Exhibit 4.1
NEW CENTURY HOME EQUITY LOAN TRUST 2004-2
Issuer
and
DEUTSCHE BANK NATIONAL TRUST COMPANY
Indenture Trustee
--------------------------------------------
INDENTURE
Dated as of June 29, 2004
--------------------------------------------
ASSET-BACKED NOTES, SERIES 2004-2
----------------------
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS.....................................................................................2
Section 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT...............................................2
Section 1.03. RULES OF CONSTRUCTION...........................................................................2
ARTICLE II
THE NOTES
Section 2.01. FORM............................................................................................4
Section 2.02. EXECUTION, AUTHENTICATION AND DELIVERY..........................................................4
Section 2.03. ACCEPTANCE OF MORTGAGE LOANS BY INDENTURE TRUSTEE...............................................5
Section 2.04. ACCEPTANCE OF CAP CONTRACTS BY INDENTURE TRUSTEE................................................6
ARTICLE III
COVENANTS
Section 3.01. COLLECTION OF PAYMENTS WITH RESPECT TO THE MORTGAGE LOANS.......................................7
Section 3.02. MAINTENANCE OF OFFICE OR AGENCY.................................................................7
Section 3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST; PAYING AGENT............................................7
Section 3.04. EXISTENCE.......................................................................................8
Section 3.05. PAYMENT OF PRINCIPAL AND INTEREST...............................................................9
Section 3.06. PROTECTION OF TRUST ESTATE.....................................................................16
Section 3.07. OPINIONS AS TO TRUST ESTATE....................................................................17
Section 3.08. PERFORMANCE OF OBLIGATIONS.....................................................................17
Section 3.09. NEGATIVE COVENANTS.............................................................................18
Section 3.10. [RESERVED].....................................................................................18
Section 3.11. [RESERVED].....................................................................................18
Section 3.12. REPRESENTATIONS AND WARRANTIES CONCERNING THE MORTGAGE LOANS...................................18
Section 3.13. AMENDMENTS TO SERVICING AGREEMENT..............................................................19
Section 3.14. MASTER SERVICER AS AGENT AND BAILEE OF THE INDENTURE TRUSTEE...................................19
Section 3.15. INVESTMENT COMPANY ACT.........................................................................19
Section 3.16. ISSUER MAY CONSOLIDATE, ETC....................................................................19
Section 3.17. SUCCESSOR OR TRANSFEREE........................................................................21
Section 3.18. NO OTHER BUSINESS..............................................................................21
Section 3.19. NO BORROWING...................................................................................21
Section 3.20. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES..............................................21
Section 3.21. CAPITAL EXPENDITURES...........................................................................22
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Section 3.22 DETERMINATION OF NOTE RATE.....................................................................22
Section 3.23. RESTRICTED PAYMENTS............................................................................22
Section 3.24. NOTICE OF EVENTS OF DEFAULT....................................................................22
Section 3.25. FURTHER INSTRUMENTS AND ACTS...................................................................22
Section 3.26. STATEMENTS TO NOTEHOLDERS......................................................................22
Section 3.27. [RESERVED].....................................................................................22
Section 3.28. CERTAIN REPRESENTATIONS REGARDING THE TRUST ESTATE.............................................22
Section 3.29. ALLOCATION OF REALIZED LOSSES..................................................................24
Section 3.30. ALLOCATION OF CERTAIN INTEREST SHORTFALLS......................................................24
ARTICLE IV
THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE
Section 4.01. THE NOTES......................................................................................26
Section 4.02. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE OF NOTES; APPOINTMENT OF
NOTE REGISTRAR AND CERTIFICATE REGISTRAR.......................................................26
Section 4.03. XXXXXXXXX, DESTROYED, LOST OR STOLEN NOTES.....................................................27
Section 4.04. PERSONS DEEMED OWNERS..........................................................................28
Section 4.05. CANCELLATION...................................................................................28
Section 4.06. BOOK-ENTRY NOTES...............................................................................28
Section 4.07. NOTICES TO DEPOSITORY..........................................................................29
Section 4.08. DEFINITIVE NOTES...............................................................................29
Section 4.09. TAX TREATMENT..................................................................................30
Section 4.10. SATISFACTION AND DISCHARGE OF INDENTURE........................................................30
Section 4.11. APPLICATION OF TRUST MONEY.....................................................................31
Section 4.12. DERIVATIVE CONTRACTS FOR BENEFIT OF THE CERTIFICATES...........................................31
Section 4.13. REPAYMENT OF MONIES HELD BY PAYING AGENT.......................................................31
Section 4.14. TEMPORARY NOTES................................................................................31
Section 4.15. REPRESENTATION REGARDING ERISA.................................................................32
ARTICLE V
DEFAULT AND REMEDIES
Section 5.01. EVENTS OF DEFAULT..............................................................................33
Section 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.............................................33
Section 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY INDENTURE TRUSTEE......................33
Section 5.04. REMEDIES; PRIORITIES...........................................................................35
Section 5.05. OPTIONAL PRESERVATION OF THE TRUST ESTATE......................................................37
Section 5.06. LIMITATION OF SUITS............................................................................38
Section 5.07. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND INTEREST..........................38
Section 5.08. RESTORATION OF RIGHTS AND REMEDIES.............................................................38
Section 5.09. RIGHTS AND REMEDIES CUMULATIVE.................................................................39
Section 5.10. DELAY OR OMISSION NOT A WAIVER.................................................................39
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Section 5.11. CONTROL BY NOTEHOLDERS.........................................................................39
Section 5.12. WAIVER OF PAST DEFAULTS........................................................................39
Section 5.13. UNDERTAKING FOR COSTS..........................................................................40
Section 5.14. WAIVER OF STAY OR EXTENSION LAWS...............................................................40
Section 5.15. SALE OF TRUST ESTATE...........................................................................40
Section 5.16. ACTION ON NOTES................................................................................42
Section 5.17. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS.............................................42
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. DUTIES OF INDENTURE TRUSTEE....................................................................43
Section 6.02. RIGHTS OF INDENTURE TRUSTEE....................................................................44
Section 6.03. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE.........................................................45
Section 6.04. INDENTURE TRUSTEE'S DISCLAIMER.................................................................45
Section 6.05. NOTICE OF EVENT OF DEFAULT.....................................................................45
Section 6.06. REPORTS BY INDENTURE TRUSTEE TO HOLDERS AND TAX ADMINISTRATION.................................45
Section 6.07. COMPENSATION AND INDEMNITY.....................................................................45
Section 6.08. REPLACEMENT OF INDENTURE TRUSTEE...............................................................46
Section 6.09. SUCCESSOR INDENTURE TRUSTEE BY MERGER..........................................................47
Section 6.10. APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE TRUSTEE..............................47
Section 6.11. ELIGIBILITY; DISQUALIFICATION..................................................................48
Section 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER...............................................48
Section 6.13. REPRESENTATIONS AND WARRANTIES.................................................................48
Section 6.14. DIRECTIONS TO INDENTURE TRUSTEE................................................................49
Section 6.15. THE AGENTS.....................................................................................49
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF NOTEHOLDERS.........................50
Section 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO NOTEHOLDERS.....................................50
Section 7.03. REPORTS OF ISSUER..............................................................................50
Section 7.04. REPORTS BY INDENTURE TRUSTEE...................................................................51
Section 7.05. STATEMENTS TO NOTEHOLDERS......................................................................51
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. COLLECTION OF MONEY............................................................................54
Section 8.02. TRUST ACCOUNTS.................................................................................54
Section 8.03. OFFICER'S CERTIFICATE..........................................................................54
Section 8.04. TERMINATION UPON DISTRIBUTION TO NOTEHOLDERS...................................................54
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Section 8.05. RELEASE OF TRUST ESTATE........................................................................55
Section 8.06. SURRENDER OF NOTES UPON FINAL PAYMENT..........................................................55
Section 8.07. OPTIONAL REDEMPTION OF THE NOTES...............................................................55
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.........................................57
Section 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS............................................58
Section 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES...........................................................60
Section 9.04. EFFECT OF SUPPLEMENTAL INDENTURE...............................................................60
Section 9.05. CONFORMITY WITH TRUST INDENTURE ACT............................................................60
Section 9.06. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES..................................................60
ARTICLE X
MISCELLANEOUS
Section 10.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC......................................................61
Section 10.02. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE...............................................62
Section 10.03. ACTS OF NOTEHOLDERS............................................................................63
Section 10.04. NOTICES ETC., TO INDENTURE TRUSTEE ISSUER AND RATING AGENCIES..................................63
Section 10.05. NOTICES TO NOTEHOLDERS; XXXXXX.................................................................64
Section 10.06. CONFLICT WITH TRUST INDENTURE ACT..............................................................65
Section 10.07. EFFECT OF HEADINGS.............................................................................65
Section 10.08. SUCCESSORS AND ASSIGNS.........................................................................65
Section 10.09. SEPARABILITY...................................................................................65
Section 10.10. [RESERVED].....................................................................................65
Section 10.11. LEGAL HOLIDAYS.................................................................................65
Section 10.12. GOVERNING LAW..................................................................................65
Section 10.13. COUNTERPARTS...................................................................................65
Section 10.14. RECORDING OF INDENTURE.........................................................................65
Section 10.15. ISSUER OBLIGATION..............................................................................66
Section 10.16. NO PETITION....................................................................................66
Section 10.17. INSPECTION.....................................................................................66
Section 10.18. NO RECOURSE TO OWNER TRUSTEE...................................................................66
Section 10.19. PROOFS OF CLAIM................................................................................67
EXHIBITS
Exhibit A-1 Form of Class A-1 Note
Exhibit A-2 Form of Class A-2 Note
Exhibit A-3 Form of Class A-3 Note
Exhibit A-4 Form of Class A-4 Note
Exhibit A-5 Form of Class M-1 Note
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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 Cap Contracts
Appendix A Definitions
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This Indenture, dated as of June 29, 2004, is entered into between New
Century Home Equity Loan Trust 2004-2, a Delaware statutory trust, as Issuer
(the "Issuer"), 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 Issuer's Asset-Backed
Notes, Series 2004-2 (the "Notes").
