NEW CENTURY HOME EQUITY LOAN TRUST 2006-1 Issuing Entity and DEUTSCHE BANK NATIONAL TRUST COMPANY Indenture Trustee INDENTURE Dated as of March 30, 2006 ASSET-BACKED NOTES, SERIES 2006-1
Issuing
Entity
and
DEUTSCHE
BANK NATIONAL TRUST COMPANY
Indenture
Trustee
_____________________________
Dated
as
of March 30, 2006
_____________________________
ASSET-BACKED
NOTES, SERIES 2006-1
________________
TABLE
OF CONTENTS
ARTICLE
I
DEFINITIONS
Section
1.01. Definitions
Section
1.02. Incorporation
by Reference of Trust Indenture Act
Section
1.03. Rules
of
Construction
ARTICLE
II
ORIGINAL
ISSUANCE OF THE NOTES
Section
2.01. Form
Section
2.02. Execution,
Authentication and Delivery
Section
2.03. Acceptance
of Mortgage Loans by Indenture Trustee.
Section
2.04. Acceptance
of Swap Agreement by Indenture Trustee
ARTICLE
III
COVENANTS
Section
3.01. Collection
of Payments with respect to the Mortgage Loans
Section
3.02. Maintenance
of Office or Agency
Section
3.03. Money
for
Payments To Be Held in Trust; Paying Agent
Section
3.04. Existence
Section
3.05. Payment
of Principal and Interest.
Section
3.06. Protection
of Trust Estate.
Section
3.07. Opinions
as to Trust Estate.
Section
3.08. Performance
of Obligations.
Section
3.09. Negative
Covenants
Section
3.10. [Reserved.]
Section
3.11. [Reserved.]
Section
3.12. Representations
and Warranties Concerning the Mortgage Loans
Section
3.13. Amendments
to Servicing Agreement
Section
3.14. Servicer
as Agent and Bailee of the Indenture Trustee
Section
3.15. Investment
Company Act
Section
3.16. Issuing
Entity May Consolidate, etc.
Section
3.17. Successor
or Transferee.
Section
3.18. No
Other
Business
Section
3.19. No
Borrowing
Section
3.20. Guarantees,
Loans, Advances and Other Liabilities
Section
3.21. Capital
Expenditures
Section
3.22. Determination
of Note Rate
Section
3.23. Restricted
Payments
Section
3.24. Notice
of
Events of Default
Section
3.25. Further
Instruments and Acts
Section
3.26. Statements
to Noteholders
Section
3.27. [Reserved].
Section
3.28. Certain
Representations Regarding the Trust Estate.
Section
3.29. Allocation
of Realized Losses.
ARTICLE
IV
THE
NOTES; SATISFACTION AND DISCHARGE OF INDENTURE
Section
4.01. The
Notes
Section
4.02. Registration
of and Limitations on Transfer and Exchange of Notes; Appointment of Note
Registrar and Certificate.
Section
4.03. Mutilated,
Destroyed, Lost or Stolen Notes
Section
4.04. Persons
Deemed Owners
Section
4.05. Cancellation
Section
4.06. Book-Entry
Notes
Section
4.07. Notices
to Depository
Section
4.08. Definitive
Notes
Section
4.09. Tax
Treatment
Section
4.10. Satisfaction
and Discharge of Indenture
Section
4.11. Application
of Trust Money
Section
4.12. Derivative
Contracts for Benefit of the Certificates
Section
4.13. Repayment
of Monies Held by Paying Agent
Section
4.14. Temporary
Notes
Section
4.15. Representation
Regarding ERISA
ARTICLE
V
DEFAULT
AND REMEDIES
Section
5.01. Events
of
Default
Section
5.02. Acceleration
of Maturity; Rescission and Annulment
Section
5.03. Collection
of Indebtedness and Suits for Enforcement by Indenture Trustee.
Section
5.04. Remedies;
Priorities.
Section
5.05. Optional
Preservation of the Trust Estate
Section
5.06. Limitation
of Suits
Section
5.07. Unconditional
Rights of Noteholders To Receive Principal and Interest.
Section
5.08. Restoration
of Rights and Remedies
Section
5.09. Rights
and Remedies Cumulative
Section
5.10. Delay
or
Omission Not a Waiver
Section
5.11. Control
By Noteholders
Section
5.12. Waiver
of
Past Defaults
Section
5.13. Undertaking
for Costs
Section
5.14. Waiver
of
Stay or Extension Laws
Section
5.15. Sale
of
Trust Estate.
Section
5.16. Action
on
Notes
Section
5.17. Performance
and Enforcement of Certain Obligations.
ARTICLE
VI
THE
INDENTURE TRUSTEE
Section
6.01. Duties
of
Indenture Trustee.
Section
6.02. Rights
of
Indenture Trustee.
Section
6.03. Individual
Rights of Indenture Trustee
Section
6.04. Indenture
Trustee’s Disclaimer
Section
6.05. Notice
of
Event of Default
Section
6.06. Reports
by Indenture Trustee to Holders and Tax Administration.
Section
6.07. Compensation
and Indemnity
Section
6.08. Replacement
of Indenture Trustee
Section
6.09. Successor
Indenture Trustee by ▇▇▇▇▇▇
Section
6.10. Appointment
of Co-Indenture Trustee or Separate Indenture Trustee.
Section
6.11. Eligibility;
Disqualification
Section
6.12. Preferential
Collection of Claims Against Issuing Entity
Section
6.13. Representations
and Warranties
Section
6.14. Directions
to Indenture Trustee
Section
6.15. The
Agents
ARTICLE
VII
NOTEHOLDERS’
LISTS AND REPORTS
Section
7.01. Issuing
Entity To Furnish Indenture Trustee Names and Addresses of
Noteholders.
Section
7.02. Preservation
of Information; Communications to Noteholders.
Section
7.03. Reports
of Issuing Entity.
Section
7.04. Reports
by Indenture Trustee
Section
7.05. Statements
to Noteholders.
ARTICLE
VIII
ACCOUNTS,
DISBURSEMENTS AND RELEASES
Section
8.01. Collection
of Money
Section
8.02. Trust
Accounts.
Section
8.03. Officer’s
Certificate
Section
8.04. Termination
Upon Distribution to Noteholders
Section
8.05. Release
of Trust Estate.
Section
8.06. Surrender
of Notes Upon Final Payment
Section
8.07. Optional
Redemption of the Notes.
ARTICLE
IX
SUPPLEMENTAL
INDENTURES
Section
9.01. Supplemental
Indentures Without Consent of Noteholders.
Section
9.02. Supplemental
Indentures With Consent of Noteholders
Section
9.03. Execution
of Supplemental Indentures
Section
9.04. Effect
of
Supplemental Indenture
Section
9.05. Conformity
with Trust Indenture Act
Section
9.06. Reference
in Notes to Supplemental Indentures
ARTICLE
X
MISCELLANEOUS
Section
10.01. Compliance
Certificates and Opinions, etc.
Section
10.02. Form
of
Documents Delivered to Indenture Trustee
Section
10.03. Acts
of
Noteholders.
Section
10.04. Notices
etc., to Indenture Trustee Issuing Entity and Rating Agencies.
Section
10.05. Notices
to Noteholders; Waiver
Section
10.06. Conflict
with Trust Indenture Act
Section
10.07. Effect
of
Headings
Section
10.08. Successors
and Assigns
Section
10.09. Separability
Section
10.10. [Reserved.]
Section
10.11. Legal
Holidays
Section
10.12. GOVERNING
LAW
Section
10.13. Counterparts
Section
10.14. Recording
of Indenture
Section
10.15. Issuing
Entity Obligation
Section
10.16. No
Petition
Section
10.17. Inspection
Section
10.18. No
Recourse to Owner Trustee
Section
10.19. Proofs
of
Claim
EXHIBITS
|
Exhibit
A-1
|
Form
of Class A-1 Note
|
|
Exhibit
A-2
|
Form
of Class A-2a Note
|
|
Exhibit
A-3
|
Form
of Class A-2b Note
|
|
Exhibit
A-4
|
Form
of Class A-2c Note
|
|
Exhibit
A-5
|
Form
of Class M-1 Note
|
|
Exhibit
A-6
|
Form
of Class M-2 Note
|
|
Exhibit
A-7
|
Form
of Class M-3 Note
|
|
Exhibit
A-8
|
Form
of Class M-4 Note
|
|
Exhibit
A-9
|
Form
of Class M-5 Note
|
|
Exhibit
A-10
|
Form
of Class M-6 Note
|
|
Exhibit
A-11
|
Form
of Class M-7 Note
|
|
Exhibit
A-12
|
Form
of Class M-8 Note
|
|
Exhibit
A-13
|
Form
of Class M-9 Note
|
|
Exhibit
B
|
Mortgage
Loan Schedule
|
|
Exhibit
C-1
|
Form
of Indenture Trustee’s Initial Certification
|
|
Exhibit
C-2
|
Form
of Indenture Trustee’s Final Certification
|
|
Exhibit
D
|
Interest
Rate Swap Agreement
|
|
Appendix
A
|
Definitions
|
This
Indenture, dated as of March 30, 2006, is entered into between New Century
Home
Equity Loan Trust 2006-1, a Delaware statutory trust, as Issuing Entity (the
“Issuing Entity”), and Deutsche Bank National Trust Company, a national banking
association, as Indenture Trustee (the “Indenture Trustee”).
WITNESSETH
THAT:
Each
party hereto agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Issuing Entity’s Asset-Backed
Notes, Series 2006-1 (the “Notes”).
GRANTING
CLAUSE
The
Issuing Entity hereby Grants to the Indenture Trustee at the Closing Date,
as
trustee for the benefit of the Holders of the Notes, all of the Issuing Entity’s
right, title and interest in and to whether now existing or hereafter created
by
(a) the Mortgage Loans, Qualified Substitute Mortgage Loans and the proceeds
thereof and all rights under the Related Documents; (b) all funds on deposit
from time to time in the Collection Account allocable to the Mortgage Loans
excluding any investment income from such funds; (c) all funds on deposit from
time to time in the Payment Account and in all proceeds thereof; (d) all rights
under (i) the Mortgage Loan Purchase Agreement as assigned to the Issuing
Entity, (ii) the Servicing Agreement, (iii) any title, hazard and primary
insurance policies with respect to the Mortgaged Properties and (iv) the rights
with respect to the Interest Rate Swap Agreement; (e) all present and future
claims, demands, causes and choses in action in respect of any or all of the
foregoing and all payments on or under, and all proceeds of every kind and
nature whatsoever in respect of, any or all of the foregoing and all payments
on
or under, and all proceeds of every kind and nature whatsoever in the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all
cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks,
deposit accounts, rights to payment of any and every kind, and other forms
of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing and (f) all other property of the Issuing Entity (collectively, the
“Trust Estate” or the “Collateral”).
The
foregoing Grant is made in trust to secure the payment of principal of and
interest on, and any other amounts owing in respect of, the Notes, equally
and
ratably without prejudice, priority or distinction, and to secure compliance
with the provisions of this Indenture, all as provided in this
Indenture.
The
Indenture Trustee, as trustee on behalf of the Holders of the Notes,
acknowledges such ▇▇▇▇▇, accepts the trust under this Indenture in accordance
with the provisions hereof and agrees to perform its duties as Indenture Trustee
as required herein.
ARTICLE
I
DEFINITIONS
Section
1.01. Definitions.
For all
purposes of this Indenture, except as otherwise expressly provided herein or
unless the context otherwise requires, capitalized terms not otherwise defined
herein shall have the meanings assigned to such terms in the Definitions
attached hereto as Appendix A which is incorporated by reference herein. All
other capitalized terms used herein shall have the meanings specified
herein.
Section
1.02. Incorporation
by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture Act (the
“TIA”), the provision is incorporated by reference in and made a part of this
Indenture. The following TIA terms used in this Indenture have the following
meanings:
“Commission”
means the Securities and Exchange Commission.
“indenture
securities” means the Notes.
“indenture
security holder” means a Noteholder.
“indenture
to be qualified” means this Indenture.
“indenture
trustee” or “institutional trustee” means the Indenture Trustee.
“obligor”
on the indenture securities means the Issuing Entity and any other obligor
on
the indenture securities.
All
other
TIA terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by Commission rules and have the
meanings assigned to them by such definitions.
Section
1.03. Rules
of Construction.
Unless
the context otherwise requires:
(i) a
term
has the meaning assigned to it;
(ii) an
accounting term not otherwise defined has the meaning assigned to it in
accordance with generally accepted accounting principles as in effect from
time
to time;
(iii) “or”
is
not exclusive;
(iv) “including”
means including without limitation;
(v) words
in
the singular include the plural and words in the plural include the singular;
and
(vi) any
agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented
and
includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein; references to a Person
are also to its permitted successors and assigns.
ARTICLE
II
ORIGINAL
ISSUANCE OF THE NOTES
Section
2.01. Form.
The
Class A Notes and the Mezzanine Notes, together with the Indenture Trustee’s
certificate of authentication, shall be in substantially the form set forth
in
Exhibits A-1 through A-13 to this Indenture, respectively, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture.
The
Notes
shall be typewritten, printed, lithographed or engraved or produced by any
combination of these methods (with or without steel engraved
borders).
The
terms
of the Notes set forth in Exhibits A-1 through A-13 to this Indenture are part
of the terms of this Indenture.
Section
2.02. Execution,
Authentication and Delivery. The
Notes shall be executed on behalf of the Issuing Entity by any of its Authorized
Officers. The signature of any such Authorized Officer on the Notes may be
manual or facsimile.
Notes
bearing the manual or facsimile signature of individuals who were at any time
Authorized Officers of the Issuing Entity shall bind the Issuing Entity,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The
Indenture Trustee shall upon Issuing Entity Request authenticate and deliver
the
Class A Notes and the Mezzanine Notes for original issue in an aggregate initial
principal amount of $1,328,077,000. The
Classes of Notes shall have the following Initial Note Balances:
|
Class
|
Initial
Note Balance
|
|
A-1
|
$456,811,000
|
|
A-2a
|
$275,608,000
|
|
A-2b
|
$308,053,000
|
|
A-2c
|
$45,080,000
|
|
M-1
|
$53,970,000
|
|
M-2
|
$48,505,000
|
|
M-3
|
$25,960,000
|
|
M-4
|
$23,228,000
|
|
M-5
|
$22,545,000
|
|
M-6
|
$21,178,000
|
|
M-7
|
$18,446,000
|
|
M-8
|
$13,663,000
|
|
M-9
|
$15,030,000
|
Each
of
the Notes shall be dated the date of its authentication. The Notes shall be
issuable as registered Notes and the Notes shall be issuable in the minimum
initial Note Balances of $25,000 and in integral multiples of $1 in excess
thereof.
No
Note
shall be entitled to any benefit under this Indenture or be valid or obligatory
for any purpose, unless there appears on such Note a certificate of
authentication substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized signatories,
and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered
hereunder.
Section
2.03. Acceptance
of Mortgage Loans by Indenture Trustee.
(a) The
Indenture Trustee acknowledges receipt of, subject to the exceptions it notes
pursuant to the procedures described below, the documents (or certified copies
thereof) referred to in Section 2.1(b) of the Mortgage Loan Purchase Agreement,
and declares that it holds and will continue to hold those documents and any
amendments, replacements or supplements thereto and all other assets of the
Trust Estate as Indenture Trustee in trust for the use and benefit of all
present and future Holders of the Notes.
The
parties hereto understand and agree that it is not intended that any Mortgage
Loan be included in the Trust that is a “High-Cost Home Loan” as defined by the
Homeownership and Equity Protection Act of 1994 or any other applicable federal,
state and local predatory or abusive lending laws.
The
Indenture Trustee agrees, for the benefit of the Noteholders, to review each
Mortgage File on or before the Closing Date and to certify in substantially
the
form attached hereto as Exhibit C-1 that, as to each Mortgage Loan listed in
the
Mortgage Loan Schedule (other than any Mortgage Loan specifically identified
in
the exception report annexed thereto as not being covered by such
certification), (i) all documents constituting part of such Mortgage File (other
than such documents described in Section 2.1(b)(v) of the Mortgage Loan Purchase
Agreement) required to be delivered to it pursuant to the Mortgage Loan Purchase
Agreement are in its possession, (ii) such documents have been reviewed by
it
and appear regular on their face and relate to such Mortgage Loan and (iii)
based on its examination and only as to the foregoing, the information set
forth
in the Mortgage Loan Schedule that corresponds to items (i), (ii), (x), (xi),
(xiv) and (xvi) (solely as to Gross Margin) of the definition of “Mortgage Loan
Schedule” accurately reflects information set forth in the Mortgage File. It is
herein acknowledged that, in conducting such review, the Indenture Trustee
was
under no duty or obligation (i) to inspect, review or examine any such
documents, instruments, certificates or other papers to determine whether they
are genuine, enforceable, or appropriate for the represented purpose or whether
they have actually been recorded or that they are other than what they purport
to be on their face or (ii) to determine whether any Mortgage File should
include any of the documents specified in clause (v) of Section 2.1(b) of the
Mortgage Loan Purchase Agreement.
Prior
to
the first anniversary date of this Indenture the Indenture Trustee shall deliver
to the Depositor and the Servicer a final certification in the form annexed
hereto as Exhibit C-2 evidencing the completeness of the Mortgage Files, with
any applicable exceptions noted thereon, and the Servicer shall forward a copy
thereof to any Sub-Servicer.
If
in the
process of reviewing the Mortgage Files and making or preparing, as the case
may
be, the certifications referred to above, the Indenture Trustee finds any
document or documents constituting a part of a Mortgage File to be missing
or
defective in any material respect, at the conclusion of its review the Indenture
Trustee shall so notify the Depositor and the Servicer. In addition, upon the
discovery by the Indenture Trustee of a breach of any of the representations
and
warranties made by NC Capital in the Mortgage Loan Purchase Agreement in respect
of any Mortgage Loan which materially adversely affects such Mortgage Loan
or
the interests of the related Noteholders in such Mortgage Loan, the Indenture
Trustee or any other party discovering such breach shall give prompt written
notice to the Depositor, the Servicer and NC Capital.
(b) Upon
deposit of the Purchase Price in the Payment Account, the Indenture Trustee
shall release and deliver to NC Capital (at the expense of the Servicer) the
related Mortgage File and shall execute and deliver all instruments of transfer
or assignment, without recourse, furnished to it by NC Capital as are necessary
to vest in NC Capital title to and rights under the related Mortgage Loan.
Such
purchase shall be deemed to have occurred on the date on which certification
of
the deposit of the Purchase Price in the Payment Account was received by the
Indenture Trustee.
Section
2.04. Acceptance
of Interest Rate Swap Agreement by Indenture Trustee.
The
Indenture Trustee acknowledges receipt of the Interest Rate Swap Agreement
and
declares that it holds and will continue to hold these documents and any
amendments, replacements or supplements thereto and all other assets of the
Trust Estate as Indenture Trustee in trust for the use and benefit of all
present and future Holders of the Notes.
ARTICLE
III
COVENANTS
Section
3.01. Collection
of Payments with respect to the Mortgage Loans.
The
Indenture Trustee shall establish and maintain an Eligible Account (the “Payment
Account”) in which the Indenture Trustee shall deposit, on the same day as it is
received from the Servicer, each remittance received by the Indenture Trustee
with respect to the Mortgage Loans. The Indenture Trustee shall make all
payments of principal of and interest on the Notes, subject to Section 3.03
as
provided in Section 3.05 herein from monies on deposit in the Payment
Account.
Section
3.02. Maintenance
of Office or Agency.
The
Issuing Entity will maintain an office or agency where, subject to satisfaction
of conditions set forth herein, Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Issuing
Entity in respect of the Notes and this Indenture may be served. The Issuing
Entity hereby initially appoints the Indenture Trustee to serve as its agent
for
the foregoing purposes. If at any time the Issuing Entity shall fail to maintain
any such office or agency or shall fail to furnish the Indenture Trustee with
the address thereof, such surrenders may be made at the office of the Indenture
Trustee’s agent located at DB Services Tennessee, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Transfer Unit, and notices and
demands may be made or served at the Corporate Trust Office.
Section
3.03. Money
for Payments To Be Held in Trust; Paying Agent.
As
provided in Section 3.01, all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Payment Account
pursuant to Section 3.01 shall be made on behalf of the Issuing Entity by the
Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from
the
Payment Account for payments of Notes shall be paid over to the Issuing Entity
except as provided in this Section 3.03. The Issuing Entity hereby appoints
the
Indenture Trustee as its Paying Agent.
The
Issuing Entity will cause each Paying Agent other than the Indenture Trustee
to
execute and deliver to the Indenture Trustee an instrument in which such Paying
Agent shall agree with the Indenture Trustee (and if the Indenture Trustee
acts
as Paying Agent it hereby so agrees), subject to the provisions of this Section
3.03, that such Paying Agent will:
(i) hold
all
sums held by it for the payment of amounts due with respect to the Notes in
trust for the benefit of the Persons entitled thereto until such sums shall
be
paid to such Persons or otherwise disposed of as herein provided and pay such
sums to such Persons as herein provided;
(ii) give
the
Indenture Trustee notice of any default by the Issuing Entity of which it has
actual knowledge in the making of any payment required to be made with respect
to the Notes;
(iii) at
any
time during the continuance of any such default, upon the written request of
the
Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held
in
trust by such Paying Agent;
(iv) immediately
resign as Paying Agent and forthwith pay to the Indenture Trustee all sums
held
by it in trust for the payment of Notes if at any time it ceases to meet the
standards required to be met by a Paying Agent at the time of its
appointment;
(v) comply
with all requirements of the Code with respect to the withholding from any
payments made by it on any Notes of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting requirements in connection
therewith; and
(vi) not
commence a bankruptcy proceeding against the Issuing Entity in connection with
this Indenture.
The
Issuing Entity may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuing Entity
Request direct any Paying Agent to pay to the Indenture Trustee all sums held
in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent;
and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such
money.
Subject
to applicable laws with respect to escheat of funds, any money held by the
Indenture Trustee or any Paying Agent in trust for the payment of any amount
due
with respect to any Note and remaining unclaimed for one year after such amount
has become due and payable shall be discharged from such trust and be paid
to
the Issuing Entity on Issuing Entity Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuing Entity
for payment thereof (but only to the extent of the amounts so paid to the
Issuing Entity), and all liability of the Indenture Trustee or such Paying
Agent
with respect to such trust money shall thereupon cease; provided,
however,
that the
Indenture Trustee or such Paying Agent, before being required to make any such
repayment, shall at the expense and direction of the Issuing Entity cause to
be
published once, in an Authorized Newspaper published in the English language,
notice that such money remains unclaimed and that, after a date specified
therein which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the Issuing
Entity. The Indenture Trustee may also adopt and employ, at the expense and
direction of the Issuing Entity, any other reasonable means of notification
of
such repayment (including, but not limited to, mailing notice of such repayment
to Holders whose Notes have been called but have not been surrendered for
redemption or whose right to or interest in monies due and payable but not
claimed is determinable from the records of the Indenture Trustee or of any
Paying Agent, at the last address of record for each such Holder).
Section
3.04. Existence.
The
Issuing Entity will keep in full effect its existence, rights and franchises
as
a statutory trust under the laws of the State of Delaware (unless it becomes,
or
any successor Issuing Entity hereunder is or becomes, organized under the laws
of any other state or of the United States of America, in which case the Issuing
Entity will keep in full effect its existence, rights and franchises under
the
laws of such other jurisdiction) and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall
be
necessary to protect the validity and enforceability of this Indenture, the
Notes, the Mortgage Loans and each other instrument or agreement included in
the
Trust Estate.
Section
3.05. Payment
of Principal and Interest.
(a) On
each
Payment Date from amounts on deposit in the Payment Account in accordance with
Section 8.02 hereof, the Indenture Trustee shall pay to the Persons specified
below, to the extent provided therein, the Available Payment Amount for such
Payment Date.
(b) (I)
On
each Payment Date, the Indenture Trustee shall withdraw from the Payment Account
an amount equal to the Group I Interest Remittance Amount and pay to the
Noteholders the following amounts, in the following order of
priority:
(i) To
the
Holders of the Group I Notes, the Senior Interest Payment Amount allocable
to
such Notes; and
(ii) concurrently,
to the Holders of each Group II Notes, on a pro
rata basis
based on the entitlement of each such Class, the Senior Interest Payment Amount
for such Notes, to the extent remaining unpaid after the payment of the Group
II
Interest Remittance Amount as set forth in Section 3.05(b)(II)(i).
(II) On
each
Payment Date, the Indenture Trustee shall withdraw from the Payment Account
an
amount equal to the Group II Interest Remittance Amount and pay to the
Noteholders the following amounts, in the following order of
priority
(i) concurrently,
to the Holders of each Class of Group II Notes, on a pro
rata basis
based on the entitlement of each such Class, an amount equal to the Senior
Interest Payment Amount allocable to such Class of Notes; and
(ii) to
the
Holders of the Group I Notes, the Senior Interest Payment Amount for such Notes,
to the extent remaining unpaid after the payment of the Group I Interest
Remittance Amount as set forth in Section 3.05 (b)(I)(i).
(III) On
each
Payment Date, following the payments made pursuant to Sections 3.05(b)(I) and
(II), the Indenture Trustee shall withdraw from the Payment Account an amount
equal to any remaining Group I Interest Remittance Amount and Group II Interest
Remittance Amount and pay sequentially, to the Holders of the Class M-1 Notes,
the Class M-2 Notes, the Class M-3 Notes, the Class M-4 Notes, the Class M-5
Notes, the Class M-6 Notes, the Class M-7 Notes, the Class M-8 Notes and the
Class M-9 Notes in that order, in an amount equal to the Interest Payment Amount
allocable to each such Class of Notes.
