosure: As defined in Section 8.12(b).
Additional Form 10-K Disclosure: As defined in Section 8.12(c).
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 11.11.
Advancing Person: The Person to whom the Servicer's rights under
this Agreement to be reimbursed for any P&I Advances or Servicing Advances have
been assigned pursuant to Section 11.11.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all amendments
or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on any
Distribution Date, the aggregate amount held in the Collection Account at the
close of business on the related Determination Date on account of (i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and
Subsequent Recoveries on the Mortgage Loans received after the end of the
related Prepayment Period and (ii) all Scheduled Payments on the Mortgage Loans
due after the end of the related Due Period.
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 Agreement: The Assignment Agreement between the Sponsor
and the Depositor, dated as of May 3, 2006.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than the assignee's
name and recording information not yet returned from the recording office),
reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans, to the extent received by the Securities Administrator (x) the
sum of (i) all scheduled installments of interest (net of the related Expense
Fees) and principal due on the Due Date on such Mortgage Loans in the related
Due Period and received by the Servicer on or prior to the related Determination
Date, together with any P&I Advances in respect thereof; (ii) all Condemnation
Proceeds, Insurance Proceeds, Liquidation Proceeds and Subsequent Recoveries
received by the Servicer during the related Prepayment Period (in each case, net
of unreimbursed expenses incurred in connection with a liquidation or
foreclosure and unreimbursed Advances, if any); (iii) all partial or full
prepayments on the Mortgage Loans received by the Servicer during the related
Prepayment Period together with all Compensating Interest paid by the Servicer
in connection therewith (excluding any Prepayment Charges); (iv) all
Substitution Adjustment Amounts with respect to substitutions of Mortgage Loans
that occur on or prior to the related Determination Date; (v) all amounts
received with respect to such Distribution Date as the Repurchase Price in
respect of a Mortgage Loan repurchased on or prior to the related Determination
Date; and (vi) the proceeds with respect to the termination of the Trust Fund
pursuant to clause (a) of Section 10.01; reduced by (y) amounts in reimbursement
for Advances previously made with respect to the Mortgage Loans and other
amounts as to which the Servicer, the Depositor 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 (not including the payment due on its stated maturity
date) that 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 Carry Forward 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 the Net WAC Rate 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 rate been calculated as
the sum of LIBOR and the applicable Pass-Through Margin on such Class of
Certificates for such Distribution Date, over (ii) the Accrued Certificate
Interest Distribution Amount payable on such Class of Certificates at the Net
WAC Rate Cap for such Distribution Date and (B) the portion of any such excess
described in clause (A) for such Class of Certificates from all previous
Distribution Dates not previously paid, together with interest thereon at a rate
equal 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 Carry Forward Amounts for such
Distribution Date and (ii) the Class X Distributable Amount (prior to any
reduction for amounts paid from the Excess Reserve Fund Account to pay any Basis
Risk Carry Forward Amount or 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 State of New
York, California, New Jersey or Delaware, (b) the State in which the Servicer's
servicing operations are located, or (c) any State in which the Corporate Trust
Office is located, are authorized or obligated by law or executive order to be
closed.
Cap Agreements: The Class M Cap Agreement and the Class B Cap
Agreement.
Cap Provider: Barclays Bank PLC, a bank authorized and regulated by
the United Kingdom's Financial Services Authority and a member of the London
Stock Exchange, 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 or Class R 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 Unpaid
Realized Loss Amount for such Class or Classes for such Distribution Date). The
Class P, Class X and Class R Certificates have no Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
Certificateholder or Holder: The Person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or any Affiliate of the Depositor shall be deemed not
to be Outstanding and the Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite amount of Percentage
Interests necessary to effect such consent has been obtained; provided, however,
that if any such Person (including the Depositor) owns 100% 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 and the NIM
Insurer are entitled to rely conclusively on a certification of the Depositor or
any Affiliate of the Depositor in determining which Certificates are registered
in the name of an Affiliate of the Depositor.
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A Certificates: As specified in the Preliminary Statement.
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 (A) 71.20% 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 $4,031,874.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1".
Class A-2 Certificates: All Certificates bearing the class
designation of "Class A-2".
Class A-3 Certificates: All Certificates bearing the class
designation of "Class A-3".
Class B Cap Agreement: The interest rate cap agreement, dated May 3,
2006, between the Cap Provider and the Securities Administrator, relating to the
Class B Certificates, a copy of which is attached hereto as Exhibit U.
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) and (E) the Class Certificate Balance of the Class B-1
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 96.90% 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
$4,031,874.
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 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) 98.00% 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 $4,031,874.
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 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) 99.00% 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
$4,031,874.
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
reduction for any Basis Risk Payments or Swap Termination Payments) on such
Distribution Date, all as further provided in Section 8.13.
Class LT-R Interest: The sole class of "residual interest" in the
Lower Tier REMIC evidenced by the Class R Certificates.
Class M Cap Agreement: The interest rate cap agreement, dated May 3,
2006, between the Cap Provider and the Securities Administrator, relating to the
Class M Certificates, a copy of which is attached hereto as Exhibit T.
Class M Certificates: As specified in the Preliminary Statement.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1".
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 83.60%
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 $4,031,874.
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) 92.90% 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
$4,031,874.
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) 95.50% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $4,031,874.
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 UT-R Interest: The sole class of "residual interest" in the
Upper Tier REMIC evidenced by the Class R Certificate.
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 X Interest (as set forth in the Preliminary Statement) 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 X Interest which is
distributable as a Subordination Reduction Amount, minus (iii) any Swap
Termination Payment or any amounts paid from the Excess Reserve Fund Account to
pay any Basis Risk Carry Forward Amount.
Class X Interest: The Upper Tier REMIC Regular Interest represented
by the Class X Certificates as specified and described in the Preliminary
Statement and the related footnote thereto.
Closing Date: May 3, 2006.
Closing Date Deposit Amount: $528,418.02 (all of which is allocable
to principal) deposited by the Depositor into the Distribution Account on the
Closing Date.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Commission: The United States Securities and Exchange Commission.
Compensating Interest: For any Distribution Date, the lesser of (a)
the amount, if any, by which the Prepayment Interest Shortfall, if any, for such
Distribution Date, with respect to voluntary Principal Prepayments (excluding
any payments made upon liquidation of any Mortgage Loan) exceeds all Prepayment
Interest Excesses for such Distribution Date, and (b) the amount of the
Servicing Fee payable to the Servicer for such Distribution Date.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement 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: (i) When used with respect to the Trustee,
the designated office of the Trustee 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 ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Services, SABR 2006-NC1, and which is the office to which notices to and
correspondence with the Trustee should be directed, and (ii) when used with
respect to the Securities Administrator, the designated office of the Securities
Administrator located (i) for purposes of Certificate transfers, at ▇▇▇▇▇ Fargo
Center, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Client Manager - SABR 2006-NC1 and (ii) for all other purposes, at
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Client
Manager-SABR 2006-NC1, facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇, and which is the address to
which notices to and correspondence with the Securities Administrator should be
directed.
Corresponding Class: The class of interests in the Lower Tier REMIC
or Upper Tier REMIC created under this Agreement that corresponds to the Class
of interests in the other such REMIC, as applicable, or to a Class of
Certificates in the manner set out below:
Corresponding Corresponding Corresponding
Lower Tier REMIC Upper Tier REMIC Class of
Class Designation Regular Interest Certificates
----------------- ---------------------------------------- ------------
Class LT-A-1 Class A-1 Class A-1
Class LT-A-2 Class A-2 Class A-2
Class LT-A-3 Class A-3 Class A-3
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-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
N/A Class X Class X
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.
Corresponding Upper Tier REMIC Regular Interest: As defined in the
Preliminary Statement.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Cumulative Loss Percentage: With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses incurred from the Cut-off Date to the last day of the
calendar month preceding the month in which such Distribution Date occurs and
the denominator of which is the Cut-off Date Pool Principal Balance of the
Mortgage Loans.
Cumulative Loss Trigger Event: If, with respect to any Distribution
Date, the quotient (expressed as a percentage) of (x) the aggregate amount of
Realized Losses incurred since the Cut-off Date through the last day of the
related Due 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 2008 through April 2009 1.200% for the first month, plus an additional 1/12th of
1.500% for each month thereafter (e.g., 1.950% in November
2008)
May 2009 through April 2010 2.700% for the first month, plus an additional 1/12th of
1.550% for each month thereafter (e.g., 3.475% in November
2009)
May 2010 through April 2011 4.250% for the first month, plus an additional 1/12th of
1.250% for each month thereafter (e.g., 4.875% in November
2010)
May 2011 through April 2012 5.500% for the first month, plus an additional 1/12th of
0.250% for each month thereafter (e.g., 5.625% in November
2011)
May 2012 and thereafter 5.750%
Custodial Agreement: The Custodial Agreement among the Sponsor, the
Responsible Party, New Century Mortgage Corporation and Deutsche Bank National
Trust Company, dated as of January 1, 2006.
Custodial File: As defined in Section 2.01(b).
Custodian: ▇▇▇▇▇ Fargo Bank, National Association, and its
successors and assigns, in its capacity as Custodian hereunder, and if any
successor custodian is appointed hereunder, such successor.
Cut-off Date: April 1, 2006.
Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
Data Tape Information: With respect to each Mortgage Loan, the
following information as of the Cut-off Date provided by the Responsible Party
to the Sponsor: (1) the Responsible Party's Mortgage Loan identifying number;
(2) the Mortgagor's name; (3) the street address of the Mortgaged Property
including the city, state and zip code; (4) a code indicating whether the
Mortgagor is self-employed; (5) as to each Mortgage Loan, the Stated Principal
Balance as of the Cut-off Date; (6) the Index; (7) a code indicating whether the
Mortgaged Property is owner-occupied; (8) the number and type of residential
units constituting the Mortgaged Property; (9) the original stated months to
maturity; (10) the original amortization months to maturity; (11) the stated
maturity date; (12) the amount of the Scheduled Payment as of the Cut-off Date;
(13) 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; (14) the "paid through date" based on payments received from the
related Mortgagor; (15) the original principal amount of the Mortgage Loan; (16)
with respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate;
(17) with respect to each Adjustable Rate Mortgage Loan, the Maximum Mortgage
Rate; (18) with respect to each Adjustable Rate Mortgage Loan, the initial
Periodic Mortgage Rate Cap; (19) with respect to each Adjustable Rate Mortgage
Loan, the subsequent Periodic Mortgage Rate Cap; (20) with respect to each
Adjustable Rate Mortgage Loan, the first payment Adjustment Date immediately
following the Cut-off Date; (21) with respect to each Adjustable Rate Mortgage
Loan, the first Interest Rate Adjustment Date immediately following the Cut-off
Date; (22) with respect to each Adjustable Rate Mortgage Loan, the Gross Margin;
(23) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Rate
adjustment period; (24) the type of Mortgage Loan (i.e., Fixed Rate or
Adjustable Rate Mortgage Loan); (25) lien position (i.e., First-Lien or
Second-Lien Mortgage Loan); (26) a code indicating the purpose of the loan
(i.e., purchase, rate and term refinance, equity take-out refinance); (27) the
credit risk score (FICO score); (28) the loan credit grade classification (as
described in the underwriting guidelines); (29) the Mortgage Rate at
origination; (30) the value of the Mortgaged Property; (31) a code indicating
the term and amount of Prepayment Charges applicable to such Mortgage Loan
(including any prepayment penalty term), if any; (32) with respect to each
Mortgage Loan, the Loan-to-Value Ratio at origination; (33) the documentation
level; (34) the date of origination; (35) a code indicating whether the Mortgage
Loan is a Balloon Loan; (36) the Due Date for the first Scheduled Payment; (37)
the original Scheduled Payment due; (38) the debt-to-income ratio with respect
to the Mortgage Loan; (39) the Mortgage Rate calculation method (i.e., 30/360,
simple interest, other); (40) a code indicating whether the Mortgage Loan is
Home Loan; (41) appraisal verification (Y/N); and (42) type of appraisal
verification, if any. 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.
DBRS: Dominion Bond Rating Service. If DBRS is designated as a
Rating Agency in the Preliminary Statement, for purposes of Section 11.05(c) the
address for notices to DBRS shall be Dominion Bond Rating Service, ▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇, or such other
address as DBRS may hereafter furnish to the Depositor, the Trustee, the
Securities Administrator and the Servicer.
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.
Deemed Material and Adverse Representation: Each representation and
warranty identified as such on Schedule III to this Agreement.
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 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: As defined in Section 2.03.
Delinquency 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 Stated Principal Balances of 60+ Day
Delinquent Mortgage Loans, divided by (y) the aggregate Stated Principal Balance
of the Mortgage Loans, as of the last day of the related Due Period, equals or
exceeds 42.00% of the prior period's Senior Enhancement Percentage.
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the Percentage Interest appearing on the face thereof.
Depositor: Securitized Asset Backed Receivables LLC, a Delaware
limited liability company, and its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust company,
including the Trustee and the Securities Administrator, that (a) is incorporated
under the laws of the United States of America or any State thereof, (b) is
subject to supervision and examination by federal or state banking authorities
and (c) has outstanding unsecured commercial paper or other short-term unsecured
debt obligations that are rated "P-1" by Moody's, "F1+" by Fitch, "A-1" by
Standard & Poor's and, if rated by DBRS, "R-1" by DBRS (in each case, to the
extent they are designated as Rating Agencies in the Preliminary Statement).
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 Remittance Date, the 15th
day (or if such day is not a Business Day, the immediately preceding Business
Day) in the calendar month in which such Remittance Date occurs.
Disqualified Non-U.S. Person: With respect to a Class R Certificate,
(i) any Non-U.S. Person or agent thereof other than a Non-U.S. Person that holds
the Class R Certificate in connection with the conduct of a trade or business
within the United States and has furnished the transferor and the Securities
Administrator with an effective IRS Form W-8ECI, (ii) any domestic entity
classified as a partnership under the Code, any of its direct or indirect
partners (other than through a U.S. corporation) which are Disqualified Non-U.S.
Persons, unless such Person described in (i) or (ii) above has delivered to both
the transferor, the Securities Administrator and the Trustee an opinion of a
nationally recognized tax counsel to the effect that the transfer of the Class R
Certificate to it is in accordance with the requirements of the Code and the
regulations promulgated thereunder and that such transfer of the Class R
Certificate will not be disregarded for federal income tax purposes.
Distribution Account: The separate Eligible Account created and
maintained by the Securities Administrator pursuant to Section 3.07(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 Securitized Asset Backed Receivables LLC Trust 2006-NC1 Mortgage
Pass-Through Certificates, Series 2006-NC1". Funds in the Distribution Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:00 noon New York City time on the third Business Day immediately preceding
such Distribution Date.
Distribution Date: The 25th day of each calendar month, or if such
day is not a Business Day, the next succeeding Business Day, commencing in May
2006.
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
the NIM Insurer and 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 Servicer and the Securities Administrator) (in each case, to the extent
they are designated as Rating Agencies in the Preliminary Statement).
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 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 Securitized Asset Backed
Receivables LLC Trust 2006-NC1, Mortgage Pass-Through Certificates, Series
2006-NC1". 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, the Securities Administrator Fee Rate and
the Loan Performance Advisor Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing
Fee, the Securities Administrator Fee and the Loan Performance Advisor Fee.
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 a Mortgage Loan or REO Property purchased
by the Responsible Party as contemplated by this Agreement), a determination
made by the Servicer that all Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds and other payments or recoveries which the Servicer, in its
reasonable good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered. The Servicer shall maintain records, prepared by
a Servicing Officer, of each Final Recovery Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date occurring in March
2036.
Fitch: Fitch, Inc., or any successor thereto. If Fitch is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section
11.05(c) the address for notices to Fitch shall be Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: MBS Monitoring - Securitized Asset
Backed Receivables LLC Trust 2006-NC1, or such other address as Fitch may
hereafter furnish to the Depositor, the Securities Administrator, the Trustee
and the Servicer.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
Form 8-K Disclosure Information: As defined in Section 8.12(g).
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note to be added
to the applicable Index to determine the Mortgage Rate.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, (b) classified as a "high cost home,"
"threshold," "covered," "high risk home," or "predatory" loan under any other
applicable federal, state 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 (c) a Mortgage Loan categorized as High Cost
pursuant to Appendix E of Standard & Poor's Glossary.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
Indenture: An indenture relating to the issuance of notes secured by
the Class X Certificates and/or the Class P Certificates (or any portion
thereof) which may or may not be guaranteed by the NIM Insurer.
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.
Initial Certification: As defined in Section 2.02.
Insurance and Indemnity Agreement: The insurance and indemnity
agreement, dated as of May 3, 2006, among the NIM Insurer, Barclays Bank PLC,
the Depositor, the NIM Issuer, the Trustee, the co-trustee for the NIM
Securities and the NIM Trustee.
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, including, without limitation, the Pool Policy.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies (including the Pool Policy) 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 REMIC 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 and ending on the day immediately preceding the current Distribution
Date (or, in the case of the first Distribution Date, the period from and
including the Closing Date to but excluding such first Distribution Date). For
purposes of computing interest accruals on each Class of 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 Payment: With respect to each Cap Agreement and
for any Distribution Date, the amount, if any, required to be paid by the Cap
Provider on such Distribution Date under such Cap Agreement.
Interest Rate Swap Agreement: The interest rate swap agreement,
dated as of May 3, 2006 between the Swap Provider and the Securities
Administrator, a copy of which is attached hereto as Exhibit T.
Interest Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans, that portion of Available Funds attributable to interest
relating to Mortgage Loans.
Investment Account: As defined in Section 3.12(a).
IRS: The Internal Revenue Service.
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received after the Determination Date immediately following
such Due Period, whether as late payments of Scheduled Payments or as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds, Subsequent Recoveries or
otherwise, which represent late payments or collections of principal and/or
interest due (without regard to any acceleration of payments under the related
Mortgage and Mortgage Note) but delinquent for such Due Period and not
previously recovered.
LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Securities Administrator on the related
LIBOR Determination Date on the basis of the offered rate for one-month U.S.
dollar deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m.
(London time) on such date; provided, that if such rate does not appear on
Telerate Page 3750, the rate for such date will be determined on the basis of
the rates at which one-month U.S. dollar deposits are offered by the Reference
Banks at approximately 11:00 a.m. (London time) on such date to prime banks in
the London interbank market. In such event, the Securities Administrator shall
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
for that date will be the arithmetic mean of the quotations (rounded upwards if
necessary to the nearest whole multiple of 1/16%). If fewer than two quotations
are provided as requested, the rate for that date will be the arithmetic mean of
the rates quoted by major banks in New York City, selected by the Securities
Administrator (after consultation with the Depositor), at approximately 11:00
a.m. (New York City time) on such date for one-month U.S. dollar loans to
leading European banks.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the LIBOR Certificates, the second London Business Day preceding the
commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
Servicer has certified to the Trustee that it has received all amounts it
expects to receive in connection with the liquidation of such Mortgage Loan
including the final disposition of an REO Property.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a trustee's sale,
foreclosure sale or otherwise.
Loan Performance Advisor: OfficeTiger Global Real Estate
Services Inc., a Delaware corporation, and its successors in interest, and if
a successor loan performance advisor is appointed hereunder, such successor.
Loan Performance Advisor Agreement: The Loan Performance Advisor
Agreement, dated as of February 1, 2005, by and between the Sponsor and the Loan
Performance Advisor.
Loan Performance Advisor Fee: As to any Distribution Date, an amount
equal to the product of (a) one-twelfth of the Loan Performance Advisor Fee Rate
and (b) the aggregate Stated Principal Balance of the Mortgage Loans as of the
preceding Distribution Date or, in the case of the first Distribution Date, the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date;
provided, however that the Loan Performance Advisor Fee for any Distribution
Date shall not be lower than $1,500.
Loan Performance Advisor Fee Rate: With respect to each Mortgage
Loan, either (a) 0.015% per annum or (b) if the Loan Performance Advisor Fee is
the amount calculated pursuant to the proviso in the definition of "Loan
Performance Advisor Fee", a per annum rate determined by dividing such fee by
the average of the aggregate Stated Principal Balance of the Mortgage Loans as
of the preceding Distribution Date.
Loan-to-Value Ratio or LTV: As of any date and as to any Mortgage
Loan, the ratio (expressed as a percentage) of the outstanding principal balance
of the Mortgage Loan to (a) in the case of a purchase, the lesser of (i) the
sale price of the Mortgaged Property and (ii) the lesser of (y) its appraised
value at the time of sale or (z) the appraised value determined by a review
appraisal conducted by the Responsible Party, or (b) in the case of a
refinancing or modification, the lesser of (i) the appraised value of the
Mortgaged Property at the time of the refinancing or modification or (ii) the
appraised value determined by a review appraisal conducted by the Responsible
Party.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lower Tier REMIC Interest Rate: As described in the Preliminary
Statement.
Lower Tier REMIC Regular Interest: Each of the Class LT-A-1, Class
A-2, Class LT-A-3, Class LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-B-1, Class
LT-B-2, Class LT-B-3, Class LT-IO and Class LT-Accrual Interests as described in
the Preliminary Statement.
Lower Tier REMIC: As described in the Preliminary Statement.
Lower Tier REMIC Principal Amount: The principal balance of each
Lower Tier REMIC Regular Interest, determined as set forth in the Preliminary
Statement. The Lower Tier REMIC Principal Amount shall be computed to at least
eight (8) decimal places.
Lower Tier REMIC Net WAC Rate: 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).
Majority Class X Certificateholder: The Holder or Holders of a
majority of the Percentage Interests in the Class X Certificates.
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.
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. If ▇▇▇▇▇'▇ is designated as
a Rating Agency in the Preliminary Statement, for purposes of Section 11.05(c)
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 Servicer.
Mortgage: The mortgage, deed of trust or other instrument
identified on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage
Loan contained in either the Servicing File or Custodial File.
Mortgage Loan: An individual Mortgage Loan that is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes,
without limitation, the Mortgage File, the Scheduled Payments, Principal
Prepayments, Liquidation Proceeds, Subsequent Recoveries, Condemnation Proceeds,
Insurance Proceeds, REO Disposition proceeds, Prepayment Charges, and all other
rights, benefits, proceeds and obligations arising from or in connection with
such Mortgage Loan, excluding replaced or repurchased Mortgage Loans.
Mortgage Loan Schedule: A schedule of Mortgage Loans delivered to
the Trustee and the Securities Administrator and referred to as Schedule I, such
schedule setting forth the Data Tape Information with respect to each Mortgage
Loan.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne on a Mortgage Note,
which shall be adjusted from time to time 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 amount
remaining for distribution pursuant to Section 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 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), or any amount withdrawn from the reserve account
referred to in the third full paragraph of Section 4.06 that is required under
that paragraph be treated as a Net Swap Receipt for purposes of determining the
distributions from the Swap Account.
Net WAC Rate Cap: With respect to the Mortgage Loans as of any
Distribution Date, the product of a per annum rate equal to (i) the weighted
average of the Adjusted Net Mortgage Rates for the Mortgage Loans then in effect
on the beginning of the related Due Period, minus the product of (A) the Net
Swap Payment plus any Swap Termination Payment (other than a Defaulted Swap
Termination Payment) made to the Swap Provider, if any, expressed as a
percentage equal to a fraction, the numerator of which is equal to the Net Swap
Payment plus any Swap Termination Payment (other than a Defaulted Swap
Termination Payment) made to the Swap Provider and the denominator of which is
equal to the aggregate Stated Principal Balance of the Mortgage Loans at the
beginning of such Due Period and (B) 12 and (ii) a fraction, the numerator of
which is 30 and the denominator of which is the actual number of days in the
related Interest Accrual Period. With respect to the first Due Period and first
Distribution Date only, the Net 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.
NIM Insurer: Radian Insurance Inc., a Pennsylvania stock insurance
company, and its successors in interest.
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise backed by
some or all of the Class X and Class P Certificates that are rated by any Rating
Agency.
NIM Trustee: The trustee for the NIM Securities.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-Permitted Transferee: A Person other than a Permitted
Transferee.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Servicer, will not or, in the case of a
proposed P&I Advance, would not be ultimately recoverable from related Late
Collections on such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances previously
made or proposed to be made in respect of a Mortgage Loan or REO Property,
which, in accordance with Accepted Servicing Practices, will not or, in the case
of a proposed Servicing Advance, would not be ultimately recoverable from
related Late Collections.
Non-U.S. Person: A person that is not a U.S. Person.
Notice of Final Distribution: The notice to be provided pursuant to
Section 10.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by an officer of the
Servicer with responsibility for the servicing of the Mortgage Loans and listed
on a list delivered to the Trustee and the Securities Administrator pursuant to
this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for the Servicer or any Subservicer, reasonably acceptable to
the Persons to whom such opinion is to be delivered in accordance with the
provisions of this Agreement, provided, that any Opinion of Counsel relating to
(a) qualification of any Trust REMIC or (b) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Servicer of the
Mortgage Loans, (ii) does not have any material direct or indirect financial
interest in the Servicer of the Mortgage Loans or in an Affiliate of the
Servicer and (iii) is not connected with the Servicer of the Mortgage Loans as
an officer, employee, director or person performing similar functions.
Optional Termination Date: The date determined as follows:
(i) the Majority Class X Certificateholder (as evidenced
on the Certificate Register), pursuant to Section 10.01, may cause
the Optional Termination Date to occur on any Distribution Date on
which the aggregate Stated Principal Balance of the Mortgage Loans,
as of the last day of the related Due Period, is equal to 10% or
less of the Cut-off Date Pool Principal Balance; and
(ii) to the extent that the Majority Class X
Certificateholder has not exercised its option as stated in clause
(i) above, the NIM Insurer, pursuant to Section 10.01, may, at its
option, cause the Optional Termination Date to occur on any
Distribution Date on which the aggregate Stated Principal Balance of
the Mortgage Loans, as of the last day of the related Due Period, is
equal to 5% or less of the Cut-off Date Pool Principal Balance.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Securities
Administrator or delivered to the Securities Administrator for
cancellation; and
(ii) Certificates in exchange for which or in lieu of
which other Certificates have been executed and delivered by the
Securities Administrator pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any advance
made by the Servicer in respect of any Remittance Date representing the
aggregate of all payments of principal and interest, net of the Servicing Fee,
that were due during the related Due Period on the Mortgage Loans and that were
delinquent on the related Determination Date, plus certain amounts representing
assumed payments not covered by any current net income on the Mortgaged
Properties acquired by foreclosure or deed in lieu of foreclosure as determined
pursuant to Section 4.01.
Pass-Through Margin: With respect to each Class of Regular
Certificates, the following percentages: Class A-1 Certificates, 0.060%; Class
A-2 Certificates, 0.160%; Class A-3 Certificates, 0.270%; Class M-1
Certificates, 0.300%; Class M-2 Certificates, 0.440%; Class M-3 Certificates,
0.530%; Class B-1 Certificates, 1.000%; Class B-2 Certificates, 1.100%; and
Class B-3 Certificates, 2.000%. On the first Distribution Date after the
Optional Termination Date, the Pass-Through Margins shall increase to: Class A-1
Certificates, 0.120%; Class A-2 Certificates, 0.320%; Class A-3 Certificates,
0.540%; Class M-1 Certificates, 0.450%; Class M-2 Certificates, 0.660%; Class
M-3 Certificates, 0.795%; Class B-1 Certificates, 1.500%; Class B-2
Certificates, 1.650%; and Class B-3 Certificates, 3.000%.
Pass-Through Rate: For each Class of Certificates, each Class of
Upper Tier REMIC Regular Interest and each Class of Lower Tier REMIC Regular
Interest, the per annum rate set forth or calculated in the manner described in
the Preliminary Statement.
PCAOB: The Public Company Accounting Oversight Board.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Rate adjustment as set forth
in the related Mortgage Note.
Permitted Investments: Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued by the Servicer, the Trustee, the Securities Administrator,
the NIM Insurer or any of their respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of,
or bankers' acceptances (which shall each have an original maturity
of not more than 90 days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or
a remaining maturity of more than 30 days) denominated in United
States dollars and issued by, any Depository Institution and rated
"F1+" by Fitch, "A-1+" by S&P, "P-1" by ▇▇▇▇▇'▇ and "R-1 by DBRS (in
each case, to the extent they are designated as Rating Agencies in
the Preliminary Statement);
(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
S&P and ▇▇▇▇▇'▇ (in each case, to the extent they are designated as
Rating Agencies in the Preliminary Statement), and by each other
Rating Agency that rates such securities in its highest long-term
unsecured rating categories at the time of such investment or
contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than 30 days after the date
of acquisition thereof) that is rated by S&P and ▇▇▇▇▇'▇ (in each
case, to the extent they are designated as Rating Agencies in the
Preliminary Statement), and by each other Agency that rates such
securities in its highest short-term unsecured debt rating available
at the time of such investment;
(vi) units of money market funds, including money market funds
managed or advised by the Depositor, the Trustee, the Securities
Administrator or an Affiliate thereof, that have been rated "Aaa" by
▇▇▇▇▇'▇, "AAAm" or "AAAm-G" by Standard & Poor's and, if rated by
Fitch, at least "AAA" by Fitch and "R-1" by DBRS (in each case, to
the extent they are designated as Rating Agencies in the Preliminary
Statement); and
(vii) if previously confirmed in writing to the Securities
Administrator and consented to by the NIM Insurer, any other demand,
money market or time deposit, or any other obligation, security or
investment, as may be acceptable to each of the Rating Agencies as a
permitted investment of funds backing "Aaa" or "AAA" rated
securities;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, international organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that is a
Disqualified Non-U.S. Person or a U.S. Person with respect to whom income from a
Residual Certificate is attributable to a foreign permanent establishment or
fixed base, within the meaning of an applicable income tax treaty, of such
Person or any other U.S. Person, (vi) an "electing large partnership" within the
meaning of Section 775 of the Code and (vii) any other Person so designated by
the Depositor based upon an Opinion of Counsel that the Transfer of an Ownership
Interest in a Residual Certificate to such Person may cause any 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 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of ▇▇▇▇▇▇▇ Mac, a majority
of its board of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Pool Insurer: Radian Guaranty Inc., a Pennsylvania corporation, and
its successors in interest.
Pool Policy: Policy No. 06-043190, with respect to the Mortgage
Loans, issued by the Pool Insurer, a copy of which is attached hereto as Exhibit
X and all endorsements thereto.
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 REMIC-1: As described in the Preliminary Statement.
Pooling Tier REMIC-1 Interest Rate: As described in the Preliminary
Statement.
Pooling Tier REMIC-1 Net WAC Rate: With respect to the Mortgage
Loans as of any Distribution Date, a per annum rate equal to (a) the weighted
average of the Adjusted Net Mortgage Rates then in effect on the beginning of
the related Due Period on the Mortgage Loans multiplied by (b) 30 divided by the
actual number of days in the related Interest Accrual Period. With respect to
the first Due Period and first Distribution Date only, the Pooling Tier REMIC-1
Net WAC Rate 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.
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 the Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any Principal Prepayment pursuant to the terms of the related
Mortgage Note.
Prepayment Interest Excess: With respect to any Distribution Date,
any interest collected by the Servicer with respect to any Mortgage Loan
serviced by the Servicer as to which a Principal Prepayment in Full occurs from
the 1st day of the month through the 15th day of the month in which such
Distribution Date occurs and that represents interest that accrues from the 1st
day of such month to the date of such Principal Prepayment in Full.
Prepayment Interest Shortfall: With respect to any Distribution
Date, the sum of, for each Mortgage Loan that was, during the portion of the
related Prepayment Period from the first day of such Prepayment Period through
the last day of the month preceding the month in which such Distribution Date
occurs, 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 that occurs during such Prepayment Period and which was
applied by the Servicer to reduce the outstanding principal balance of such
Mortgage Loan on a date preceding such Due Date, an amount equal to the product
of (a) the Mortgage Rate net of the Servicing Fee Rate for such Mortgage Loan,
(b) the amount of the Principal Prepayment for such Mortgage Loan, (c) 1/360 and
(d) the number of days commencing on the date on which such Principal Prepayment
was applied and ending on the last day of the calendar month in which the
related Prepayment Period begins.
Prepayment Period: With respect to any Distribution Date and any
Principal Prepayments in Full, the period from and including 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 the Cut-off Date) to and including the
15th day of the month in which such Distribution Date occurs. With respect to
each Distribution Date and Principal Prepayments that are not Principal
Prepayments in Full, the calendar month preceding the month in which the related
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 in advance of its scheduled Due Date, excluding any Prepayment
Charge thereon and which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution Date,
the amount equal to the sum of the following amounts (without duplication) with
respect to the related Due Period: (i) each Scheduled Payment of principal on a
Mortgage Loan due during such Due Period and received by the Servicer on or
prior to the related Determination Date or advanced by the Servicer for the
related Remittance Date, (ii) all Principal Prepayments received during the
related Prepayment Period; (iii) all net Liquidation Proceeds, Condemnation
Proceeds and Insurance Proceeds on the Mortgage Loans allocable to principal,
and all Subsequent Recoveries, actually collected by the Servicer during the
related Prepayment Period; (iv) the portion of the Repurchase Price allocable to
principal with respect to each Mortgage Loan repurchased on or prior to the
related Determination Date; (v) all Substitution Adjustment Amounts allocable to
principal with respect to the substitutions of Mortgage Loans that occur on or
prior to the related Determination Date; (vi) the allocable portion of the
proceeds received with respect to the termination of the Trust Fund pursuant to
clause (a) of Section 10.01 (to the extent such proceeds relate to principal)
and (vii) with respect to the Distribution Date in May 2006 only, the Closing
Date Deposit Amount.
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated April 27,
2006, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A planned unit development.
Purchase Agreement: The Mortgage Loan Purchase Agreement, dated as
of January 1, 2006, between the Responsible Party and the Sponsor.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee and the
Securities Administrator. References herein to a given rating or rating category
of a Rating Agency shall mean such rating category without giving effect to any
modifiers. For purposes of Section 11.05(c), 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 such
Rating Agency may hereafter furnish to the Depositor, the Securities
Administrator, the Trustee and the Servicer.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect thereto net
of the expenses incurred by the Servicer in connection with the liquidation of
such Liquidated Mortgage Loan and net of the amount of unreimbursed Servicing
Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date;
provided, however, that, for any Certificate issued in definitive form, the
Record Date shall be the close of business on the last Business Day of the month
preceding the month in which such applicable Distribution Date occurs.
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, 70 Fed. Reg. 1,506, 1,531 (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 third
Business Day immediately preceding such Distribution Date.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by
any income from the REO Property treated as a recovery of principal).
REO Mortgage Loan: A Mortgage Loan where title to the related
Mortgaged Property has been obtained by the Servicer in the name of the Trustee
on behalf of the Certificateholders.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Reportable Event: As defined in Section 8.12(g).
Repurchase Price: With respect to any Mortgage Loan, an amount equal
to the sum of (i) the unpaid principal balance of such Mortgage Loan as of the
date of repurchase, (ii) interest on such unpaid principal balance of such
Mortgage Loan at the Mortgage Rate from the last date through which interest has
been paid to the end of the month in which such repurchase occurs, (iii) all
unreimbursed Servicing Advances and (iv) all expenses incurred by the Securities
Administrator arising out of the Securities Administrator's enforcement of the
applicable Person's repurchase obligation hereunder.
Request for Release: The Request for Release submitted by the
Servicer to the Custodian, substantially in the form of Exhibit J.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee or the
Securities Administrator, any vice president, any assistant vice president, any
assistant secretary, any assistant treasurer, any associate, or any other
officer of the Trustee or the Securities Administrator 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.
Responsible Party: NC Capital Corporation, a California corporation,
and its successors in interest.
Rule 144A Letter: As defined in Section 5.02(b).
Sarbanes Certification: As defined in Section 8.12(c).
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified herein, shall give effect to any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: ▇▇▇▇▇ Fargo Bank, National Association, a
national banking association, and its successors and assigns, in its capacity as
Securities Administrator hereunder and, if a successor securities administrator
is appointed hereunder, such successor.
Securities Administrator Fee: With respect to any Distribution Date,
an amount equal to the product of (a) one-twelfth of the Securities
Administrator Fee Rate and (b) the Stated Principal Balance of the Mortgage
Loans as of the prior Distribution Date (or as of the Cut-off Date in the case
of the first Distribution Date).
Securities Administrator Fee Rate: With respect to each Mortgage
Loan, 0.002% per annum.
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 and any principal payments on such Classes from the Swap
Account for such 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, 28.80%.
Servicer: ▇▇▇▇▇ Fargo Bank, National Association, a national banking
association, and its successors in interest, and if a successor servicer is
appointed hereunder, such successor.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the Servicer in the performance of
its servicing obligations in connection with a default, delinquency or other
unanticipated event, including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of a Mortgaged Property,
(ii) any enforcement or judicial proceedings, including foreclosures and
litigation, in respect of a particular Mortgage Loan, (iii) the management
(including reasonable fees in connection therewith) and liquidation of any REO
Property and (iv) the performance of its obligations under Sections 3.01, 3.09,
3.13 and 3.15. The Servicing Advances shall also include any reasonable
"out-of-pocket" costs and expenses (including legal fees) incurred by the
Servicer in connection with executing and recording instruments of satisfaction,
deeds of reconveyance or Assignments of Mortgage in connection with any
satisfaction or foreclosure in respect of any Mortgage Loan to the extent not
recovered from the Mortgagor or otherwise payable under this Agreement. The
Servicer shall not be required to make any Nonrecoverable Servicing Advances.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, which as of the Closing Date are listed on Exhibit P
hereto.
Servicing Fee: With respect to each Mortgage Loan and for any
calendar month, an amount equal to one-twelfth of the product of (a) the
Servicing Fee Rate and (b) the Stated Principal Balance of such Mortgage Loan.
Such fee shall be payable monthly for any month during which the Mortgage Loan
is serviced by the Servicer under this Agreement. The Servicing Fee is payable
solely from the interest portion (including recoveries with respect to interest
from Liquidation Proceeds, Subsequent Recoveries, Insurance Proceeds,
Condemnation Proceeds and proceeds received with respect to REO Properties) of
such Scheduled Payment collected by the Servicer, or as otherwise provided under
Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50%.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals or copies of all documents in
the Mortgage File which are not delivered to the Custodian 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 employee or officer of the Servicer involved
in, or responsible for, the administration and servicing of the Mortgage Loans
whose name and facsimile signature appear on a list of servicing officers
furnished to the Trustee and the Securities Administrator by the Servicer on the
Closing Date pursuant to this Agreement, as such list may from time to time be
amended.
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: Each Mortgage Loan with respect to
which any portion of a Scheduled Payment is, as of the last day of the prior Due
Period, two months or more past due (without giving effect to any grace period),
each Mortgage Loan in foreclosure, each Mortgage Loan related to REO Property
and each Mortgage Loan where the related Mortgagor has filed for bankruptcy.
Specified Subordinated Amount: Prior to the Stepdown Date, an amount
equal to 0.50% of the Cut-off Date Pool Principal Balance. On and after the
Stepdown Date, an amount equal to 1.00% of the aggregate 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 aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date; provided, however, that
if, on any Distribution Date, a Trigger Event exists, the Specified Subordinated
Amount shall not be reduced to the applicable percentage of the then current
aggregate Stated Principal Balance of the Mortgage Loans until the Distribution
Date on which a Trigger Event no longer exists. 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: ▇▇▇▇▇▇ Funding LLC, a Delaware limited liability company,
and its successors in interest.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. If Standard & Poor's is designated as a Rating
Agency in the Preliminary Statement, for purposes of Section 11.05(c) the
address for notices to Standard & Poor's shall be Standard & Poor's, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage Surveillance
Group - Securitized Asset Backed Receivables LLC Trust 2006-NC1, or such other
address as Standard & Poor's may hereafter furnish to the Depositor, the
Securities Administrator, the Trustee and the Servicer.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of any
date of determination, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before such
date (whether or not received), minus (ii) all amounts previously remitted to
the Securities Administrator with respect to the related Mortgage Loan
representing payments or recoveries of principal including advances in respect
of scheduled payments of principal. For purposes of any Distribution Date, the
Stated Principal Balance of any Mortgage Loan will give effect to any scheduled
payments of principal received by the Servicer on or prior to the related
Determination Date or advanced by the Servicer for the related Remittance Date
and any unscheduled principal payments and other unscheduled principal
collections received during the related Prepayment Period, and the Stated
Principal Balance of any Mortgage Loan that has prepaid in full or has been
liquidated 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 2009 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 Balance of the Mortgage Loans for the applicable
Distribution Date but prior to any applications of Principal Distribution Amount
to the Certificates on such Distribution Date) is greater than or equal to the
Senior Specified Enhancement Percentage.
Subcontractor: Any third-party or Affiliated vendor, subcontractor
or other Person utilized by the Servicer, a Subservicer or the Securities
Administrator, 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 any of the Mortgage
Loans.
Subordinated Amount: As of any Distribution Date, the excess, if
any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date over (b) the aggregate of the Class Certificate Balances
of the LIBOR Certificates 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 included as part of the Principal Remittance Amount
for the related Distribution Date.
Subservicer: Any Person that services Mortgage Loans on behalf of
the Servicer or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Servicer under
this Agreement, with respect to some or all of the Mortgage Loans, that are
identified in Item 1122(d) of Regulation AB.
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan substituted by the
Responsible Party 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, (i) have a Stated Principal Balance, after deduction of all
Scheduled Payments due in the month of substitution, not in excess of the Stated
Principal Balance of the Deleted Mortgage Loan; (ii) be accruing interest at a
rate not lower than and not more than 1% higher than that of the Deleted
Mortgage Loan; (iii) have a remaining term to maturity not greater than (and not
more than one year less than) that of the Deleted Mortgage Loan; (iv) be of the
same type as the Deleted Mortgage Loan; and (v) comply with each representation
and warranty set forth in Section 2.03.
Substitution Adjustment Amount: As defined in Section 2.03.
Swap Account: The trust account created pursuant to Section 4.06 of
this Agreement consisting of 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 Rate 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 Provider: Barclays Bank PLC, a bank authorized and regulated by
the United Kingdom's Financial Services Authority and a member of the London
Stock Exchange, 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).
Tax Matters Person: The Holder of the Class R Certificates
designated as "tax matters person" of each Trust REMIC, 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).
Telerate Page 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).
Termination Price: As defined in Section 10.01.
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 (other
than Prepayment Interest Excesses) received by the Servicer on or prior to the
related Determination Date or advanced by the Servicer for the related
Remittance Date (net of Expense Fees) over (ii) the sum of (A) the amounts
payable to the Certificates 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) to the
Swap Provider.
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 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 interest and principal with respect thereto
received on or after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or prior to the related Cut-off Date; (ii) the
Collection Account, 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 Cap Agreements;
(v) the Interest Rate Swap Agreement; (vi) the Swap Account; (vii) the Pool
Policy;(viii) the Closing Date Deposit Amount; (ix) the Assignment Agreement;
and (x) 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 or the Upper Tier REMIC, as applicable.
Trustee: U.S. Bank National Association, 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 Carry Forward 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 REMIC Interest Rate for the Corresponding Class
of Upper Tier REMIC Regular Interest is based upon the Upper Tier REMIC Net WAC
Rate, the excess, if any, of (i) the Accrued Certificate Interest Distribution
Amount such Class of LIBOR Certificates would otherwise be entitled to receive
on such Distribution Date taking into account the Net WAC Rate Cap, over (ii)
the Accrued Certificate Interest Distribution Amount such Class of Upper Tier
REMIC Regular Interest on such Distribution Date taking into account the Upper
Tier REMIC Net WAC Rate and (B) the Upper Tier Carry Forward 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
REMIC Interest Rate for such Class of Certificates for such Distribution Date,
without giving effect to the Upper Tier REMIC Net WAC Rate.
Upper Tier REMIC: As described in the Preliminary Statement.
Upper Tier REMIC Net WAC Rate: For any Distribution Date, the
weighted average of the Lower Tier REMIC Interest Rate of the Lower Tier REMIC
Regular Interests (other than the Class LT-IO Interest), weighted on the basis
of the Lower Tier REMIC Principal Amounts.
Upper Tier REMIC Regular Interest: As described in the Preliminary
Statement.
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.
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 related Cap Agreement) due and payable to the
Cap Provider pursuant to the terms of each Cap Agreement. On the Closing Date,
the Sponsor shall pay, without any right of reimbursement from the Trust, to the
Pool Insurer the one-time, upfront premium due and payable to the Pool Insurer
pursuant to the terms of Pool Policy.
(b) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor shall, pursuant to Section 2.02, deliver or cause to be
delivered to the Custodian for the benefit of the Certificateholders the
following documents or instruments with respect to each Mortgage Loan so
assigned:
(i) the original Mortgage Note bearing all intervening endorsements
showing a complete chain of endorsement from the originator to the last
endorsee, 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 Notes for endorsements, the endorsement may be
contained on an allonge;
(ii) the original of any guarantee executed in connection with the
Mortgage Note;
(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 Responsible Party shall deliver or cause to be
delivered to the Custodian a photocopy of such Mortgage, together with (A)
in the case of a delay caused by the public recording office, an Officer's
Certificate of the Responsible Party (or certified by the title company,
escrow agent, or closing attorney) stating that such Mortgage has been
dispatched to the appropriate public recording office for recordation and
that the original recorded Mortgage or a copy of such Mortgage certified
by such public recording office to be a true and complete copy of the
original recorded Mortgage will be promptly delivered to the Custodian
upon receipt thereof by the Responsible Party; or (B) 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
and extension agreements, if any, with evidence of recording thereon;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed in blank;
(vi) the originals of all intervening assignments of Mortgage (if
any) evidencing a complete chain of assignment from the applicable
originator to the last endorsee with evidence of recording thereon, 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 Responsible
Party shall deliver or cause to be delivered a photocopy of such
intervening assignment, together with (A) in the case of a delay caused by
the public recording office, an Officer's Certificate of the Responsible
Party or a certificate from an escrow company, a title company or a
closing attorney stating that such intervening assignment of Mortgage has
been dispatched to the appropriate public recording office for recordation
and that such original recorded intervening assignment of Mortgage or a
copy of such intervening assignment of Mortgage certified by the
appropriate public recording office to be a true and complete copy of the
original recorded intervening assignment of Mortgage will be promptly
delivered to the Custodian upon receipt thereof by the Responsible Party;
or (B) 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 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;
(viii) the original or, if unavailable, a copy of any security
agreement, chattel mortgage or equivalent document executed in connection
with the Mortgage (if provided); and
(ix) if any of the above documents has been executed by a person
holding a power of attorney, an original or photocopy of such power
certified by the Responsible Party to be a true and correct copy of the
original.
To the extent not previously delivered to the Sponsor pursuant to
the Purchase Agreement, the Responsible Party shall promptly upon receipt from
the respective recording office cause to be delivered to the Custodian the
original recorded document described in (iii), (iv) and (vi) above.
From time to time, the Responsible Party, the Depositor or the
Servicer, as applicable, shall forward to the Custodian, additional original
documents and 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 Custodian as to each Mortgage Loan shall constitute the "Custodial File".
To the extent not previously delivered to the Sponsor pursuant to
the Purchase Agreement, on or prior to the Closing Date, the Responsible Party
shall deliver to the Custodian, Assignments of Mortgages, in blank, for each
Mortgage Loan. No later than thirty (30) Business Days following the later of
the Closing Date and the date of receipt by the Servicer of the complete
recording information for a Mortgage, the Servicer shall promptly submit or
cause to be submitted for recording, at the expense of the Responsible Party and
at no expense to the Trust Fund, the Custodian or the Depositor, 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 if the Custodian and
each Rating Agency have received an Opinion of Counsel, at the expense of the
Trust and satisfactory in form and substance to the Custodian 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. If the Assignment of Mortgage is to be recorded, the
Mortgage shall be assigned by the Responsible Party, at the expense of the
Responsible Party, to "U.S. Bank National Association, as trustee under the
Pooling and Servicing Agreement dated as of April 1, 2006, Securitized Asset
Backed Receivables LLC Trust 2006-NC1". In the event that any such Assignment of
Mortgage is lost or returned unrecorded because of a defect therein, the
Responsible Party 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 at no expense to the Trust Fund.
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 Custodian within 180 days (or such other time period as may be required
by any Rating Agency) following the Closing Date, and in the event that the
Responsible Party 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
Responsible Party at the price and in the manner specified in Section 2.03. The
foregoing repurchase obligation shall not apply in the event that the
Responsible Party 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 Responsible Party 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 Responsible Party,
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 Responsible Party shall be deemed to have been satisfied upon delivery by
the Responsible Party to the Custodian, 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.
(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 "Securitized Asset Backed
Receivables LLC Trust 2006-NC1" and U.S. Bank National Association 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 representation and warranty set
forth in paragraph (ccc) of Schedule III. 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 Interest Rate Swap
Agreement) pursuant to Section 2.01(a). The Securities Administrator on behalf
of the Trust is hereby authorized to enter into the Cap Agreements and the
Interest Rate Swap Agreement. The Trustee is hereby authorized and directed to
enter into the Insurance and Indemnity Agreement. In so doing, the Trustee shall
be entitled to all of the rights, protections and benefits given to the Trustee
under Article VIII hereof.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans. The
Depositor shall cause the Mortgage Loan files with respect to the Mortgage Loans
held under the Custodial Agreement to be transferred to the Custodian within 30
days of the Closing Date. Upon receipt, the Custodian will hold such documents
and the other documents delivered to it pursuant to Section 2.01, in trust for
the exclusive use and benefit of all present and future Certificateholders.
Within 30 days after the Closing Date, the Custodian shall be
required to deliver via facsimile (with original to follow the next Business
Day) to the Depositor and the NIM Insurer an Initial Certification in the form
annexed hereto as Exhibit E ("Initial Certification"), certifying receipt of a
Mortgage Note and Assignment of Mortgage for each Mortgage Loan. The Custodian
shall not be responsible to verify the validity, sufficiency or genuineness of
any document in any Custodial File. The Custodian shall maintain possession of
the related Mortgage Notes in the States of Minnesota, California or Utah,
unless otherwise permitted by the Rating Agencies.
Within 90 days after the receipt of the Custodial Files, the
Custodian shall ascertain that all documents identified in the Document
Certification and Exception Report in the form attached hereto as Exhibit F are
in its possession, and shall deliver to the Depositor, the NIM Insurer and the
Servicer a Document Certification and Exception Report, in the form annexed
hereto as Exhibit F, to the effect that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in such certification as an exception and
not covered by such certification): (i) all documents identified in the Document
Certification and Exception Report and required to be reviewed by it are in its
possession; (ii) such documents have been reviewed by it and appear regular on
their face and relate to such Mortgage Loan; (iii) based on its examination and
only as to the foregoing documents, the information set forth in items (1), (2),
(3), (15), (22) and (29) of the Data Tape Information respecting such Mortgage
Loan is correct; and (iv) each Mortgage Note has been endorsed as provided in
Section 2.01 of this Agreement. The Custodian shall not be responsible to verify
the validity, sufficiency or genuineness of any document in any Custodial File.