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as
trustee for the benefit of the Holders of the Notes, all of the Issuer'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 Sale and Contribution Agreement as assigned to the Issuer, (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
Cap Contracts; and (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 (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 Xxxxx, 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 Issuer 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
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(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.
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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-10 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 Issuer 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 Issuer shall bind the Issuer,
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 Issuer Request authenticate and deliver
the Class A Notes and the Mezzanine Notes for original issue in an aggregate
initial principal amount of $1,873,530,000. The Class A-1 Notes shall be issued
in an aggregate initial Note Balance of $788,259,000, the Class A-2 Notes shall
be issued in an aggregate initial Note Balance of $275,000,000, the Class A-3
Notes shall be issued in an aggregate initial Note Balance of $372,000,000, the
Class A-4 Notes shall be issued in an aggregate initial Note Balance of
$143,776,000, the Class M-1 Notes shall be issued in an aggregate initial Note
Balance of $59,093,000, the Class M-2 Notes shall be issued in an aggregate
initial Note Balance of $54,249,000, the Class M-3 Notes shall be issued in an
aggregate initial Note Balance of $38,750,000, the Class M-4 Notes shall be
issued in an aggregate initial Note Balance of $28,093,000, the Class M-5 Notes
shall be issued in an aggregate initial Note Balance of $28,093,000, the Class
M-6 Notes shall be issued in an aggregate initial Note Balance of $23,250,000,
the Class M-7 Notes shall be issued in an aggregate initial Note Balance of
$23,249,000, the Class M-8 Notes shall be issued in an aggregate initial Note
Balance of $20,344,000 and the Class M-9 Notes shall be issued in an aggregate
initial Note Balance of $19,374,000.
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.
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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
Sale and Contribution 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 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 Sale and Contribution Agreement) required to be delivered to it
pursuant to the Mortgage Loan Sale and Contribution 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), (iii), (xi), (xii), (xv) and (xvii)
(solely as to the 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
Sale and Contribution Agreement.
Prior to the first anniversary date of this Indenture the Indenture
Trustee shall deliver to the Depositor and the Master 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 Master 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
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conclusion of its review the Indenture Trustee shall so notify the Depositor and
the Master 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 Sale and Contribution 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 Master Servicer and NC Capital.
(b) Upon deposit of the Purchase Price in the Payment Account, the
Indenture Trustee shall release to NC Capital 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 CAP CONTRACTS BY INDENTURE TRUSTEE. The Issuer
hereby directs the Indenture Trustee to execute, deliver and perform its
obligations under the Cap Contracts on the Closing Date and thereafter on behalf
of the Holders of the Notes. The Issuer and the Holders of the Notes by their
acceptance of such Notes acknowledge and agree that the Indenture Trustee shall
execute, deliver and perform its obligations under the Cap Contracts and shall
do so solely in its capacity as Indenture Trustee of the Trust and not in its
individual capacity.
The Indenture Trustee acknowledges receipt of the Cap Contracts 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. Every provision of this Indenture
affording protection to the Indenture Trustee shall apply to the Indenture
Trustee's execution of the Cap Contracts and the performance of its duties and
satisfaction of its obligations thereunder.
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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 Master 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 Issuer 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 Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. If at any time the
Issuer 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 c/o DTC Transfer
Services, 00 Xxxxx Xxxxxx, Xxxxxxxx Xxxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, 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 Issuer 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 Issuer except as
provided in this Section 3.03. The Issuer hereby appoints the Indenture Trustee
as its Paying Agent.
The Issuer 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 Issuer
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;
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(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 Issuer in
connection with this Indenture.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer 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 Issuer on Issuer Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
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 Issuer 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 Issuer. The Indenture Trustee
may also adopt and employ, at the expense and direction of the Issuer, 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 Issuer 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 Issuer hereunder is or
becomes, organized under the laws of any other state or of the United States of
America, in which case the Issuer 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.
8
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 Class A-1 Notes, an amount equal to the
Senior Interest Payment Amount allocable to such Notes; and
(ii) concurrently, to the Holders of each Class of 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 Notes; and
(ii) to the Holders of the Class A-1 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
Section 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 to the Noteholders the
following amounts, in the following order of priority:
(i) to the Holders of the Class M-1 Notes, an amount equal to the
Interest Payment Amount allocable to the Class M-1 Notes;
(ii) to the Holders of the Class M-2 Notes, an amount equal to the
Interest Payment Amount allocable to the Class M-2 Notes;
(iii) to the Holders of the Class M-3 Notes, an amount equal to the
Interest Payment Amount allocable to the Class M-3 Notes;
(iv) to the Holders of the Class M-4 Notes, an amount equal to the
Interest Payment Amount allocable to the Class M-4 Notes;
9
(v) to the Holders of the Class M-5 Notes, an amount equal to the
Interest Payment Amount allocable to the Class M-5 Notes;
(vi) to the Holders of the Class M-6 Notes, an amount equal to the
Interest Payment Amount allocable to the Class M-6 Notes;
(vii) to the Holders of the Class M-7 Notes, an amount equal to the
Interest Payment Amount allocable to the Class M-7 Notes;
(viii) to the Holders of the Class M-8 Notes, an amount equal to the
Interest Payment Amount allocable to the Class M-8 Notes; and
(ix) to the Holders of the Class M-9 Notes, an amount equal to the
Interest Payment Amount allocable to the Class M-9 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 Class A-1 Notes, until the Note Balance
thereof has 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
distributed 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), until the Note Balances thereof
have been reduced to zero; and
(ii) after taking into account the amount paid to the Holders of the
Class A-1 Notes pursuant to Section 3.05(c)(I)(i) on such Payment Date, to
the Holders of the Class A- 1 Notes, until the Note Balance thereof has
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 unpaid for such Payment Date
shall be paid in the following order of priority:
(i) to the Holders of the Class M-1 Notes, until the Note Balance of
such Class has been reduced to zero;
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(ii) to the Holders of the Class M-2 Notes, until the Note Balance
of such Class has been reduced to zero;
(iii) to the Holders of the Class M-3 Notes, until the Note Balance
of such Class has been reduced to zero;
(iv) to the Holders of the Class M-4 Notes, until the Note Balance
of such Class has been reduced to zero;
(v) to the Holders of the Class M-5 Notes, until the Note Balance of
such Class has been reduced to zero;
(vi) to the Holders of the Class M-6 Notes, until the Note Balance
of such Class has been reduced to zero;
(vii) to the Holders of the Class M-7 Notes, until the Note Balance
of such Class has been reduced to zero;
(viii) to the Holders of the Class M-8 Notes, until the Note Balance
of such Class has been reduced to zero; and
(ix) to the Holders of the Class M-9 Notes, until the Note Balance
of 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 Class A-1 Notes, the Group I Senior
Principal Payment Amount, until the Note Balance thereof has 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 distributed 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
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(ii) to the Holders of the Class A-1 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.