(c) (I)
On
each Payment Date (a) prior to the Stepdown Date or (b) on which a Trigger
Event
is in effect, the Group I Principal Payment Amount shall be paid in the
following order of priority:
(i) to
the
Holders of the Group I Notes, until the Note Balances thereof have been reduced
to zero; and
(ii) after
taking into account the amount paid to the Holders of the Group II Notes
pursuant to Section 3.05(c)(II)(i) on such Payment Date, to the Holders of
the
Group II Notes (allocated among the Group II Notes in the priority described
below), until the Note Balances thereof have been reduced to zero.
(II) On
each
Payment Date (a) prior to the Stepdown Date or (b) on which a Trigger Event
is
in effect, the Group II Principal Payment Amount shall be paid in the following
order of priority:
(i) to
the
Holders of the Class of Group II Notes (allocated among the Group II Notes
in
the priority described below), until the Note Balances thereof have been reduced
to zero; and
(ii) after
taking into account the amount paid to the Holders of the Group I Notes pursuant
to Section 3.05(c)(I)(i) on such Payment Date, to the Holders of the Group
I
Notes, until the Note Balances thereof have been reduced to zero.
(III) On
each
Payment Date (a) prior to the Stepdown Date or (b) on which a Trigger Event
is
in effect, the sum of the Group I Principal Payment Amount and the Group II
Principal Payment Amount remaining after payments pursuant to Section 3.05(c)(I)
and Section (c)(II) for such Payment Date shall be paid in the following order
of priority: sequentially, to the Holders of the Class M-1 Notes, the Class
M-2
Notes, the Class M-3 Notes, the Class M-4 Notes, the Class M-5 Notes, the Class
M-6 Notes, the Class M-7 Notes, the Class M-8 Notes and the Class M-9 Notes
in
that order, until the respective Note Balance of each such Class has been
reduced to zero.
(IV) On
each
Payment Date (a) on or after the Stepdown Date and (b) on which a Trigger Event
is not in effect, the Group I Principal Payment Amount shall be paid in the
following order of priority:
(i) to
the
Holders of the Group I Notes, the Group I Senior Principal Payment Amount,
until
the Note Balances thereof have been reduced to zero; and
(ii) to
the
Holders of the Group II Notes (allocated among the Group II Notes in the
priority described below), an amount equal to the excess, if any, of (x) the
amount required to be paid pursuant to Section 3.05(c)(V)(i) for such Payment
Date over (y) the amount actually paid pursuant to Section 3.05(c)(V)(i) from
the Group II Principal Payment Amount on such Payment Date.
(V) On
each
Payment Date (a) on or after the Stepdown Date and (b) on which a Trigger Event
is not in effect, the Group II Principal Payment Amount shall be paid in the
following order of priority:
(i) to
the
Holders of the Group II Notes (allocated among the Group II Notes in the
priority described below), the Group II Senior Principal Payment Amount, until
the Note Balances thereof have been reduced to zero; and
(ii) to
the
Holders of the Group I Notes, an amount equal to the excess, if any, of (x)
the
amount required to be paid pursuant to Section 3.05(c)(IV)(i) for such Payment
Date over (y) the amount actually paid pursuant to Section 3.05(c)(IV)(i) from
the Group I Principal Payment Amount on such Payment Date.
(iii) (VI)On
each
Payment Date (a) on or after the Stepdown Date and (b) on which a Trigger Event
is not in effect, the sum of the Group I Principal Payment Amount and the Group
II Principal Payment Amount remaining after payments pursuant to Section
3.05(c)(IV) and Section 3.05(c)(V) shall be paid to the holders of the Class
M-1
Notes, Class M-2 Notes, Class M-3 Notes, Class M-4 Notes, Class M-5 Notes,
Class
M-6 Notes, Class M-7 Notes, Class M-8 Notes and Class M-9 Notes, the related
Class m principal Payment Amount, in that order, until the Note Balance thereof
has been reduced to zero.
With
respect to the Group II Notes, all principal payments will be paid sequentially,
to the Class A-2a Notes, the Class A-2b Notes and the Class A-2c Notes in that
order, until their respective Note Balances have been reduced to zero; provided,
however, on any Payment Date on which the aggregate Note Balance of the
Mezzanine Notes and the Overcollateralization Amount have been reduced to zero,
principal payments will be paid, concurrently, to the Class A-2a Notes, the
Class A-2b Notes and the Class A-2c Notes, on a pro
rata
basis
based on the Note Balance of each such Class, until their respective Note
Balances have been reduced to zero.
(d) On
each
Payment Date, the Net Monthly Excess Cashflow shall be paid by the Indenture
Trustee as follows:
(i) to
the
Holders of the Class or Classes of Notes then entitled to receive payments
in
respect of principal, as part of the Group I Principal Payment Amount and the
Group II Principal Payment Amount in an amount equal to the
Overcollateralization Increase Amount for the Notes, applied to reduce the
Note
Balance of such Notes until the aggregate Note Balance of such Notes is reduced
to zero;
(ii) sequentially,
to the Holders of the Class M-1 Notes, the Class M-2 Notes, the Class M-3 Notes,
the Class M-4 Notes, the Class M-5 Notes, the Class M-6 Notes, the Class M-7
Notes, the Class M-8 Notes and the Class M-9 Notes, in that order, first, in
an
amount equal to the Interest Carry Forward Amount allocable to each such Class
of Notes and second, in an amount equal to the Allocated Realized Loss Amount
allocable to each such Class of Notes;
(iii) to
the
Holders of the Class A Notes and the Mezzanine Notes (in the priority described
below), any Basis Risk Shortfalls for such Payment Date;
(iv) sequentially,
to the Holders of the Class M-1 Notes, the Class M-2 Notes, the Class M-3 Notes,
the Class M-4 Notes, the Class M-5 Notes, the Class M-6 Notes, the Class M-7
Notes, the Class M-8 Notes and the Class M-9 Notes, in that order, in an amount
equal to the Deferred Interest allocated to each such Class of Notes;
(v) to
the
Swap Provider, any Swap Termination Payments resulting from a Swap Provider
Trigger Event; and
(vi) to
the
Owner Trustee, any fees, expenses and indemnities not otherwise paid and then,
to the Holders of the Certificates, any remaining amounts.
On
each
Payment Date, all amounts representing Prepayment Charges in respect of the
Mortgage Loans received during the related Prepayment Period that were not
otherwise used to absorb Realized Losses as set forth in Section 3.29 shall
be
withdrawn from the Payment Account and distributed by the Indenture Trustee
to
the Holders of the Certificates and shall not be available for payment to the
Holders of any Class of Notes.
Following
the foregoing payments, an amount equal to the amount of Subsequent Recoveries
deposited into the Collection Account pursuant to Section 3.10 of the Servicing
Agreement shall be applied to increase the Note Balance of the Class of Notes
with the Highest Priority up to the extent of such Realized Losses previously
unreimbursed to that Class of Notes pursuant to Section 3.29. An amount equal
to
the amount of any remaining Subsequent Recoveries shall be applied to increase
the Note Balance of the Class of Notes with the next Highest Priority, up to
the
amount of such Realized Losses previously allocated to that Class of Notes
pursuant to Section 3.29. Holders of such Notes will not be entitled to any
distribution in respect of interest on the amount of such increases for any
Interest Accrual Period preceding the Payment Date on which such increase
occurs. Any such increases shall be applied to the Note Balance of each Note
of
such Class in accordance with its respective Percentage Interest.
(e) On
each
Payment Date, after making the distributions of the Available Payment Amount
as
set forth above, the Indenture Trustee will determine the amount of any Basis
Risk Shortfalls with respect to the Class A Notes and the Mezzanine Notes for
such Payment Date and pay such amount to the extent of the applicable Basis
Risk
Shortfall in the following order of priority:
(i) concurrently
to each Class of Class A Notes, on a pro
rata
basis
based on the Basis Risk Shortfall for each such Class, until the unpaid Basis
Risk Shortfall for each such class has been reduced to zero; and
(ii) sequentially,
to the Class M-1 Notes, the Class M-2 Notes, the Class M-3 Notes, the Class
M-4
Notes, the Class M-5 Notes, the Class M-6 Notes, the Class M-7 Notes, the Class
M-8 Notes and the Class M-9 Notes in that order, until the unpaid Basis Risk
Shortfall for each such class has been reduced to zero.
(f) Each
payment with respect to a Book-Entry Note shall be paid to the Depository,
as
Holder thereof, and the Depository shall be responsible for crediting the amount
of such payment to the accounts of its Depository Participants in accordance
with its normal procedures. Each Depository Participant shall be responsible
for
disbursing such payment to the Note Owners that it represents and to each
indirect participating brokerage firm (a “brokerage firm” or “indirect
participating firm”) for which it acts as agent. Each brokerage firm shall be
responsible for disbursing funds to the Note Owners that it represents. None
of
the Indenture Trustee, the Note Registrar, the Paying Agent, the Depositor
or
the Servicer shall have any responsibility therefor except as otherwise provided
by this Indenture or applicable law.
(g) On
each
Payment Date, the Certificate Paying Agent shall deposit in the Certificate
Distribution Account all amounts it received pursuant to this Section 3.05
for
the purpose of distributing such funds pursuant to the Trust
Agreement.
(h) Any
installment of interest or principal, if any, payable on any Note that is
punctually paid or duly provided for by the Issuing Entity on the applicable
Payment Date shall, if such Holder shall have so requested at least five
Business Days prior to the related Record Date, be paid to each Holder of record
on the preceding Record Date, by wire transfer to an account specified in
writing by such Holder reasonably satisfactory to the Indenture Trustee as
of
the preceding Record Date or in all other cases or if no such instructions
have
been delivered to the Indenture Trustee, by check to such Noteholder mailed
to
such Holder’s address as it appears in the Note Register in the amount required
to be paid to such Holder on such Payment Date pursuant to such Holder’s Notes;
provided,
however,
that
the Indenture Trustee shall not pay to such Holders any amount required to
be
withheld from a payment to such Holder by the Code.
(i) The
principal of each Note shall be due and payable in full on the Final Stated
Maturity Date for such Note as provided in the forms of Notes set forth in
Exhibits A-1 through A-13 to this Indenture. All principal payments on the
Notes
shall be made to the Noteholders entitled thereto in accordance with the
Percentage Interests represented by such Notes. The Indenture Trustee shall
notify the Person in whose name a Note is registered at the close of business
on
the Record Date preceding the Final Stated Maturity Date or other final Payment
Date (including any final Payment Date resulting from any redemption pursuant
to
Section 8.07 hereof). Such notice shall to the extent practicable be mailed
no
later than five Business Days prior to such Final Stated Maturity Date or other
final Payment Date and shall specify that payment of the principal amount and
any interest due with respect to such Note at the Final Stated Maturity Date
or
other final Payment Date will be payable only upon presentation and surrender
of
such Note and shall specify the place where such Note may be presented and
surrendered for such final payment. No interest shall accrue on the Notes on
or
after the Final Stated Maturity Date or any such other final Payment
Date.
Section
3.06. Protection
of Trust Estate.
(a) The
Issuing Entity will from time to time prepare, execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:
(i) maintain
or preserve the lien and security interest (and the priority thereof) of this
Indenture or carry out more effectively the purposes hereof;
(ii) perfect,
publish notice of or protect the validity of any Grant made or to be made by
this Indenture;
(iii) cause
the
Issuing Entity or Servicer to enforce any of the rights to the Mortgage Loans;
or
(iv) preserve
and defend title to the Trust Estate and the rights of the Indenture Trustee
and
the Noteholders in such Trust Estate against the claims of all persons and
parties.
(b) Except
as
otherwise provided in this Indenture, the Indenture Trustee shall not remove
any
portion of the Trust Estate that consists of money or is evidenced by an
instrument, certificate or other writing from the jurisdiction in which it
was
held at the date of the most recent Opinion of Counsel delivered pursuant to
Section 3.07 hereof (or from the jurisdiction in which it was held as described
in the Opinion of Counsel delivered on the Closing Date pursuant to Section
3.07(a) hereof, or if no Opinion of Counsel has yet been delivered pursuant
to
Section 3.07(b) hereof, unless the Indenture Trustee shall have first received
an Opinion of Counsel to the effect that the lien and security interest created
by this Indenture with respect to such property will continue to be maintained
after giving effect to such action or actions).
The
Issuing Entity hereby designates the Indenture Trustee its agent and
attorney-in-fact to sign any financing statement, continuation statement or
other instrument required to be signed pursuant to this Section 3.06 upon the
Issuing Entity’s preparation thereof and delivery to the Indenture
Trustee.
Section
3.07. Opinions
as to Trust Estate.
(a) On
the
Closing Date, the Issuing Entity shall furnish to the Indenture Trustee and
the
Owner Trustee an Opinion of Counsel either stating that, in the opinion of
such
counsel, such action has been taken with respect to the recording and filing
of
this Indenture, any indentures supplemental hereto, and any other requisite
documents, and with respect to the execution and filing of any financing
statements and continuation statements, as are necessary to perfect and make
effective the lien and first priority security interest in the Collateral and
reciting the details of such action, or stating that, in the opinion of such
counsel, no such action is necessary to make such lien and first priority
security interest effective.
(b) On
or
before April 15th
in each
calendar year, beginning in 2007, the Issuing Entity shall furnish to the
Indenture Trustee an Opinion of Counsel at the expense of the Issuing Entity
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and with respect to the execution and filing of any financing statements and
continuation statements as is necessary to maintain the lien and first priority
security interest in the Collateral and reciting the details of such action
or
stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture,
any
indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien
and
security interest in the Collateral until December 31st
in the
following calendar year.
Section
3.08. Performance
of Obligations.
The
Issuing Entity will punctually perform and observe all of its obligations and
agreements contained in this Indenture, the Basic Documents and in the
instruments and agreements included in the Trust Estate.
The
Issuing Entity may contract with other Persons to assist it in performing its
duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officer’s Certificate of the Issuing
Entity shall be deemed to be action taken by the Issuing Entity.
The
Issuing Entity will not take any action or permit any action to be taken by
others which would release any Person from any of such Person’s covenants or
obligations under any of the documents relating to the Mortgage Loans or under
any instrument included in the Trust Estate, or which would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any of the documents relating to the Mortgage
Loans or any such instrument, except such actions as the Servicer is expressly
permitted to take in the Servicing Agreement. The Indenture Trustee may exercise
the rights of the Issuing Entity to direct the actions of the Servicer pursuant
to the Servicing Agreement.
The
Issuing Entity may retain an administrator and may enter into contracts with
other Persons for the performance of the Issuing Entity’s obligations hereunder,
and performance of such obligations by such Persons shall be deemed to be
performance of such obligations by the Issuing Entity.
Section
3.09. Negative
Covenants. So
long as any Notes are Outstanding, the Issuing Entity shall not:
(i) except
as
expressly permitted by this Indenture, sell, transfer, exchange or otherwise
dispose of the Trust Estate, unless directed to do so by the Indenture
Trustee;
(ii) claim
any
credit on, or make any deduction from the principal or interest payable in
respect of, the Notes (other than amounts properly withheld from such payments
under the Code) or assert any claim against any present or former Noteholder
by
reason of the payment of the taxes levied or assessed upon any part of the
Trust
Estate;
(iii) (A)
permit the validity or effectiveness of this Indenture to be impaired, or permit
the lien of this Indenture to be amended, hypothecated, subordinated, terminated
or discharged, or permit any Person to be released from any covenants or
obligations with respect to the Notes under this Indenture except as may be
expressly permitted hereby, (B) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien of this Indenture)
to be created on or extend to or otherwise arise upon or burden the Trust Estate
or any part thereof or any interest therein or the proceeds thereof or (C)
permit the lien of this Indenture not to constitute a valid first priority
security interest in the Trust Estate; or
(iv) waive
or
impair, or fail to assert rights under, the Mortgage Loans, or impair or cause
to be impaired the Issuing Entity’s interest in the Mortgage Loans, the Mortgage
Loan Purchase Agreement or in any Basic Document, if any such action would
materially and adversely affect the interests of the Noteholders.
Section
3.10. [Reserved.]
Section
3.11. [Reserved.]
Section
3.12. Representations
and Warranties Concerning the Mortgage Loans.
The
Indenture Trustee, as pledgee of the Mortgage Loans, has the benefit of the
representations and warranties made by NC Capital in the Mortgage Loan Purchase
Agreement concerning NC Capital, the Seller and the Mortgage Loans to the same
extent as though such representations and warranties were made directly to
the
Indenture Trustee. If a Responsible Officer of the Indenture Trustee has actual
knowledge of any breach of any representation or warranty made by NC Capital
in
the Mortgage Loan Purchase Agreement, the Indenture Trustee shall promptly
notify NC Capital of such finding and NC Capital’s obligation to cure such
defect or repurchase or substitute for the related Mortgage Loan.
Section
3.13. Amendments
to Servicing Agreement.
The
Issuing Entity covenants with the Indenture Trustee that it will not enter
into
any amendment or supplement to the Servicing Agreement without the prior written
consent of the Indenture Trustee.
Section
3.14. Servicer
as Agent and Bailee of the Indenture Trustee.
Solely
for purposes of perfection under Section 9-305 of the UCC or other similar
applicable law, rule or regulation of the state in which such property is held
by the Servicer, the Issuing Entity and the Indenture Trustee hereby acknowledge
that the Servicer is acting as bailee of the Indenture Trustee in holding
amounts on deposit in the Collection Account, as well as its bailee in holding
any Related Documents released to the Servicer, and any other items constituting
a part of the Trust Estate which from time to time come into the possession
of
the Servicer. It is intended that, by the Servicer’s acceptance of such bailee
arrangement, the Indenture Trustee, as a secured party of the Mortgage Loans,
will be deemed to have possession of such Related Documents, such monies and
such other items for purposes of Section 9-305 of the UCC of the state in which
such property is held by the Servicer. The Indenture Trustee shall not be liable
with respect to such documents, monies or items while in possession of the
Servicer.
Section
3.15. Investment
Company Act.
The
Issuing Entity shall not become an “investment company” or be under the
“control” of an “investment company” as such terms are defined in the Investment
Company Act of 1940, as amended (or any successor or amendatory statute), and
the rules and regulations thereunder (taking into account not only the general
definition of the term “investment company” but also any available exceptions to
such general definition); provided,
however,
that the
Issuing Entity shall be in compliance with this Section 3.15 if it shall have
obtained an order exempting it from regulation as an “investment company” so
long as it is in compliance with the conditions imposed in such
order.
Section
3.16. Issuing
Entity May Consolidate, etc.
(a) The
Issuing Entity shall not consolidate or merge with or into any other Person,
unless:
(i) the
Person (if other than the Issuing Entity) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the
laws
of the United States of America or any state or the District of Columbia and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form reasonably satisfactory to the
Indenture Trustee, the due and punctual payment of the principal of and interest
on all Notes, and all other amounts payable to the Indenture Trustee, the
payment to the Certificate Paying Agent of all amounts due to the
Certificateholders, and the performance or observance of every agreement and
covenant of this Indenture on the part of the Issuing Entity to be performed
or
observed, all as provided herein;
(ii) immediately
after giving effect to such transaction, no Event of Default shall have occurred
and be continuing;
(iii) the
Rating Agencies shall have notified the Issuing Entity that such transaction
shall not cause the rating of the Notes to be reduced, suspended or withdrawn
or
to be considered by either Rating Agency to be below investment
grade;
(iv) the
Issuing Entity shall have received an Opinion of Counsel (and shall have
delivered a copy thereof to the Indenture Trustee) to the effect that such
transaction will not (A) result in a “substantial modification” of the Notes
under Treasury Regulation section 1.1001-3, or adversely affect the status
of
the Notes as indebtedness for federal income tax purposes, or (B) if 100% of
the
Certificates are not owned by the Seller, cause the Trust to be subject to
an
entity level tax for federal income tax purposes;
(v) any
action that is necessary to maintain the lien and security interest created
by
this Indenture shall have been taken; and
(vi) the
Issuing Entity shall have delivered to the Indenture Trustee an Officer’s
Certificate and an Opinion of Counsel each stating that such consolidation
or
merger and such supplemental indenture comply with this Article III and that
all
conditions precedent herein provided for or relating to such transaction have
been complied with (including any filing required by the Exchange Act), and
that
such supplemental indenture is enforceable.
(b) The
Issuing Entity shall not convey or transfer any of its properties or assets,
including those included in the Trust Estate, to any Person,
unless:
(i) the
Person that acquires by conveyance or transfer the properties and assets of
the
Issuing Entity, the conveyance or transfer of which is hereby restricted, shall
(A) be a United States citizen or a Person organized and existing under the
laws
of the United States of America or any state thereof, (B) expressly assume,
by
an indenture supplemental hereto, executed and delivered to the Indenture
Trustee, in form satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the part of
the
Issuing Entity to be performed or observed, all as provided herein, (C)
expressly agree by means of such supplemental indenture that all right, title
and interest so conveyed or transferred shall be subject and subordinate to
the
rights of the Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agree to indemnify, defend and hold harmless
the Issuing Entity and the Indenture Trustee against and from any loss,
liability or expense arising under or related to this Indenture and the Notes
and (E) expressly agree by means of such supplemental indenture that such Person
(or if a group of Persons, then one specified Person) shall make all filings
with the Commission (and any other appropriate Person) required by the Exchange
Act in connection with the Notes;
(ii) immediately
after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing;
(iii) the
Rating Agencies shall have notified the Issuing Entity that such transaction
shall not cause the rating of the Notes to be reduced, suspended or
withdrawn;
(iv) the
Issuing Entity shall have received an Opinion of Counsel (and shall have
delivered a copy thereof to the Indenture Trustee) to the effect that such
transaction will not (A) result in a “substantial modification” of the Notes
under Treasury Regulation section 1.1001-3, or adversely affect the status
of
the Notes as indebtedness for federal income tax purposes, or (B) if 100% of
the
Certificates are not owned by the Seller, cause the Trust to be subject to
an
entity level tax for federal income tax purposes;
(v) any
action that is necessary to maintain the lien and security interest created
by
this Indenture shall have been taken; and
(vi) the
Issuing Entity shall have delivered to the Indenture Trustee an Officer’s
Certificate and an Opinion of Counsel each stating that such conveyance or
transfer and such supplemental indenture comply with this Article III and that
all conditions precedent herein provided for relating to such transaction have
been complied with (including any filing required by the Exchange
Act).
Section
3.17. Successor
or Transferee.
(a) Upon
any
consolidation or merger of the Issuing Entity in accordance with Section
3.16(a), the Person formed by or surviving such consolidation or merger (if
other than the Issuing Entity) shall succeed to, and be substituted for, and
may
exercise every right and power of, the Issuing Entity under this Indenture
with
the same effect as if such Person had been named as the Issuing Entity
herein.
(b) Upon
a
conveyance or transfer of all the assets and properties of the Issuing Entity
pursuant to Section 3.16(b), the Issuing Entity will be released from every
covenant and agreement of this Indenture to be observed or performed on the
part
of the Issuing Entity with respect to the Notes immediately upon the delivery
of
written notice to the Indenture Trustee of such conveyance or
transfer.
Section
3.18. No
Other Business.
The
Issuing Entity shall not engage in any business other than financing,
purchasing, owning and selling and managing the Mortgage Loans and the issuance
of the Notes and Certificates in the manner contemplated by this Indenture
and
the Basic Documents and all activities incidental thereto.
Section
3.19. No
Borrowing.
The
Issuing Entity shall not issue, incur, assume, guarantee or otherwise become
liable, directly or indirectly, for any indebtedness except for the Notes under
this Indenture.
Section
3.20. Guarantees,
Loans, Advances and Other Liabilities. Except
as contemplated by this Indenture or the Basic Documents, the Issuing Entity
shall not make any loan or advance or credit to, or guarantee (directly or
indirectly or by an instrument having the effect of assuring another’s payment
or performance on any obligation or capability of so doing or otherwise),
endorse or otherwise become contingently liable, directly or indirectly, in
connection with the obligations, stocks or dividends of, or own, purchase,
repurchase or acquire (or agree contingently to do so) any stock, obligations,
assets or securities of, or any other interest in, or make any capital
contribution to, any other Person.
Section
3.21. Capital
Expenditures.
The
Issuing Entity shall not make any expenditure (by long-term or operating lease
or otherwise) for capital assets (either realty or personalty).
Section
3.22. Determination
of Note Rate.
On each
Interest Determination Date, the Indenture Trustee shall determine One-Month
LIBOR and the related Note Rate for each Class of Notes for the following
Interest Accrual Period. The establishment of One-Month LIBOR on each Interest
Determination Date by the Indenture Trustee and the Indenture Trustee’s
calculation of the rate of interest applicable to each Class of Notes for the
related Accrual Period shall (in the absence of manifest error) be final and
binding.
Section
3.23. Restricted
Payments.
The
Issuing Entity shall not, directly or indirectly, (i) pay any dividend or make
any distribution (by reduction of capital or otherwise), whether in cash,
property, securities or a combination thereof, to the Owner Trustee or any
owner
of a beneficial interest in the Issuing Entity or otherwise with respect to
any
ownership or equity interest or security in or of the Issuing Entity, (ii)
redeem, purchase, retire or otherwise acquire for value any such ownership
or
equity interest or security or (iii) set aside or otherwise segregate any
amounts for any such purpose; provided,
however,
that the
Issuing Entity may make, or cause to be made, (x) distributions and payments
to
the Owner Trustee, the Indenture Trustee, Noteholders and the Certificateholders
as contemplated by, and to the extent funds are available for such purpose
under
this Indenture and the Trust Agreement and (y) payments to the Servicer pursuant
to the terms of the Servicing Agreement. The Issuing Entity will not, directly
or indirectly, make payments to or distributions from the Collection Account
except in accordance with this Indenture and the Basic Documents.