The Custodian shall retain possession and custody of each Custodial
File in accordance with and subject to the terms and conditions set forth
herein. The Servicer shall promptly deliver to the Custodian, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Custodial File as come into the possession of the Servicer from
time to time.
The Responsible Party shall deliver to the Servicer copies of all
trailing documents required to be included in the Custodial File at the same
time the original or certified copies thereof are delivered to the Custodian,
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 documents shall be delivered by the Responsible Party at the Responsible
Party's expense to the Servicer.
Section 2.03 Representations, Warranties and Covenants of the
Responsible Party and the Servicer; Remedies for Breaches of Representations and
Warranties with Respect to the Mortgage Loans. (a) ▇▇▇▇▇ Fargo Bank, National
Association hereby makes the representations and warranties set forth in
Schedule II hereto to the Depositor, the NIM Insurer and the Trustee, as of the
Closing Date.
(b) NC Capital Corporation, in its capacity as Responsible Party,
hereby makes the representations and warranties, set forth in Schedule III and
Schedule IV hereto, to the Depositor, the Securities Administrator, the NIM
Insurer and the Trustee, as of the Closing Date. The Depositor hereby makes the
representations and warranties set forth in Schedule V hereto to the Trustee and
Securities Administrator as of the dates set forth in such Schedule.
(c) It is understood and agreed by the Servicer and the Responsible
Party 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
on the Closing Date, and shall inure to the benefit of the Depositor and the
Trustee 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 Responsible Party, the Securities
Administrator, the Depositor, the Trustee, the Custodian, the NIM Insurer or the
Servicer of a breach of any of the foregoing representations and warranties, the
party discovering such breach shall give prompt written notice to the others.
(d) Within 30 days of the earlier of either discovery by or notice
to the Responsible Party that any Mortgage Loan does not conform to the
requirements as determined in the Custodian's review of the related Custodial
File or within 60 days of the earlier of either discovery by or notice to the
Responsible Party of any breach of a representation or warranty set forth in
Section 2.03(b) that materially and adversely affects the value of any Mortgage
Loan or the interest of the Trustee, or the Certificateholders therein, the
Responsible Party shall use its best efforts to cause to be remedied a material
defect in a document constituting part of a Mortgage File or promptly to cure
such breach in all material respects and, if such defect or breach cannot be
remedied, the Responsible Party shall, at the Depositor's option as specified in
writing and provided to the Responsible Party, the Securities Administrator, the
Custodian, the NIM Insurer and the Trustee, (i) if such 30- or 60-day period, as
applicable, expires prior to the second anniversary of the Closing Date, remove
such Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund and
substitute in its place a Substitute Mortgage Loan, in the manner and subject to
the conditions set forth in this Section 2.03; or (ii) repurchase such Mortgage
Loan at the Repurchase Price; provided, however, that any such substitution
pursuant to clause (i) above shall not be effected prior to the delivery to the
Custodian of a Request for Release substantially in the form of Exhibit J, and
the delivery of the Mortgage File to the Custodian for any such Substitute
Mortgage Loan. Notwithstanding the foregoing, a breach (i) which causes a
Mortgage Loan not to constitute a "qualified mortgage" within the meaning of
Section 860G(a)(3) of the Code, (ii) by the Responsible Party of any of the
representations and warranties identified as a Deemed Material and Adverse
Representation on Schedule III will be deemed automatically to materially and
adversely affect the value of such Mortgage Loan and the interests of the
Trustee and Certificateholders in such Mortgage Loan. In the event that the
Securities Administrator receives notice of a breach by the Responsible Party of
any of the representations and warranties identified as a Deemed Material and
Adverse Representation on Schedule III, the Securities Administrator shall give
notice of such breach to the Responsible Party and request the Responsible Party
to repurchase the Mortgage Loan at the Repurchase Price within sixty (60) days
of receipt by the Responsible Party of such notice. The Responsible Party shall
repurchase each such Mortgage Loan within 60 days of the earlier of discovery or
receipt of notice with respect to each such Mortgage Loan.
(e) With respect to any Substitute Mortgage Loan or Loans, the
Responsible Party shall deliver to the Custodian for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related assignment of
the Mortgage, and such other documents and agreements as are required by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned as required by
Section 2.01. No substitution under this Agreement is permitted to be made with
respect to any Distribution Date after the end of the related Prepayment Period.
Scheduled Payments due with respect to Substitute Mortgage Loans in the Due
Period of substitution shall not be part of the Trust Fund and will be retained
by the Responsible Party on the next succeeding Distribution Date. For the Due
Period of substitution, distributions to Certificateholders will include the
Scheduled Payment due on any Deleted Mortgage Loan for such Due Period and
thereafter the Responsible Party shall be entitled to retain all amounts
received in respect of such Deleted Mortgage Loan.
(f) The Servicer shall amend the Mortgage Loan Schedule for the
benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Substitute Mortgage Loan or Loans and
the Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee,
the Securities Administrator and the NIM Insurer. Upon such substitution, the
Substitute Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the Responsible Party 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 Section
2.03(b) with respect to such Mortgage Loan. Upon any such substitution and the
deposit to the Collection Account of the amount required to be deposited therein
in connection with such substitution as described in the following paragraph,
the Custodian shall release the Mortgage File held for the benefit of the
Certificateholders relating to such Deleted Mortgage Loan to the Responsible
Party and shall execute and deliver at the Responsible Party's direction such
instruments of transfer or assignment prepared by the Responsible Party, in each
case without recourse, as shall be necessary to vest title in the Responsible
Party, of the Trustee's interest in any Deleted Mortgage Loan substituted for
pursuant to this Section 2.03.
(g) For any month in which the Responsible Party substitutes one or
more Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Servicer will determine the amount (if any) by which the aggregate unpaid
principal balance of all such Substitute Mortgage Loans as of the date of
substitution is less than the aggregate unpaid principal balance of all such
Deleted Mortgage Loans. The amount of such shortage plus an amount equal to the
aggregate of any unreimbursed Advances with respect to such Deleted Mortgage
Loans (collectively, the "Substitution Adjustment Amount") shall be remitted by
the Responsible Party to the Servicer for deposit into the Collection Account on
or before the Distribution Account Deposit Date for the Distribution Date in the
month succeeding the calendar month during which the related Mortgage Loan
became required to be purchased or replaced hereunder.
(h) In addition to such repurchase or substitution obligation
referred to in Section 2.03(d), the Responsible Party shall indemnify the
Depositor, any of its Affiliates, the Servicer, the Trustee, the Securities
Administrator, the NIM Insurer and the Trust and hold such parties harmless
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
(including, without limitation, any taxes payable by the Trust) resulting from
any third party claim, demand, defense or assertion based on or grounded upon,
or resulting from, a breach by the Responsible Party of any of its
representations and warranties or obligations contained in this Agreement.
(i) [Reserved.]
(j) In the event that a Mortgage Loan shall have been repurchased
pursuant to this Agreement, the proceeds from such repurchase shall be deposited
by the Servicer in the Collection Account pursuant to Section 3.10 on or before
the Distribution Account Deposit Date for the Distribution Date in the month
following the month during which the Responsible Party became obligated to
repurchase or replace such Mortgage Loan and upon such deposit of the Repurchase
Price, and receipt of a Request for Release in the form of Exhibit J hereto, the
Custodian shall release the related Custodial File held for the benefit of the
Certificateholders to such Person as directed by the Servicer, and the Trustee
shall execute and deliver at such Person's direction such instruments of
transfer or assignment prepared by such Person, in each case without recourse,
as shall be necessary to transfer title from the Trustee. In accordance with
Section 11.05(b), the Securities Administrator shall promptly notify each Rating
Agency of a purchase of a Mortgage Loan pursuant to this Section 2.03.
It is understood and agreed that the obligation of the Responsible
Party under this Agreement to cure, repurchase or substitute any Mortgage Loan
as to which a breach of a representation and warranty has occurred and is
continuing, together with any related indemnification obligations of the
Responsible Party set forth in Section 2.03(h), shall constitute the sole
remedies against such Person respecting such breach available to
Certificateholders, the Depositor and any of its Affiliates, or the Trustee on
their behalf.
The provisions of this Section 2.03 shall survive delivery of the
respective Custodial Files to the Custodian for the benefit of the
Certificateholders.
Section 2.04 [Reserved].
Section 2.05 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 2.06 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 2036,
which is the Distribution Date in the month following the month in which the
latest Mortgage Loan maturity date occurs.
Amounts distributable to the Class X Certificates (prior to any
reduction for any Basis Risk Payment, Net Swap Payment or Swap Termination
Payment), exclusive of any amounts received from the Swap Provider, shall be
deemed paid from the Upper Tier REMIC 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 to the LIBOR Certificates or Net Swap
Payments or Swap Termination Payment 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 2.07 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee, the Servicer
and the NIM Insurer that as of the date of this Agreement or as of such date
specifically provided herein:
(a) The Depositor is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(b) The Depositor has the power and authority to convey the Mortgage
Loans and to execute, deliver and perform, and to enter into and consummate
transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite company action having been taken,
and, assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes or will constitute the legal, valid and binding
agreement of the Depositor, enforceable against the Depositor in accordance with
its terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors generally, and by general equity principles (regardless of
whether such enforcement is considered in a proceeding in equity or at law);
(d) No consent, approval, authorization or order of, or registration
or filing with, or notice to, any governmental authority or court is required
for the execution, delivery and performance of or compliance by the Depositor
with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been received or obtained on or
prior to the Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the certificate of formation or limited liability company
agreement of the Depositor, or (B) of any term, condition or provision of any
material indenture, deed of trust, contract or other agreement or instrument to
which the Depositor or any of its subsidiaries is a party or by which it or any
of its subsidiaries is bound; (ii) results or will result in a violation of any
law, rule, regulation, order, judgment or decree applicable to the Depositor of
any court or governmental authority having jurisdiction over the Depositor or
its subsidiaries; or (iii) results in the creation or imposition of any lien,
charge or encumbrance which would have a material adverse effect upon the
Mortgage Loans or any documents or instruments evidencing or securing the
Mortgage Loans;
(f) There are no actions, suits or proceedings before or against or
investigations of, the Depositor pending, or to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal, and no
notice of any such action, which, in the Depositor's reasonable judgment, might
materially and adversely affect the performance by the Depositor of its
obligations under this Agreement, or the validity or enforceability of this
Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that would materially and adversely affect its
performance hereunder; and
(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 11.04.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.07 shall survive delivery of the
respective Custodial Files to the Custodian, and shall inure to the benefit of
the Trustee.
Section 2.08 Rights of the NIM Insurer. Each of the rights of the
NIM Insurer set forth in this Agreement shall exist so long as (i) the NIM
Insurer guaranteed certain payments with respect to any class of NIM Securities
issued pursuant to the Indenture and (ii) any such class of notes guaranteed by
the NIM Insurer remains outstanding or the NIM Insurer is owed amounts in
respect of its guarantee of payment on such class of NIM Securities; provided,
however, the NIM Insurer shall not have any rights hereunder (except pursuant to
Section 11.01 and any rights to indemnification hereunder in the case of clause
(ii) below) so long as (i) the NIM Insurer has not guaranteed certain payments
with respect to a class of NIM Securities issued pursuant to the Indenture or
(ii) any default has occurred and is continuing under the insurance policy
issued by the NIM Insurer pursuant to which such payments on such class or
classes of NIM Securities are guaranteed.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders, the Servicer shall service and administer the
Mortgage Loans in accordance with the terms of this Agreement and the respective
Mortgage Loans and, to the extent consistent with such terms, in the same manner
in which it services and administers similar mortgage loans for its own
portfolio, giving due consideration to customary and usual standards of practice
of mortgage lenders and loan servicers administering similar mortgage loans but
without regard to:
(i) any relationship that the Servicer, any Subservicer or any
Affiliate of the Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or Servicing
Advances; or
(iv) the Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, if the Servicer shall
seek to maximize the timely and complete recovery of principal and interest on
the Mortgage Notes. Subject only to the above-described servicing standards and
the terms of this Agreement and of the respective Mortgage Loans, the Servicer
shall have full power and authority, acting alone or through Subservicers as
provided in Section 3.02, to do or cause to be done any and all things in
connection with such servicing and administration which it may deem necessary or
desirable. Without limiting the generality of the foregoing, the Servicer in its
own name or in the name of a Subservicer is hereby authorized and empowered by
the Trustee when the Servicer believes it appropriate in its best judgment in
accordance with Accepted Servicing Practices, to execute and deliver any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Mortgage
Loans and the Mortgaged Properties and to institute foreclosure proceedings or
obtain a deed-in-lieu of foreclosure so as to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on behalf
of the Trustee. The Servicer shall at its own expense be responsible for
preparing and recording all lien releases and mortgage satisfactions in
accordance with state and local regulations. The Servicer shall service and
administer the Mortgage Loans in accordance with applicable state and federal
law and shall provide to the Mortgagors any reports required to be provided to
them thereby. The Servicer shall also comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
standard hazard insurance policy. Subject to Section 3.16, the Trustee shall
execute, at the written request of the Servicer, and furnish to the Servicer and
any Subservicer such documents provided to the Trustee as are necessary or
appropriate to enable the Servicer or any Subservicer to carry out their
servicing and administrative duties hereunder, and the Trustee hereby grants to
the Servicer, and this Agreement shall constitute, a power of attorney to carry
out such duties including a power of attorney to take title to Mortgaged
Properties after foreclosure on behalf of the Trustee. The Trustee shall execute
a separate power of attorney, furnished to it by the Servicer, in favor of the
Servicer for the purposes described herein to the extent necessary or desirable
to enable the Servicer to perform its duties hereunder. The Trustee shall not be
liable for the actions of the Servicer or any Subservicers under such powers of
attorney and shall be indemnified by Servicer for any costs, liabilities or
expenses incurred by the Trustee in connection with the Servicer's misuse of
such power of attorney.
(b) Subject to Section 3.09(b), in accordance with the standards of
the preceding paragraph, the Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.09(b), and further as provided in Section 3.11.
Any cost incurred by the Servicer or by Subservicers in effecting the timely
payment of taxes and assessments on a Mortgaged Property shall not be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary, the
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01 and except for Servicing Advances) and the
Servicer shall not (i) (unless, subject to the last sentence of this Section
3.01(c), the Mortgagor is in default with respect to the Mortgage Loan or such
default is, in the judgment of the Servicer, reasonably foreseeable) 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 day" under the
REMIC Provisions, or (iii) except as provided in Section 3.07(a), waive any
Prepayment Charges. With respect to any modification referred to in clause (i)
above, in the event the Mortgagor is in default with respect to the Mortgage
Loan or such default is, in the judgment of the Servicer, reasonably
foreseeable, the Servicer shall give written notice to the NIM Insurer prior to
any such modification. The NIM Insurer's prior written consent shall be required
for any such modification if the aggregate number of outstanding Mortgage Loans
which have been modified exceeds 5% of the number of Mortgage Loans as of the
Cut-off Date. The Servicer may perform such modification if the Servicer does
not receive notice from the NIM Insurer stating that such modification requires
the consent of the NIM Insurer, as set forth above, within three (3) Business
Days after receipt by the NIM Insurer of such Servicer's notice.
(d) The Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Servicer
from the responsibilities or liabilities arising under this Agreement.
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers. (a) The Servicer may enter into subservicing agreements with
Subservicers for the servicing and administration of the Mortgage Loans
("Subservicing Agreements"). The Servicer represents and warrants to the other
parties hereto that no Subservicing Agreement is in effect as of the Closing
Date with respect to any Mortgage Loans required to be serviced by it hereunder.
The Servicer shall give notice to the Depositor, the Securities Administrator,
the NIM Insurer and the Trustee of any such Subservicer and Subservicing
Agreement, which notice shall contain all information (including without
limitation a copy of the Subservicing Agreement and any amendments or
modifications thereof) 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 (i) until 30 days after such written
notice is received by the Depositor, the Securities Administrator, the NIM
Insurer and the Trustee and (ii) unless the NIM Insurer shall have consented to
such Subservicing Agreement. The Trustee shall not be required to review or
consent to such Subservicing Agreements and shall have no liability in
connection therewith.
(b) The Servicer shall cause any Subservicer engaged by the Servicer
(or by any Subservicer) for the benefit of the Depositor, the Securities
Administrator and the Trustee to comply with the provisions of this Section 3.02
and with Sections 3.22, 3.23, 6.02 and 6.05 of this Agreement to the same extent
as if such Subservicer were the Servicer, and to provide the information
required with respect to such Subservicer under Section 8.12 of this Agreement.
The Servicer shall be responsible for obtaining from each such Subservicer and
delivering to applicable Persons any servicer compliance statement required to
be delivered by such Subservicer under Section 3.22 and any assessment of
compliance report and related accountant's attestation required to be delivered
by such Subservicer under Section 3.23, in each case as and when required to be
delivered.
(c) Subject to the conditions set forth in this Section 3.02(c), the
Servicer and any Subservicer engaged by the Servicer is permitted to utilize one
or more Subcontractors to perform certain of its obligations hereunder. The
Servicer shall promptly upon request provide to the Depositor a written
description (in form and substance satisfactory to the Depositor) of the role
and function of each Subcontractor utilized by the Servicer or any such
Subservicer, specifying, not later than the date specified for delivery of the
annual report on assessment of compliance set forth in Section 3.23(b) (i) the
identity of each such Subcontractor, if any, that is "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, and (ii)
which elements of the Servicing Criteria will be addressed in assessments of
compliance provided by each Subcontractor identified pursuant to clause (i) of
this paragraph. As a condition to the utilization by the Servicer or any such
Subservicer of any Subcontractor determined to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, the
Servicer shall cause any such Subcontractor used by the Servicer (or by any such
Subservicer) for the benefit of the Depositor and the Securities Administrator
to comply with the provisions of Section 3.23 of this Agreement to the same
extent as if such Subcontractor were the Servicer. The Servicer shall be
responsible for obtaining from each such Subcontractor and delivering to the
applicable Persons any assessment of compliance report and related accountant's
attestation required to be delivered by such Subcontractor under Section 3.23,
in each case as and when required to be delivered.
Notwithstanding the foregoing, if the Servicer engages a
Subcontractor in connection with the performance of any of its duties under this
Agreement, the Servicer shall be responsible for determining whether such
Subcontractor is a "servicer" within the meaning of Item 1101 of Regulation AB
and whether any such affiliate or third-party vendor meets the criteria in Item
1108(a)(2)(i) through (iii) of Regulation AB. If the Servicer determines,
pursuant to the preceding sentence, that such Subcontractor is a "servicer"
within the meaning of Item 1101 of Regulation AB and meets the criteria in Item
1108(a)(2)(i) through (iii) of Regulation AB, then such Subcontractor shall be
deemed to be a Subservicer for purposes of this Agreement, the engagement of
such Subservicer shall not be effective unless and until notice is given
pursuant to Section 3.02(a).
Section 3.03 Successor Subservicers. The Servicer, with the consent
of the NIM Insurer, shall be entitled to terminate any Subservicing Agreement
and the rights and obligations of any Subservicer pursuant to any 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 be not be effective until 30 days after written notice is
received by both the Depositor and the Securities Administrator that contains
all information reasonably necessary to enable the Securities Administrator,
pursuant to Section 8.12(g), to accurately and timely report the event under
Item 6.02 of Form 8-K pursuant to the Exchange Act (if such reports under the
Exchange Act are required to be filed under the Exchange Act). In the event of
termination of any Subservicer, all servicing obligations of such Subservicer
shall be assumed simultaneously by the Servicer without any act or deed on the
part of such Subservicer or the Servicer, and the Servicer either shall service
directly the related Mortgage Loans or shall enter into a Subservicing Agreement
with a successor Subservicer which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Servicer shall, for any reason, no longer be the Servicer (including termination
due to an Event of Default).
Section 3.04 Liability of the Servicer. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a Subservicer or reference
to actions taken through a Subservicer or otherwise, the Servicer shall remain
obligated and primarily liable to the Trustee for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from the
Subservicer and to the same extent and under the same terms and conditions as if
the Servicer alone were servicing and administering the Mortgage Loans. The
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of the Servicer by such Subservicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05 No Contractual Relationship between Subservicers and
the Trustee, the Securities Administrator or the NIM Insurer. Any Subservicing
Agreement that may be entered into and any transactions or services relating to
the Mortgage Loans involving a Subservicer in its capacity as such shall be
deemed to be between the Subservicer and the Servicer alone, and the Trustee (or
any successor Servicer), the Securities Administrator or the NIM Insurer shall
not be deemed a party thereto and shall have no claims, rights, obligations,
duties or liabilities with respect to the Subservicer except as set forth in
Section 3.06. The Servicer shall be solely liable for all fees owed by it to any
Subservicer, irrespective of whether the Servicer's compensation pursuant to
this Agreement is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee. In the event the Servicer at any time shall for any reason no longer be
the Servicer (including by reason of the occurrence of an Event of Default), the
Trustee, or its designee or the successor Servicer if the successor is not the
Trustee, shall thereupon assume all of the rights and obligations of the
Servicer under each Subservicing Agreement that the Servicer may have entered
into, with copies thereof provided to the Trustee or the successor Servicer if
the successor is not the Trustee, prior to the Trustee or the successor Servicer
if the successor is not the Trustee, assuming such rights and obligations,
unless the Trustee elects to terminate any Subservicing Agreement in accordance
with its terms as provided in Section 3.03.
Upon such assumption, the Trustee, its designee or the successor
servicer shall be deemed, subject to Section 3.03, to have assumed all of the
Servicer's interest therein and to have replaced the Servicer as a party to each
Subservicing Agreement to the same extent as if each Subservicing Agreement had
been assigned to the assuming party, except that (i) the Servicer shall not
thereby be relieved of any liability or obligations under any Subservicing
Agreement that arose before it ceased to be the Servicer and (ii) none of the
Depositor, the Trustee, their designees or any successor Servicer shall be
deemed to have assumed any liability or obligation of the Servicer that arose
before it ceased to be the Servicer.
The Servicer at its expense shall, upon request of the Trustee, its
designee or the successor Servicer deliver to the assuming party all documents
and records relating to each Subservicing Agreement and the Mortgage Loans then
being serviced and an accounting of amounts collected and held by or on behalf
of it, and otherwise use its best efforts to effect the orderly and efficient
transfer of the Subservicing Agreements to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a) The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Mortgage Loan and the Pool Policy, and shall, to
the extent such procedures shall be consistent with this Agreement and the terms
and provisions of any applicable Insurance Policies, follow such collection
procedures as it would follow with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. Consistent with the foregoing and
Accepted Servicing Practices, the Servicer may (i) waive any late payment charge
or, if applicable, any penalty interest, or (ii) extend the Due Dates for the
Scheduled Payments due on a Mortgage Note for a period of not greater than 360
days; provided, that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, the Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to Section 4.01
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements, subject to Section 4.01(d)
pursuant to which the Servicer shall not be required to make any such advances
that are Nonrecoverable P&I Advances. Notwithstanding the foregoing, the
Servicer may waive, in whole or in part, a Prepayment Charge only under the
following circumstances: (i) such waiver relates to a default or a reasonably
foreseeable default and would, in the reasonable judgment of the Servicer,
maximize recovery of total proceeds taking into account the value of such
Prepayment Charge and the related Mortgage Loan or (ii) such Prepayment Charge
is not permitted to be collected by applicable law. If a Prepayment Charge is
waived other than as permitted by the prior sentence, then the Servicer is
required to pay the amount of such waived Prepayment Charge, for the benefit of
the Holders of the Class P Certificates, by depositing such amount into the
Collection Account from its own funds, without any right of reimbursement
therefor, together with and at the time that the amount prepaid on the related
Mortgage Loan is required to be deposited into the Collection Account; provided,
however, that the Servicer shall not have an obligation to pay the amount of any
uncollected Prepayment Charge if the failure to collect such amount is the
direct result of inaccurate or incomplete information on the Mortgage Loan
Schedule in effect at such time.
(b) (i) The Securities Administrator shall establish and maintain
the Excess Reserve Fund Account, on behalf of the Class X Certificateholders, to
receive any Basis Risk Payment and any Interest Rate Cap Payment and to secure
their limited recourse obligation to pay to the LIBOR Certificateholders Basis
Risk Carry Forward Amounts (prior to using any Net Swap Receipts). For the
avoidance of doubt, any Basis Risk Carry Forward 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 for such date into the Excess Reserve Fund Account.
(c) (i) On each Distribution Date on which there exists a Basis Risk
Carry Forward 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)(M), the lesser of (x)
the Class X Distributable Amount (without regard to the reduction in the
definition thereof with respect to the Basis Risk Payment or Defaulted Swap
Termination Payments (to the extent remaining after the distributions specified
in Sections 4.02(a)(iii)(A)-(P)) and (y) the aggregate Basis Risk Carry Forward
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 Carry Forward Amount. Such payments shall be allocated to those
Classes and paid in the priority set forth in Sections 4.02(a)(iii)(P)-(O).
(ii) The Securities Administrator shall account for the Excess
Reserve Fund Account as an asset of a grantor trust under subpart E, Part
I of subchapter J of the Code and not as an asset of any REMIC created
pursuant to this Agreement. 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 Carry Forward Amounts paid by the Securities
Administrator to the LIBOR Certificateholders from the Excess Reserve Fund
Account or the Swap Account shall be accounted for by the Securities
Administrator as amounts paid first to the Holders of the Class X
Certificates (in respect of the Class X Interest or the Class IO Interest,
respectively) 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
Carry Forward Amounts from the Excess Reserve Fund Account (along with
payments of Basis Risk Carry Forward Amounts and, without duplication,
Upper Tier Carry Forward Amounts from the Swap Account) as rights in a
limited recourse interest rate cap contract written by the Class X
Certificateholders in favor of the LIBOR Certificateholders.
(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)(N), (O) and (Q).
(d) The Securities Administrator, on behalf of the Trustee 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
Securities Administrator shall, promptly upon receipt, deposit in the
Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Servicer to the Securities
Administrator pursuant to Section 3.11;
(ii) any amount deposited by the Servicer pursuant to Section
3.12(b) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not required
to be remitted, it may at any time direct the Securities Administrator in
writing to withdraw such amount from the Distribution Account, any provision
herein to the contrary notwithstanding. Such direction may be accomplished by
delivering notice to the Securities Administrator which describes the amounts
deposited in error in the Distribution Account. All funds deposited in the
Distribution Account shall be held by Securities Administrator on behalf of the
Trustee in trust for the Certificateholders until disbursed in accordance with
this Agreement or withdrawn in accordance with Section 4.02. In no event shall
the Securities Administrator incur liability for withdrawals from the
Distribution Account at the direction of the Servicer.
(e) The Securities Administrator may invest the funds in the
Distribution Account in one or more Permitted Investments in accordance with
Section 3.12. The Securities Administrator may withdraw from the Distribution
Account any income or gain earned from the investment of funds deposited therein
for its own benefit.
(f) The Servicer shall give notice to the Securities Administrator
and the Securities Administrator shall give notice to each Rating Agency and the
Depositor of any proposed change of the location of the Collection Account not
later than 30 days and not more than 45 days prior to any change thereof.
(g) In order to comply with its duties under the USA Patriot Act of
2001, the Securities Administrator shall comply with any ▇▇▇▇▇ Fargo anti-money
laundering policies, including, without limitation, any customer identification
procedures.
(h) To help the government fight the funding of terrorism and money
laundering activities, Federal law requires all financial institutions to
obtain, verify and record information that identifies each person who opens an
account. For a non-individual person such as a business entity, a charity, a
trust or other legal entity, the Trustee may ask for documentation to verify its
formation and existence as a legal entity. The Trustee may also ask to see
financial statements, licenses, identification and authorization documents from
individuals claiming authority to represent the entity or other relevant
documentation.
Section 3.08 Subservicing Accounts. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a Subservicing Agreement,
the Subservicer will be required to establish and maintain one or more
segregated accounts (collectively, the "Subservicing Account"). The Subservicing
Account shall be an Eligible Account and shall otherwise be acceptable to the
Servicer. The Subservicer shall deposit in the clearing account (which account
must be an Eligible Account) in which it customarily deposits payments and
collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Subservicer's receipt thereof, all proceeds of Mortgage Loans received by
the Subservicer less its servicing compensation to the extent permitted by the
Subservicing Agreement, and shall thereafter deposit such amounts in the
Subservicing Account, in no event more than two Business Days after the deposit
of such funds into the clearing account. The Subservicer shall thereafter
deposit such proceeds in the Collection Account or remit such proceeds to the
Servicer for deposit in the Collection Account not later than two Business Days
after the deposit of such amounts in the Subservicing Account. For purposes of
this Agreement, the Servicer shall be deemed to have received payments on the
Mortgage Loans when the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts. (a) The Servicer shall ensure that each of the Mortgage Loans
shall be covered by a paid-in-full, life-of-the-loan tax service contract with a
provider mutually acceptable to the Depositor and Servicer (each, a "Tax Service
Contract"). Each Tax Service Contract shall be assigned to the Trustee, or its
designee, at the Servicer's expense in the event that the Servicer is terminated
as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph (b)
are not otherwise provided pursuant to the Tax Service Contracts described in
paragraph (a) hereof, the Servicer undertakes to perform such functions. To the
extent the related Mortgage provides for Escrow Payments, the Servicer shall
establish and maintain, or cause to be established and maintained, one or more
segregated accounts (the "Escrow Accounts"), which shall be Eligible Accounts.
The Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Servicer's
receipt thereof, all (i) 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 (ii) all Condemnation
Proceeds and Insurance Proceeds to be applied to the restoration of the related
Mortgaged Property or released to the related Mortgagor in accordance with
applicable law and Accepted Servicing Practices, and the Servicer shall
thereafter deposit such Escrow Payments in the Escrow Accounts, in no event more
than two Business Days after the deposit of such funds in the clearing account,
for the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from an Escrow Account may be
made only to (i) effect payment of taxes, assessments, hazard insurance
premiums, and comparable items; (ii) reimburse the Servicer (or a Subservicer to
the extent provided in the related Subservicing Agreement) out of related
collections for any advances made pursuant to Section 3.01 (with respect to
taxes and assessments) and Section 3.13 (with respect to hazard insurance);
(iii) refund to Mortgagors any sums as may be determined to be overages; (iv)
pay itself any interest earned on the Escrow Account or, if required and as
described below, to Mortgagors on balances in the Escrow Account; (v) clear and
terminate the Escrow Account at the termination of the Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement; (vi)
transfer such funds to a replacement Escrow Account that meets the requirements
hereof; (vii) recover amounts deposited in error or (viii) to release
Condemnation Proceeds or Insurance Proceeds to be applied to the restoration of
the related Mortgaged Property or to the related Mortgagor in accordance with
the applicable law and Accepted Servicing Practices. As part of its servicing
duties, the Servicer or Subservicers shall pay to the Mortgagors interest on
funds in Escrow Accounts, to the extent required by law and, to the extent that
interest earned on funds in the Escrow Accounts is insufficient, to pay such
interest from its or their own funds, without any reimbursement therefor. To the
extent that a Mortgage does not provide for Escrow Payments, the Servicer shall
use its reasonable best efforts to determine whether any such payments are made
by the Mortgagor in a manner and at a time that avoids the loss of the Mortgaged
Property due to a tax sale or the foreclosure of a tax lien. The Servicer
assumes full responsibility for the payment of all such bills within such time
and shall effect payments of all such bills irrespective of the Mortgagor's
faithful performance in the payment of same or the making of the Escrow Payments
and shall make advances from its own funds to effect such payments, including
any payment required to be made in connection with a Mortgage Loan that does
provide for Escrow Payments and is insufficient to make such payments; provided,
however, that such advances are deemed to be Servicing Advances.
Section 3.10 Collection Account. (a) On behalf of the Trustee and
the Certificateholders, the Servicer shall establish and maintain, or cause to
be established and maintained, one or more segregated Eligible Accounts (such
account or accounts, the "Collection Account"), held in trust for the benefit of
the Trustee on behalf of the Certificateholders. On behalf of the Trustee, the
Servicer shall deposit or cause to be deposited in the clearing account (which
account must be an Eligible Account) in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Servicer's receipt thereof, and shall thereafter deposit into the Collection
Account, in no event more than two Business Days 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, Liquidation Proceeds and
Subsequent Recoveries;
(iv) any amounts required to be deposited pursuant to Section 3.12
in connection with any losses realized on Permitted Investments with
respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer pursuant to
the second paragraph of Section 3.13(a) in respect of any blanket policy
deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with this Agreement;
(vii) all Prepayment Charges collected by the Servicer or required
to be paid by the Servicer pursuant to Section 3.07; and
(viii) without duplication, all amounts required to be deposited
pursuant to Section 3.27.
The foregoing requirements for deposit in the Collection Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by the Servicer in the Collection Account and shall, upon
collection, belong to the Servicer as additional compensation for its servicing
activities. In the event the Servicer shall deposit in the Collection Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Collection Account, any provision herein to the contrary
notwithstanding. The Servicer shall at its own expense be responsible for
reviewing and reconciling the Collection Account in accordance with industry
standards and shall act promptly to resolve any discrepancies related thereto.
(b) Funds in the Collection Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. The
Servicer shall give notice to the Securities Administrator, and the Securities
Administrator shall give notice to the Trustee, the NIM Insurer and the
Depositor, of the location of the Collection Account maintained by the Servicer
when established and prior to any change thereof.
Section 3.11 Withdrawals from the Collection Account. (a) The
Servicer shall, from time to time, make withdrawals from the Collection Account
for any of the following purposes or as described in Section 4.01:
(i) on or prior to each Remittance Date, to remit to the Securities
Administrator (A) the Securities Administrator Fee with respect to such
Distribution Date and (B) all Available Funds in respect of the related
Distribution Date together with all amounts representing Prepayment
Charges (payable to the Class P Certificateholders) from the Mortgage
Loans received during the related Prepayment Period;
(ii) to reimburse the Servicer for P&I Advances, but only to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Scheduled Payments on Mortgage Loans with
respect to which such P&I Advances were made in accordance with the
provisions of Section 4.01;
(iii) to pay the Servicer or any Subservicer (A) any unpaid
Servicing Fees or (B) any unreimbursed Servicing Advances with respect to
each Mortgage Loan, but only to the extent of any Late Collections or
other amounts as may be collected by the Servicer from a Mortgagor, or
otherwise received with respect to such Mortgage Loan (or the related REO
Property);
(iv) to pay to the Servicer as servicing compensation (in addition
to the Servicing Fee) on each Remittance Date any interest or investment
income earned on funds deposited in the Collection Account;
(v) to pay to the applicable Person, with respect to each Mortgage
Loan that has previously been repurchased or replaced by such Person
pursuant to this Agreement, all amounts received thereon subsequent to the
date of purchase or substitution, as the case may be;
(vi) to reimburse the Servicer for any P&I Advance or Servicing
Advance previously made which the Servicer has determined to be a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01;
(vii) to pay, or to reimburse the Servicer for Servicing Advances in
respect of, expenses incurred in connection with any Mortgage Loan
pursuant to Section 3.15;
(viii) to reimburse the Servicer, the Depositor or the Trustee for
expenses incurred by or reimbursable to the Servicer, the Depositor or the
Trustee, as the case may be, pursuant to Section 6.03, Section 7.02 or
Section 8.05;
(ix) to reimburse the Servicer, the Securities Administrator, the
NIM Insurer 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 under this Agreement that were included in the Repurchase Price
of the Mortgage Loan, including any expenses arising out of the
enforcement of the repurchase obligation, to the extent not otherwise paid
pursuant to the terms hereof;
(x) to withdraw any amounts deposited in the Collection Account in
error; and
(xi) to clear and terminate the Collection Account upon termination
of this Agreement.
(b) The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii) and (ix)
above. The Servicer shall provide written notification (as set forth in Section
4.01(d)) to the Securities Administrator, on or prior to the next succeeding
Remittance Date, upon making any withdrawals from the Collection Account
pursuant to subclause (a)(vi) above.
Section 3.12 Investment of Funds in the Collection Account, Escrow
Accounts and the Distribution Account. (a) The Servicer may invest the funds in
the Collection Account and the Escrow Accounts (to the extent permitted by law
and the related Mortgage Loan documents) and the Securities Administrator may
invest funds in the Distribution Account (for purposes of this Section 3.12,
each such Account is 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 any such Permitted
Investment managed by or advised by the Securities Administrator or any of its
Affiliates may mature, unless payable on demand, no later than the date on which
such funds are required to be withdrawn from such account pursuant to this
Agreement. All such Permitted Investments shall be held to maturity, unless
payable on demand. Any investment of funds in an Investment Account shall be
made in the name of the Servicer or the Securities Administrator, as applicable.
The Servicer or the Securities Administrator, as applicable, shall be entitled
to sole possession over each such investment, and any certificate or other
instrument evidencing any such investment shall be delivered directly to the
Servicer or the Securities Administrator or its agent, as applicable, together
with any document of transfer necessary to transfer title to such investment to
the Servicer or the Securities Administrator or its agent, as applicable. In the
event amounts on deposit in an Investment Account are at any time invested in a
Permitted Investment payable on demand, the Servicer or the Securities
Administrator, as applicable, 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 Collection Account or Escrow Account, as applicable, held by or
on behalf of the Servicer, shall be for the benefit of the Servicer and shall be
subject to its withdrawal in the manner set forth in Section 3.11. The Servicer
shall deposit in the 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 funds
deposited in the Distribution Account held by the Securities Administrator,
shall be for the benefit of the Securities Administrator, and shall be subject
to the Securities Administrator's withdrawal in the manner set forth in Section
3.07(e). The Securities Administrator shall deposit in the Distribution Account
the amount of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such account 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 of
funds held in the Escrow Account or the Collection Account, or if a default
occurs in any other performance required under any Permitted Investment of funds
held in the Escrow Account or the Collection Account, the Servicer shall take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage. (a) The Servicer shall cause to be maintained
for each Mortgage Loan fire insurance with extended coverage on the related
Mortgaged Property in an amount which is at least equal to the least of (i) the
outstanding principal balance of such Mortgage Loan, (ii) the amount necessary
to fully compensate for any damage or loss to the improvements that are a part
of such property on a replacement cost basis and (iii) the maximum insurable
value of the improvements which are a part of such Mortgaged Property, in each
case in an amount not less than such amount as is necessary to avoid the
application of any coinsurance clause contained in the related hazard insurance
policy. The Servicer shall also cause to be maintained fire insurance with
extended coverage on each REO Property in an amount which is at least equal to
the lesser of (i) the maximum insurable value of the improvements which are a
part of such property and (ii) the outstanding principal balance of the related
Mortgage Loan at the time it became an REO Property, plus accrued interest at
the Mortgage Rate and related Servicing Advances. The Servicer will comply in
the performance of this Agreement with all reasonable rules and requirements of
each insurer under any such hazard policies. Any amounts to be collected by the
Servicer under any such policies (other than amounts required to be deposited in
the Escrow Account and applied to the restoration or repair of the property
subject to the related Mortgage or amounts to be released to the Mortgagor in
accordance with the procedures that the Servicer would follow in servicing loans
held for its own account, subject to the terms and conditions of the related
Mortgage and Mortgage Note) shall be deposited in the Collection Account,
subject to withdrawal pursuant to Section 3.11. Any cost incurred by the
Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to the Securities Administrator, 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 such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. If the Mortgaged
Property or REO Property is at any time in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards and flood insurance has been made available, the Servicer will cause to
be maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the amount necessary to fully
compensate for any damage or loss to the related Mortgaged Property or REO
Property on a replacement cost basis and (ii) the maximum amount of such
insurance available for the related Mortgaged Property under the national flood
insurance program (assuming that the area in which such Mortgaged Property is
located is participating in such program).
In the event that the Servicer shall obtain and maintain a blanket
policy with an insurer having a general policy rating of A:X or better in Best's
(or such other rating that is comparable to such rating) insuring against hazard
losses on all of the Mortgage Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO Property
a policy complying with the first two sentences of this Section 3.13, and there
shall have been one or more losses which would have been covered by such policy,
deposit to the Collection Account from its own funds the amount not otherwise
payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Servicer agrees to prepare and present, on behalf of itself and the
Trustee, claims under any such blanket policy in a timely fashion in accordance
with the terms of such policy.
(b) The Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac if it were the purchaser of the
Mortgage Loans, unless the Servicer has obtained a waiver of such requirements
from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Servicer shall also maintain a fidelity bond
in the form and amount that would meet the requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac, unless the Servicer has obtained a waiver of such requirements from ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac. The Servicer shall provide the Trustee, the NIM Insurer and
the Securities Administrator with copies of any such insurance policies and
fidelity bond. The Servicer shall be deemed to have complied with this provision
if an Affiliate of the Servicer has such errors and omissions and fidelity bond
coverage and, by the terms of such insurance policy or fidelity bond, the
coverage afforded thereunder extends to the Servicer. Any such errors and
omissions policy and fidelity bond shall by its terms not be cancelable without
thirty days' prior written notice to the Trustee, the NIM Insurer and the
Securities Administrator. The Servicer shall also cause each Subservicer to
maintain a policy of insurance covering errors and omissions and a fidelity bond
which would meet such requirements.
Section 3.14 Enforcement of Due-On-Sale Clauses; Assumption
Agreements. The Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Servicer shall not be required to take such action if, in its sole business
judgment, the Servicer believes it is not in the best interests of the Trust
Fund and shall not exercise any such rights if prohibited by law from doing so.
If the Servicer reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause or if any of the other conditions set forth in the
proviso to the preceding sentence apply, the Servicer will enter into either (i)
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 or (ii) a
substitution agreement as provided in the succeeding sentence. The Servicer is
also authorized to enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note, provided, that no such substitution shall be effective unless
such person satisfies the underwriting criteria of the Servicer and has a credit
risk rating at least equal to that of the original Mortgagor. In connection with
any assumption, modification or substitution, the Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be
normal and usual in its general mortgage servicing activities and as it applies
to other mortgage loans owned solely by it. The Servicer shall not take or enter
into any assumption and modification agreement, however, unless (to the extent
practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy, or a new policy meeting the requirements of this Section is obtained.
Any fee collected by the Servicer in respect of an assumption or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the related Mortgage Rate and the
amount of the Scheduled Payment) may be amended or modified, except as otherwise
required pursuant to the terms thereof. The Servicer shall notify the Securities
Administrator that any such substitution, modification or assumption agreement
has been completed and shall forward to the Custodian the executed original of
such substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans. The Servicer
shall use its best efforts, consistent with Accepted Servicing Practices, to
foreclose upon or otherwise comparably convert (which may include an acquisition
of REO Property) the ownership of properties securing such of the Mortgage Loans
as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.07, and which are not released from this Agreement pursuant to any
other provision hereof. The Servicer shall use reasonable efforts to realize
upon such defaulted Mortgage Loans in such manner as will maximize the receipt
of principal and interest by the Trustee, taking into account, among other
things, the timing of foreclosure proceedings. The foregoing is subject to the
provisions that, in any case in which Mortgaged Property shall have suffered
damage from an uninsured cause, the Servicer shall not be required to expend its
own funds toward the restoration of such property unless it shall determine in
its sole discretion (i) that such restoration will increase the net Liquidation
Proceeds of the related Mortgage Loan to the Trustee, after reimbursement to
itself for such expenses, and (ii) that such expenses will be recoverable by the
Servicer through Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds
or Subsequent Recoveries from the related Mortgaged Property, as contemplated in
Section 3.11. The Servicer shall be responsible for all other costs and expenses
incurred by it in any such proceedings; provided, however, that it shall be
entitled to reimbursement thereof 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, Liquidation Proceeds or Subsequent Recoveries or any income from an
REO Property, will be applied in the following order of priority: first, to
reimburse the Servicer or any Subservicer for any related unreimbursed Servicing
Advances, pursuant to Section 3.11 or 3.17; second, to 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; third, to reimburse the Servicer for any
related ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, pursuant to Section 3.11; and fourth, as a
recovery of principal of the Mortgage Loan. If the amount of the recovery so
allocated to interest is less than a full recovery thereof, that amount will be
allocated as follows: first, to unpaid Servicing Fees; and second, as interest
at the Mortgage Rate (net of the Servicing Fee Rate). The portion of the
recovery so allocated to unpaid Servicing Fees shall be reimbursed to the
Servicer or any Subservicer pursuant to Section 3.11 or 3.17. The portions of
the recovery so allocated to interest at the Mortgage Rate (net of the Servicing
Fee Rate) and to principal of the Mortgage Loan shall be applied as follows:
first, to reimburse the Servicer or any Subservicer for any related unreimbursed
Servicing Advances in accordance with Section 3.11 or 3.17, and second, to the
Securities Administrator in accordance with the provisions of Section 4.02,
subject to paragraph (g) of Section 3.17 with respect to certain excess
recoveries from an REO Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee otherwise requests, the Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a qualified inspector. Upon completion of the inspection, the
Servicer shall promptly provide the Trustee and the Depositor with a written
report of the environmental inspection.
In the event (a) the environmental inspection report indicates that
the Mortgaged Property is contaminated by hazardous or toxic substances or
wastes and (b) the Servicer proceeds with foreclosure or acceptance of a deed in
lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs
associated with such foreclosure or acceptance of a deed in lieu of foreclosure
and any related environmental clean-up costs, as applicable, from the related
Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully
reimburse the Servicer, the Servicer shall be entitled to be reimbursed from
amounts in the Collection Account pursuant to Section 3.11. In the event the
Servicer does not proceed with foreclosure or acceptance of a deed in lieu of
foreclosure, the Servicer shall be reimbursed from general collections for all
Servicing Advances made with respect to the related Mortgaged Property from the
Collection Account pursuant to Section 3.11.
Notwithstanding the foregoing, if such environmental inspection
report reveals, or if the Servicer has actual knowledge or notice, that such
Mortgaged Property contains such toxic or hazardous waste or substances, the
Servicer shall not foreclose or accept a deed in lieu of foreclosure without
prior written consent of the NIM Insurer.
Section 3.16 Release of Mortgage Files. (a) Upon the payment in full
of any Mortgage Loan, or the receipt by the Servicer of a notification that
payment in full shall be escrowed in a manner customary for such purposes, the
Servicer will, within five (5) Business Days of the payment in full, notify the
Custodian by a certification (which certification shall include a statement to
the effect that all amounts received or to be received in connection with such
payment which are required to be deposited in the Collection Account pursuant to
Section 3.10 have been or will be so deposited) of a Servicing Officer and shall
request delivery to it of the Custodial File by submitting a Request for
Release, which Request for Release may be in an electronic format in a form
acceptable to the Custodian, to the Custodian. Upon receipt of such
certification and Request for Release, the Custodian shall promptly release the
related Custodial File to the Servicer within two (2) Business Days. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Insurance Policy relating to the Mortgage Loans, the Custodian shall, upon
request of the Servicer and delivery to the Custodian of a Request for Release,
which Request for Release may be in an electronic format in a form acceptable to
the Custodian, release the related Custodial File to the Servicer, and the
Trustee shall, at the direction of the Servicer, execute such documents as shall
be necessary to the prosecution of any such proceedings and the Servicer shall
retain the Mortgage File in trust for the benefit of the Trustee. Such Request
for Release shall obligate the Servicer to return each and every document
previously requested from the Custodial File to the Custodian when the need
therefor by the Servicer no longer exists, unless the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Collection Account or the Mortgage File or such document has
been delivered to an attorney, or to a public trustee or other public official
as required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Servicer has delivered to the Custodian 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 liquidated and that all amounts received or to be
received in connection with such liquidation that are required to be deposited
into the Collection Account have been so deposited, or that such Mortgage Loan
has become an REO Property, a copy of the Request for Release shall be released
by the Custodian to the Servicer or its designee.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Servicer copies of any court pleadings, requests for
trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity, or shall exercise and deliver to the Servicer a power of attorney
sufficient to authorize the Servicer to execute such documents on its behalf.
Each such certification shall include a request that such pleadings or documents
be executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO Property.
(a) In the event that title to a Mortgaged Property is acquired in foreclosure
or by deed in lieu of foreclosure, the deed or certificate of sale shall be
taken (pursuant to a limited power of attorney to be provided by the Trustee to
the Servicer) in the name of the Trustee or a nominee thereof, on behalf of the
Certificateholders, or in the event the Trustee or a nominee thereof is not
authorized or permitted to hold title to real property in the state where the
REO Property is located, or would be adversely affected under the "doing
business" or tax laws of such state by so holding title, the deed or certificate
of sale shall be taken in the name of such Person or Persons as shall be
consistent with an Opinion of Counsel obtained by the Servicer from an attorney
duly licensed to practice law in the state where the REO Property is located.
Any Person or Persons holding such title other than the Trustee shall
acknowledge in writing that such title is being held as nominee for the benefit
of the Trustee. The Trustee's name shall be placed on the title to such REO
Property solely as the Trustee hereunder and not in its individual capacity. The
Servicer shall ensure that the title to such REO Property references this
Agreement and the Trustee's capacity hereunder.
(b) The Servicer shall manage, conserve, protect and operate each
REO Property for the Trustee solely for the purpose of its prompt disposition
and sale. The Servicer, either itself or through an agent selected by the
Servicer, shall manage, conserve, protect and operate the REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. The Servicer shall attempt to
sell the same (and may temporarily rent the same in accordance with clause (g)
below) on such terms and conditions as the Servicer deems to be in the best
interest of the Trustee on behalf of the Certificateholders. The Servicer shall
notify the Trustee and Securities Administrator from time to time as to the
status of each REO Property.
(c) [Reserved.]
(d) The Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall deposit such funds in the
Collection Account.
(e) The Servicer shall deposit net of reimbursement to the Servicer
for any related outstanding Servicing Advances and unpaid Servicing Fees
provided in Section 3.11, or cause to be deposited, in no event more than one
(1) Business Day after the Servicer's receipt thereof, in the 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.
(f) The Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances as well as any
unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.11.
(g) Any net proceeds from an REO Disposition which are in excess of
the unpaid principal balance of the related Mortgage Loan plus all unpaid REO
Imputed Interest thereon through the date of the REO Disposition shall be
retained by the Servicer as additional servicing compensation.
(h) The Servicer shall use its reasonable best efforts to sell, or
cause the Subservicer to sell, in accordance with Accepted Servicing Practices,
any REO Property as soon as possible, but in no event later than the conclusion
of the third calendar year beginning after the year of its acquisition by
Pooling Tier REMIC-1 unless (i) the Servicer applies for an extension of such
period from the Internal Revenue Service pursuant to the REMIC Provisions and
Code Section 856(e)(3), in which event such REO Property shall be sold within
the applicable extension period, or (ii) the Servicer obtains for the Trustee
and Securities Administrator an Opinion of Counsel, addressed to the Depositor,
the Trustee, the Servicer, the Securities Administrator and the NIM Insurer to
the effect that the holding by Pooling Tier REMIC-1 of such REO Property
subsequent to such period will not result in the imposition of taxes on
"prohibited transactions" as defined in Section 860F of the Code or cause any
Trust REMIC to fail to qualify as a REMIC under the REMIC Provisions or
comparable provisions of relevant state laws at any time. The Servicer shall
manage, conserve, protect and operate each REO Property for the Trustee, the
Certificateholders and the Trust Fund 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 the Pooling Tier REMIC-1 of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code or
any "net income from foreclosure property" which is subject to taxation under
Section 860G(a)(1) of the Code. Pursuant to its efforts to sell such REO
Property, the Servicer shall either itself or through an agent selected by the
Servicer protect and conserve such REO Property in the same manner and to such
extent as is customary in the locality where such REO Property is located and
may, incident to its conservation and protection of the interests of the Trustee
on behalf of the Certificateholders, rent the same, or any part thereof, as the
Servicer deems to be in the best interest of the Trustee on behalf of the
Certificateholders for the period prior to the sale of such REO Property;
provided, however, that any rent received or accrued with respect to such REO
Property qualifies as "rents from real property" as defined in Section 856(d) of
the Code.