(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 unpaid shall be paid
in the following order of priority:
(i) to the holders of the Class M-1 Notes, the Class M-1 Principal
Payment Amount until the Note Balance thereof has been reduced to zero;
(ii) to the holders of the Class M-2 Notes, the Class M-2 Principal
Payment Amount until the Note Balance thereof has been reduced to zero;
(iii) to the holders of the Class M-3 Notes, the Class M-3 Principal
Payment Amount until the Note Balance thereof has been reduced to zero;
(iv) to the holders of the Class M-4 Notes, the Class M-4 Principal
Payment Amount until the Note Balance thereof has been reduced to zero;
(v) to the holders of the Class M-5 Notes, the Class M-5 Principal
Payment Amount until the Note Balance thereof has been reduced to zero;
(vi) to the holders of the Class M-6 Notes, the Class M-6 Principal
Payment Amount until the Note Balance thereof has been reduced to zero;
(vii) to the holders of the Class M-7 Notes, the Class M-7 Principal
Payment Amount until the Note Balance thereof has been reduced to zero;
(viii) to the holders of the Class M-8 Notes, the Class M-8
Principal Payment Amount until the Note Balance thereof has been reduced
to zero; and
(ix) to the holders of the Class M-9 Notes, the Class M-9 Principal
Payment Amount until the Note Balance thereof has been reduced to zero.
With respect to the Group II Notes, all principal payments will be paid
concurrently, (a) to the Holders of the Class A-2 Notes (in an amount equal to
the Class A-2 Allocation Percentage of the principal to be paid) and (b)
sequentially, to the Holders of the Class A-3 Notes and the Class A-4 Notes (in
an amount equal to the Class A-3/4 Allocation Percentage of the principal to be
paid), in that order, until the Note Balance of each such Class of Group II
Notes has been reduced to zero; provided, however, on any Payment Date on which
the aggregate Note Balance of the Mezzanine Notes and the Overcollateralization
Amount has been reduced to zero, notwithstanding anything contained herein to
the contrary, all payments of principal to the Group II Notes will be paid
concurrently on a PRO RATA basis based on the Note Balance of each such Class.
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(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) to the Holders of the Class M-1 Notes, in an amount equal to
the Interest Carry Forward Amount allocable to such Class of Notes;
(iii) to the Holders of the Class M-1 Notes, in an amount equal to
the Allocated Realized Loss Amount allocable to such Notes;
(iv) to the Holders of the Class M-2 Notes, in an amount equal to
the Interest Carry Forward Amount allocable to such Class of Notes;
(v) to the Holders of the Class M-2 Notes, in an amount equal to the
Allocated Realized Loss Amount allocable to such Notes;
(vi) to the Holders of the Class M-3 Notes, in an amount equal to
the Interest Carry Forward Amount allocable to such Class of Notes;
(vii) to the Holders of the Class M-3 Notes, in an amount equal to
the Allocated Realized Loss Amount allocable to such Notes;
(viii) to the Holders of the Class M-4 Notes, in an amount equal to
the Interest Carry Forward Amount allocable to such Class of Notes;
(ix) to the Holders of the Class M-4 Notes, in an amount equal to
the Allocated Realized Loss Amount allocable to such Notes;
(x) to the Holders of the Class M-5 Notes, in an amount equal to the
Interest Carry Forward Amount allocable to such Class of Notes;
(xi) to the Holders of the Class M-5 Notes, in an amount equal to
the Allocated Realized Loss Amount allocable to such Notes;
(xii) to the Holders of the Class M-6 Notes, in an amount equal to
the Interest Carry Forward Amount allocable to such Class of Notes;
(xiii) to the Holders of the Class M-6 Notes, in an amount equal to
the Allocated Realized Loss Amount allocable to such Notes;
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(xiv) to the Holders of the Class M-7 Notes, in an amount equal to
the Interest Carry Forward Amount allocable to such Class of Notes;
(xv) to the Holders of the Class M-7 Notes, in an amount equal to
the Allocated Realized Loss Amount allocable to such Notes;
(xvi) to the Holders of the Class M-8 Notes, in an amount equal to
the Interest Carry Forward Amount allocable to such Class of Notes;
(xvii) to the Holders of the Class M-8 Notes, in an amount equal to
the Allocated Realized Loss Amount allocable to such Notes;
(xviii) to the Holders of the Class M-9 Notes, in an amount equal to
the Interest Carry Forward Amount allocable to such Class of Notes;
(xix) to the Holders of the Class M-9 Notes, in an amount equal to
the Allocated Realized Loss Amount allocable to such Notes;
(xx) concurrently, to the Holders of the Class A Notes, on a PRO
RATA basis based on the entitlement of each such Class, in an amount equal
to the aggregate of any Prepayment Interest Shortfalls and any Relief Act
Interest Shortfall on the Mortgage Loans allocated to such Notes, PRO RATA
based on the entitlement of each such Class, in each case, without
interest accrued thereon;
(xxi) 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 allocated share
for each such Class of Notes of any Prepayment Interest Shortfalls and any
shortfalls resulting from the application of the Relief Act, in each case,
without interest accrued thereon;
(xxii) to the Holders of the Class A Notes and the Mezzanine Notes
(in the priority described below), the amount by which the aggregate Basis
Risk Shortfall for such Payment Date exceeds the amounts received by the
Indenture Trustee under the Cap Contracts;
(xxiii) 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 interest accrued
on any Allocated Realized Loss Amounts for such Class of Notes, in each
case at the related Note Rate; and
(xxiv) 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 will
be withdrawn from the
14
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 allocated 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 in the following order
of priority:
(i) any amounts received by the Indenture Trustee in respect of the
Group II Cap Contract will be paid to the Group II Notes, on a PRO RATA
basis based on the Note Balance of each such Class, to the extent of the
related Basis Risk Shortfall for such Payment Date and then on a PRO RATA
basis based on the remaining unpaid Basis Risk Shortfall for each such
Class;
(ii) any amounts received by the Indenture Trustee in respect of the
Mezzanine Cap Contract will be paid to the Mezzanine Notes, on a PRO RATA
basis based on the Note Balance of each such Class, to the extent of the
related Basis Risk Shortfall for such Payment Date and then on a PRO RATA
basis based on the remaining unpaid Basis Risk Shortfall for each such
Class; and
(iii) Any amounts from the Net Monthly Excess Cashflow will be paid
as follows, in each case to the extent of the applicable Basis Risk
Shortfall:
(a) concurrently to each Class of Class A Notes, on a PRO RATA basis
based on the Basis Risk Shortfall due on each such Class on such Payment
Date, to the extent not paid pursuant to Section 3.05(e)(i) above;
(b) to the Class M-1 Notes, to the extent not paid pursuant to
Section 3.05(e)(ii) above;
(c) to the Class M-2 Notes, to the extent not paid pursuant to
Section 3.05(e)(ii) above;
15
(d) to the Class M-3 Notes, to the extent not paid pursuant to
Section 3.05(e)(ii) above;
(e) to the Class M-4 Notes, to the extent not paid pursuant to
Section 3.05(e)(ii) above;
(f) to the Class M-5 Notes, to the extent not paid pursuant to
Section 3.05(e)(ii) above;
(g) to the Class M-6 Notes, to the extent not paid pursuant to
Section 3.05(e)(ii) above;
(h) to the Class M-7 Notes, to the extent not paid pursuant to
Section 3.05(e)(ii) above;
(i) to the Class M-8 Notes, to the extent not paid pursuant to
Section 3.05(e)(ii) above; and
(j) to the Class M-9 Notes, to the extent not paid pursuant to
Section 3.05(e)(ii) above.