Section
3.24. Notice
of Events of Default.
The
Issuing Entity shall give the Indenture Trustee and the Rating Agencies prompt
written notice of each Event of Default hereunder and under the Trust
Agreement.
Section
3.25. Further
Instruments and Acts.
Upon
request of the Indenture Trustee, the Issuing Entity will execute and deliver
such further instruments and do such further acts as may be reasonably necessary
or proper to carry out more effectively the purpose of this
Indenture.
Section
3.26. Statements
to Noteholders.
On each
Payment Date, the Indenture Trustee and the Certificate Registrar shall prepare
and make available on the Indenture Trustee’s website,
▇▇▇▇▇://▇▇▇.▇▇▇.▇▇.▇▇▇/▇▇▇▇ (or deliver at the recipient’s option), to each
Noteholder and Certificateholder the most recent statement prepared by the
Indenture Trustee pursuant to Section 7.05 hereof.
Section
3.27. [Reserved].
Section
3.28. Certain
Representations Regarding the Trust Estate.
(a) With
respect to that portion of the Collateral described in clauses (a) through
(d)
of the definition of Trust Estate, the Issuing Entity represents to the
Indenture Trustee that:
(i) This
Indenture creates a valid and continuing security interest (as defined in the
applicable UCC) in the Collateral in favor of the Indenture Trustee, which
security interest is prior to all other liens, and is enforceable as such as
against creditors of and purchasers from the Issuing Entity.
(ii) The
Collateral constitutes “deposit accounts” or “instruments,” as applicable,
within the meaning of the applicable UCC.
(iii) The
Issuing Entity owns and has good and marketable title to the Collateral, free
and clear of any lien, claim or encumbrance of any Person.
(iv) The
Issuing Entity has taken all steps necessary to cause the Indenture Trustee
to
become the account holder of the Collateral.
(v) Other
than the security interest granted to the Indenture Trustee pursuant to this
Indenture, the Issuing Entity has not pledged, assigned, sold, granted a
security interest in, or otherwise conveyed any of the Collateral.
(vi) The
Collateral is not in the name of any Person other than the Issuing Entity or
the
Indenture Trustee. The Issuing Entity has not consented to the bank maintaining
the Collateral to comply with instructions of any Person other than the
Indenture Trustee.
(b) With
respect to that portion of the Collateral described in clause (e), the Issuing
Entity represents to the Indenture Trustee that:
(i) This
Indenture creates a valid and continuing security interest (as defined in the
applicable UCC) in the Collateral in favor of the Indenture Trustee, which
security interest is prior to all other liens, and is enforceable as such as
against creditors of and purchasers from the Issuing Entity.
(ii) The
Collateral constitutes “general intangibles” within the meaning of the
applicable UCC.
(iii) The
Issuing Entity owns and has good and marketable title to the Collateral, free
and clear of any lien, claim or encumbrance of any Person.
(iv) Other
than the security interest granted to the Indenture Trustee pursuant to this
Indenture, the Issuing Entity has not pledged, assigned, sold, granted a
security interest in, or otherwise conveyed any of the Collateral.
(c) With
respect to any Collateral in which a security interest may be perfected by
filing, the Issuing Entity has not authorized the filing of, and is not aware
of
any financing statements against, the Issuing Entity, that include a description
of collateral covering such Collateral, other than any financing statement
relating to the security interest granted to the Indenture Trustee hereunder
or
that has been terminated. The Issuing Entity is not aware of any judgment or
tax
lien filings against the Issuing Entity.
(d) The
Issuing Entity has caused or will have caused, within ten days, the filing
of
all appropriate financing statements in the proper filing office in the
appropriate jurisdictions under applicable law in order to perfect the security
interest in all Collateral granted to the Indenture Trustee hereunder in which
a
security interest may be perfected by filing and the Issuing Entity will cause
such security interest to be maintained. Any financing statement that is filed
in connection with this Section 3.28 shall contain a statement that a purchase
or security interest in any collateral described therein will violate the rights
of the secured party named in such financing statement.
(e) The
foregoing representations may not be waived and shall survive the issuance
of
the Notes.
Section
3.29. Allocation
of Realized Losses.
(a) All
Realized Losses on the Mortgage Loans shall be allocated by the Indenture
Trustee on each Payment Date as follows: first, to the Net Monthly Excess
Cashflow for the related Interest Accrual Period; second, to the Prepayment
Charges collected or paid by the Servicer during the related Prepayment Period,
third, to the Overcollateralized Amount, until the Overcollateralized Amount
has
been reduced to zero; fourth, to the Class M-9 Notes until the Note Balance
thereof has been reduced to zero; fifth, to the Class M-8 Notes until the Note
Balance thereof has been reduced to zero; sixth, to the Class M-7 Notes until
the Note Balance thereof has been reduced to zero; seventh, to the Class M-6
Notes until the Note Balance thereof has been reduced to zero; eighth, to the
Class M-5 Notes until the Note Balance thereof has been reduced to zero; ninth,
to the Class M-4 Notes until the Note Balance thereof has been reduced to zero;
tenth, to the Class M-3 Notes until the Note Balance thereof has been reduced
to
zero; eleventh, to the Class M-2 Notes, until the Note Balance thereof has
been
reduced to zero and twelfth, to the Class M-1 Notes, until the Note Balance
thereof has been reduced to zero.
(b) All
Realized Losses to be allocated to the Note Balances of all Classes on any
Payment Date shall be so allocated after the actual payments to be made on
such
date as provided above. All references above to the Note Balance of any Class
of
Notes shall be to the Note Balance of such Class immediately prior to the
relevant Payment Date, before reduction thereof by any Realized Losses, in
each
case to be allocated to such Class of Notes, on such Payment Date.
Any
allocation of Realized Losses to a Mezzanine Note on any Payment Date shall
be
made by reducing the Note Balance thereof by the amount so allocated. No
allocations of any Realized Losses shall be made to the Note Balances of the
Class A Notes.
As
used
herein, an allocation of a Realized Loss on a “pro
rata
basis”
among two or more specified Classes of Notes means an allocation on a pro rata
basis, among the various Classes so specified, to each such Class of Notes
on
the basis of their then outstanding Note Balances prior to giving effect to
payments to be made on such Payment Date. All Realized Losses and all other
losses allocated to a Class of Notes hereunder will be allocated among the
Notes
of such Class in proportion to the Percentage Interests evidenced
thereby.
ARTICLE
IV
THE
NOTES; SATISFACTION AND DISCHARGE OF INDENTURE
Section
4.01. The
Notes.
Each
Class of Notes shall be registered in the name of a nominee designated by the
Depository. Beneficial Owners will hold interests in the Notes through the
book-entry facilities of the Depository in minimum initial Note Balances of
$25,000 and integral multiples of $1 in excess thereof.
The
Indenture Trustee may for all purposes (including the making of payments due
on
the Notes) deal with the Depository as the authorized representative of the
Beneficial Owners with respect to the Notes for the purposes of exercising
the
rights of Holders of the Notes hereunder. Except as provided in the next
succeeding paragraph of this Section 4.01, the rights of Beneficial Owners
with
respect to the Notes shall be limited to those established by law and agreements
between such Beneficial Owners and the Depository and Depository Participants.
Except as provided in Section 4.08 hereof, Beneficial Owners shall not be
entitled to definitive notes for the Notes as to which they are the Beneficial
Owners. Requests and directions from, and votes of, the Depository as Holder
of
the Notes shall not be deemed inconsistent if they are made with respect to
different Beneficial Owners. The Indenture Trustee may establish a reasonable
record date in connection with solicitations of consents from or voting by
Noteholders and give notice to the Depository of such record date. Without
the
consent of the Issuing Entity and the Indenture Trustee, no Note may be
transferred by the Depository except to a successor Depository that agrees
to
hold such Note for the account of the Beneficial Owners.
In
the
event the Depository Trust Company resigns or is removed as Depository, the
Indenture Trustee with the approval of the Issuing Entity may appoint a
successor Depository. If no successor Depository has been appointed within
30
days of the effective date of the Depository’s resignation or removal, each
Beneficial Owner shall be entitled to certificates representing the Notes it
beneficially owns in the manner prescribed in Section 4.08.
The
Notes
shall, on original issue, be executed on behalf of the Issuing Entity by the
Owner Trustee, not in its individual capacity but solely as Owner Trustee,
authenticated by the Indenture Trustee and delivered by the Indenture Trustee
to
or upon the order of the Issuing Entity.
Section
4.02. Registration
of and Limitations on Transfer and Exchange of Notes; Appointment of Note
Registrar and Certificate.
The
Issuing Entity shall cause to be kept at the Corporate Trust Office a Note
Register in which, subject to such reasonable regulations as it may prescribe,
the Note Registrar shall provide for the registration of Notes and of transfers
and exchanges of Notes as herein provided.
Subject
to the restrictions and limitations set forth below, upon surrender for
registration of transfer of any Note at the Corporate Trust Office, the Issuing
Entity shall execute and the Note Registrar shall authenticate and deliver,
in
the name of the designated transferee or transferees, one or more new Notes
in
authorized initial Note Balances evidencing the same Class and aggregate
Percentage Interests.
Subject
to the foregoing, at the option of the Noteholders, Notes may be exchanged
for
other Notes of like tenor and in authorized initial Note Balances evidencing
the
same Class and aggregate Percentage Interests upon surrender of the Notes to
be
exchanged at the Corporate Trust Office of the Note Registrar. Whenever any
Notes are so surrendered for exchange, the Issuing Entity shall execute and
the
Indenture Trustee shall authenticate and deliver the Notes which the Noteholder
making the exchange is entitled to receive. Each Note presented or surrendered
for registration of transfer or exchange shall (if so required by the Note
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer in form reasonably satisfactory to the Note Registrar duly executed
by
the Holder thereof or his attorney duly authorized in writing with such
signature guaranteed by a commercial bank or trust company located or having
a
correspondent located in the city of New York. Notes delivered upon any such
transfer or exchange will evidence the same obligations, and will be entitled
to
the same rights and privileges, as the Notes surrendered.
No
service charge shall be made for any registration of transfer or exchange of
Notes, but the Note Registrar shall require payment of a sum sufficient to
cover
any tax or governmental charge that may be imposed in connection with any
registration of transfer or exchange of Notes.
The
Issuing Entity hereby appoints the Indenture Trustee as (i) Certificate
Registrar to keep at its Corporate Trust Office a Certificate Register pursuant
to Section 3.09 of the Trust Agreement in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for
the
registration of Certificates and of transfers and exchanges thereof pursuant
to
Section 3.05 of the Trust Agreement and (ii) Note Registrar under this
Indenture. The Indenture Trustee hereby accepts such appointments.
Section
4.03. Mutilated,
Destroyed, Lost or Stolen Notes.
If (i)
any mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, and (ii) there is delivered to the Indenture Trustee such security
or indemnity as may be required by it to hold the Issuing Entity and the
Indenture Trustee harmless, then, in the absence of notice to the Issuing
Entity, the Note Registrar or the Indenture Trustee that such Note has been
acquired by a bona fide purchaser, and provided that the requirements of Section
8-405 of the UCC are met, the Issuing Entity shall execute, and upon its request
the Indenture Trustee shall authenticate and deliver, in exchange for or in
lieu
of any such mutilated, destroyed, lost or stolen Note, a replacement Note;
provided,
however,
that if
any such destroyed, lost or stolen Note, but not a mutilated Note, shall have
become or within seven days shall be due and payable, instead of issuing a
replacement Note, the Issuing Entity may pay such destroyed, lost or stolen
Note
when so due or payable without surrender thereof. If, after the delivery of
such
replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the
proviso to the preceding sentence, a bona fide purchaser of the original Note
in
lieu of which such replacement Note was issued presents for payment such
original Note, the Issuing Entity and the Indenture Trustee shall be entitled
to
recover such replacement Note (or such payment) from the Person to whom it
was
delivered or any Person taking such replacement Note from such Person to whom
such replacement Note was delivered or any assignee of such Person, except
a
bona fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or expense
incurred by the Issuing Entity or the Indenture Trustee in connection
therewith.
Upon
the
issuance of any replacement Note under this Section 4.03, the Issuing Entity
may
require the payment by the Holder of such Note of a sum sufficient to cover
any
tax or other governmental charge that may be imposed in relation thereto and
any
other reasonable expenses (including the fees and expenses of the Indenture
Trustee) connected therewith.
Every
replacement Note issued pursuant to this Section 4.03 in replacement of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuing Entity, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable
by
anyone, and shall be entitled to all the benefits of this Indenture equally
and
proportionately with any and all other Notes duly issued hereunder.
The
provisions of this Section 4.03 are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Notes.
Section
4.04. Persons
Deemed Owners.
Prior
to due presentment for registration of transfer of any Note, the Issuing Entity,
the Indenture Trustee, the Paying Agent and any agent of the Issuing Entity
or
the Indenture Trustee may treat the Person in whose name any Note is registered
(as of the day of determination) as the owner of such Note for the purpose
of
receiving payments of principal of and interest, if any, on such Note and for
all other purposes whatsoever, whether or not such Note be overdue, and neither
the Issuing Entity, the Indenture Trustee, the Paying Agent nor any agent of
the
Issuing Entity or the Indenture Trustee shall be affected by notice to the
contrary.
Section
4.05. Cancellation.
All
Notes surrendered for payment, registration of transfer, exchange or redemption
shall, if surrendered to any Person other than the Indenture Trustee, be
delivered to the Indenture Trustee and shall be promptly cancelled by the
Indenture Trustee. The Issuing Entity may at any time deliver to the Indenture
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Issuing Entity may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly cancelled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this Section 4.05, except as expressly permitted by
this Indenture. All cancelled Notes may be held or disposed of by the Indenture
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuing Entity shall direct by an Issuing Entity
Request that they be destroyed or returned to it; provided,
however,
that
such Issuing Entity Request is timely and the Notes have not been previously
disposed of by the Indenture Trustee.
Section
4.06. Book-Entry
Notes. The
Notes, upon original issuance, will be issued in the form of typewritten Notes
representing the Book-Entry Notes, to be delivered to The Depository Trust
Company, the initial Depository, by, or on behalf of, the Issuing Entity. The
Notes shall initially be registered on the Note Register in the name of Cede
& Co., the nominee of the initial Depository, and no Beneficial Owner will
receive a Definitive Note representing such Beneficial Owner’s interest in such
Note, except as provided in Section 4.08. With respect to such Notes, unless
and
until definitive, fully registered Notes (the “Definitive Notes”) have been
issued to Beneficial Owners pursuant to Section 4.08:
(i) the
provisions of this Section 4.06 shall be in full force and effect;
(ii) the
Note
Registrar, the Paying Agent and the Indenture Trustee shall be entitled to
deal
with the Depository for all purposes of this Indenture (including the payment
of
principal of and interest on the Notes and the giving of instructions or
directions hereunder) as the sole holder of the Notes, and shall have no
obligation to the Beneficial Owners of the Notes;
(iii) to
the
extent that the provisions of this Section 4.06 conflict with any other
provisions of this Indenture, the provisions of this Section 4.06 shall
control;
(iv) the
rights of Beneficial Owners shall be exercised only through the Depository
and
shall be limited to those established by law and agreements between such Owners
of Notes and the Depository and/or the Depository Participants. Unless and
until
Definitive Notes are issued pursuant to Section 4.08, the initial Depository
will make book-entry transfers among the Depository Participants and receive
and
transmit payments of principal of and interest on the Notes to such Depository
Participants; and
(v) whenever
this Indenture requires or permits actions to be taken based upon instructions
or directions of Holders of Notes evidencing a specified percentage of the
Note
Balances of the Notes, the Depository shall be deemed to represent such
percentage with respect to the Notes only to the extent that it has received
instructions to such effect from Beneficial Owners and/or Depository
Participants owning or representing, respectively, such required percentage
of
the beneficial interest in the Notes and has delivered such instructions to
the
Indenture Trustee.
Section
4.07. Notices
to Depository.
Whenever a notice or other communication to the Note Holders is required under
this Indenture, unless and until Definitive Notes shall have been issued to
Beneficial Owners pursuant to Section 4.08, the Indenture Trustee shall give
all
such notices and communications specified herein to be given to Holders of
the
Notes to the Depository, and shall have no obligation to the Beneficial
Owners.
Section
4.08. Definitive
Notes.
If (i)
the Indenture Trustee determines that the Depository is no longer willing or
able to properly discharge its responsibilities with respect to the Notes and
the Indenture Trustee is unable to locate a qualified successor or (ii) after
the occurrence of an Event of Default, Beneficial Owners of Notes representing
beneficial interests aggregating at least a majority of the Note Balances of
the
Notes advise the Depository in writing that the continuation of a book-entry
system through the Depository is no longer in the best interests of the
Beneficial Owners, then the Depository shall notify all Beneficial Owners and
the Indenture Trustee of the occurrence of any such event and of the
availability of Definitive Notes to Beneficial Owners requesting the same.
Upon
surrender to the Indenture Trustee of the typewritten Notes representing the
Book-Entry Notes by the Depository, accompanied by registration instructions,
the Issuing Entity shall execute and the Indenture Trustee shall authenticate
the Definitive Notes in accordance with the instructions of the Depository.
None
of the Issuing Entity, the Note Registrar or the Indenture Trustee shall be
liable for any delay in delivery of such instructions and may conclusively
rely
on, and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Notes, the Indenture Trustee shall recognize the Holders of the
Definitive Notes as Noteholders.
Section
4.09. Tax
Treatment.
The
Issuing Entity has entered into this Indenture, and the Notes will be issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Notes will qualify as indebtedness. The Issuing
Entity and the Indenture Trustee (in accordance with Section 6.06 hereof),
by
entering into this Indenture, and each Noteholder, by its acceptance of its
Note
(and each Beneficial Owner by its acceptance of an interest in the applicable
Book-Entry Note), agree to treat the Notes for federal, state and local income,
single business and franchise tax purposes as indebtedness.
Section
4.10. Satisfaction
and Discharge of Indenture.
This
Indenture shall cease to be of further effect with respect to the Notes except
as to (i) rights of registration of transfer and exchange, (ii) substitution
of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections 3.03,
3.04, 3.06, 3.09, 3.17, 3.19 and 3.20, (v) the rights and immunities of the
Indenture Trustee hereunder (including the rights of the Indenture Trustee
under
Section 6.07) and the obligations of the Indenture Trustee under Section 4.11
and (vi) the rights of Noteholders as beneficiaries hereof with respect to
the
property so deposited with the Indenture Trustee payable to all or any of them,
and the Indenture Trustee, on demand of and at the expense of the Issuing
Entity, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Notes and shall release and
deliver the Collateral to or upon the order of the Issuing Entity,
when
(A) either
(1) all
Notes
theretofore authenticated and delivered (other than (i) Notes that have been
destroyed, lost or stolen and that have been replaced or paid as provided in
Section 4.03 hereof and (ii) Notes for whose payment money has theretofore
been
deposited in trust or segregated and held in trust by the Issuing Entity and
thereafter repaid to the Issuing Entity or discharged from such trust, as
provided in Section 3.03) have been delivered to the Indenture Trustee for
cancellation; or
(2) all
Notes
not theretofore delivered to the Indenture Trustee for cancellation (a) have
become due and payable, (b) will become due and payable at the Final Stated
Maturity Date within one year, or (c) have been called for early redemption
pursuant to Section 8.07 hereof, and the Issuing Entity, in the case of (a)
or
(b) above, has irrevocably deposited or caused to be irrevocably deposited
with
the Indenture Trustee cash or direct obligations of or obligations guaranteed
by
the United States of America (which will mature prior to the date such amounts
are payable), in trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Notes then outstanding not theretofore
delivered to the Indenture Trustee for cancellation when due on the Final Stated
Maturity Date or other final Payment Date, or, in the case of (c) above, the
Issuing Entity shall have complied with all requirements of Section 8.07
hereof,
(B) the
Issuing Entity has paid or caused to be paid all other sums payable hereunder;
and
(C) the
Issuing Entity has delivered to the Indenture Trustee an Officer’s Certificate
and an Opinion of Counsel, each meeting the applicable requirements of Section
10.01 hereof, each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been complied
with and, if the Opinion of Counsel relates to a deposit made in connection
with
Section 4.10(A)(2)(b) above, such opinion shall further be to the effect that
such deposit will constitute an “in-substance defeasance” within the meaning of
Revenue Ruling 85-42, 1985-1 C.B. 36, and in accordance therewith, the Issuing
Entity will be the owner of the assets deposited in trust for federal income
tax
purposes.
Section
4.11. Application
of Trust Money.
All
monies deposited with the Indenture Trustee pursuant to Section 4.10 hereof
shall be held in trust and applied by it, in accordance with the provisions
of
the Notes and this Indenture, to the payment, either directly or through any
Paying Agent or the Issuing Entity, Certificate Paying Agent as designee of
the
Issuing Entity, as the Indenture Trustee may determine, to the Holders of Notes
or Certificates, of all sums due and to become due thereon for principal and
interest or otherwise; but such monies need not be segregated from other funds
except to the extent required herein or required by law.
Section
4.12. Derivative
Contracts for Benefit of the Certificates.
At any
time on or after the Closing Date, the Issuing Entity shall have the right
to
convey to the Trust Estate, solely for the benefit of the Holder of the
Certificates, a derivative contract or comparable instrument. Any such
instrument shall constitute a fully prepaid agreement. All collections, proceeds
and other amounts in respect of such an instrument shall be distributed to
the
Certificates on the Payment Date following receipt thereof by the Indenture
Trustee.
Section
4.13. Repayment
of Monies Held by Paying Agent.
In
connection with the satisfaction and discharge of this Indenture with respect
to
the Notes, all monies then held by any Person other than the Indenture Trustee
under the provisions of this Indenture with respect to such Notes shall, upon
demand of the Issuing Entity, be paid to the Indenture Trustee to be held and
applied according to Section 3.05 and thereupon such Person shall be released
from all further liability with respect to such monies.
Section
4.14. Temporary
Notes.
Pending
the preparation of any Definitive Notes, the Issuing Entity may execute and
upon
its written direction, the Indenture Trustee may authenticate and make available
for delivery, temporary Notes that are printed, lithographed, typewritten,
photocopied or otherwise produced, in any denomination, substantially of the
tenor of the Definitive Notes in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Notes may determine, as evidenced by their execution
of
such Notes.
If
temporary Notes are issued, the Issuing Entity will cause Definitive Notes
to be
prepared without unreasonable delay. After the preparation of the Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office of the Indenture Trustee located
at DB Services Tennessee, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Transfer Unit, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuing
Entity shall execute and the Indenture Trustee shall authenticate and make
available for delivery, in exchange therefor, Definitive Notes of authorized
denominations and of like tenor, class and aggregate principal amount. Until
so
exchanged, such temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as Definitive Notes.
Section
4.15. Representation
Regarding ERISA.
By
acquiring a Note or interest therein, each Holder of such Note or Beneficial
Owner of any such interest will be deemed to represent that either (1) it is
not
acquiring the Note with Plan Assets or (2) (A) the acquisition, holding and
transfer of such Note will not give rise to a non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code and (B) the Notes are
rated investment grade or better and such person believes that the Notes are
properly treated as indebtedness without substantial equity features for
purposes of the Department of Labor regulation 29 C.F.R. § 2510.3-101, and
agrees to so treat the Notes. Alternatively, regardless of the rating of the
Notes, such person may provide the Indenture Trustee and the Owner Trustee
with
an opinion of counsel, which opinion of counsel will not be at the expense
of
the Issuing Entity, the Seller, NC Capital, any Underwriter, the Owner Trustee,
the Indenture Trustee, the Servicer or any successor servicer which opines
that
the acquisition, holding and transfer of such Note or interest therein is
permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the Issuing Entity, the Seller, NC Capital, the Depositor, the Owner
Trustee, the Indenture Trustee, the Servicer or any successor servicer to any
obligation in addition to those undertaken in the Indenture or the other
Operative Agreements.
ARTICLE
V
DEFAULT
AND REMEDIES
Section
5.01. Events
of Default.
The
Issuing Entity shall deliver to the Indenture Trustee, written notice in the
form of an Officer’s Certificate, within five days after learning of the
occurrence of any event which with the giving of notice and the lapse of time
would become an Event of Default under clause (iii), (iv) or (v) of the
definition of “Event of Default,” its status and what action the Issuing Entity
is taking or proposes to take with respect thereto. The Indenture Trustee shall
not be deemed to have knowledge of any Event of Default unless a Responsible
Officer has actual knowledge thereof or unless written notice of such Event
of
Default is received by a Responsible Officer and such notice references the
Notes, the Trust Estate or this Indenture.
Section
5.02. Acceleration
of Maturity; Rescission and Annulment.
If an
Event of Default should occur and be continuing, then and in every such case
the
Indenture Trustee at the written direction of the Holders of Notes representing
not less than a majority of the aggregate Note Balance of the Notes, together
with accrued and unpaid interest thereon through the date of acceleration shall
become immediately due and payable.
At
any
time after such declaration of acceleration of maturity with respect to an
Event
of Default has been made and before a judgment or decree for payment of the
money due has been obtained by the Indenture Trustee as hereinafter in this
Article V provided, Holders of the Notes representing not less than a majority
of the aggregate Note Balance of the Notes, by written notice to the Issuing
Entity and the Indenture Trustee, may waive the related Event of Default and
rescind and annul such declaration and its consequences if
(i) the
Issuing Entity has paid or deposited with the Indenture Trustee a sum sufficient
to pay (a) all payments of principal of and interest on the Notes and all other
amounts that would then be due hereunder or upon the Notes if the Event of
Default giving rise to such acceleration had not occurred; and (b) all sums
paid
or advanced by the Indenture Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee and its agents
and
counsel; and
(ii) all
Events of Default, other than the nonpayment of the principal of the Notes
that
has become due solely by such acceleration, have been cured or waived as
provided in Section 5.12.