Section 3.18 Notification of Adjustments. With respect to each
Adjustable Rate Mortgage Loan, the Servicer shall adjust the Mortgage Rate on
the related Adjustment Date and shall adjust the Scheduled Payment on the
related mortgage payment adjustment date, if applicable, in compliance with the
requirements of applicable law and the related Mortgage and Mortgage Note. In
the event that an Index becomes unavailable or otherwise unpublished, the
Servicer shall select a comparable alternative index over which it has no direct
control and which is readily verifiable. The Servicer shall execute and deliver
any and all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Rate and Scheduled
Payment adjustments. The Servicer shall promptly, upon written request therefor,
deliver to the Securities Administrator such notifications and any additional
applicable data regarding such adjustments and the methods used to calculate and
implement such adjustments. Upon the discovery by the Servicer that the Servicer
has failed to adjust a Mortgage Rate or Scheduled Payment in accordance with the
terms of the related Mortgage Note, the Servicer shall deposit in the 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. In the event the Servicer reasonably believes that
compliance with this Section will make the Mortgage Loans legal for investment
by federally insured savings and loan associations, the Servicer shall provide,
or cause the Subservicer to provide, to the Depositor, the Securities
Administrator, the Trustee, 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 reasonable and prior
written request and during normal business hours at the offices of the Servicer
or, if applicable, any Subservicer. In addition, access to the documentation
regarding the Mortgage Loans required by applicable laws and regulations will be
provided to such Certificateholder, the Trustee, the Securities Administrator,
the NIM Insurer and to any Person identified to the Servicer as a prospective
transferee of a Certificate subject to the execution of a confidentiality
agreement in form and substance satisfactory to the Servicer, upon reasonable
request during normal business hours at the offices of the Servicer designated
by it at the expense of the Person requesting such access. Nothing in this
Section shall derogate from the obligation of any such party to observe any
applicable law prohibiting disclosure of information regarding the Mortgagors
and the failure of any such party to provide access as provided in this Section
as a result of such obligation shall not constitute a breach of this Section.
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Securities Administrator. Not later than thirty days
after each Distribution Date, the Servicer shall forward to the Securities
Administrator and the NIM Insurer a statement prepared by the Servicer setting
forth the status of the Collection Account as of the close of business on the
last day of the calendar month relating to such Distribution Date and showing,
for the period covered by such statement, the aggregate amount of deposits into
and withdrawals from the Collection Account of each category of deposit
specified in Section 3.10(a) and each category of withdrawal specified in
Section 3.11. Such statement may be in the form of the then current ▇▇▇▇▇▇ Mae
Monthly Accounting Report for its Guaranteed Mortgage Pass-Through Program with
appropriate additions and changes. Copies of such statement shall be provided by
the Securities Administrator to any Certificateholder and to any Person
identified to the Securities Administrator as a prospective transferee of a
Certificate, upon the request and at the expense of the requesting party,
provided such statement is delivered by the Servicer to the Securities
Administrator.
Section 3.21 Servicing Compensation. (a) As compensation for its
activities hereunder, the Servicer shall, with respect to each Mortgage Loan, be
entitled to retain from deposits to the Collection Account and from Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, Subsequent Recoveries and
REO Proceeds related to such Mortgage Loan, the Servicing Fee with respect to
each Mortgage Loan (less any portion of such amounts retained by any
Subservicer). In addition, the Servicer shall be entitled to recover unpaid
Servicing Fees out of related Late Collections and as otherwise permitted under
Section 3.11. The right to receive the Servicing Fee may not be transferred in
whole or in part except in connection with the transfer of all of the Servicer's
responsibilities and obligations under this Agreement; provided, however, that
the Servicer may pay from the Servicing Fee any amounts due to a Subservicer
pursuant to a Subservicing Agreement entered into under Section 3.02.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, net Prepayment Interest Excesses (to
the extent not required to offset Prepayment Interest Shortfalls), NSF fees,
reconveyance fees and other similar fees and charges (other than Prepayment
Charges) shall be retained by the Servicer only to the extent such fees or
charges are received by the Servicer. The Servicer shall also be entitled
pursuant to Section 3.11(a)(iv) to withdraw from the Collection Account, as
additional servicing compensation, interest or other income earned on deposits
therein. The Servicer shall also be entitled as additional servicing
compensation, to interest or other income earned on deposits in the Escrow
Account (to the extent permitted by law and the related Mortgage Loan documents)
in accordance with Section 3.12.
(c) The Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by the Servicer), and shall not be entitled to reimbursement
therefor from the Trust Fund except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance. The Servicer shall
deliver, and shall cause each Subservicer engaged by the Servicer to deliver or
cause to be delivered, an Officer's Certificate (as described below) to the
Securities Administrator on or before March 1st of each calendar year,
commencing in 2007 (the Securities Administrator shall deliver such Officer's
Certificate to the Depositor and otherwise make available to the NIM Insurer),
and the Securities Administrator shall deliver, to the Depositor and the NIM
Insurer on or before March 1st of each calendar year, commencing in 2007, an
Officer's Certificate stating, as to each signatory thereof, that (i) a review
of the activities of the Securities Administrator, 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, 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 failure to
fulfill any such obligation in any material respect, specifying each such
failure known to such officers and the nature and status thereof. Promptly after
receipt of each such Officer's Certificate, the Depositor shall review such
Officer's Certificate and, if applicable, consult with the Securities
Administrator, Servicer or Subservicer as to the nature of any failure by the
Securities Administrator, Servicer or Subservicer to fulfill any of the
Securities Administrator's, Servicer's or Subservicer's obligations. The
obligations of the Securities Administrator, Servicer and Subservicer under this
Section apply to each Securities Administrator, Servicer and Subservicer that
acted as Securities Administrator or serviced a Mortgage Loan, as applicable,
during the applicable period, whether or not the Securities Administrator, the
Servicer or such Subservicer is acting as the Securities Administrator, Servicer
or Subservicer, as applicable, at the time such Officer's Certificate is
required to be delivered. None of the Securities Administrator, Servicer or
Subservicer shall be required to cause the delivery of any Officer's Certificate
required by this Section until March 15th 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.
In the event the Servicer, the Securities Administrator or any
Subservicer engaged by the Servicer is terminated or resigns pursuant to the
terms of this Agreement, or any applicable agreement in the case of a
Subservicer, as the case may be, such party shall provide an Officer's
Certificate pursuant to this Section 3.22 or to such applicable agreement, as
the case may be, notwithstanding any such termination, assignment or
resignation.
Section 3.23 Annual Reports on Assessment of Compliance with
Servicing Criteria; Annual Independent Public Accountants' Attestation Report.
(a) Not later than March 1st of each calendar year commencing in
2007, the Servicer, the Securities Administrator and the Custodian shall
deliver, and the Servicer shall cause each Subservicer engaged by the Servicer
and the Servicer, the Securities Administrator and the Custodian shall cause
each Subcontractor utilized by the Servicer (or by any such Subservicer), the
Securities Administrator or the Custodian, as applicable, and determined by the
Servicer, the Securities Administrator or the Custodian, 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 Securities
Administrator, and the Securities Administrator shall deliver to the Depositor
and otherwise make available to the NIM Insurer, a report on an assessment of
compliance with the Servicing Criteria applicable to it during the immediately
preceding calendar year, as required under Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB. 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 O hereto, or as set forth in the notification
furnished to the Depositor and the Securities Administrator pursuant to Section
3.23(c). The Servicer, the Securities Administrator and the Custodian hereby
acknowledge and agree that their respective assessments of compliance will cover
the items identified on Exhibit O hereto as being covered by such party. The
parties to this Agreement acknowledge that where a particular Servicing
Criterion 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, the Depositor shall review each such report and, if
applicable, consult with the Servicer, the Securities Administrator or the
Custodian as to the nature of any material instance of noncompliance with the
Servicing Criteria applicable to it (and each Subservicer or Servicing Function
Participant engaged or utilized by the Servicer, the Securities Administrator or
the Custodian, as applicable), as the case may be. None of the Servicer, the
Securities Administrator, the Custodian or any Subservicer or Servicing Function
Participant shall be required to cause the delivery of any such assessments
until March 15th 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.
In the event the Servicer, the Custodian, the Securities
Administrator or any Servicing Function Participant or Subservicer engaged by
any such party is terminated, assigns its rights and obligations under, or
resigns pursuant to, the terms of this Agreement, or any other applicable
agreement, as the case may be, such party shall provide a report on assessment
of compliance pursuant to this Section 3.23, or to such other applicable
agreement, notwithstanding any such termination, assignment or resignation.
(b) Not later than March 1st of each calendar year commencing in
2007, the Servicer, the Securities Administrator and the Custodian shall cause,
and the Servicer shall cause each Subservicer engaged by the Servicer and the
Servicer, the Securities Administrator and the Custodian shall cause each
Servicing Function Participant utilized by the Custodian, Securities
Administrator or the Servicer, as applicable (or by any Subservicer engaged by
the Servicer), to cause, each at its own expense, a registered public accounting
firm (which may also render other services to such party) that is a member of
the American Institute of Certified Public Accountants to furnish a report to
the Securities Administrator, the Depositor and the NIM Insurer that attests to
and reports on such Person's assessment of compliance with the Servicing
Criteria applicable to it made pursuant to Section 3.23(a). 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. Promptly after receipt of each such accountants' attestation
report, the Depositor shall review the report and, if applicable, consult with
the Servicer, the Securities Administrator or the Custodian as to the nature of
any defaults by the Servicer, the Securities Administrator or the Custodian (and
each Subservicer or Servicing Function Participant engaged or utilized by the
Servicer, the Securities Administrator or the Custodian, as applicable, or by
any Subservicer engaged by the Servicer), as the case may be, in the fulfillment
of any of the Servicer's, the Securities Administrator's, the Custodian's or the
applicable Subservicer's or Servicing Function Participant's obligations
hereunder or under any applicable sub-servicing agreement. None of the Servicer,
the Securities Administrator, the Custodian or any Servicer or Servicing
Function Participant shall be required to cause the delivery of any such
attestation required by this paragraph until March 15th 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.
(c) Promptly upon written request of the Depositor or Securities
Administrator, the Servicer shall notify the Securities Administrator, the
Depositor and the NIM Insurer as to the name of each Subservicer engaged by the
Servicer for the prior fiscal year and each Servicing Function Participant
utilized by the Servicer and by each Subservicer engaged by the Servicer, and
the Securities Administrator and the Custodian shall notify the Depositor and
the NIM Insurer as to the name of each Servicing Function Participant utilized
by it, and each such notice will specify what specific Servicing Criteria will
be addressed in the report on assessment of compliance prepared by such
Subservicer and Servicing Function Participant in each case, to the extent of
any change from the prior year's notice, if any. When the Servicer or the
Securities Administrator submits its assessment pursuant to Section 3.23(a), the
Servicer and the Securities Administrator, 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.
Promptly after receipt of each such assessment of compliance with
servicing criteria and attestation report, the Securities Administrator shall
confirm to the Depositor that each assessment of compliance with servicing
criteria submitted pursuant to Section 3.23 is accompanied by an attestation
report meeting the requirements of this Section 3.23 and shall notify the
Depositor and the NIM Insurer of any exceptions.
In the event the Servicer, the Securities Administrator, the
Custodian, or any Servicing Function Participant or Subservicer engaged by any
such party, is terminated, assigns its rights and duties under, or resigns
pursuant to the terms of, this Agreement, or any applicable agreement, as the
case may be, such party shall cause a registered public accounting firm to
provide, at the cost and expense of such party, an attestation report pursuant
to this Section 3.23, or such other applicable agreement, notwithstanding any
such termination, assignment or resignation.
Section 3.24 Trustee to Act as Servicer. (a) In the event that the
Servicer shall for any reason no longer be the Servicer hereunder (including by
reason of an Event of Default), the Trustee or its successor shall thereupon
assume all of the rights and obligations of the Servicer hereunder arising
thereafter, except that the Trustee shall not be (i) liable for losses of the
predecessor Servicer pursuant to Section 3.10 or any acts or omissions of the
predecessor Servicer hereunder, (ii) obligated to effectuate repurchases or
substitutions of Mortgage Loans hereunder, (iii) responsible for expenses of the
predecessor Servicer pursuant to Section 2.03, (iv) obligated to make Advances
if it is prohibited from doing so by applicable law, (v) deemed to have made any
representations and warranties of the Servicer hereunder, or (vi) obligated to
perform an obligation of the Servicer under Sections 3.22 or 3.23 with respect
to any period of time during which the Trustee was not the Servicer. Any such
assumption shall be subject to Section 7.02.
(b) Every Subservicing Agreement entered into by the Servicer shall
contain a provision giving the successor Servicer the option to terminate such
agreement in the event a successor Servicer is appointed.
(c) If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any Subservicing Agreement in accordance with the terms
thereof; provided, that the Trustee (or any other successor Servicer) shall not
incur any liability or have any obligations in its capacity as successor
Servicer under a Subservicing Agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of the Servicer thereunder; and the Servicer shall not thereby be relieved of
any liability or obligations under the Subservicing Agreement arising prior to
the date of such succession.
(d) The Servicer shall, upon request of the Trustee, but at the
expense of the Servicer, deliver to the assuming party all documents and records
relating to each Subservicing Agreement (if any) 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 the Subservicing Agreement to the assuming party.
Section 3.25 Compensating Interest. The Servicer shall remit to the
Securities Administrator on each Remittance Date an amount from its own funds
equal to the Compensating Interest payable by the Servicer for the related
Distribution Date.
Section 3.26 Credit Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act. (a) With
respect to each Mortgage Loan, the Servicer agrees to fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on the
primary borrower of such Mortgage Loan to Equifax, Experian and TransUnion
Credit Information Company (three of the credit repositories) on a monthly
basis.
(b) The Servicer shall comply with Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Act of 1999 and all applicable regulations promulgated thereunder, relating to
the Mortgage Loans and the related borrowers and shall provide all required
notices thereunder.
Section 3.27 Pool Policy; Claims Under the Pool Policy(a) .
Notwithstanding anything to the contrary elsewhere in this Agreement, the
Servicer shall not agree to any modification or assumption of a Mortgage Loan or
take any other action with respect to a Mortgage Loan that could result in a
limitation, qualification or denial of coverage under the Pool Policy. The
Servicer shall not agree to any modification of a Mortgage Loan without the Pool
Insurer's prior written consent. The Servicer covenants and agrees to exercise
its best reasonable efforts to maintain and keep the Pool Policy in full force
and effect throughout the term of this Agreement. In the performance of its
duties hereunder, the Servicer shall comply with the terms of the Pool Policy.
The Servicer shall notify the Pool Insurer that the Trustee, on behalf of the
Certificateholders, is the "Insured", as that term is defined in the Pool
Policy. The Servicer shall, on behalf of the Trustee, prepare and file on a
timely basis with the Pool Insurer, with a copy to the Trustee, all claims which
may be made under the Pool Policy. Consistent with all rights and obligations
hereunder, the Servicer shall take all actions required under the Pool Policy as
a condition to the payment of any such claim. Any amount received from the Pool
Insurer shall be deposited by the Servicer, no later than two Business Days
following receipt thereof, into the Collection Account.
With respect to the Mortgage Loans, coverage with respect thereto
shall be terminated in accordance with the Pool Policy on the first date upon
which termination is permitted pursuant to the terms of the Pool Policy.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances. (a) The amount of P&I Advances to be made by
the Servicer for any Remittance Date shall equal, subject to Section 4.01(c),
the sum of (i) the aggregate amount of Scheduled Payments (with each interest
portion thereof net of the related Servicing Fee), due during the Due Period
immediately preceding such Remittance Date in respect of the Mortgage Loans,
which Scheduled Payments were not received as of the close of business on the
related Determination Date, plus (ii) with respect to each REO Property, which
REO Property was acquired during or prior to the related Prepayment Period and
as to which such REO Property an REO Disposition did not occur during the
related Prepayment Period, an amount equal to the excess, if any, of the
Scheduled Payments (with each interest portion thereof net of the related
Servicing Fee) that would have been due on the related Due Date in respect of
the related Mortgage Loans, over the net income from such REO Property
transferred to the Collection Account for distribution on such Remittance Date.
(b) On each Remittance Date, the Servicer shall remit in immediately
available funds to the Securities Administrator an amount equal to the aggregate
amount of P&I Advances, if any, to be made in respect of the Mortgage Loans and
REO Properties for the related Remittance Date either (i) from its own funds or
(ii) from the Collection Account, to the extent of funds held therein for future
distribution (in which case, it will cause to be made an appropriate entry in
the records of Collection Account that Amounts Held for Future Distribution have
been, as permitted by this Section 4.01, used by the Servicer in discharge of
any such P&I Advance) or (iii) in the form of any combination of (i) and (ii)
aggregating the total amount of P&I Advances to be made by the Servicer with
respect to the Mortgage Loans and REO Properties. Any Amounts Held for Future
Distribution and so used shall be appropriately reflected in the Servicer's
records and replaced by the Servicer by deposit in the Collection Account on or
before any future Remittance Date to the extent required.
(c) The obligation of the Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan or REO Property, shall
continue until a Final Recovery Determination in connection therewith or the
removal thereof from coverage under this Agreement, except as otherwise provided
in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I Advance
or Servicing Advance shall be required to be made hereunder by the Servicer if
such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by the Servicer that it has made a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance or that any proposed P&I Advance or Servicing
Advance, if made, would constitute a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of the Servicer delivered to the Securities Administrator
(and the Securities Administrator shall deliver such Officer's Certificate to
the Trustee and the NIM Insurer within one Business Day of receipt).
(e) Except as otherwise provided herein, the Servicer shall be
entitled to reimbursement pursuant to Section 3.11 for Servicing Advances from
recoveries from the related Mortgagor or from all Liquidation Proceeds and other
payments or recoveries (including Insurance Proceeds, Condemnation Proceeds and
Subsequent Recoveries) with respect to the related Mortgage Loan.
Section 4.02 Priorities of Distribution. (a) On each Distribution
Date, the Securities Administrator will make disbursements and transfers from
amounts then on deposit in the Distribution Account in the following order of
priority and to the extent of Available Funds remaining 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 owed to the Swap Provider other
than a Defaulted Swap Termination Payment;
(B) from the Interest Remittance Amounts, to the Class A-1,
Class A-2 and Class A-3 Certificates, the related Accrued
Certificate Interest Distribution Amounts and Unpaid Interest
Amounts for such Distribution Date, allocated pro rata based on
their respective entitlements to those amounts;
(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 B-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(G) from any remaining Interest Remittance Amounts, to the
Class B-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date; and
(H) 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:
(a) 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
(b) sequentially to the Class M-1, Class M-2, Class M-3, 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:
(a) 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;
(b) 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;
(c) 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;
(d) 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;
(e) 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 and to the
Class M-3 Certificates in clause (ii)(B)(d) above and (y) the Class
B-1 Principal Distribution Amount, until the Class Certificate
Balance thereof has been reduced to zero;
(f) 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 and to the Class B-1
Certificates in clause (ii)(B)(e) above and (y) the Class B-2
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(g) 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 B-1
Certificates in clause (ii)(B)(e) above and to the Class B-2
Certificates in clause (ii)(B)(f) 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 B-1 Certificates, any Unpaid Interest Amount
for such Class;
(H) to the Class B-1 Certificates, any Unpaid Realized Loss
Amount for such Class;
(I) to the Class B-2 Certificates, any Unpaid Interest Amount
for such Class;
(J) to the Class B-2 Certificates, any Unpaid Realized Loss
Amount for such Class;
(K) to the Class B-3 Certificates, any Unpaid Interest Amount
for such Class;
(L) to the Class B-3 Certificates, any Unpaid Realized Loss
Amount for such Class;
(M) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment (without regard to Net Swap Receipts) for such
Distribution Date;
(N) concurrently, (i) from any Interest Rate Cap Payments with
respect to the Class M Cap Agreement on deposit in the Excess
Reserve Fund Account with respect to such Distribution Date, an
amount equal to any unpaid Basis Risk Carry Forward Amount with
respect to the Class M Certificates for such Distribution Date to
the Class M Certificates, allocated (a) first, among the Class M-1
Certificates, Class M-2 Certificates and Class M-3 Certificates, pro
rata, based upon their respective Class Certificate Balances (only
with respect to those Class M Certificates with an outstanding Basis
Risk Carry Forward Amount) and (b) second, any remaining amounts to
the Class M-1 Certificates, Class M-2 Certificates and Class M-3
Certificates, pro rata, based on any such Basis Risk Carry Forward
Amounts remaining unpaid, to reimburse such Basis Risk Carry Forward
Amounts remaining unpaid, and (ii) from any Interest Rate Cap
Payments with respect to the Class B Cap Agreement on deposit in the
Excess Reserve Fund Account with respect to such Distribution Date,
an amount equal to any unpaid Basis Risk Carry Forward Amount with
respect to the Class B Certificates for such Distribution Date to
the Class B Certificates, allocated (a) first, among the Class B-1
Certificates, Class B-2 Certificates and Class B-3 Certificates, pro
rata, based upon their respective Class Certificate Balances (only
with respect to those Class B Certificates with an outstanding Basis
Risk Carry Forward Amount) and (b) second, any remaining amounts to
the Class B-1 Certificates, Class B-2 Certificates and Class B-3
Certificates, pro rata, based on any such Basis Risk Carry Forward
Amounts remaining unpaid, to reimburse such Basis Risk Carry Forward
Amounts remaining unpaid;
(O) from funds on deposit in the Excess Reserve Fund Account
(not including any Interest Rate Cap Payments included in such
account) with respect to such Distribution Date, an amount equal to
any remaining unpaid Basis Risk Carry Forward Amount with respect to
any LIBOR Certificate for such Distribution Date 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, except that the Class A Certificates shall
be paid (a) first, among the Class A-1 Certificates, Class A-2
Certificates and Class A-3 Certificates, pro rata, based upon their
respective Class Certificate Balances (only with respect to those
Class A Certificates with an outstanding Basis Risk Carry Forward
Amount) and (b) second, any remaining amounts to the Class A-1
Certificates, Class A-2 Certificates and Class A-3 Certificates, pro
rata, based on any such Basis Risk Carry Forward Amounts remaining
unpaid;
(P) to the Swap Account, the amount of any Defaulted Swap
Termination Payment owed to the Swap Provider;
(Q) to the Class X Certificates, the remainder of the Class X
Distributable Amount not distributed pursuant to Sections
4.02(a)(iii)(A)-(P) and any remaining Interest Rate Cap Payments in
the Excess Reserve Fund Account; and
(R) to the Class R Certificates, any remaining amount.
Without limiting the provisions of this Section 4.02, by acceptance
of the Residual Certificates the Holders of the Residual Certificates agree, and
it is the understanding of the parties hereto, that for so long as any class of
NIM Securities as to which certain payments with respect thereto have been
guaranteed by the NIM Insurer are outstanding or any amounts are reimbursable or
payable to the NIM Insurer in accordance with the terms of the Indenture, to
pledge their rights to receive any amounts otherwise distributable to the
Holders of the Class R Certificates (and such rights are hereby assigned and
transferred) to the Holders of the Class X Certificates.
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 any 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 (including
amounts payable by the Servicer pursuant to Section 3.07) shall be distributed
by the Securities Administrator to the holders of the Class P Certificates.
(c) Any principal distributions allocated to the Class A
Certificates shall be allocated sequentially, first to the Class A-1
Certificates, until their Class Certificate Balance has been reduced to zero,
then to the Class A-2 Certificates, until their Class Certificate Balance has
been reduced to zero and then to the Class A-3 Certificates, until their Class
Certificate Balance has been reduced to zero. Notwithstanding the foregoing, on
and after the Distribution Date on which the aggregate Class Certificate
Balances of the Subordinated Certificates and the principal balance of the Class
X Certificates have been reduced to zero, any principal distributions allocated
to the Class A Certificates shall be allocated, pro rata among the Class A
Certificates, based on their respective Class Certificate Balances, until their
respective Class Certificate Balances have been reduced to zero.
(d) 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 amount of interest payable to the Class X
Certificates; 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.
Section 4.03 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Securities Administrator shall make available
to each Certificateholder, the Servicer, the Depositor, the Trustee, the NIM
Insurer and each Rating Agency a statement based on information provided by the
Servicer 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 and
the LIBOR Determination 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 (and the calculation
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 Carry Forward Amount
for each Class and the amount of such Basis Risk Carry Forward 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 Carry Forward 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 related
Distribution Date;
(ix) the amount of the Expense Fees paid to or retained by the
Servicer and paid to or retained by the Securities Administrator (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 Advances included in the distribution on such
Distribution Date reported by the Servicer (and the Trustee 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, 91 or more days, and in such other periods and for
such times as required by Regulation AB, (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 determined in accordance with Section 4.03(e);
(xiii) for each of the preceding 12 calendar months, or all calendar
months since the related Cut-off Date, whichever is less, the aggregate
dollar amount of the Scheduled Payments (A) due on all outstanding
Mortgage Loans on each of the Due Dates in each such month and (B)
delinquent 60 days or more on each of the Due Dates in each such month;
(xiv) 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 outstanding principal balance of such Mortgage
Loans as of the close of business on the last Business Day of the
immediately preceding month and the month and year of acquisition of such
REO Properties;
(xv) the total number and 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;
(xvi) whether a Trigger Event has occurred and is continuing
(including the calculation demonstrating the existence of the Trigger
Event);
(xvii) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xviii) 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;
(xix) 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, Applied Realized Loss Amounts and
Basis Risk Carry Forward Amounts;
(xx) the amount of any Net Swap Payments, Net Swap Receipts, Swap
Termination Payments or Defaulted Swap Termination Payments;
(xxi) the calculations of LIBOR and Swap LIBOR;
(xxii) the Subordinated Amount and Specified Subordinated Amount;
(xxiii) Prepayment Charges collected or paid (pursuant to Section
3.07(a)) by the Servicer;
(xxiv) the Cumulative Loss Percentage and the aggregate amount of
Realized Losses used to calculate the Cumulative Loss Percentage;
(xxv) the remaining coverage under the Pool Policy, by dollar amount
and as a percentage of the aggregate scheduled principal balance of the
Mortgage Loans as of the Cut-off Date;
(xxvi) the amount distributed on the Class X Certificates;
(xxvii) the amount of any Subsequent Recoveries for such
Distribution Date; and
(xxviii) the number of Mortgage Loans at the beginning and end of
the applicable reporting period, the pool factor, and the weighted average
interest rate, and weighted average remaining term.
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:
(1) material breaches of Mortgage Loan representations and
warranties of which the Securities Administrator has knowledge or has
received written notice; and
(2) material breaches of any covenants under this Agreement of which
the Securities Administrator has knowledge or has received written notice.
(b) The Securities Administrator's responsibility for providing the
above statement to the Certificateholders, each Rating Agency, the NIM Insurer
and the Depositor is limited, if applicable, to the availability, timeliness and
accuracy of the information received from the Servicer. 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 (▇▇▇) ▇▇▇-▇▇▇▇. 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. As a condition to
access the Securities Administrator's internet website, the Securities
Administrator may require registration and the acceptance of a disclaimer. 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 via the Securities Administrator's internet website each statement to
Certificateholders prepared pursuant to this Section 4.03(a). The Securities
Administrator and the Servicer 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 within ten Business Days of 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) Not later than three Business Days following the Determination
Date and in no event later than the 20th calendar day of each month, the
Servicer shall furnish to the Securities Administrator a monthly remittance
advice statement (the "Servicer Remittance Report") (in a format substantially
similar to that attached as Exhibit V to this Agreement) containing such
information as shall be reasonably requested (to the extent such information is
available to the Servicer), (i) by the Depositor or the Responsible Party 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
Securities Administrator to enable the Securities Administrator to provide the
reports required by Section 4.03(a) as to the accompanying remittance. Upon
receipt of the Servicer Remittance Report, the Securities Administrator shall
furnish such Servicer Remittance Report to the Depositor and the NIM Insurer.
The Servicer shall concurrently deliver to the Securities Administrator a data
tape, in a format substantially similar to that attached as Exhibit V to this
Agreement, containing the information required pursuant to this Section 4.03(d)
on a loan-by-loan basis for all of the Mortgage Loans and in turn the Securities
Administrator will concurrently deliver such data tape to the Depositor, the
Responsible Party and the NIM Insurer. Not later than three Business Days
following the Determination Date and in no event later than the 20th calendar
day of each month, the Servicer shall furnish to the Securities Administrator a
default report (the "Default Report") and the Securities Administrator shall
furnish such Default Report to the Depositor and the NIM Insurer.
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);
(ii) with respect to each Scheduled Payment, the amount of such
remittance allocable to interest;
(iii) the amount of Servicing Fees received by the Servicer during
the prior distribution period; and
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans.
The Default Report shall, at a minimum, document, on such
Determination Date, Mortgage Loan payment activity on an individual Mortgage
Loan basis, as follows:
(i) the aggregate expenses reimbursed to the Servicer during the
prior distribution period pursuant to Section 3.11; and
(ii) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent 31 to 60 days, 61 to 90 days, 91 days or
more, and in such other periods and for such times as required by
Regulation AB; (b) as to which foreclosure or bankruptcy proceedings of
the related mortgagor have commenced; and (c) as to which REO Property has
been acquired.
(e) For all purposes of this Agreement, with respect to any Mortgage
Loan, delinquencies shall be determined and reported by the Securities
Administrator, from information provided by the Servicer, based on the "OTS"
methodology for determining delinquencies on mortgage loans similar to the
Mortgage Loans. By way of example, a Mortgage Loan would be delinquent with
respect to a Scheduled Payment due on a Due Date if such Scheduled Payment is
not made by the close of business on the Mortgage Loan's next succeeding Due
Date, and a Mortgage Loan would be more than 30-days Delinquent with respect to
such Scheduled Payment if such Scheduled Payment were not made by the close of
business on the Mortgage Loan's second succeeding Due Date. The Servicer hereby
represents and warrants to the Depositor that the Servicer is not subject to any
delinquency recognition policy established by the primary safety and soundness
regulator, if any, of the Servicer, that is more restrictive than the foregoing
delinquency recognition policy.
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
LIBOR shall be calculated by the Securities Administrator in accordance with the
definition of LIBOR. Until all of the LIBOR Certificates are paid in full, the
Securities Administrator will 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.
(i) 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 Trustee.
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 LIBOR 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 any Distribution Date, Swap Termination Payments, Net Swap
Payments owed to the Swap Provider and Net Swap Receipts 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, the sum of (x) all Net Swap Payments and
(y) any Swap Termination Payment, other than a Defaulted Swap Termination
Payment, to the Swap Provider, if any, owed for that Distribution Date;
(ii) 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;
(iii) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, 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 (iii), to the
extent unpaid from Available Funds;
(iv) to the LIBOR Certificates, to pay Basis Risk Carry Forward
Amounts as described in Section 4.02(a)(iii)(N)-(O), to the extent unpaid
from Available Funds (including Basis Risk Payments on deposit in the
Excess Reserve Fund Account);
(v) sequentially, to the Class A, Class M-1, Class M-2, Class M-3,
Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay
principal as described 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 at the Specified Subordinated Amount as a result
of current or prior Realized Losses not previously reimbursed, after
giving effect to payments and distributions from Available Funds;
(vi) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
B-1, Class B-2 and Class B-3 Certificates, in that order, to pay any
Unpaid Interest Amounts as described in Section 4.02(a)(iii), to the
extent unpaid from Available Funds;
(vii) to the Swap Provider, any Defaulted Swap Termination Payment
owed to the Swap Provider for that Distribution Date; and
(viii) 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 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.
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.
The Securities Administrator shall account for the Swap Account as
an asset of a grantor trust under subpart E, Part I of subchapter J of the Code
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
payable to the Swap Provider shall be deemed to be paid to the Swap Account from
the Upper Tier REMIC, first, by the Holder of the Class X Certificates (in
respect of the Class IO Interest and, if applicable, Class X Interest) and
second, other than any Defaulted Swap Termination Payment, 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 Carry Forward Amounts and, without duplication, Upper
Tier Carry Forward Amounts distributed by the Securities Administrator to the
LIBOR Certificateholders from the Excess Reserve Fund Account or the Swap
Account 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 or the Class IO Interest,
respectively) 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
Carry Forward Amounts and, without duplication, Upper Tier Carry Forward Amounts
from the Swap Account (along with Basis Risk Carry Forward Amounts payable from
the Excess Reserve Fund Account) as rights in a separate limited recourse
interest rate cap contract written by the Class X Certificateholders in favor of
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, and any amounts reimbursed from the Upper Tier REMIC to the Swap
Account shall be treated as having been distributed to the Holders of the Class
X Certificates.
In the event the Swap Provider does not deliver the Delivery Amount
(as defined in the Interest Rate Swap Agreement) to the Securities
Administrator, the Securities Administrator shall provide notice of such failure
to the Swap Provider within one Business Day of such failure.
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 10.02 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 Section 5.06, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate, the Securities
Administrator shall execute and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same Class and
aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Securities
Administrator. Whenever any Certificates are so surrendered for exchange, the
Securities Administrator shall execute, authenticate, and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Securities Administrator duly executed by the Holder thereof
or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Securities
Administrator in accordance with the Securities Administrator's customary
procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. In
determining whether a transfer is being made pursuant to an effective
registration statement, the Securities Administrator shall be entitled to rely
solely upon a written notice to such effect from the Depositor. Neither the
Securities Administrator nor the Trustee shall be under any obligation to
register or cause the registration of any Certificates under the Securities Act
or any applicable state securities laws or to take any other action not
otherwise required under this Agreement to permit the transfer of any
Certificate without registration. Except with respect to (i) the transfer of the
Class X, Class P or Class R Certificates to the Depositor or 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. As directed by the
Depositor, the Securities Administrator shall provide to any Holder of a Private
Certificate and any prospective transferee designated by any such Holder,
information regarding the related Certificates and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to eligibility
set forth in Rule 144A(d)(4) for transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. The Depositor and the Servicer shall cooperate
with the Securities Administrator in providing the Rule 144A information
referenced in the preceding sentence, including providing to the Securities
Administrator such information regarding the Certificates, the Mortgage Loans
and other matters regarding the Trust Fund as the Depositor shall reasonably
determine to meet its obligation under the preceding sentence. Each Holder of a
Private Certificate desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee, the Securities Administrator, the Servicer and
the Depositor against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
Except with respect to (i) the transfer of the Class X, Class P or
Class R Certificates to the Depositor or 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 and the Servicer, which Opinion of Counsel shall not be
an expense of the Depositor, the Securities Administrator, the Servicer 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 or the Servicer to any obligation in addition to
those expressly undertaken in this Agreement or to any liability. For purposes
of the preceding sentence, with respect to an ERISA-Restricted Certificate that
is not a Private Certificate or a Residual 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.
None of the Class R or Class P Certificates may be sold to any
employee benefit plan subject to Title I of ERISA, any plan subject to Section
4975 of the Code, or any plan subject to any Similar Law or any Person investing
on behalf or with plan assets of such plan.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Securities Administrator shall be under no liability to
any Person for any registration of transfer of any ERISA-Restricted Certificate
that is in fact not permitted by this Section 5.02(b) or for making any payments
due on such Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as 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 (i) Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 84-14 (for transactions by
independent "qualified professional asset managers"), (ii) PTCE 91-38 (for
transactions by bank collective investment funds), (iii) ▇▇▇▇ ▇▇-▇ (for
transactions by insurance company pooled separate accounts), PTCE 95-60 (for
transactions by insurance company general accounts) or (iv) PTCE 96-23 (for
transactions effected by "in-house asset managers") or similar exemption under
similar law.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Securities Administrator of any change or impending change in
its status as a Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Securities Administrator shall not register the Transfer of any Residual
Certificate unless, in addition to the certificates required to be
delivered to the Securities Administrator under subparagraph (b) above,
the Securities Administrator shall have been furnished with an affidavit
(a "Transfer Affidavit") of the initial owner or the proposed transferee
in the form attached hereto as Exhibit G;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Securities Administrator shall
be under no liability to any Person for any registration of Transfer of a
Residual Certificate that is in fact not permitted by Section 5.02(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, the
Trustee or the Servicer, to the effect that the elimination of such restrictions
will not cause any Trust REMIC 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 and the Trustee, 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 of its intent to terminate the book-entry
system through the Depository and, upon receipt of notice of such intent from
the Depository, the Depository Participants holding beneficial interests in the
Book-Entry Certificates agree to initiate such termination, the Securities
Administrator shall notify all Certificate Owners, through the Depository, of
the occurrence of any such event and of the availability of definitive, fully
registered Certificates (the "Definitive Certificates") to Certificate Owners
requesting the same. Upon surrender to the Securities Administrator of the
related Class of Certificates by the Depository, accompanied by the instructions
from the Depository for registration, the Securities Administrator shall issue
the Definitive Certificates. None of the Servicer, the Depositor or the
Securities Administrator shall be liable for any delay in delivery of such
instruction and each may conclusively rely on, and shall be protected in relying
on, such instructions. The Depositor shall provide the Securities Administrator
with an adequate inventory of Certificates to facilitate the issuance and
transfer of Definitive Certificates. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Securities Administrator, to the extent applicable with respect to such
Definitive Certificates and the Securities Administrator shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder;
provided, that the Securities Administrator shall not by virtue of its
assumption of such obligations become liable to any party for any act or failure
to act of the Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Securities
Administrator, duly executed by the Certificateholder or his attorney duly
authorized in writing. Each Certificate presented or surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Securities Administrator in accordance with its customary practice. No
service charge shall be made for any registration of transfer or exchange of
Private Certificates, but the Securities Administrator may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Private Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Securities Administrator, or
the Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Depositor, the Servicer, the NIM Insurer, and the Securities Administrator such
security or indemnity as may be required by them to hold each of them harmless,
then, in the absence of notice to the Securities Administrator that such
Certificate has been acquired by a bona fide purchaser, the Securities
Administrator shall execute, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, tenor and Percentage Interest. In connection with the
issuance of any new Certificate under this Section 5.03, the Securities
Administrator may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Securities Administrator)
connected therewith. Any replacement Certificate issued pursuant to this Section
5.03 shall constitute complete and indefeasible evidence of ownership, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04 Persons Deemed Owners. The Servicer, the Securities
Administrator, the NIM Insurer, the Depositor and any agent of the Servicer, the
NIM Insurer, the Depositor or the Securities Administrator may treat the Person
in whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions as provided in this Agreement and for all
other purposes whatsoever, and neither the Servicer, the Securities
Administrator, the NIM Insurer, the Depositor, nor any agent of the Servicer,
the NIM Insurer, the Depositor or the Securities Administrator shall be affected
by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Securities Administrator, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates and (c)
provide a copy of the communication which such Certificateholders propose to
transmit, or if the Depositor, Servicer or the NIM Insurer 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 Servicer, the NIM Insurer or such Certificateholders
at such recipients' expense the most recent list of the Certificateholders of
such Trust Fund held by the Securities Administrator, if any. The Depositor and
every Certificateholder, by receiving and holding a Certificate, agree that the
Securities Administrator shall not be held accountable by reason of the
disclosure of any such information as to the list of the Certificateholders
hereunder, regardless of the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Securities
Administrator will maintain or cause to be maintained at its expense an office
or offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange. The Securities Administrator initially
designates its offices located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The Securities Administrator shall give prompt
written notice to the Certificateholders and the NIM Insurer of any change in
such location of any such office or agency.
ARTICLE VI
THE DEPOSITOR, THE SERVICER
AND THE LOAN PERFORMANCE ADVISOR
Section 6.01 Respective Liabilities of the Depositor and the
Servicer. The Depositor and the Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor or the
Servicer. (a) The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation or federally chartered savings
bank, as the case may be, under the laws of the United States or under the laws
of one of the states thereof and will each obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
(b) The Servicer is and shall continue to be an institution which is
a ▇▇▇▇▇▇ ▇▇▇-approved and ▇▇▇▇▇▇▇ Mac-approved seller/servicer in good standing,
shall maintain a net worth of at least $30,000,000 (as determined in accordance
with generally accepted accounting principles) and shall maintain its license to
do business or service residential mortgage loans in any jurisdictions in which
the Mortgaged Properties are located.
(c) Any Person into which the Depositor or the Servicer may be
merged or consolidated, or any Person resulting from any merger or consolidation
to which the Depositor or the Servicer shall be a party, or any person
succeeding to the business of the Depositor or the Servicer, shall be the
successor of the Depositor or the Servicer, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or surviving Person to the Servicer shall
make the covenant set forth in Section 6.02(b). As a condition to the succession
to the Servicer under this Agreement by any Person (i) into which the Servicer
may be merged or consolidated, or (ii) which may be appointed as a successor to
a Servicer, the Servicer shall provide to the Depositor, at least 15 calendar
days prior to the effective date of such succession or appointment, (x) written
notice to the Depositor of such succession or appointment and (y) in writing and
in form and substance reasonably satisfactory to the Depositor, 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).
Section 6.03 Limitation on Liability of the Depositor, the Servicer
and Others. None of the Depositor, the Servicer, the NIM Insurer or any of their
respective directors, officers, employees or agents shall be under any liability
to the Certificateholders for any action taken or for refraining from the taking
of any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the
Depositor, the Servicer or any such Person against any breach of representations
or warranties made by it herein or protect the Depositor, the Servicer or any
such Person from any liability which would otherwise be imposed by reasons of
willful misfeasance, bad faith or negligence (or gross negligence in the case of
the Depositor) in the performance of duties or by reason of reckless disregard
of obligations and duties hereunder. The Depositor, its Affiliates, the
Servicer, the NIM Insurer and any of their respective directors, officers,
employees or agents may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor, its Affiliates, the Servicer, the NIM Insurer
and any of their respective directors, officers, employees or agents shall be
indemnified by the Trust Fund and held harmless against any loss, liability or
expense incurred in connection with any audit, controversy or judicial
proceeding relating to a governmental taxing authority or any legal action
relating to this Agreement, the Certificates or the Loan Performance Advisor
Agreement other than any loss, liability or expense related to any specific
Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement and any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence (or gross negligence in the case of the Depositor) in the performance
of duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. Neither the Depositor nor the NIM Insurer shall not be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective duties hereunder and which in its opinion may
involve it in any expense or liability; provided, however, that the Depositor
may in its discretion undertake any such action (or direct the Trustee to
undertake such actions pursuant to Section 2.03 for the benefit of the
Certificateholders) that it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties hereto and interests of the
Trustee and the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Depositor shall be
entitled to be reimbursed therefor out of the Collection Account.
Neither the Servicer nor any of the officers, employees or agents of
the Servicer shall be under any liability to the Trustee or the Depositor for
any action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement; provided, however, that this provision shall not
protect the Servicer or any such person against any breach of warranties or
representations made herein, or failure to perform its obligations in strict
compliance with the terms of this Agreement, or any liability which would
otherwise be imposed by reason of any breach of the terms and conditions of this
Agreement. The Servicer and any officer, employee or agent of the Servicer may
rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action that is not incidental to its duties to service the Mortgage Loans in
accordance with this Agreement and which in its opinion may involve it in any
expenses or liability; provided, however, that the Servicer may undertake any
such action which it may deem necessary or desirable in respect to this
Agreement and the rights and duties of the parties hereto. In such event, the
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities for which the Trust Fund will be
liable, and the Servicer shall be entitled to be reimbursed therefor out of the
Collection Account.
Section 6.04 Limitation on Resignation of the Servicer. Subject to
Section 6.02 and 7.01, the Servicer shall not assign this Agreement or resign
from the obligations and duties hereby imposed on it except by mutual consent of
the Servicer, the Depositor, the NIM Insurer and the Trustee or (i) upon the
determination that the performance of its obligations or 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 or its subsidiaries or
Affiliates, the other activities of the Servicer so causing such a conflict
being of a type and nature carried on by the Servicer or its subsidiaries or
Affiliates at the date of this Agreement or (ii) upon satisfaction of the
following conditions: (a) the Servicer has proposed a successor servicer to the
Trustee and (b) each Rating Agency shall have delivered a letter to the Trustee
prior to the appointing of the successor servicer stating that the proposed
appointment of such successor servicer as Servicer hereunder will not result in
the reduction or withdrawal of the then current rating of the Certificates;
provided, however, that no such resignation by the Servicer shall become
effective until such successor servicer or, in the case of (i) above, the
Trustee shall have assumed the Servicer's responsibilities and obligations
hereunder or the Trustee shall have designated a successor servicer in
accordance with Section 7.02. Any such resignation shall not relieve the
Servicer of responsibility for any of the obligations specified in Sections 7.01
and 7.02 as obligations that survive the resignation or termination of the
Servicer. Any such determination permitting the resignation of the Servicer
pursuant to (i) above shall be evidenced by an Opinion of Counsel to such effect
delivered to the Depositor, the NIM Insurer and the Trustee which Opinion of
Counsel shall be in form and substance acceptable to the Depositor, the NIM
Insurer and the Trustee. No such resignation shall become effective until a
successor shall have assumed in writing the Servicer's responsibilities and
obligations hereunder.
Section 6.05 Additional Indemnification by the Servicer; Third Party
Claims.
(a) The Servicer shall indemnify the Responsible Party, the Sponsor,
the Depositor, the Trustee, the Securities Administrator (unless the Servicer
and Securities Administrator are Affiliates), the NIM Insurer and any Affiliate,
director, officer, employee or agent of each and hold them harmless against any
and all third party claims, losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and any other
costs, fees and expenses that any of them may sustain in any way related to (i)
any breach by the Servicer, of any of its representations and warranties
referred to in Section 2.03(a), (ii) any error in any tax or information return
prepared by the Servicer, or (iii) the failure of the Servicer to perform its
duties and service the Mortgage Loans in strict 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(d)). The
Servicer immediately shall notify the Depositor, the NIM Insurer, the
Responsible Party and the Trustee if a 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 Responsible Party and the Trustee) 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 the Responsible Party, the Depositor, the NIM Insurer
or the Trustee in respect of such claim.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Servicer shall indemnify the Depositor, the Sponsor, the
Securities Administrator (unless the Servicer and Securities Administrator are
Affiliates), the NIM Insurer, the Trustee and any director, officer, employee or
agent of the Depositor, the Sponsor, the NIM Insurer, the Securities
Administrator (unless the Servicer and Securities Administrator are Affiliates)
or the Trustee and hold them harmless against any and all claims, losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments, and any other costs, fees and expenses that any of
them may sustain in any way related to any failure by the Servicer or any
Subservicer engaged by the Servicer or any Subcontractor utilized by the
Servicer to deliver any information, report, certification or accountants'
letter when and as required under Sections 3.22, 3.23, 6.02 or 8.12, including
without limitation any failure by the Servicer to identify pursuant to Section
3.02(e) any Subcontractor "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB.
(c) If the indemnification provided for in this Section 6.05 is
unavailable or insufficient to hold harmless any Person entitled to
indemnification thereunder, then the Servicer shall contribute to the amount
paid or payable by the Person entitled to indemnification as a result of the
losses, claims, damages or liabilities of such Person in such proportion as is
appropriate to reflect the relative fault of such Person on the one hand and the
Servicer, on the other, in connection with the Servicer's obligations pursuant
to this Section 6.05. This Section 6.05 shall survive the termination of this
Agreement or the earlier resignation or removal of the Servicer.
Section 6.06 Duties of the Loan Performance Advisor. The Loan
Performance Advisor shall perform its obligations under the Loan Performance
Advisor Agreement.
Section 6.07 Loan Performance Advisor's Fees. On each Distribution
Date the Securities Administrator shall withdraw from the Distribution Account
the Loan Performance Advisor Fee and pay such fee to the Loan Performance
Advisor as compensation for its activities under this Agreement.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default", wherever used
herein, means any one of the following events:
(a) any failure by the Servicer to remit to the Securities
Administrator 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 is received by facsimile and confirmed by
telephone pursuant to 11.05(c), requiring the same to be remedied, shall have
been given to the Servicer by the Depositor, by the Trustee or by the Securities
Administrator, or to the Servicer, the Depositor, the Trustee and the Securities
Administrator by the NIM Insurer or by Certificateholders entitled to at least
25% of the Voting Rights in the Certificates; or
(b) the failure on the part of the Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Servicer set forth in this Agreement which continues unremedied for
a period of forty-five days (except that (x) such number of days shall be
fifteen 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 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) after the earlier of (i) the
date on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Depositor or by the Trustee, or to
the Servicer, the Depositor, the Trustee, the Securities Administrator and the
NIM Insurer 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 the Servicer; or
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty consecutive days; or
(d) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(e) the Servicer shall admit in writing its inability generally 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; or
(f) any failure of the Servicer to make any P&I Advance on any
Remittance Date required to be made from its own funds pursuant to Section 4.01
which continues unremedied for one Business Day immediately following the
Remittance Date; or
(g) a breach of any representation and warranty of the Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders and which continues unremedied for a period
of thirty days after the date upon which written notice of such breach is given
to the Servicer by the Trustee, by the Securities Administrator or by the
Depositor, or to the Servicer, the Trustee, the Securities Administrator and the
Depositor by the NIM Insurer or the Certificateholders entitled to at least 25%
of the Voting Rights in the Certificates; or
(h) any withdrawal or downgrade of two or more levels of ▇▇▇▇▇
Fargo's servicer rating by any rating agency that results in a downgrade,
qualification or withdrawal of the rating assigned to any class of the
certificates by any rating agency.
If an Event of Default described in clauses (a) through (h) 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 Trustee may, and at the
written direction of a majority of the Voting Rights, or at the direction of the
NIM Insurer, the Trustee shall, by notice in writing to the Servicer (with a
copy to each Rating Agency), terminate all of the rights and obligations of the
Servicer under this Agreement and in and to the Mortgage Loans and the proceeds
thereof, other than its rights as a Certificateholder hereunder; provided,
however, that the Trustee shall not be required to give written notice to the
Servicer of the occurrence of an Event of Default unless and until a Responsible
Officer of the Trustee has actual knowledge of the occurrence of such an event.
In the event that a Responsible Officer of the Trustee has actual knowledge of
the occurrence of an event of default described in clause (f) of this Section
7.01, the Trustee shall give written notice by facsimile with confirmation by
telephone to the Servicer of the occurrence of such an event within one Business
Day of the first day on which such Responsible Officer obtains actual knowledge
of such occurrence. On and after the receipt by the Servicer of such written
notice by facsimile and confirmation by telephone, all authority and power of
the Servicer hereunder, whether with respect to the Mortgage Loans or otherwise,
shall, subject to Section 7.02, pass to and be vested in the Trustee. Subject to
Section 7.02, the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of the Servicer to pay amounts owed pursuant to Article VIII. The Servicer
agrees to cooperate with the Trustee in effecting the termination of the
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Trustee of all cash amounts which shall at the time be
credited to the Collection Account, or thereafter be received with respect to
the Mortgage Loans.