(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 Master 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 Issuer 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.
16
(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 Notes 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 Issuer 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 Issuer or Master 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 Issuer 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
17
pursuant to this Section 3.06 upon the Issuer's preparation thereof and delivery
to the Indenture Trustee.
Section 3.07. OPINIONS AS TO TRUST ESTATE.
(a) On the Closing Date, the Issuer 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 2005, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at the
expense of the Issuer 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.
(a) The Issuer 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.
(b) The Issuer 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 Issuer
shall be deemed to be action taken by the Issuer.
(c) The Issuer 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 Master Servicer is
expressly permitted to take in the Servicing Agreement. The Indenture Trustee
may exercise the rights of the Issuer to direct the actions of the Master
Servicer pursuant to the Servicing Agreement.
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(d) The Issuer may retain an administrator and may enter into contracts
with other Persons for the performance of the Issuer's obligations hereunder,
and performance of such obligations by such Persons shall be deemed to be
performance of such obligations by the Issuer.
Section 3.09. NEGATIVE COVENANTS. So long as any Notes are Outstanding,
the Issuer 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 Issuer's interest in the
Mortgage Loans, the Mortgage Loan Sale and Contribution 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
Sale and Contribution 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 Sale and Contribution
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.
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Section 3.13. AMENDMENTS TO SERVICING AGREEMENT. The Issuer 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. MASTER 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 Master Servicer, the Issuer and the Indenture Trustee
hereby acknowledge that the Master 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 Master Servicer, and any
other items constituting a part of the Trust Estate which from time to time come
into the possession of the Master Servicer. It is intended that, by the Master
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 Master
Servicer. The Indenture Trustee shall not be liable with respect to such
documents, monies or items while in possession of the Master Servicer.
Section 3.15. INVESTMENT COMPANY ACT. The Issuer 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 Issuer 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. ISSUER MAY CONSOLIDATE, ETC.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
(i) the Person (if other than the Issuer) 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 Issuer 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;
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(iii) the Rating Agencies shall have notified the Issuer 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 Issuer 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 Issuer 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 Issuer 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 Issuer, 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
Issuer 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 Issuer 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 Issuer that such
transaction shall not cause the rating of the Notes to be reduced,
suspended or withdrawn;
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(iv) the Issuer 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 Issuer 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 Issuer in accordance with
Section 3.16(a), the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to Section 3.16(b), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer 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 Issuer 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 Issuer 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 Issuer 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.
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Section 3.21. CAPITAL EXPENDITURES. The Issuer 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 Issuer 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
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer, (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 Issuer 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 Master Servicer
pursuant to the terms of the Servicing Agreement. The Issuer 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 Issuer 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 Issuer 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, xxxxx://xxx.xxxxxxxxxxxxxx.xx.xxx/xxxx (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 Issuer 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
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interest is prior to all other liens, and is enforceable as such as
against creditors of and purchasers from the Issuer.
(ii) The Collateral constitutes "deposit accounts" or "instruments,"
as applicable, within the meaning of the applicable UCC.
(iii) The Issuer owns and has good and marketable title to the
Collateral, free and clear of any lien, claim or encumbrance of any
Person.
(iv) The Issuer 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 Issuer 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
Issuer or the Indenture Trustee. The Issuer 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 Issuer 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
Issuer.
(ii) The Collateral constitutes "general intangibles" within the
meaning of the applicable UCC.
(iii) The Issuer 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 Issuer 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 Issuer has not authorized the filing of, and is not
aware of any financing statements against, the Issuer, 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 Issuer is not aware of any judgment
or tax lien filings against the Issuer.
(d) The Issuer 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
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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. 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
Overcollateralized Amount, until the Overcollateralized Amount has been reduced
to zero; third, to the Class M-9 Notes until the Note Balance thereof has been
reduced to zero; fourth, to the Class M-8 Notes until the Note Balance thereof
has been reduced to zero; fifth, to the Class M-7 Notes until the Note Balance
thereof has been reduced to zero; sixth, to the Class M-6 Notes until the Note
Balance thereof has been reduced to zero; seventh, to the Class M-5 Notes until
the Note Balance thereof has been reduced to zero; eighth, to the Class M-4
Notes until the Note Balance thereof has been reduced to zero; ninth, to the
Class M-3 Notes until the Note Balance thereof has been reduced to zero; tenth,
to the Class M-2 Notes until the Note Balance thereof has been reduced to zero;
and eleventh, 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.
Section 3.30. ALLOCATION OF CERTAIN INTEREST SHORTFALLS. For purposes of
calculating the amount of Accrued Note Interest and the amount of the Interest
Payment Amount for the Class A Notes and the Mezzanine Notes for any Payment
Date, the aggregate amount of any Prepayment Interest Shortfalls (to the extent
not covered by payments by the Master Servicer pursuant to Section 3.24 of the
Servicing Agreement) and any Relief Act Interest Shortfall incurred in respect
of the
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Mortgage Loans for any Payment Date shall be allocated first, to the Net Monthly
Excess Cashflow for such Payment Date and, thereafter, among the Class A Notes
and the Mezzanine Notes on a PRO RATA basis based on, and to the extent of, one
month's interest at the then applicable respective Note Rate on the respective
Note Balance of each such Note.
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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 Issuer 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 Issuer 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 Issuer 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 Issuer.
Section 4.02. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE OF
NOTES; APPOINTMENT OF NOTE REGISTRAR AND CERTIFICATE
REGISTRAR.
The Issuer 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 Issuer 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.
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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 Issuer 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 Issuer 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 Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, 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
Issuer 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 Issuer 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 Issuer 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 Issuer or the Indenture Trustee in connection therewith.
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Upon the issuance of any replacement Note under this Section 4.03, the
Issuer 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 Issuer, 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 Issuer, the Indenture Trustee, the
Paying Agent and any agent of the Issuer 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 Issuer, the Indenture Trustee, the
Paying Agent nor any agent of the Issuer 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 Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer 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 Issuer shall direct by an Issuer
Request that they be destroyed or returned to it; PROVIDED, HOWEVER, that such
Issuer 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 Issuer. 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;
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(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
(iv) 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 Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Notes in accordance with the
instructions of the Depository. None of the Issuer, 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.
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Section 4.09. TAX TREATMENT. The Issuer 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 Issuer 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, obligations 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 Issuer, 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 Issuer, 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 Issuer and thereafter repaid to the Issuer 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
Issuer, 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 Issuer shall have complied with all requirements of Section
8.07 hereof,
(B) the Issuer has paid or caused to be paid all other sums payable
hereunder; and
(C) the Issuer 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
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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 Issuer 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
Issuer, Certificate Paying Agent as designee of the Issuer, 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 Issuer 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 Issuer, 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 Issuer 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 Issuer 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 c/o DTC Transfer Services, 00 Xxxxx Xxxxxx, Xxxxxxxx Xxxx Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Notes, the Issuer 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.
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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. ss. 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 Issuer, the Seller, NC
Capital, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master
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 Issuer, the Seller,
NC Capital, the Depositor, the Owner Trustee, the Indenture Trustee, the Master
Servicer or any successor servicer to any obligation in addition to those
undertaken in the Indenture.
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ARTICLE V
DEFAULT AND REMEDIES
Section 5.01. EVENTS OF DEFAULT. The Issuer 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 Issuer 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 Issuer and the Indenture Trustee, may waive the related Event of
Default and rescind and annul such declaration and its consequences if
(i) the Issuer 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 Issuer 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
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any Note when the same becomes due and payable, the Issuer 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 Issuer 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 Issuer or other obligor upon the Notes and collect in the manner provided by
law out of the property of the Issuer 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 Issuer 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 Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
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
35
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 Issuer, 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.