No
such
rescission shall affect any subsequent default or impair any right consequent
thereto.
Section
5.03. Collection
of Indebtedness and Suits for Enforcement by Indenture Trustee.
(a) The
Issuing Entity covenants that if (i) default is made in the payment of any
interest on any Note when the same becomes due and payable, and such default
continues for a period of five days, or (ii) default is made in the payment
of
the principal of or any installment of the principal of any Note when the same
becomes due and payable, the Issuing Entity shall, upon demand of the Indenture
Trustee, at the direction of the Holders of a majority of the aggregate Note
Balance of the Notes, pay to the Indenture Trustee, for the benefit of the
Holders of Notes, the whole amount then due and payable on the Notes for
principal and interest, with interest at the applicable Note Rate upon the
overdue principal, and in addition thereto such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.
(b) In
case
the Issuing Entity shall fail forthwith to pay such amounts upon such demand,
the Indenture Trustee, in its own name and as trustee of an express trust,
subject to the provisions of Section 10.16 hereof may institute a Proceeding
for
the collection of the sums so due and unpaid, and may prosecute such Proceeding
to judgment or final decree, and may enforce the same against the Issuing Entity
or other obligor upon the Notes and collect in the manner provided by law out
of
the property of the Issuing Entity or other obligor the Notes, wherever
situated, the monies adjudged or decreed to be payable.
(c) If
an
Event of Default occurs and is continuing, the Indenture Trustee, subject to
the
provisions of Section 10.16 hereof may, as more particularly provided in Section
5.04 hereof, in its discretion, proceed to protect and enforce its rights and
the rights of the Noteholders, by such appropriate Proceedings, as directed
in
writing by Holders of a majority of the aggregate Note Balance of the Notes,
to
protect and enforce any such rights, whether for the specific enforcement of
any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy or legal or equitable
right vested in the Indenture Trustee by this Indenture or by law.
(d) In
case
there shall be pending, relative to the Issuing Entity or any other obligor
upon
the Notes or any Person having or claiming an ownership interest in the Trust
Estate, Proceedings under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or other similar law, or
in
case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for
or
taken possession of the Issuing Entity or its property or such other obligor
or
Person, or in case of any other comparable judicial Proceedings relative to
the
Issuing Entity or other obligor upon the Notes, or to the creditors or property
of the Issuing Entity or such other obligor, the Indenture Trustee, as directed
in writing by Holders of a majority of the aggregate Note Balance of the Notes,
irrespective of whether the principal of any Notes shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions
of
this Section, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:
(i) to
file
and prove a claim or claims for the whole amount of principal and interest
owing
and unpaid in respect of the Notes and to file such other papers or documents
as
may be necessary or advisable in order to have the claims of the Indenture
Trustee (including any claim for reasonable compensation to the Indenture
Trustee and each predecessor Indenture Trustee, and their respective agents,
attorneys and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee, except as a result of negligence or bad faith) and of the
Noteholders allowed in such Proceedings;
(ii) unless
prohibited by applicable law and regulations, to vote on behalf of the Holders
of Notes in any election of a trustee, a standby trustee or Person performing
similar functions in any such Proceedings;
(iii) to
collect and receive any monies or other property payable or deliverable on
any
such claims and to distribute all amounts received with respect to the claims
of
the Noteholders and of the Indenture Trustee on their behalf, and
(iv) to
file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee or the Holders
of
Notes allowed in any judicial proceedings relative to the Issuing Entity, its
creditors and its property; and any trustee, receiver, liquidator, custodian
or
other similar official in any such Proceeding is hereby authorized by each
of
such Noteholders to make payments to the Indenture Trustee and, in the event
that the Indenture Trustee shall consent to the making of payments directly
to
such Noteholders, to pay to the Indenture Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances
made,
by the Indenture Trustee and each predecessor Indenture Trustee.
(e) Nothing
herein contained shall be deemed to authorize the Indenture Trustee to authorize
or consent to or vote for or accept or adopt on behalf of any Noteholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder thereof or to authorize the Indenture Trustee
to vote in respect of the claim of any Noteholder in any such proceeding except,
as aforesaid, to vote for the election of a trustee in bankruptcy or similar
Person.
(f) All
rights of action and of asserting claims under this Indenture, or under any
of
the Notes, may be enforced by the Indenture Trustee without the possession
of
any of the Notes or the production thereof in any trial or other Proceedings
relative thereto, and any such action or proceedings instituted by the Indenture
Trustee shall be brought in its own name as trustee of an express trust, and
any
recovery of judgment, subject to the payment of the expenses, disbursements
and
compensation of the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents and attorneys, shall be for the ratable benefit of
the
Holders of the Notes, subject to Section 5.05 hereof.
(g) In
any
Proceedings brought by the Indenture Trustee (and also any Proceedings involving
the interpretation of any provision of this Indenture to which the Indenture
Trustee shall be a party), the Indenture Trustee shall be held to represent
all
the Holders of the Notes, and it shall not be necessary to make any Noteholder
a
party to any such Proceedings.
Section
5.04. Remedies;
Priorities.
(a) If
an
Event of Default shall have occurred and be continuing and if an acceleration
has been declared and not rescinded pursuant to Section 5.02 hereof, the
Indenture Trustee subject to the provisions of Section 10.16 hereof may, and
shall, at the written direction of the Holders of a majority of the aggregate
Note Balance of the Notes, do one or more of the following (subject to Section
5.05 hereof):
(i) institute
Proceedings in its own name and as trustee of an express trust for the
collection of all amounts then payable on the Notes or under this Indenture
with
respect thereto, whether by declaration or otherwise enforce any judgment
obtained, and collect from the Issuing Entity and any other obligor upon such
Notes monies adjudged due;
(ii) institute
Proceedings from time to time for the complete or partial foreclosure of this
Indenture with respect to the Trust Estate;
(iii) exercise
any remedies of a secured party under the UCC and take any other appropriate
action to protect and enforce the rights and remedies of the Indenture Trustee
and the Holders of the Notes; and
(iv) sell
the
Trust Estate or any portion thereof or rights or interest therein, at one or
more public or private sales called and conducted in any manner permitted by
law; provided,
however,
that
the Indenture Trustee may not sell or otherwise liquidate the Trust Estate
following an Event of Default, unless (A) the Indenture Trustee obtains the
consent of the Holders of 100% of the aggregate Note Balance of the Notes,
(B)
the proceeds of such sale or liquidation distributable to the Holders of the
Notes are sufficient to discharge in full all amounts then due and unpaid upon
such Notes for principal and interest or (C) the Indenture Trustee determines
that the Mortgage Loans will not continue to provide sufficient funds for the
payment of principal of and interest on the applicable Notes as they would
have
become due if the Notes had not been declared due and payable, and the Indenture
Trustee obtains the consent of the Holders of a majority of the aggregate Note
Balance of the Notes. In determining such sufficiency or insufficiency with
respect to clause (B) and (C), the Indenture Trustee may, but need not, obtain
and rely upon written advice or an opinion (obtained at the expense of the
Trust) of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose. Notwithstanding the foregoing,
so long as a Servicer Event of Default has not occurred, any sale of the Trust
Estate shall be made subject to the continued servicing of the Mortgage Loans
by
the Servicer as provided in the Servicing Agreement.
(b) If
the
Indenture Trustee collects any money or property pursuant to this Article V,
it
shall pay out the money or property in the following order:
(i) to
the
Indenture Trustee and the Owner Trustee for amounts due under Section 6.07
hereof and to the Owner Trustee for amounts due pursuant to Article VII of
the
Trust Agreement;
(ii) to
the
Noteholders for amounts due and unpaid on the Notes (including Interest
Carryforward Amount but not including any Basis Risk Shortfalls) with respect
to
interest, first, concurrently, to the Holders of each Class of Class A Notes,
on
a pro
rata
basis
based on the entitlement of each such Class, second, to the Holders of the
Class
M-1 Notes, third, to the Holders of the Class M-2 Notes, fourth, to the Holders
of the Class M-3 Notes, fifth, to the Holders of the Class M-4 Notes, sixth,
to
the Holders of the Class M-5 Notes, seventh, to the Holders of the Class M-6
Notes, eighth, to the Holders of the Class M-7 Notes, ninth to the Holders
of
the Class M-8 Notes and tenth, to the Holders of the Class M-9 Notes according
to the amounts due and payable on the Notes for interest;
(iii) to
the
Noteholders for amounts due and unpaid on the Notes with respect to principal,
first, concurrently, to the Holders of each Class of Class A Notes, on a
pro
rata
basis
based on the Note Balance of each such Class, second, to the Holders of the
Class M-1 Notes, third, to the Holders of the Class M-2 Notes, fourth, to the
Holders of the Class M-3 Notes, fifth, to the Holders of the Class M-4 Notes,
sixth, to the Holders of the Class M-5 Notes, seventh, to the Holders of the
Class M-6 Notes, eighth, to the Holders of the Class M-7 Notes, ninth, to the
Holders of the Class M-8 Notes and tenth, to the Holders of the Class M-9 Notes
according to the amounts due and payable on the Notes for interest according
to
the amounts due and payable on such Notes for principal, in each case, until
the
Note Balance of each such Class is reduced to zero;
(iv) to
the
Noteholders for the amount of any related Allocated Realized Loss Amount and
Deferred Interest not previously paid, first, to the Holders of the Class M-1
Notes, second, to the Holders of the Class M-2 Notes, third, to the Holders
of
the Class M-3 Notes, fourth, to the Holders of the Class M-4 Notes, fifth,
to
the Holders of the Class M-5 Notes, sixth, to the Holders of the Class M-6
Notes, seventh, to the Holders of the Class M-7 Notes, eighth, to the Holders
of
the Class M-8 Notes and tenth, to the Holders of the Class M-9
Notes;
(v) to
the
Noteholders for amounts due and unpaid on the Notes with respect to any related
Basis Risk Shortfalls, first, concurrently, to the Holders of each Class of
Class A Notes, on a pro
rata
basis
based on the Basis Risk Shortfalls for each such Class, second, to the Holders
of the Class M-1 Notes, third, to the Holders of the Class M-2 Notes, fourth,
to
the Holders of the Class M-3 Notes, fifth, to the Holders of the Class M-4
Notes, sixth, to the Holders of the Class M-5 Notes, seventh, to the Holders
of
the Class M-6 Notes, eighth, to the Holders of the Class M-7 Notes, ninth,
to
the Holders of the Class M-8 Notes and tenth, to the Holders of the Class M-9
Notes according to the amounts due and payable on the Notes with respect
thereto, from amounts available in the Trust Estate for the Noteholders;
and
(vi) to
the
payment of the remainder, if any to the Certificate Paying Agent on behalf
of
the Issuing Entity or to any other person legally entitled thereto.
The
Indenture Trustee may fix a record date and Payment Date for any payment to
Noteholders pursuant to this Section 5.04. At least 15 days before such record
date, the Indenture Trustee shall mail to each Noteholder a notice that states
the record date, the Payment Date and the amount to be paid.
Section
5.05. Optional
Preservation of the Trust Estate.
If the
Notes have been declared to be due and payable under Section 5.02 following
an
Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may elect to take and maintain
possession of the Trust Estate. It is the desire of the parties hereto and
the
Noteholders that there be at all times sufficient funds for the payment of
principal of and interest on the Notes and other obligations of the Issuing
Entity and the Indenture Trustee shall take such desire into account when
determining whether or not to take and maintain possession of the Trust Estate.
In determining whether and how to take and maintain possession of the Trust
Estate, the Indenture Trustee may, but need not, obtain and rely upon the
written advice or an opinion of an Independent investment banking or accounting
firm of national reputation as to the feasibility of such proposed action and
as
to the sufficiency of the Trust Estate for such purpose.
Section
5.06. Limitation
of Suits.
No
Holder of any Note shall have any right to institute any Proceeding, judicial
or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless and subject to the
provisions of Section 10.16 hereof
(i) such
Holder has previously given written notice to the Indenture Trustee of a
continuing Event of Default;
(ii) the
Holders of not less than 25% of the aggregate Note Balance of the Notes have
made a written request to the Indenture Trustee to institute such Proceeding
in
respect of such Event of Default in its own name as Indenture Trustee
hereunder;
(iii) such
Holder or Holders have offered to the Indenture Trustee indemnity reasonably
satisfactory to it against the costs, expenses and liabilities to be incurred
in
complying with such request;
(iv) the
Indenture Trustee for 60 days after its receipt of such notice of request and
offer of indemnity has failed to institute such Proceedings; and
(v) no
direction inconsistent with such written request has been given to the Indenture
Trustee during such 60-day period by the Holders of a majority of the Note
Balances of the Notes.
It
is
understood and intended that no one or more Holders of Notes shall have any
right in any manner whatever by virtue of, or by availing of, any provision
of
this Indenture to affect, disturb or prejudice the rights of any other Holders
of Notes or to obtain or to seek to obtain priority or preference over any
other
Holders or to enforce any right under this Indenture, except in the manner
herein provided.
Section
5.07. Unconditional
Rights of Noteholders To Receive Principal and Interest.
Notwithstanding
any other provisions in this Indenture, the Holder of any Note shall have the
right, which is absolute and unconditional, to receive payment of the principal
of and interest, if any, on such Note on or after the respective due dates
thereof expressed in such Note or in this Indenture and to institute suit for
the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder.
Section
5.08. Restoration
of Rights and Remedies.
If the
Indenture Trustee or any Noteholder has instituted any Proceeding to enforce
any
right or remedy under this Indenture and such Proceeding has been discontinued
or abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuing Entity,
the Indenture Trustee and the Noteholders shall, subject to any determination
in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had
been
instituted.
Section
5.09. Rights
and Remedies Cumulative.
No
right or remedy herein conferred upon or reserved to the Indenture Trustee
or to
the Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative
and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section
5.10. Delay
or Omission Not a Waiver.
No
delay or omission of the Indenture Trustee or any Holder of any Note to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by
law
to the Indenture Trustee or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee or
by
the Noteholders, as the case may be.
Section
5.11. Control
By Noteholders. The
Holders of a majority of the aggregate Note Balance of Notes shall have the
right to direct the time, method and place of conducting any Proceeding for
any
remedy available to the Indenture Trustee with respect to the Notes or
exercising any trust or power conferred on the Indenture Trustee; provided
that:
(i) such
direction shall not be in conflict with any rule of law or with this
Indenture;
(ii) any
direction to the Indenture Trustee to sell or liquidate the Trust Estate shall
be by Holders of Notes representing not less than 100% of the Note Balances
of
the Notes;
(iii) the
Indenture Trustee has been provided with indemnity satisfactory to it;
and
(iv) the
Indenture Trustee may take any other action deemed proper by the Indenture
Trustee that is not inconsistent with such direction of the Holders of Notes
representing a majority of the Note Balances of the Notes.
Notwithstanding
the rights of Noteholders set forth in this Section 5.11 the Indenture Trustee
need not take any action that it determines might involve it in
liability.
Section
5.12. Waiver
of Past Defaults. Prior
to the declaration of the acceleration of the maturity of the Notes as provided
in Section 5.02 hereof, the Holders of Notes representing not less than a
majority of the aggregate Note Balance of the Notes may waive any past Event
of
Default and its consequences except an Event of Default (a) with respect to
payment of principal of or interest on any of the Notes or (b) in respect of
a
covenant or provision hereof which cannot be modified or amended without the
consent of the Holder of each Note. In the case of any such waiver, the Issuing
Entity, the Indenture Trustee and the Holders of the Notes shall be restored
to
their former positions and rights hereunder, respectively, but no such waiver
shall extend to any subsequent or other Event of Default or impair any right
consequent thereto.
Upon
any
such waiver, any Event of Default arising therefrom shall be deemed to have
been
cured and not to have occurred, for every purpose of this Indenture; but no
such
waiver shall extend to any subsequent or other Event of Default or impair any
right consequent thereto.
Section
5.13. Undertaking
for Costs.
All
parties to this Indenture agree, and each Holder of any Note and each Beneficial
Owner of any interest therein by such ▇▇▇▇▇▇’s or Beneficial Owner’s acceptance
thereof shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Indenture Trustee for any action taken,
suffered or omitted by it as Indenture Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys’ fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 5.13 shall not apply to (a) any suit
instituted by the Indenture Trustee, (b) any suit instituted by any Noteholder,
or group of Noteholders, in each case holding in the aggregate more than 10%
of
the Note Balances of the Notes or (c) any suit instituted by any Noteholder
for
the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this
Indenture.
Section
5.14. Waiver
of Stay or Extension Laws.
The
Issuing Entity covenants (to the extent that it may lawfully do so) that it
will
not at any time insist upon, or plead or in any manner whatsoever, claim or
take
the benefit or advantage of, any stay or extension law wherever enacted, now
or
at any time hereafter in force, that may affect the covenants or the performance
of this Indenture; and the Issuing Entity (to the extent that it may lawfully
do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it shall not hinder, delay or impede the execution of any power
herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been
enacted.
Section
5.15. Sale
of Trust Estate.
(a) The
power
to effect any sale or other disposition (a “Sale”) of any portion of the Trust
Estate pursuant to Section 5.04 hereof is expressly subject to the provisions
of
Section 5.05 hereof and this Section 5.15. The power to effect any such Sale
shall not be exhausted by any one or more Sales as to any portion of the Trust
Estate remaining unsold, but shall continue unimpaired until the entire Trust
Estate shall have been sold or all amounts payable on the Notes and under this
Indenture shall have been paid. The Indenture Trustee may from time to time
postpone any public Sale by public announcement made at the time and place
of
such Sale. The Indenture Trustee hereby expressly waives its right to any amount
fixed by law as compensation for any Sale.
(b) The
Indenture Trustee shall not in any private Sale sell the Trust Estate, or any
portion thereof, unless
(i) the
Holders of all Notes consent to or direct the Indenture Trustee to make, such
Sale, or
(ii) the
proceeds of such Sale would be not less than the entire amount which would
be
payable to the Noteholders under the Notes, in full payment thereof in
accordance with Section 5.02 hereof, on the Payment Date next succeeding the
date of such Sale, or
(iii) the
Indenture Trustee determines that the conditions for retention of the Trust
Estate set forth in Section 5.05 hereof cannot be satisfied (in making any
determination under this Section 5.15, the Indenture Trustee may rely upon
written advice or an opinion of an Independent investment banking firm obtained
and delivered as provided in Section 5.05 hereof), the Holders of Notes
representing at least 100% of the Note Balances of the Notes consent to such
Sale.
The
purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a
private Sale shall not be deemed a Sale or other disposition thereof for
purposes of this Section 5.15(b).
(c) [Reserved].
(d) In
connection with a Sale of all or any portion of the Trust Estate,
(i) any
Holder or Holders of Notes may bid for and purchase the property offered for
sale, and upon compliance with the terms of sale may hold, retain and possess
and dispose of such property, without further accountability, and may, in paying
the purchase money therefor, deliver any Notes or claims for interest thereon
in
lieu of cash up to the amount which shall, upon distribution of the net proceeds
of such sale, be payable thereon, and such Notes, in case the amounts so payable
thereon shall be less than the amount due thereon, shall be returned to the
Holders thereof after being appropriately stamped to show such partial
payment;
(ii) the
Indenture Trustee, may bid for and acquire the property offered for Sale in
connection with any Sale thereof, and, subject to any requirements of, and
to
the extent permitted by, applicable law in connection therewith, may purchase
all or any portion of the Trust Estate in a private sale, and, in lieu of paying
cash therefor, may make settlement for the purchase price by crediting the
gross
Sale price against the sum of (A) the amount which would be payable to the
Holders of the Notes and Holders of Certificates on the Payment Date next
succeeding the date of such Sale and (B) the expenses of the Sale and of any
Proceedings in connection therewith which are reimbursable to it, without being
required to produce the Notes in order to complete any such Sale or in order
for
the net Sale price to be credited against such Notes, and any property so
acquired by the Indenture Trustee shall be held and dealt with by it in
accordance with the provisions of this Indenture;
(iii) the
Indenture Trustee shall execute and deliver an appropriate instrument of
conveyance, prepared by the Issuing Entity and satisfactory to the Indenture
Trustee, transferring its interest in any portion of the Trust Estate in
connection with a Sale thereof;
(iv) the
Indenture Trustee is hereby irrevocably appointed the agent and attorney-in-fact
of the Issuing Entity to transfer and convey its interest in any portion of
the
Trust Estate in connection with a Sale thereof, and to take all action necessary
to effect such Sale; and
(v) no
purchaser or transferee at such a Sale shall be bound to ascertain the Indenture
Trustee’s authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
Section
5.16. Action
on Notes.
The
Indenture Trustee’s right to seek and recover judgment on the Notes or under
this Indenture shall not be affected by the seeking, obtaining or application
of
any other relief under or with respect to this Indenture. Neither the lien
of
this Indenture nor any rights or remedies of the Indenture Trustee or the
Noteholders shall be impaired by the recovery of any judgment by the Indenture
Trustee against the Issuing Entity or by the levy of any execution under such
judgment upon any portion of the Trust Estate or upon any of the assets of
the
Issuing Entity. Any money or property collected by the Indenture Trustee shall
be applied in accordance with Section 5.04(b) hereof.
Section
5.17. Performance
and Enforcement of Certain Obligations.
(a) Promptly
following a request from the Indenture Trustee to do so, the Issuing Entity
in
its capacity as holder of the Mortgage Loans, shall take all such lawful action
as the Indenture Trustee may request to cause the Issuing Entity to compel
or
secure the performance and observance by the Seller, NC Capital and the
Servicer, as applicable, of each of their obligations to the Issuing Entity
under or in connection with the Mortgage Loan Purchase Agreement and the
Servicing Agreement, and to exercise any and all rights, remedies, powers and
privileges lawfully available to the Issuing Entity under or in connection
with
the Mortgage Loan Purchase Agreement and the Servicing Agreement to the extent
and in the manner directed by the Indenture Trustee, as pledgee of the Mortgage
Loans, including the transmission of notices of default on the part of the
Seller, NC Capital or the Servicer thereunder and the institution of legal
or
administrative actions or proceedings to compel or secure performance by the
Seller, NC Capital or the Servicer of each of their obligations under the
Mortgage Loan Purchase Agreement and the Servicing Agreement.
(b) The
Indenture Trustee, as pledgee of the Mortgage Loans, may, and at the direction
(which direction shall be in writing or by telephone (confirmed in writing
promptly thereafter)) of the Holders of 66-2/3% of the Note Balances of the
Notes, shall exercise all rights, remedies, powers, privileges and claims of
the
Issuing Entity against the Seller, NC Capital or the Servicer under or in
connection with the Mortgage Loan Purchase Agreement and the Servicing
Agreement, including the right or power to take any action to compel or secure
performance or observance by the Seller, NC Capital or the Servicer, as the
case
may be, of each of their obligations to the Issuing Entity thereunder and to
give any consent, request, notice, direction, approval, extension or waiver
under the Mortgage Loan Purchase Agreement and the Servicing Agreement, as
the
case may be, and any right of the Issuing Entity to take such action shall
not
be suspended.
ARTICLE
VI
THE
INDENTURE TRUSTEE
Section
6.01. Duties
of Indenture Trustee.
(a) If
an
Event of Default has occurred and is continuing, the Indenture Trustee shall
exercise the rights and powers vested in it by this Indenture 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.
(b) Except
during the continuance of an Event of Default:
(i) the
Indenture Trustee undertakes to perform such duties and only such duties as
are
specifically set forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Indenture Trustee;
and
(ii) in
the
absence of bad faith on its part, the Indenture Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture; however, the Indenture Trustee
shall examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The
Indenture Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(i) this
paragraph does not limit the effect of paragraph (b) of this Section
6.01;
(ii) the
Indenture Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer unless it is proved that the Indenture Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the
Indenture Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it from
Noteholders or from the Issuing Entity, which they are entitled to give under
the Basic Documents.
(d) The
Indenture Trustee shall not be liable for interest on any money received by
it.
(e) Money
held in trust by the Indenture Trustee need not be segregated from other trust
funds except to the extent required by law or the terms of this Indenture or
the
Trust Agreement.
(f) No
provision of this Indenture shall require the Indenture Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance
of
any of its duties hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds to believe that repayment of such funds
or
indemnity satisfactory to it against such risk or liability is not reasonably
assured to it.
(g) Every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Indenture Trustee shall be subject to the
provisions of this Section and to the provisions of the TIA.
(h) The
Indenture Trustee shall act in accordance with Sections 6.03 of the Servicing
Agreement and shall act as successor to the Servicer or appoint a successor
Servicer in accordance with Section 6.02 of the Servicing
Agreement.
(i) To
help
fight the funding of terrorism and money laundering activities, the Trustee
will
obtain, verify, and record information that identifies individuals or entities
that establish a relationship or open an account with the Trustee. The Trustee
will ask for the name, address, tax identification number and other information
that will allow the Trustee to identify the individual or entity who is
establishing the relationship or opening the account. The Trustee may also
ask
for formation documents such as articles of incorporation, an offering
memorandum, or other identifying documents to be provided.
(j) The
Indenture Trustee shall, at the written direction of the Depositor, enforce
all
of its rights and exercise any remedies under the Interest Rate Swap Agreement.
In the event the Interest Rate Swap Agreement is terminated as a result of
the
designation by either party thereto of an Early Termination Date (as defined
therein), the Indenture Trustee shall, at the direction of the Depositor,
appoint a replacement counterparty to enter into a replacement swap agreement.