Notwithstanding any termination of the activities of the Servicer
hereunder, the terminated Servicer shall be entitled to receive from the
successor Servicer, at the time of 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 Trustee to Act; Appointment of Successor. On and after
the time the Servicer receives a notice of termination pursuant to Section 7.01,
the Trustee shall, subject to and to the extent provided in Section 3.24, be the
successor to the Servicer in its capacity as servicer under this Agreement and
the transactions set forth or provided for herein and shall be subject to all
the responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof and applicable law including the
obligation to make P&I Advances and Servicing Advances pursuant to Section 4.01.
It is understood and acknowledged by the parties hereto that there will be a
period of transition before the transfer of servicing obligations is fully
effective. Notwithstanding the foregoing, the Trustee will have a period (not to
exceed 90 days) to complete the transfer of all servicing data and correct or
manipulate such servicing data as may be required by the Trustee to correct any
errors or insufficiencies in the servicing data or otherwise enable the Trustee
to service the Mortgage Loans in accordance with Accepted Servicing Practices.
As compensation therefor, the Trustee shall be entitled to all funds relating to
the Mortgage Loans that the Servicer would have been entitled to charge to the
Collection Account if the Servicer had continued to act hereunder including, if
the Servicer was receiving the Servicing Fee, the Servicing Fee and the income
on investments or gain related to the Collection Account which the Servicer
would be entitled to receive. Notwithstanding the foregoing, if the Trustee has
become the successor to the Servicer in accordance with Section 7.02, the
Trustee 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 or of
the NIM Insurer, appoint, or petition a court of competent jurisdiction to
appoint, any established mortgage loan servicing institution the appointment of
which (i) does not adversely affect the then current rating of the Certificates
by each Rating Agency and (ii) is acceptable to the NIM Insurer, as the
successor to the Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder. Any successor
to the Servicer shall make the covenant set forth in Section 6.02(b). Any
successor to the Servicer shall be an institution which is willing to service
the Mortgage Loans and which executes and delivers to the Depositor and the
Trustee an agreement accepting such delegation and assignment, containing an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer (other than liabilities of the
Servicer under Section 6.03 incurred prior to termination of the Servicer under
Section 7.01), with like effect as if originally named as a party to this
Agreement; provided, that each Rating Agency acknowledges that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified or reduced, as a result of such assignment and delegation.
Pending appointment of a successor to the Servicer hereunder, the Trustee,
unless the Trustee is prohibited by law from so acting, shall, subject to
Section 3.24, act in such capacity as hereinabove provided. 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 no such compensation shall be in
excess of the Servicing Fee Rate and amounts paid to the Servicer from
investments. The Trustee and such successor Servicer shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Neither the Trustee nor any other successor to the 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 Servicer to deliver or provide, or
any delay in delivering or providing, any cash, information, documents or
records to it.
In the event that the Servicer is terminated pursuant to Section
7.01, the terminated Servicer shall provide notices to the Mortgagors, transfer
the Servicing Files to a successor Servicer and pay all of its own out-of-pocket
costs and expenses at its own expense. In addition, in the event that the
Servicer is terminated pursuant to Section 7.01, the terminated Servicer shall
pay all reasonable out-of-pocket costs and expenses of a servicing transfer
incurred by parties other than the terminated Servicer (including, without
limitation, any costs or expenses (including but not limited to personnel time)
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 or successor servicer to correct ay errors or insufficiencies in the
servicing data or otherwise to enable the Trustee or successor servicer to
service the Mortgage Loans properly and effectively, but excluding set-up costs
and other administrative expenses of the successor Servicer, in which case the
successor Servicer shall pay for such costs and expenses but shall not be
entitled to reimbursement therefor from the Trust Fund), such an amount shall be
paid by the terminated Servicer promptly upon presentation of reasonable
documentation of such costs. If the Trustee is the predecessor Servicer (except
in the case where the Trustee 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 Trustee 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. If the terminated Servicer defaults in its obligation to pay such
costs and expenses, the same shall be paid by the successor Servicer, in which
case the successor Servicer shall be entitled to reimbursement therefor from the
Trust Fund.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer, maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 3.13.
Section 7.03 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to the Servicer, the Trustee shall
give prompt written notice thereof to Certificateholders, the NIM Insurer and
each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default of
which a Responsible Officer of the Trustee has actual knowledge, the Trustee
shall transmit by mail to all Certificateholders, the NIM Insurer and each
Rating Agency notice of each such Event of Default, 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 an Event of Default and after the curing of all 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 an Event of
Default has occurred and remains uncured, the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
Unless an Event of Default known to the Trustee has occurred and is
continuing:
(a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement which it believes in good faith
to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts;
(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 NIM Insurer or 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; and
(d) the Trustee shall not be accountable, shall have no liability
and makes no representation as to any acts or omissions hereunder of the
Servicer or the Securities Administrator.
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 advice or Opinion of
Counsel;
(c) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the NIM Insurer
or 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 (other than in its corporate capacity as
obligor of the investment security and with respect to the investment of funds
in the Distribution Account);
(h) unless a Responsible Officer of the Trustee has actual knowledge
of the occurrence of an Event of Default, the Trustee shall not be deemed to
have knowledge of an 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 or the NIM Insurer, pursuant to
this Agreement, unless such Certificateholders or the NIM Insurer, as
applicable, 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 other than with respect to the Trustee's execution and
authentication of the Certificates. The Trustee shall not be accountable for the
use or application by the Depositor or the Servicer of any funds paid to the
Depositor or the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or the Servicer.
The 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 a fee by the
Securities Administrator. The Trustee and any director, officer, employee, or
agent of the Trustee shall be indemnified by the Trust Fund and held harmless
against any loss, liability, or expense (including reasonable attorney's fees)
resulting from any error in any tax or information return prepared by the
Servicer or incurred in connection with:
(a) this Agreement,
(b) the Certificates, or
(c) the performance of any of the Trustee's duties under this
Agreement,
other than any loss, liability, or expense (i) resulting from any breach of the
Servicer's obligations in connection with this Agreement for which the Servicer
has performed its obligation to indemnify the Trustee pursuant to Section 6.05,
(ii) resulting from any breach of the Responsible Party's obligations in
connection with this Agreement for which the Responsible Party has performed its
obligation to indemnify the Trustee pursuant to Section 2.03(h) or (iii)
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, Registrar, or
paying agent under this Agreement or for any other routine expenses incurred by
the Trustee; provided, however, no expense shall be reimbursed hereunder if it
would not constitute an "unanticipated expense incurred by the REMIC" within the
meaning of the REMIC Provisions.
Section 8.06 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation or association organized and doing
business under the laws of a state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, subject to supervision or examination by
federal or state authority and with a credit rating which would not cause any of
the Rating Agencies to reduce their respective then current ratings of the
Certificates (or having provided such security from time to time as is
sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07. The
entity serving as Trustee may have normal banking and trust relationships with
the Depositor and its Affiliates or the Servicer and its Affiliates; provided,
however, that such entity cannot be an Affiliate of the Depositor or the
Servicer other than the Trustee in its role as successor to the 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 NIM Insurer, the Servicer
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 acceptable by the NIM Insurer 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 the NIM Insurer, 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 acceptable to the NIM Insurer, then the
Depositor or the NIM Insurer may remove the Trustee and appoint a successor
trustee by written instrument, in triplicate, one copy of which shall be
delivered to the Trustee, one copy to the Servicer and one copy to the successor
trustee.
The Holders of Certificates entitled to at least a majority of the
Voting Rights (or the NIM Insurer upon failure of the Trustee to perform its
obligations hereunder) may at any time remove the Trustee and appoint a
successor trustee (acceptable to the NIM Insurer) by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which shall be delivered by the successor
Trustee to the Servicer, one complete set to the Trustee so removed and one
complete set to the successor so appointed. The successor trustee shall notify
each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the Depositor
and the NIM Insurer and to its predecessor trustee and the Servicer an
instrument accepting such appointment hereunder and thereupon the resignation or
removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as trustee herein. The
Depositor, the Servicer and the predecessor trustee shall execute and deliver
such instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect 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 and the NIM Insurer. 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, the Trustee shall notify the Depositor
and the NIM Insurer of such succession or appointment and shall furnish to the
Depositor in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably necessary for the Securities Administrator
to accurately and timely report, pursuant to Section 8.12(g), the event under
Item 6.02 of Form 8-K pursuant to the Exchange Act (if such reports under the
Exchange Act are required to be filed under the Exchange Act).
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee and the NIM Insurer to act as co-trustee or co-trustees
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of the Trust Fund, and to vest in such Person or Persons, in such
capacity and for the benefit of the Certificateholders, such title to the Trust
Fund or any part thereof, whichever is applicable, and, subject to the other
provisions of this Section 8.10, such powers, duties, obligations, rights and
trusts as the Servicer and the Trustee may consider appropriate. If the Servicer
and the NIM Insurer shall not have joined in such appointment within 15 days
after the receipt by it 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 under this Agreement
to advance funds on behalf of the 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 Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the applicable Trust
Fund or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because of
any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection and indemnity to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Servicer, the NIM Insurer 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 and file, and the Trustee shall sign 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
and 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) within thirty days of the Closing Date, the Securities
Administrator will apply for an employer identification number from the Internal
Revenue Service via Form SS-4 or any other acceptable method for all tax
entities and shall also 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) make an election that each of Pooling Tier REMIC-1, Pooling Tier
REMIC-2, the Lower Tier REMIC and the Upper Tier REMIC be treated as a REMIC on
the federal tax return for its first taxable year (and, if necessary, under
applicable state law);
(d) 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);
(e) 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);
(f) 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;
(g) 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;
(h) 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 each Trust REMIC 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);
(i) 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
(j) maintain records relating to each of the Trust REMICs, including
the income, expenses, assets, and liabilities thereof on a calendar year basis
and on the accrual method of accounting and the 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 R
Certificates shall act as Tax Matters Person for each Trust 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 any Trust REMIC 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 any
Trust REMIC, enter into settlement agreements with any governmental taxing
agency, extend any statute of limitations relating to any tax item of any Trust
REMIC, and otherwise act on behalf of each REMIC in relation to any tax matter
or controversy involving it.
The Securities Administrator shall treat the rights of the Class P
Certificateholders to receive Prepayment Charges (including amounts payable by
Servicer with respect thereto), the rights of the Class X Certificateholders to
receive Interest Rate Cap Payments and amounts in the Excess Reserve Fund
Account and the Swap Account (subject, other than in the case of the Class X
Certificates, to the obligation to pay Basis Risk Carry Forward Amounts and,
without duplication, Upper Tier Carry Forward Amounts) and the rights of the
LIBOR Certificateholders to receive Basis Risk Carry Forward Amounts and,
without duplication, Upper Tier Carry Forward Amounts as the beneficial
ownership of interests in a grantor trust, and not as an obligation of any Trust
REMIC created hereunder, for federal income tax purposes. The Securities
Administrator shall file or cause to be filed with the IRS together with Form
1041 or such other form as may be applicable and shall furnish or cause to be
furnished, to the Class P Certificateholders, the Class X Certificateholders and
the 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 to each Class
of Certificates of the right to receive Basis Risk Carry Forward Amounts from
the Excess Reserve Fund Account and Basis Risk Carry Forward Amounts or, without
duplication, Upper Tier Carry Forward Amounts from the Swap Account. Unless
otherwise advised by the Depositor, for federal income tax purposes, the
Securities Administrator is hereby directed to assign a value of zero to the
right of each Holder allocating the purchase price of an initial Offered
Certificateholder between such right and the related Upper Tier Regular
Interest. Thereafter, the Depositor shall provide to the Securities
Administrator promptly upon written request therefor any additional information
or data that the Securities Administrator may, from time to time, reasonably
request to enable the Securities Administrator to perform its duties under this
Agreement; provided, however, that the Depositor shall not be required to
provide any information regarding the Mortgage Loans that the Servicer is
required to provide to the Securities Administrator pursuant to this Agreement.
The Depositor hereby indemnifies the Securities Administrator and the NIM
Insurer for any losses, liabilities, damages, claims, or expenses of the
Securities Administrator or the NIM Insurer 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.
Neither the Servicer nor 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 (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 (A) endanger
the status of any Trust REMIC as a REMIC or (B) 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 Trust REMIC set forth in Section 860G(d) of the
Code, or the tax on "net income from foreclosure property") unless the
Securities Administrator receives an Opinion of Counsel (at the expense of the
party seeking to take such action or, if such party fails to pay such expense,
and the Securities Administrator determines that taking such action is in the
best interest of the Trust Fund and the Certificateholders, at the expense of
the Trust Fund, but in no event at the expense of the Securities Administrator)
to the effect that the contemplated action will not, with respect to the Trust
Fund or any Trust REMIC created hereunder, endanger such status or, unless the
Securities Administrator determines in its sole discretion to indemnify the
Trust Fund and the NIM Insurer 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 Startup Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including
any minimum tax imposed on any Trust REMIC pursuant to Sections 23153 and 24874
of the California Revenue and Taxation Code, if not paid as otherwise provided
for herein, the tax shall be paid by (i) the Securities Administrator if such
tax arises out of or results from negligence of the Securities Administrator in
the performance of any of its obligations under this Agreement, (ii) the
Servicer, in the case of any such minimum tax, and otherwise if such tax arises
out of or results from a breach by the Servicer of any of its obligations under
this Agreement, or (iii) in all other cases, or if the Securities Administrator
or the Servicer fails to honor its obligations under the preceding clause (i) or
(ii), any such tax will be paid with amounts otherwise to be distributed to the
Certificateholders, as provided in Section 4.02(a).
Section 8.12 Periodic Filings. (a) The Securities Administrator and
the Servicer shall reasonably cooperate with the Depositor in connection with
the reporting requirements of the Trust under the Exchange Act. The Securities
Administrator shall prepare for execution by the Depositor any Forms 10-D and
10-K and certain Form 8-K's (not to include any 8-K related to the filing of
this Agreement and any amendments thereto), required by the Exchange Act and the
rules and regulations of the Commission thereunder, in order to permit the
timely filing thereof, and the Securities Administrator shall file (via the
Commission's Electronic Data Gathering and Retrieval System, or ▇▇▇▇▇) such
Forms executed by the Depositor.
(b) Within 15 days after each Distribution Date (subject to
permitted extensions under the Exchange Act), the Securities Administrator shall
prepare and file on behalf of the Trust any Form 10-D required by the Exchange
Act, in form and substance as required by the Exchange Act. The Securities
Administrator shall file each Form 10-D with a copy of the related Monthly
Statement attached thereto. Any disclosure in addition to the Monthly Statement
that is required to be included on Form 10-D ("Additional Form 10-D Disclosure")
shall be reported to the Depositor and the Securities Administrator by the
parties set forth on Exhibit P and directed and approved by the Depositor
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 P hereto, within 5 calendar days after the
related Distribution Date, the parties, to the extent described on Exhibit P,
shall be required to provide to the Securities Administrator and the Depositor,
to the extent known by such applicable parties, any Additional Form 10-D
Disclosure, the form and substance of the Additional Form 10-D Disclosure
described on Exhibit P applicable to such party (and shall include with such
Additional Form 10-D Disclosure an Additional Disclosure Notification in the
form attached hereto as Exhibit W), and the Depositor will approve, as to form
and substance, or disapprove, as the case may be, the inclusion of the
Additional Form 10-D Disclosure on Form 10-D. The Securities Administrator has
no duty under this Agreement to monitor or enforce the performance by the
parties listed on Exhibit P (other than with respect to the Securities
Administrator) of their duties under this paragraph or proactively solicit or
procure from such parties any Additional Form 10-D Disclosure information;
provided, however, the Securities Administrator shall cooperate with the
Depositor in a reasonable manner in order for the Depositor to comply with its
reporting obligations under the Exchange Act as set forth in Section 8.12(a).
The Depositor will be responsible for any reasonable fees and expenses assessed
or incurred by the Securities Administrator in connection with including any
Additional Form 10-D Disclosure on Form 10-D pursuant to this paragraph. The
Securities Administrator shall compile all such information provided to it in a
Form 10-D prepared by it.
After preparing the Form 10-D, the Securities Administrator shall
forward electronically a copy of the Form 10-D to the Depositor for approval and
execution. No later than 2 Business Days prior to the 15th calendar day after
the related Distribution Date, an officer of the Depositor shall sign the Form
10-D and return an electronic or fax copy of such signed Form 10-D (with an
original executed hard copy to follow by overnight mail) to the Securities
Administrator. 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(f)(ii). Promptly (but not later than one
Business Day) after filing with the Commission, the Securities Administrator
will make available on its internet website a final executed copy of each Form
10-D prepared and filed by the Securities Administrator. Form 10-D 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 Depositor was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days." The Depositor hereby instructs the
Securities Administrator, with respect to each Form 10-D, to check "yes" for
each item unless the Securities Administrator has received timely prior written
notice from the Depositor that the answer should be "no" for an item. The
Depositor shall notify the Securities Administrator in writing, as soon as
reasonably practicable but no later than 2 Business Days prior to the 15th
calendar day after the related Distribution Date with respect to the filing of a
report on Form 10-D, if the answer to the questions should be "no." The
Securities Administrator shall be entitled to rely on such instructions in
preparing and/or filing any such Form 10-D. The Depositor acknowledges that the
performance by the Securities Administrator of its duties under this Section
8.12(b) related to the timely preparation and filing of Form 10-D is contingent
upon the Servicer and the Depositor observing all applicable deadlines in the
performance of their duties under this Section 8.12(b). The Securities
Administrator shall have no liability for any loss, expense, damage, claim
arising out of or with respect to any failure to properly prepare and/or timely
file such Form 10-D, where such failure results from the Securities
Administrator's inability or failure to receive, on a timely basis, any
information from any party hereto (other than the Securities Administrator or
any Subcontractor utilized by the Securities Administrator) needed to prepare,
arrange for execution or file such Form 10-D, not resulting from its own
negligence, bad faith or willful misconduct.
(c) On or before 90 days 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 2007, 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 Servicer
and each Subservicer engaged by the Servicer and the Securities Administrator,
as described under Section 3.22, (ii)(A) the annual reports on assessment of
compliance with servicing criteria for the Securities Administrator, the
Servicer, the Custodian, each Subservicer engaged by the Servicer and each
Servicing Function Participant utilized by the Servicer, the Custodian or the
Securities Administrator, 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
Servicer, the Custodian, each Subservicer engaged by the Servicer and each
Servicing Function Participant utilized by the Servicer, the Custodian or the
Securities Administrator, 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 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 Depositor 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
reported to the Depositor and the Securities Administrator by the parties set
forth on Exhibit Q and directed and approved by the Depositor 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 Q hereto, no later than March 1 of each year
that the Trust is subject to the Exchange Act reporting requirements, commencing
in 2007, the parties, to the extent described on Exhibit Q, shall be required to
provide to the Securities Administrator and the Depositor, to the extent known
by such applicable parties, any Additional Form 10-K Disclosure, the form and
substance of the Additional Form 10-K Disclosure described on Exhibit Q
applicable to such party (and shall include with such Additional Form 10-K
Disclosure an Additional Disclosure Notification in the form attached hereto as
Exhibit W), and the Depositor will approve, as to form and substance, or
disapprove, as the case may be, the inclusion of the Additional Form 10-K
Disclosure on Form 10-K. The Securities Administrator has no duty under this
Agreement to monitor or enforce the performance by the parties listed on Exhibit
Q (other than with respect to the Securities Administrator) of their duties
under this paragraph or proactively solicit or procure from such parties any
Additional Form 10-K Disclosure information; provided however, the Securities
Administrator shall cooperate with the Depositor in a reasonable manner in order
for the Depositor to comply with its reporting obligations under the Exchange
Act as set forth in Section 8.12(a). The Depositor will be responsible for any
reasonable fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Additional Form 10-K Disclosure
on Form 10-K pursuant to this paragraph. The Securities Administrator shall
compile all such information provided to it in a Form 10-K prepared by it.
After preparing the Form 10-K, the Securities Administrator shall
forward electronically a copy of the Form 10-K to the Depositor for approval and
execution. Form 10-K requires the registrant to indicate (by checking "yes" or
"no") that it "(1) has filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days." The Depositor hereby
instructs the Securities Administrator, with respect to each Form 10-K, to check
"yes" for each item unless the Securities Administrator has received timely
prior written notice from the Depositor that the answer should be "no" for an
item. The Depositor shall notify the Securities Administrator in writing, as
soon as reasonably practicable but no later than 5:00 p.m. EST on the 4th
Business Day prior to the 10-K Filing Deadline if the answer to the questions
should be "no." The Securities Administrator shall be entitled to rely on such
instructions in preparing and/or filing any such Form 10-K. No later than 5:00
p.m. EST on the 4th Business Day prior to the 10-K Filing Deadline, an officer
of the Depositor shall sign the Form 10-K and return an electronic or fax copy
of such signed Form 10-K (with an original executed hard copy to follow by
overnight mail) to the Securities Administrator. 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(f)(ii).
Promptly (but no later than one Business Day) after filing with the Commission,
the Securities Administrator will make available on its internet website a final
executed copy of each Form 10-K prepared and filed by the Securities
Administrator. The Depositor acknowledges that the performance by the Securities
Administrator of its duties under this Section 8.12(c) related to the timely
preparation and filing of Form 10-K is contingent upon the Servicer (and any
Subservicer or Servicing Function Participant engaged by the Servicer) and the
Depositor 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. The
Securities Administrator shall have no liability for any loss, expense, damage,
claim arising out of or with respect to any failure to properly prepare and/or
timely file such Form 10-K, where such failure results from the Securities
Administrator's inability or failure to receive, on a timely basis, any
information from any party hereto or any Subservicer or Servicing Function
Participant engaged by any such party hereto (other than the Securities
Administrator or any Servicing Function Participant utilized by the Securities
Administrator) needed to prepare, arrange for execution or file such Form 10-K,
not resulting from its own negligence, bad faith or willful misconduct.
(d) In connection with the execution of a Sarbanes Certification,
the Securities Administrator shall sign a certification (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) for the benefit of the
Depositor and its officers, directors and Affiliates, and the Servicer shall
sign a certification solely with respect to the Servicer (in the form attached
hereto as Exhibit N, with such changes as may be necessary or appropriate as a
result of changes promulgated by the Commission) for the benefit of the
Depositor, the Securities Administrator and their respective officers, directors
and Affiliates. Each such certification shall be delivered to the Depositor no
later than March 10th of each year (or if such day is not a Business Day, the
immediately preceding Business Day) and the Depositor shall deliver the Sarbanes
Certification no later than the time set forth for the delivery to the
Securities Administrator of the signed Form 10-K pursuant to Section 8.12(c) for
such year. In the event that prior to the filing date of the Form 10-K in March
of each year, the Securities Administrator or the Servicer 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 the
Securities Administrator's material misstatement, omission, negligence, bad
faith or willful misconduct in connection therewith, and (ii) the Servicer shall
indemnify and hold harmless the Depositor, 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 Servicer's obligations under this
Section 8.12(d) or any material misstatement, omission, negligence, bad faith or
willful misconduct of the 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 the Securities Administrator's material misstatement,
omission, negligence, bad faith or willful misconduct in connection therewith
that it shall contribute to the amount paid or payable by the Depositor and the
Sponsor as a result of the losses, claims, damages or liabilities of the
Depositor and the Sponsor in such proportion as is appropriate to reflect the
relative fault of the Depositor and the Sponsor on the one hand and the
Securities Administrator on the other and (ii) the Servicer agrees that it shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities of such indemnified party in such
proportion as is appropriate to reflect the relative fault of such indemnified
party, on the one hand, and the Servicer, on the other hand, in connection with
a breach of the Servicer's obligations under this Section 8.12(d) or any
material misstatement or omission, negligence, bad faith or willful misconduct
of the Servicer in connection therewith.
(e) [Reserved.]
(f) (i) The obligations set forth in paragraphs (a) through (d) of
this Section shall only apply with respect to periods for which reports are
required to be filed with respect to the Trust under the Exchange Act. On or
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 any time 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 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 8.12.
(ii) In the event that the Securities Administrator is unable to
timely file with the Commission all or any required portion of any Form
8-K, 10-D or 10-K required to be filed pursuant to this Agreement because
required disclosure information was either not delivered to it or
delivered to it after the delivery deadlines set forth in this Agreement,
the Securities Administrator will promptly notify the Depositor. In the
case of Form 10-D and 10-K, the Depositor and Securities Administrator
will thereupon prepare and file, and the other parties shall cooperate in
connection with such preparation and filing, 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 required Form 8-K Disclosure Information and, upon the approval and
direction of the Depositor, include such disclosure information on the
next succeeding Form 10-D. In the event that any previously filed Form
8-K, 10-D or 10-K needs to be amended, in connection with any Additional
Form 10-D Disclosure (other than, in the case of Form 10-D, for the
purpose of restating any Monthly Statement), Additional Form 10-K
Disclosure or Form 8-K Disclosure Information, the Securities
Administrator will notify the Depositor and such other parties to the
transaction as are affected by such amendment, and the Depositor and the
Securities Administrator shall prepare and file, and such other parties
will cooperate in connection with such preparation and filing, 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 by an officer of the
Depositor. The Depositor acknowledges that the performance by the
Securities Administrator of its duties under this Section 8.12(f) 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 upon the Servicer and
the Depositor observing all applicable deadlines in the performance of
their duties under this Section 8.12 and Sections 3.22 and 3.23. The
Securities Administrator shall have no liability for any loss, expense,
damage, claim arising out of or with respect to any failure to properly
prepare and/or timely file 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 or any Subservicer or any
Servicing Function Participant engaged by any such party hereto (other
than the Securities Administrator or any Servicing Function Participant
utilized by the Securities Administrator) 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.
(g) 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 (other
than the initial Form 8-K) ("Form 8-K Disclosure Information") shall be reported
to the Depositor and the Securities Administrator by the parties set forth on
Exhibit R and directed and approved by the Depositor 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 R hereto, for so long as the Trust is
subject to the Exchange Act reporting requirements, no later than the end of
business (New York City time) on the 2nd Business Day after the occurrence of a
Reportable Event the parties, to the extent described on Exhibit R, shall be
required to provide to the Securities Administrator and the Depositor, to the
extent known by such applicable parties, any Form 8-K Disclosure Information,
the form and substance of the Form 8-K Disclosure Information described on
Exhibit R applicable to such party (and shall include with such Form 8-K
Disclosure Information, an Additional Disclosure Notification in the form
attached hereto as Exhibit W), and 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 on Form 8-K. The Securities Administrator has no duty
under this Agreement to monitor or enforce the performance by the parties listed
on Exhibit R (other than with respect to the Securities Administrator) of their
duties under this paragraph or proactively solicit or procure from such parties
any Form 8-K Disclosure Information; provided however, the Securities
Administrator shall cooperate with the Depositor in a reasonable manner in order
for the Depositor to comply with its reporting obligations under the Exchange
Act as set forth in Section 8.12(a). The Depositor will be responsible for any
reasonable fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Form 8-K Disclosure Information
on Form 8-K pursuant to this paragraph. The Securities Administrator shall
compile all such information provided to it in a Form 8-K prepared by it.
After preparing the Form 8-K, the Securities Administrator shall no
later than 12:00 noon (New York City time) on the 3rd Business Day after the
Reportable Event but in no case without having had notice for 24 hours forward
electronically a draft copy of the Form 8-K to the Depositor for review. No
later than 12:00 noon (New York City time) on the 4th Business Day after the
Reportable Event, an officer of the Depositor shall sign the 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(f)(ii). Promptly (but no later than one Business Day) after filing
with the Commission, the Securities Administrator will, make available on its
internet website a final executed copy of each Form 8-K prepared and filed by
the Securities Administrator. The Depositor and Servicer acknowledge that the
performance by the Securities Administrator of its duties under this Section
8.12(g) related to the timely preparation, arrangement for execution and filing
of Form 8-K is contingent upon the Servicer and the Depositor observing all
applicable deadlines in the performance of their duties under this Section
8.12(g). The Securities Administrator shall have no liability for any loss,
expense, damage, claim arising out of or with respect to any failure to properly
prepare and/or timely file such Form 8-K, where such failure results from the
Securities Administrator's inability or failure to obtain or receive, on a
timely basis, any information from any party hereto (other than the Securities
Administrator or any Subcontractor utilized by the Securities Administrator)
needed to prepare, arrange for execution or file such Form 8-K, not resulting
from its own negligence, bad faith or willful misconduct.
(h) The Securities Administrator shall have no 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 approve for filing any Forms 10-D, 10-K
and 8-K required to be prepared 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.
(i) Any Additional Form 10-D Disclosure, Additional Form 10-K
Disclosure or Form 8-K Disclosure Information required to be provided to the
Securities Administrator shall be sent (by email at
▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ and facsimile at 410-715-2380) in
▇▇▇▇▇-compatible format, or in such other format as otherwise agreed upon by the
Securities Administrator, the Depositor and the party providing such
information. With respect to any notice required to be delivered by the
Securities Administrator to the Depositor pursuant to Section 8.12 of this
Agreement, the Securities Administrator may deliver such notice, notwithstanding
any contrary provision in Section 11.05, via facsimile to ▇▇▇-▇▇▇-▇▇▇▇ or
telephonically by calling the General Counsel at 212-412-4000. The signing party
at the Depositor can be contacted at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, or such other address as
to which the Depositor has provided prior written notice to the Securities
Administrator.
(j) For so long as reports are required to be filed with the
Commission under the Exchange Act with respect to the Trust, the Custodian shall
not utilize any Subcontractor for the performance of its duties hereunder if
such Subcontractor would be "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB without the prior written consent of the
Depositor, in its sole discretion.
(k) The Custodian shall indemnify the Depositor, the Sponsor and any
director, officer, employee, agent and affiliate of the Depositor or the Sponsor
and hold them harmless against any and all claims, losses, damages, penalties,
fines, forfeitures, reasonably 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) the failure of the Custodian to deliver when required
any assessment of compliance required to be delivered by the Custodian or (ii)
any material misstatement or omission contained in any assessment of compliance
provided to be delivered by the Custodian. This indemnity shall survive the
termination of this Agreement or the earlier resignation or removal of the
Custodian.
Section 8.13 Tax Classification of the Excess Reserve Fund Account,
the Swap Account, the Interest Rate Swap Agreement and the Cap Agreements. For
federal income tax purposes, the Securities Administrator shall treat the Excess
Reserve Fund Account, the Swap Account, the Cap Agreements and the Interest Rate
Swap Agreement 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 Carry Forward Amounts from the Excess Reserve
Fund Account and, to the extent not paid from the Excess Reserve Fund Account
from the Swap Account (including, without duplication, Upper Tier Carry Forward
Amounts), as rights to receive payments under an interest rate cap contract
written by the Class X Certificateholders in favor of 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 and Class R
Certificates) will be comprised of two components - an Upper Tier REMIC Regular
Interest and an interest in an interest rate cap contract, and the Class X
Certificates will be comprised of five components - two Upper Tier REMIC Regular
Interests (the Class X Interest and the Class IO Interest), the Cap Agreements,
an interest in the Excess Reserve Fund Account, subject to obligation to pay
Basis Risk Carry Forward Amounts, and ownership of the Swap Account and the
Interest Rate Swap Agreement, subject to the obligation to pay Basis Risk Carry
Forward Amounts (including, without duplication, Upper Tier Carry Forward
Amounts). 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 each Upper Tier REMIC Regular Interest component
based on information received from the Depositor.
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.
ARTICLE IX
CONCERNING THE SECURITIES ADMINISTRATOR
Section 9.01 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 any error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Securities Administrator, unless it shall be conclusively
determined by a court of competent jurisdiction, such determination 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 Servicer or the Trustee.
The Securities Administrator shall be permitted to utilize one or
more Subcontractors for the performance of certain of its obligations under this
Agreement, provided that the Securities Administrator complies with Section
3.02(e) as if the Securities Administrator were a "Servicer" pursuant to that
Section. The Securities Administrator shall indemnify the Depositor, the Sponsor
and any director, officer, employee or agent of the Depositor or the 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 Party. This
indemnity shall survive the termination of this Agreement or the earlier
resignation or removal of the Securities Administrator.
Section 9.02 Certain Matters Affecting the Securities Administrator.
Except as otherwise provided in Section 9.01:
(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 to do so by the NIM Insurer or 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 Servicer to observe any
applicable law prohibiting disclosure of information regarding the
Mortgagors, provided that the Servicer shall have no liability for
disclosure required by this Agreement;
(v) the Securities Administrator may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian and the Securities
Administrator shall not be responsible for any misconduct or negligence on
the part of any such agent, attorney or custodian appointed by the
Securities Administrator with due care;
(vi) the Securities Administrator shall not be required to risk or
expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights
or powers hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not assured to it, and none of the provisions contained in
this Agreement shall in any event require the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the Servicer under this Agreement;
(vii) the Securities Administrator shall be under no obligation to
exercise any of the trusts, rights or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder or
in relation hereto at the request, order or direction of any of the
Certificateholders or the NIM Insurer, pursuant to the provisions of this
Agreement, unless such Certificateholders or the NIM Insurer, as
applicable, 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 Collection 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 or maintenance 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 9.03 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 Purchaser, as the case may be,
and the Securities Administrator assumes no responsibility for their
correctness. The Securities Administrator makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates or of any
Mortgage Loan or related document other than with respect to the Securities
Administrator's execution and authentication of the Certificates. The Securities
Administrator shall not be accountable for the use or application by the
Depositor or the Servicer of any funds paid to the Depositor or the Servicer in
respect of the Mortgage Loans or deposited in or withdrawn from the Collection
Account by the Depositor or the Servicer.
The Securities Administrator executes the 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
upon 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 Certificates is made and intended not as a personal undertaking or agreement
by the Securities Administrator but is made and intended for the purpose of
binding only the Trust Fund.
Section 9.04 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 9.05 Securities Administrator's Fees and Expenses. The
Securities Administrator shall be entitled to the Securities Administrator Fee
and the investment income earned on amounts in the Distribution Account held by
the Securities Administrator. 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, (b) the Mortgage Loans or (c) the
Certificates, other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of any of the
Securities Administrator's duties hereunder, (ii) incurred in connection with
the performance of any of the Securities Administrator's duties hereunder, other
than any loss, liability or expense incurred by reason of willful misfeasance,
bad faith or negligence in the performance of any of the Securities
Administrator's duties hereunder or (iii) incurred by reason of any action of
the Securities Administrator taken at the direction of the Certificateholders,
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 9.06 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 9.06 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 9.06, the Securities
Administrator shall resign immediately in the manner and with the effect
specified in Section 9.07 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, (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 ▇▇▇▇▇'▇ and (iv) must be
acceptable to the NIM Insurer. 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 9.07, 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 9.07. The Trustee shall
notify the Rating Agencies of any change of Securities Administrator.
Section 9.07 Resignation and Removal of Securities Administrator.
The Securities Administrator may at any time resign by giving written notice of
resignation to the Depositor, the NIM Insurer and the Trustee and each Rating
Agency not less than 60 days before the date specified in such notice when,
subject to Section 9.08, such resignation is to take effect, and acceptance by a
successor Securities Administrator in accordance with Section 9.08 meeting the
qualifications set forth in Section 9.06 and acceptable to the NIM Insurer. 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 9.06 hereof and shall fail
to resign after written request thereto by the Depositor or the NIM Insurer, 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 or the NIM Insurer may remove the Securities Administrator and appoint
a successor Securities Administrator (acceptable to the NIM Insurer) 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 Servicer and one copy to the successor Securities Administrator.
The Holders of Certificates entitled to at least 51% of the Voting
Rights (or the NIM Insurer upon failure of the Securities Administrator to
perform its obligations hereunder) may at any time remove the Securities
Administrator and appoint a successor Securities Administrator (acceptable to
the NIM Insurer) 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 9.07 shall become effective upon acceptance by the
successor Securities Administrator of appointment as provided in Section 9.08
hereof.
Section 9.08 Successor Securities Administrator. Any successor
Securities Administrator (which may be the Trustee) appointed as provided in
Section 9.07 hereof shall execute, acknowledge and deliver to the Depositor, the
NIM Insurer and to the 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 like effect as if originally
named as Securities Administrator herein. The Depositor, the Trustee, the
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 9.08 unless at the time of such acceptance such
successor Securities Administrator shall be eligible under the provisions of
Section 9.06 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 9.08, the Depositor shall mail notice of
the succession of such Securities Administrator hereunder to all Holders of
Certificates and the NIM Insurer. 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 9.09 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
9.06 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 9.10 Assignment or Delegation of Duties by the Securities
Administrator. Except as expressly provided herein, the Securities Administrator
shall not assign or transfer any of its rights, benefits or privileges hereunder
to any other Person, or delegate to or subcontract with, or authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Securities Administrator; provided, however, that the
Securities Administrator shall have the right with the prior written consent of
the Depositor and the NIM Insurer (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 Trustee and the NIM Insurer. 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 X
TERMINATION
Section 10.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Section 10.03, the obligations and responsibilities
of the Depositor, the 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 the Optional Termination Date, of all Mortgage Loans
(and REO Properties) at the price (the "Termination 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 the Majority Class X Certificateholder at its
expense and (y) the unpaid principal balance of each Mortgage Loan related to
any REO Property, in each case plus accrued and unpaid interest thereon at the
applicable Mortgage Rate, (iii) all ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, Servicing
Advances and indemnification payments payable to the Servicer, (iv) any Swap
Termination Payment, other than a Defaulted Swap Termination Payment, owed to
the Swap Provider pursuant to the Interest Rate Swap Agreement, and (v) any
unreimbursed indemnification payments payable to the Securities Administrator or
the Trustee under this Agreement and (b) the later of (i) the maturity or other
liquidation (or any Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and the disposition of all REO Property and (ii) the
distribution to Certificateholders of all amounts required to be distributed to
them pursuant to this Agreement; provided that in the case of clause (a) above,
if the Depositor or any of its Affiliates is a Class X Certificateholder
exercising this option, it may only do so with at least one other unaffiliated
person that holds at least a 10% Percentage Interest in the Class X
Certificates. 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 by the Majority Class X Certificateholder 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 10.02, 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, plus any remaining amounts owed to the NIM
Insurer or (ii) prior to such purchase, the Majority Class X Certificateholder
remits to the Securities Administrator an amount 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, plus any remaining amounts owed to the NIM
Insurer.
Section 10.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicer determines that there are no Outstanding Mortgage
Loans and no other funds or assets in the Trust Fund other than the funds in the
Collection Account, the Servicer shall direct the Securities Administrator
promptly to send a Notice of Final Distribution to each Certificateholder, the
NIM Insurer and the Swap Provider. If the Majority Class X Certificateholder
elects to exercise its option to purchase the Mortgage Loans pursuant to clause
(a) of Section 10.01, at least 20 days prior to the date the Notice of Final
Distribution is to be mailed to the affected Certificateholders, the Securities
Administrator, upon receipt of notice from the Majority Class X
Certificateholder indicating its intent to exercise such purchase option, shall
notify the Depositor, the NIM Insurer and the Securities Administrator of (a)
the date on which the Majority Class X Certificateholder intends to exercise
such purchase option and (b) the Termination Price.
A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Securities
Administrator by letter to Certificateholders mailed not earlier than the 10th
day and not later than the 15th day of the month of such final distribution. Any
such Notice of Final Distribution shall specify (a) the Distribution Date upon
which final distribution on the Certificates will be made upon presentation and
surrender of Certificates at the office therein designated, (b) the amount of
such final distribution, (c) the location of the office or agency at which such
presentation and surrender must be made and (d) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office therein
specified. The Securities Administrator will give such Notice of Final
Distribution to each Rating Agency at the time such Notice of Final Distribution
is given to Certificateholders.
In the event such Notice of Final Distribution is given, the
Servicer shall cause all funds in the Collection Account to be remitted to the
Securities Administrator for deposit in the Distribution Account on the Business
Day prior to the applicable Distribution Date in an amount equal to the final
distribution in respect of the Certificates. Upon such final deposit with
respect to the Trust Fund and the receipt by the Custodian of a Request for
Release therefor, the Custodian shall promptly release to the Majority Class X
Certificateholder or its designee the Custodial Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to the Certificateholders of each
Class (after reimbursement of all amounts due to the Servicer, the Depositor,
the Trustee, the Securities Administrator and the NIM Insurer 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 Notice of Final Distribution, the Securities Administrator
shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If within six months after such second notice all the
applicable Certificates shall not have been surrendered for cancellation, the
Securities Administrator may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets of the Trust Fund which remain subject hereto.
Section 10.03 Additional Termination Requirements. In the event the
Majority Class X Certificateholder exercises its purchase option with respect to
the Mortgage Loans as provided in Section 10.01, the Trust Fund shall be
terminated in accordance with the following additional requirements, unless the
Securities Administrator and the Trustee have been supplied with an Opinion of
Counsel, at the expense of the Majority Class X Certificateholder, to the effect
that the failure to comply with the requirements of this Section 10.03 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 Majority Class X Certificateholder, and, within 90 days of
such sale, shall distribute to the Certificateholders the proceeds of such sale
in complete liquidation of each of the Trust REMICs; and
(b) The Securities Administrator shall attach a statement to the
final federal income tax return for each of the Trust REMICs stating that
pursuant to Treasury Regulations Section 1.860F-1, the first day of the 90-day
liquidation period for each such REMIC was the date on which the Trustee sold
the assets of the Trust Fund to the Majority Class X Certificateholder.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Responsible Party, the Servicer, the Securities
Administrator, the NIM Insurer 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 or the Servicer, (iv) to add any other provisions with respect to
matters or questions arising hereunder or (v) to modify, alter, amend, add to or
rescind any of the terms or provisions contained in this Agreement; provided,
that any action pursuant to clause (iv) or (v) above shall not, as evidenced by
an Opinion of Counsel (which Opinion of Counsel shall not be an expense of the
Trustee or the Trust Fund) provided to Securities Administrator, the Trustee and
the NIM Insurer, adversely affect in any material respect the interests of any
Certificateholder; provided, further, that any such action pursuant to clause
(iv) or (v) above shall not be deemed to adversely affect in any material
respect the interests of the Certificateholders if the Person requesting the
amendment obtains a letter from each Rating Agency stating that the amendment
would not result in the downgrading or withdrawal of the respective ratings then
assigned to the Certificates; it being understood and agreed that any such
letter in and of itself will not represent a determination as to the materiality
of any such amendment and will represent a determination only as to the credit
issues affecting any such rating. The Trustee, the Depositor, the Responsible
Party, the NIM Insurer and the Securities Administrator also may at any time and
from time to time amend this Agreement, but without the consent of the
Certificateholders to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or helpful to (i) maintain the qualification of
each Trust REMIC under the Code, (ii) avoid or minimize the risk of the
imposition of any tax on any Trust REMIC pursuant to the Code that would be a
claim at any time prior to the final redemption of the Certificates or (iii)
comply with any other requirements of the Code; provided, that the Securities
Administrator, the Trustee and the NIM Insurer have 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 Securities Administrator, the
Trustee or the Trust Fund, to the effect that such action is necessary or
helpful to, as applicable, (i) maintain such qualification, (ii) avoid or
minimize the risk of the imposition of such a tax or (iii) comply with any such
requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Responsible Party, the Securities Administrator,
the NIM Insurer and the Trustee, with the consent of the Pool Insurer to the
extent the amendment would materially and adversely affect the Pool Insurer, but
with the consent of the Holders of Certificates evidencing Percentage Interests
aggregating not less than 66(2)/3% of each Class of Certificates affected
thereby for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments required to be distributed on any Certificate without the consent
of the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner other than
as described in clause (i), without the consent of the Holders of Certificates
of such Class evidencing, as to such Class, Percentage Interests aggregating not
less than 66(2)/3% or (iii) reduce the aforesaid percentages of Certificates the
Holders of which are required to consent to any such amendment, without the
consent of the Holders of all such Certificates then Outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee, the NIM Insurer or the Securities Administrator 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 Securities
Administrator, the NIM Insurer, 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 REMIC to fail to qualify as a REMIC
or the grantor trust to fail to qualify as a grantor trust at any time that any
Certificates are Outstanding and (ii) the party seeking such amendment shall
have provided written notice to the Rating Agencies (with a copy of such notice
to the Securities Administrator, the NIM Insurer and the Trustee) of such
amendment, stating the provisions of the Agreement to be amended.
Notwithstanding the foregoing provisions of this Section 11.01, with
respect to any amendment that significantly modifies the permitted activities of
the Securities Administrator, the Trustee or the Servicer, any Certificate
beneficially owned by the Depositor shall be deemed not to be Outstanding (and
shall not be considered when determining the percentage of Certificateholders
consenting or when calculating the total number of Certificates entitled to
consent) for purposes of determining if the requisite consents of
Certificateholders under this Section 11.01 have been obtained.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Securities Administrator shall
furnish written notification of the substance or a copy of such amendment to
each Certificateholder, the NIM Insurer and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 11.01 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 Securities Administrator may prescribe.
Nothing in this Agreement shall require the Securities Administrator
or the Trustee to enter into an amendment without receiving an Opinion of
Counsel (which Opinion shall not be an expense of the Securities Administrator,
the Trustee or the Trust Fund), satisfactory to the Securities Administrator,
the Trustee and the NIM Insurer that (i) such amendment is permitted and is not
prohibited by this Agreement and that all requirements for amending this
Agreement have been complied with and (ii) either (A) the amendment does not
adversely affect in any material respect the interests of any Certificateholder
or (B) the conclusion set forth in the immediately preceding clause (A) is not
required to be reached pursuant to this Section 11.01.
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 11.02 Recordation of Agreement; Counterparts. This Agreement
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the direction and expense of the Depositor, but only upon receipt of
an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 11.03 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 11.04 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 11.05 Notices. (a) The Securities Administrator shall use
its best efforts to promptly provide notice to each Rating Agency and the NIM
Insurer with respect to each of the following of which it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Servicer, the Securities
Administrator or the Trustee and the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
5. The final payment to Certificateholders.
(b) In addition, the Securities Administrator shall promptly make
available on its internet website to each Rating Agency and the NIM Insurer
copies of the following:
1. Each report to Certificateholders described in Section 4.03; and
2. Any notice of a purchase of a Mortgage Loan pursuant to Section
2.02, 2.03 or 3.11.
(c) All directions, demands, consents and notices hereunder shall be
in writing and shall be deemed to have been duly given when delivered to: (a) in
the case of the Depositor, Securitized Asset Backed Receivables LLC, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, Facsimile: (212)
412-7519, or such other address as the Depositor may hereafter furnish to the
Servicer, the Securities Administrator, the NIM Insurer and the Trustee; (b) in
the case of the Servicer, ▇▇▇▇▇ Fargo Bank, National Association, 1 Home Campus,
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (or, for purposes of Section 7.01, by facsimile at
▇▇▇-▇▇▇-▇▇▇▇ and by telephone at ▇▇▇-▇▇▇-▇▇▇▇), or such other address as may be
hereafter furnished to the Depositor, the Securities Administrator, the NIM
Insurer and the Trustee by the Servicer in writing; (c) in the case of the
Securities Administrator to ▇▇▇▇▇ Fargo Bank, National Association, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: Client Manager - SABR
2006-NC1, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Client Manager - SABR 2006-NC1, and a separate copy
to ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Client Manager - SABR 2006-NC1, or in each case such other address as
the Securities Administrator may hereafter furnish to the Depositor, the
Servicer, the NIM Insurer and Trustee in writing; (d) in the case of the
Trustee, to the Corporate Trust Office of the Trustee; (e) in the case of the
Responsible Party, NC Capital Corporation, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or in each case such other address as the Responsible Party
may hereafter furnish to the Depositor, the Servicer, the NIM Insurer and
Trustee in writing; (f) in the case of the Loan Performance Advisor, OfficeTiger
Global Real Estate Services Inc., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, or in each case such other address as the Responsible Party may
hereafter furnish to the Depositor, the Servicer, the NIM Insurer and Trustee in
writing; (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; and
(h) in the case of the NIM Insurer, Radian Guaranty Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
Section 11.06 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 11.07 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 6.02, this Agreement may not be
assigned by the Servicer without the prior written consent of the Trustee, the
Securities Administrator, Depositor and the NIM Insurer; provided, however, that
the Servicer may pledge its interest in any reimbursements for P&I Advances or
Servicing Advances hereunder.
Section 11.08 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 11.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.09 Inspection and Audit Rights. The Servicer agrees that,
on reasonable prior notice, it will permit any representative of the Depositor,
the Securities Administrator, the Trustee or the NIM Insurer during the
Servicer's normal business hours, to examine all the books of account, records,
reports and other papers of the Servicer 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 Securities
Administrator, the Trustee or the NIM Insurer and to discuss its affairs,
finances and accounts relating to the Mortgage Loans with its officers,
employees and independent public accountants (and by this provision the Servicer
hereby authorizes said accountants to discuss with such representative such
affairs, finances and accounts), all at such reasonable times and as often as
may be reasonably requested. Any out-of-pocket expense of the Servicer incident
to the exercise by the Depositor, the Securities Administrator, the Trustee or
the NIM Insurer of any right under this Section 11.09 shall be borne by the
Servicer.
Section 11.10 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 11.11 Assignment; Sales; Advance Facilities. Notwithstanding
anything to the contrary contained herein, except as provided in Section 6.02,
this Agreement may not be assigned by the Servicer without the prior written
consent of the Trustee, the NIM Insurer and the Depositor; provided, however,
the Servicer is hereby authorized to enter into an Advance Facility under which
(1) the Servicer sells, assigns or pledges to an Advancing Person the Servicer's
rights under this Agreement to be reimbursed for any P&I Advances or Servicing
Advances ("Advance Reimbursement Amounts") and/or (2) an Advancing Person agrees
to fund some or all P&I Advances or Servicing Advances required to be made by
the Servicer pursuant to this Agreement. No consent of the Trustee,
Certificateholders or any other party (other than the NIM Insurer) is required
before the Servicer may enter into an Advance Facility. Notwithstanding the
existence of any Advance Facility under which an Advancing Person agrees to fund
P&I Advances and/or Servicing Advances on the Servicer's behalf, the Servicer
shall remain obligated pursuant to this Agreement to make P&I Advances and
Servicing Advances pursuant to and as required by this Agreement, and shall not
be relieved of such obligations by virtue of such Advance Facility.
Advance Reimbursement Amounts shall consist solely of amounts in
respect of P&I Advances and/or Servicing Advances made with respect to the
Mortgage Loans for which the Servicer would be permitted to reimburse itself in
accordance with this Agreement, assuming the Servicer had made the related P&I
Advance(s) and/or Servicing Advance(s). The Trustee shall not have any duty or
liability with respect to the calculation of any Advance Reimbursement Amount.
