EX-10.12






Exhibit 10.12




Deutsche Bank AG, New York Branch

60 Wall Street

MS NYC 60-2606

New York, NY 10005

Attention: Commercial Paper




December 19, 2006




	 	 	 	 	 
	St. Andrew Funding Trust
	 	 	 	 
	18400 St. Andrew, Suite 1000

	Irvine, CA 92616
Attn:
	 	Kevin Cloyd (business contact)







General Counsel (legal contact)



Deutsche Bank Trust Company Americas


60 Wall Street, 26th Floor


New York, NY 10005-2606


Attention: Jessica Richmond



Dear Sirs:



Reference is made to the (i) Mortgage Loan Purchase and Servicing Agreement, dated as of
December 19, 2006 (the “Purchase Agreement”), among New Century Mortgage Corporation, as
seller and servicer, St. Andrew Funding Trust, as purchaser, and New Century Financial Corporation,
as performance guarantor, and (ii) Security Agreement, dated as of December 19, 2006 (the
“Security Agreement”), between the Purchaser and Deutsche Bank Trust Company Americas, as
Collateral Agent, each as may be amended, modified or supplemented. Capitalized terms used and not
defined herein shall have the meanings assigned to such terms in the Security Agreement.



Pursuant to Section 11.2 of the Purchase Agreement, if a Termination Event described
in (d), (h), or (k) through (r) of Section 11.2 of the
Purchase Agreement occurs, or a Termination Event described in (e)(ii) of Section 11.2 of
the Purchase Agreement occurs and any Swap Counterparty gives the written notice to the Purchaser
described therein, or a Security Agreement Event of Default described in clauses (f),
(m), or (o) through (s) of Section 7.01 of the Security Agreement
occurs, or an Indenture Event of Default described in clauses (f), (m), or
(o) through (s) of Section 9.1 of the Indenture occurs, the Servicer shall
use its best efforts to sell all non-Delinquent Loans and non-Defaulted Loans within sixty (60)
days of the date on which such Termination Event, Security Agreement Event of Default or Indenture
Event of Default occurred. In the event that all non-Delinquent Loans and non-Defaulted Loans have
not been so sold by such sixtieth (60th) day, the Collateral Agent shall hold an auction (a
“Termination Event Auction”) of the remaining non-Delinquent Loans and non-Defaulted Loans
for settlement not later than the seventy-fifth (75th) day following the date on which such
Termination Event, Security Agreement Event of Default, or Indenture Event of Default occurred (the
“Final Settlement Date”). Additionally, pursuant to Section 4.1 of the Purchase
Agreement, in the event the principal of any Notes becomes due and payable (a “Repayment
Event”), whether pursuant to the terms thereof or by the occurrence of a Security Agreement
Event of Default or Indenture Event of Default or optional repurchase, maturity or otherwise, the
Servicer is required to arrange for the sale of the non-Delinquent Loans and non-Defaulted Loans at
such times and in such manner so that the proceeds of the sale, together with amounts received by
the Purchaser in connection with each Interest Rate Swap, are available to pay amounts due and
owing on such Notes on the dates the Notes are required to be repaid (each, a “Repayment
Date”). Finally, pursuant to Section 2.8 of the Purchase Agreement, if a Junior Loan
Exposure Trigger Event occurs, the Servicer shall use commercially reasonable efforts to sell all
Junior Loans within sixty (60) days of the date on which such Junior Loan Exposure Trigger Event
occurred. In the event that all Junior Loans have not been so sold, on such sixtieth (60th) day
the Collateral Agent shall hold an auction (a “Junior Loan Exposure Trigger Event Auction”)
of the remaining Junior Loans for settlement not later than the seventy-fifth (75th) day following
the date on which such Junior Loan Exposure Trigger Event occurred (the “Junior Loan Exposure
Final Settlement Date”).



In connection with any such Termination Event Auction, Repayment Event, or Junior Loan
Exposure Trigger Event Auction, Deutsche Bank AG, New York Branch (the “Bank”), the
Servicer, the Collateral Agent and the Purchaser agree as follows:



(a) With respect to the Termination Event Auction:




(i) the Bank shall participate in a Termination Event Auction and agrees to make a
binding bid (the “Bid”) for all non-Delinquent Loans and non-Defaulted Loans. The
amount of the Bid shall be determined in the sole discretion of the Bank and such Bid shall
remain in effect until the Final Settlement Date; and




(ii) if the Collateral Agent accepts the Bid, the Collateral Agent shall notify the
Bank and the Purchaser of such acceptance and the principal balance of all non-Delinquent
Loans and non-Defaulted Loans to be purchased by the Bank (which amount may be all or a
portion of the principal balance of all non-Delinquent Loans and non-Defaulted Loans) in
writing not later than two (2) Business Days prior to the Final Settlement Date. Any such
purchase of all non-Delinquent Loans and non-Defaulted Loans by the Bank shall be settled on
or prior to the Final Settlement Date.