The Indenture Trustee shall have no responsibility with regard to the selection
of a replacement swap provider or the negotiation of a replacement swap
agreement. Any Swap Termination Payment received by the Indenture Trustee shall
be part of the available Payment Amount and shall be used to make any upfront
payment required under a replacement swap agreement and any upfront payment
received from the counterparty to a replacement swap agreement shall be used
to
pay any Swap Termination Payment owed to the Swap Provider.
Section
6.02. Rights
of Indenture Trustee.
(a) The
Indenture Trustee may conclusively rely on, and shall be fully protected from
acting or refraining from acting upon, any document believed by it to be genuine
and to have been signed or presented by the proper person. The Indenture Trustee
need not investigate any fact or matter stated in the document.
(b) Before
the Indenture Trustee acts or refrains from acting, it may require an Officer’s
Certificate or an Opinion of Counsel. The Indenture Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on an
Officer’s Certificate or Opinion of Counsel.
(c) The
Indenture Trustee shall not be liable for any action it takes or omits to take
in good faith which it believes to be authorized or within its rights or powers;
provided,
however,
that
the Indenture Trustee’s conduct does not constitute willful misconduct,
negligence or bad faith.
(d) The
Indenture Trustee may consult with counsel, and the advice or Opinion of Counsel
with respect to legal matters relating to the Basic Documents and the Notes
shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder or in
connection herewith in good faith and in accordance with the advice or opinion
of such counsel.
(e) The
Indenture Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder, either directly or by or through agents, attorneys,
custodians or nominees appointed with due care, and shall not be responsible
for
any willful misconduct or negligence on the part of any agent, attorney,
custodian or nominee so appointed.
(f) The
Indenture Trustee or its Affiliates are permitted to receive additional
compensation that could be deemed to be in the Indenture Trustee’s economic
self-interest for (i) serving as investment adviser, administrator, shareholder,
servicing agent, custodian or sub-custodian with respect to certain of the
Permitted Investments, (ii) using Affiliates to effect transactions in certain
Permitted Investments and (iii) effecting transactions in certain Permitted
Investments. Such compensation shall not be considered an amount that is
reimbursable or payable to the Indenture Trustee (i) as part of the Indenture
Trustee Fee, (ii) pursuant to Sections 3.05(d), 3.05(h), 5.04(b), 6.07 or
8.02(c) hereunder or (iii) out of the Available Payment Amount.
Section
6.03. Individual
Rights of Indenture Trustee.
The
Indenture Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Issuing Entity or its
Affiliates with the same rights it would have if it were not Indenture Trustee,
subject to the requirements of the Trust Indenture Act. Any Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However,
the
Indenture Trustee must comply with Sections 6.11 and 6.12 hereof.
Section
6.04. Indenture
Trustee’s Disclaimer.
The
Indenture Trustee shall not be responsible for and makes no representation
as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Issuing Entity’s use of the proceeds from the Notes, and it
shall not be responsible for any statement of the Issuing Entity in the
Indenture or in any document issued in connection with the sale of the Notes
or
in the Notes other than the Indenture Trustee’s certificate of
authentication.
Section
6.05. Notice
of Event of Default.
Subject
to Section 5.01, the Indenture Trustee shall promptly mail to each Noteholder
notice of the Event of Default after it is actually known to a Responsible
Officer
of
the Indenture Trustee, unless such Event of Default shall have been waived
or
cured. Except in the case of an Event of Default in payment of principal of
or
interest on any Note, the Indenture Trustee may withhold the notice if and
so
long as it in good faith determines that withholding the notice is in the
interests of Noteholders.
Section
6.06. Reports
by Indenture Trustee to Holders and Tax Administration.
The
Indenture Trustee shall deliver to each Noteholder such information as may
be
required to enable such holder to prepare its federal and state income tax
returns. The Indenture Trustee shall prepare and file (or cause to be prepared
and filed), on behalf of the Owner Trustee or the Issuing Entity, all tax
returns (if any) and information reports, tax elections and such annual or
other
reports of the Issuing Entity as are necessary for preparation of tax returns
and information reports as provided in Section 5.03 of the Trust Agreement,
including without limitation Form 1099. All tax returns and information reports
shall be signed by the Owner Trustee as provided in Section 5.03 of the Trust
Agreement.
Section
6.07. Compensation
and Indemnity. The
Indenture Trustee shall withdraw from the Payment Account on each Payment Date
and pay to itself the Indenture Trustee Fee. The Indenture Trustee’s
compensation shall not be limited by any law on compensation of a trustee of
an
express trust. In addition, the Indenture Trustee shall withdraw from the
Payment Account on each Payment Date and pay to the Owner Trustee the Owner
Trustee Fee and its Expenses.
The
Issuing Entity shall reimburse the Indenture Trustee and the Owner Trustee
for
all reasonable out-of-pocket expenses incurred or made by it, including costs
of
collection, in addition to compensation for its services. Such expenses shall
include reasonable compensation and expenses, disbursements and advances of
the
Indenture Trustee’s or the Owner Trustee’s agents, counsel, accountants and
experts. The Issuing Entity shall indemnify the Indenture Trustee and hold
it
harmless against any and all claim, tax, penalty, loss, liability or expense
(including attorneys’ fees and expenses) of any kind whatsoever incurred by it
in connection with the administration of this Trust and the performance of
its
duties under any of the Basic Documents. The Indenture Trustee shall notify
the
Issuing Entity promptly of any claim for which it may seek indemnity. Failure
by
the Indenture Trustee to so notify the Issuing Entity shall not relieve the
Issuing Entity of its obligations hereunder. The Issuing Entity shall defend
any
such claim, and the Indenture Trustee may have separate counsel and the Issuing
Entity shall pay the fees and expenses of such counsel. The Issuing Entity
is
not obligated to reimburse any expense or indemnify against any loss, liability
or expense incurred by the Indenture Trustee through the Indenture Trustee’s own
willful misconduct, negligence or bad faith.
The
Issuing Entity’s payment obligations to the Indenture Trustee and the Owner
Trustee pursuant to this Section 6.07 shall survive the discharge of this
Indenture and the termination or resignation of the Indenture Trustee. When
the
Indenture Trustee or the Owner Trustee incurs expenses after the occurrence
of
an Event of Default with respect to the Issuing Entity, the expenses are
intended to constitute expenses of administration under Title 11 of the United
States Code or any other applicable federal or state bankruptcy, insolvency
or
similar law.
Section
6.08. Replacement
of Indenture Trustee.
No
resignation or removal of the Indenture Trustee and no appointment of a
successor Indenture Trustee shall become effective until the acceptance of
appointment by the successor Indenture Trustee pursuant to this Section 6.08.
The Indenture Trustee may resign at any time by so notifying the Issuing Entity.
Holders of a majority of Note Balances of the Notes may remove the Indenture
Trustee by so notifying the Indenture Trustee and may appoint a successor
Indenture Trustee. The Issuing Entity shall, remove the Indenture Trustee
if:
(i) the
Indenture Trustee fails to comply with Section 6.11 hereof;
(ii) the
Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a
receiver or other public officer takes charge of the Indenture Trustee or its
property; or
(iv) the
Indenture Trustee otherwise becomes incapable of acting.
If
the
Indenture Trustee resigns or is removed or if a vacancy exists in the office
of
the Indenture Trustee for any reason (the Indenture Trustee in such event being
referred to herein as the retiring Indenture Trustee), the Issuing Entity shall,
promptly appoint a successor Indenture Trustee.
A
successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuing Entity.
Thereupon, the resignation or removal of the retiring Indenture Trustee shall
become effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to Noteholders. The
retiring Indenture Trustee shall promptly transfer all property held by it
as
Indenture Trustee to the successor Indenture Trustee.
If
a
successor Indenture Trustee does not take office within 30 days after the
retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuing Entity or the Holders of a majority of Note Balances of
the
Notes may petition any court of competent jurisdiction for the appointment
of a
successor Indenture Trustee.
Notwithstanding
the replacement of the Indenture Trustee pursuant to this Section, the Issuing
Entity’s obligations under Section 6.07 shall continue for the benefit of
the retiring Indenture Trustee.
Section
6.09. Successor
Indenture Trustee by ▇▇▇▇▇▇.
If the
Indenture Trustee consolidates with, merges or converts into, or transfers
all
or substantially all of its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation, without any further act, shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11 hereof. The Indenture Trustee shall
provide the Rating Agencies with prior written notice of any such
transaction.
If
at the
time such successor or successors by merger, conversion or consolidation to
the
Indenture Trustee shall succeed to the trusts created by this Indenture and
any
of the Notes shall have been authenticated but not delivered, any such successor
to the Indenture Trustee may adopt the certificate of authentication of any
predecessor trustee and deliver such Notes so authenticated; and if at that
time
any of the Notes shall not have been authenticated, any successor to the
Indenture Trustee may authenticate such Notes either in the name of any
predecessor hereunder or in the name of the successor to the Indenture Trustee;
and in all such cases such certificates shall have the full force which it
is in
the Notes or in this Indenture provided that the certificate of the Indenture
Trustee shall have.
Section
6.10. Appointment
of Co-Indenture Trustee or Separate Indenture Trustee.
(a) Notwithstanding
any other provisions of this Indenture, at any time, for the purpose of meeting
any legal requirement of any jurisdiction in which any part of the Trust Estate
may at the time be located, the Indenture Trustee shall have the power and
may
execute and deliver all instruments to appoint one or more Persons to act as
a
co-trustee or co-trustees, or separate trustee or separate trustees, of all
or
any part of the Trust Estate, and to vest in such Person or Persons, in such
capacity and for the benefit of the Noteholders, such title to the Trust Estate,
or any part hereof, and, subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the Indenture Trustee may
consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 6.11 hereof.
(b) Every
separate trustee and co-trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and
conditions:
(i) all
rights, powers, duties and obligations conferred or imposed upon the Indenture
Trustee shall be conferred or imposed upon and exercised or performed by the
Indenture 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 Indenture 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 the Indenture 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 Trust Estate
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 Indenture Trustee;
(ii) no
trustee hereunder shall be personally liable by reason of any act or omission
of
any other trustee hereunder; and
(iii) the
Indenture Trustee may at any time accept the resignation of or remove any
separate trustee or co-trustee.
(c) Any
notice, request or other writing given to the Indenture Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Indenture and the conditions
of this Article VI. 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 Indenture Trustee or
separately, as may be provided therein, subject to all the provisions of this
Indenture, specifically including every provision of this Indenture relating
to
the conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.
(d) Any
separate trustee or co-trustee may at any time constitute the Indenture 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 Indenture
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
Indenture Trustee, to the extent permitted by law, without the appointment
of a
new or successor trustee.
Section
6.11. Eligibility;
Disqualification. The
Indenture Trustee shall at all times satisfy the requirements of TIA § 310(a).
The Indenture Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of condition
and it or its parent shall have a long-term debt rating of “Baa3” or better by
▇▇▇▇▇’▇ and “BBB” or better by S&P and Fitch. The Indenture Trustee shall
comply with TIA § 310(b), including the optional provision permitted by the
second sentence of TIA § 310(b)(9); provided,
however,
that
there shall be excluded from the operation of TIA § 310(b)(1) any indenture or
indentures under which other securities of the Issuing Entity are outstanding
if
the requirements for such exclusion set forth in TIA § 310(b)(1) are
met.
Section
6.12. Preferential
Collection of Claims Against Issuing Entity.
The
Indenture Trustee shall comply with TIA § 311(a), excluding any creditor
relationship listed in TIA § 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA § 311(a) to the extent
indicated.
Section
6.13. Representations
and Warranties. The
Indenture Trustee hereby represents that:
(i) It
is a
national banking association duly organized, validly existing and in good
standing under the laws of the United States.
(ii) The
execution and delivery of this Indenture by it, and the performance and
compliance with the terms of this Indenture by it, will not violate its charter
or bylaws.
(iii) It
has
the full power and authority to enter into and consummate all transactions
contemplated by this Indenture has duly authorized the execution, delivery
and
performance of this Indenture, and has duly executed and delivered this
Indenture.
(iv) This
Indenture, assuming due authorization, execution and delivery by the Issuing
Entity, constitutes a valid, legal and binding obligation of it, enforceable
against it in accordance with the terms hereof, subject to (A) applicable
bankruptcy, insolvency, receivership, reorganization, moratorium and other
laws
affecting the enforcement of creditors’ rights generally, and (B) general
principles of equity, regardless of whether such enforcement is considered
in a
proceeding in equity or at law.
(v) The
Indenture Trustee is a “securities intermediary,” as such term is defined in
Section 8-102(a)(14)(B) of the New York UCC, that in the ordinary course of
its
business maintains “securities accounts” for others, as such term is used in
Section 8-501 of the New York UCC.
(vi) The
“securities intermediary’s jurisdiction” as defined in the New York UCC shall be
the State of New York.
(vii) The
Indenture Trustee is not a “clearing corporation”, as such term is defined in
Section 8-102(a)(5) of the New York UCC.
Section
6.14. Directions
to Indenture Trustee.
The Indenture Trustee is hereby directed:
(i) to
accept
the pledge of the Mortgage Loans and hold the assets of the Trust Estate in
trust for the Noteholders;
(ii) to
authenticate and deliver the Notes substantially in the form prescribed by
Exhibits A-1 through A-13 to this Indenture in accordance with the terms of
this
Indenture; and
(iii) to
take
all other actions as shall be required to be taken by the terms of this
Indenture.
Section
6.15. The
Agents. The
provisions of this Indenture relating to the limitations of the Indenture
Trustee’s liability and to its indemnity, rights and protections shall inure
also to the Paying Agent and Note Registrar.
ARTICLE
VII
NOTEHOLDERS’
LISTS AND REPORTS
Section
7.01. Issuing
Entity To Furnish Indenture Trustee Names and Addresses of
Noteholders.
The
Issuing Entity will furnish or cause to be furnished to the Indenture Trustee
(a) not more than five days after each Record Date, a list, in such form as
the
Indenture Trustee may reasonably require, of the names and addresses of the
Holders of Notes as of such Record Date, (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuing Entity of any such request, a list of similar form and content as of
a
date not more than 10 days prior to the time such list is furnished;
provided,
however,
that so
long as the Indenture Trustee is the Note Registrar, no such list shall be
required to be furnished to the Indenture Trustee.
Section
7.02. Preservation
of Information; Communications to Noteholders.
(a) The
Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Indenture Trustee as provided in Section
7.01
hereof and the names and addresses of Holders of Notes received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy
any
list furnished to it as provided in such Section 7.01 upon receipt of a new
list
so furnished.
(b) Noteholders
or Note Owners may communicate pursuant to TIA § 312(b) with other Noteholders
or Note Owners with respect to their rights under this Indenture or under the
Notes.
(c) The
Issuing Entity, the Indenture Trustee and the Note Registrar shall have the
protection of TIA § 312(c).
Section
7.03. Reports
of Issuing Entity.
(a) Subject
to Section 4.02 of the Servicing Agreement,
(i) The
Indenture Trustee shall file with the Commission on behalf of the Issuing
Entity, with a copy to the Issuing Entity within 15 days before the Issuing
Entity is required to file the same with the Commission, the annual reports
and
the information, documents and other reports (or such portions of any of the
foregoing as the Commission may from time to time by rules and regulations
prescribe) that the Issuing Entity may be required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) The
Indenture Trustee shall file with the Commission, on behalf of the Issuing
Entity, in accordance with rules and regulations prescribed from time to time
by
the Commission such additional information, documents and reports with respect
to compliance by the Issuing Entity with the conditions and covenants of this
Indenture as may be required from time to time by such rules and regulations;
and
(iii) The
Indenture Trustee shall supply (and the Indenture Trustee shall transmit by
mail
to all Noteholders described in TIA § 313(c)) such summaries of any information,
documents and reports required to be filed by the Issuing Entity pursuant to
clauses (i) and (ii) of this Section 7.03(a) and by rules and regulations
prescribed from time to time by the Commission.
(b) Unless
the Issuing Entity otherwise determines, the fiscal year of the Issuing Entity
shall end on December 31st
of each
year.
Section
7.04. Reports
by Indenture Trustee.
If
required by TIA § 313(a), within 60 days after each January 30th
beginning with March 31, 2007, the Indenture Trustee shall mail to each
Noteholder as required by TIA § 313(c) a brief report dated as of such date that
complies with TIA § 313(a). The Indenture Trustee also shall comply with TIA §
313(b).
A
copy of
each report at the time of its mailing to Noteholders shall be filed by the
Indenture Trustee with the Commission via ▇▇▇▇▇ and each stock exchange, if
any,
on which the Notes are listed. The Issuing Entity shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
Section
7.05. Statements
to Noteholders.
(a) With
respect to each Payment Date, the Indenture Trustee shall make available via
the
Indenture Trustee’s website ▇▇▇▇▇://▇▇▇.▇▇▇.▇▇.▇▇▇/▇▇▇▇ or deliver at the
recipient’s option to each Noteholder and each Certificateholder, the Depositor,
the Owner Trustee, the Certificate Paying Agent and each Rating Agency, a
statement setting forth the following information as to the Notes, to the extent
applicable:
(i) the
amount of the payment made on such Payment Date to the Holders of the Notes
of
each Class allocable to principal;
(ii) the
amount of the payment made on such Payment Date to the Holders of the Notes
of
each Class allocable to interest;
(iii) the
fees
and expenses of the Trust accrued and paid on such Payment Date and to whom
such
fees and expenses were paid;
(iv) the
aggregate amount of P&I Advances for such Payment Date (including the
general purpose of such P&I Advances);
(v) the
aggregate Stated Principal Balance of the Mortgage Loans and any REO Properties
as of the close of business on such Payment Date by Loan Group and in the
aggregate;
(vi) the
number, aggregate principal balance, weighted average remaining term to maturity
and weighted average Mortgage Rate of the Mortgage Loans as of the related
Due
Date by Loan Group and in the aggregate;
(vii) the
number and aggregate unpaid principal balance of Mortgage Loans by Loan Group
and in the aggregate (a) delinquent 30 to 59 days, (b) delinquent 60 to 89
days,
(c) delinquent 90 or more days, in each case, as of the last day of the
preceding calendar month, (d) as to which foreclosure proceedings have been
commenced and (e) with respect to which the related Mortgagor has filed for
protection under applicable bankruptcy laws, with respect to whom bankruptcy
proceedings are pending or with respect to whom bankruptcy protection is in
force;
(viii) with
respect to any Mortgage Loan that became an REO Property during the preceding
calendar month, the loan number of such Mortgage Loan and the Stated Principal
Balance of such Mortgage Loan as of the date it became an REO
Property;
(ix) the
aggregate amount of Principal Prepayments made during the related Prepayment
Period;
(x) the
aggregate amount of Realized Losses incurred during the related Prepayment
Period by Loan Group and in the aggregate and the aggregate amount of Realized
Losses incurred since the Closing Date and the aggregate amount of Subsequent
Recoveries received during the Prepayment Period and the cumulative amount
of
Subsequent Recoveries received since the Closing Date;
(xi) the
aggregate Note Balance of each Class of Notes, before and after giving effect
to
the payments, and allocations of Realized Losses, made on such Payment
Date;
(xii) the
Interest Payment Amount in respect of the Class A Notes and the Mezzanine Notes
for such Payment Date and the Interest Carry Forward Amount, if any, with
respect to the Class A Notes and the Mezzanine Notes on such Payment
Date;
(xiii) the
aggregate amount of any Prepayment Interest Shortfall for such Payment Date,
to
the extent not covered by payments by the Servicer pursuant to Section 3.24
of
the Servicing Agreement;
(xiv) the
aggregate amount of Relief Act Interest Shortfalls for such Payment
Date;
(xv) the
Net
Monthly Excess Cashflow, the Overcollateralized Amount, the
Overcollateralization Reduction Amount, Overcollateralization Increase Amount,
the Overcollateralization Target Amount, the Credit Enhancement Percentage
for
such Payment Date;
(xvi) the
respective Note Rates applicable to the Class A Notes and the Mezzanine Notes
for such Payment Date and the Note Rate applicable to the Class A Notes and
the
Mezzanine Notes for the immediately succeeding Payment Date;
(xvii) the
Basis
Risk Shortfall for the Class A Notes and the Mezzanine Notes, if any, for such
Payment Date and the amount remaining unpaid after reimbursements therefor
on
such Payment Date;
(xviii) whether
the Stepdown Date or a Trigger Event is in effect on such Payment Date;
(xix) the
Delinquency Percentage and Realized Loss Percentage for such Payment
Date;
(xx) the
amount of Prepayment Charges collected or paid by the Servicer for such Payment
Date;
(xxi) the
total
cashflows received and the general sources thereof;
(xxii) the
amount of any Net Swap Payments or Swap Termination Payments;
(xxiii) the
applicable Record Dates, Interest Accrual Periods and Interest Determination
Dates for calculating payments for such Payment Date; and
(xxiv) the
Significance Percentage for such Payment Date.
Items
(i)
and (ii) above shall be presented on the basis of a Note having a $1,000
denomination. In addition, by January 31st
of each
calendar year following any year during which the Notes are outstanding, the
Indenture Trustee shall furnish a report to each Noteholder of record if so
requested in writing at any time during each calendar year as to the aggregate
of amounts reported pursuant to (i) and (ii) with respect to the Notes for
such
calendar year.
(b) The
Indenture Trustee may conclusively rely upon the Remittance Report provided
by
the Servicer pursuant to Section 4.01 of the Servicing Agreement and on the
amounts furnished to the Indenture Trustee pursuant to the Interest Rate Swap
Agreement in its preparation of its Statement to Noteholders.
(c) For
each
Payment Date, through and including the Payment Date in December 2006, the
Indenture Trustee shall calculate the Significance Percentage of the Interest
Rate Swap Agreement. If on any such Payment Date, the Significance Percentage
is
equal to or greater than 9%, the Indenture Trustee shall promptly notify the
Depositor and the Depositor, on behalf of the Indenture Trustee, shall obtain
the financial information required to be delivered by the Swap Provider pursuant
to the terms of the Interest Rate Swap Agreement. If, on any succeeding Payment
Date through and including the Payment Date in December 2006, the Significance
Percentage is equal to or greater than 10%, the Indenture Trustee shall promptly
notify the Depositor and the Depositor shall, within 5 Business Days of such
Payment Date, deliver to the Indenture Trustee the financial information
provided to it by the Swap Provider for inclusion in the Form 10-D relating
to
such Payment Date.
With
respect to any Payment Date, for purposes of determining the numerator of the
fraction that constitutes the Significance Percentage, the interest rate used
to
project future amounts payable under the Interest Rate Swap Agreement shall
be
equal to the highest rate reflected on the Implied Forwards Curve available
at
Bloomberg Financial Markets, L.P. for the remaining term of the Interest Rate
Swap Agreement plus the percentage equivalent of a fraction, the numerator
of
which is 3.00% and the denominator of which is the remaining Payment Dates
on
which the Indenture Trustee is entitled to receive payments under the Interest
Rate Swap Agreement). The discount rate used to determine the net present value
of the estimated future amounts payable shall be equal to the lowest rate
reflected on the Implied Forwards Curve. The Indenture Trustee shall obtain
the
Implied Forwards Curve from Bloomberg within 15 Business Days of the respective
Payment Date. To determine the Implied Forwards Curve for such Payment Date,
the
Indenture Trustee shall take the following steps on the Bloomberg terminal:
(1)
the following keystrokes shall be entered: fwcv <enter>, 27 <enter>,
3 <enter>; (2) the Forwards shall be set to “1-Mo”; (3) the Intervals
shall be set to “1-Mo”; and (4) the Points shall be set to equal the remaining
term of the Interest Rate Swap Agreement in months and the Trustee shall click
<enter>. For purposes of estimating future amounts payable under the
Interest Rate Swap Agreement, the accrual period for both the Fixed Amounts
and
the Floating Amounts (as defined in the Confirmation) shall be assumed to be
a
30-day period in a 360-day year.
ARTICLE
VIII
ACCOUNTS,
DISBURSEMENTS AND RELEASES
Section
8.01. Collection
of Money.
Except
as otherwise expressly provided herein, the Indenture Trustee may demand payment
or delivery of, and shall receive and collect, directly and without intervention
or assistance of any fiscal agent or other intermediary, all money and other
property payable to or receivable by the Indenture Trustee pursuant to this
Indenture. The Indenture Trustee shall apply all such money received by it
as
provided in this Indenture. Except as otherwise expressly provided in this
Indenture, if any default occurs in the making of any payment or performance
under any agreement or instrument that is part of the Trust Estate, the
Indenture Trustee may take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim
a
Default or Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.
Section
8.02. Trust
Accounts.
(a) On
or
prior to the Closing Date, the Issuing Entity shall cause the Indenture Trustee
to establish and maintain, in the name of the Indenture Trustee, for the benefit
of the Noteholders, the Payment Account as provided in Section 3.01
hereof.
(b) On
each
Payment Date, the Indenture Trustee shall pay itself the Indenture Trustee
Fee
and any expenses owing to it for such Payment Date and shall pay the Owner
Trustee the Owner Trustee Fee and its Expenses, and then the Indenture Trustee
shall pay all remaining amounts on deposit in the Payment Account to the
Noteholders in respect of the Notes and to such other persons in the order
of
priority set forth in Section 3.05 hereof (except as otherwise provided in
Section 5.04(b) hereof).
(c) Pursuant
to Section 3.12 of the Servicing Agreement, funds in the Payment Account shall
remain uninvested unless the Indenture Trustee is otherwise directed by the
Servicer in Section 3.10(d) of the Servicing Agreement.
Section
8.03. Officer’s
Certificate.
The
Indenture Trustee shall receive at least seven Business Days’ notice when
requested by the Issuing Entity to take any action pursuant to Section 8.05(a)
hereof, accompanied by copies of any instruments to be executed, and the
Indenture Trustee shall also require, as a condition to such action, an
Officer’s Certificate, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent
to
the taking of such action have been complied with.