The Trustee shall also not have any responsibility to track or monitor the
administration of the Advance Facility or the payment of Advance Reimbursement
Amounts to the related Advancing Person.
The Servicer shall maintain and provide to any successor Servicer
and (upon request) the Securities Administrator 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.
Advance Reimbursement Amounts allocated to reimburse P&I Advances or
Servicing Advances made with respect to any particular Mortgage Loan shall be
allocated to the reimbursement of the ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances or Servicing
Advances (as the case may be) made with respect to such Mortgage Loan on a
"first-in, first out" ("FIFO") basis, such that the Advance Reimbursement
Amounts shall be applied to reimburse the P&I Advance or Servicing Advance (as
the case may be) for such Mortgage Loan that was disbursed earliest in time
first, and to reimburse the P&I Advance or Servicing Advance (as the case may
be) for such Mortgage Loan that was disbursed latest in time last. Liquidation
Proceeds and Subsequent Recoveries with respect to a Mortgage Loan shall be
applied to reimburse Servicing Advances outstanding with respect to such
Mortgage Loan before being applied to reimburse P&I Advances outstanding with
respect to such Mortgage Loan. The Servicer shall provide to the related
Advancing Person, the Advance Facility trustee (or to any designee of either)
loan-by-loan information with respect to each Advance Reimbursement Amount
remitted to such Advancing Person, Advance Facility trustee or designee, to
enable the Advancing Person or Advance Facility trustee to make the FIFO
allocation of each such Advance Reimbursement Amount with respect to each
Mortgage Loan. The Servicer shall remain entitled to be reimbursed by the
Advancing Person or Advance Facility trustee for all P&I Advances and Servicing
Advances funded by the Servicer to the extent the related rights to be
reimbursed therefor have not been sold, assigned or pledged to an Advancing
Person. The Servicer shall indemnify the Trustee, the Trust Fund and the NIM
Insurer for any loss, liability or damage resulting from any claim by the
related Advancing Person.
Any amendment to this Section 11.11 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 11.11, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee and the Servicer without the consent of any
Certificateholder but with the consent of the NIM Insurer, 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. All
reasonable costs and expenses (including attorney's fees) of each party hereto
of any such amendment shall be borne by the Servicer.
Prior to entering into an Advance Facility, the Servicer shall
notify the Advancing Person in writing that (1) the Trustee and the Trust are
not obligated or liable to repay any Advances financed by the Advancing Person
and (2) the Trustee shall not have any responsibility to track or monitor the
administration of the Advance Facility between the Servicer and the Advancing
Person.
Section 11.12 Rule of Construction. Article and section headings are
for the convenience of the reader and shall not be considered in interpreting
this Pooling and Servicing Agreement or the intent of the parties hereto.
Section 11.13 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 11.14 Rights of the Swap Provider. The Swap Provider 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 11.15 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, to
the extent practicable from a timing and information systems perspective and to
the extent the Depositor will pay any increased costs of the Trustee and the
Securities Administrator caused by such request, agree to comply with all
reasonable requests made by the Depositor in good faith for delivery of
information under these provisions on the basis of evolving interpretations of
Regulation AB. In connection with the Trust, the Servicer, the Securities
Administrator and the Trustee shall, to the extent practicable from a timing and
information systems perspective and to the extent the Depositor will pay any
increased costs of the Servicer, the Trustee and the Securities Administrator
caused by such request, cooperate fully with the Depositor to deliver to the
Depositor (including its assignees or designees), any and all statements,
reports, certifications, records and any other information available to such
party and reasonably necessary in the good faith determination of the Depositor
to permit the Depositor to comply with the provisions of Regulation AB, together
with such disclosures relating to the Servicer, the Securities Administrator and
the Trustee, as applicable, reasonably believed by the Depositor to be necessary
in order to effect such compliance.
Section 11.16 Third Party Rights. Each of the NIM Insurer and the
Pool Insurer 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
the provisions of this Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Depositor, the Securities Administrator, the
Custodian, the Trustee, the Loan Performance Advisor, the Responsible Party and
the Servicer have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
SECURITIZED ASSET BACKED RECEIVABLES
LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
U.S. BANK NATIONAL ASSOCIATION, solely as
Trustee and not in its individual
capacity
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
NC CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President
OFFICETIGER GLOBAL REAL ESTATE
SERVICES INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, as Servicer
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, as Securities
Administrator
By: /s/ ▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, as Custodian
By: /s/ ▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Vice President
SCHEDULE I
Mortgage Loan Schedule
(Delivered to the Trustee and not attached to the
Pooling and Servicing Agreement)
SCHEDULE II
Mortgage Pass-Through Certificates,
Series 2006-NC1
Representations and Warranties of ▇▇▇▇▇ Fargo
▇▇▇▇▇ Fargo hereby makes the representations and warranties set
forth in this Schedule II to the Depositor, the NIM Insurer and the Trustee, as
of the Closing Date, or if so specified herein, as of the Cut-off Date.
(1) ▇▇▇▇▇ Fargo is duly organized and is validly existing and in
good standing under the laws of its jurisdiction of incorporation and is
duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by ▇▇▇▇▇ Fargo in any state
in which a Mortgaged Property is located or is otherwise not required
under applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in
accordance with the terms thereof.
(2) ▇▇▇▇▇ Fargo has the full power and authority to execute, deliver
and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary
action on the part of ▇▇▇▇▇ Fargo the execution, delivery and performance
of this Agreement; and this Agreement, assuming the due authorization,
execution and delivery thereof by the other parties thereto, constitutes a
legal, valid and binding obligation of ▇▇▇▇▇ Fargo, enforceable against
▇▇▇▇▇ Fargo in accordance with its terms, except that (i) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
(3) The execution and delivery of this Agreement by ▇▇▇▇▇ Fargo, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof are
in the ordinary course of business of ▇▇▇▇▇ Fargo and will not (i) result
in a material breach of any term or provision of the articles of
incorporation or by laws of ▇▇▇▇▇ Fargo, (ii) materially conflict with,
result in a material breach, violation or acceleration of, or result in a
material default under, the terms of any other material agreement or
instrument to which ▇▇▇▇▇ Fargo is a party or by which it may be bound, or
(iii) constitute a material violation of any statute, order or regulation
applicable to ▇▇▇▇▇ Fargo of any court, regulatory body, administrative
agency or governmental body having jurisdiction over ▇▇▇▇▇ Fargo; and
▇▇▇▇▇ Fargo is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any statute,
order or regulation of any court, regulatory body, administrative agency
or governmental body having jurisdiction over it which breach or violation
may materially impair ▇▇▇▇▇ Fargo's ability to perform or meet any of its
obligations under this Agreement.
(4) No litigation is pending or threatened against ▇▇▇▇▇ Fargo that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of ▇▇▇▇▇ Fargo to perform
any of its obligations under this Agreement in accordance with the terms
thereof. For purposes of the foregoing, ▇▇▇▇▇ Fargo does not regard any
actions, proceedings or investigations "threatened" unless the potential
litigants or governmental authority has manifested to a member of the
▇▇▇▇▇ Fargo & Company Law Department having responsibility for litigation
matters involving the corporate trust activities of ▇▇▇▇▇ Fargo its
present intention to initiate such proceedings.
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by ▇▇▇▇▇ Fargo of, or compliance by ▇▇▇▇▇ Fargo with, this
Agreement or the consummation of the transactions contemplated thereby, or
if any such consent, approval, authorization or order is required, ▇▇▇▇▇
Fargo has obtained the same.
SCHEDULE III
Mortgage Pass-Through Certificates,
Series 2006-NC1
Representations and Warranties of the Responsible Party as to the Mortgage Loans
The Responsible Party hereby makes the representations and
warranties set forth in this Schedule III as to the Mortgage Loans only to the
Depositor, the Securities Administrator, the NIM Insurer and the Trustee, as of
May 3, 2006 (the "Securitization Closing Date") (unless otherwise expressly
indicated). Capitalized terms used but not otherwise defined in this Schedule
III shall have the meanings ascribed thereto in the Purchase Agreement.
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related 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. No payment required under the Mortgage Loan is 30 days or more
delinquent nor has any payment under the Mortgage Loan been 30 days or
more delinquent at any time since the origination of the Mortgage Loan.
The first Monthly Payment shall be 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 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. NC Capital has not advanced funds, or induced,
solicited or knowingly received any advance of funds by a party other than
the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan
proceeds, whichever is earlier, to the day which precedes by one month the
related Due Date of the first installment of principal and interest;
(d) 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 Purchaser,
and which has been delivered to the Custodian or to such other Person as
the Purchaser shall designate in writing, and the terms of which are
reflected in the related Mortgage Loan Schedule. The substance of any such
waiver, alteration or modification has been approved by the issuer of any
related PMI Policy and the title insurer, if any, to the extent required
by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in
part, except in connection with an assumption agreement, approved by the
issuer of any related PMI Policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part of the
Mortgage Loan File delivered to the Custodian or to such other Person as
the Purchaser shall designate in writing and the terms of which are
reflected in the related Mortgage Loan Schedule;
(e) 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;
(f) 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 provided for in the ▇▇▇▇▇▇ ▇▇▇
Guides or by ▇▇▇▇▇▇▇ Mac, as well as all additional requirements set forth
in Section 2.10 of the Interim Servicing Agreement. If required by the
National Flood Insurance Act of 1968, as amended, each Mortgage Loan is
covered by a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration as in effect
which policy conforms to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac requirements, as well
as all additional requirements set forth in Section 2.10 of the Interim
Servicing Agreement. All individual insurance policies contain a standard
mortgagee clause naming NC Capital and its successors and assigns as
mortgagee, and all premiums thereon have been paid. The Mortgage obligates
the Mortgagor thereunder to maintain the hazard insurance policy at the
Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such
insurance at such Mortgagor's cost and expense, and to seek reimbursement
therefor from the Mortgagor. Where required by state law or regulation,
the Mortgagor has been given an opportunity to choose the carrier of the
required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit
development. The hazard insurance policy is the valid and binding
obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Purchaser upon the
consummation of the transactions contemplated by this Agreement. NC
Capital has not engaged in, and has no knowledge of the Mortgagor's having
engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value
of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have
been received, retained or realized by NC Capital;
(g) 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 and
abusive lending laws applicable to the Mortgage Loan, including, without
limitation, any provisions relating to Prepayment Penalties, have been
complied with, and the consummation of the transactions contemplated
hereby will not involve the violation of any such laws or regulations. NC
Capital shall maintain in its possession, available for the Purchaser's
inspection, and shall deliver to the Purchaser upon demand, evidence of
compliance with all such requirements. This representation and warranty is
a Deemed Material and Adverse Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, 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.
NC Capital 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 NC Capital waived any default resulting
from any action or inaction by the Mortgagor;
(i) Type of Mortgaged Property. With respect to a Mortgage Loan that
is not a Co-op Loan, the Mortgaged Property is a fee simple estate or a
leasehold estate located in a jurisdiction in which the use of a leasehold
estate for residential properties is a widely accepted practice that
consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an
individual residential condominium unit in a condominium project, or a
manufactured home, or an individual unit in a planned unit development, or
an individual unit in a residential cooperative housing corporation;
provided, however, that any condominium unit, planned unit development or
residential cooperative housing corporation shall conform with the
Underwriting Guidelines and any manufactured dwelling shall conform with
the applicable ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac requirements regarding such
dwellings. No portion of the Mortgaged Property (or underlying Mortgaged
Property, in the case of a Co-op Loan) is used for commercial purposes,
and since the date of origination, no portion of the Mortgaged Property
has been used for commercial purposes; provided, that Mortgaged Properties
which contain a home office shall not be considered as being used for
commercial purposes as long as the Mortgaged Property has not been altered
for commercial purposes and is not storing any chemicals or raw materials
other than those commonly used for homeowner repair, maintenance and/or
household purposes. In the case of a manufactured home, (i) the related
manufactured dwelling and the related land are subject to a Mortgage
properly filed in the appropriate public recording office and naming
Seller as mortgagee, (ii) the applicable laws of the jurisdiction in which
the related Mortgaged Property is located will deem the manufactured
dwelling located on such Mortgaged Property to be a part of the real
property on which such dwelling is located, (iii) the related manufactured
dwelling was the related Mortgagor's principal residence as of the
origination date of such manufactured home Mortgage Loan and (iv) such
manufactured home Mortgage Loan is (x) a qualified mortgage under Section
860G(a)(3) of the Internal Revenue Code of 1986, as amended and (y)
secured by manufactured housing treated as a single family residence under
Section 25(e)(10) of the Code. None of the Mortgaged Properties are log
homes, mobile homes, geodesic domes or other unique property types;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan)
or second lien (with respect to a Second Lien 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:
(i) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(ii) the lien of current real property taxes and assessments
not yet due and payable;
(iii) 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
(iv) 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 Loan) or second lien (with respect to a Second Lien Loan) and
first priority (with respect to a First Lien Loan) or second priority (with
respect to a Second Lien Loan) security interest on the property described
therein and NC Capital has full right to sell and assign the same to the
Purchaser.
(k) Valid First or Second Priority Security Interest. With respect
to any Co-op Loan, the related Mortgage is a valid, subsisting,
enforceable and perfected, first priority security interest (with respect
to a First Lien Loan) or second priority security interest (with respect
to a Second Lien Loan) on the related cooperative shares securing the
Mortgage Note, subject only to (a) liens of the related residential
cooperative housing corporation for unpaid assessments representing the
Mortgagor's pro rata share of the related residential cooperative housing
corporation's payments for its blanket mortgage, current and future real
property taxes, insurance premiums, maintenance fees and other assessments
to which like collateral is commonly subject and (b) other matters to
which like collateral is commonly subject which do not materially
interfere with the benefits of the security interest intended to be
provided by the related Security Agreement;
(l) No Negative Amortization. With respect to any Second Lien Loan,
the related First Lien Loan does not permit negative amortization. This
representation and warranty is a Deemed Material and Adverse
Representation;
(m) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which
the Mortgaged Property is located, the original lender has filed for
record a request for notice of any action by the related senior
lienholder, and NC Capital has notified the senior lienholder in writing
of the existence of the Second Lien Loan and requested notification of any
action to be taken against the Mortgagor by the senior lienholder. Either
(a) no consent for the Second Lien Loan is required by the holder of the
related first lien or (b) such consent has been obtained and is contained
in the related Mortgage File. This representation and warranty is a Deemed
Material and Adverse Representation;
(n) 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 Penalties). 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 NC Capital in connection with the origination of the Mortgage
Loan or in the application of any insurance in relation to such Mortgage
Loan. 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 or in the application for any insurance in relation
to such Mortgage Loan. NC Capital has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set
forth herein;
(o) 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 Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage Note
or Mortgage;
(p) Ownership. NC Capital is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and
upon the sale of the Mortgage Loans to the Purchaser, NC Capital will
retain the Mortgage Files or any part thereof with respect thereto not
delivered to the Custodian, the Purchaser or the Purchaser's designee, in
trust only for the purpose of servicing and supervising the servicing of
each Mortgage Loan. The Mortgage Loan is not assigned or pledged, and NC
Capital has good, indefeasible and marketable title thereto, and has full
right to transfer and sell the Mortgage Loan to the Purchaser 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 pursuant to this Agreement
and following the sale of each Mortgage Loan, the Purchaser will own such
Mortgage Loan free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest. NC Capital
intends to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the related Closing Date, NC Capital will have no
right to modify or alter the terms of the sale of the Mortgage Loan and NC
Capital will have no obligation or right to repurchase the Mortgage Loan
or substitute another Mortgage Loan, except as provided in this Agreement;
(q) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are
(or, during the period in which they held and disposed of such interest,
were) (1) in compliance with any and all applicable licensing requirements
of the laws of the state wherein the Mortgaged Property is located, and
(2) either (i) organized under the laws of such state, or (ii) qualified
to do business in such state, or (iii) a federal savings and loan
association, a savings bank or a national bank having a principal office
in such state, or (3) not doing business in such state;
(r) LTV, PMI Policy. No Mortgage Loan has an LTV greater than 100%.
Any Mortgage Loan that had at the time of origination an LTV in excess of
80% is insured as to payment defaults by a PMI Policy. Any PMI Policy in
effect covers the related Mortgage Loan for the life of such Mortgage
Loan. All provisions of such PMI Policy have been and are being complied
with, such policy is in full force and effect, and all premiums due
thereunder have been paid. No action, inaction, or event has occurred and
no state of facts exists that has, or will result in the exclusion from,
denial of, or defense to coverage. Any Mortgage Loan subject to a PMI
Policy obligates the Mortgagor thereunder to maintain the PMI Policy and
to pay all premiums and charges in connection therewith. The Mortgage
Interest Rate for the Mortgage Loan as set forth on the related Mortgage
Loan Schedule is net of any such insurance premium;
(s) 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 title insurer acceptable to ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac and qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring NC Capital, its successors and
assigns, as to the first (with respect to a First Lien Loan) or second
(with respect to a Second Lien 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 (i), (ii) and (iii) of paragraph (j)
of this Section 9.02, 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 Interest Rate and Monthly Payment. Where
required by state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or
upon the Mortgaged Property or any interest therein. NC Capital, its
successor and assigns, are the sole insureds of such lender's title
insurance policy, and such lender's title insurance policy is valid and
remains in full force and effect and will be in force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims
have been made under such lender's title insurance policy, and no prior
holder of the related Mortgage, including NC Capital, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy, including without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind
has been or will be received, retained or realized by any attorney, firm
or other person or entity, and no such unlawful items have been received,
retained or realized by NC Capital;
(t) No Defaults. Other than payments due but not yet 30 days or more
delinquent, 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 NC Capital nor any
of its Affiliates nor any of their respective predecessors, have waived
any default, breach, violation or event which would permit acceleration;
(u) 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;
(v) 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;
(w) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act, a savings
and loan association, a savings bank, a commercial bank, credit union,
insurance company or other similar institution which is supervised and
examined by a federal or state authority. Principal payments on the
Mortgage Loan commenced no more than seventy days after funds were
disbursed in connection with the Mortgage Loan. The Mortgage Interest Rate
as well as, in the case of an Adjustable Rate Mortgage Loan, the Lifetime
Rate Cap and the Periodic Cap are as set forth on the related Mortgage
Loan Schedule. The Mortgage Note is payable in equal monthly installments
of principal and interest, which installments of interest, with respect to
Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment
Date, with interest calculated and payable in arrears, sufficient to
amortize the Mortgage Loan fully by the stated maturity date, over an
original term of not more than thirty years from commencement of
amortization. Unless otherwise specified on the related Mortgage Loan
Schedule, the Mortgage Loan is payable on the first day of each month. The
Mortgage Loan does not require a balloon payment on its stated maturity
date;
(x) 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;
(y) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting
Guidelines (a copy of which is attached to each related Assignment and
Conveyance Agreement). The Mortgage Note and Mortgage are on forms
acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae and neither NC Capital nor the
Originator has made any representations to a Mortgagor that are
inconsistent with the mortgage instruments used;
(z) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with
respect to the use and occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting certificates, have been
made or obtained from the appropriate authorities. Unless otherwise
specified on the related Mortgage Loan Schedule, the Mortgagor represented
at the time of origination of the Mortgage Loan that the Mortgagor would
occupy the Mortgaged Property as the Mortgagor's primary residence;
(aa) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding
Mortgage and the security interest of any applicable security agreement or
chattel mortgage referred to in clause (j) above;
(bb) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to
serve as such, has been properly designated and currently so serves and is
named in the Mortgage, and no fees or expenses are or will become payable
by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor;
(cc) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be
expected to cause private institutional investors who invest in mortgage
loans similar to the Mortgage Loan to regard the Mortgage Loan as an
unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan, or cause
the Mortgage Loans to prepay during any period materially faster or slower
than the mortgage loans originated by NC Capital generally;
(dd) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to
be delivered under the Custodial Agreement for each Mortgage Loan have
been delivered to the Custodian. NC Capital is in possession of a
complete, true and accurate Mortgage File in compliance with Exhibit A
hereto, except for such documents the originals of which have been
delivered to the Custodian;
(ee) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a
de minimis planned unit development) such condominium or planned unit
development project such Mortgage Loan was originated in accordance with,
and the Mortgaged Property meets the guidelines set forth in the
Originator's Underwriting Guidelines;
(ff) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with respect to any Mortgage that has been recorded in the name of MERS or
its designee) with respect to each Mortgage Loan is in recordable form and
is acceptable for recording under the laws of the jurisdiction in which
the Mortgaged Property is located;
(gg) 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 NC
Capital's knowledge, such provision is enforceable;
(hh) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first
Interest Rate Adjustment Date, a related Mortgage Loan may only be assumed
if the party assuming such Mortgage Loan meets certain credit requirements
stated in the Mortgage Loan Documents;
(ii) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any
separate account established by NC Capital, the Mortgagor, or anyone on
behalf of the Mortgagor, or paid by any source other than the Mortgagor
nor does it contain any other similar provisions which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage
loan and the Mortgage Loan does not have a shared appreciation or other
contingent interest feature;
(jj) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the applicable Cut-off Date have been consolidated
with the outstanding principal amount secured by the Mortgage, and the
secured principal amount, as consolidated, bears a single interest rate
and single repayment term. The lien of the Mortgage securing the
consolidated principal amount is expressly insured as having first (with
respect to a First Lien Loan) or second (with respect to a Second Lien
Loan) lien priority by a title insurance policy, an endorsement to the
policy insuring the mortgagee's consolidated interest or by other title
evidence acceptable to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac. The consolidated
principal amount does not exceed the original principal amount of the
Mortgage Loan;
(kk) 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;
(ll) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by
NC Capital and the Originator with respect to the Mortgage Loan have been
in all respects in compliance with Accepted Servicing Practices,
applicable laws and regulations, and have been in all respects legal and
proper. With respect to escrow deposits and Escrow Payments, all such
payments are in the possession of, or under the control of, NC Capital or
the Originator 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.
An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item that remains
unpaid and has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due NC Capital
have been capitalized under the Mortgage or the Mortgage Note. All
Mortgage Interest Rate adjustments have been made in strict compliance
with state and federal law and the terms of the related Mortgage and
Mortgage Note on the related Interest Rate Adjustment Date. If, pursuant
to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with
respect to each Mortgage Note which required a new index to be selected,
and such selection did not conflict with the terms of the related Mortgage
Note. NC Capital or the Originator executed and delivered any and all
notices required under applicable law and the terms of the related
Mortgage Note and Mortgage regarding the Mortgage Interest Rate and the
Monthly Payment adjustments. Any interest required to be paid pursuant to
state, federal and local law has been properly paid and credited;
(mm) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the
Mortgage Interest Rate from an adjustable rate to a fixed rate;
(nn) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed
on or prior to the Closing Date that has resulted or will result in the
exclusion from, denial of, or defense to coverage under any applicable
hazard insurance policy, PMI Policy or bankruptcy bond (including, without
limitation, any exclusions, denials or defenses which would limit or
reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured), irrespective of the cause
of such failure of coverage. In connection with the placement of any such
insurance, no commission, fee, or other compensation has been or will be
received by NC Capital or by any officer, director, or employee of NC
Capital or any designee of NC Capital or any corporation in which NC
Capital or any officer, director, or employee had a financial interest at
the time of placement of such insurance;
(oo) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which
compliance with any environmental law, rule or regulation is an issue;
there is no violation of any environmental law, rule or regulation with
respect to the Mortgage Property; and nothing further remains to be done
to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(pp) Servicemembers Civil Relief Act. The Mortgagor has not notified
NC Capital, and NC Capital has no knowledge of any relief requested or
allowed to the Mortgagor under the Relief Act, or other similar state
statute;
(qq) 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 NC Capital or
the Originator, 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;
(rr) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials
required by, and the Originator has complied with, all applicable law with
respect to the making of the Mortgage Loans. NC Capital shall cause the
Originator to maintain such statement in the Mortgage File;
(ss) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(tt) Escrow Analysis. If applicable, with respect to each Mortgage,
NC Capital or the Originator has within the last twelve months (unless
such Mortgage was originated within such twelve month period) analyzed the
required Escrow Payments for each Mortgage and adjusted the amount of such
payments so that, assuming all required payments are timely made, any
deficiency will be eliminated on or before the first anniversary of such
analysis, or any overage will be refunded to the Mortgagor, in accordance
with RESPA and any other applicable law;
(uu) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(vv) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full force and
effect, and there is no default, lien, breach, violation or event which
would permit acceleration existing under such first lien Mortgage or
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
thereunder. This representation and warranty is a Deemed Material and
Adverse Representation;
(ww) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides
for giving notice of default or breach to the mortgagee under the Mortgage
Loan and allows such mortgagee to cure any default under the related first
lien Mortgage. This representation and warranty is a Deemed Material and
Adverse Representation;
(xx) No Failure to Cure Default. NC Capital has not received a
written notice of default of any senior mortgage loan related to the
Mortgaged Property which has not been cured;
(yy) Principal Residence. With respect to each Second Lien Loan, the
related Mortgaged Property was the Mortgagor's principal residence at the
time of the origination of such Second Lien Loan. This representation and
warranty is a Deemed Material and Adverse Representation;
(zz) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit
information furnished by NC Capital to the Purchaser, that Seller has full
right and authority and is not precluded by law or contract from
furnishing such information to the Purchaser and the Purchaser is not
precluded from furnishing the same to any subsequent or prospective
purchaser of such Mortgage. NC Capital shall hold the Purchaser harmless
from any and all damages, losses, costs and expenses (including attorney's
fees) arising from disclosure of credit information in connection with the
Purchaser's secondary marketing operations and the purchase and sale of
mortgages or Servicing Rights thereto;
(aaa) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, (1) the ground lease is assignable or transferable; (2) the ground
lease will not terminate earlier than five years after the maturity date
of the Mortgage Loan; (3) the ground lease does not provide for
termination of the lease in the event of lessee's default without the
mortgagee being entitled to receive written notice of, and a reasonable
opportunity to cure the default; (4) the ground lease permits the
mortgaging of the related Mortgaged Property; (5) the ground lease
protects the mortgagee's interests in the event of a property
condemnation; (6) all ground lease rents, other payments, or assessments
that have become due have been paid; and (7) the use of leasehold estates
for residential properties is a widely accepted practice in the
jurisdiction in which the Mortgaged Property is located;
(bbb) Prepayment Penalty. Each Mortgage Loan that is subject to a
Prepayment Penalty as provided in the related Mortgage Note is identified
on the related Mortgage Loan Schedule, and (i) specifically authorizes
such Prepayment Penalties to be collected and such Prepayment Penalties
are permissible and enforceable and were originated in accordance with the
terms of the related Mortgage Loan documents and all applicable state,
federal and local law (except to the extent that the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium, receivership
and other similar laws relating to creditors' rights generally or the
collectability thereof may be limited due to acceleration in connection
with a foreclosure) and (ii) include all necessary documentation to
determine the amount of the Prepayment Penalty to be collected. With
respect to Mortgage Loans originated prior to October 1, 2002, no such
Prepayment Penalty may be imposed for a term in excess of five (5) years
following origination. With respect to Mortgage Loans originated on or
after October 1, 2002, no such Prepayment Penalty may be imposed for a
term in excess of three (3) years following origination. With respect to
any Mortgage Loan that contains a provision permitting imposition of a
premium upon a prepayment prior to maturity: (i) prior to the Mortgage
Loan's origination, the Mortgagor agreed to such premium in exchange for a
monetary benefit, including but not limited to a rate or fee reduction,
(ii) prior to the Mortgage Loan's origination, the Mortgagor was offered
the option of obtaining a mortgage loan that did not require payment of
such a premium, (iii) the Prepayment Penalty is disclosed to the Mortgagor
in the mortgage loan documents pursuant to applicable state, local and
federal law, and (iv) notwithstanding any state, local or federal law to
the contrary, NC Capital shall not impose such Prepayment Penalty in any
instance when the mortgage debt is accelerated or paid off in connection
with the workout of a delinquent Mortgage Loan or as the result of the
Mortgagor's default in making the Mortgage Loan payments. This
representation and warranty is a Deemed Material and Adverse
Representation;
(ccc) 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. This representation and warranty is a
Deemed Material and Adverse Representation;
(ddd) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage
under Section 860G(a)(3) of the Code. This representation and warranty is
a Deemed Material and Adverse Representation;
(eee) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by a provider chosen by
NC Capital and acceptable to the Purchaser in its sole discretion, and
such contract is transferable at no cost to the Purchaser or any Successor
Servicer;
(fff) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to
the ability of the Mortgagor to repay and the extension of credit which
has no apparent benefit to the Mortgagor, were employed in the origination
of the Mortgage Loan;
(ggg) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment
to the Purchaser) have been recorded in the appropriate jurisdictions
wherein such recordation is necessary to perfect the lien thereof as
against creditors of NC Capital, or is in the process of being recorded;
(hhh) Co-op Loans. With respect to a Mortgage Loan that is a Co-op
Loan, (i) a search for filings of financing statements has been made by a
company competent to make the same, which company is acceptable to ▇▇▇▇▇▇
▇▇▇ and qualified to do business in the jurisdiction where the cooperative
unit is located, and such search has not found anything which would
materially and adversely affect the Co-op Loan, (ii) the stock that is
pledged as security for the Mortgage Loan is held by a person as a
"tenant-stockholder" and the related cooperative corporation that owns
title to the related cooperative apartment building is a "cooperative
housing corporation," each within the meaning of Section 216 of the Code
and (iii) there is no prohibition against pledging the shares of the
cooperative corporation or assigning the Co-op Lease;
(iii) Mortgagor Bankruptcy. On or prior to the date 60 days after
the related Closing Date, the Mortgagor has not filed and will not file a
bankruptcy petition or has not become the subject and will not become the
subject of involuntary bankruptcy proceedings or has not consented to or
will not consent to the filing of a bankruptcy proceeding against it or to
a receiver being appointed in respect of the related Mortgaged Property;
(jjj) No Prior Offer. The Mortgage Loan has not previously been
offered for sale;
(kkk) No Arbitration. No Mortgage Loan originated on or after August
1, 2004 requires the related Mortgagor to submit to arbitration to resolve
any dispute arising out of or relating in any way to the Mortgage Loan
transaction. This representation and warranty is a Deemed Material and
Adverse Representation;
(lll) Credit Reporting. NC Capital has caused to be fully furnished,
in accordance with the Fair Credit Reporting Act and its implementing
regulations, 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 credit repositories), on a
monthly basis. This representation and warranty is a Deemed Material and
Adverse Representation;
(mmm) ▇▇▇▇▇▇ Mae Guides Anti-Predatory Lending Eligibility. Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility
for purchase requirements of ▇▇▇▇▇▇ ▇▇▇ Guides. This representation and
warranty is a Deemed Material and Adverse Representation;
(nnn) Mortgagor Selection. No Mortgagor was encouraged or required
to select a Mortgage Loan product offered by the Originator which is a
higher cost product designed for less creditworthy mortgagors, unless at
the time of the Mortgage Loan's origination, such Mortgagor did not
qualify taking into account credit history and debt to income ratios for a
lower cost credit product then offered by the Originator or any Affiliate
of the Originator. If, at the time of loan application, the Mortgagor may
have qualified for a lower cost credit product then offered by any
mortgage lending Affiliate of the Originator, the Originator referred the
related Mortgagor's application to such Affiliate for underwriting
consideration. This representation and warranty is a Deemed Material and
Adverse Representation;
(ooo) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective
mathematical principles which relate the related Mortgagor's income,
assets and liabilities to the proposed payment and such underwriting
methodology does not rely on the extent of the related Mortgagor's equity
in the collateral as the principal determining factor in approving such
credit extension. Such underwriting methodology confirmed that at the time
of origination (application/approval) the related Mortgagor had a
reasonable ability to make timely payments on the Mortgage Loan. This
representation and warranty is a Deemed Material and Adverse
Representation;
(ppp) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium
upon a prepayment prior to maturity: (i) prior to the Mortgage Loan's
origination, the related Mortgagor agreed to such premium in exchange for
a monetary benefit, including but not limited to a rate or fee reduction,
(ii) prior to the Mortgage Loan's origination, the related Mortgagor was
offered the option of obtaining a mortgage loan that did not require
payment of such a premium, (iii) the prepayment premium is disclosed to
the related Mortgagor in the Mortgage Loan documents pursuant to
applicable state and federal law, and (iv) notwithstanding any state or
federal law to the contrary, the Originator, as servicer, shall not impose
such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the related Mortgagor's default in making the
Mortgage Loan payments. This representation and warranty is a Deemed
Material and Adverse Representation;
(qqq) 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.
This representation and warranty is a Deemed Material and Adverse
Representation;
(rrr) [Reserved.]
(sss) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected
or to be collected in connection with the origination and servicing of
each Mortgage Loan, have been disclosed in writing to the Mortgagor in
accordance with applicable state and federal law and regulation. This
representation and warranty is a Deemed Material and Adverse
Representation;
(ttt) New Jersey Covered Loans. Neither NC Capital nor the
Originator has engaged in the practice of "flipping" (as defined in the
New Jersey Home Ownership Security Act of 2002) a New Jersey Covered Loan;
(uuu) No Services Termination Fee. Each agreement with a servicer of
the Mortgage Loan, if any, provides for the termination of the servicing
rights relating to the Mortgage Loan on the related servicing transfer
date, without the payment of any termination fee or other expense by
Purchaser;
(vvv) Consumer Credit Laws. The Mortgage Loan complies with all
applicable consumer credit statutes and regulations, including, without
limitation, the respective Uniform Consumer Credit Code laws in effect in
Colorado, Idaho, Indiana, Iowa, Kansas, Maine, Oklahoma, South Carolina,
Utah and Wyoming, has been originated by a properly licensed entity, and
in all other respects, complies with all of the material requirements of
any such applicable laws;
(www) Simple Interest Mortgage Loans. With respect to each Mortgage
Loan that is a simple interest Mortgage Loan, the Mortgage Loan is
identified on the related Mortgage Loan Schedule as a simple interest
Mortgage Loan, the Mortgage Loan is required to be serviced as a simple
interest mortgage loan pursuant to the terms of the related Mortgage Note,
and the servicing and collection practices used in connection therewith
have been in accordance with legal, proper, prudent and customary
practices for servicing simple interest mortgage loans;
(xxx) First Lien Loans. With respect to any First Lien Loan, the
Mortgaged Property was not, as of the date of origination of the Mortgage
Loan, subject to a mortgage, deed of trust, deed to secure debt or other
security instrument creating a lien subordinate to the lien of the
Mortgage;
(yyy) Second Lien Loans. No Mortgage Loan which is a second lien was
originated at the same time or otherwise in connection with any first lien
Mortgage Loan except to the extent that Seller has disclosed the existence
of the second lien mortgage loan to Purchaser;
(zzz) 100% of Purchase Financed. No Mortgage Loan is a "manufactured
housing loan" pursuant to the New Jersey Act, and one hundred percent of
the amount financed of any purchase money second lien Mortgage Loan
subject to the New Jersey Act was used for the purchase of the related
Mortgaged Property;
(aaaa) No Points or Fees on Prepayment. No points, fees or similar
charges are required to be reimbursed to a Mortgagor upon a prepayment in
full of the related Mortgage Loan; and
(bbbb) Points and Fees. No Mortgagor was charged "points and fees"
(whether or not financed) in an amount greater than (i) $1,000, or (ii) 5%
of the principal amount of such Mortgage Loan, whichever is greater. For
purposes of this representation, such 5% limitation is calculated in
accordance with ▇▇▇▇▇▇ Mae's anti-predatory lending requirements as set
forth in the ▇▇▇▇▇▇ ▇▇▇ Guides and "points and fees" (x) include
origination, underwriting, broker and finder fees and charges that the
mortgagee imposed as a condition of making the 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 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 that, in total, do not exceed 0.25% of the principal amount of
such Mortgage Loan. This representation and warranty is a Deemed Material
and Adverse Representation.
SCHEDULE IV
Mortgage Pass-Through Certificates,
Series 2006-NC1
Representations and Warranties as to the Responsible Party
NC Capital Corporation hereby makes the representations and
warranties set forth in this Schedule IV to the Depositor, the Securities
Administrator, the NIM Insurer and the Trustee, as of the Closing Date:
(a) Due Organization and Authority. The Responsible Party is a
corporation duly organized, validly existing and in good standing
under the laws of the state of California and has all licenses
necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in each state wherein it
owns or leases any material properties or where a 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 Responsible Party, and in any event the Responsible Party is in
compliance with the laws of any such state to the extent necessary;
the Responsible Party has the full corporate power, authority and
legal right to execute and deliver this Agreement and to perform its
obligations hereunder; the execution, delivery and performance of
this Agreement by the Responsible Party and the consummation of the
transactions contemplated hereby have been duly and validly
authorized; this Agreement and all agreements contemplated hereby
have been duly executed and delivered and constitute the valid,
legal, binding and enforceable obligations of the Responsible Party,
regardless of whether such enforcement is sought in a proceeding in
equity or at law; and all requisite corporate action has been taken
by the Responsible Party to make this Agreement and all agreements
contemplated hereby valid and binding upon the Responsible Party in
accordance with their terms;
(b) No Conflicts. Neither the execution and delivery of this Agreement,
the consummation of the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of this
Agreement, will conflict with or result in a breach of any of the
terms, conditions or provisions of the Responsible Party's charter
or by-laws or any legal restriction or any agreement or instrument
to which the Responsible Party 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 Responsible Party
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;
(c) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Responsible Party,
before any court, administrative agency or other tribunal asserting
the invalidity of this Agreement, seeking to prevent the
consummation of any of the transactions contemplated by this
Agreement or which, either in any one instance or in the aggregate,
may result in any material adverse change in the business,
operations, financial condition, properties or assets of the
Responsible Party, or in any material impairment of the right or
ability of the Responsible Party to carry on its business
substantially as now conducted, or in any material liability on the
part of the Responsible Party, or which would draw into question the
validity of this Agreement or of any action taken or to be taken in
connection with the obligations of the Responsible Party
contemplated herein, or which would be likely to impair materially
the ability of the Responsible Party to perform under the terms of
this Agreement; and
(d) No Consent Required. No consent, approval, authorization or order
of, or registration or filing with, or notice to any court or
governmental agency or body including HUD, the FHA or the VA is
required for the execution, delivery and performance by the
Responsible Party of or compliance by the Responsible Party with
this Agreement or the consummation of the transactions contemplated
by this Agreement, or if required, such approval has been obtained
prior to the Closing Date.
SCHEDULE V
Mortgage Pass-Through Certificates,
Series 2006-NC1
Representations and Warranties of the Depositor as to the Mortgage Loans
The Depositor hereby makes the following representation and warranty
to the Trustee and the Securities Administrator as of the Closing Date:
(a) No Mortgage Loan is a Mortgage Loan categorized as "High Cost"
or "Covered" pursuant to Appendix E of Standard & Poor's Glossary. No Mortgage
Loan originated on or after October 1, 2002 through March 6, 2003 is governed by
the Georgia Fair Lending Act.
(b) Each loan at the time it was made complied in all material
respects with applicable local, state and federal laws, including, but not
limited to, all applicable predatory and abusive lending laws.
EXHIBIT A
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") 84-14, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ 95-60 OR PTCE 96-23
OR A COMPARABLE EXEMPTION AVAILABLE UNDER SIMILAR LAW.
Certificate No: A-1-[ ]
A-2-[ ]
A-3-[ ]
M-1-[ ]
M-2-[ ]
M-3-[ ]
B-1-[ ]
B-2-[ ]
B-3-[ ]
Cut-off Date: April 1, 2006
First Distribution Date: May 25, 2006
Initial Certificate Balance
of this Certificate
("Denomination"): $[ ]
Initial Certificate
Balances of all
Certificates of this Class: [A-1: $360,025,000]
[A-2: $158,409,000]
[A-3: $171,822,000]
[M-1: $49,996,000]
[M-2: $37,496,000]
[M-3: $10,483,000]
[B-1: $ 5,644,000]
[B-2: $ 4,435,000]
[B-3: $ 4,032,000]
CUSIP: [A-1: 81375H AA 7]
[A-2: 81375H AB 5]
[A-3: 81375H AC 3]
[M-1: 81375H AD 1]
[M-2: 81375H AE 9]
[M-3: 81375H AF 6]
[B-1: 81375H AG 4]
[B-2: 81375H AH 2]
[B-3: 81375H AJ 8]
ISIN: [A-1: US81375HAA77]
[A-2: US81375HAB50]
[A-3: US81375HAC34]
[M-1: US81375HAD17]
[M-2: US81375HAE99]
[M-3: US81375HAF64]
[B-1: US81375HAG48]
[B-2: US81375HAH21]
[B-3: US81375HAJ86]
SECURITIZED ASSET BACKED RECEIVABLES LLC
SABR Trust 2006-NC1
Mortgage Pass-Through Certificates, Series 2006-NC1
[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 Responsible Party, the Servicer, the Trustee or the Securities
Administrator 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 Securitized Asset Backed
Receivables LLC, as depositor (the "Depositor"), NC Capital Corporation., as
responsible party (the "Responsible Party"), ▇▇▇▇▇ Fargo Bank, National
Association, as servicer (the "Servicer"), OfficeTiger Global Real Estate
Services Inc., as loan performance advisor, ▇▇▇▇▇ Fargo Bank, National
Association, as securities administrator (the "Securities Administrator") and
custodian (the "Custodian"), and U.S. Bank National Association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ 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
SECURITIZED ASSET BACKED RECEIVABLES LLC
Securitized Asset Backed Receivables LLC Trust 2006-NC1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Securitized Asset Backed Receivables LLC Trust 2006-NC1 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 the Securities Administrator is not 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 Securities Administrator.
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
Securities Administrator and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Responsible Party, the Servicer and
the Securities Administrator 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 and the Securities Administrator and any agent of the
Depositor or the Securities Administrator may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Securities Administrator, 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% or 10%, as applicable,
of the Cut-off Date Pool Principal Balance, the Person specified in Section
10.01 of the Agreement 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 10.01 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:
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _____________________________________________,
____________________________________________________________________________,
for the account of _________________________________________________________,
account number __________, or, if mailed by check, to ______________________.
Applicable statements should be mailed to __________________________________,
________________________________________________________________________________
This information is provided by ________________________________,
the assignee named above, or _______________________________________________,
as its agent.
EXHIBIT B
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A 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 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.
Certificate No. : P-1
Cut-off Date : April 1, 2006
First Distribution Date : May 25, 2006
Percentage Interest of
this Certificate
("Denomination") : [___]%
SECURITIZED ASSET BACKED RECEIVABLES LLC
SABR Trust 2006-NC1
Mortgage Pass-Through Certificates, Series 2006-NC1
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 Responsible
Party, the Servicer, the Trustee or the Securities Administrator 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 Securitized Asset Backed
Receivables LLC, as depositor (the "Depositor"), NC Capital Corporation, as
responsible party (the "Responsible Party"), ▇▇▇▇▇ Fargo Bank, National
Association, as servicer (the "Servicer"), OfficeTiger Global Real Estate
Services Inc., as loan performance advisor, ▇▇▇▇▇ Fargo Bank, National
Association, as securities administrator (the "Securities Administrator") and
custodian (the "Custodian"), and U.S. Bank National Association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Securities Administrator for such purpose, or the
office or agency maintained by the Securities Administrator.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Securities Administrator shall require the transferor to
execute a transferor certificate (in substantially the form attached to the
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 1933 Act or is being made pursuant to the 1933 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
SECURITIZED ASSET BACKED RECEIVABLES LLC
Securitized Asset Backed Receivables LLC Trust 2006-NC1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Securitized Asset Backed Receivables LLC Trust 2006-NC1 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 the Securities Administrator is not 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 Securities Administrator.
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
Securities Administrator and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Servicer, the Responsible Party and
the Securities Administrator 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 or the office or agency maintained by
the Securities Administrator in Minnesota, 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 and the Securities Administrator and any agent of the
Depositor or the Securities Administrator may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Securities Administrator, 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% or 10%, as applicable,
of the Cut-off Date Pool Principal Balance, the Person specified in Section
10.01 of the Agreement 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 10.01 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:
Dated:
_________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _____________________________________________,
____________________________________________________________________________,
for the account of _________________________________________________________,
account number __________, or, if mailed by check, to ______________________.
Applicable statements should be mailed to __________________________________,
________________________________________________________________________________
This information is provided by ________________________________,
the assignee named above, or _______________________________________________,
as its agent.
EXHIBIT C
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, 2006
First Distribution Date : May 25, 2006
Percentage Interest of : 100%
this Certificate
("Denomination")
SECURITIZED ASSET BACKED RECEIVABLES LLC
Securitized Asset Backed Receivables LLC Trust 2006-NC1
Mortgage Pass-Through Certificates, Series 2006-NC1
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 Servicer, the Responsible Party, the Trustee or
the Securities Administrator 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 Securitized Asset
Backed Receivables LLC, as depositor (the "Depositor"), NC Capital Corporation,
as responsible party (the "Responsible Party"), ▇▇▇▇▇ Fargo Bank, National
Association, as servicer (the "Servicer"), OfficeTiger Global Real Estate
Services Inc., as loan performance advisor, ▇▇▇▇▇ Fargo Bank, National
Association, as securities administrator (the "Securities Administrator") and
custodian (the "Custodian"), and U.S. Bank National Association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Securities Administrator for such
purposes or the office or agency maintained by the Securities Administrator in
New York, New York.
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 Securities Administrator,
the Servicer or the Trust Fund. In the event that such representation is
violated, or any attempt is made to transfer to a plan or arrangement subject to
Section 406 of ERISA or a plan subject to Section 4975 of the Code or a plan
subject to Similar Law, or a person acting on behalf of any such plan or
arrangement or using the assets of any such plan or arrangement, such attempted
transfer or acquisition shall be void and of no effect.
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
SECURITIZED ASSET BACKED RECEIVABLES LLC
Securitized Asset Backed Receivables LLC Trust 2006-NC1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Securitized Asset Backed Receivables LLC Trust 2006-NC1 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 the Securities Administrator is not 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 Securities Administrator.
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
Securities Administrator and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Servicer, the Responsible Party and
the Securities Administrator 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 or the office or agency maintained by
the Securities Administrator in Minnesota, 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 and the Securities Administrator and any agent of the
Depositor or the Securities Administrator may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Securities Administrator, 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% or 10%, as applicable,
of the Cut-off Date Pool Principal Balance, the Person specified in Section
10.01 of the Agreement 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 10.01 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:
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _____________________________________________,
____________________________________________________________________________,
for the account of _________________________________________________________,
account number __________, or, if mailed by check, to ______________________.
Applicable statements should be mailed to __________________________________,
________________________________________________________________________________
This information is provided by ________________________________,
the assignee named above, or _______________________________________________,
as its agent.
EXHIBIT D
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 LETTER
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 AND THE
SERVICER, 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 SIMILAR LAW AND WILL NOT SUBJECT
THE DEPOSITOR, THE SECURITIES ADMINISTRATOR OR THE SERVICER TO ANY OBLIGATION IN
ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THE AGREEMENT OR TO ANY LIABILITY.
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 AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : X-1
Cut-off Date : April 1, 2006
First Distribution Date : May 25, 2006
Percentage Interest of this
Certificate ("Denomination") : [___]%
SECURITIZED ASSET BACKED RECEIVABLES LLC
Securitized Asset Backed Receivables LLC Trust 2006-NC1
Mortgage Pass-Through Certificates, Series 2006-NC1
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 Servicer, the
Responsible Party, the Trustee or the Securities Administrator 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 Securitized Asset Backed
Receivables LLC, as depositor (the "Depositor"), NC Capital Corporation, as
responsible party (the "Responsible Party"), ▇▇▇▇▇ Fargo Bank, National
Association, as servicer (the "Servicer"), OfficeTiger Global Real Estate
Services Inc., as loan performance advisor, ▇▇▇▇▇ Fargo Bank, National
Association, as securities administrator (the "Securities Administrator") and
custodian (the "Custodian"), and U.S. Bank National Association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Securities Administrator for such purposes or the
office or agency maintained by the Securities Administrator.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Securities Administrator shall require the transferor to
execute a transferor certificate (in substantially the form attached to the
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 1933 Act or is being made pursuant to the 1933 Act,
which Opinion of Counsel shall be an expense of the transferor.
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
SECURITIZED ASSET BACKED RECEIVABLES LLC
Securitized Asset Backed Receivables LLC Trust 2006-NC1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Securitized Asset Backed Receivables LLC Trust 2006-NC1 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 the Securities Administrator is not 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 Securities Administrator.
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
Securities Administrator and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Servicer, the Responsible Party and
the Securities Administrator 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 or the office or agency maintained by
the Securities Administrator in Minnesota, 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 and the Securities Administrator and any agent of the
Depositor or the Securities Administrator may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Securities Administrator, 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% or 10%, as applicable,
of the Cut-off Date Pool Principal Balance, the Person specified in Section
10.01 of the Agreement 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 10.01 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:
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _____________________________________________,
____________________________________________________________________________,
for the account of _________________________________________________________,
account number __________, or, if mailed by check, to ______________________.
Applicable statements should be mailed to __________________________________,
________________________________________________________________________________
This information is provided by ________________________________,
the assignee named above, or _______________________________________________,
as its agent.
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF CUSTODIAN
[date]
Securitized Asset Backed Receivables LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
U.S. Bank National Association
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement, dated as of April 1, 2006, by and
among Securitized Asset Backed Receivables LLC, as Depositor, ▇▇▇▇▇
Fargo Bank, National Association, as Servicer, NC Capital
Corporation, as Responsible Party, OfficeTiger Global Real Estate
Services Inc., as Loan Performance Advisor, ▇▇▇▇▇ Fargo Bank,
National Association, as Securities Administrator and Custodian, and
U.S. Bank National Association, as Trustee, Securitized Asset Backed
Receivables LLC Trust 2006-NC1 Mortgage Pass-Through Certificates,
Series 2006-NC1
____________________________________________________________________
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 (other than any Mortgage Loan listed
in the attached schedule), it has received:
1. the original Mortgage Note, endorsed as provided in the following
form: "Pay to the order of ________, without recourse"; and
2. a duly executed assignment of the Mortgage (which may be included
in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Custodian makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any of
the documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Custodian
By:____________________________________
Name:
Title:
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF CUSTODIAN
[date]
Securitized Asset Backed Receivables LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
U.S. Bank National Association
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement, dated as of April 1, 2006, by and
among Securitized Asset Backed Receivables LLC, as Depositor, ▇▇▇▇▇
Fargo Bank, National Association, as Servicer, NC Capital
Corporation, as Responsible Party, OfficeTiger Global Real Estate
Services Inc., as Loan Performance Advisor, ▇▇▇▇▇ Fargo Bank,
National Association, as Securities Administrator and Custodian, and
U.S. Bank National Association, as Trustee, Securitized Asset Backed
Receivables LLC Trust 2006-NC1 Mortgage Pass-Through Certificates,
Series 2006-NC1
____________________________________________________________________
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
Custodian, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received:
1. 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.