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(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 Issuer 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 Master 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 Master 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 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
37
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 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 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 ninth, 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 Issuer 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
38
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 Issuer 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
39
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 Issuer, 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.
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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 Issuer, 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 Xxxxxx'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 Issuer 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 Issuer (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
41
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
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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 Issuer 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 Issuer 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 Issuer 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 Issuer. 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
Issuer in its capacity as holder of the Mortgage Loans, shall take all such
lawful action as the Indenture Trustee may request to cause the Issuer to compel
or secure the performance and observance by the Seller, NC Capital and the
Master Servicer, as applicable, of each of their obligations to the Issuer under
or in connection with the Mortgage Loan Sale and Contribution Agreement and the
Servicing Agreement, and to exercise any and all rights, remedies, powers and
privileges lawfully available to the Issuer under or in connection with the
Mortgage Loan Sale and Contribution 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 Master Servicer thereunder and the institution of
legal or administrative actions or proceedings to compel or secure performance
by the Seller, NC Capital or the Master Servicer of each of their obligations
under the Mortgage Loan Sale and Contribution 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 Issuer against the Seller, NC Capital or the Master Servicer under or in
connection with the Mortgage Loan Sale and Contribution Agreement and the
Servicing Agreement, including the right or power to take any action to compel
or secure
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performance or observance by the Seller, NC Capital or the Master Servicer, as
the case may be, of each of their obligations to the Issuer thereunder and to
give any consent, request, notice, direction, approval, extension or waiver
under the Mortgage Loan Sale and Contribution Agreement and the Servicing
Agreement, as the case may be, and any right of the Issuer to take such action
shall not be suspended.
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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 Issuer, 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
45
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 Master Servicer or
appoint a successor Master Servicer in accordance with Section 6.02 of the
Servicing Agreement.
(i) In order to comply with its duties under U.S. Patriot Act, the
Indenture Trustee shall obtain and verify certain information and documentation
from the other parties hereto, including, but not limited to, such party's name,
address, and other indentifying information.
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
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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 Issuer 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
Issuer's use of the proceeds from the Notes, and it shall not be responsible for
any statement of the Issuer 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 Issuer, all tax
returns (if any) and information reports, tax elections and such annual or other
reports of the Issuer 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 Issuer 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
47
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 Issuer
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 Issuer promptly of any
claim for which it may seek indemnity. Failure by the Indenture Trustee to so
notify the Issuer shall not relieve the Issuer of its obligations hereunder. The
Issuer shall defend any such claim, and the Indenture Trustee may have separate
counsel and the Issuer shall pay the fees and expenses of such counsel. The
Issuer 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 Issuer'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 Issuer, 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 Issuer. 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 Issuer
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
Issuer 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 Issuer. 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.
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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 Issuer 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 Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.
Section 6.09. SUCCESSOR INDENTURE TRUSTEE BY MERGER. 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
49
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 ss. 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 Xxxxx'x and "BBB" or
better by S&P and Fitch. The Indenture Trustee shall comply with TIA ss. 310(b),
including the optional provision permitted by the second sentence of TIA ss.
310(b)(9); PROVIDED, HOWEVER, that there shall be excluded from the operation of
TIA ss. 310(b)(1) any indenture or indentures under which other securities of
the Issuer are outstanding if the requirements for such exclusion set forth in
TIA ss. 310(b)(1) are met.
Section 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
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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 Issuer, 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.
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-10 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.
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ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF
NOTEHOLDERS.
The Issuer 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
Issuer 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 ss. 312(b)
with other Noteholders or Note Owners with respect to their rights under this
Indenture or under the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA ss. 312(c).
Section 7.03. REPORTS OF ISSUER.
(a) Subject to Section 4.02 of the Servicing Agreement,
(i) The Indenture Trustee shall file with the Commission on behalf
of the Issuer, with a copy to the Issuer within 15 days before the Issuer
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 Issuer 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 Issuer, 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 Issuer
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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 ss. 313(c))
such summaries of any information, documents and reports required to be
filed by the Issuer 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 Issuer otherwise determines, the fiscal year of the Issuer
shall end on December 31st of each year.
Section 7.04. REPORTS BY INDENTURE TRUSTEE. If required by TIA ss. 313(a),
within 60 days after each January 30th beginning with March 31, 2005, the
Indenture Trustee shall mail to each Noteholder as required by TIA ss. 313(c) a
brief report dated as of such date that complies with TIA ss. 313(a). The
Indenture Trustee also shall comply with TIA ss. 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 XXXXX and each stock
exchange, if any, on which the Notes are listed. The Issuer 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
xxxxx://xxx.xxxxxxxxxxxxxx.xx.xxx/xxxx 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 aggregate Servicing Fee received by the Master Servicer
during the related Due Period and such other customary information as the
Indenture Trustee deems necessary or desirable, or which a Noteholder
reasonably requests, to enable Certificateholders to prepare their tax
returns;
(iv) the aggregate amount of P&I Advances for such Payment Date;
(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 ;
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(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, the unpaid principal balance and the Stated Principal Balance of
such Mortgage Loan as of the date it became an REO Property;
(ix) the book value of any REO Property as of the close of business
on the last Business Day of the calendar month preceding the Payment Date;
(x) the aggregate amount of Principal Prepayments made during the
related Prepayment Period;
(xi) the aggregate amount of Realized Losses incurred during the
related Prepayment Period by Loan Group and in the aggregate (or, in the
case of Bankruptcy Losses allocable to interest, during the related Due
Period), separately identifying whether such Realized Losses constituted
Bankruptcy Losses 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;
(xii) the aggregate Note Balance of each Class of Notes, after
giving effect to the payments, and allocations of Realized Losses, made on
such Payment Date;
(xiii) 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, and in the case of the Class A Notes
and the Mezzanine Notes, separately identifying any reduction thereof due
to allocations of Realized Losses (in the case of the Mezzanine Notes
only), Prepayment Interest Shortfalls and Relief Act Interest Shortfalls;
(xiv) the aggregate amount of any Prepayment Interest Shortfall for
such Payment Date, to the extent not covered by payments by the Master
Servicer pursuant to Section 3.24 of the Servicing Agreement;
(xv) the aggregate amount of Relief Act Interest Shortfalls for such
Payment Date;
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(xvi) the Overcollateralization Target Amount and the Credit
Enhancement Percentage for such Distribution Date;
(xvii) the Overcollateralization Increase Amount, if any, for such
Payment Date;
(xviii) the Overcollateralization Reduction Amount, if any, for such
Payment Date;
(xix) 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;
(xx) 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;
(xxi) the amount of such distribution to the Certificates;
(xxii) whether a Trigger Event is in effect and the calculation
thereof; and
(xxii) the amount due and the amount received under the Cap
Contracts, if any.
Items (i) through (iii) 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) through (iii) with respect to the Notes for such calendar year.
(b) The Indenture Trustee may conclusively rely upon the Remittance Report
provided by the Master Servicer pursuant to Section 4.01 of the Servicing
Agreement and on the amounts furnished to the Indenture Trustee pursuant to the
Cap Contracts in its preparation of its Statement to Noteholders.
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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 Issuer 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 Master 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 Issuer 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 Issuer 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
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beyond the expiration of 21 years from the death of the survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United States to
the Court of St. Xxxxx, 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 Master 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
Issuer 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 Master Servicer shall have the option to redeem the Notes in
whole, but not in part, 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
redemption price for the Notes 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 Master 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 Master 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 redemption, 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 (the
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"Redemption Price"). If the determination of the fair market value of the
Mortgage Loans and REO Properties shall be required to be made by the Master
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 Master 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 Master 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
Master Servicer is not sufficient to make such redemption or such redemption
cannot be completed for any reason, the amount so deposited by the Master
Servicer with the Indenture Trustee shall be immediately returned to the Master
Servicer in full and shall not be used for any other purpose or be deemed to be
part of the Trust Estate.
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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 Issuer and the Indenture Trustee, when authorized by
an Issuer 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 Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
Holders of the Notes, or to surrender any right or power herein conferred
upon the Issuer;
(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 Master 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
(vii) 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
59
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 Issuer and the Indenture Trustee, when authorized by an Issuer
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 Issuer to be
subject to an entity level tax for federal income tax purposes.