Section
8.04. Termination
Upon Distribution to Noteholders.
This
Indenture and the respective obligations and responsibilities of the Issuing
Entity and the Indenture Trustee created hereby shall terminate upon the payment
to Noteholders, the Certificate Paying Agent on behalf of the Owner Trustee,
the
Certificateholders and the Indenture Trustee of all amounts required to be
paid
pursuant to Article III; provided,
however,
that in
no event shall the trust 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. ▇▇▇▇▇, living
on
the date hereof.
Section
8.05. Release
of Trust Estate.
(a) Subject
to the payment of its fees and expenses, the Indenture Trustee may, and when
required by the provisions of this Indenture shall, execute instruments to
release property from the lien of this Indenture, or convey the Indenture
Trustee’s interest in the same, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture, including for the purposes
of any repurchase by the Servicer of a Mortgage Loan pursuant to Section 3.16
of
the Servicing Agreement. No party relying upon an instrument executed by the
Indenture Trustee as provided in Article VIII hereunder shall be bound to
ascertain the Indenture Trustee’s authority, inquire into the satisfaction of
any conditions precedent, or see to the application of any monies.
(b) The
Indenture Trustee shall, at such time as (i) there are no Notes Outstanding
and
(ii) all sums due to the Indenture Trustee pursuant to this Indenture have
been
paid, release any remaining portion of the Trust Estate that secured the Notes
from the lien of this Indenture.
(c) The
Indenture Trustee shall release property from the lien of this Indenture
pursuant to this Section 8.05 only upon receipt of a request from the Issuing
Entity accompanied by an Officers’ Certificate and an Opinion of Counsel stating
that all applicable requirements have been satisfied.
Section
8.06. Surrender
of Notes Upon Final Payment.
By
acceptance of any Note, the Holder thereof agrees to surrender such Note to
the
Indenture Trustee promptly, prior to such Noteholder’s receipt of the final
payment thereon.
Section
8.07. Optional
Redemption of the Notes.
(a) The
Servicer shall have the option to purchase the Mortgage Loans and REO Property
on any Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date. The aggregate purchase price will be equal
to
the greater of (i) the Stated Principal Balance of the Mortgage Loans and the
appraised value of any REO Properties, such appraisal to be conducted by an
Independent appraiser mutually agreed upon by the Servicer and the Indenture
Trustee in their reasonable discretion and (ii) the fair market value of the
Mortgage Loans and the REO Properties (as determined by the Servicer and, to
the
extent that a Class of Class A Notes or a Class of Mezzanine Notes will not
receive all amounts owed to it as a result of the purchase, the Indenture
Trustee (it being understood and agreed that any determination by the Indenture
Trustee shall be made solely in reliance on an appraisal by an Independent
appraiser as provided above), in each case plus accrued and unpaid interest
thereon at the weighted average of the Mortgage Rates through the end of the
Due
Period preceding the final Payment Date plus unreimbursed Servicing Advances,
P&I Advances, any unpaid Servicing Fees allocable to such Mortgage Loans and
REO Properties and any accrued and unpaid Basis Risk Shortfalls and any Swap
Termination Payment to the Swap Provider then remaining unpaid or which is
due
to the exercise of such option (the “Redemption Price”); provided, however, that
the Servicer will not be permitted to purchase the Mortgage Loans unless the
Redemption Price is sufficient to retire the Note Balance of the remaining
Notes
to zero. If the determination of the fair market value of the Mortgage Loans
and
REO Properties shall be required to be made by the Servicer and an Independent
appraiser as provided above, (A) such appraisal shall be obtained at no expense
to the Indenture Trustee and (B) the Indenture Trustee may conclusively rely
on,
and shall be protected in relying on, such appraisal.
(b) In
order
to exercise the foregoing option, the Servicer shall provide written notice
of
its exercise of such option to the Indenture Trustee and the Owner Trustee
at
least 15 days prior to its exercise. Following receipt of the notice, the
Indenture Trustee shall provide notice to the Noteholders of the final payment
on the Notes. In addition, the Servicer shall, not less than one Business Day
prior to the proposed Payment Date on which such redemption is to be made,
deposit the aggregate redemption price specified in (a) above with the Indenture
Trustee, who shall deposit the aggregate redemption price into the Payment
Account and shall, on the Payment Date after receipt of the funds, apply such
funds to make final payments of principal and interest on the Notes in
accordance with Section 3.05(b) and (c) hereof and payment in full to the
Indenture Trustee, and this Indenture shall be discharged subject to the
provisions of Section 4.10 hereof. If for any reason the amount deposited by
the
Servicer is not sufficient to make such redemption or such redemption cannot
be
completed for any reason, the amount so deposited by the Servicer with the
Indenture Trustee shall be immediately returned to the Servicer in full and
shall not be used for any other purpose or be deemed to be part of the Trust
Estate.
ARTICLE
IX
SUPPLEMENTAL
INDENTURES
Section
9.01. Supplemental
Indentures Without Consent of Noteholders.
(a) Without
the consent of the Holders of any Notes but with prior notice to the Rating
Agencies, the Issuing Entity and the Indenture Trustee, when authorized by
an
Issuing Entity Request, at any time and from time to time, may enter into one
or
more indentures supplemental hereto (which shall conform to the provisions
of
the TIA as in force at the date of the execution thereof), in form satisfactory
to the Indenture Trustee, for any of the following purposes:
(i) to
correct or amplify the description of any property at any time subject to the
lien of this Indenture, or better to assure, convey and confirm unto the
Indenture Trustee any property subject or required to be subjected to the lien
of this Indenture, or to subject to the lien of this Indenture additional
property;
(ii) to
evidence the succession, in compliance with the applicable provisions hereof,
of
another person to the Issuing Entity, and the assumption by any such successor
of the covenants of the Issuing Entity herein and in the Notes
contained;
(iii) to
add to
the covenants of the Issuing Entity, for the benefit of the Holders of the
Notes, or to surrender any right or power herein conferred upon the Issuing
Entity;
(iv) to
convey, transfer, assign, mortgage or pledge any property to or with the
Indenture Trustee;
(v) to
cure
any ambiguity, to correct or supplement any provision herein or in any
supplemental indenture that may be inconsistent with any other provision herein
or in any supplemental indenture;
(vi) to
make
any other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; provided, that such action (as
evidenced by either (i) an Opinion of Counsel delivered to the Servicer and
the
Indenture Trustee or (ii) confirmation from the Rating Agencies that such
amendment will not result in the reduction or withdrawal of the rating of any
Class of Notes) shall not materially and adversely affect the interests of
the
Holders of the Notes;
(vii) to
evidence and provide for the acceptance of the appointment hereunder by a
successor trustee with respect to the Notes and to add to or change any of
the
provisions of this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one trustee, pursuant to
the
requirements of Article VI hereof; or
(viii) to
modify, eliminate or add to the provisions of this Indenture to such extent
as
shall be necessary to effect the qualification of this Indenture under the
TIA
or under any similar federal statute hereafter enacted and to add to this
Indenture such other provisions as may be expressly required by the
TIA;
provided,
however,
that no
such indenture supplements shall be entered into unless the Indenture Trustee
shall have received an Opinion of Counsel as to the enforceability of any such
indenture supplement and to the effect that (i) such indenture supplement is
permitted hereunder and (ii) entering into such indenture supplement will not
result in a “substantial modification” of the Notes under Treasury Regulation
Section 1.1001-3 or adversely affect the status of the Notes as indebtedness
for
federal income tax purposes.
The
Indenture Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The
Issuing Entity and the Indenture Trustee, when authorized by an Issuing Entity
Request, may, also without the consent of any of the Holders of the Notes and
prior notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing
in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided,
however,
that
such action as evidenced by an Opinion of Counsel, (i) is permitted by this
Indenture, and shall not (ii) adversely affect in any material respect the
interests of any Noteholder (which may be evidenced by confirmation from the
Rating Agencies that such amendment will not result in the reduction or
withdrawal of the rating of any Class of Notes) or (iii) if 100% of the
Certificates are not owned by the Seller, cause the Issuing Entity to be subject
to an entity level tax for federal income tax purposes.
Section
9.02. Supplemental
Indentures With Consent of Noteholders.
The
Issuing Entity and the Indenture Trustee, when authorized by an Issuing Entity
Request, also may, with prior notice to the Rating Agencies and, with the
consent of the Holders of not less than a majority of the Note Balance of each
Class of Notes affected thereby, by Act (as defined in Section 10.03 hereof)
of
such Holders delivered to the Issuing Entity and the Indenture Trustee, enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided,
however,
that no
such supplemental indenture shall, without the consent of the Holder of each
Note affected thereby:
(i) change
the date of payment of any installment of principal of or interest on any Note,
or reduce the principal amount thereof or the interest rate thereon, change
the
provisions of this Indenture relating to the application of collections on,
or
the proceeds of the sale of, the Trust Estate to payment of principal of or
interest on the Notes, or change any place of payment where, or the coin or
currency in which, any Note or the interest thereon is payable, or impair the
right to institute suit for the enforcement of the provisions of this Indenture
requiring the application of funds available therefor, as provided in Article
V,
to the payment of any such amount due on the Notes on or after the respective
due dates thereof;
(ii) reduce
the percentage of the Note Balances of the Notes, the consent of the Holders
of
which is required for any such supplemental indenture, or the consent of the
Holders of which is required for any waiver of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences provided for in this Indenture;
(iii) modify
or
alter the provisions of the proviso to the definition of the term “Outstanding”
or modify or alter the exception in the definition of the term
“Holder”;
(iv) reduce
the percentage of the Note Balances of the Notes required to direct the
Indenture Trustee to direct the Issuing Entity to sell or liquidate the Trust
Estate pursuant to Section 5.04 hereof;
(v) modify
any provision of this Section 9.02 except to increase any percentage specified
herein or to provide that certain additional provisions of this Indenture or
the
Basic Documents cannot be modified or waived without the consent of the Holder
of each Note affected thereby;
(vi) modify
any of the provisions of this Indenture in such manner as to affect the
calculation of the amount of any payment of interest or principal due on any
Note on any Payment Date (including the calculation of any of the individual
components of such calculation); or
(vii) permit
the creation of any lien ranking prior to or on a parity with the lien of this
Indenture with respect to any part of the Trust Estate or, except as otherwise
permitted or contemplated herein, terminate the lien of this Indenture on any
property at any time subject hereto or deprive the Holder of any Note of the
security provided by the lien of this Indenture;
and
provided,
further,
that
such action shall not, as evidenced by an Opinion of Counsel, cause the Issuing
Entity (if 100% of the Certificates are not owned by the Seller) to be subject
to an entity level tax.
Any
such
action shall not (as evidenced by either (i) an Opinion of Counsel delivered
to
the Servicer and the Indenture Trustee or (ii) confirmation from the Rating
Agencies that such amendment will not result in the reduction or withdrawal
of
the rating of any Class of Notes) adversely affect in any material respect
the
interest of any Holder (other than a Holder who shall consent to such
supplemental indenture).
It
shall
not be necessary for any Act of Noteholders under this Section 9.02 to approve
the particular form of any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance thereof.
Promptly
after the execution by the Issuing Entity and the Indenture Trustee of any
supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Notes to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of
such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
Section
9.03. Execution
of Supplemental Indentures.
In
executing, or permitting the additional trusts created by, any supplemental
indenture permitted by this Article IX or the modification thereby of the trusts
created by this Indenture, the Indenture Trustee shall be entitled to receive,
and subject to Sections 6.01 and 6.02 hereof, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee’s own rights, duties,
liabilities or immunities under this Indenture or otherwise.
Section
9.04. Effect
of Supplemental Indenture.
Upon
the execution of any supplemental indenture pursuant to the provisions hereof,
this Indenture shall be and shall be deemed to be modified and amended in
accordance therewith with respect to the Notes affected thereby, and the
respective rights, limitations of rights, obligations, duties, liabilities
and
immunities under this Indenture of the Indenture Trustee, the Issuing Entity
and
the Holders of the Notes shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and
all
the terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and
all
purposes.
Section
9.05. Conformity
with Trust Indenture Act.
Every
amendment of this Indenture and every supplemental indenture executed pursuant
to this Article IX shall conform to the requirements of the Trust Indenture
Act
as then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
Section
9.06. Reference
in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuing Entity or the
Indenture Trustee shall so determine, new Notes so modified as to conform,
in
the opinion of the Indenture Trustee and the Issuing Entity, to any such
supplemental indenture may be prepared and executed by the Issuing Entity and
authenticated and delivered by the Indenture Trustee in exchange for Outstanding
Notes.
ARTICLE
X
MISCELLANEOUS
Section
10.01. Compliance
Certificates and Opinions, etc.
(a) Upon
any
application or request by the Issuing Entity to the Indenture Trustee to take
any action under any provision of this Indenture, the Issuing Entity shall
furnish to the Indenture Trustee (i) an Officer’s Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and (ii) an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any,
have
been complied with, except that, in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Indenture, no additional certificate or opinion need be
furnished.
Every
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(i) a
statement that each signatory of such certificate or opinion has read or has
caused to be read such covenant or condition and the definitions herein relating
thereto;
(ii) a
brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based;
(iii) a
statement that, in the opinion of each such signatory, such signatory has made
such examination or investigation as is necessary to enable such signatory
to
express an informed opinion as to whether or not such covenant or condition
has
been complied with;
(iv) a
statement as to whether, in the opinion of each such signatory, such condition
or covenant has been complied with; and
(v) if
the
signatory of such certificate or opinion is required to be Independent, the
statement required by the definition of the term “Independent
Certificate.”
(b) (i)
Prior
to the deposit of any Collateral or other property or securities with the
Indenture Trustee that is to be made the basis for the release of any property
or securities subject to the lien of this Indenture, the Issuing Entity shall,
in addition to any obligation imposed in Section 10.01(a) or elsewhere in this
Indenture, furnish to the Indenture Trustee an Officer’s Certificate certifying
or stating the opinion of each person signing such certificate as to the fair
value (within 90 days prior to such deposit) to the Issuing Entity of the
Collateral or other property or securities to be so deposited and a report
from
a nationally recognized accounting firm verifying such value.
(ii) Whenever
the Issuing Entity is required to furnish to the Indenture Trustee an Officer’s
Certificate certifying or stating the opinion of any signer thereof as to the
matters described in clause (i) above, the Issuing Entity shall also deliver
to
the Indenture Trustee an Independent Certificate from a nationally recognized
accounting firm as to the same matters, if the fair value of the securities
to
be so deposited and of all other such securities made the basis of any such
withdrawal or release since the commencement of the then current fiscal year
of
the Issuing Entity, as set forth in the certificates delivered pursuant to
clause (i) above and this clause (ii), is 10% or more of the Note Balances
of
the Notes, but such a certificate need not be furnished with respect to any
securities so deposited, if the fair value thereof as set forth in the related
Officer’s Certificate is less than $25,000 or less than one percent of the Note
Balances of the Notes.
(iii) Whenever
any property or securities are to be released from the lien of this Indenture,
the Issuing Entity shall also furnish to the Indenture Trustee an Officer’s
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days prior to such release) of
the
property or securities proposed to be released and stating that in the opinion
of such person the proposed release will not impair the security under this
Indenture in contravention of the provisions hereof.
(iv) Whenever
the Issuing Entity is required to furnish to the Indenture Trustee an Officer’s
Certificate certifying or stating the opinion of any signer thereof as to the
matters described in clause (iii) above, the Issuing Entity shall also furnish
to the Indenture Trustee an Independent Certificate as to the same matters
if
the fair value of the property or securities and of all other property or
securities released from the lien of this Indenture since the commencement
of
the then-current calendar year, as set forth in the certificates required by
clause (iii) above and this clause (iv), equals 10% or more of the Note
Principal Balances of the Notes, but such certificate need not be furnished
in
the case of any release of property or securities if the fair value thereof
as
set forth in the related Officer’s Certificate is less than $25,000 or less than
one percent of the then Note Principal Balances of the Notes.
Section
10.02. Form
of Documents Delivered to Indenture Trustee.
In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters
be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any
certificate or opinion of an Authorized Officer of the Issuing Entity may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of,
or representations by, counsel, unless such officer knows, or in the exercise
of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based
are
erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate
or
opinion of, or representations by, an officer or officers of the Seller or
the
Issuing Entity, stating that the information with respect to such factual
matters is in the possession of the Seller or the Issuing Entity, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where
any
Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this
Indenture, they may, but need not, be consolidated and form one
instrument.
Whenever
in this Indenture, in connection with any application or certificate or report
to the Indenture Trustee, it is provided that the Issuing Entity shall deliver
any document as a condition of the granting of such application, or as evidence
of the Issuing Entity’s compliance with any term hereof, it is intended that the
truth and accuracy, at the time of the granting of such application or at the
effective date of such certificate or report (as the case may be), of the facts
and opinions stated in such document shall in such case be conditions precedent
to the right of the Issuing Entity to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however,
be
construed to affect the Indenture Trustee’s right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
Section
10.03. Acts
of Noteholders.
(a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Noteholders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Noteholders in person or by agents duly appointed in
writing; and except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Indenture Trustee, and, where it is hereby expressly required, to the Issuing
Entity. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the “Act” of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01 hereof)
conclusive in favor of the Indenture Trustee and the Issuing Entity, if made
in
the manner provided in this Section 10.03 hereof.
(b) The
fact
and date of the execution by any person of any such instrument or writing may
be
proved in any manner that the Indenture Trustee deems sufficient.
(c) The
ownership of Notes shall be proved by the Note Registrar.
(d) Any
request, demand, authorization, direction, notice, consent, waiver or other
action by the Holder of any Notes shall bind the Holder of every Note issued
upon the registration thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuing Entity in reliance thereon, whether or not notation
of
such action is made upon such Note.
Section
10.04. Notices
etc., to Indenture Trustee Issuing Entity and Rating Agencies.
Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Noteholders or other documents provided or permitted by this Indenture shall
be
in writing and if such request, demand, authorization, direction, notice,
consent, waiver or act of Noteholders is to be made upon, given or furnished
to
or filed with:
(i) the
Indenture Trustee by any Noteholder or by the Issuing Entity shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to
or
with the Indenture Trustee at the Corporate Trust Office. The Indenture Trustee
shall promptly transmit any notice received by it from the Noteholders to the
Issuing Entity; or
(ii) the
Issuing Entity by the Indenture Trustee or by any Noteholder shall be sufficient
for every purpose hereunder if in writing and mailed first-class, postage
prepaid to the Issuing Entity addressed to: New Century Home Equity Loan Trust
2006-1, in care of Wilmington Trust Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust
Administration, or at any other address previously furnished in writing to
the
Indenture Trustee by the Issuing Entity. The Issuing Entity shall promptly
transmit any notice received by it from the Noteholders to the Indenture
Trustee.
Notices
required to be given to the Rating Agencies by the Issuing Entity, the Indenture
Trustee or the Owner Trustee shall be in writing, mailed first-class postage
pre-paid, to (i) in the case of Moody’s, at the following address: ▇▇▇▇▇’▇
Investors Service, Inc., Residential Mortgage Monitoring Department, ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (ii) in the case of S&P, at the following
address: Standard & Poor’s, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of Asset Backed Surveillance Department
and
(iii) in the case of Fitch Ratings, at the following address: Fitch Ratings,
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; or as to each of the foregoing,
at
such other address as shall be designated by written notice to the other
parties.
Section
10.05. Notices
to Noteholders; Waiver.
Where
this Indenture provides for notice to Noteholders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if
in
writing and mailed, first-class, postage prepaid to each Noteholder affected
by
such event, at such Person’s address as it appears on the Note Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Noteholders is given
by mail, neither the failure to mail such notice nor any defect in any notice
so
mailed to any particular Noteholder shall affect the sufficiency of such notice
with respect to other Noteholders, and any notice that is mailed in the manner
herein provided shall conclusively be presumed to have been duly given
regardless of whether such notice is in fact actually received.
Where
this Indenture provides for notice in any manner, such notice may be waived
in
writing by any Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers
of
notice by Noteholders shall be filed with the Indenture Trustee but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such a waiver.
In
case,
by reason of the suspension of regular mail service as a result of a strike,
work stoppage or similar activity, it shall be impractical to mail notice of
any
event to Noteholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall
be
satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving
of such notice.
Where
this Indenture provides for notice to the Rating Agencies, failure to give
such
notice shall not affect any other rights or obligations created hereunder,
and
shall not under any circumstance constitute an Event of Default.
Section
10.06. Conflict
with Trust Indenture Act.
If any
provision hereof limits, qualifies or conflicts with another provision hereof
that is required to be included in this Indenture by any of the provisions
of
the TIA, such required provision shall control.
The
provisions of TIA §§ 310 through 317 that impose duties on any Person (including
the provisions automatically deemed included herein unless expressly excluded
by
this Indenture) are a part of and govern this Indenture, whether or not
physically contained herein.
Section
10.07. Effect
of Headings.
The
Article and Section headings herein are for convenience only and shall not
affect the construction hereof.
Section
10.08. Successors
and Assigns. All
covenants and agreements in this Indenture and the Notes by the Issuing Entity
shall bind its successors and assigns, whether so expressed or not. All
agreements of the Indenture Trustee in this Indenture shall bind its successors,
co-trustees and agents.
Section
10.09. Separability.
In case
any provision in this Indenture or in the Notes shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section
10.10. [Reserved.]
Section
10.11. Legal
Holidays.
In any
case where the date on which any payment is due shall not be a Business Day,
then (notwithstanding any other provision of the Notes or this Indenture)
payment need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the date on which
nominally due, and no interest shall accrue for the period from and after any
such nominal date.
Section
10.12. GOVERNING
LAW. THIS
INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
Section
10.13. Counterparts.
This
Indenture may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
Section
10.14. Recording
of Indenture.
If this
Indenture is subject to recording in any appropriate public recording offices,
such recording is to be effected by the Issuing Entity and at its expense
accompanied by an Opinion of Counsel at its expense (which may be counsel to
the
Indenture Trustee or any other counsel reasonably acceptable to the Indenture
Trustee) to the effect that such recording is necessary either for the
protection of the Noteholders or any other Person secured hereunder or for
the
enforcement of any right or remedy granted to the Indenture Trustee under this
Indenture.
Section
10.15. Issuing
Entity Obligation. No
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuing Entity, the Owner Trustee or the Indenture Trustee on the Notes
or under this Indenture or any certificate or other writing delivered in
connection herewith or therewith, against (i) the Indenture Trustee or the
Owner
Trustee in its individual capacity, (ii) any owner of a beneficial interest
in
the Issuing Entity or (iii) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Indenture Trustee or the Owner Trustee in
its
individual capacity, any holder of a beneficial interest in the Issuing Entity,
the Owner Trustee or the Indenture Trustee or of any successor or assign of
the
Indenture Trustee or the Owner Trustee in its individual capacity, except as
any
such Person may have expressly agreed (it being understood that the Indenture
Trustee and the Owner Trustee have no such obligations in their individual
capacity) and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or
call
owing to such entity. For all purposes of this Indenture, in the performance
of
any duties or obligations of the Issuing Entity hereunder, the Owner Trustee
shall be subject to, and entitled to the benefits of, the terms and provisions
of Article VI, VII and VIII of the Trust Agreement.
Section
10.16. No
Petition. The
Indenture Trustee, by entering into this Indenture, and each Noteholder, by
accepting a Note, hereby covenant and agree that they will not at any time
prior
to one year from the date of termination hereof, institute against the Depositor
or the Issuing Entity, or join in any institution against the Depositor or
the
Issuing Entity of, any bankruptcy, reorganization, arrangement, insolvency
or
liquidation proceedings, or other proceedings under any United States federal
or
state bankruptcy or similar law in connection with any obligations relating
to
the Notes, this Indenture or any of the Basic Documents, except for filing
proofs of claim.
Section
10.17. Inspection.
The
Issuing Entity agrees that, at its expense, on reasonable prior notice, it
shall
permit any representative of the Indenture Trustee, during the Issuing Entity’s
normal business hours, to examine all the books of account, records, reports
and
other papers of the Issuing Entity, to make copies and extracts therefrom,
to
cause such books to be audited by Independent certified public accountants,
and
to discuss the Issuing Entity’s affairs, finances and accounts with the Issuing
Entity’s officers, employees, and Independent certified public accountants, all
at such reasonable times and as often as may be reasonably requested. The
Indenture Trustee shall cause its representatives to hold in confidence all
such
information except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except
to
the extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
Section
10.18. No
Recourse to Owner Trustee.
It is
expressly understood and agreed by the parties hereto that (a) this Indenture
is
executed and delivered by Wilmington Trust Company, not individually or
personally, but solely as Owner Trustee of New Century Home Equity Loan Trust
2006-1, in the exercise of the powers and authority conferred and vested in
it,
(b) each of the representations, undertakings and agreements herein made on
the
part of the Issuing Entity is made and intended not as personal representations,
undertakings and agreements by Wilmington Trust Company but is made and intended
for the purpose for binding only the Issuing Entity, (c) nothing herein
contained shall be construed as creating any liability of Wilmington Trust
Company, 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 (d) under no circumstances shall Wilmington Trust Company be
personally liable for the payment of any indebtedness or expenses of the Issuing
Entity or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Issuing Entity under this
Indenture or any other related documents.
Section
10.19. Proofs
of Claim.
The
Indenture Trustee is authorized to file such proofs of claim and other papers
or
documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel) and the Noteholders allowed in any judicial proceedings relative to
the
Issuing Entity (or any other obligor upon the Notes), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
any money or other property payable or deliverable on any such claims and any
custodian in any such judicial proceeding is hereby authorized by each
Noteholder to make such payments to the Indenture Trustee, as administrative
expenses associated with any such proceeding, and, in the event that the
Indenture Trustee shall consent to the making of such payments directly to
the
Noteholder to pay to the Indenture Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee, its agents and counsel, and any other amounts due to the Indenture
Trustee under Section 6.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Indenture Trustee,
its
agents and counsel, and any other amounts due the Indenture Trustee under
Section 6.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall
be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Noteholders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Noteholder of the rights of any Noteholder thereof, or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding.