2. The original recorded Mortgage.
3. A duly executed assignment of the Mortgage in the form provided
in Section 2.01 of the Pooling and Servicing Agreement; or, if the Responsible
Party has certified or the Custodian otherwise knows that the related Mortgage
has not been returned from the applicable recording office, a copy of the
assignment of the Mortgage (excluding information to be provided by the
recording office).
4. The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment from the
originator to the last endorsee.
5. The original or duplicate original lender's title policy and all
riders thereto or, any one of an original title binder, an original preliminary
title report or an original title commitment, or a copy thereof certified by the
title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1), (2), (3), (15),
(22) and (29) of the Data Tape Information accurately reflects information set
forth in the Custodial File.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Pooling and Servicing Agreement. The Custodian
makes no 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 or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the Custodian
has made no determination and makes no representations as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Custodian
By:____________________________________
Name:
Title:
EXHIBIT G
RESIDUAL TRANSFER AFFIDAVIT
Securitized Asset Backed Receivables LLC Trust 2006-NC1,
Mortgage Pass-Through Certificates, Series 2006-NC1
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
First, The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement (the
"Agreement"), relating to the above-referenced Series, by and among Securitized
Asset Backed Receivables LLC, as depositor (the "Depositor"), NC Capital
Corporation, as responsible party (the "Responsible Party"), ▇▇▇▇▇ Fargo Bank,
National Association, as servicer (the "Servicer"), OfficeTiger Global Real
Estate Services Inc., as loan performance advisor, ▇▇▇▇▇ Fargo Bank, National
Association, as securities administrator (the "Securities Administrator") and
custodian (the "Custodian"), and U.S. Bank National Association, 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 Securities Administrator.
Second, The Transferee is, as of the date hereof, and will be, as of
the date of the Transfer, a Permitted Transferee. The Transferee is acquiring
its Ownership Interest in the Certificate for its own account. The Transferee
has no knowledge that any such affidavit is false.
Third, The Transferee has been advised of, and understands that (i)
a tax will be imposed on Transfers of the Certificate to Persons that are
Non-Permitted Transferees; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is a Non-Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
Fourth, The Transferee has been advised of, and understands that a
tax will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is a
Non-Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
Fifth, The Transferee has reviewed the provisions of Section 5.02(c)
of the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
Sixth, The Transferee agrees to require a Transfer Affidavit from
any Person to whom the Transferee attempts to Transfer its Ownership Interest in
the Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is a Non-Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Securities Administrator a certificate
substantially in the form set forth as Exhibit H to the Agreement (a "Transferor
Certificate") to the effect that, among other things, such Transferee has no
actual knowledge that the Person to which the Transfer is to be made is a
Non-Permitted Transferee.
Seventh, The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate. The Transferee has historically paid its debts as they have
come due and intends to pay its debts as they come due in the future. The
Transferee intends to pay all taxes due with respect to the Certificate as they
become due.
Eighth, The Transferee's taxpayer identification number is
__________.
Ninth, The Transferee is not a Disqualified Non-U.S. Person as
defined in the Agreement.
Tenth, The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
Eleventh, 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.
Twelfth, Check the applicable paragraph:
[ ] The present value of the anticipated tax liabilities associated
with holding the Certificate, as applicable, does not exceed the sum of:
1. the present value of any consideration given to the Transferee to
acquire such Certificate;
2. the present value of the expected future distributions on such
Certificate; and
3. the present value of the anticipated tax savings associated with
holding such Certificate as the related REMIC generates losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate) and (ii) present values are
computed using a discount rate equal to the short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee.
[ ] The transfer of the Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly,
(i) the Transferee is an "eligible corporation," as defined in U.S.
Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income from
the Certificate will only be taxed in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the transfer, the
Transferee had gross assets for financial reporting purposes (excluding
any obligation of a person related to the Transferee within the meaning of
U.S. Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Certificate only to another
"eligible corporation," as defined in U.S. Treasury Regulations Section
1.860E-1(c)(6)(i), in a transaction that satisfies the requirements of
Sections 1.860E-1(c)(4)(i), (ii) and (iii) and Section 1.860E-1(c)(5) of
the U.S. Treasury Regulations; and
(iv) the Transferee determined the consideration paid to it to
acquire the Certificate based on reasonable market assumptions (including,
but not limited to, borrowing and investment rates, prepayment and loss
assumptions, expense and reinvestment assumptions, tax rates and other
factors specific to the Transferee) that it has determined in good faith.
[ ] None of the above.
Thirteenth, 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__
Securitized Asset Backed Receivables LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [_________]
▇▇▇▇▇ Fargo Bank, National Association,
as Securities Administrator
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: SABR 2006-NC1
Re: Securitized Asset Backed Receivables LLC Trust 2006-NC1 Mortgage
Pass-Through Certificates, Series 2006-NC1, 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 and (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__
Securitized Asset Backed Receivables LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [_________]
▇▇▇▇▇ Fargo Bank, National Association,
as Securities Administrator
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: SABR 2006-NC1
Re: Securitized Asset Backed Receivables LLC Trust 2006-NC1 Mortgage
Pass-Through Certificates, Series 2006-NC1 [___________________]
________________________________________________________________
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 ▇-▇,
▇▇▇▇▇ ▇-▇, Class M-1, Class M-2, Class M-3, 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.
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:
First, As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
Second, 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.
Third, 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.
Fourth, 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.
Fifth, 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.
Sixth, Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
---------------------------------------
Print Name of Transferee
By:____________________________________
Name:
Title:
Date: ________________________________
--------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That Are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
First, 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.
Second, 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).
Third, 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).
Fourth, 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.
Fifth, 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.
Sixth, 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 Custodian)
To: ▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Inventory Control - SABR 2006-NC1
Re: In connection with the administration of the Mortgage Loans held by
you as the Custodian on behalf of the Certificateholders pursuant to
the Pooling and Servicing Agreement, dated as of April 1, 2006, by
and among Securitized Asset Backed Receivables LLC, as Depositor,
▇▇▇▇▇ Fargo Bank, National Association, as Servicer, NC Capital
Corporation, as Responsible Party, OfficeTiger Global Real Estate
Services Inc., as Loan Performance Advisor, ▇▇▇▇▇ Fargo Bank,
National Association, as Securities Administrator and Custodian, and
U.S. Bank National Association, as Trustee, Securitized Asset-Backed
Receivables LLC Trust 2006-NC1, we request the release, and
acknowledge receipt, of the (Custodial File/[specify documents]) for
the Mortgage Loan described below, for the reason indicated.
____________________________________________________________________
Mortgagor's Name, Address & Zip Code:
Mortgage Loan Number:
Send Custodial File to:
Delivery Method (check one)
____1. Regular mail
____2. Overnight courier (Tracking information: )
If neither box 1 nor 2 is checked, regular mail shall be assumed.
Reason for Requesting Documents (check one)
____1. Mortgage Loan Paid in Full. (The Servicer hereby certifies that all
amounts received in connection therewith have been credited to the
Collection Account as provided in the Pooling and Servicing
Agreement.)
____2. Mortgage Loan Repurchase Pursuant to Section 2.03 of the Pooling and
Servicing Agreement. (The Servicer hereby certifies that the
repurchase price has been credited to the Collection Account as
provided in the Pooling and Servicing Agreement.)
____3. Mortgage Loan Liquidated by _________________. (The Servicer hereby
certifies that all proceeds of foreclosure, insurance, condemnation
or other liquidation have been finally received and credited to the
Collection Account pursuant to the Pooling and Servicing Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other (explain).
If box 1, 2 or 3 above is checked, and if all or part of the
Custodial File was previously released to us, please release to us our previous
request and receipt on file with you, as well as any additional documents in
your possession relating to the specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the above
documents to you as the Custodian, please acknowledge your receipt by signing in
the space indicated below, and returning this form if requested by us.
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
By:____________________________________
Name:
Title:
Date:
ACKNOWLEDGED AND AGREED:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
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
Purchaser and which shall be retained by the Servicer or delivered to and
retained by the Custodian, as applicable:
(A) The documents or instruments set forth as items (i) to
(ix) in Section 2.01(b) of the Agreement.
(B) Residential loan application.
(C) Mortgage Loan closing statement.
(D) Verification of employment and income, if applicable.
(E) Verification of acceptable evidence of source and amount
of down payment.
(F) Credit report on Mortgagor.
(G) Residential appraisal report.
(H) Photograph of the Mortgaged Property.
(I) Survey of the Mortgaged Property.
(J) Copy of each instrument necessary to complete
identification of any exception set forth in the exception schedule
in the title policy, i.e., map or plat, restrictions, easements,
sewer agreements, home association declarations, etc.
(K) All required disclosure statements.
(L) If required in an appraisal, termite report, structural
engineer's report, water potability and septic certification.
(M) 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: Securitized Asset Backed Receivables LLC Trust 2006-NC1 (the
"Trust"), Mortgage Pass-Through Certificates, Series 2006-NC1,
issued pursuant to the Pooling and Servicing Agreement, dated as
April 1, 2006, by and among Securitized Asset Backed Receivables
LLC, as Depositor, ▇▇▇▇▇ Fargo Bank, National Association, as
Servicer, NC Capital Corporation, as Responsible Party, OfficeTiger
Global Real Estate Services Inc., as Loan Performance Advisor, ▇▇▇▇▇
Fargo Bank, National Association, as Securities Administrator and
Custodian, and U.S. Bank National Association, as Trustee
____________________________________________________________________
I, [identify the certifying individual], certify that:
First, 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;
Second, 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;
Third, 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;
Fourth, 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
Fifth, 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 parties: the Securities
Administrator and the Servicer.
Date: ________________________________
By:____________________________________
Name:
Title:
EXHIBIT M
FORM OF CERTIFICATION TO BE
PROVIDED BY THE SECURITIES ADMINISTRATOR TO DEPOSITOR
Re: Securitized Asset Backed Receivables LLC Trust 2006-NC1 (the
"Trust"), Mortgage Pass-Through Certificates, Series 2006-NC1,
issued pursuant to the Pooling and Servicing Agreement, dated as
April 1, 2006, by and among Securitized Asset Backed Receivables
LLC, as Depositor, ▇▇▇▇▇ Fargo Bank, National Association, as
Servicer, NC Capital Corporation, as Responsible Party, OfficeTiger
Global Real Estate Services Inc., as Loan Performance Advisor, ▇▇▇▇▇
Fargo Bank, National Association, as Securities Administrator and
Custodian, and U.S. Bank National Association, as Trustee
____________________________________________________________________
The Securities Administrator hereby certifies to the Depositor and
its officers, directors and affiliates, and with the knowledge and intent that
they will rely upon this certification, that:
First, I have reviewed the annual report on Form 10-K for the fiscal
year [___] (the "Annual Report"), and all reports on Form 10-D required to be
filed in respect of the period covered by the Annual Report (collectively with
the Annual Report, the "Reports"), of the Trust;
Second, 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
the Annual Report;
Third, Based on my knowledge, the distribution information required
to be provided by the Securities Administrator under the Pooling and Servicing
Agreement for inclusion in the Reports is included in the Reports;
Fourth, I am responsible for reviewing the activities performed by
the Securities Administrator under the Pooling and Servicing Agreement, and
based on my knowledge and the compliance review conducted in preparing the
compliance statement of the Securities Administrator required in the Annual
Report under Item 1123 of Regulation AB, and except as disclosed in the Reports,
the Securities Administrator has fulfilled its obligations under the Pooling and
Servicing Agreement in all material respects; and
Fifth, The report on assessment of compliance with servicing
criteria applicable to the Securities Administrator for asset-backed securities
of the Securities Administrator and each Subcontractor utilized by the
Securities Administrator and its related attestation report on assessment of
compliance with servicing criteria 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 included as an exhibit to the Annual Report. Any material
instances of non-compliance are described in such report and have been disclosed
in the Annual Report.
Date: ________________________________
By:____________________________________
Name:
Title:
EXHIBIT N
FORM OF SERVICER'S CERTIFICATION
TO BE PROVIDED TO DEPOSITOR
Re: Securitized Asset Backed Receivables LLC Trust 2006-NC1 (the
"Trust"), Mortgage Pass-Through Certificates, Series 2006-NC1,
issued pursuant to the Pooling and Servicing Agreement, dated as
April 1, 2006, by and among Securitized Asset Backed Receivables
LLC, as Depositor, ▇▇▇▇▇ Fargo Bank, National Association, as
Servicer, NC Capital Corporation, as Responsible Party, OfficeTiger
Global Real Estate Services Inc., as Loan Performance Advisor, ▇▇▇▇▇
Fargo Bank, National Association, as Securities Administrator and
Custodian, and U.S. Bank National Association, as Trustee
____________________________________________________________________
I, [identify the certifying individual], certify to the Depositor
and the Securities Administrator, and their officers, directors and affiliates,
and with the knowledge and intent that they will rely upon this certification,
that:
First, I am responsible for reviewing the activities performed by
the Servicer under the Pooling and Servicing Agreement and I have reviewed the
servicer compliance statement of the Servicer and the compliance statements of
each Subservicer, if any, engaged by the Servicer provided to the Depositor and
the Securities Administrator for the Trust's fiscal year [___] in accordance
with Item 1123 of Regulation AB (each a "Compliance Statement"), the report on
assessment of the Servicer'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
the Servicer and of each Subservicer or Subcontractor, if any, engaged or
utilized by the Servicer provided to the Depositor and the Securities
Administrator 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 a "Attestation
Report"), and all servicing reports, officer's certificates and other
information relating to the servicing of the Mortgage Loans by the Servicer
during 200[ ] that were delivered or caused to be delivered by the Servicer
pursuant to the Agreement (collectively, the "Servicing Information");
Second, Based on my 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;
Third, Based on my knowledge, the servicing information required to
be provided to the Securities Administrator by the Servicer pursuant to the
Pooling and Servicing Agreement has been provided to the Securities
Administrator;
Fourth, Based on my knowledge and the compliance review conducted in
preparing the Compliance Statement of the Servicer and, if applicable, reviewing
each Compliance Statement of each Subservicer, if any, engaged by the Servicer,
and except as disclosed in such Compliance Statement[(s)], the Servicer
[(directly and through its Subservicers, if any)] has fulfilled its obligations
under the Pooling and Servicing Agreement in all material respects.
Fifth, Each Servicing Assessment of the Servicer and of each
Subservicer or Subcontractor, if any, engaged or utilized by the Servicer 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 Securities Administrator. Any
material instances of non-compliance are described in any such Servicing
Assessment or Attestation Report.
Date: ________________________________
By:____________________________________
Name:
Title:
EXHIBIT O
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Securities Administrator],
[the Servicer], [each Subservicer] and [each Subcontractor] shall address, at a
minimum, the criteria identified as below as "Applicable Servicing Criteria":
------------------------------------------------------------------------------------------------------------------------------------
APPLICABLE SERVICING
SERVICING CRITERIA CRITERIA
------------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
General Servicing Considerations
Policies and procedures are instituted to monitor any performance Securities
or other triggers and events of default in accordance with the Administrator/Servicer
1122(d)(1)(i) transaction agreements.
If any material servicing activities are outsourced to third Securities
parties, policies and procedures are instituted to monitor the Administrator/Servicer
third party's performance and compliance with such servicing
1122(d)(1)(ii) activities.
Any requirements in the transaction agreements to maintain a N/A
1122(d)(1)(iii) back-up servicer for the mortgage loans are maintained.
A fidelity bond and errors and omissions policy is in effect on the Servicer
party participating in the servicing function throughout the
reporting period in the amount of coverage required by and
otherwise in accordance with the terms of the transaction
1122(d)(1)(iv) agreements.
Cash Collection and Administration
Payments on mortgage loans are deposited into the appropriate Servicer/Securities
custodial bank accounts and related bank clearing accounts no more Administrator
than two business days following receipt, or such other number of
1122(d)(2)(i) days specified in the transaction agreements.
Disbursements made via wire transfer on behalf of an obligor or to Servicer/Securities
1122(d)(2)(ii) an investor are made only by authorized personnel. Administrator
Advances of funds or guarantees regarding collections, cash flows Servicer
or distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the
1122(d)(2)(iii) transaction agreements.
The related accounts for the transaction, such as cash reserve Servicer/Securities
accounts or accounts established as a form of Administrator
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the transaction
1122(d)(2)(iv) agreements.
Each custodial account is maintained at a federally insured Servicer/Securities
depository institution as set forth in the transaction agreements. Administrator
For purposes of this criterion, "federally insured depository
institution" with respect to a foreign financial institution means
a foreign financial institution that meets the requirements of Rule
1122(d)(2)(v) 13k-1(b)(1) of the Securities Exchange Act.
Unissued checks are safeguarded so as to prevent unauthorized Servicer
1122(d)(2)(vi) access.
Reconciliations are prepared on a monthly basis for all Servicer/Securities
asset-backed securities related bank accounts, including custodial Administrator
accounts and related bank clearing accounts. These reconciliations
are (A) mathematically accurate; (B) prepared within 30 calendar
days after the bank statement cutoff date, or such other number of
days specified in the transaction agreements; (C) reviewed and
approved by someone other than the person who prepared the
reconciliation; and (D) contain explanations for reconciling items.
These reconciling items are resolved within 90 calendar days of
their original identification, or such other number of days
1122(d)(2)(vii) specified in the transaction agreements.
Investor Remittances and Reporting
Reports to investors, including those to be filed with the Securities
Commission, are maintained in accordance with the transaction Administrator/Servicer
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in
the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with
investors' or the trustee's records as to the total unpaid
principal balance and number of mortgage loans serviced by the
1122(d)(3)(i) Servicer.
Amounts due to investors are allocated and remitted in accordance Securities
with timeframes, distribution priority and other terms set forth in Administrator/Servicer
1122(d)(3)(ii) the transaction agreements.
Disbursements made to an investor are posted within two business Securities
days to the Servicer's investor records, or such other number of Administrator/Servicer
1122(d)(3)(iii) days specified in the transaction agreements.
Amounts remitted to investors per the investor reports agree with Securities
cancelled checks, or other form of payment, or custodial bank Administrator/Servicer
1122(d)(3)(iv) statements.
Pool Asset Administration
Collateral or security on mortgage loans is maintained as required Custodian/Servicer
1122(d)(4)(i) by the transaction agreements or related mortgage loan documents.
Mortgage loan and related documents are safeguarded as required by Custodian/Servicer
1122(d)(4)(ii) the transaction agreements
Any additions, removals or substitutions to the asset pool are Servicer
made, reviewed and approved in accordance with any conditions or
1122(d)(4)(iii) requirements in the transaction agreements.
Payments on mortgage loans, including any payoffs, made in Servicer
accordance with the related mortgage loan documents are posted to
the Servicer's obligor records maintained no more than two business
days after receipt, or such other number of days specified in the
transaction agreements, and allocated to principal, interest or
other items (e.g., escrow) in accordance with the related mortgage
1122(d)(4)(iv) loan documents.
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree with the Servicer
Servicer's records with respect to an obligor's unpaid principal
balance.
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's Servicer
mortgage loans (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance with
the transaction agreements and related pool asset documents.
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
1122(d)(4)(vii) established by the transaction agreements.
Records documenting collection efforts are maintained during the Servicer
period a mortgage loan is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction
agreements, and describe the entity's activities in monitoring
delinquent mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency
1122(d)(4)(viii) is deemed temporary (e.g., illness or unemployment).
Adjustments to interest rates or rates of return for mortgage loans Servicer
with variable rates are computed based on the related mortgage loan
1122(d)(4)(ix) 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
1122(d)(4)(x) number of days specified in the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or insurance Servicer
payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such
payments, provided that such support has been received by the
servicer at least 30 calendar days prior to these dates, or such
1122(d)(4)(xi) other number of days specified in the transaction agreements.
Any late payment penalties in connection with any payment to be Servicer
made on behalf of an obligor are paid from the servicer's funds and
not charged to the obligor, unless the late payment was due to the
1122(d)(4)(xii) obligor's error or omission.
Disbursements made on behalf of an obligor are posted within two Servicer
business days to the obligor's records maintained by the servicer,
or such other number of days specified in the transaction
1122(d)(4)(xiii) agreements.
Delinquencies, charge-offs and uncollectible accounts are Servicer/Securities
recognized and recorded in accordance with the transaction Administrator
1122(d)(4)(xiv) agreements.
Any external enhancement or other support, identified in Item Securities
1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained Administrator, if
1122(d)(4)(xv) as set forth in the transaction agreements. applicable.
EXHIBIT P
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ADDITIONAL FORM 10-D DISCLOSURE
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Item on Form 10-D Party Responsible
Item 1: Distribution and Pool Performance Information
Information included in the [Monthly Statement] Servicer
Securities Administrator
Any information required by 1121 which is NOT included Depositor
on the [Monthly Statement]
Item 2: Legal Proceedings
Any legal proceeding pending against the following
entities or their respective property, that is material
to Certificateholders, including any proceeding known to
be contemplated by governmental authorities:
o Issuing Entity Trustee, Servicer and Securities Administrator
o Depositor Depositor
o Trustee Trustee
o Securities Administrator Securities Administrator
o Sponsor Depositor
o Servicer Servicer
o Custodian Custodian
o 1110(b) Originator Depositor
o Any 1108(a)(2) Servicer (other than the Servicer
Servicer, the Securities Administrator or Trustee)
o Any other party contemplated by 1100(d)(1) Depositor
Item 3: Sale of Securities and Use of Proceeds Depositor
Information from Item 2(a) of Part II of Form 10-Q:
With respect to any sale of securities by the sponsor,
depositor or issuing entity, that are backed by the same
asset pool or are otherwise issued by the issuing
entity, whether or not registered, provide the sales and
use of proceeds information in Item 701 of Regulation
S-K. Pricing information can be omitted if securities
were not registered.
Item 4: Defaults Upon Senior Securities Securities Administrator/Trustee
Information from Item 3 of Part II of Form 10-Q:
Report the occurrence of any Event of Default (after
expiration of any grace period and provision of any
required notice)
Item 5: Submission of Matters to a Vote of Securities Administrator
Security Holders
Information from Item 4 of Part II of Form 10-Q
Item 6: Significant Obligors of Pool Assets N/A
Item 1112(b) - Significant Obligor Financial Information*
*This information need only be reported on the Form 10-D
for the distribution period in which updated information
is required pursuant to the Item.
Item 7: Significant Enhancement Provider Information
Item 1114(b)(2) - Credit Enhancement Provider Financial
Information*
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) - 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
Disclose any information required to be reported on Form Any party to the Agreement responsible for the
8-K during the period covered by the Form 10-D but not applicable Form 8-K Disclosure item
reported
Item 9: Exhibits
Monthly Statement to Certificateholders Securities Administrator
Exhibits required by Item 601 of Regulation S-K, such as Depositor
material agreements
EXHIBIT Q
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ADDITIONAL FORM 10-K DISCLOSURE
------------------------------------------------------------------------------------------------------------------------------------
Item on Form 10-K Party Responsible
Item 9B: Other Information Any party to this Agreement responsible for disclosure
Disclose any information required to be reported on Form items on Form 8-K
8-K during the fourth quarter covered by the Form 10-K
but not reported
Item 15: Exhibits, Financial Statement Schedules Securities Administrator
Depositor
Reg AB Item 1112(b): Significant Obligors of Pool Assets
Significant Obligor Financial Information* N/A
*This information need only be reported on the Form 10-K
if updated information is required pursuant to
Item 1112(b).
Reg AB Item 1114(b)(2): 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
* This information need only be reported on the Form
10-K if updated information is required pursuant to the
Item.
Reg AB Item 1115(b): Derivative Counterparty Financial
Information
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-K if updated information is required pursuant to the
Item.
Reg AB Item 1117: Legal Proceedings
Any legal proceeding pending against the following
entities or their respective property, that is material
to Certificateholders, including any proceeding known to
be contemplated by governmental authorities:
o Issuing Entity Trustee, Servicer, Depositor and
Securities Administrator
o Depositor Depositor
o Trustee Trustee
o Securities Administrator Securities Administrator
o Sponsor Depositor
o Servicer Servicer
o Custodian Custodian
o 1110(b) Originator Depositor
o Any 1108(a)(2) Servicer (other than the Servicer
Servicer, Securities Administrator or Trustee)
o Any other party contemplated by 1100(d)(1) Depositor
Reg AB Item 1119: Affiliations and Relationships
Whether (a) the Sponsor (Seller), Depositor or Issuing Depositor as to (a)
Entity is an affiliate of the following parties, and (b)
to the extent known and material, any of the following
parties are affiliated with one another:
o Servicer Servicer
o Trustee Trustee
o Securities Administrator Securities Administrator
o Any other 1108(a)(3) servicer Servicer
o Any 1110 Originator Depositor
o Any 1112(b) Significant Obligor Depositor
o Any 1114 Credit Enhancement Provider Depositor
o Any 1115 Derivative Counterparty Provider Depositor
o Any other 1101(d)(1) material party Depositor
Whether there are any "outside the ordinary course Depositor as to (a)
business arrangements" other than would be obtained in
an arm's length transaction between (a) the Sponsor
(Seller), Depositor or Issuing Entity on the one hand,
and (b) any of the following parties (or their
affiliates) on the other hand, that exist currently or
within the past two years and that are material to a
Certificateholder's understanding of the Certificates:
o Servicer Servicer
o Trustee Trustee
o Securities Administrator Securities Administrator
o Any other 1108(a)(3) servicer Servicer
o Any 1110 Originator Depositor
o Any 1112(b) Significant Obligor Depositor
o Any 1114 Credit Enhancement Provider Depositor
o Any 1115 Derivative Counterparty Provider Depositor
o Any other 1101(d)(1) material party Depositor
Whether there are any specific relationships involving Depositor as to (a)
the transaction or the pool assets between (a) the
Sponsor (Seller), Depositor or Issuing Entity on the one
hand, and (b) any of the following parties (or their
affiliates) on the other hand, that exist currently or
within the past two years and that are material:
o Servicer Servicer
o Trustee Trustee
o Securities Administrator Securities Administrator
o Any other 1108(a)(3) servicer Servicer
o Any 1110 Originator Depositor
o Any 1112(b) Significant Obligor Depositor
o Any 1114 Credit Enhancement Provider Depositor
o Any 1115 Derivative Counterparty Provider Depositor
o Any other 1101(d)(1) material party Depositor
EXHIBIT R
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FORM 8-K DISCLOSURE INFORMATION
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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 Sponsor (Seller) Depositor
o Depositor Depositor
o Servicer Servicer
o Affiliated Servicer Servicer
o Other Servicer servicing 20% or more of the Servicer
pool assets at the time of the report
o Other material servicers Servicer
o Trustee Trustee
o Securities Administrator Securities Administrator
o Significant Obligor Depositor
o Credit Enhancer (10% or more) Depositor
o Derivative Counterparty Depositor
o Custodian Custodian
Item 2.04- Triggering Events that Accelerate or Increase Depositor
a Direct Financial Obligation or an Obligation under an Servicer
Off-Balance Sheet Arrangement Securities Administrator
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 Securities Administrator/Trustee/Responsible
Holders Party/Depositor/Servicer
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 Depositor
Bylaws; Change of Fiscal Year
Disclosure is required of any amendment "to the
governing documents of the issuing entity".
Item 6.01- ABS Informational and Computational Material Depositor
Item 6.02- Change of Servicer or Trustee Servicer/Depositor/Securities Administrator/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.
Reg AB disclosure about any new servicer or master Servicer/Depositor
servicer is also required.
Reg AB disclosure about any new Trustee is also required. Trustee
Item 6.03- Change in Credit Enhancement or External Depositor/Securities Administrator
Support
Covers termination of any enhancement in manner other
than by its terms, the addition of an enhancement, or a
material change in the enhancement provided. Applies to
external credit enhancements as well as derivatives.
Reg AB disclosure about any new enhancement provider is Depositor
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 Reg
AB disclosure about the actual asset pool.
If there are any new servicers or originators required Depositor
to be disclosed under Regulation AB as a result of the
foregoing, provide the information called for in Items
1108 and 1110 respectively.
Item 7.01- Reg FD Disclosure Depositor
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 Party responsible for reporting/disclosing the
financial statement or exhibit
EXHIBIT S
INTEREST RATE SWAP AGREEMENT
BARCLAYS BANK PLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
DATE: May 3, 2006
TO: ▇▇▇▇▇ Fargo Bank, National Association, not
individually, but solely as Securities Administrator
for Securitized Asset Backed Receivables LLC Trust
2006-NC1, Mortgage Pass-Through Certificates, Series
2006-NC1
ATTENTION: Client Manager - SABR 2006-NC1
TELEPHONE: ▇▇▇-▇▇▇-▇▇▇▇
FACSIMILE: ▇▇▇-▇▇▇-▇▇▇▇
FROM: Barclays Bank PLC
TELEPHONE: ▇▇(▇▇) ▇▇▇ ▇▇▇▇▇
FACSIMILE: ▇▇(▇▇) ▇▇▇ ▇▇▇▇▇
SUBJECT: Fixed Income Derivatives Confirmation and Agreement
REFERENCE NUMBER: 1162729B
The purpose of this letter agreement ("Agreement") is to confirm the terms and
conditions of the Transaction entered into on the Trade Date specified below
(the "Transaction") between Barclays Bank PLC ("Barclays") and ▇▇▇▇▇ Fargo Bank,
National Association, not individually, but solely as Securities Administrator
and Custodian ("Counterparty") under the Pooling and Servicing Agreement, dated
and effective as of April 1, 2006, among Securitized Asset Backed Receivables
LLC, NC Capital Corporation, as Responsible Party, ▇▇▇▇▇ Fargo Bank, National
Association, as Servicer, Securities Administrator and Custodian, U.S. Bank
National Association, as Trustee, and OfficeTiger Global Real Estate Services
Inc., as Loan Performance Advisor (the "Pooling and Servicing Agreement") for
the Securitized Asset Backed Receivables LLC Trust 2006-NC1, Mortgage
Pass-Through Certificates, Series 2006-NC1. This Agreement, which evidences a
complete and binding agreement between you and us to enter into the Transaction
on the terms set forth below, constitutes a "Confirmation" as referred to in the
"ISDA Form Master Agreement" (as defined below), as well as a "Schedule" as
referred to in the ISDA Form Master Agreement.
1. This Agreement is subject to the 2000 ISDA Definitions (the
"Definitions"), as published by the International Swaps and Derivatives
Association, Inc. ("ISDA"). You and we have agreed to enter into this
Agreement in lieu of negotiating a Schedule to the 1992 ISDA Master
Agreement (Multicurrency--Cross Border) form (the "ISDA Form Master
Agreement") but, rather, an ISDA Form Master Agreement attached hereto
as Exhibit B shall be deemed to have been executed by you and us on the
date we entered into the Transaction. In the event of any inconsistency
between the provisions of this Agreement and the Definitions or the
ISDA Form Master Agreement, this Agreement shall prevail for purposes
of the Transaction. Terms capitalized but not defined herein shall have
the meanings attributed to them in the Pooling and Servicing Agreement.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount:................... With respect to any Calculation
Period, the amount set forth for such
period in Schedule I attached hereto.
Trade Date:........................ May 3, 2006
Effective Date:.................... May 3, 2006
Termination Date:.................. December 25, 2010
Fixed Amount:
Fixed Rate Payer:............... Counterparty
Fixed Rate Payer Payment Date:.. Early Payment shall be
applicable. For each Calculation
Period, the Floating Rate Payer
Payment Date shall be the first
Business Day prior to the related
Floating Rate Payer Period End Date.
Fixed Rate Payer Period End
Dates:........................ The 25th calendar day of each month
during the Term of this Transaction,
commencing May 25, 2006 and ending on
the Termination Date, subject to No
Adjustment.
Fixed Rate:..................... 5.33%
Fixed Amount:................... To be determined in accordance with
the following formula:
Fixed Rate * Notional Amount *
Multiplier * Fixed Rate Day Count
Fraction.
Fixed Rate Day Count Fraction:.. 30/360
Floating Amounts:
Floating Rate Payer:............ Barclays
Floating Rate Payer Payment
Dates:........................ Early Payment shall be applicable. For
each Calculation Period, the Floating
Rate Payer Payment Date shall be the
first Business Day prior to the
related 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,
2006 and ending on the Termination
Date, 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:
Floating Rate * Notional Amount *
Multiplier * 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
Business Day Convention:........... Modified Following
3. Additional Provisions: Each party hereto is hereby advised and
acknowledges that the other party has engaged in (or refrained from
engaging in) substantial financial transactions and has taken (or
refrained from taking) other material actions in reliance upon the
entry by the parties into the Transaction being entered into on the
terms and conditions set forth herein and in the Confirmation relating
to such Transaction, as applicable. This paragraph shall be deemed
repeated on the trade date of each Transaction.
4. Provisions Deemed Incorporated in a Schedule to the ISDA Form Master
Agreement:
1) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA
Form Master Agreement will apply to any Transaction.
2) Termination Provisions. For purposes of the ISDA Form Master
Agreement:
(a) "Specified Entity" is not applicable to Barclays or
Counterparty for any purpose.
(b) "Breach of Agreement" provision of Section 5(a)(ii) will not
apply to Barclays or Counterparty.
(c) "Credit Support Default" provisions of Section 5(a)(iii) will
not apply to Counterparty.
(d) "Misrepresentation" provisions of Section 5(a)(iv) will not
apply to Barclays or Counterparty.
(e) "Specified Transaction" is not applicable to Barclays or
Counterparty for any purpose, and, accordingly, Section
5(a)(v) shall not apply to Barclays or Counterparty.
(f) The "Cross Default" provisions of Section 5(a)(vi) will not
apply to Barclays or to Counterparty.
(g) The "Merger Without Assumption" provisions of Section
5(a)(viii) will not apply to Counterparty.
(h) The "Credit Event Upon Merger" provisions of Section 5(b)(iv)
will not apply to Barclays or Counterparty.
(i) With respect to Counterparty only, the "Bankruptcy" provision
of Section 5(a)(vii)(2) will not apply to Counterparty.
(j) The "Automatic Early Termination" provision of Section 6(a)
will not apply to Barclays or to Counterparty; provided
that, if the Event of Default specified in
Section 5(a)(vii)(1), (3), (4), (5), (6) or, to the extent
analogous thereto, (8) is governed by a system of law that
does not permit termination to take place after the
occurrence of the relevant Event of Default with respect to
a party, then the Automatic Early Termination provision of
Section 6(a) will apply to such party.
(k) Payments on Early Termination. For the purpose of Section 6(e)
of the ISDA Form Master Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(l) "Termination Currency" means United States Dollars.
3) Tax Representations.
Payer Representations. For the purpose of Section 3(e) of the ISDA
Form Master Agreement, Barclays and Counterparty make the following
representations:
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 the ISDA Form
Master 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 the ISDA Form Master
Agreement, (ii) the satisfaction of the agreement contained in
Section 4(a)(i) or 4(a)(iii) of the ISDA Form Master 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
the ISDA Form Master Agreement and (iii) the satisfaction of
the agreement of the other party contained in Section 4(d) of
the ISDA Form Master 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 of its legal or commercial position.
Payee Representations. (i) For the purpose of Section 3(f) of the
ISDA Form Master Agreement, Barclays makes the following
representations:
(a) Barclays is duly incorporated and validly existing as a public
company with liability under English law.
(b) Barclays is fully eligible for the benefits of the
"Business Profits" or "Industrial and Commercial Profits"
provision, as the case may be, the "Interest" provision or
the "Other Income" provision (if any) of the Specified
Treaty with respect to any payment described in such
provisions and received or to be received by it in
connection with this Agreement and no such payment is
attributable to a trade or business carried on by it
through a permanent establishment in the Specified
Jurisdiction.
If such representation applies, then:
"Specified Treaty" means, with respect to a Transaction, the
Convention for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with Respect to Taxes on Income
on Capital Gains, U.S.-U.K. (effective March 31, 2003); and
"Specified Jurisdiction" means United States of America
(c) Barclays is a "non-U.S. branch of a foreign person" for
purposes of section 1.1441-4(a)(3)(ii) and a "foreign person"
for purposes of section 1.6041-4(a)(4) of the United States
Treasury Regulations.
(ii) The following representation applies to Counterparty:
Counterparty represents that it is securities administrator of
the trust formed under the Pooling and Servicing Agreement and
is a "United States person" as such term is defined in Section
7701(a)(30) of the Internal Revenue Code of 1986, as amended.
4) The ISDA Form Master Agreement is hereby amended as follows:
(a) The word "third" shall be replaced by the word "second" in the
third line of Section 5(a)(i) of the ISDA Form Master
Agreement;
5) Documents to be Delivered. For the purpose of Section 4(a):
(1) Tax forms, documents, or certificates to be delivered are:
Party required Form/Document/ Date by which
to deliver document Certificate to be delivered
--------------------------------------------------------------------------------
Barclays A correct, complete and (i) Before the first
executed U.S. Internal Payment Date under
Revenue Service Form this Agreement,
W-8BEN, or any successor (ii) before December 31
thereto, including of each third
appropriate attachments, succeeding calendar
that eliminates U.S. year, (iii) promptly
federal withholding tax upon reasonable demand
and backup withholding by Counterparty, and
tax on payments under (iv) promptly upon
this Agreement. learning that any such
Form previously
provided by Barclays
has become obsolete or
incorrect.
Counterparty A complete and executed (i) Before the first
U.S. Internal Revenue Payment Date under this
Form W-9 (or any Agreement, (ii) promptly
successor thereto) that upon reasonable demand
eliminates U.S. federal by Barclays, and Service
backup withholding tax (iii) promptly upon
on payments under this learning that any such
Agreement. form previously provided
by Counterparty has
become obsolete or
incorrect.
(2) Other documents to be delivered are:
Party required to Form/Document/ Date by which Covered by Section 3(d)
deliver document Certificate to be delivered Representation
----------------------------- ---------------------------------- -------------------------- --------------------------
Barclays and the Any documents required by the Upon the execution and Yes
Counterparty receiving party to evidence the delivery of this
authority of the delivering Agreement and such
party or its Credit Support Confirmation
Provider, if any, for it to
execute and deliver this
Agreement, any Confirmation, and
any Credit Support Documents to
which it is a party, and to
evidence the authority of the
delivering party or its Credit
Support Provider to perform its
obligations under this
Agreement, such Confirmation
and/or Credit Support Document,
as the case may be
Barclays and the A certificate of an authorized Upon the execution and Yes
Counterparty officer of the party, as to the delivery of this
incumbency and authority of the Agreement and such
respective officers of the party Confirmation
signing this Agreement, any
relevant Credit Support
Document, or any Confirmation,
as the case may be
6) Miscellaneous. Miscellaneous
(a) Address for Notices: For the purposes of Section 12(a) of the
ISDA Form Master Agreement:
Address for notices or communications to Barclays:
Address: ▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Swap Desk
Facsimile: ▇▇(▇▇) ▇▇▇ ▇▇▇▇▇
Telephone: ▇▇(▇▇) ▇▇▇ ▇▇▇▇▇
(For all purposes)
Address for notices or communications to the Counterparty:
Address: ▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Client Manager - SABR 2006-NC1
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
(For all purposes)
(b) Process Agent. For the purpose of Section 13(c):
Barclays appoints as its Process Agent: Not Applicable
The Counterparty appoints as its Process Agent: Not
Applicable
(c) Offices. The provisions of Section 10(a) will not apply to
this Agreement; neither Barclays nor the Counterparty have any
Offices other than as set forth in the Notices Section and
Barclays agrees that, for purposes of Section 6(b) of the ISDA
Form Master Agreement, it shall not in future have any Office
other than one in the United States.
(d) Multibranch Party. For the purpose of Section 10(c) of the
ISDA Form Master Agreement:
Barclays is not a Multibranch Party.
The Counterparty is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Barclays.
(f) Credit Support Document. Not applicable with respect to the
Counterparty. With respect to Barclays, the Credit Support
Annex by and between the parties hereto dated as of a date
even herewith shall be a Credit Support Document in such case
that Barclays elects to post collateral pursuant to Section 12
hereof.
(g) Credit Support Provider.
Barclays: Not Applicable
The Counterparty: Not Applicable
(h) Governing Law. The parties to this Agreement hereby agree that
the law of the State of New York shall govern their rights and
duties in whole without regard to conflict of law provisions
thereof other than New York General Obligations Law Sections
5-1401 and 5-1402.
(i) 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.
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.
(j) 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 officers
or employees 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.
(k) Waiver of Jury Trial. Each party waives any right it may have
to a trial by jury in respect of any Proceedings relating to
this Agreement or any Credit Support Document.
(l) Securities Administrator Capacity. It is expressly
understood and agreed by the parties hereto that insofar as
this Confirmation is executed by the Securities
Administrator (i) this Confirmation is executed and
delivered by ▇▇▇▇▇ Fargo Bank, National Association not in
its individual capacity but solely as Securities
Administrator under the Pooling and Servicing Agreement
referred to in this Confirmation in the exercise of the
powers and authority conferred upon and vested in it, and
pursuant to instructions set for the therein, (ii) each of
the representations, undertakings and agreements herein
made on the part of Securitized Asset Backed Receivables
LLC Trust 2006-NC1 is made and intended not as a personal
representation, undertaking or agreement by ▇▇▇▇▇ Fargo
Bank, National Association but is made and intended for the
purposes of binding only Securitized Asset Backed
Receivables LLC Trust 2006-NC1, (iii) nothing herein
contained shall be construed as imposing any liability upon
▇▇▇▇▇ Fargo Bank, National Association, individually or
personally, to perform any covenant either expressed or
implied contained herein, all such liability, if any, being
expressly waived by the parties hereto and by any Person
claiming by, through or under the parties hereto, and
(iv) 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 or any other
related documents.
(m) Proceedings. Barclays shall not institute against or cause
any other person to institute against, or join any other
person in instituting against, Securitized Asset Backed
Receivables LLC Trust 2006-NC1 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 (as defined below).
7) "Affiliate" Barclays and Counterparty shall be deemed to not have
any Affiliates for purposes of this Agreement, including for
purposes of Section 6(b)(ii).
8) Section 3 of the ISDA Form Master Agreement is hereby amended by
adding at the end thereof the following subsection (g):
"(g) Relationship Between Parties.
Subject to Section 4(6)(l) of this Agreement, each party
represents to the other party on each date when it enters into
a Transaction that:
(1) Nonreliance. It is not relying on any statement or
representation of the other party regarding the
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) Barclays is acting for its own account and ▇▇▇▇▇
Fargo Bank, National Association is acting as
Securities Administrator under the Pooling and
Servicing Agreement and not for its own account.
Each party has the capacity to evaluate
(internally or through independent professional
advice) the Transaction and has made its own
decision to enter into the Transaction;
(ii) It understands the terms, conditions and risks of
the Transaction and is willing and able to accept
those terms and conditions and to assume those
risks, financially and otherwise; and
(iii) The other party is not acting as a fiduciary or an
advisor for it in respect of this 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 1(a)(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) Status of Parties. The other party is not acting as an
agent, fiduciary or advisor for it in respect of
the Transaction."
9) Set-off. 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. The provisions for Set-off set forth in Section 6(e) of
the Agreement shall not apply for purposes of this Transaction.
10) Transfer, Amendment and Assignment. No transfer, amendment, waiver,
supplement, assignment or other modification of this Transaction
shall be permitted by either party unless each of Standard & Poor's
Ratings Service, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
("S&P") and ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's" and, together
with S&P, the "Rating Agencies"), has been provided notice of the
same and confirms in writing (including by facsimile transmission)
promptly after such notice is given that it will not downgrade,
qualify, withdraw or otherwise modify its then-current rating of the
Securitized Asset Backed Receivables LLC Trust 2006-NC1, Mortgage
Pass-Through Certificates, Series 2006-NC1 (the "Certificates"). In
addition, the Trust may not assign or transfer all or a portion of
this Agreement without the prior written consent of Barclays.
11) Additional Termination Events. The following Additional Termination
Events will apply, in each case with respect to the Counterparty as
the sole Affected Party (unless otherwise provided below):
(i) The Pooling and Servicing Agreement is amended without
the consent of Barclays and such amendment materially
and adversely affects the rights or interests of
Barclays.
(ii) Barclays fails to comply with the Rating Agency
Downgrade provisions as set forth in Section 12 below.
For all purposes of this Agreement, Barclays shall be
the sole Affected Party with respect to the occurrence
of a Termination Event described in this Section 11(ii).
(iii) Notice of the Majority Class X Certificateholder's or
the NIMS Insurer's, as applicable, intention to exercise
its option to purchase the Mortgage Loans pursuant to
Section 10.01 of the Pooling and Servicing Agreement is
given by the Securities Administrator to
Certificateholders pursuant to Section 10.02 of the
Pooling and Servicing Agreement. Notwithstanding the
foregoing, this clause shall not constitute an
Additional Termination Event until such date as the
notice of the Majority Class X Certificateholder's or
the NIMS Insurer's, as applicable, intention to exercise
its option to purchase the Mortgage Loans can no longer
be withdrawn or rescinded in accordance with the Pooling
and Servicing Agreement.
(iv) 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.
12) Rating Agency Downgrade. In the event that (x) either of the Rating
Agencies downgrades Barclays' rating below the Required Swap
Counterparty Rating (but Barclays has (i) a rating of at least
"BBB-" or "A-3", if applicable, by S&P, or (ii) (x) if Barclays has
only a long-term rating, a rating of at least "A2" by Moody's, or
(y) if Barclays has a long-term rating and a short-term rating, a
rating of at least "A3" or "P2", if applicable, by Moody's) or, S&P
or Moody's withdraws its ratings of Barclays, then within 30 days
after such rating withdrawal or downgrade, Barclays shall, subject
to the Rating Agency Condition, at its own expense, either (i) cause
another entity to replace Barclays as party to this Agreement that
meets or exceeds the Required Swap Counterparty Rating on terms
substantially similar to this Agreement, (ii) obtain a guaranty of,
or a contingent agreement of, another person with the Required Swap
Counterparty Rating to honor Barclays' obligations under this
Agreement, (iii) collateralize its exposure to the Trust pursuant to
an ISDA Credit Support Annex substantially in the form attached
hereto as Exhibit A; provided that such ISDA Credit Support Annex
shall be made a credit support document for Barclays pursuant to an
amendment to this Agreement, or (iv) take other steps, if any, to
enable the Trust to satisfy the Rating Agency Condition.
Notwithstanding the foregoing, in the event that Barclays' long term
rating or short term rating is withdrawn by S&P, it shall, subject
to the Rating Agency Condition, cause another entity to replace
Barclays as party to this Agreement that meets or exceeds the
Required Swap Counterparty Rating on terms substantially similar to
this Agreement within 30 days from such ratings withdrawal. For
purposes of this provision, "Rating Agency Condition" means, with
respect to any particular proposed act or omission to act hereunder
that the party acting or failing to act must consult with each of
the Rating Agencies then providing a rating of the Certificates and
receive from each Rating Agency 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.
Notwithstanding the foregoing, within 10 days from the occurrence of
either of the following conditions, Barclays must use its
commercially reasonable efforts to find a party, subject to the
Rating Agency Condition, acceptable to Counterparty, which
acceptance shall not be unreasonably withheld, to whom all of
Barclays' interests and obligations under this Agreement shall be
assigned at no cost to Counterparty, and following which Barclays
shall be released from all further obligations under this Agreement:
(1) Barclays' Short Term rating is reduced below "A-3" by S&P
or Barclays' Long Term rating is reduced below "BBB-" by S&P;
or
(2) (A) if Barclays has only a long-term rating, its rating is
reduced below "A2" by Moody's, or (B) if Barclays has a
long-term rating and a short-term rating, its rating is
reduced below "A3" or "P2", if applicable, by Moody's.
For purposes of this provision, "Required Swap Counterparty Rating"
means, with respect to a counterparty or entity guaranteeing the
obligations of such counterparty, (x) either (i) if such
counterparty or entity has only a long-term rating by Moody's, a
long-term senior, unsecured debt obligation rating, credit rating or
other similar rating (as the case may be, the "Long-Term Rating") of
at least "Aa3" by Moody's and if rated "Aa3" by ▇▇▇▇▇'▇ is not on
negative credit watch by Moody's or (ii) if such counterparty or
entity has a Long-Term Rating and a short-term rating by Moody's, a
Long-Term Rating of at least "A1" by Moody's and a short-term rating
of "P-1" by Moody's and, in each case, such rating is not on
negative credit watch by Moody's and (y) (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.
NEITHER BARCLAYS BANK PLC NOR ANY SUBSIDIARY OR AFFILIATE OF
BARCLAYS BANK PLC OTHER THAN BARCLAYS IS AN OBLIGOR OR A CREDIT
SUPPORT PROVIDER ON THIS AGREEMENT.
The NIMS Insurer shall be a third party beneficiary of this
Agreement and shall have the right to enforce this Agreement to the
same extent as if it were a party hereto.
5. Account Details and Settlement Information:
Payments to Barclays:
Correspondent: Barclays Bank PLC New York
FEED: ▇▇▇▇▇▇▇▇▇
Beneficiary: Barclays Swaps
Beneficiary Account: ▇▇▇-▇▇▇▇▇-▇
Payments to Counterparty:
▇▇▇▇▇ Fargo Bank, National Association
San Francisco, CA
ABA No.: ▇▇▇-▇▇▇-▇▇▇
Account No.: ▇▇▇▇▇▇▇▇▇▇
Account Name: Corporate Trust Clearing
FFC: 17214200, SABR 2006-NC1 Swap Account
The time of dealing will be confirmed by Barclays upon written request. Barclays
is regulated by the Financial Services Authority.
This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to Barclays a facsimile of the fully-executed
Confirmation to Incoming Transaction Documentation, Barclays Capital Global OTC
Transaction Documentation & Management, Global Operations, Fax +(44)
▇▇-▇▇▇▇-▇▇▇▇/6857, Tel ▇(▇▇) ▇▇-▇▇▇▇-▇▇▇▇/6904/6965 and mailing the signed copy
to Barclays Bank PLC, 5 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇,
Attention of Incoming Transaction Documentation, Barclays Capital Global OTC
Transaction Documentation & Management, Global Operation. This facsimile shall
be the only documentation in respect of the Transaction and accordingly no hard
copy versions of this Confirmation for this Transaction shall be provided unless
the Counterparty requests.