Section 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The
Issuer and the Indenture Trustee, when authorized by an Issuer 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 Issuer 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;
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(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 Issuer 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 Issuer (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 Master 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 Issuer 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
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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 Issuer 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 Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
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ARTICLE X
MISCELLANEOUS
Section 10.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
(a) Upon any application or request by the Issuer to the Indenture Trustee
to take any action under any provision of this Indenture, the Issuer 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
Issuer 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
Issuer 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 Issuer 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 Issuer
shall also deliver to the Indenture Trustee an Independent Certificate
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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 Issuer, 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 Issuer 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 Issuer 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
Issuer 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 Issuer 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
Issuer, stating that the information with respect to such factual matters is in
the possession of the Seller or the Issuer, 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.
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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 Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer'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 Issuer 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 Issuer.
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 Issuer, 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 Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
Section 10.04. NOTICES ETC., TO INDENTURE TRUSTEE ISSUER 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:
65
(i) the Indenture Trustee by any Noteholder or by the Issuer 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 Issuer; or
(ii) the Issuer 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 Issuer addressed to: New Century Home
Equity Loan Trust 2004-2, in care of Wilmington Trust Company, Xxxxxx
Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000- 0000,
Attention: Corporate Trust Administration, or at any other address
previously furnished in writing to the Indenture Trustee by the Issuer.
The Issuer 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 Issuer, 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:
Xxxxx'x Investors Service, Inc., Residential Mortgage Monitoring Department, 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (ii) in the case of S&P, at the
following address: Standard & Poor's, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention of Asset Backed Surveillance Department and (iii) Fitch
Ratings, Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; 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.
66
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 xx.xx. 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 Issuer 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 Issuer 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
67
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. ISSUER OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, 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 Issuer 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 Issuer, 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 Issuer
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 Issuer, or join in any
institution against the Depositor or the Issuer 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 Issuer agrees that, at its expense, on
reasonable prior notice, it shall permit any representative of the Indenture
Trustee, during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer'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 2004-2, 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
Issuer 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 Issuer, (c) nothing herein
68
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 Issuer
or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Issuer 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 Issuer (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.
69
IN WITNESS WHEREOF, the Issuer 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, 2004-2, as Issuer
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner Trustee
By:_____________________________________
Name:
Title:
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Indenture Trustee
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On this ___th day of June, 2004, before me personally appeared
__________________ to me known, who being by me duly sworn, did depose and say,
that he is a __________________ of the Indenture Trustee, one of the
corporations described in and which executed the above instrument; and that he
signed his name thereto by like order.
Notary Public
----------------------
NOTARY PUBLIC
[NOTARIAL SEAL]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On this ___th day of June, 2004, before me personally appeared
________________ to me known, who being by me duly sworn, did depose and say,
that she is a ___________________ of the Indenture Trustee, one of the
corporations described in and which executed the above instrument; and that she
signed her name thereto by like order.
Notary Public
----------------------
NOTARY PUBLIC
[NOTARIAL SEAL]
STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
On this ____ day of June, 2004, before me personally appeared
_______________ to me known, who being by me duly sworn, did depose and say,
that she is a _____________________ of the Owner Trustee, one of the entities
described in and which executed the above instrument; and that she signed her
name thereto by like order.
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.
A-1-1
NEW CENTURY HOME EQUITY LOAN TRUST, 2004-2
ASSET-BACKED NOTES, SERIES 2004-2
CLASS A-1
AGGREGATE NOTE BALANCE: NOTE RATE: Variable
$_____________________
INITIAL NOTE BALANCE OF THIS BOND: BOND NO. 1
$_____________________
PERCENTAGE INTEREST: 100% CUSIP NO. [ ]
New Century Home Equity Loan Trust 2004-2 (the "Issuer"), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) 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 July 2004 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 Issuer's Asset-Backed
Notes, Series 2004-2 (the "Notes"), issued under an Indenture dated as of June
29, 2004 (the "Indenture"), between the Issuer 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 Issuer, 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 Issuer 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.
A-1-2
The Notes are subject to redemption in whole, but not in part, by the
Master 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 Issuer 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
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Master Servicer or any of their respective affiliates, or to the assets of any
of the foregoing entities, except the assets of the Issuer pledged to secure the
Class A-1 Notes pursuant to the Indenture and the rights conveyed to the Issuer
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 Issuer
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.
A-1-3
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 Issuer, the Seller, NC Capital, any Underwriter, the Owner Trustee, the
Indenture Trustee, the Master 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 Issuer, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Master 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 Issuer. 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 Issuer 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 Issuer, the Indenture Trustee and any agent of the Issuer 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 Issuer, the Indenture Trustee nor any such agent of the Issuer
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
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer 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 Issuer and the
Indenture Trustee to amend or waive
A-1-4
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-1-5
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: June __ 2004
NEW CENTURY HOME EQUITY LOAN TRUST
2004-2
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
A-1-6
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.
A-1-7
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.
A-1-8
EXHIBIT A-2
FORM OF CLASS A-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.
A-2-1
NEW CENTURY HOME EQUITY LOAN TRUST, 2004-2
ASSET-BACKED NOTES, SERIES 2004-2
CLASS A-2
AGGREGATE NOTE BALANCE: NOTE RATE: Variable
$_____________________
INITIAL NOTE BALANCE OF THIS BOND: BOND NO. 1
$_____________________
PERCENTAGE INTEREST: 100% CUSIP NO. [ ]
New Century Home Equity Loan Trust 2004-2 (the "Issuer"), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) 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 July 2004 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 Issuer's Asset-Backed
Notes, Series 2004-2 (the "Notes"), issued under an Indenture dated as of June
29, 2004 (the "Indenture"), between the Issuer 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 Issuer, 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 Issuer with respect to this Note shall
be equal to this Note's PRO RATA share of the aggregate payments on all Class
A-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.
A-2-2
The Notes are subject to redemption in whole, but not in part, by the
Master 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 Issuer 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-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
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Master Servicer or any of their respective affiliates, or to the assets of any
of the foregoing entities, except the assets of the Issuer pledged to secure the
Class A-2 Notes pursuant to the Indenture and the rights conveyed to the Issuer
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 Issuer
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.
A-2-3
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 Issuer, the Seller, NC Capital, any Underwriter, the Owner Trustee, the
Indenture Trustee, the Master 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 Issuer, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Master 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 Issuer. 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 Issuer 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 Issuer, the Indenture Trustee and any agent of the Issuer 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 Issuer, the Indenture Trustee nor any such agent of the Issuer
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
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer 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 Issuer and the
Indenture Trustee to amend or waive
A-2-4
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-2-5
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: June __ 2004
NEW CENTURY HOME EQUITY LOAN TRUST
2004-2
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
A-2-6
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.
A-2-7
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.
A-2-8
EXHIBIT A-3
FORM OF CLASS A-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.
A-3-1
NEW CENTURY HOME EQUITY LOAN TRUST, 2004-2
ASSET-BACKED NOTES, SERIES 2004-2
CLASS A-3
AGGREGATE NOTE BALANCE: NOTE RATE: Variable
$_____________________
INITIAL NOTE BALANCE OF THIS BOND: BOND NO. 1
$_____________________
PERCENTAGE INTEREST: 100% CUSIP NO. [ ]
New Century Home Equity Loan Trust 2004-2 (the "Issuer"), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) 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 July 2004 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 Issuer's Asset-Backed
Notes, Series 2004-2 (the "Notes"), issued under an Indenture dated as of June
29, 2004 (the "Indenture"), between the Issuer 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 Issuer, 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 Issuer with respect to this Note shall
be equal to this Note's PRO RATA share of the aggregate payments on all Class
A-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.
A-3-2
The Notes are subject to redemption in whole, but not in part, by the
Master 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 Issuer 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-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
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Master Servicer or any of their respective affiliates, or to the assets of any
of the foregoing entities, except the assets of the Issuer pledged to secure the
Class A-3 Notes pursuant to the Indenture and the rights conveyed to the Issuer
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 Issuer
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.