(b) With respect to any Repayment Event, if requested by the Collateral Agent:




(i) the Bank agrees to make a Bid for the principal balance of all non-Delinquent Loans
and non-Defaulted Loans specified by the Collateral Agent. The amount of the Bid shall be
determined in the sole discretion of the Bank and such Bid shall remain in effect until such
Repayment Date; and




(ii) if the Collateral Agent accepts the Bid, the Collateral Agent shall notify the
Bank and the Purchaser of such acceptance and the principal balance of all non-Delinquent
Loans and non-Defaulted Loans to be purchased by the Bank (which amount may be all or a
portion of the principal balance of all non-Delinquent Loans and non-Defaulted Loans) in
writing on or prior to such Repayment Date. Any such purchase of the non-Delinquent Loans
and non-Defaulted Loans by the Bank shall be settled on or prior to such Repayment Date.



(c) With respect to the Junior Loan Exposure Trigger Event Auction:




(i) the Bank shall participate in a Junior Loan Exposure Trigger Event Auction and
agrees to make a binding bid (the “Bid”) for all Junior Loans which, as of the
auction date, are non-Defaulted or non-Delinquent Loans. The amount of the Bid shall be
determined in the sole discretion of the Bank and such Bid shall remain in effect until the
Junior Loan Exposure Final Settlement Date, subject only to changes in a relevant index rate
(which rate shall be indicated in the Bid) until accepted; and




(ii) if the Issuer accepts the Bid, the Issuer shall notify the Bank and the Collateral
Agent of such acceptance and the principal balance of Junior Loans to be purchased by the
Bank (which amount may be all or a portion of the principal balance of the Junior Loans) in
writing not later than two (2) Business Days prior to the Junior Loan Exposure Final
Settlement Date. Any such purchase of Junior Loans by the Bank shall be settled on or prior
to the Junior Loan Exposure Final Settlement Date;



(d) If the Bank’s rating assigned by any Rating Agency is either downgraded or withdrawn from
the required level of a “P-1” rating from Moody’s, the Bank shall give notice of such downgrade or
withdrawal to the Purchaser within three days of notice thereof. The Bank shall use its best
efforts to assist the Purchaser in finding a replacement rated bidder to assume the Bank’s
obligations under this agreement.



This agreement shall remain in full force and effect until all the Notes have been paid in
full. This agreement and the Bank’s rights and obligations hereunder may not be assigned or
otherwise transferred by the Bank, whether by operation of law or otherwise, unless (i) the
Purchaser, each Swap Counterparty, the Servicer and the Collateral Agent consent in writing to such
assignment, (ii) the assignee has expressly assumed the obligations of the Bank hereunder by
written instrument in form and substance satisfactory to the Purchaser, each Swap Counterparty, the
Servicer and the Collateral Agent and (iii) Rating Agency Confirmation with respect to such
assignment has been received by the Purchaser.



In consideration of the above agreement the Purchaser shall pay the Bank such fee as shall be
separately agreed between the Purchaser and the Bank.



This agreement shall be governed by the internal laws of the State of New York and may be
executed in counterparts.



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Very truly yours,



DEUTSCHE BANK AG, NEW YORK BRANCH



By: /s/ Susan Valenti





Name: Susan Valenti

Title: Director



By: /s/ Robert Lopena





Name: Robert Lopena

Title: Authorized Signatory



Accepted And Agreed as of the date written above:



St. Andrew Funding Trust



By: Christiana Bank & Trust Company,



as Owner Trustee



By: /s/ James M. Young





Name: James M. Young

Title: Vice President



	 	 	 
	New Century Mortgage Corporation,

	 
	 	 
	as Servicer

By:

	 	

/s/ Warren Licata






Name: Warren Licata

Title: Senior Vice President



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Deutsche Bank Trust Company Americas,



as Collateral Agent




	 	 	By: /s/ Eileen M. Hughes






	 	 	Name: Eileen M. Hughes

Title: Vice President






	 	 	By: /s/ James P. Bowden






	 	 	Name: James P. Bowden

Title: Associate






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