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
BARCLAYS BANK PLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorised Signatory
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
SECURITIZED ASSET BACKED RECEIVABLES
LLC TRUST 2006-NC1
By: ▇▇▇▇▇ Fargo Bank, National
Association, not individually but
solely as Securities Administrator
for Securitized Asset Backed
Receivables LLC Trust 2006-NC1
By: /s/ ▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Vice President
SCHEDULE I
From and including To but excluding Notional Amount (USD) Multiplier
----------------------------- --------------------------- ----------------------------- ----------------------------
Effective Date 5/25/2006 7,794,910.00 100
5/25/2006 6/25/2006 7,539,351.47 100
6/25/2006 7/25/2006 7,289,303.35 100
7/25/2006 8/25/2006 7,044,473.52 100
8/25/2006 9/25/2006 6,804,605.54 100
9/25/2006 10/25/2006 6,569,478.17 100
10/25/2006 11/25/2006 6,338,904.86 100
11/25/2006 12/25/2006 6,112,732.88 100
12/25/2006 1/25/2007 5,890,842.39 100
1/25/2007 2/25/2007 5,673,151.36 100
2/25/2007 3/25/2007 5,459,620.86 100
3/25/2007 4/25/2007 5,252,698.78 100
4/25/2007 5/25/2007 5,053,317.27 100
5/25/2007 6/25/2007 4,861,496.85 100
6/25/2007 7/25/2007 4,676,950.88 100
7/25/2007 8/25/2007 4,499,403.61 100
8/25/2007 9/25/2007 4,328,589.74 100
9/25/2007 10/25/2007 4,164,254.03 100
10/25/2007 11/25/2007 4,006,150.93 100
11/25/2007 12/25/2007 3,854,044.15 100
12/25/2007 1/25/2008 3,707,706.41 100
1/25/2008 2/25/2008 3,566,923.53 100
2/25/2008 3/25/2008 3,431,758.23 100
3/25/2008 4/25/2008 3,301,709.70 100
4/25/2008 5/25/2008 3,176,584.33 100
5/25/2008 6/25/2008 3,056,195.84 100
6/25/2008 7/25/2008 2,940,364.98 100
7/25/2008 8/25/2008 2,828,921.90 100
8/25/2008 9/25/2008 2,721,861.02 100
9/25/2008 10/25/2008 2,618,847.75 100
10/25/2008 11/25/2008 2,519,741.70 100
11/25/2008 12/25/2008 2,424,382.55 100
12/25/2008 1/25/2009 2,332,628.33 100
1/25/2009 2/25/2009 2,244,349.71 100
2/25/2009 3/25/2009 2,159,442.17 100
3/25/2009 4/25/2009 2,077,743.24 100
4/25/2009 5/25/2009 1,999,139.79 100
5/25/2009 6/25/2009 1,923,506.77 100
6/25/2009 7/25/2009 1,850,731.76 100
7/25/2009 8/25/2009 1,780,710.50 100
8/25/2009 9/25/2009 1,713,337.45 100
9/25/2009 10/25/2009 1,648,510.25 100
10/25/2009 11/25/2009 1,586,136.54 100
11/25/2009 12/25/2009 1,526,119.86 100
12/25/2009 1/25/2010 1,468,371.07 100
1/25/2010 2/25/2010 1,412,806.01 100
2/25/2010 3/25/2010 1,359,341.51 100
3/25/2010 4/25/2010 1,307,897.39 100
4/25/2010 5/25/2010 1,258,397.33 100
5/25/2010 6/25/2010 1,210,767.95 100
6/25/2010 7/25/2010 1,164,938.60 100
7/25/2010 8/25/2010 1,120,841.40 100
8/25/2010 9/25/2010 1,078,410.83 100
9/25/2010 10/25/2010 1,037,853.95 100
10/25/2010 11/25/2010 998,300.19 100
11/25/2010 12/25/2010 960,500.95 100
12/25/2010 1/25/2011 - -
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 deemed to be entered into
dated as of [________]
between
BARCLAYS BANK PLC SECURITIZED ASSET BACKED RECEIVABLES
LLC TRUST 2006-NC1
By: ▇▇▇▇▇ Fargo Bank, National
Association, not individually, but
solely as Securities Administrator
of Securitized Asset Backed
Receivables LLC Trust 2006-NC1
........................................ and ...................................
("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.
Elections and Variables
to the ISDA Credit Support Annex
dated as of
between
BARCLAYS BANK PLC and Securitized Asset Backed
Receivables LLC Trust 2006-NC1
("Party A") ("Party B")
Paragraph 13
(a) Security Interest for "Obligations". The term "Obligations" as used in
this Annex includes the following additional obligations:
With respect to Party A: None.
With respect to Party B: None.
(b) Credit Support Obligations.
(i) Delivery Amount, Return Amount and Credit Support Amount.
(A) "Delivery Amount" has the meaning specified in
Paragraph 3(a) , except that the words "upon a demand
made by the Secured Party on or promptly following a
Valuation Date" shall be deleted and replaced with
the words "not later than the close of business on
the next Local Business Day following a Valuation
Date".
(B) "Return Amount" has the meaning specified in
Paragraph 3(b).
(C) "Credit Support Amount" shall not have the meaning
specified in Paragraph 3(b) and, instead, will have
the following meaning:
"Credit Support Amount" means, (a) for any Valuation
Date on which a Rating Agency Downgrade (as defined
in the Agreement) has occurred and is continuing, the
Secured Party's Modified Exposure for that Valuation
Date.
(ii) Eligible Credit Support. On any date, the following items will
qualify as "Eligible Credit Support" for each party:
Valuation
Percentage
(A) cash in U.S. Dollars 100%
(B) negotiable debt obligations issued after 18 July 98.6%
1984 by the U.S. Treasury Department having a
residual maturity on such date of less than 1 year
(with local and foreign currency issuer ratings of
Moody's Aa2 and S&P AA or above)
(C) negotiable debt obligations issued after 18 July To Be Determined
1984 by the U.S. Treasury Department having a
residual maturity on such date equal to or greater
than 1 year but less than 5 years (with local and
foreign currency issuer ratings of Moody's Aa2 and
S&P AA or above)
(D) negotiable debt obligations issued after l8 July To Be Determined
1984 by the U.S. Treasury Department having a
residual maturity on such date equal to or greater
than 5 years but less than 10 years (with local and
foreign currency issuer ratings of Moody's Aa2 and
S&P AA or above)
(E) negotiable debt obligations of the Government To Be Determined
National Mortgage Association, the Federal National
Mortgage Association, the Federal Home Loan Mortgage
Corporation, the Student Loan Marketing Association
or a Federal Home Loan Bank (all entities rated
Moody's Aal and S&P AA+ or above) with a residual
maturity on such date equal to or
greater than 1 year but less than 3 years.
(F) negotiable debt obligations of the Government To Be Determined
National Mortgage Association, the Federal National
Mortgage Association, the Federal Home Loan Mortgage
Corporation, the Student Loan Marketing Association
or a Federal Home Loan Bank (all entries rated
▇▇▇▇▇'▇ ▇▇ 1 and S&P AA+ or above) with a residual
maturity on such date equal to or
greater than 3 years but less than 5 years.
(G) negotiable debt obligations of the Government To Be Determined
National Mortgage Association, the Federal National
Mortgage Association, the Federal Home Loan Mortgage
Corporation, the Student Loan Marketing Association
or a Federal Home Loan Bank (all entries rated
Moody's Aal and S&P AA+ or above) with a residual
maturity on such date equal to or
greater than 5 years but less than 7 years.
(H) negotiable debt obligations of the Government To Be Determined
National Mortgage Association, the Federal National
Mortgage Association, the Federal Home Loan Mortgage
Corporation, the Student Loan Marketing Association
or a Federal Home Loan Bank (all entries rated
Moody's Aal and S&P AA+ or above) with a residual
maturity on such date equal to or
greater than 7 years but less than 10 years.
For the avoidance of doubt, where negotiable debt obligations are rated
by only one of the above relevant rating agencies, the rating applied
will be based on the rating of that agency. Notwithstanding the
foregoing, the Eligible Collateral referenced above may only be posted
if S&P has assigned a rating to such Eligible Collateral and
concurrently with such delivery of Eligible Collateral, Party A shall
cause its counsel to deliver an opinion as to the enforceability,
perfection and priority of Counterparty's security interest in such
Eligible Collateral if necessary to satisfy the Rating Agency
Condition.
Where the ratings of the relevant agencies differ with respect to the
same negotiable debt obligation, the lower of the ratings shall apply.
In addition, upon a Rating Agency Downgrade, Party A shall agree to the
Valuation Percentage in relation to (C) through (H) above with the
relevant rating agency, which shall be S&P and Moody's (to the extent
such ratings agency has provided a rating for the underlying
Certificates); provided, however, that if Party A is required to post
collateral in accordance with the terms of this Agreement it shall post
only (A) and (B) above until such time as the Valuation Percentages are
agreed.
(iii) Other Eligible Support. Such Other Eligible Support as the
Pledgor may designate; provided, at the expense of the
Pledgor, the prior written consent of the relevant rating
agency, which shall be S&P and Moody's (to the extent such
ratings agency has provided a rating for the underlying
Certificates), shall have been obtained. For the avoidance of
doubt there are no items which qualify as Other Eligible
Support as of the date of this Annex.
(iv) Thresholds.
(A) "Independent Amount" means zero.
(B) "Threshold" means for Party A:
1. infinity, unless (i) a Rating Agency
Downgrade occurs and is continuing and (ii)
Party A has not otherwise complied with
Section 4(12) of this Agreement, then its
Threshold shall be zero, or
2. in the event that Party A has otherwise
complied with Section 4(12) of this
Agreement, its Threshold shall continue to
be infinity.
"Threshold" means, for Party B: infinity
(C) "Minimum Transfer Amount" means USD 20,000, provided,
however, with respect to the Secured Party at any
time when the Secured Party is a Defaulting Party,
"Minimum Transfer Amount" means zero.
(D) Rounding: The Delivery Amount and the Return Amount
will not be rounded.
(c) Valuation and Timing.
(i) "Valuation Agent" means Party A. The Valuation Agent's
calculations shall be in accordance with standard market
practice using commonly accepted third party sources.
(ii) "Valuation Date" means each Local Business Day which, if
treated as a Valuation Date, would result in a Delivery Amount
or Return Amount.
(iii) "Valuation Time" means the close of business in the city of
the Valuation Agent on the Local Business Day before 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 11:00 a.m., New York time, on a
Local Business Day.
(d) Conditions Precedent and Secured Party's Rights and Remedies. The
following Termination Event will be a "Specified Condition" for the
party specified (that party being the Affected Party if the Termination
Event occurs with respect to that party): None.
(e) Substitution.
(i) "Substitution Date" has the meaning specified in Paragraph
4(d)(ii).
(ii) Consent. Not applicable.
(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.
Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), on any
date, the Value of Eligible Credit Support will be calculated
as follows:
For Eligible Credit Support comprised of cash, the amount of
such cash.
For Eligible Collateral comprising securities; the sum of
(a)(x) the last bid price on such date for such securities on
the principal national securities exchange on which such
securities are listed, multiplied by the applicable Valuation
Percentage or (y) where any such securities are not listed on
a national securities exchange, the bid price for such
securities quoted as at the close of business on such date by
any principal market maker for such securities chosen by the
Valuation Agent, multiplied by the applicable Valuation
Percentage or (z) if no such bid price is listed or quoted for
such date, the last bid price listed or quoted (as the case
may be), as of the day next preceding such date on which such
prices were available; multiplied by the applicable Valuation
Percentage; plus (b) the accrued interest on such securities
(except to the extent that such interest shall have been paid
to the Pledgor pursuant to Paragraph 6(d)(ii) or included in
the applicable price referred to in subparagraph (a) above) as
of such date.
(ii) Alternative. The provisions of Paragraph 5 will apply;
provided that the obligation of the appropriate party to
deliver the undisputed amount to the other party will not
arise prior to the time that would otherwise have applied to
the Transfer pursuant to, or deemed made, under Paragraph 3 if
no dispute had arisen.
(g) Holding and Using Posted Collateral.
(i) Eligibility to Hold Posted Collateral; Custodians.
Party B is not and will not be entitled to hold Posted
Collateral. Party B's Custodian will be entitled to hold
Posted Collateral pursuant to Paragraph 6(b); provided that
initially, the Custodian for Party B is ▇▇▇▇▇ Fargo Bank,
National Association, not in its individual capacity, but
solely as Administrator.
(ii) Use of Posted Collateral. The provisions of Paragraph 6(c)
will not apply to Party B; therefore, Party B will not have
any of the rights specified in Paragraph 6(c)(i) or 6 (c)(ii);
provided, however, that the Securities Administrator shall
invest Cash Posted Credit Support in such investments as
designated by Party A, with losses (net of gains) incurred in
respect of such investments to be for the account of Party A.
The Secured Party is authorized to liquidate any Posted Credit
Support pursuant to written instructions from Party A.
(h) Distributions and Interest Amount.
(i) Interest Rate. The "Interest Rate" will be the rate earned on
Cash Posted Credit Support pursuant to clause (g)(ii) above.
(ii) Transfer of Interest Amount. The Transfer of the Interest
Amount will be made on each Distribution Date only to the
extent of the interest rate provided for in (h)(i) above.
(iii) Alternative to Interest Amount. The provisions of Paragraph
6(d)(ii) will not apply.
(i) Additional Representation(s).
There are no additional representations by either party.
(j) Other Eligible Support and Other Posted Support.
(i) "Value" with respect to Other Eligible Support and Other
Posted Support shall have such meaning as the parties shall
agree in writing from time to time.
(ii) "Transfer" with respect to Other Eligible Support and Other
Posted Support shall have such meaning as the parties shall
agree in writing from time to time.
(k) Demands and Notices.
All demands, specifications and notices under this Annex will be made
pursuant to the Notices Section of this Agreement, save that any
demand, specification or notice:
(i) shall be given to or made at the following addresses:
If to Party A:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Collateral Management
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
General Counsel's Office
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
If to Party B:
Securitized Asset Backed Receivables LLC Trust
2006-NC1
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Client Manager - SABR 2006-NC1
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Standard & Poor's
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
or at such other address as the relevant party may from time to time
designate by giving notice (in accordance with the terms of this
paragraph) to the other party;
(ii) shall (unless otherwise stated in this Annex) be deemed to be
effective at the time such notice is actually received unless
such notice is received on a day which is not a Local Business
Day or after the Notification Time on any Local Business Day
in which event such notice shall be deemed to be effective on
the next succeeding Local Business Day.
(l) Address for Transfers.
Party A:
For Cash: For Treasury Securities:
Barclays Bank PLC, NY Bank of NYC/BBPLCLDN
ABA #▇▇▇-▇▇▇-▇▇▇ ABA #▇▇▇-▇▇▇-▇▇▇
F/O Barclays Swaps & Options Group NY
A/C #: 050019228
REF: Collateral
Party B:
▇▇▇▇▇ Fargo Bank, National Association
New York, NY
ABA: ▇▇▇▇▇▇▇▇▇
Account No: ▇▇▇▇▇▇▇▇▇▇
Account Name: Corporate Trust Clearing
FFC: 17214200
REF: SABR 2006-NC1 Swap Account
(m) Other Provisions.
(i) Additional Definitions. As used in this Annex:
"Local Business Day" means: (i) any day on which commercial
banks are open for business (including dealings in foreign
exchange and foreign currency deposits) in London, New York
and the location of the Securities Administrator, and (ii) in
relation to a Transfer of Eligible Credit Support, a day on
which the clearance system agreed between the parties for the
delivery of Eligible Credit Support is open for acceptance and
execution of settlement instructions (or in the case of a
Transfer of Cash or other Eligible Credit Support for which
delivery is contemplated by other means, a day on which
commercial banks are open for business (including dealings for
foreign exchange and foreign deposits) in New York and such
other places as the parties shall agree).
(ii) Holding Collateral. The Secured Party shall cause any
Custodian appointed hereunder to open and maintain a
segregated account and to hold, record and identify all the
Posted Collateral in such segregated account and, subject to
Paragraph 8(a), such Posted Collateral shall at all times be
and remain the property of the Pledgor and shall at no time
constitute the property of, or be commingled with the property
of, the Secured Party or the Custodian.
(iii) Agreement as to Single Secured Party and Pledgor. Party A and
Party B agree that, notwithstanding anything to the contrary
in this Annex, (a) the term "Secured Party" as used in this
Annex means only Party B, (b) the term "Pledgor" as used in
this Annex means 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) Party A shall have no obligations under
this Annex other than during a Collateral Requirement Period.
(iv) Form of Annex. The parties hereby agree that the text of the
body of this Annex is intended to be the printed form of ISDA
Credit Support Annex (Bilateral Form - ISDA Agreements Subject
to New York Law version) as published and copyrighted by the
International Swaps and Derivatives Association, Inc.
(v) Exposure. The Parties agree that in the event of a Rating
Agency Downgrade relating to an action taken by S&P, the
Valuation Agent shall verify its calculation of the Secured
Party's Exposure on a weekly basis but shall verify such
valuation by seeking two quotations from Reference
Market-makers at the end of each quarter. For the avoidance of
doubt, the Valuation Agent must (i) obtain at least 2 Market
Quotations (as stated above) and (ii) may not obtain the
quotations referred to above from the same Reference
Market-maker in excess of four times during any 12 month
period. Furthermore, the Exposure valuations should reflect
the higher of two bids from Reference Market-makers that would
be eligible and willing to provide the market quotation in the
absence of the current provider. The collateral requirement
should be based on the greater of the internal and external
market quotations. In the event the verification procedures
set forth above indicate that there is a deficiency in the
amount of Eligible Collateral that has been posted to the
Secured Party, the Pledgor shall post the amount of Eligible
Collateral necessary to cure such deficiency to the Secured
Party within three Local Business Days.
(vi) Expenses. Notwithstanding Paragraph 10, the Pledgor will be
responsible for, and will reimburse the Secured Party for, all
transfer and other taxes and other costs involved in the
transfer of Eligible Collateral.
(n) Securities Administrator Capacity
It is expressly understood and agreed by the parties hereto that (i)
this Annex is executed and delivered by ▇▇▇▇▇ Fargo Bank, National
Association, not individually or personally but solely as Securities
Administrator of the Trust under the pooling and servicing agreement
pursuant to which the Trust was formed, in the exercise of the powers
and authority conferred upon and vested in it, and pursuant to
instructions set forth therein, (ii) each of the representations,
undertakings and agreements by ▇▇▇▇▇ Fargo Bank, National Association
is made and intended not as a personal representation, undertaking or
agreement of ▇▇▇▇▇ Fargo Bank, National Association, but solely for the
purpose of binding only the Trust, (iii) nothing herein contained shall
be construed as imposing any liability upon ▇▇▇▇▇ Fargo Bank, National
Association, individually or personally, to perform any covenant
(either express or implied) contained herein, and all such liability,
if any, is hereby expressly waived by the parties hereto, and such
waiver shall bind any third party making a claim by or through one of
the parties hereto, and (iv) under no circumstances shall ▇▇▇▇▇ Fargo
Bank, National Association be personally liable for the payment of any
indebtedness or expenses of the Trust, or be liable for the breach or
failure of any obligaion, representation, warranty or covenant made or
undertaken by the Trust under this Annex or any related document.
(o) Additional Definitions. As used in this Annex:
"Rating Agency Downgrade" means a "Rating Agency Downgrade" (as
defined in the Agreement).
"Modified Exposure" means, for any Valuation Date, an amount equal to
the greater of (a) the sum of Secured Party's Exposure for that
Valuation Date plus (the Notional Volatility Buffer multiplied by the
Notional Amount) and (b) zero.
"Notional Volatility Buffer" as determined by the Valuation Agent for
any date, means the outstanding Notional Amount of the Transaction on
such date multiplied by the relevant percentage for such date as set
out in the table below on such date.
Less than
or equal to Less than or equal to
5 years to 10 years but greater
Termination than 5 years to
Party A S&P Rating Date of the Termination Date of
on such date Transaction the Transaction
-------------------- ------------- ----------------------
S-T Rating of A-2 3.25% 4.00%
S-T Rating of A-3 4.00% 5.00%
L-T Rating of BB+ or 4.50% 5.75%
lower
IN WITNESS WHEREOF, the parties have executed this Annex by their
duly authorized representatives as of the date of the Agreement.
BARCLAYS BANK PLC SECURITIZED ASSET BACKED RECEIVABLES
LLC TRUST 2006-NC1
By: ▇▇▇▇▇ Fargo Bank, National
Association, not individually, but
solely as securities administrator of
Securitized Asset Backed Receivables
LLC Trust 2006-NC1
By: By:
------------------------------------ ------------------------------------
Name: Name:
Title: Title:
(Multicurrency -- Cross Border)
EXHIBIT B
---------
ISDA Form Master Agreement
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of ............
...................................... and ....................................
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows: --
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than by
payment), such delivery will be made for receipt on the due date in the
manner customary for the relevant obligation unless otherwise specified in
the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing,
(2) the condition precedent that no Early Termination Date in respect of
the relevant Transaction has occurred or been effectively designated and
(3) each other applicable condition precedent specified in this Agreement.
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified by
the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that party
("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that
such deduction or withholding is required or receiving notice that
such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
the payment to which Y is otherwise entitled under this Agreement,
such additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal the full amount Y would
have received had no such deduction or withholding been required.
However, X will not be required to pay any additional amount to Y to
the extent that it would not be required to be paid but for:--
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure would
not have occurred but for (I) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on
or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (II) a Change in Tax
Law.
(ii) Liability. If: --
(1) X is required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, to make any
deduction or withholding in respect of which X would not be required
to pay an additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against
X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
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.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of
the jurisdiction of its organisation or incorporation and, if relevant
under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to perform
its obligations under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken all necessary
action to authorise such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision of
its constitutional documents, any order or judgment of any court or other
agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in 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.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation specified in
the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to allow
such other party or its Credit Support Provider to make a payment under
this Agreement or any applicable Credit Support Document without any
deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of such
demand), with any such form or document to be accurate and completed in a
manner reasonably satisfactory to such other party and to be executed and
to be delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or 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.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:--
(i) Failure to Pay or Deliver. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the
party;
(ii) Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment
under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
notice of a Termination Event or any agreement or obligation under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
in accordance with this Agreement if such failure is not remedied on or
before the thirtieth day after notice of such failure is given to the
party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any applicable
grace period has elapsed;
(2) the expiration or termination of such Credit Support Document or
the failing or ceasing of such Credit Support Document to be in full
force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction
of all obligations of such party under each Transaction to which
such Credit Support Document relates without the written consent of
the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the
validity of such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made or
repeated by the party or any Credit Support Provider of such party in this
Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation
of, an acceleration of obligations under, or an early termination of, that
Specified Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or delivery due
on the last payment, delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims, repudiates or
rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or act
on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event
of default or other similar condition or event (however described) in
respect of such party, any Credit Support Provider of such party or any
applicable Specified Entity of such party under one or more agreements or
instruments relating to Specified Indebtedness of any of them
(individually or collectively) in an aggregate amount of not less than the
applicable Threshold Amount (as specified in the Schedule) which has
resulted in such Specified Indebtedness becoming, or becoming capable at
such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a
default by such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more payments on
the due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a
judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (A)
results in a judgment of insolvency or bankruptcy or the entry of an
order for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant
to a consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets;
(7) has a secured party take possession of all or substantially all
its assets or has a distress, execution, attachment, sequestration
or other legal process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed
or restrained, in each case within 30 days thereafter; (8) causes or
is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect to any
of the events specified in clauses (1) to (7) (inclusive); or (9)
takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at
the time of such consolidation, amalgamation, merger or transfer:--
(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it or
its predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the event
is specified pursuant to (v) below:--
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party): --
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in respect
of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is
required to be paid in respect of such Tax under Section 2(d)(i)(4) (other
than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which
the other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X consolidates
or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event" is
specified in the Schedule or any Confirmation as applying, the occurrence
of such event (and, in such event, the Affected Party or Affected Parties
shall be as specified for such Additional Termination Event in the
Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying the
nature of that Termination Event and each Affected Transaction and will
also give such other information about that Termination Event as the other
party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days
after it gives notice under Section 6(b)(i) all its rights and obligations
under this Agreement in respect of the Affected Transactions to another of
its Offices or Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a
Tax Event occurs and there are two Affected Parties, each party will use
all reasonable efforts to reach agreement within 30 days after notice
thereof is given under Section 6(b)(i) on action to avoid that Termination
Event.
(iv) Right to Terminate. If: --
(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect to
all Affected Transactions within 30 days after an Affected Party
gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a
Credit Event Upon Merger or an Additional Termination Event if there is
only one Affected Party may, by not more than 20 days notice to the other
party and provided that the relevant Termination Event is then continuing,
designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all Affected Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount,
if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining such
quotation will be conclusive evidence of the existence and accuracy of
such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in the
Termination Currency, from (and including) the relevant Early Termination
Date to (but excluding) the date such amount is paid, at the Applicable
Rate. Such interest will be calculated on the basis of daily compounding
and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an Event
of Default: --
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-Defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party less (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party. If that amount is
a positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the Defaulting
Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute
value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event: --
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
except that, in either case, references to the Defaulting Party and
to the Non-defaulting Party will be deemed to be references to the
Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in
respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties: --
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions,
and an amount will be payable equal to (I) the sum of (a)
one-half of the difference between the Settlement Amount of
the party with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower Settlement
Amount ("Y") and (b) the Termination Currency Equivalent of
the Unpaid Amounts owing to X less (II) the Termination
Currency Equivalent of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal
to one-half of the difference between the Loss of the party
with the higher Loss ("X") and the Loss of the party with the
lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if
it is a negative number, X will pay the absolute value of that
amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will be
subject to such adjustments as are appropriate and permitted by law to
reflect any payments or deliveries made by one party to the other under
this Agreement (and retained by such other party) during the period from
the relevant Early Termination Date to the date for payment determined
under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate of
loss and not a penalty. Such amount is payable for the loss of bargain and
the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire Agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by
facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall 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.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the date it is
delivered;
(ii) if sent by telex, on the date the recipient's answerback is received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date that mail is delivered
or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if
this Agreement is expressed to be governed by the laws of the State of New
York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments ▇▇▇ ▇▇▇▇ or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement:--
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means:--
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the 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 ease
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.
........................................ .......................................
(Name of Party) (Name of Party
By:.................................... By:....................................
Name: Name:
Title: Title:
Date: Date:
ISDA(R)
International Swap Dealers Association, Inc.
SCHEDULE
to the
Master Agreement
dated as of ............
between................................ and ....................................
("Party A") ("Party B")
Part 1. Termination Provisions.
(a) "Specified Entity" means in relation to Party A for the purpose of: --
Section 5(a)(v),........................................................
Section 5(a)(vi),.......................................................
Section 5(a)(vii),......................................................
Section 5(b)(iv),.......................................................
and in relation to Party B for the purpose of:--
Section 5(a)(v),........................................................
Section 5(a)(vi),.......................................................
Section 5(a)(vii),......................................................
Section 5(b)(iv),.......................................................
(b) "Specified Transaction" will have the meaning specified in Section 14 of
this Agreement unless another meaning is specified here ................
........................................................................
........................................................................
(c) The "Cross Default" provisions of Section 5(a)(vi)
will/will not * apply to Party A
will/will not * apply to Party B
If such provisions apply:--
"Specified Indebtedness" will have the meaning specified in Section 14 of
this Agreement unless another meaning is specified here ................
........................................................................
"Threshold Amount" means ...............................................
........................................................................
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will/will
not * apply to Party A will/will not * apply to Party B
(e) The "Automatic Early Termination" provisions of Section 6(a) will/will not
* apply to Party A will/will not * apply to Party B
(f) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement: --
(i) Market Quotation/Loss * will apply.
(ii) The First Method/The Second Method * will apply.
(g) "Termination Currency" means .................., if such currency is
specified and freely available, and otherwise United States Dollars.
(h) Additional Termination Event will/will not apply*. The following shall
constitute an Additional Termination Event: -- .........................
........................................................................
........................................................................
........................................................................
........................................................................
........................................................................
For the purpose of the foregoing Termination Event, the Affected Party or
Affected Parties shall be: -- ..........................................
........................................................................
Part 2. Tax Representations.
(a) Payer Representations. For the purpose of Section 3(e) of this Agreement,
Party A will/will not* make the following representation and Party B
will/will not* make 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.
(b) Payee Representations. For the purpose of Section 3(f) of this Agreement,
Party A and Party B make the representations specified below, if any:
(i) The following representation will/will not* apply to Party A and
will/will not* apply to Party B: --
It is fully eligible for the benefits of the "Business Profits" or
"Industrial and Commercial Profits" provision, as the case may be, the
"Interest" provision or the "Other Income" provision (if any) of the
Specified Treaty with respect to any payment described in such provisions
and received or to be received by it in connection with this Agreement and
no such payment is attributable to a trade or business carried on by it
through a permanent establishment in the Specified Jurisdiction.
If such representation applies, then: --
"Specified Treaty" means with respect to Party A..............................
"Specified Jurisdiction" means with respect to Party A........................
"Specified Treaty" means with respect to Party B..............................
"Specified Jurisdiction" means with respect to Party B........................
(ii) The following representation will/will not* apply to Party A and
will/will not* apply to Party B: --
Each payment received or to be received by it in connection with this
Agreement will be effectively connected with its conduct of a trade or
business in the Specified Jurisdiction.
If such representation applies, then: --
"Specified Jurisdiction" means with respect to Party A........................
"Specified Jurisdiction" means with respect to Party B........................
(iii) The following representation will/will not* apply to Party A and
will/will not* apply to Party B: --
(A) It is entering into each Transaction in the ordinary course of its
trade as, and is, either (1) a recognized U.K. bank or (2) a recognised
U.K. swaps dealer (in either ease (1) or (2), for purposes of the United
Kingdom Inland Revenue extra statutory concession C17 on interest and
currency swaps dated March 14, 1989), and (B) it will bring into account
payments made and received in respect of each Transaction in computing its
income for United Kingdom tax purposes.
(iv) Other Payee Representations: -- ...................................
........................................................................
........................................................................
........................................................................
N.B. The above representations may need modification if either party is a
Multibranch Party.
Part 3. Agreement to Deliver Documents.
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents, as applicable: --
(a) Tax forms, documents or certificates to be delivered are: --
Party required to Form/Document/ Date by which
deliver document Certificate to be delivered
....................... ....................... .......................
....................... ....................... .......................
....................... ....................... .......................
....................... ....................... .......................
....................... ....................... .......................
....................... ....................... .......................
(b) Other documents to be delivered are: --
Covered by
Party required to Form/Document/ Date by which Section 3(d)
deliver document Certificate to be delivered Representation
.................. ................. ................. Yes/No*
.................. ................. ................. Yes/No*
.................. ................. ................. Yes/No*
.................. ................. ................. Yes/No*
.................. ................. ................. Yes/No*
Part 4. Miscellaneous.
(a) Addresses for Notices. For the purpose of Section 12(a) of this Agreement:
--
Address for notices or communications to Party A: --
Address: ...............................................................
Attention: .............................................................
Telex No.: ............................ Answerback:.....................
Facsimile No.: ........................ Telephone No.: .................
Electronic Messaging System Details:....................................
Address for notices or communications to Party B: --
Address: ...............................................................
Attention: .............................................................
Telex No.: ............................ Answerback:.....................
Facsimile No.: ........................ Telephone No.: .................
Electronic Messaging System Details:....................................
(b) Process Agent. For the purpose of Section 13(c) of this Agreement: --
Party A appoints as its Process Agent ..................................
Party B appoints as its Process Agent ..................................
(c) Offices. The provisions of Section 10(a) will/will not* apply to this
Agreement.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:
Party A is/is not* a Multibranch Party and, if so, may act through the following
Offices: --
....................... ....................... ......................
....................... ....................... ......................
Party B is/is not* a Multibranch Party and, if so, may act through the following
Offices: --
....................... ....................... ......................
....................... ....................... ......................
(e) Calculation Agent. The Calculation Agent is ............, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.
(f) Credit Support Document. Details of any Credit Support Document: -- ....
........................................................................
........................................................................
........................................................................
(g) Credit Support Provider. Credit Support Provider means in relation to
Party A, ...............................................................
........................................................................
........................................................................
Credit Support Provider means in relation to Party B, ..................
........................................................................
........................................................................
(h) Governing Law. This Agreement will be governed by and construed in
accordance with English law/the laws of the State of New York (without
reference to choice of law doctrine)*.
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement
will not apply to the following Transactions or groups of Transactions (in
each ease starting from the date of this Agreement/in each case starting
from .....................*) ...........................................
........................................................................
........................................................................
(j) "Affiliate" will have the meaning specified in Section 14 of this
Agreement unless another meaning is specified here
........................................................................
........................................................................
Part 5. Other Provisions.
--------
* Delete as applicable.
EXHIBIT T
CLASS M CAP AGREEMENT
EXECUTION COPY
Barclays Capital
5 ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Tel ▇▇▇ (▇)▇▇ ▇▇▇▇ ▇▇▇▇
To: Securitized Asset Backed Receivables LLC Trust 2006-NC1
(the "Trust" or the "Counterparty")
▇▇▇▇▇ Fargo Bank, National Association,
not individually, but solely as securities administrator
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
From: BARCLAYS BANK PLC (LONDON HEAD OFFICE) ("Barclays")
Date: May 3, 2006
Reference: 1170814B/ 1170816B (Class M)
Rate Cap Confirmation
The purpose of this facsimile (this "Confirmation") is to confirm the terms and
conditions of the Transaction entered into between us on the Trade Date
specified below (the "Transaction").
The definitions and provisions contained in the 2000 ISDA Definitions (the "2000
Definitions"), as published by the International Swaps and Derivatives
Association, Inc. ("ISDA") are incorporated into this Confirmation. In the event
of any inconsistency between the 2000 Definitions and this Confirmation, this
Confirmation will govern for the purposes of the Transaction. References herein
to a "Transaction" shall be deemed to be references to a "Swap Transaction" for
the purposes of the 2000 Definitions. Capitalized terms used in this
Confirmation and not defined in this Confirmation or the 2000 Definitions shall
have the respective meanings assigned in the Agreement. Each party hereto agrees
to make payment to the other party hereto in accordance with the provisions of
this Confirmation and of the Agreement. In this Confirmation, "Party A" means
Barclays and "Party B" means the Counterparty.
1. This Confirmation supersedes any previous Confirmation or other communication
with respect to the Transaction and evidences a complete and binding agreement
between you and us as to the terms of the Swap Transaction to which this
Confirmation relates. This Confirmation, together with all other documents
referring to the form of the 1992 ISDA Master Agreement (Multicurrency -- Cross
Border) (the "ISDA Form") (each a "Confirmation") confirming transactions (each
a "Transaction") entered into between us (notwithstanding anything to the
contrary in a Confirmation), shall supplement, form part of, and be subject to,
an agreement in the form of the ISDA Form as if we had executed an agreement in
such form (but without any Schedule except for the election of the laws of the
State of New York (without reference to choice of law doctrine except Section
5-1401 and Section 5-1402 of the New York General Obligation Law) as governing
law, the election of Market Quotation and Second Method for purposes of Section
6(e) of the ISDA Form, U.S. Dollars as the Termination Currency and the
additional material set forth in Part 5) on the Trade Date for the first such
Transaction between us.
The terms of the particular Transaction to which this Confirmation relates are
as follows:
2. TRADE DETAILS
Party A: Barclays
Party B: Counterparty
Initial Notional Amount: USD 9,797,500 (amortizing as per
the attached Schedule A)
Trade Date: May 3, 2006
Effective Date: May 3, 2006
Termination Date: July 25, 2009; subject to adjustment in
accordance with the Modified Following Business
Day Convention
Fixed Amounts:
Fixed Rate Payer: Counterparty
Fixed Rate Payer Payment
Date(s): May 25, 2006; subject to adjustment in
accordance with the Modified Following Business
Day Convention
Fixed Amount: USD 40,000
Floating Amounts:
Floating Rate Payer: Barclays
Cap Rate: For the Calculation Period related to a
Floating Rate Payer Payment Date, the "Strike
Rate" set forth in Schedule A hereto for such
Floating Rate Payer Payment Date.
Floating Rate Payer Period
End Date(s): The 25th of each month in each year from and
including May 25, 2006 to and including July
25, 2009, subject to adjustment in accordance
with the Modified Following Business Day
Convention Floating Rate Payer Payment Date(s):
Each day that is one day prior to each Floating
Rate Payer Period End Date subject to
adjustment in accordance with the Preceding
Business Day Convention.
Floating Rate Option: For the Calculation Period related to a
Floating Rate Payer Payment Date, the lesser of
(a) USD-LIBOR-BBA with a Designated Maturity of
1 month and (b) the "Ceiling Rate" set forth in
Schedule A hereto for such Floating Rate Payer
Payment Date.
Floating Amount: To be determined in accordance with the
following formula: greater of (i) 10 *
(Floating Rate Option - Cap Rate) * Notional
Amount * Floating Rate Day Count Fraction and
(ii) zero.
Floating Rate Day Count
Fraction: Actual / 360
Designated Maturity: 1 Month
Reset Dates: The first day in each
Calculation Period
Compounding: Inapplicable
Business Days: New York, New York; Columbia, Maryland
Calculation Agent: Party A
Governing Law: The Transaction and this Confirmation will be
governed by and construed in accordance with
the laws of the State of New York (without
reference to choice of law doctrine except
Section 5-1401 and Section 5-1402 of the New
York General Obligation Law)
3. ACCOUNT DETAILS
Payments to Barclays: Correspondent: BARCLAYS BANK PLC NEW YORK
FFED: ▇▇▇▇▇▇▇▇▇
Beneficiary: BARCLAYS SWAPS
Beneficiary Account: ▇▇▇-▇▇▇▇▇-▇
Payments to the Counterparty: ▇▇▇▇▇ Fargo Bank, National Association
San Francisco, California
ABA No. ▇▇▇-▇▇▇-▇▇▇
Account No. ▇▇▇▇▇▇▇▇▇▇
Account Name: Corporate Trust Clearing
FFC: Acct 17214200 SABR 2006-NC1 Excess
Reserve Fund Account
4. OFFICES
Barclays: Address for Notices:
▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇
Tel: ▇▇(▇▇) ▇▇▇▇▇▇▇▇
Fax: ▇▇(▇▇) ▇▇▇▇▇▇▇▇
Counterparty: Address for Notices:
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ - Client Manager -
SABR 2006-NC1
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
5. Miscellaneous Provisions with respect to the ISDA Form
1) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA Form
will apply to any Transaction.
2) Termination Provisions. For purposes of the Agreement:
(a) "Specified Entity" means in relation to Party A for the purpose of the
Agreement:
Section 5(a)(v): None;
Section 5(a)(vi): None;
Section 5(a)(vii): None;
Section 5(b)(iv): None;
and in relation to Party B for the purpose of this
Agreement:
Section 5(a)(v): None;
Section 5(a)(vi): None;
Section 5(a)(vii): None;
Section 5(b)(iv): None.
(b) "Specified Transaction" shall have the meaning specified in Section 14 of
the Agreement.
(c) The "Breach of Agreement" provisions of Section 5(a)(ii) of the Agreement
will be inapplicable to Party A and Party B.
(d) The "Credit Support Default" provisions of Section 5(a)(iii) of the
Agreement will be inapplicable to Party B.
(e) The "Misrepresentation" provisions of Section 5(a)(iv) of the Agreement
will be inapplicable to Party A and Party B.
(f) The "Default Under Specified Transaction" provisions of Section 5(a)(v) of
the Agreement will be inapplicable to Party A and Party B.
(g) The "Cross Default" provisions of Section 5(a)(vi) of the Agreement will
be inapplicable to Party A and Party B.
(h) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of the
Agreement will be inapplicable to Party A and Party B.
(i) The "Automatic Early Termination" provision of Section 6(a) of the
Agreement will be inapplicable to Party A and Party B; provided that where there
is an Event of Default under Section 5(a)(vii)(1), (3), (4), (5), (6) or, to the
extent analogous thereto, (8), and the Defaulting Party is governed by a system
of law that does not permit termination to take place after the occurrence of
such Event of Default, then the Automatic Early Termination provisions of
Section 6(a) will apply; provided, however, that this proviso shall only apply
with respect to an Event of Default specified in Section 5(a)(vii)(4) or, to the
extent analogous thereto, Section 5(a)(vii)(8), if the proceeding is instituted
by, or the relevant petition is presented to a court or other authority in the
jurisdiction where the Defaulting Party is incorporated.
If an Early Termination Date has occurred under Section 6(a) of the Agreement as
a result of Automatic Early Termination, and if the Non-defaulting Party
determines that it has either sustained or incurred a loss or damage or
benefited from a gain in respect of any Transaction, as a result of movement in
interest rates, currency exchange rates, other relevant rates or market
quotations between the Early Termination Date and the date upon which the
Non-defaulting Party first becomes aware that such Event of Default has occurred
under Section 6(a) of the Agreement, then without any duplication (i) the amount
of such loss or damage shall be added to the amount due by the Defaulting Party
or deducted from the amount due by the Non-defaulting Party, as the case may be
(in both cases pursuant to Section 6(e)(i)(3) of the Agreement); or (ii) the
amount of such gain shall be deducted from the amount due by the Defaulting
Party or added to the amount due by the Non-defaulting Party, as the case may be
(in both cases pursuant to Section 6(e)(i)(3) of the Agreement).
(j) Payments on Early Termination. For the purpose of Section 6(e) of the
Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(k) "Termination Currency" means United States Dollars.
3) Tax Representations.
Payer Tax Representations. For the purpose of Section 3(e), each of
Barclays and the Counterparty 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
representation made by the other party pursuant to Section 3(f) of
this Agreement; (ii) the satisfaction of the agreement of the other
party 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.
Barclays Payee Tax Representations. For the purpose of Section 3(f),
Barclays makes the following representations:
Barclays is a "non-U.S. branch of a foreign person" for purposes of
section 1.1441-4(a)(3)(ii) and a "foreign person" for purposes of
section 1.6041-4(a)(4) of the United States Treasury Regulations.
Counterparty Payee Tax Representations. For the purpose of Section 3(f),
Counterparty makes the following representation:
Counterparty represents that it is the securities administrator of
the trust formed under the Pooling and Servicing Agreement and is a
"United States person" as such term is defined in Section
7701(a)(30) of the Internal Revenue Code of 1986, as amended.
4) Documents to be Delivered. For the purpose of Section 4(a):
(1) Tax forms, documents, or certificates to be delivered are:
Party required to deliver document Form/Document/ Certificate Date by which to be delivered
----------------------------------- -------------------------------- --------------------------------
Barclays and the Counterparty Any document required or Promptly after the earlier of
reasonably requested to allow (i) reasonable demand by
the other party to make either party or (ii) learning
payments under this Agreement that such form or document is
without any deduction or required.
withholding for or on the
account of any Tax or with
such deduction or withholding
at a reduced rate.
(2) Other documents to be delivered are:
Covered by Section 3(d)
Party required to deliver document Form/Document/ Certificate Date by which to be delivered Representation
----------------------------------- --------------------------------- --------------------------------- ----------------------------
----------------------------------- --------------------------------- --------------------------------- ----------------------------
Counterparty An opinion of Counterparty's Within 10 Business Days from Yes
counsel addressed to Barclays the execution and delivery of
in form and substance the Confirmation
reasonably acceptable to
Barclays
Barclays and the Counterparty A certificate of an authorized Effective Date Yes
officer of the party, as to the
incumbency and authority of the
respective officers of the
party signing this Agreement,
any relevant Credit Support
Document, or any Confirmation,
as the case may be
Counterparty Pooling and Servicing Upon receipt by Counterparty of Yes
Agreement, dated as of April 1, Execution Copy
2006, among Securitized Asset
Backed Receivables LLC, NC
Capital Corporation, U.S. Bank
National Association,
OfficeTiger Global Real Estate
Services, Inc., and the
Counterparty (the "Pooling and
Servicing Agreement").
5) Miscellaneous.
(a) Address for Notices: For the purposes of Section 12(a) of this Agreement:
Address for notices or communications to Barclays:
Address: ▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇
Facsimile: ▇▇(▇▇) ▇▇▇▇▇▇▇▇
Phone: ▇▇(▇▇) ▇▇▇▇▇▇▇▇
(For all purposes)
Address for notices or communications to the Counterparty:
Address: ▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ - Client
Manager - SABR 2006-NC1
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Process Agent. For the purpose of Section 13(c):
Barclays appoints as its
Process Agent: Not Applicable
The Counterparty appoints as its
Process Agent: Not Applicable
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:
Barclays is a Multibranch Party and may act through its London and New
York offices.
Counterparty is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Barclays.
(f) Credit Support Document. Not Applicable.
(g) Credit Support Provider.
Barclays: Not Applicable
Counterparty: Not Applicable
(h) Governing Law. This Agreement shall be governed by, and construed in
accordance with the laws of the State of New York (without reference to choice
of law doctrine except Section 5-1401 and Section 5-1402 of the New York General
Obligation Law).
(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 officers or employees 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) Waiver of Jury Trial. To the extent permitted by applicable law, each
party irrevocably waives any and all right to trial by jury in any legal
proceeding in connection with this Agreement, any Credit Support Document to
which it is a Party, or any Transaction. Each party also acknowledges that this
waiver is a material inducement to the other party's entering into this
Agreement.
(k) "Affiliate" will have the meaning specified in Section 14 of the ISDA Form
Master Agreement.
6) Additional Representations:
Subject to Section 7(b) of this Confirmation, each party represents to the other
party that (absent a written agreement between the parties that expressly
imposes affirmative obligations to the contrary):
(a) Non-Reliance. Barclays is acting for its own account and ▇▇▇▇▇ Fargo Bank,
National Association is acting as securities administrator for the Trust under
the Pooling and Servicing Agreement and not for its own account. Each party has
made its own independent decisions to enter into the Transaction and as to
whether the Transaction is appropriate or proper based upon its own judgment and
upon advice from such advisers as it has deemed necessary. It is not relying on
any communication (written or oral) of the other party as investment advice or
as a recommendation to enter into the Transaction; it being understood that
information and explanations related to the terms and conditions of the
Transaction shall not be considered investment advice or a recommendation to
enter into the 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 the Transaction.
(b) 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 the Transaction.
It is also capable of assuming, and assumes, the risks of the Transaction.
(c) Status of Parties. The other party is not acting as a fiduciary for or an
adviser to it in respect of the Transaction.
(d) Purpose. It is entering into the Transaction for the purposes of hedging
its assets or liabilities or in connection with a line of business.
(e) Eligible Contract Participant Representation. It is an "eligible contract
participant" within the meaning of Section 1(a)(12) of the Commodity Exchange
Act, as amended, including as amended by the Commodity Futures Modernization Act
of 2000.
7) Other Provisions:
(a) Fully-Paid Party Protected. Notwithstanding the terms of Sections 5 and 6
of the Agreement, if Party B has satisfied in full all its payment obligations
under Section 2(a)(i) of the Agreement, then unless Party A is required pursuant
to appropriate proceedings to return to Party B or otherwise returns to Party B
upon demand of Party B any portion of such payment, (a) the occurrence of an
event described in Section 5(a) of the Agreement with respect to Party B shall
not constitute an Event of Default or Potential Event of Default with respect to
Party B as the Defaulting Party and (b) Party A shall be entitled to designate
an Early Termination Event pursuant to Section 6 of the Agreement only as a
result of a Termination Event set forth in either Section 5(b)(i) or Section
5(b)(ii) of the Agreement with respect to Party A as the Affected Party or
Section 5(b)(iii) of the Agreement with respect to Party A as the Burdened
Party. For purposes of the Transaction to which this Confirmation relates, Party
B's only obligation under Section 2(a)(i) of the Agreement is to pay the Fixed
Amount on the Fixed Rate Payer Payment Date.
(b) Securities Administrator Capacity. It is expressly understood and agreed
by the parties hereto that (i) this Confirmation is executed and delivered by
▇▇▇▇▇ Fargo Bank, National Association, not individually or personally but
solely as Securities Administrator of the Trust under the Pooling and Servicing
Agreement pursuant to which the Trust was formed, in the exercise of the powers
and authority conferred upon and vested in it, and pursuant to instructions set
for the therein, (ii) each of the representations, undertakings and agreements
by ▇▇▇▇▇ Fargo Bank, National Association is made and intended not as a personal
representation, undertaking or agreement of ▇▇▇▇▇ Fargo Bank, National
Association, but solely for the purpose of binding only the Trust, (iii) nothing
herein contained shall be construed as imposing any liability upon ▇▇▇▇▇ Fargo
Bank, National Association, individually or personally, to perform any covenant
(either express or implied) contained herein, and all such liability, if any, is
hereby expressly waived by the parties hereto, and such waiver shall bind any
third party making a claim by or through one of the parties hereto, and (iv)
under no circumstances shall ▇▇▇▇▇ Fargo Bank, National Association be
personally liable for the payment of any indebtedness or expenses of the Trust,
or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Trust under this Confirmation,
the Agreement or any related document.
(c) Transfer, Amendment and Assignment. No transfer, amendment, waiver,
supplement, assignment or other modification of this Transaction shall be
permitted by either party unless each of the rating agencies listed in the
Pooling and Servicing Agreement applicable to the Securitized Asset Backed
Receivables LLC Trust 2006-NC1, Mortgage Pass-Through Certificates, Series
2006-NC1 (the "Certificates") has been provided notice of such modification and
confirms in writing (including by facsimile transmission) within five Business
Days after such notice is given that it will not downgrade, withdraw or modify
its then-current rating of the Certificates issued by Party B.
(d) Proceedings. Party A shall not institute against or cause any other person
to institute against, or join any other person in instituting against, Party B,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state bankruptcy,
dissolution or similar law, for a period of one year and one day (or, if longer,
the applicable preference period) following indefeasible payment in full of the
Certificates, provided that nothing herein will preclude, or be deemed to estop,
Party A from taking any action in any case or proceeding voluntarily filed or
commenced by or on behalf of Party B or in any involuntary case or proceeding
pertaining to Party B after it has been commenced.
(e) Set-Off. Notwithstanding any 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 or 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. The provisions for Set-off set forth in Section 6(e) of the
Agreement shall not apply for purposes of this Transaction, provided that
nothing herein shall be construed to waive or otherwise limit the netting
provisions contained in Section 2(c) or 6(e) of this Agreement.
(f) 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.
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.
Exhibit A
The time of dealing will be confirmed by Barclays upon written request. Barclays
is regulated by the Financial Services Authority. Barclays is acting for its own
account in respect of this Transaction.
Please confirm that the foregoing correctly sets forth all the terms and
conditions of our agreement with respect to the Transaction by responding within
three (3) Business Days by promptly signing in the space provided below and both
(i) faxing the signed copy to Incoming Transaction Documentation, Barclays
Capital Global OTC Transaction Documentation & Management, Global Operations,
Fax ▇(▇▇) ▇▇-▇▇▇▇-▇▇▇▇/6857, Tel ▇(▇▇) ▇▇-▇▇▇▇-▇▇▇▇/6904/6965, and (ii) mailing
the signed copy to Barclays Bank PLC, 5 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ Attention of Incoming Transaction Documentation, Barclays Capital
Global OTC Transaction Documentation & Management, Global Operations. Your
failure to respond within such period shall not affect the validity or
enforceability of the Transaction as against you. This facsimile shall be the
only documentation in respect of the Transaction and accordingly no hard copy
versions of this Confirmation for this Transaction shall be provided unless the
Counterparty requests.