IN
WITNESS WHEREOF, the Issuing Entity and the Indenture Trustee have caused their
names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
|
NEW
CENTURY HOME EQUITY LOAN TRUST, 2006-1, as Issuing
Entity
|
||||||||||||
|
By:
Wilmington Trust Company, not in its individual capacity but solely
as
Owner Trustee
|
||||||||||||
|
By:
|
/s/
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|||||||||||
|
Name:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
||||||||||||
|
Title:
Vice President
|
||||||||||||
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, as Indenture Trustee
|
||||||||||||
|
By:
|
/s/
▇▇▇▇ ▇▇▇▇▇▇▇
|
|||||||||||
|
Name:
▇▇▇▇ ▇▇▇▇▇▇▇
|
||||||||||||
|
Title:
Associate
|
||||||||||||
|
By:
|
/s/
▇▇▇▇▇▇▇
▇▇▇▇▇
|
||||||
|
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|||||||
|
Title:
Vice President
|
|
STATE
OF CALIFORNIA
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF ORANGE
|
)
|
On
this
28th day of March, 2006, before me personally appeared ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ to me
known, who being by me duly sworn, did depose and say, that (s)he is a Financial
Services Officer of the Owner Trustee, one of the corporations described in
and
which executed the above instrument; and that he signed his name thereto by
like
order.
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|
|
Notary
Public
|
|
|
NOTARY
PUBLIC
|
[NOTARIAL
SEAL]
|
STATE
OF DELAWARE
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF NEW CASTLE
|
)
|
On
this
28th day of March, 2006, before me personally appeared ▇▇▇▇ ▇▇▇▇▇▇▇ to me known,
who being by me duly sworn, did depose and say, that (s)he is an associate
and
▇▇▇▇▇▇▇ ▇▇▇▇ to me known, who being by me duly sworn, did depose and say, that
(s)he is a Vice President of the Indenture Trustee, one of the entities
described in and which executed the above instrument; and that she signed her
name thereto by like order.
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Notary
Public
|
|
|
NOTARY
PUBLIC
|
[NOTARIAL
SEAL]
EXHIBIT
A-1
FORM
OF
CLASS A-1 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE 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.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
NEW
CENTURY HOME EQUITY LOAN TRUST, 2006-1
ASSET-BACKED
NOTES, SERIES 2006-1
CLASS
A-1
|
AGGREGATE
NOTE BALANCE: $_____________________
|
NOTE
RATE: Variable
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $_____________________
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO.
[
]
|
New
Century Home Equity Loan Trust 2006-1 (the “Issuing Entity”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a “Payment Date”),
commencing in April 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
Series 2006-1 (the “Notes”), issued under an Indenture dated as of March 30,
2006 (the “Indenture”), between the Issuing Entity and Deutsche Bank National
Trust Company, as indenture trustee (the “Indenture Trustee”, which term
includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a
statement of the respective rights thereunder of the Issuing Entity, the
Indenture Trustee, and the Holders of the Notes and the terms upon which the
Notes are to be authenticated and delivered. All terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuing Entity with respect to this Note shall be equal
to
this Note’s pro
rata
share of
the aggregate payments on all Class A-1 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Servicer on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Class A-1 Notes, and
each Holder hereof, by its acceptance of this Note, agrees that (i) such Note
will be limited in right of payment to amounts available from the Trust Estate
as provided in the Indenture and (ii) such Holder shall have no recourse to
the
Issuing Entity, the Owner Trustee, the Indenture Trustee, the Seller, NC
Capital, the Servicer or any of their respective affiliates, or to the assets
of
any of the foregoing entities, except the assets of the Issuing Entity pledged
to secure the Class A-1 Notes pursuant to the Indenture and the rights conveyed
to the Issuing Entity under the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuing Entity maintained
by
it for such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuing Entity,
the
Seller, NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee,
the Servicer or any successor servicer which opines that the acquisition,
holding and transfer of this Note or interest herein is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Issuing Entity, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Servicer or any successor servicer
to
any obligation in addition to those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuing
Entity. Upon surrender for registration of transfer of, or presentation of
a
written instrument of transfer for, this Note at the office or agency designated
by the Issuing Entity pursuant to the Indenture, accompanied by proper
instruments of assignment in form satisfactory to the Indenture Trustee, one
or
more new Notes of any authorized denominations and of a like aggregate initial
Note Balance, will be issued to the designated transferee or
transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuing
Entity, the Indenture Trustee and any agent of the Issuing Entity or the
Indenture Trustee may treat the Person in whose name this Note is registered
as
the owner of such Note (i) on the applicable Record Date for the purpose of
making payments and interest of such Note and (ii) on any other date for all
other purposes whatsoever, as the owner hereof, whether or not this Note be
overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuing Entity
and the rights of the Holders of the Notes under the Indenture at any time
by
the Issuing Entity and the Holders of a majority of all Notes at the time
outstanding. The Indenture also contains provisions permitting the Holders
of
Notes representing specified percentages of the aggregate Note Balance of the
Notes on behalf of the Holders of all the Notes, to waive any past Default
under
the Indenture and its consequences. Any such waiver by the Holder, at the time
of the giving thereof, of this Note (or any one or more predecessor Notes)
shall
bind the Holder of every Note issued upon the registration of transfer hereof
or
in exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuing Entity
and
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
-
IN
WITNESS WHEREOF, the Issuing Entity has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated:
March ____, 2006
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
-
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
__________________________________________________________________________
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
__________________________________________________________________________
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above LIST.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
NUMBER
OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-2
FORM
OF
CLASS A-2A NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE 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.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
NEW
CENTURY HOME EQUITY LOAN TRUST, 2006-1
ASSET-BACKED
NOTES, SERIES 2006-1
CLASS
A-2A
|
AGGREGATE
NOTE BALANCE: $_____________________
|
NOTE
RATE: Variable
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $_____________________
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Home Equity Loan Trust 2006-1 (the “Issuing Entity”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a “Payment Date”),
commencing in April 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
Series 2006-1 (the “Notes”), issued under an Indenture dated as of March 30,
2006 (the “Indenture”), between the Issuing Entity and Deutsche Bank National
Trust Company, as indenture trustee (the “Indenture Trustee”, which term
includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a
statement of the respective rights thereunder of the Issuing Entity, the
Indenture Trustee, and the Holders of the Notes and the terms upon which the
Notes are to be authenticated and delivered. All terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuing Entity with respect to this Note shall be equal
to
this Note’s pro
rata
share of
the aggregate payments on all Class A-2a Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Servicer on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Class A-2a Notes, and
each Holder hereof, by its acceptance of this Note, agrees that (i) such Note
will be limited in right of payment to amounts available from the Trust Estate
as provided in the Indenture and (ii) such Holder shall have no recourse to
the
Issuing Entity, the Owner Trustee, the Indenture Trustee, the Seller, NC
Capital, the Servicer or any of their respective affiliates, or to the assets
of
any of the foregoing entities, except the assets of the Issuing Entity pledged
to secure the Class A-2a Notes pursuant to the Indenture and the rights conveyed
to the Issuing Entity under the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuing Entity maintained
by
it for such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuing Entity,
the
Seller, NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee,
the Servicer or any successor servicer which opines that the acquisition,
holding and transfer of this Note or interest herein is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Issuing Entity, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Servicer or any successor servicer
to
any obligation in addition to those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuing
Entity. Upon surrender for registration of transfer of, or presentation of
a
written instrument of transfer for, this Note at the office or agency designated
by the Issuing Entity pursuant to the Indenture, accompanied by proper
instruments of assignment in form satisfactory to the Indenture Trustee, one
or
more new Notes of any authorized denominations and of a like aggregate initial
Note Balance, will be issued to the designated transferee or
transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuing
Entity, the Indenture Trustee and any agent of the Issuing Entity or the
Indenture Trustee may treat the Person in whose name this Note is registered
as
the owner of such Note (i) on the applicable Record Date for the purpose of
making payments and interest of such Note and (ii) on any other date for all
other purposes whatsoever, as the owner hereof, whether or not this Note be
overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuing Entity
and the rights of the Holders of the Notes under the Indenture at any time
by
the Issuing Entity and the Holders of a majority of all Notes at the time
outstanding. The Indenture also contains provisions permitting the Holders
of
Notes representing specified percentages of the aggregate Note Balance of the
Notes on behalf of the Holders of all the Notes, to waive any past Default
under
the Indenture and its consequences. Any such waiver by the Holder, at the time
of the giving thereof, of this Note (or any one or more predecessor Notes)
shall
bind the Holder of every Note issued upon the registration of transfer hereof
or
in exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuing Entity
and
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuing Entity has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated:
March ____, 2006
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
____________________________________________________________________________
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
____________________________________________________________________________
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-3
FORM
OF
CLASS A-2B NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE 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.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
NEW
CENTURY HOME EQUITY LOAN TRUST, 2006-1
ASSET-BACKED
NOTES, SERIES 2006-1
CLASS
A-2B
|
AGGREGATE
NOTE BALANCE: $_____________________
|
NOTE
RATE: Variable
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $_____________________
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Home Equity Loan Trust 2006-1 (the “Issuing Entity”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a “Payment Date”),
commencing in April 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
Series 2006-1 (the “Notes”), issued under an Indenture dated as of March 30,
2006 (the “Indenture”), between the Issuing Entity and Deutsche Bank National
Trust Company, as indenture trustee (the “Indenture Trustee”, which term
includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a
statement of the respective rights thereunder of the Issuing Entity, the
Indenture Trustee, and the Holders of the Notes and the terms upon which the
Notes are to be authenticated and delivered. All terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuing Entity with respect to this Note shall be equal
to
this Note’s pro
rata
share of
the aggregate payments on all Class A-2b Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Servicer on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Class A-2b Notes, and
each Holder hereof, by its acceptance of this Note, agrees that (i) such Note
will be limited in right of payment to amounts available from the Trust Estate
as provided in the Indenture and (ii) such Holder shall have no recourse to
the
Issuing Entity, the Owner Trustee, the Indenture Trustee, the Seller, NC
Capital, the Servicer or any of their respective affiliates, or to the assets
of
any of the foregoing entities, except the assets of the Issuing Entity pledged
to secure the Class A-2b Notes pursuant to the Indenture and the rights conveyed
to the Issuing Entity under the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuing Entity maintained
by
it for such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuing Entity,
the
Seller, NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee,
the Servicer or any successor servicer which opines that the acquisition,
holding and transfer of this Note or interest herein is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Issuing Entity, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Servicer or any successor servicer
to
any obligation in addition to those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuing
Entity. Upon surrender for registration of transfer of, or presentation of
a
written instrument of transfer for, this Note at the office or agency designated
by the Issuing Entity pursuant to the Indenture, accompanied by proper
instruments of assignment in form satisfactory to the Indenture Trustee, one
or
more new Notes of any authorized denominations and of a like aggregate initial
Note Balance, will be issued to the designated transferee or
transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuing
Entity, the Indenture Trustee and any agent of the Issuing Entity or the
Indenture Trustee may treat the Person in whose name this Note is registered
as
the owner of such Note (i) on the applicable Record Date for the purpose of
making payments and interest of such Note and (ii) on any other date for all
other purposes whatsoever, as the owner hereof, whether or not this Note be
overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuing Entity
and the rights of the Holders of the Notes under the Indenture at any time
by
the Issuing Entity and the Holders of a majority of all Notes at the time
outstanding. The Indenture also contains provisions permitting the Holders
of
Notes representing specified percentages of the aggregate Note Balance of the
Notes on behalf of the Holders of all the Notes, to waive any past Default
under
the Indenture and its consequences. Any such waiver by the Holder, at the time
of the giving thereof, of this Note (or any one or more predecessor Notes)
shall
bind the Holder of every Note issued upon the registration of transfer hereof
or
in exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuing Entity
and
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuing Entity has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated:
March ____, 2006
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
_____________________________________________________________________________
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
_____________________________________________________________________________
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-4
FORM
OF
CLASS A-2C NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE 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.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
NEW
CENTURY HOME EQUITY LOAN TRUST, 2006-1
ASSET-BACKED
NOTES, SERIES 2006-1
CLASS
A-2C
|
AGGREGATE
NOTE BALANCE: $_____________________
|
NOTE
RATE: Variable
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $_____________________
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Home Equity Loan Trust 2006-1 (the “Issuing Entity”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a “Payment Date”),
commencing in April 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
Series 2006-1 (the “Notes”), issued under an Indenture dated as of March 30,
2006 (the “Indenture”), between the Issuing Entity and Deutsche Bank National
Trust Company, as indenture trustee (the “Indenture Trustee”, which term
includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a
statement of the respective rights thereunder of the Issuing Entity, the
Indenture Trustee, and the Holders of the Notes and the terms upon which the
Notes are to be authenticated and delivered. All terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuing Entity with respect to this Note shall be equal
to
this Note’s pro
rata
share of
the aggregate payments on all Class A-2c Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Servicer on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Class A-2c Notes, and
each Holder hereof, by its acceptance of this Note, agrees that (i) such Note
will be limited in right of payment to amounts available from the Trust Estate
as provided in the Indenture and (ii) such Holder shall have no recourse to
the
Issuing Entity, the Owner Trustee, the Indenture Trustee, the Seller, NC
Capital, the Servicer or any of their respective affiliates, or to the assets
of
any of the foregoing entities, except the assets of the Issuing Entity pledged
to secure the Class A-2c Notes pursuant to the Indenture and the rights conveyed
to the Issuing Entity under the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
▇▇▇▇▇▇. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuing Entity maintained
by
it for such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuing Entity,
the
Seller, NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee,
the Servicer or any successor servicer which opines that the acquisition,
holding and transfer of this Note or interest herein is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Issuing Entity, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Servicer or any successor servicer
to
any obligation in addition to those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuing
Entity. Upon surrender for registration of transfer of, or presentation of
a
written instrument of transfer for, this Note at the office or agency designated
by the Issuing Entity pursuant to the Indenture, accompanied by proper
instruments of assignment in form satisfactory to the Indenture Trustee, one
or
more new Notes of any authorized denominations and of a like aggregate initial
Note Balance, will be issued to the designated transferee or
transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuing
Entity, the Indenture Trustee and any agent of the Issuing Entity or the
Indenture Trustee may treat the Person in whose name this Note is registered
as
the owner of such Note (i) on the applicable Record Date for the purpose of
making payments and interest of such Note and (ii) on any other date for all
other purposes whatsoever, as the owner hereof, whether or not this Note be
overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuing Entity
and the rights of the Holders of the Notes under the Indenture at any time
by
the Issuing Entity and the Holders of a majority of all Notes at the time
outstanding. The Indenture also contains provisions permitting the Holders
of
Notes representing specified percentages of the aggregate Note Balance of the
Notes on behalf of the Holders of all the Notes, to waive any past Default
under
the Indenture and its consequences. Any such waiver by the Holder, at the time
of the giving thereof, of this Note (or any one or more predecessor Notes)
shall
bind the Holder of every Note issued upon the registration of transfer hereof
or
in exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuing Entity
and
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuing Entity has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated:
March ____, 2006
|
NEW
CENTURY HOME EQUITY LOAN TRUST 2006-1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
_____________________________________________________________________________
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
_____________________________________________________________________________
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-5
FORM
OF
CLASS M-1 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE 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.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THIS
NOTE
IS SUBORDINATE TO THE CLASS A NOTES TO THE EXTENT DESCRIBED IN THE INDENTURE
REFERRED TO HEREIN.
NEW
CENTURY HOME EQUITY LOAN TRUST, 2006-1
ASSET-BACKED
NOTES, SERIES 2006-1
CLASS
M-1
|
AGGREGATE
NOTE BALANCE: $_____________________
|
NOTE
RATE: Variable
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $_____________________
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Home Equity Loan Trust 2006-1 (the “Issuing Entity”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a “Payment Date”),
commencing in April 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
Series 2006-1 (the “Notes”), issued under an Indenture dated as of March 30,
2006 (the “Indenture”), between the Issuing Entity and Deutsche Bank National
Trust Company, as indenture trustee (the “Indenture Trustee”, which term
includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a
statement of the respective rights thereunder of the Issuing Entity, the
Indenture Trustee, and the Holders of the Notes and the terms upon which the
Notes are to be authenticated and delivered. All terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuing Entity with respect to this Note shall be equal
to
this Note’s pro
rata
share of
the aggregate payments on all Class M-1 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Servicer on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Class M-1 Notes, and
each Holder hereof, by its acceptance of this Note, agrees that (i) such Note
will be limited in right of payment to amounts available from the Trust Estate
as provided in the Indenture and (ii) such Holder shall have no recourse to
the
Issuing Entity, the Owner Trustee, the Indenture Trustee, the Seller, NC
Capital, the Servicer or any of their respective affiliates, or to the assets
of
any of the foregoing entities, except the assets of the Issuing Entity pledged
to secure the Class M-1 Notes pursuant to the Indenture and the rights conveyed
to the Issuing Entity under the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuing Entity maintained
by
it for such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuing Entity,
the
Seller, NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee,
the Servicer or any successor servicer which opines that the acquisition,
holding and transfer of this Note or interest herein is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Issuing Entity, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Servicer or any successor servicer
to
any obligation in addition to those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuing
Entity. Upon surrender for registration of transfer of, or presentation of
a
written instrument of transfer for, this Note at the office or agency designated
by the Issuing Entity pursuant to the Indenture, accompanied by proper
instruments of assignment in form satisfactory to the Indenture Trustee, one
or
more new Notes of any authorized denominations and of a like aggregate initial
Note Balance, will be issued to the designated transferee or
transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuing
Entity, the Indenture Trustee and any agent of the Issuing Entity or the
Indenture Trustee may treat the Person in whose name this Note is registered
as
the owner of such Note (i) on the applicable Record Date for the purpose of
making payments and interest of such Note and (ii) on any other date for all
other purposes whatsoever, as the owner hereof, whether or not this Note be
overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuing Entity
and the rights of the Holders of the Notes under the Indenture at any time
by
the Issuing Entity and the Holders of a majority of all Notes at the time
outstanding. The Indenture also contains provisions permitting the Holders
of
Notes representing specified percentages of the aggregate Note Balance of the
Notes on behalf of the Holders of all the Notes, to waive any past Default
under
the Indenture and its consequences. Any such waiver by the Holder, at the time
of the giving thereof, of this Note (or any one or more predecessor Notes)
shall
bind the Holder of every Note issued upon the registration of transfer hereof
or
in exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuing Entity
and
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuing Entity has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated:
March ____, 2006
|
NEW
CENTURY HOME EQUITY LOAN TRUST 2006-1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
_____________________________________________________________________________
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
_____________________________________________________________________________
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-6
FORM
OF
CLASS M-2 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE 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.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THIS
NOTE
IS SUBORDINATE TO THE CLASS A NOTES AND THE CLASS M-1 NOTES TO THE EXTENT
DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
NEW
CENTURY HOME EQUITY LOAN TRUST, 2006-1
ASSET-BACKED
NOTES, SERIES 2006-1
CLASS
M-2
|
AGGREGATE
NOTE BALANCE: $_____________________
|
NOTE
RATE: Variable
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $_____________________
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Home Equity Loan Trust 2006-1 (the “Issuing Entity”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a “Payment Date”),
commencing in April 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
Series 2006-1 (the “Notes”), issued under an Indenture dated as of March 30,
2006 (the “Indenture”), between the Issuing Entity and Deutsche Bank National
Trust Company, as indenture trustee (the “Indenture Trustee”, which term
includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a
statement of the respective rights thereunder of the Issuing Entity, the
Indenture Trustee, and the Holders of the Notes and the terms upon which the
Notes are to be authenticated and delivered. All terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuing Entity with respect to this Note shall be equal
to
this Note’s pro
rata
share of
the aggregate payments on all Class M-2 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Servicer on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Class M-2 Notes, and
each Holder hereof, by its acceptance of this Note, agrees that (i) such Note
will be limited in right of payment to amounts available from the Trust Estate
as provided in the Indenture and (ii) such Holder shall have no recourse to
the
Issuing Entity, the Owner Trustee, the Indenture Trustee, the Seller, NC
Capital, the Servicer or any of their respective affiliates, or to the assets
of
any of the foregoing entities, except the assets of the Issuing Entity pledged
to secure the Class M-2 Notes pursuant to the Indenture and the rights conveyed
to the Issuing Entity under the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuing Entity maintained
by
it for such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuing Entity,
the
Seller, NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee,
the Servicer or any successor servicer which opines that the acquisition,
holding and transfer of this Note or interest herein is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Issuing Entity, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Servicer or any successor servicer
to
any obligation in addition to those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuing
Entity. Upon surrender for registration of transfer of, or presentation of
a
written instrument of transfer for, this Note at the office or agency designated
by the Issuing Entity pursuant to the Indenture, accompanied by proper
instruments of assignment in form satisfactory to the Indenture Trustee, one
or
more new Notes of any authorized denominations and of a like aggregate initial
Note Balance, will be issued to the designated transferee or
transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuing
Entity, the Indenture Trustee and any agent of the Issuing Entity or the
Indenture Trustee may treat the Person in whose name this Note is registered
as
the owner of such Note (i) on the applicable Record Date for the purpose of
making payments and interest of such Note and (ii) on any other date for all
other purposes whatsoever, as the owner hereof, whether or not this Note be
overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuing Entity
and the rights of the Holders of the Notes under the Indenture at any time
by
the Issuing Entity and the Holders of a majority of all Notes at the time
outstanding. The Indenture also contains provisions permitting the Holders
of
Notes representing specified percentages of the aggregate Note Balance of the
Notes on behalf of the Holders of all the Notes, to waive any past Default
under
the Indenture and its consequences. Any such waiver by the Holder, at the time
of the giving thereof, of this Note (or any one or more predecessor Notes)
shall
bind the Holder of every Note issued upon the registration of transfer hereof
or
in exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuing Entity
and
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuing Entity has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated:
March ____, 2006
|
NEW
CENTURY HOME EQUITY LOAN TRUST 2006-1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
___________________________________________________________________________
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
___________________________________________________________________________
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-7
FORM
OF
CLASS M-3 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE 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.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THIS
NOTE
IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES AND THE CLASS M-2
NOTES
TO THE EXTENT DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
NEW
CENTURY HOME EQUITY LOAN TRUST, 2006-1
ASSET-BACKED
NOTES, SERIES 2006-1
CLASS
M-3
|
AGGREGATE
NOTE BALANCE: $_____________________
|
NOTE
RATE: Variable
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $_____________________
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Home Equity Loan Trust 2006-1 (the “Issuing Entity”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a “Payment Date”),
commencing in April 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
Series 2006-1 (the “Notes”), issued under an Indenture dated as of March 30,
2006 (the “Indenture”), between the Issuing Entity and Deutsche Bank National
Trust Company, as indenture trustee (the “Indenture Trustee”, which term
includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a
statement of the respective rights thereunder of the Issuing Entity, the
Indenture Trustee, and the Holders of the Notes and the terms upon which the
Notes are to be authenticated and delivered. All terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuing Entity with respect to this Note shall be equal
to
this Note’s pro
rata
share of
the aggregate payments on all Class M-3 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Servicer on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Class M-3 Notes, and
each Holder hereof, by its acceptance of this Note, agrees that (i) such Note
will be limited in right of payment to amounts available from the Trust Estate
as provided in the Indenture and (ii) such Holder shall have no recourse to
the
Issuing Entity, the Owner Trustee, the Indenture Trustee, the Seller, NC
Capital, the Servicer or any of their respective affiliates, or to the assets
of
any of the foregoing entities, except the assets of the Issuing Entity pledged
to secure the Class M-3 Notes pursuant to the Indenture and the rights conveyed
to the Issuing Entity under the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuing Entity maintained
by
it for such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuing Entity,
the
Seller, NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee,
the Servicer or any successor servicer which opines that the acquisition,
holding and transfer of this Note or interest herein is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Issuing Entity, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Servicer or any successor servicer
to
any obligation in addition to those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuing
Entity. Upon surrender for registration of transfer of, or presentation of
a
written instrument of transfer for, this Note at the office or agency designated
by the Issuing Entity pursuant to the Indenture, accompanied by proper
instruments of assignment in form satisfactory to the Indenture Trustee, one
or
more new Notes of any authorized denominations and of a like aggregate initial
Note Balance, will be issued to the designated transferee or
transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuing
Entity, the Indenture Trustee and any agent of the Issuing Entity or the
Indenture Trustee may treat the Person in whose name this Note is registered
as
the owner of such Note (i) on the applicable Record Date for the purpose of
making payments and interest of such Note and (ii) on any other date for all
other purposes whatsoever, as the owner hereof, whether or not this Note be
overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuing Entity
and the rights of the Holders of the Notes under the Indenture at any time
by
the Issuing Entity and the Holders of a majority of all Notes at the time
outstanding. The Indenture also contains provisions permitting the Holders
of
Notes representing specified percentages of the aggregate Note Balance of the
Notes on behalf of the Holders of all the Notes, to waive any past Default
under
the Indenture and its consequences. Any such waiver by the Holder, at the time
of the giving thereof, of this Note (or any one or more predecessor Notes)
shall
bind the Holder of every Note issued upon the registration of transfer hereof
or
in exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuing Entity
and
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuing Entity has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated:
March ____, 2006
|
NEW
CENTURY HOME EQUITY LOAN TRUST 2006-1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
____________________________________________________________________________
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
____________________________________________________________________________
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-8
FORM
OF
CLASS M-4 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE 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.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THIS
NOTE
IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES, THE CLASS M-2 NOTES
AND THE CLASS M-3 NOTES TO THE EXTENT DESCRIBED IN THE INDENTURE REFERRED TO
HEREIN.