A-3-3
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 Issuer, the Seller, NC Capital, any Underwriter, the Owner Trustee, the
Indenture Trustee, the Master 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 Issuer, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Master 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 Issuer. 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 Issuer 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 Issuer, the Indenture Trustee and any agent of the Issuer 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 Issuer, the Indenture Trustee nor any such agent of the Issuer
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
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer 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 Issuer and the
Indenture Trustee to amend or waive
A-3-4
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-3-5
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: June __ 2004
NEW CENTURY HOME EQUITY LOAN TRUST
2004-2
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
A-3-6
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.
A-3-7
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.
A-3-8
EXHIBIT A-4
FORM OF CLASS A-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.
A-4-1
NEW CENTURY HOME EQUITY LOAN TRUST, 2004-2
ASSET-BACKED NOTES, SERIES 2004-2
CLASS A-4
AGGREGATE NOTE BALANCE: NOTE RATE: Variable
$_____________________
INITIAL NOTE BALANCE OF THIS BOND: BOND NO. 1
$_____________________
PERCENTAGE INTEREST: 100% CUSIP NO. [ ]
New Century Home Equity Loan Trust 2004-2 (the "Issuer"), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) 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 July 2004 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 Issuer's Asset-Backed
Notes, Series 2004-2 (the "Notes"), issued under an Indenture dated as of June
29, 2004 (the "Indenture"), between the Issuer 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 Issuer, 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 Issuer with respect to this Note shall
be equal to this Note's PRO RATA share of the aggregate payments on all Class
A-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.
A-4-2
The Notes are subject to redemption in whole, but not in part, by the
Master 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 Issuer 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-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
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Master Servicer or any of their respective affiliates, or to the assets of any
of the foregoing entities, except the assets of the Issuer pledged to secure the
Class A-4 Notes pursuant to the Indenture and the rights conveyed to the Issuer
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 Issuer
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.
A-4-3
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 Issuer, the Seller, NC Capital, any Underwriter, the Owner Trustee, the
Indenture Trustee, the Master 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 Issuer, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Master 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 Issuer. 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 Issuer 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 Issuer, the Indenture Trustee and any agent of the Issuer 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 Issuer, the Indenture Trustee nor any such agent of the Issuer
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
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer 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 Issuer and the
Indenture Trustee to amend or waive
A-4-4
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-4-5
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: June __ 2004
NEW CENTURY HOME EQUITY LOAN TRUST
2004-2
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
A-4-6
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.
A-4-7
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.
A-4-8
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.
A-5-1
NEW CENTURY HOME EQUITY LOAN TRUST, 2004-2
ASSET-BACKED NOTES, SERIES 2004-2
CLASS M-1
AGGREGATE NOTE BALANCE: NOTE RATE: Variable
$_____________________
INITIAL NOTE BALANCE OF THIS BOND: BOND NO. 1
$_____________________
PERCENTAGE INTEREST: 100% CUSIP NO. [ ]
New Century Home Equity Loan Trust 2004-2 (the "Issuer"), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) 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 July 2004 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 Issuer's Asset-Backed
Notes, Series 2004-2 (the "Notes"), issued under an Indenture dated as of June
29, 2004 (the "Indenture"), between the Issuer 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 Issuer, 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 Issuer 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.
A-5-2
The Notes are subject to redemption in whole, but not in part, by the
Master 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 Issuer 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
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Master Servicer or any of their respective affiliates, or to the assets of any
of the foregoing entities, except the assets of the Issuer pledged to secure the
Class M-1 Notes pursuant to the Indenture and the rights conveyed to the Issuer
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 Issuer
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.
A-5-3
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 Issuer, the Seller, NC Capital, any Underwriter, the Owner Trustee, the
Indenture Trustee, the Master 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 Issuer, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Master 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 Issuer. 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 Issuer 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 Issuer, the Indenture Trustee and any agent of the Issuer 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 Issuer, the Indenture Trustee nor any such agent of the Issuer
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
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer 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 Issuer and the
Indenture Trustee to amend or waive
A-5-4
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-5-5
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: June __ 2004
NEW CENTURY HOME EQUITY LOAN TRUST
2004-2
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
A-5-6
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.
A-5-7
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.
A-5-8
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.
A-6-1
NEW CENTURY HOME EQUITY LOAN TRUST, 2004-2
ASSET-BACKED NOTES, SERIES 2004-2
CLASS M-2
AGGREGATE NOTE BALANCE: NOTE RATE: Variable
$_____________________
INITIAL NOTE BALANCE OF THIS BOND: BOND NO. 1
$_____________________
PERCENTAGE INTEREST: 100% CUSIP NO. [ ]
New Century Home Equity Loan Trust 2004-2 (the "Issuer"), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) 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 July 2004 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 Issuer's Asset-Backed
Notes, Series 2004-2 (the "Notes"), issued under an Indenture dated as of June
29, 2004 (the "Indenture"), between the Issuer 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 Issuer, 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 Issuer 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.
A-6-2
The Notes are subject to redemption in whole, but not in part, by the
Master 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 Issuer 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
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Master Servicer or any of their respective affiliates, or to the assets of any
of the foregoing entities, except the assets of the Issuer pledged to secure the
Class M-2 Notes pursuant to the Indenture and the rights conveyed to the Issuer
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 Issuer
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.
A-6-3
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 Issuer, the Seller, NC Capital, any Underwriter, the Owner Trustee, the
Indenture Trustee, the Master 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 Issuer, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Master 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 Issuer. 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 Issuer 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 Issuer, the Indenture Trustee and any agent of the Issuer 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 Issuer, the Indenture Trustee nor any such agent of the Issuer
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
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer 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 Issuer and the
Indenture Trustee to amend or waive
A-6-4
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-6-5
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: June __ 2004
NEW CENTURY HOME EQUITY LOAN TRUST
2004-2
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
A-6-6
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.
A-6-7
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.
A-6-8
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.
A-7-1
NEW CENTURY HOME EQUITY LOAN TRUST, 2004-2
ASSET-BACKED NOTES, SERIES 2004-2
CLASS M-3
AGGREGATE NOTE BALANCE: NOTE RATE: Variable
$________________________
INITIAL NOTE BALANCE OF THIS BOND: BOND NO. 1
$________________________
PERCENTAGE INTEREST: 100% CUSIP NO. [ ]
New Century Home Equity Loan Trust 2004-2 (the "Issuer"), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) 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 July 2004 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 Issuer's Asset-Backed
Notes, Series 2004-2 (the "Notes"), issued under an Indenture dated as of June
29, 2004 (the "Indenture"), between the Issuer 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 Issuer, 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 Issuer 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.
A-7-2
The Notes are subject to redemption in whole, but not in part, by the
Master 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 Issuer 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
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Master Servicer or any of their respective affiliates, or to the assets of any
of the foregoing entities, except the assets of the Issuer pledged to secure the
Class M-3 Notes pursuant to the Indenture and the rights conveyed to the Issuer
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 Issuer
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.
A-7-3
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 Issuer, the Seller, NC Capital, any Underwriter, the Owner Trustee, the
Indenture Trustee, the Master 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 Issuer, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Master 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 Issuer. 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 Issuer 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 Issuer, the Indenture Trustee and any agent of the Issuer 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 Issuer, the Indenture Trustee nor any such agent of the Issuer
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
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer 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 Issuer and the
Indenture Trustee to amend or waive
A-7-4
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-7-5
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: June __ 2004
NEW CENTURY HOME EQUITY LOAN TRUST
2004-2
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
A-7-6
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.
A-7-7
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.
A-7-8
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.
A-8-1
NEW CENTURY HOME EQUITY LOAN TRUST, 2004-2
ASSET-BACKED NOTES, SERIES 2004-2
CLASS M-4
AGGREGATE NOTE BALANCE: NOTE RATE: Variable
$_____________________
INITIAL NOTE BALANCE OF THIS BOND: BOND NO. 1
$_____________________
PERCENTAGE INTEREST: 100% CUSIP NO. [ ]
New Century Home Equity Loan Trust 2004-2 (the "Issuer"), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) 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 July 2004 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 Issuer's Asset-Backed
Notes, Series 2004-2 (the "Notes"), issued under an Indenture dated as of June
29, 2004 (the "Indenture"), between the Issuer 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 Issuer, 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 Issuer 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.