For and on behalf of BARCLAYS BANK PLC For and on behalf of
Securitized Asset Backed Receivables
LLC Trust 2006-NC1
By: ▇▇▇▇▇ Fargo Bank, National
Association, not individually, but
solely as securities administrator
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇ ▇▇▇▇▇
------------------------------------ ---------------------------------------
NAME ▇▇▇▇ ▇▇▇▇▇▇▇ NAME ▇▇▇ ▇▇▇▇▇
Authorised Signatory Vice President
Date: May 3, 2006 Date: May 3, 2006
Barclays Bank PLC and its affiliates, including Barclays Capital Inc., may share
with each other information, including non-public credit information, concerning
its clients and prospective clients. If you do not want such information to be
shared, you must write to the Director of Compliance, Barclays Bank PLC, ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Schedule A
Interest Rate Cap Schedule for Class M
Floating Rate
Payer Period Notional Amount Strike Ceiling
Period End Date* ($) Rate (%) Rate (%) Multiplier
------ -------------- ---------------- -------- -------- ----------
1 May 2006 9,797,500 10.170 10.170 10.00
2 June 2006 9,797,500 10.170 10.170 10.00
3 July 2006 9,797,500 10.170 10.170 10.00
4 August 2006 9,797,500 10.170 10.170 10.00
5 September 2006 9,797,500 10.170 10.170 10.00
6 October 2006 9,797,500 10.170 10.170 10.00
7 November 2006 9,797,500 10.170 10.170 10.00
8 December 2006 9,797,500 10.170 10.170 10.00
9 January 2007 9,797,500 10.170 10.170 10.00
10 February 2007 9,797,500 10.170 10.170 10.00
11 March 2007 9,797,500 10.170 10.170 10.00
12 April 2007 9,797,500 6.662 10.170 10.00
13 May 2007 9,797,500 6.895 10.170 10.00
14 June 2007 9,797,500 6.661 10.170 10.00
15 July 2007 9,797,500 6.894 10.170 10.00
16 August 2007 9,797,500 6.661 10.170 10.00
17 September 2007 9,797,500 6.661 10.170 10.00
18 October 2007 9,797,500 6.894 10.170 10.00
19 November 2007 9,797,500 6.661 10.170 10.00
20 December 2007 9,797,500 6.894 10.170 10.00
21 January 2008 9,797,500 6.663 10.170 10.00
22 February 2008 9,797,500 7.653 10.170 10.00
23 March 2008 9,797,500 8.203 10.170 10.00
24 April 2008 9,797,500 7.652 10.170 10.00
25 May 2008 9,797,500 7.918 10.170 10.00
26 June 2008 9,797,500 7.651 10.170 10.00
27 July 2008 9,797,500 7.919 10.170 10.00
28 August 2008 9,797,500 8.640 10.170 10.00
29 September 2008 9,797,500 8.639 10.170 10.00
30 October 2008 9,797,500 8.968 10.170 10.00
31 November 2008 9,797,500 8.669 10.170 10.00
32 December 2008 9,797,500 8.985 10.170 10.00
33 January 2009 9,797,500 8.764 10.170 10.00
34 February 2009 9,797,500 9.723 10.170 10.00
35 March 2009 9,797,500 10.170 10.170 10.00
36 April 2009 9,797,500 9.750 10.170 10.00
37 May 2009 9,797,500 10.087 10.170 10.00
38 June 2009 9,271,090 9.766 10.170 10.00
39 July 2009 8,509,283 10.145 10.170 10.00
40 August 2009 -- -- -- --
--------
* Subject to adjustment in accordance with the Following Business Day
Convention.
EXHIBIT U
CLASS B CAP AGREEMENT
Barclays Capital
5 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Tel ▇▇▇ (▇)▇▇ ▇▇▇▇ ▇▇▇▇
To: Securitized Asset Backed Receivables LLC Trust 2006-NC1
(the "Trust" or the "Counterparty")
▇▇▇▇▇ Fargo Bank, National Association, not individually, but
solely as securities administrator ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
From: BARCLAYS BANK PLC (LONDON HEAD OFFICE) ("Barclays")
Date: May 3, 2006
Reference: 1170794B/1170812B (Class B)
Rate Cap Confirmation
The purpose of this facsimile (this "Confirmation") is to confirm the terms and
conditions of the Transaction entered into between us on the Trade Date
specified below (the "Transaction").
The definitions and provisions contained in the 2000 ISDA Definitions (the "2000
Definitions"), as published by the International Swaps and Derivatives
Association, Inc. ("ISDA") are incorporated into this Confirmation. In the event
of any inconsistency between the 2000 Definitions and this Confirmation, this
Confirmation will govern for the purposes of the Transaction. References herein
to a "Transaction" shall be deemed to be references to a "Swap Transaction" for
the purposes of the 2000 Definitions. Capitalized terms used in this
Confirmation and not defined in this Confirmation or the 2000 Definitions shall
have the respective meanings assigned in the Agreement. Each party hereto agrees
to make payment to the other party hereto in accordance with the provisions of
this Confirmation and of the Agreement. In this Confirmation, "Party A" means
Barclays and "Party B" means the Counterparty.
1. This Confirmation supersedes any previous Confirmation or other communication
with respect to the Transaction and evidences a complete and binding agreement
between you and us as to the terms of the Swap Transaction to which this
Confirmation relates. This Confirmation, together with all other documents
referring to the form of the 1992 ISDA Master Agreement (Multicurrency -- Cross
Border) (the "ISDA Form") (each a "Confirmation") confirming transactions (each
a "Transaction") entered into between us (notwithstanding anything to the
contrary in a Confirmation), shall supplement, form part of, and be subject to,
an agreement in the form of the ISDA Form as if we had executed an agreement in
such form (but without any Schedule except for the election of the laws of the
State of New York (without reference to choice of law doctrine except Section
5-1401 and Section 5-1402 of the New York General Obligation Law) as governing
law, the election of Market Quotation and Second Method for purposes of Section
6(e) of the ISDA Form, U.S. Dollars as the Termination Currency and the
additional material set forth in Part 5) on the Trade Date for the first such
Transaction between us.
The terms of the particular Transaction to which this Confirmation relates are
as follows:
2. TRADE DETAILS
Party A: Barclays
Party B: Counterparty
Initial Notional Amount: USD $1,411,100 (amortizing as per the
attached Schedule A)
Trade Date: May 3, 2006
Effective Date: May 3, 2006
Termination Date: July 25, 2009; subject to adjustment in
accordance with the Modified Following
Business Day Convention
Fixed Amounts:
Fixed Rate Payer: Counterparty
Fixed Rate Payer Payment Date(s): May 25, 2006; subject to adjustment in
accordance with the Modified Following
Business Day Convention
Fixed Amount: USD 19,000
Floating Amounts:
Floating Rate Payer: Barclays
Cap Rate: For the Calculation Period related to a
Floating Rate Payer Payment Date, the "Strike
Rate" set forth in Schedule A hereto for such
Floating Rate Payer Payment Date.
Floating Rate Payer Period End
Date(s): The 25th of each month in each year from and
including May 25, 2006 to and including July
25, 2009, subject to adjustment in accordance
with the Modified Following Business Day
Convention
Floating Rate Payer Payment
Date(s): Each day that is one day prior to
each Floating Rate Payer Period End Date
subject to adjustment in accordance with the
Preceding Business Day Convention.
Floating Rate Option: For the Calculation Period related to a
Floating Rate Payer Payment Date, the lesser
of (a) USD-LIBOR-BBA with a Designated
Maturity of 1 month and (b) the "Ceiling
Rate" set forth in Schedule A hereto for such
Floating Rate Payer Payment Date.
Floating Amount: To be determined in accordance with the
following formula: greater of (i) 10 *
(Floating Rate Option - Cap Rate) * Notional
Amount * Floating Rate Day Count Fraction and
(ii) zero.
Floating Rate Day Count Fraction: Actual / 360
Designated Maturity: 1 Month
Reset Dates: The first day in each Calculation Period
Compounding: Inapplicable
Business Days: New York, New York; Columbia, Maryland
Calculation Agent: Party A
Governing Law: The Transaction and this Confirmation will be
governed by and construed in accordance with
the laws of the State of New York (without
reference to choice of law doctrine except
Section 5-1401 and Section 5-1402 of the New
York General Obligation Law)
3. ACCOUNT DETAILS
Payments to Barclays: Correspondent: BARCLAYS BANK PLC NEW YORK
FFED: ▇▇▇▇▇▇▇▇▇
Beneficiary: BARCLAYS SWAPS
Beneficiary Account: ▇▇▇-▇▇▇▇▇-▇
Payments to the Counterparty: ▇▇▇▇▇ Fargo Bank, National Association
San Francisco, California
ABA No. ▇▇▇-▇▇▇-▇▇▇
Account No. ▇▇▇▇▇▇▇▇▇▇
Account Name: Corporate Trust Clearing
FFC: Acct 17214200 SABR 2006-NC1 Excess
Reserve Fund Account
4. OFFICES
Barclays: Address for Notices:
▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇
Tel: ▇▇(▇▇) ▇▇▇▇▇▇▇▇
Fax: ▇▇(▇▇) ▇▇▇▇▇▇▇▇
Counterparty: Address for Notices:
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ - Client Manager -
SABR 2006-NC1
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
5. Miscellaneous Provisions with respect to the ISDA Form
1) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA Form
will apply to any Transaction.
2) Termination Provisions. For purposes of the
Agreement:
(a) "Specified Entity" means in relation to Party A for the purpose of the
Agreement:
Section 5(a)(v): None;
Section 5(a)(vi): None;
Section 5(a)(vii): None;
Section 5(b)(iv): None;
and in relation to Party B for the purpose of this Agreement:
Section 5(a)(v): None;
Section 5(a)(vi): None;
Section 5(a)(vii): None;
Section 5(b)(iv): None.
(b) "Specified Transaction" shall have the meaning specified in Section 14 of
the Agreement.
(c) The "Breach of Agreement" provisions of Section 5(a)(ii) of the Agreement
will be inapplicable to Party A and Party B.
(d) The "Credit Support Default" provisions of Section 5(a)(iii) of the
Agreement will be inapplicable to Party B.
(e) The "Misrepresentation" provisions of Section 5(a)(iv) of the Agreement will
be inapplicable to Party A and Party B.
(f) The "Default Under Specified Transaction" provisions of Section 5(a)(v) of
the Agreement will be inapplicable to Party A and Party B.
(g) The "Cross Default" provisions of Section 5(a)(vi) of the Agreement will be
inapplicable to Party A and Party B.
(h) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of the
Agreement will be inapplicable to Party A and Party B.
(i) The "Automatic Early Termination" provision of Section 6(a) of the Agreement
will be inapplicable to Party A and Party B; provided that where there is an
Event of Default under Section 5(a)(vii)(1), (3), (4), (5), (6) or, to the
extent analogous thereto, (8), and the Defaulting Party is governed by a system
of law that does not permit termination to take place after the occurrence of
such Event of Default, then the Automatic Early Termination provisions of
Section 6(a) will apply; provided, however, that this proviso shall only apply
with respect to an Event of Default specified in Section 5(a)(vii)(4) or, to the
extent analogous thereto, Section 5(a)(vii)(8), if the proceeding is instituted
by, or the relevant petition is presented to a court or other authority in the
jurisdiction where the Defaulting Party is incorporated.
If an Early Termination Date has occurred under Section 6(a) of the Agreement as
a result of Automatic Early Termination, and if the Non-defaulting Party
determines that it has either sustained or incurred a loss or damage or
benefited from a gain in respect of any Transaction, as a result of movement in
interest rates, currency exchange rates, other relevant rates or market
quotations between the Early Termination Date and the date upon which the
Non-defaulting Party first becomes aware that such Event of Default has occurred
under Section 6(a) of the Agreement, then without any duplication (i) the amount
of such loss or damage shall be added to the amount due by the Defaulting Party
or deducted from the amount due by the Non-defaulting Party, as the case may be
(in both cases pursuant to Section 6(e)(i)(3) of the Agreement); or (ii) the
amount of such gain shall be deducted from the amount due by the Defaulting
Party or added to the amount due by the Non-defaulting Party, as the case may be
(in both cases pursuant to Section 6(e)(i)(3) of the Agreement).
(j) Payments on Early Termination. For the purpose of Section 6(e) of the
Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(k) "Termination Currency" means United States Dollars.
3) Tax Representations.
Payer Tax Representations. For the purpose of Section 3(e), each of
Barclays and the Counterparty 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
representation made by the other party pursuant to Section 3(f) of
this Agreement; (ii) the satisfaction of the agreement of the other
party 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.
Barclays Payee Tax Representations. For the purpose of Section 3(f),
Barclays makes the following representations:
Barclays is a "non-U.S. branch of a foreign person" for purposes of
section 1.1441-4(a)(3)(ii) and a "foreign person" for purposes of
section 1.6041-4(a)(4) of the United States Treasury Regulations.
Counterparty Payee Tax Representations. For the purpose of Section 3(f),
Counterparty makes the following representation:
Counterparty represents that it is securities administrator of the
trust formed under the Pooling and Servicing Agreement and is a
"United States person" as such term is defined in Section
7701(a)(30) of the Internal Revenue Code of 1986, as amended.
4) Documents to be Delivered. For the purpose of Section 4(a):
(1) Tax forms, documents, or certificates to be delivered are:
Party required to deliver document Form/Document/ Certificate Date by which to be delivered
----------------------------------- -------------------------------- --------------------------------
Barclays and the Counterparty Any document required or Promptly after the earlier of
reasonably requested to allow (i) reasonable demand by
the other party to make either party or (ii) learning
payments under this Agreement that such form or document is
without any deduction or required.
withholding for or on the
account of any Tax or with
such deduction or withholding
at a reduced rate.
(2) Other documents to be delivered are:
Covered by Section 3(d)
Party required to deliver document Form/Document/ Certificate Date by which to be delivered Representation
----------------------------------- --------------------------------- --------------------------------- ----------------------------
Counterparty An opinion of Counterparty's Within 10 Business Days from Yes
counsel addressed to Barclays the execution and delivery of
in form and substance the Confirmation
reasonably acceptable to
Barclays
Barclays and the Counterparty A certificate of an authorized Effective Date Yes
officer of the party, as to the
incumbency and authority of the
respective officers of the
party signing this Agreement,
any relevant Credit Support
Document, or any Confirmation,
as the case may be
Counterparty Pooling and Servicing Upon receipt by Counterparty of Yes
Agreement, dated as of April 1, execution copy
2006, among Securitized Asset
Backed Receivables LLC, NC
Capital Corporation, U.S. Bank
National Association,
OfficeTiger Global Real Estate
Services, Inc., and the
Counterparty (the "Pooling and
Servicing Agreement").
5) Miscellaneous.
(a) Address for Notices: For the purposes of Section 12(a) of this Agreement:
Address for notices or communications to Barclays:
Address: ▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇
Facsimile: ▇▇(▇▇) ▇▇▇▇▇▇▇▇
Phone: ▇▇(▇▇) ▇▇▇▇▇▇▇▇
(For all purposes)
Address for notices or communications to the Counterparty:
Address: ▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ - Client Manager -
SABR 2006-NC1
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Process Agent. For the purpose of Section 13(c):
Barclays appoints as its
Process Agent: Not Applicable
The Counterparty appoints as its
Process Agent: Not Applicable
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:
Barclays is a Multibranch Party and may act through its London and New York
offices.
Counterparty is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Barclays.
(f) Credit Support Document. Not Applicable.
(g) Credit Support Provider.
Barclays: Not Applicable
Counterparty: Not Applicable
(h) Governing Law. This Agreement shall be governed by, and construed in
accordance with the laws of the State of New York (without reference to choice
of law doctrine except Section 5-1401 and Section 5-1402 of the New York General
Obligation Law).
(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 officers or employees 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) Waiver of Jury Trial. To the extent permitted by applicable law, each party
irrevocably waives any and all right to trial by jury in any legal proceeding in
connection with this Agreement, any Credit Support Document to which it is a
Party, or any Transaction. Each party also acknowledges that this waiver is a
material inducement to the other party's entering into this Agreement.
(k) "Affiliate" will have the meaning specified in Section 14 of the ISDA Form
Master Agreement.
6) Additional Representations:
Subject to Section 7(b) of this Confirmation, each party represents to the other
party that (absent a written agreement between the parties that expressly
imposes affirmative obligations to the contrary):
(a) Non-Reliance. Barclays is acting for its own account and ▇▇▇▇▇ Fargo Bank,
National Association is acting as securities administrator for the Trust under
the Pooling and Servicing Agreement and not for its own account. Each party has
made its own independent decisions to enter into the Transaction and as to
whether the Transaction is appropriate or proper based upon its own judgment and
upon advice from such advisers as it has deemed necessary. It is not relying on
any communication (written or oral) of the other party as investment advice or
as a recommendation to enter into the Transaction; it being understood that
information and explanations related to the terms and conditions of the
Transaction shall not be considered investment advice or a recommendation to
enter into the 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 the Transaction.
(b) 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 the Transaction.
It is also capable of assuming, and assumes, the risks of the Transaction.
(c) Status of Parties. The other party is not acting as a fiduciary for or an
adviser to it in respect of the Transaction.
(d) Purpose. It is entering into the Transaction for the purposes of hedging its
assets or liabilities or in connection with a line of business.
(e) Eligible Contract Participant Representation. It is an "eligible contract
participant" within the meaning of Section 1(a)(12) of the Commodity Exchange
Act, as amended, including as amended by the Commodity Futures Modernization Act
of 2000.
7) Other Provisions:
(a) Fully-Paid Party Protected. Notwithstanding the terms of Sections 5 and 6 of
the Agreement, if Party B has satisfied in full all its payment obligations
under Section 2(a)(i) of the Agreement, then unless Party A is required pursuant
to appropriate proceedings to return to Party B or otherwise returns to Party B
upon demand of Party B any portion of such payment, (a) the occurrence of an
event described in Section 5(a) of the Agreement with respect to Party B shall
not constitute an Event of Default or Potential Event of Default with respect to
Party B as the Defaulting Party and (b) Party A shall be entitled to designate
an Early Termination Event pursuant to Section 6 of the Agreement only as a
result of a Termination Event set forth in either Section 5(b)(i) or Section
5(b)(ii) of the Agreement with respect to Party A as the Affected Party or
Section 5(b)(iii) of the Agreement with respect to Party A as the Burdened
Party. For purposes of the Transaction to which this Confirmation relates, Party
B's only obligation under Section 2(a)(i) of the Agreement is to pay the Fixed
Amount on the Fixed Rate Payer Payment Date.
(b) Securities Administrator Capacity. It is expressly understood and agreed by
the parties hereto that (i) this Confirmation is executed and delivered by ▇▇▇▇▇
Fargo Bank, National Association, not individually or personally but solely as
Securities Administrator of the Trust under the Pooling and Servicing Agreement
pursuant to which the Trust was formed, in the exercise of the powers and
authority conferred upon and vested in it, and pursuant to instructions set for
the therein, (ii) each of the representations, undertakings and agreements by
▇▇▇▇▇ Fargo Bank, National Association is made and intended not as a personal
representation, undertaking or agreement of ▇▇▇▇▇ Fargo Bank, National
Association, but solely for the purpose of binding only the Trust, (iii) nothing
herein contained shall be construed as imposing any liability upon ▇▇▇▇▇ Fargo
Bank, National Association, individually or personally, to perform any covenant
(either express or implied) contained herein, and all such liability, if any, is
hereby expressly waived by the parties hereto, and such waiver shall bind any
third party making a claim by or through one of the parties hereto, and (iv)
under no circumstances shall ▇▇▇▇▇ Fargo Bank, National Association be
personally liable for the payment of any indebtedness or expenses of the Trust,
or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Trust under this Confirmation,
the Agreement or any related document.
(c) Transfer, Amendment and Assignment. No transfer, amendment, waiver,
supplement, assignment or other modification of this Transaction shall be
permitted by either party unless each of the rating agencies listed in the
Pooling and Servicing Agreement applicable to the Securitized Asset Backed
Receivables LLC Trust 2006-NC1, Mortgage Pass-Through Certificates, Series
2006-NC1 (the "Certificates") has been provided notice of such modification and
confirms in writing (including by facsimile transmission) within five Business
Days after such notice is given that it will not downgrade, withdraw or modify
its then-current rating of the Certificates issued by Party B.
(d) Proceedings. Party A shall not institute against or cause any other person
to institute against, or join any other person in instituting against, Party B,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state bankruptcy,
dissolution or similar law, for a period of one year and one day (or, if longer,
the applicable preference period) following indefeasible payment in full of the
Certificates, provided that nothing herein will preclude, or be deemed to estop,
Party A from taking any action in any case or proceeding voluntarily filed or
commenced by or on behalf of Party B or in any involuntary case or proceeding
pertaining to Party B after it has been commenced.
(e) Set-Off. Notwithstanding any 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 or 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. The provisions for Set-off set forth in Section 6(e) of the
Agreement shall not apply for purposes of this Transaction, provided that
nothing herein shall be construed to waive or otherwise limit the netting
provisions contained in Section 2(c) or 6(e) of this Agreement.
(f) 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.
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.
Exhibit A
The time of dealing will be confirmed by Barclays upon written request. Barclays
is regulated by the Financial Services Authority. Barclays is acting for its own
account in respect of this Transaction.
Please confirm that the foregoing correctly sets forth all the terms and
conditions of our agreement with respect to the Transaction by responding within
three (3) Business Days by promptly signing in the space provided below and both
(i) faxing the signed copy to Incoming Transaction Documentation, Barclays
Capital Global OTC Transaction Documentation & Management, Global Operations,
Fax ▇(▇▇) ▇▇-▇▇▇▇-▇▇▇▇/6857, Tel ▇(▇▇) ▇▇-▇▇▇▇-▇▇▇▇/6904/6965, and (ii) mailing
the signed copy to Barclays Bank PLC, 5 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ Attention of Incoming Transaction Documentation, Barclays Capital
Global OTC Transaction Documentation & Management, Global Operations. Your
failure to respond within such period shall not affect the validity or
enforceability of the Transaction as against you. This facsimile shall be the
only documentation in respect of the Transaction and accordingly no hard copy
versions of this Confirmation for this Transaction shall be provided unless the
Counterparty requests.
For and on behalf of BARCLAYS BANK PLC For and on behalf of
Securitized Asset Backed Receivables
LLC Trust 2006-NC1
By: ▇▇▇▇▇ Fargo Bank, National
Association, not
individually, but solely as
securities administrator
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇ ▇▇▇▇▇
------------------------------------- --------------------------------------
NAME ▇▇▇▇ ▇▇▇▇▇▇▇ NAME ▇▇▇ ▇▇▇▇▇
Authorised Signatory Vice President
Date: May 3, 2006 Date: May 3, 2006
Barclays Bank PLC and its affiliates, including Barclays Capital Inc., may share
with each other information, including non-public credit information, concerning
its clients and prospective clients. If you do not want such information to be
shared, you must write to the Director of Compliance, Barclays Bank PLC, ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Schedule A
Interest Rate Cap Schedule for Class B
Floating Rate
Payer Period End Notional Strike Rate Ceiling Rate
Period Date* Amount ($) (%) (%) Multiplier
------ ---------------- ------------ ----------- ------------ ----------
1 May 2006 1,411,100.00 9.450 9.450 10.00
2 June 2006 1,411,100.00 9.450 9.450 10.00
3 July 2006 1,411,100.00 9.450 9.450 10.00
4 August 2006 1,411,100.00 9.450 9.450 10.00
5 September 2006 1,411,100.00 9.450 9.450 10.00
6 October 2006 1,411,100.00 9.450 9.450 10.00
7 November 2006 1,411,100.00 9.450 9.450 10.00
8 December 2006 1,411,100.00 9.450 9.450 10.00
9 January 2007 1,411,100.00 5.942 9.450 10.00
10 February 2007 1,411,100.00 5.942 9.450 10.00
11 March 2007 1,411,100.00 6.691 9.450 10.00
12 April 2007 1,411,100.00 5.942 9.450 10.00
13 May 2007 1,411,100.00 6.175 9.450 10.00
14 June 2007 1,411,100.00 5.941 9.450 10.00
15 July 2007 1,411,100.00 6.174 9.450 10.00
16 August 2007 1,411,100.00 5.941 9.450 10.00
17 September 2007 1,411,100.00 5.941 9.450 10.00
18 October 2007 1,411,100.00 6.174 9.450 10.00
19 November 2007 1,411,100.00 5.941 9.450 10.00
20 December 2007 1,411,100.00 6.174 9.450 10.00
21 January 2008 1,411,100.00 5.943 9.450 10.00
22 February 2008 1,411,100.00 6.933 9.450 10.00
23 March 2008 1,411,100.00 7.483 9.450 10.00
24 April 2008 1,411,100.00 6.932 9.450 10.00
25 May 2008 1,411,100.00 7.198 9.450 10.00
26 June 2008 1,411,100.00 6.931 9.450 10.00
27 July 2008 1,411,100.00 7.199 9.450 10.00
28 August 2008 1,411,100.00 7.920 9.450 10.00
29 September 2008 1,411,100.00 7.919 9.450 10.00
30 October 2008 1,411,100.00 8.248 9.450 10.00
31 November 2008 1,411,100.00 7.949 9.450 10.00
32 December 2008 1,411,100.00 8.265 9.450 10.00
33 January 2009 1,411,100.00 8.014 9.450 10.00
34 February 2009 1,411,100.00 9.003 9.450 10.00
35 March 2009 1,411,100.00 9.450 9.450 10.00
36 April 2009 1,411,100.00 9.030 9.450 10.00
37 May 2009 1,411,100.00 9.367 9.450 10.00
38 June 2009 1,411,100.00 9.046 9.450 10.00
39 July 2009 1,411,100.00 9.434 9.450 10.00
40 August 2009 - - - -
--------
* Subject to adjustment in accordance with the Following Business Day
Convention.
EXHIBIT V
SERVICER REMITTANCE REPORT FORMAT
Standard File Layout - Master Servicing
Column Name Description Decimal Format Comment Max Size
---------------------- ----------------------------------------------------- --------- ------------------------- --------
SER_INVESTOR_NBR A value assigned by the Servicer to define a group of Text up to 10 digits 20
loans
LOAN_NBR A unique identifier assigned to each loan by the Text up to 10 digits 10
investor.
SERVICER_LOAN_NBR A unique number assigned to a loan by the Servicer. Text up to 10 digits 10
This may be different than the LOAN_NBR.
BORROWER_NAME The borrower name as received in the file. It is not Maximum length of 30 30
separated by first and last name. (Last, First)
SCHED_PAY_AMT Scheduled monthly principal and scheduled interest 2 No commas(,) or dollar 11
payment that a borrower is expected to pay, P&I signs ($)
constant.
NOTE_INT_RATE The loan interest rate as reported by the Servicer. 4 Max length of 6 6
NET_INT_RATE The loan gross interest rate less the service fee 4 Max length of 6 6
rate as reported by the Servicer.
SERV_FEE_RATE The servicer's fee rate for a loan as reported by the 4 Max length of 6 6
Servicer.
SERV_FEE_AMT The servicer's fee amount for a loan as reported by 2 No commas(,) or dollar 11
the Servicer. signs ($)
NEW_PAY_AMT The new loan payment amount as reported by the 2 No commas(,) or dollar 11
Servicer. signs ($)
NEW_LOAN_RATE The new loan rate as reported by the Servicer. 4 Max length of 6 6
ARM_INDEX_RATE The index the Servicer is using to calculate a 4 Max length of 6 6
forecasted rate.
ACTL_BEG_PRIN_BAL The borrower's actual principal balance at the 2 No commas(,) or dollar 11
beginning of the processing cycle. signs ($)
ACTL_END_PRIN_BAL The borrower's actual principal balance at the end of 2 No commas(,) or dollar 11
the processing cycle. signs ($)
BORR_NEXT_PAY_DUE_DATE The date at the end of processing cycle that the MM/DD/YYYY 10
borrower's next payment is due to the Servicer, as
reported by Servicer.
SERV_CURT_AMT_1 The first curtailment amount to be applied. 2 No commas(,) or dollar 11
signs ($)
SERV_CURT_DATE_1 The curtailment date associated with the first MM/DD/YYYY 10
curtailment amount.
CURT_ADJ_ AMT_1 The curtailment interest on the first curtailment 2 No commas(,) or dollar 11
amount, if applicable. signs ($)
SERV_CURT_AMT_2 The second curtailment amount to be applied. 2 No commas(,) or dollar 11
signs ($)
SERV_CURT_DATE_2 The curtailment date associated with the second MM/DD/YYYY 10
curtailment amount.
CURT_ADJ_ AMT_2 The curtailment interest on the second curtailment 2 No commas(,) or dollar 11
amount, if applicable. signs ($)
SERV_CURT_AMT_3 The third curtailment amount to be applied. 2 No commas(,) or dollar 11
signs ($)
SERV_CURT_DATE_3 The curtailment date associated with the third MM/DD/YYYY 10
curtailment amount.
CURT_ADJ_AMT_3 The curtailment interest on the third curtailment 2 No commas(,) or dollar 11
amount, if applicable. signs ($)
PIF_AMT The loan "paid in full" amount as reported by the 2 No commas(,) or dollar 11
Servicer. signs ($)
PIF_DATE The paid in full date as reported by the Servicer. MM/DD/YYYY 10
Action Code Key: 2
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 reported by 2 No commas(,) or dollar 11
the Servicer. signs ($)
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment amount, if 2 No commas(,) or dollar 11
applicable. signs ($)
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if applicable. 2 No commas(,) or dollar 11
signs ($)
LOAN_LOSS_AMT The amount the Servicer is passing as a loss, if 2 No commas(,) or dollar 11
applicable. signs ($)
SCHED_BEG_PRIN_BAL The scheduled outstanding principal amount due at the 2 No commas(,) or dollar 11
beginning of the cycle date to be passed through to signs ($)
investors.
SCHED_END_PRIN_BAL The scheduled principal balance due to investors at 2 No commas(,) or dollar 11
the end of a processing cycle. signs ($)
SCHED_PRIN_AMT The scheduled principal amount as reported by the 2 No commas(,) or dollar 11
Servicer for the current cycle -- only applicable for signs ($)
Scheduled/Scheduled Loans.
SCHED_NET_INT The scheduled gross interest amount less the service 2 No commas(,) or dollar 11
fee amount for the current cycle as reported by the signs ($)
Servicer -- only applicable for Scheduled/Scheduled
Loans.
ACTL_PRIN_AMT The actual principal amount collected by the Servicer 2 No commas(,) or dollar 11
for the current reporting cycle -- only applicable signs ($)
for Actual/Actual Loans.
ACTL_NET_INT The actual gross interest amount less the service fee 2 No commas(,) or dollar 11
amount for the current reporting cycle as reported by signs ($)
the Servicer -- only applicable for Actual/Actual
Loans.
PREPAY_PENALTY_ AMT The penalty amount received when a borrower prepays 2 No commas(,) or dollar 11
on his loan as reported by the Servicer. signs ($)
PREPAY_PENALTY_ WAIVED The prepayment penalty amount for the loan waived by 2 No commas(,) or dollar 11
the servicer. signs ($)
MOD_DATE The Effective Payment Date of the Modification for MM/DD/YYYY 10
the loan.
MOD_TYPE The Modification Type. Varchar - value can be 30
alpha or numeric
DELINQ_P&I_ADVANCE_AMT The current outstanding principal and interest 2 No commas(,) or dollar 11
advances made by Servicer. signs ($)
EXHIBIT W
ADDITIONAL DISCLOSURE NOTIFICATION
Securitized Asset Backed Receivables LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [_________]
▇▇▇▇▇ Fargo Bank, N.A., as Securities Administrator
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Services - SABR 2006-NC1--SEC REPORT PROCESSING
Re: RE: **Additional Form [10-D][10-K][8-K] Disclosure** Required
Ladies and Gentlemen:
In accordance with Section [ ] of the Pooling and Servicing
Agreement, dated as of [____] [__], 2006, among [____], as [____], [____], as
[____], [____], as [____] and [____], as [____]. The undersigned, as [____],
hereby notifies you that certain events have come to our attention that [will]
[may] need to be disclosed on Form [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:
Any inquiries related to this notification should be directed to
[____], phone number: [____]; email address: [____].
[NAME OF PARTY],
as [role]
By:____________________________________
Name:
Title:
EXHIBIT X
POOL POLICY
RADIAN GUARANTY INC.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ - (▇▇▇) ▇▇▇-▇▇▇▇
MORTGAGE POOL INSURANCE POLICY
RADIAN GUARANTY INC., a Pennsylvania corporation, (a stock insurance company
herein called the "Company") agrees to pay to the insured identified below, in
consideration of the premium paid or to be paid as specified herein, the loss
sustained by reason of the default in payments by a Borrower on any Residential
Mortgage Agreement insured under this policy and listed in the attached Schedule
A, subject to the terms and conditions contained herein.
----------------------------------------------------------------------------------------------------------------------
Insured: U.S. Bank National Association, as Trustee with respect to the Security, located at ▇▇▇ ▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Trust Administration.
----------------------------------------------------------------------------------------------------------------------
Policy Number Issuance Date Effective Date of Policy
06-043190 05/03/06 04/01/06
----------------------------------------------------------------------------------------------------------------------
Premium Rates and Due Dates: On the Issuance
Date, a one-time upfront premium equal to
$6,000,000.00 payable in immediately
available funds by wire transfer to the
account specified by the Company.
Total Initial Principal Balances: $805,846,324.97
Aggregate Loss Percentage: 7.50%.
Aggregate Loss Limit: $60,438,474.37
Deductible Percentage: 3.25%.
Deductible Amount: $26,190,005.56, which is equal to the
Deductible Percentage of the Total
Initial Principal Balances of the
Residential Mortgage Agreements listed in
the attached Schedule A.
Aggregate Risk Amount $34,248,468.81
Security: Securitized Asset Backed Receivables LLC
Trust 2006-NC1
Special Conditions: This is a second-loss policy. The Company
will not be obligated to pay any loss
under this Policy unless and until the
Insured's losses have exceeded the
Deductible Amount. Claims for losses
shall be filed with the Company even if
the Insured's losses have not reached the
Deductible Amount. If any claim is denied
by the Company, the related loss will not
be included in the total of the Insured's
losses for purposes of calculating
whether such losses have exceeded the
Deductible Amount.
The Company shall not be liable for and
this Policy shall not apply to, extend to
or cover any loss for which a claim is
made in connection with an act of Fraud
(including but not limited to any breach
of a representation or warranty contained
in the attached Exhibit A).
The Company may reduce the Aggregate Loss
Limit to not less than zero if each
Rating Agency confirms in writing that it
will not, as the immediate result of the
related reduction, downgrade, withdraw or
qualify its then-current ratings of the
Security.
With respect to each Residential Mortgage
Agreement listed in the attached Schedule
A, the Insured shall comply with the
requirements of Condition 6 herein as a
condition precedent to any obligation of
the Company under this Policy in respect
thereof. The failure of the Insured to
comply with any of the foregoing
conditions precedent will give the
Company in its sole discretion, the right
to declare any liability or obligation
under this Policy null and void.
----------------------------------------------------------------------------------------------------------------------
CONDITIONS
1. Definitions
The terms set forth below shall have the specified meanings when used
in this Policy. Capitalized terms used and not defined in this Policy
shall have the respective meanings assigned to such terms in the
Transaction Agreements.
A. "Policy" is this policy of insurance and all applications,
commitments, endorsements, schedules and exhibits relating
hereto, all of which are incorporated by reference herein.
B. "Schedule A" is the listing of Residential Mortgage Agreements
which are insured under this Policy.
C. "Insured" is the Person designated on the face of this Policy.
The Insured may contract with any other Person to perform the
Insured's obligations under this Policy.
D. "Person" is any individual, corporation, partnership, association
or other entity.
E. "Borrower" is the Person required to repay the debt obligation
created pursuant to a Residential Mortgage Agreement insured
under this Policy.
F. "Default" occurs when the Borrower becomes in arrears in an
amount equal to or greater than one (1) monthly principal and
interest payment due under the terms of the Residential Mortgage
Agreement or violates any other term or condition of the
Residential Mortgage Agreement which is a basis for a foreclosure
action.
G. "Three (3) Months in Default" occurs when the Borrower becomes in
arrears in an amount equal to or greater than three (3) monthly
principal and interest payments due under the terms of the
Residential Mortgage Agreement.
H. "Residential Mortgage Agreement" is any note and any mortgage,
bond, deed of trust, or other instrument used in connection with
the Borrower's loan and evidencing a first lien or charge on
residential real property.
I. "Residential" is a type of building or condominium unit which is
designed for occupancy by not more than four families.
J. "Good and Merchantable Title" is title free and clear of all
liens, defects encumbrances, covenants, conditions, restrictions
and easements, including but not limited to rights of parties in
possession, except for:
(1) the lien of current general real estate taxes and other
public charges and assessments not yet due and payable; and
(2) easements for public utilities, covenants, conditions,
restrictions, rights of way, building restrictions, the
effect of building laws or regulations with which the
improvements on the property comply and other matters of
public record, which in any case do not impair the use of
the property and the improvements thereon for their intended
purposes: and
(3) tenants under leases approved in writing by the Insured;
and except for any other impediments which will not have an
adverse effect on the marketability of the title.
K. "Approved Sale" is (1) a sale of property acquired by the Insured
because of a Default by Borrower and to which the Company has
given prior approval, (2) a foreclosure or trustee's sale of a
property to a third party at a price equal to or exceeding the
maximum amount specified by the Company to be bid by the Insured,
(3) the acquisition of a property by the Company pursuant to
Condition 7D herein.
L. "Initial Principal Balance" is the unpaid principal balance of a
Residential Mortgage Agreement at the Effective Date as listed on
Schedule A.
M. "Total Initial Principal Balances" is the sum of the Initial
Principal Balances of all of the Residential Mortgage Agreements
listed on the attached Schedule A.
N. Total Amortized Principal Balances" is the sum of the unpaid
principal balances of the Residential Mortgage Agreements listed
on the attached Schedule A which were outstanding at the
beginning of the month.
O. "Security" is the bond(s), certificate(s), or other security
instrument(s) identified or referred to on the face of this
policy.
P. "Fraud" is any claim where fraud, error, omission,
misrepresentation, dishonesty, negligence or similar occurrence
with respect to any Residential Mortgage Agreement has taken
place on the part of the person, including without limitation,
the mortgagor, any appraiser, any builder or developer, or any
other party involved in the origination or servicing of the
Residential Mortgage Agreement.
Q. "Qualified" means the Company is duly qualified under applicable
state laws as a mortgage guaranty insurance company, duly
authorized to write the insurance provided by this Policy, and
has a financial strength rating of not lower than "Baa3" from
▇▇▇▇▇'▇ and "BBB-" from S&P.
R. "Transaction Agreements" means the agreements related to the
Security, without regard to any amendments, supplements or other
modifications to which the Company has not given its written
consent.
S. "Servicer" means ▇▇▇▇▇ Fargo Bank, N.A..
T. "Effective Date" means the effective date listed on the face of
this Policy.
U. "Originator" means NC Capital Corporation..
2. Effective Date, Policy Period, Termination and Cancellation
The effective date of this Policy shall be the date specified on the
face hereof. This Policy shall continue in force (1) as to each
Residential Mortgage Agreement listed on the attached Schedule A, until
it has been paid in full, is otherwise liquidated, or the Security is
no longer secured or otherwise backed by it or (2) until the Security
is redeemed or otherwise paid in full. If at any time the Company
ceases to be Qualified, the Insured may terminate this Policy upon
written notice by it to the Company, and thereupon no further premium
shall be due under this Policy. The Company shall use all diligent
effort to remain qualified under applicable state laws as a mortgage
guaranty insurance company, duly authorized to write the insurance
provided by this Policy. Except as provided in this Condition and
Condition 3 herein, there is no right of cancellation under this
Policy.
3. Premiums
A. The premium for this Policy shall be paid to the Company in
the manner and at the Premium Rates specified on the face
hereof. Failure to pay any installment of the premium within
thirty (30) days after receipt of notice from the Company that
such installment is due and unpaid will terminate the
liability of the Company with respect to the coverage
contained in this Policy, and the Policy thereupon shall be
canceled. The Company will provide the Insured with prior
written notice mailed to the last known address of the Insured
at least thirty (30) days in advance of the effective date of
such cancellation. Except as otherwise provided herein, there
shall be no refund of premium under this Policy.
4. Assumptions
If a Residential Mortgage Agreement listed on Schedule A is assumed,
the coverage under this Policy shall remain in force if the original
Borrower is not released from personal liability. If the original
Borrower by an assumption is released from personal liability on a
Residential Mortgage Agreement listed on Schedule A, the liability of
the Company for coverage under this Policy as to such Residential
Mortgage Agreement shall terminate unless the Company approves the
assumption in writing. The Insured shall provide the Company with the
information and documentation required by the Company. The Company
shall not unreasonably withhold approval of an assumption.
5. Notice of Prepayments and Assumptions
Unless otherwise mutually agreed by the Insured and the Company, the
Insured shall each month provide the Company with: (1) a listing of
those Residential Mortgage Agreements which have been prepaid in full,
which have been assumed or as to which there have been losses.
6. Notice of Default
Within fifteen (15) days after the Insured receives notice or otherwise
becomes aware that:
A. A Borrower is Three (3) Months in Default, as defined herein,
or
B. Proceedings to acquire title to a Borrower's property have
been commenced,
whichever event occurs first, notice thereof shall be given to the
Company by the Insured upon the form furnished by the Company,
provided, however, that failure of the Company to furnish forms shall
not relieve the Insured of the obligation to give notice in any
reasonable form within the required time. Thereafter, the Insured shall
report monthly to the Company in summary form the status of the
Borrower's account, until a claim is submitted to the Company or until
the Borrower is less than Three (3) Months in Default.
7. Loss Computation and Conditions
A. Advances - In the event of Default, it shall be a condition
precedent to payment of a claim on any Residential Mortgage
Agreement that the Insured advance: (1) hazard insurance
premiums, (2) real estate property taxes, (3) property
protection and preservation expenses, (4) property sales
expenses, and (5) foreclosure costs (including court costs and
reasonable attorneys fees), in each case to the extent not
constituting Nonrecoverable Servicing Advances.
B. Restoration - In the event of Default, if there is any
physical loss or damage to the property from any cause,
whether by accidental means or otherwise, it shall be a
condition precedent to payment of a claim on the Residential
Mortgage Agreement that the Insured restore the property to
its condition at the time of the issuance of this Policy,
reasonable wear and tear excepted.
C. Computation of Loss - The Deductible Amount and the Aggregate
Loss Limit contained in Condition 7F below, the amount of loss
payable to the Insured on each individual claim shall be:
the total of:
(1) the amount of the unpaid principal balance at the
time of an Approved Sale of the property,
(2) subject to Condition 8B herein, the amount of the
accumulated delinquent interest computed to the date
of claim settlement at the Residential Mortgage
Agreement rate of interest, and
(3) the amount of advances made by the Insured under
Condition 7A above,
less:
(4) the net proceeds upon an Approved Sale of the
property.
D. Loss Payment Option - Subject to the exhaustion of the
Deductible Amount and the Aggregate Loss Limit contained in
Condition 7F below, in lieu of paying the loss determined by
the computation in Condition 7C above, the Company may, at its
option, pay the Insured the total of the amounts under clauses
(1), (2) and (3) of Condition 7C above. As a condition
precedent to the payment of any sum under this loss payment
option, the Insured shall provide the Company with Good and
Merchantable Title to the property. Within thirty (30) days
after the property is sold by the Company, the Company shall
give written notice to the Insured of the net amount received
for such sale.
E. Discharge of Obligation - Any claim payment by the Company
pursuant to Condition 7C above or loss payment pursuant to
Condition 8D above shall be a full and final discharge of its
obligation with respect to such claim or loss under the terms
of this Policy.
F. Aggregate Loss Limit - Notwithstanding the provisions of
Conditions 7C and 7D above, the Aggregate Loss Limit of the
Company under this Policy is equal to the Aggregate Loss
Percentage of the Total Initial Principal Balances of the
Residential Mortgage Agreements listed on the attached
Schedule A, as indicated and subject to the Special Condition
on the face of this Policy. The aggregate losses are the sum
of losses paid by the Company pursuant to Condition 7C or 7D
above, reduced by any net amount the Company receives upon
disposal of any property and by any other reimbursement that
the Company receives for such losses. When the aggregate
losses paid by the Company under this Policy reach an amount
equal to the Aggregate Loss Limit, the liability of the
Company to pay any additional claims for loss ceases until the
aggregate losses are reduced to an amount below the Aggregate
Loss Limit.
G. Aggregate Risk Amount - The Aggregate Risk Amount of the
Company under this Policy is equal to the Aggregate Loss Limit
less the Deductible Amount. The Aggregate Risk Amount is the
maximum aggregate amount the Company will pay under this
Policy. When payments by the Company have exceeded the
Aggregate Risk Amount the liability of the Company to pay any
additional claims for loss ceases.
8. Submission and Payment of Claims
A. Claims - Unless otherwise mutually agreed, a claim for loss
may be filed with the Company on the appropriate form provided
by the Company within sixty (60) days after the Insured has
conveyed title to the property pursuant to an Approved Sale
and shall be accompanied by such documents and other
information as are reasonably requested by the Company. The
Company shall not unreasonably withhold the approval necessary
for such an Approved Sale.
B. Failure to File - Failure to file a claim for loss within
sixty (60) days after a claim could first be filed under
Condition 8A above shall be deemed an election by the Insured
to waive any rights to claim payment under the terms of this
Policy.
C. Loss Payments - Any payment of loss required to be made to the
Insured with respect to any claim shall be payable within
sixty (60) days after receipt by the Company of such claim,
provided that, if the Company shall within twenty (20) days
after the filing of the claim request additional information
necessary to complete its review of the claim, then the sixty
(60) day period shall be suspended until the Company receives
the requested information.
9. Where Notice is Given
All notices, claims, tenders, reports and other data required to be
submitted to the Company by the Insured shall be mailed postpaid to:
Claims Department, Radian Guaranty Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The Company may change this address
by giving written notice to the Insured. All notices to the Insured
shall be mailed postpaid to it at its address shown on the face of this
Policy.
10. To Whom Provisions Applicable
The provisions of this Policy shall inure to the benefit of and be
binding upon the Company, the Insured, and any of their respective
successors and assigns.
11. Suit
No suit or action on this Policy for recovery of any claim shall be
sustained in any court of law or equity unless all material conditions
of this Policy have been complied with, except that a condition may be
specifically waived by the Company in writing. A suit against the
Company must be commenced within three (3) years after the loss can be
determined.
12. Waiver of Conditions
No condition of the Policy, amendment or endorsement thereto shall be
deemed waived, altered or otherwise compromised unless stated in
writing and duly executed. Each of the conditions of this Policy is
severable, and a waiver, alteration or compromise of one condition
shall not be construed as a waiver, alteration or compromise of any
other condition.
13. Servicer Reports
In addition to any reporting requirements specified in this Policy, the
Servicer agrees to forward to the Company any monthly report that is
required to be delivered to the Trustee, within five (5) business days
of receipt.
14. Conflict with Laws
Any provision of this Policy which is in conflict with the laws of the
jurisdiction in which it is effective is hereby amended to conform with
the minimum requirements of such laws.
15. Governing Law
This Policy shall be governed by and construed in accordance with the
internal laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, The Company has caused its Corporate Seal to be
hereto affixed and these presents to be signed by its duly authorized officer.
RADIAN GUARANTY INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Senior Vice President
SCHEDULE A
Residential Mortgage Agreements Insured by the Policy
(Delivered to the Securities Administrator and not attached to the Pool Policy)
EXHIBIT A
Representations and Warranties
A. The description of each Residential Mortgage Agreement on the Schedule
A submitted to the Company by the Originator is true and accurate in
all material respects. This information shall be deemed to be
incorporated herein by this reference as if set forth in full. A list
of the Residential Mortgage Agreements has been submitted to the
Company and are attached is Schedule A hereto.
B. The property identified as the security for each Residential Mortgage
Agreement listed on Schedule A consists of real property improved by a
residential one-to four-family dwelling located in the United States of
America.
C. The original appraised value of the property securing each Residential
Mortgage Agreement listed on Schedule A as of the origination of each
loan is accurately set forth on Schedule A.
D. The original principal balance of each Residential Mortgage Agreement
listed on Schedule A is accurately set forth on such Schedule A.
E. A credit report with FICO score (or equivalent approved by the Company)
was obtained and utilized in the underwriting of each Residential
Mortgage Agreement listed on Schedule A. This FICO score (or equivalent
approved by the Company) is accurately set forth on Schedule A. This
FICO score is the middle of three (3) scores, or the lower of two (2)
scores if only two (2) scores were available.
F. Each Residential Mortgage Agreement listed on Schedule A is secured by
a first mortgage lien on a Residential property.
G. As of the Effective Date of this Policy, each Residential Mortgage
Agreement listed on Exhibit B is not thirty (30) days or more past due
as of April 1, 2006 on a scheduled payment and each Residential
Mortgage Agreement listed on Exhibit C is not sixty (60) days or more
past due as of April 1, 2006 on a scheduled payment. For the avoidance
of doubt, a Residential Mortgage Agreement listed on Exhibit B is
considered current as of the Effective Date if the customer is due for
the March 1, 2006 or later scheduled payment and a Residential Mortgage
Agreement listed on Exhibit C is considered current as of the Effective
Date if the customer is due for the related February 1, 2006 scheduled
payment or later.
H. Each Residential Mortgage Agreement listed on Schedule A will be
serviced by the Servicer in a manner materially consistent with the
Pooling and Servicing Agreement dated April 1, 2006 for the Security.
Any transfer of servicing to a counterparty other than the Servicer
requires the Company's prior written approval.
I. Each Residential Mortgage Agreement listed on Schedule A was
underwritten at the time it was originated in a manner materially
consistent with the Originator's underwriting guidelines (the
"Underwriting Guidelines") attached as Exhibit D hereto. Any material
change to the Underwriting Guidelines requires the Company's written
approval prior to submission of loans.
J. The Insured will pay all applicable premium taxes on Residential
Mortgage Agreements listed on Schedule A where the related properties
are located in the State of Kentucky or West Virginia.
K. Each Residential Mortgage Agreement listed on Schedule A was originated
in compliance with all applicable laws and regulations.
L. None of the Residential Mortgage Agreements listed on the attached
Schedule A is secured by a manufactured home.
Notwithstanding any investigation by the Company, the representations
and warranties set forth above are material inducements to the Company
to extend mortgage insurance coverage on the Residential Mortgage
Agreements listed on Schedule A. The Company has relied on and shall
continue to rely upon the accuracy and completeness of each of the
above representations and warranties. The Insured agrees that the
Company shall not be liable for and this Policy shall not apply, extend
to or cover any loan (s) whose terms do not satisfy each of the
criteria set forth above. Notwithstanding any contrary or otherwise
inconsistent provision of the Policy or any other document, agreement
or instrument, the above representations and warranties shall survive
the issuance of this Policy and shall continue in full force and effect
throughout the term of this Policy.
EXHIBIT B
(Residential Mortgage Agreements not thirty (30) days or more past due as of
April 1, 2006 on a scheduled payment)
(Delivered to the Securities Administrator and not attached to the Pool Policy)
EXHIBIT C
(Residential Mortgage Agreements not sixty (60) days or more past due as of
April 1, 2006 on a scheduled payment)
(Delivered to the Securities Administrator and not attached to the Pool Policy)
EXHIBIT D
Underwriting Guidelines
(Delivered to the Securities Administrator and not attached to the Pool Policy)