NEW
CENTURY HOME EQUITY LOAN TRUST, 2006-1
ASSET-BACKED
NOTES, SERIES 2006-1
CLASS
M-4
|
AGGREGATE
NOTE BALANCE: $_____________________
|
NOTE
RATE: Variable
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $_____________________
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Home Equity Loan Trust 2006-1 (the “Issuing Entity”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a “Payment Date”),
commencing in April 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
Series 2006-1 (the “Notes”), issued under an Indenture dated as of March 30,
2006 (the “Indenture”), between the Issuing Entity and Deutsche Bank National
Trust Company, as indenture trustee (the “Indenture Trustee”, which term
includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a
statement of the respective rights thereunder of the Issuing Entity, the
Indenture Trustee, and the Holders of the Notes and the terms upon which the
Notes are to be authenticated and delivered. All terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuing Entity with respect to this Note shall be equal
to
this Note’s pro
rata
share of
the aggregate payments on all Class M-4 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Servicer on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Class M-4 Notes, and
each Holder hereof, by its acceptance of this Note, agrees that (i) such Note
will be limited in right of payment to amounts available from the Trust Estate
as provided in the Indenture and (ii) such Holder shall have no recourse to
the
Issuing Entity, the Owner Trustee, the Indenture Trustee, the Seller, NC
Capital, the Servicer or any of their respective affiliates, or to the assets
of
any of the foregoing entities, except the assets of the Issuing Entity pledged
to secure the Class M-4 Notes pursuant to the Indenture and the rights conveyed
to the Issuing Entity under the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuing Entity maintained
by
it for such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuing Entity,
the
Seller, NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee,
the Servicer or any successor servicer which opines that the acquisition,
holding and transfer of this Note or interest herein is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Issuing Entity, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Servicer or any successor servicer
to
any obligation in addition to those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuing
Entity. Upon surrender for registration of transfer of, or presentation of
a
written instrument of transfer for, this Note at the office or agency designated
by the Issuing Entity pursuant to the Indenture, accompanied by proper
instruments of assignment in form satisfactory to the Indenture Trustee, one
or
more new Notes of any authorized denominations and of a like aggregate initial
Note Balance, will be issued to the designated transferee or
transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuing
Entity, the Indenture Trustee and any agent of the Issuing Entity or the
Indenture Trustee may treat the Person in whose name this Note is registered
as
the owner of such Note (i) on the applicable Record Date for the purpose of
making payments and interest of such Note and (ii) on any other date for all
other purposes whatsoever, as the owner hereof, whether or not this Note be
overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuing Entity
and the rights of the Holders of the Notes under the Indenture at any time
by
the Issuing Entity and the Holders of a majority of all Notes at the time
outstanding. The Indenture also contains provisions permitting the Holders
of
Notes representing specified percentages of the aggregate Note Balance of the
Notes on behalf of the Holders of all the Notes, to waive any past Default
under
the Indenture and its consequences. Any such waiver by the Holder, at the time
of the giving thereof, of this Note (or any one or more predecessor Notes)
shall
bind the Holder of every Note issued upon the registration of transfer hereof
or
in exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuing Entity
and
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
A-8-
IN
WITNESS WHEREOF, the Issuing Entity has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated:
March ____, 2006
|
NEW
CENTURY HOME EQUITY LOAN TRUST 2006-1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
____________________________________________________________________________
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
____________________________________________________________________________
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-9
FORM
OF
CLASS M-5 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE 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.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THIS
NOTE
IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES, THE CLASS M-2 NOTES,
THE CLASS M-3 NOTES AND THE CLASS M-4 NOTES TO THE EXTENT DESCRIBED IN THE
INDENTURE REFERRED TO HEREIN.
NEW
CENTURY HOME EQUITY LOAN TRUST, 2006-1
ASSET-BACKED
NOTES, SERIES 2006-1
CLASS
M-5
|
AGGREGATE
NOTE BALANCE: $_____________________
|
NOTE
RATE: Variable
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $_____________________
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Home Equity Loan Trust 2006-1 (the “Issuing Entity”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a “Payment Date”),
commencing in April 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
Series 2006-1 (the “Notes”), issued under an Indenture dated as of March 30,
2006 (the “Indenture”), between the Issuing Entity and Deutsche Bank National
Trust Company, as indenture trustee (the “Indenture Trustee”, which term
includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a
statement of the respective rights thereunder of the Issuing Entity, the
Indenture Trustee, and the Holders of the Notes and the terms upon which the
Notes are to be authenticated and delivered. All terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuing Entity with respect to this Note shall be equal
to
this Note’s pro
rata
share of
the aggregate payments on all Class M-5 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Servicer on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Class M-5 Notes, and
each Holder hereof, by its acceptance of this Note, agrees that (i) such Note
will be limited in right of payment to amounts available from the Trust Estate
as provided in the Indenture and (ii) such Holder shall have no recourse to
the
Issuing Entity, the Owner Trustee, the Indenture Trustee, the Seller, NC
Capital, the Servicer or any of their respective affiliates, or to the assets
of
any of the foregoing entities, except the assets of the Issuing Entity pledged
to secure the Class M-5 Notes pursuant to the Indenture and the rights conveyed
to the Issuing Entity under the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuing Entity maintained
by
it for such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuing Entity,
the
Seller, NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee,
the Servicer or any successor servicer which opines that the acquisition,
holding and transfer of this Note or interest herein is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Issuing Entity, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Servicer or any successor servicer
to
any obligation in addition to those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuing
Entity. Upon surrender for registration of transfer of, or presentation of
a
written instrument of transfer for, this Note at the office or agency designated
by the Issuing Entity pursuant to the Indenture, accompanied by proper
instruments of assignment in form satisfactory to the Indenture Trustee, one
or
more new Notes of any authorized denominations and of a like aggregate initial
Note Balance, will be issued to the designated transferee or
transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuing
Entity, the Indenture Trustee and any agent of the Issuing Entity or the
Indenture Trustee may treat the Person in whose name this Note is registered
as
the owner of such Note (i) on the applicable Record Date for the purpose of
making payments and interest of such Note and (ii) on any other date for all
other purposes whatsoever, as the owner hereof, whether or not this Note be
overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuing Entity
and the rights of the Holders of the Notes under the Indenture at any time
by
the Issuing Entity and the Holders of a majority of all Notes at the time
outstanding. The Indenture also contains provisions permitting the Holders
of
Notes representing specified percentages of the aggregate Note Balance of the
Notes on behalf of the Holders of all the Notes, to waive any past Default
under
the Indenture and its consequences. Any such waiver by the Holder, at the time
of the giving thereof, of this Note (or any one or more predecessor Notes)
shall
bind the Holder of every Note issued upon the registration of transfer hereof
or
in exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuing Entity
and
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuing Entity has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated:
March ____, 2006
|
NEW
CENTURY HOME EQUITY LOAN TRUST 2006-1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
_________________________________________________________________________
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
_________________________________________________________________________
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-10
FORM
OF
CLASS M-6 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE 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.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THIS
NOTE
IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES, THE CLASS M-2 NOTES,
THE CLASS M-3 NOTES, THE CLASS M-4 NOTES AND THE CLASS M-5 NOTES TO THE EXTENT
DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
NEW
CENTURY HOME EQUITY LOAN TRUST, 2006-1
ASSET-BACKED
NOTES, SERIES 2006-1
CLASS
M-6
|
AGGREGATE
NOTE BALANCE: $_____________________
|
NOTE
RATE: Variable
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $_____________________
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Home Equity Loan Trust 2006-1 (the “Issuing Entity”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a “Payment Date”),
commencing in April 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
Series 2006-1 (the “Notes”), issued under an Indenture dated as of March 30,
2006 (the “Indenture”), between the Issuing Entity and Deutsche Bank National
Trust Company, as indenture trustee (the “Indenture Trustee”, which term
includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a
statement of the respective rights thereunder of the Issuing Entity, the
Indenture Trustee, and the Holders of the Notes and the terms upon which the
Notes are to be authenticated and delivered. All terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuing Entity with respect to this Note shall be equal
to
this Note’s pro
rata
share of
the aggregate payments on all Class M-6 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Servicer on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Class M-6 Notes, and
each Holder hereof, by its acceptance of this Note, agrees that (i) such Note
will be limited in right of payment to amounts available from the Trust Estate
as provided in the Indenture and (ii) such Holder shall have no recourse to
the
Issuing Entity, the Owner Trustee, the Indenture Trustee, the Seller, NC
Capital, the Servicer or any of their respective affiliates, or to the assets
of
any of the foregoing entities, except the assets of the Issuing Entity pledged
to secure the Class M-6 Notes pursuant to the Indenture and the rights conveyed
to the Issuing Entity under the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuing Entity maintained
by
it for such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuing Entity,
the
Seller, NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee,
the Servicer or any successor servicer which opines that the acquisition,
holding and transfer of this Note or interest herein is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Issuing Entity, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Servicer or any successor servicer
to
any obligation in addition to those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuing
Entity. Upon surrender for registration of transfer of, or presentation of
a
written instrument of transfer for, this Note at the office or agency designated
by the Issuing Entity pursuant to the Indenture, accompanied by proper
instruments of assignment in form satisfactory to the Indenture Trustee, one
or
more new Notes of any authorized denominations and of a like aggregate initial
Note Balance, will be issued to the designated transferee or
transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuing
Entity, the Indenture Trustee and any agent of the Issuing Entity or the
Indenture Trustee may treat the Person in whose name this Note is registered
as
the owner of such Note (i) on the applicable Record Date for the purpose of
making payments and interest of such Note and (ii) on any other date for all
other purposes whatsoever, as the owner hereof, whether or not this Note be
overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuing Entity
and the rights of the Holders of the Notes under the Indenture at any time
by
the Issuing Entity and the Holders of a majority of all Notes at the time
outstanding. The Indenture also contains provisions permitting the Holders
of
Notes representing specified percentages of the aggregate Note Balance of the
Notes on behalf of the Holders of all the Notes, to waive any past Default
under
the Indenture and its consequences. Any such waiver by the Holder, at the time
of the giving thereof, of this Note (or any one or more predecessor Notes)
shall
bind the Holder of every Note issued upon the registration of transfer hereof
or
in exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuing Entity
and
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuing Entity has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated:
March ____, 2006
|
NEW
CENTURY HOME EQUITY LOAN TRUST 2006-1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
___________________________________________________________________________
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
___________________________________________________________________________
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-11
FORM
OF
CLASS M-7 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE 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.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THIS
NOTE
IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES, THE CLASS M-2 NOTES,
THE CLASS M-3 NOTES, THE CLASS M-4 NOTES, THE CLASS M-5 NOTES AND THE CLASS
M-6
NOTES TO THE EXTENT DESCRIBED IN THE INDENTURE REFERRED TO
HEREIN.
NEW
CENTURY HOME EQUITY LOAN TRUST, 2006-1
ASSET-BACKED
NOTES, SERIES 2006-1
CLASS
M-7
|
AGGREGATE
NOTE BALANCE: $_____________________
|
NOTE
RATE: Variable
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $_____________________
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Home Equity Loan Trust 2006-1 (the “Issuing Entity”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a “Payment Date”),
commencing in April 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
Series 2006-1 (the “Notes”), issued under an Indenture dated as of March 30,
2006 (the “Indenture”), between the Issuing Entity and Deutsche Bank National
Trust Company, as indenture trustee (the “Indenture Trustee”, which term
includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a
statement of the respective rights thereunder of the Issuing Entity, the
Indenture Trustee, and the Holders of the Notes and the terms upon which the
Notes are to be authenticated and delivered. All terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuing Entity with respect to this Note shall be equal
to
this Note’s pro
rata
share of
the aggregate payments on all Class M-7 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Servicer on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Class M-7 Notes, and
each Holder hereof, by its acceptance of this Note, agrees that (i) such Note
will be limited in right of payment to amounts available from the Trust Estate
as provided in the Indenture and (ii) such Holder shall have no recourse to
the
Issuing Entity, the Owner Trustee, the Indenture Trustee, the Seller, NC
Capital, the Servicer or any of their respective affiliates, or to the assets
of
any of the foregoing entities, except the assets of the Issuing Entity pledged
to secure the Class M-7 Notes pursuant to the Indenture and the rights conveyed
to the Issuing Entity under the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuing Entity maintained
by
it for such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuing Entity,
the
Seller, NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee,
the Servicer or any successor servicer which opines that the acquisition,
holding and transfer of this Note or interest herein is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Issuing Entity, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Servicer or any successor servicer
to
any obligation in addition to those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuing
Entity. Upon surrender for registration of transfer of, or presentation of
a
written instrument of transfer for, this Note at the office or agency designated
by the Issuing Entity pursuant to the Indenture, accompanied by proper
instruments of assignment in form satisfactory to the Indenture Trustee, one
or
more new Notes of any authorized denominations and of a like aggregate initial
Note Balance, will be issued to the designated transferee or
transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuing
Entity, the Indenture Trustee and any agent of the Issuing Entity or the
Indenture Trustee may treat the Person in whose name this Note is registered
as
the owner of such Note (i) on the applicable Record Date for the purpose of
making payments and interest of such Note and (ii) on any other date for all
other purposes whatsoever, as the owner hereof, whether or not this Note be
overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuing Entity
and the rights of the Holders of the Notes under the Indenture at any time
by
the Issuing Entity and the Holders of a majority of all Notes at the time
outstanding. The Indenture also contains provisions permitting the Holders
of
Notes representing specified percentages of the aggregate Note Balance of the
Notes on behalf of the Holders of all the Notes, to waive any past Default
under
the Indenture and its consequences. Any such waiver by the Holder, at the time
of the giving thereof, of this Note (or any one or more predecessor Notes)
shall
bind the Holder of every Note issued upon the registration of transfer hereof
or
in exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuing Entity
and
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN
THE
INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE
SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW
YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuing Entity has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated:
March ____, 2006
|
NEW
CENTURY HOME EQUITY LOAN TRUST 2006-1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
___________________________________________________________________________
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
___________________________________________________________________________
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-12
FORM
OF
CLASS M-8 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE 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.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THIS
NOTE
IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES, THE CLASS M-2 NOTES,
THE CLASS M-3 NOTES, THE CLASS M-4 NOTES, THE CLASS M-5 NOTES, THE CLASS M-6
NOTES AND THE CLASS M-7 NOTES TO THE EXTENT DESCRIBED IN THE INDENTURE REFERRED
TO HEREIN.
NEW
CENTURY HOME EQUITY LOAN TRUST, 2006-1
ASSET-BACKED
NOTES, SERIES 2006-1
CLASS
M-8
|
AGGREGATE
NOTE BALANCE: $_____________________
|
NOTE
RATE: Variable
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $_____________________
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Home Equity Loan Trust 2006-1 (the “Issuing Entity”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a “Payment Date”),
commencing in April 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
Series 2006-1 (the “Notes”), issued under an Indenture dated as of March 30,
2006 (the “Indenture”), between the Issuing Entity and Deutsche Bank National
Trust Company, as indenture trustee (the “Indenture Trustee”, which term
includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a
statement of the respective rights thereunder of the Issuing Entity, the
Indenture Trustee, and the Holders of the Notes and the terms upon which the
Notes are to be authenticated and delivered. All terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuing Entity with respect to this Note shall be equal
to
this Note’s pro
rata
share of
the aggregate payments on all Class M-8 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Servicer on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Class M-8 Notes, and
each Holder hereof, by its acceptance of this Note, agrees that (i) such Note
will be limited in right of payment to amounts available from the Trust Estate
as provided in the Indenture and (ii) such Holder shall have no recourse to
the
Issuing Entity, the Owner Trustee, the Indenture Trustee, the Seller, NC
Capital, the Servicer or any of their respective affiliates, or to the assets
of
any of the foregoing entities, except the assets of the Issuing Entity pledged
to secure the Class M-8 Notes pursuant to the Indenture and the rights conveyed
to the Issuing Entity under the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuing Entity maintained
by
it for such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuing Entity,
the
Seller, NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee,
the Servicer or any successor servicer which opines that the acquisition,
holding and transfer of this Note or interest herein is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Issuing Entity, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Servicer or any successor servicer
to
any obligation in addition to those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuing
Entity. Upon surrender for registration of transfer of, or presentation of
a
written instrument of transfer for, this Note at the office or agency designated
by the Issuing Entity pursuant to the Indenture, accompanied by proper
instruments of assignment in form satisfactory to the Indenture Trustee, one
or
more new Notes of any authorized denominations and of a like aggregate initial
Note Balance, will be issued to the designated transferee or
transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuing
Entity, the Indenture Trustee and any agent of the Issuing Entity or the
Indenture Trustee may treat the Person in whose name this Note is registered
as
the owner of such Note (i) on the applicable Record Date for the purpose of
making payments and interest of such Note and (ii) on any other date for all
other purposes whatsoever, as the owner hereof, whether or not this Note be
overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuing Entity
and the rights of the Holders of the Notes under the Indenture at any time
by
the Issuing Entity and the Holders of a majority of all Notes at the time
outstanding. The Indenture also contains provisions permitting the Holders
of
Notes representing specified percentages of the aggregate Note Balance of the
Notes on behalf of the Holders of all the Notes, to waive any past Default
under
the Indenture and its consequences. Any such waiver by the Holder, at the time
of the giving thereof, of this Note (or any one or more predecessor Notes)
shall
bind the Holder of every Note issued upon the registration of transfer hereof
or
in exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuing Entity
and
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuing Entity has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated:
March ____, 2006
|
NEW
CENTURY HOME EQUITY LOAN TRUST 2006-1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
____________________________________________________________________________
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
____________________________________________________________________________
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-13
FORM
OF
CLASS M-9 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE 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.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THIS
NOTE
IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES, THE CLASS M-2 NOTES,
THE CLASS M-3 NOTES, THE CLASS M-4 NOTES, THE CLASS M-5 NOTES, THE CLASS M-6
NOTES AND THE CLASS M-7 NOTES TO THE EXTENT DESCRIBED IN THE INDENTURE REFERRED
TO HEREIN.
NEW
CENTURY HOME EQUITY LOAN TRUST, 2006-1
ASSET-BACKED
NOTES, SERIES 2006-1
CLASS
M-9
|
AGGREGATE
NOTE BALANCE: $_____________________
|
NOTE
RATE: Variable
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $_____________________
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Home Equity Loan Trust 2006-1 (the “Issuing Entity”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a “Payment Date”),
commencing in April 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
Series 2006-1 (the “Notes”), issued under an Indenture dated as of March 30,
2006 (the “Indenture”), between the Issuing Entity and Deutsche Bank National
Trust Company, as indenture trustee (the “Indenture Trustee”, which term
includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a
statement of the respective rights thereunder of the Issuing Entity, the
Indenture Trustee, and the Holders of the Notes and the terms upon which the
Notes are to be authenticated and delivered. All terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuing Entity with respect to this Note shall be equal
to
this Note’s pro
rata
share of
the aggregate payments on all Class M-9 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Servicer on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Class M-9 Notes, and
each Holder hereof, by its acceptance of this Note, agrees that (i) such Note
will be limited in right of payment to amounts available from the Trust Estate
as provided in the Indenture and (ii) such Holder shall have no recourse to
the
Issuing Entity, the Owner Trustee, the Indenture Trustee, the Seller, NC
Capital, the Servicer or any of their respective affiliates, or to the assets
of
any of the foregoing entities, except the assets of the Issuing Entity pledged
to secure the Class M-9 Notes pursuant to the Indenture and the rights conveyed
to the Issuing Entity under the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuing Entity maintained
by
it for such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuing Entity,
the
Seller, NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee,
the Servicer or any successor servicer which opines that the acquisition,
holding and transfer of this Note or interest herein is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Issuing Entity, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Servicer or any successor servicer
to
any obligation in addition to those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuing
Entity. Upon surrender for registration of transfer of, or presentation of
a
written instrument of transfer for, this Note at the office or agency designated
by the Issuing Entity pursuant to the Indenture, accompanied by proper
instruments of assignment in form satisfactory to the Indenture Trustee, one
or
more new Notes of any authorized denominations and of a like aggregate initial
Note Balance, will be issued to the designated transferee or
transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuing
Entity, the Indenture Trustee and any agent of the Issuing Entity or the
Indenture Trustee may treat the Person in whose name this Note is registered
as
the owner of such Note (i) on the applicable Record Date for the purpose of
making payments and interest of such Note and (ii) on any other date for all
other purposes whatsoever, as the owner hereof, whether or not this Note be
overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuing Entity
and the rights of the Holders of the Notes under the Indenture at any time
by
the Issuing Entity and the Holders of a majority of all Notes at the time
outstanding. The Indenture also contains provisions permitting the Holders
of
Notes representing specified percentages of the aggregate Note Balance of the
Notes on behalf of the Holders of all the Notes, to waive any past Default
under
the Indenture and its consequences. Any such waiver by the Holder, at the time
of the giving thereof, of this Note (or any one or more predecessor Notes)
shall
bind the Holder of every Note issued upon the registration of transfer hereof
or
in exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuing Entity
and
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuing Entity has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated:
March ____, 2006
|
NEW
CENTURY HOME EQUITY LOAN TRUST 2006-1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
____________________________________________________________________________
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
____________________________________________________________________________
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
B
MORTGAGE
LOAN SCHEDULE
EXHIBIT
C-1
FORM
OF
INITIAL CERTIFICATION
March
[___], 2006
|
New
Century Home Equity Loan Trust 2006-1
c/o
Wilmington Trust Company
▇▇▇▇▇▇
Square North
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
Corporate Trust Administration
|
New
Century Mortgage Corporation
▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
Re:
|
Indenture
dated as of March 30, 2006, between New Century Home
Equity
Loan Trust 2006-1 and Deutsche Bank National Trust
Company
|
Ladies
and Gentlemen:
In
accordance with Section 2.03(a) of the above-captioned Indenture and Section
2.1(b)(i)-(v) of the Mortgage Loan Purchase Agreement, dated as of March 30,
2006 (the “MLPA”; and together with the Indenture, the “Agreements”), among New
Century Credit Corporation, NC Capital Corporation and New Century Mortgage
Securities LLC., the undersigned, as Indenture Trustee, hereby certifies 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
the
exception report annexed thereto as not being covered by such certification)
(i)
all documents constituting part of such Mortgage File (other than such documents
described in Section 2.1(v) of the MLPA) required to be delivered to it pursuant
to the Agreement are in its possession, (ii) such documents have been reviewed
by it and appear regular on their face and relate to such Mortgage Loan and
(iii) based on its examination and only as to the foregoing, the information
set
forth in the Mortgage Loan Schedule that corresponds to items (i), (ii), (x),
(xi), (xiv) and (xvi) (solely as to the Gross Margin) of the definition of
“Mortgage Loan Schedule” accurately reflects information set forth in the
Mortgage File.
The
Indenture Trustee makes no representations as to: (i) the validity, legality,
sufficiency, enforceability or genuineness of any of the documents contained
in
the Mortgage File of any of the Mortgage Loans identified on the Mortgage Loan
Schedule, (ii) the collectability, insurability, effectiveness or suitability
of
any such Mortgage Loan, or (iii) whether any Mortgage File included any of
the
documents specified in clause (v) of Section 2.1 of the MLPA.
Capitalized
words and phrases used herein shall have the respective meanings assigned to
them in the above-captioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, as Indenture Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Name:
|
||||||||||||
|
Title:
|
||||||||||||
EXHIBIT
C-2
FORM
OF
FINAL CERTIFICATION
,
200__
|
New
Century Home Equity Loan Trust 2006-1
c/o
Wilmington Trust Company
▇▇▇▇▇▇
Square North
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
Corporate Trust Administration
|
New
Century Mortgage Corporation
▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
Re:
|
Indenture
dated as of March 30, 2006, between New Century Home Equity Loan
Trust
2006-1 and Deutsche Bank National Trust
Company
|
Ladies
and Gentlemen:
In
accordance with Section 2.03(b) of the above-captioned Indenture, and Section
2.1(b) of the Mortgage Loan Purchase Agreement, dated as of March 30, 2006,
(the
“MLPA”; and together with the Indenture, the “Agreements”), among New Century
Credit Corporation, NC Capital Corporation and New Century Mortgage Securities
LLC, the undersigned, as Indenture Trustee, hereby certifies that as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan
paid in full or listed on the exception report attached hereto) it has received
the documents set forth in Section 2.1(b) of the MLPA.
The
Indenture Trustee has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the Agreements.
The Indenture Trustee makes no representation that any documents specified
in
clause (v) of Section 2.1(b) should be included in any Mortgage
File.
The
Indenture Trustee makes no representations as to and shall not be responsible
to
verify: (i) the validity, legality, sufficiency, enforceability, due
authorization, recordability or genuineness of any of the documents contained
in
each Mortgage File of any of the Mortgage Loans identified on the Mortgage
Loan
Schedule, (ii) the collectability, insurability, effectiveness or suitability
of
any such Mortgage Loan or (iii) the existence of any assumption, modification,
written assurance or substitution agreement with respect to any Mortgage File
if
no such documents appear in the Mortgage File delivered to the Indenture
Trustee.
Capitalized
words and phrases used herein shall have the respective meanings assigned to
them in the above-captioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, as Indenture Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Name:
|
||||||||||||
|
Title:
|
||||||||||||
EXHIBIT
D
INTEREST
RATE SWAP AGREEMENT
(PROVIDED
UPON REQUEST)