A-8-2
The Notes are subject to redemption in whole, but not in part, by the
Master 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 Issuer 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
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Master Servicer or any of their respective affiliates, or to the assets of any
of the foregoing entities, except the assets of the Issuer pledged to secure the
Class M-4 Notes pursuant to the Indenture and the rights conveyed to the Issuer
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 Issuer
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.
A-8-3
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 Issuer, the Seller, NC Capital, any Underwriter, the Owner Trustee, the
Indenture Trustee, the Master 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 Issuer, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Master 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 Issuer. 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 Issuer 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 Issuer, the Indenture Trustee and any agent of the Issuer 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 Issuer, the Indenture Trustee nor any such agent of the Issuer
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
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer 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 Issuer and the
Indenture Trustee to amend or waive
A-8-4
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-8-5
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: June __ 2004
NEW CENTURY HOME EQUITY LOAN TRUST
2004-2
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
A-8-6
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.
A-8-7
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.
A-8-8
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.
A-9-1
NEW CENTURY HOME EQUITY LOAN TRUST, 2004-2
ASSET-BACKED NOTES, SERIES 2004-2
CLASS M-5
AGGREGATE NOTE BALANCE: NOTE RATE: Variable
$____________________
INITIAL NOTE BALANCE OF THIS BOND: BOND NO. 1
$____________________
PERCENTAGE INTEREST: 100% CUSIP NO. [ ]
New Century Home Equity Loan Trust 2004-2 (the "Issuer"), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) 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 July 2004 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 Issuer's Asset-Backed
Notes, Series 2004-2 (the "Notes"), issued under an Indenture dated as of June
29, 2004 (the "Indenture"), between the Issuer 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 Issuer, 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 Issuer 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.
A-9-2
The Notes are subject to redemption in whole, but not in part, by the
Master 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 Issuer 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
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Master Servicer or any of their respective affiliates, or to the assets of any
of the foregoing entities, except the assets of the Issuer pledged to secure the
Class M-5 Notes pursuant to the Indenture and the rights conveyed to the Issuer
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 Issuer
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.
A-9-3
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 Issuer, the Seller, NC Capital, any Underwriter, the Owner Trustee, the
Indenture Trustee, the Master 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 Issuer, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Master 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 Issuer. 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 Issuer 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 Issuer, the Indenture Trustee and any agent of the Issuer 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 Issuer, the Indenture Trustee nor any such agent of the Issuer
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
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer 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 Issuer and the
Indenture Trustee to amend or waive
A-9-4
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-9-5
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: June __ 2004
NEW CENTURY HOME EQUITY LOAN TRUST
2004-2
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
A-9-6
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.
A-9-7
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.
A-9-8
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.
A-10-1
NEW CENTURY HOME EQUITY LOAN TRUST, 2004-2
ASSET-BACKED NOTES, SERIES 2004-2
CLASS M-6
AGGREGATE NOTE BALANCE: NOTE RATE: Variable
$______________________
INITIAL NOTE BALANCE OF THIS BOND: BOND NO. 1
$______________________
PERCENTAGE INTEREST: 100% CUSIP NO. [ ]
New Century Home Equity Loan Trust 2004-2 (the "Issuer"), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) 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 July 2004 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 Issuer's Asset-Backed
Notes, Series 2004-2 (the "Notes"), issued under an Indenture dated as of June
29, 2004 (the "Indenture"), between the Issuer 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 Issuer, 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 Issuer 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.
A-10-2
The Notes are subject to redemption in whole, but not in part, by the
Master 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 Issuer 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
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Master Servicer or any of their respective affiliates, or to the assets of any
of the foregoing entities, except the assets of the Issuer pledged to secure the
Class M-6 Notes pursuant to the Indenture and the rights conveyed to the Issuer
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 Issuer
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.
A-10-3
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 Issuer, the Seller, NC Capital, any Underwriter, the Owner Trustee, the
Indenture Trustee, the Master 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 Issuer, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Master 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 Issuer. 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 Issuer 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 Issuer, the Indenture Trustee and any agent of the Issuer 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 Issuer, the Indenture Trustee nor any such agent of the Issuer
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
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer 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 Issuer and the
Indenture Trustee to amend or waive
A-10-4
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-10-5
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: June __ 2004
NEW CENTURY HOME EQUITY LOAN TRUST
2004-2
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
A-10-6
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.
A-10-7
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.
A-10-8
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.
A-11-1
NEW CENTURY HOME EQUITY LOAN TRUST, 2004-2
ASSET-BACKED NOTES, SERIES 2004-2
CLASS M-7
AGGREGATE NOTE BALANCE: NOTE RATE: Variable
$______________________
INITIAL NOTE BALANCE OF THIS BOND: BOND NO. 1
$______________________
PERCENTAGE INTEREST: 100% CUSIP NO. [ ]
New Century Home Equity Loan Trust 2004-2 (the "Issuer"), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) 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 July 2004 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 Issuer's Asset-Backed
Notes, Series 2004-2 (the "Notes"), issued under an Indenture dated as of June
29, 2004 (the "Indenture"), between the Issuer 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 Issuer, 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 Issuer 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.
A-11-2
The Notes are subject to redemption in whole, but not in part, by the
Master 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 Issuer 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
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Master Servicer or any of their respective affiliates, or to the assets of any
of the foregoing entities, except the assets of the Issuer pledged to secure the
Class M-7 Notes pursuant to the Indenture and the rights conveyed to the Issuer
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 Issuer
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.
A-11-3
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 Issuer, the Seller, NC Capital, any Underwriter, the Owner Trustee, the
Indenture Trustee, the Master 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 Issuer, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Master 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 Issuer. 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 Issuer 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 Issuer, the Indenture Trustee and any agent of the Issuer 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 Issuer, the Indenture Trustee nor any such agent of the Issuer
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
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer 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 Issuer and the
Indenture Trustee to amend or waive
A-11-4
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-11-5
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: June __ 2004
NEW CENTURY HOME EQUITY LOAN TRUST
2004-2
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
A-11-6
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.
A-11-7
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.
A-11-8
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.
A-12-1
NEW CENTURY HOME EQUITY LOAN TRUST, 2004-2
ASSET-BACKED NOTES, SERIES 2004-2
CLASS M-8
AGGREGATE NOTE BALANCE: NOTE RATE: Variable
$_____________________
INITIAL NOTE BALANCE OF THIS BOND: BOND NO. 1
$_____________________
PERCENTAGE INTEREST: 100% CUSIP NO. [ ]
New Century Home Equity Loan Trust 2004-2 (the "Issuer"), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) 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 July 2004 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 Issuer's Asset-Backed
Notes, Series 2004-2 (the "Notes"), issued under an Indenture dated as of June
29, 2004 (the "Indenture"), between the Issuer 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 Issuer, 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 Issuer 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.
A-12-2
The Notes are subject to redemption in whole, but not in part, by the
Master 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 Issuer 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
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Master Servicer or any of their respective affiliates, or to the assets of any
of the foregoing entities, except the assets of the Issuer pledged to secure the
Class M-8 Notes pursuant to the Indenture and the rights conveyed to the Issuer
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 Issuer
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.
A-12-3
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 Issuer, the Seller, NC Capital, any Underwriter, the Owner Trustee, the
Indenture Trustee, the Master 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 Issuer, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Master 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 Issuer. 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 Issuer 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 Issuer, the Indenture Trustee and any agent of the Issuer 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 Issuer, the Indenture Trustee nor any such agent of the Issuer
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
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer 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 Issuer and the
Indenture Trustee to amend or waive
A-12-4
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-12-5
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: June __ 2004
NEW CENTURY HOME EQUITY LOAN TRUST
2004-2
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
A-12-6
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.
A-12-7
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.
A-12-8
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, THE CLASS M-7 NOTES AND THE CLASS M-8 NOTES TO THE EXTENT
DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
A-13-1
NEW CENTURY HOME EQUITY LOAN TRUST, 2004-2
ASSET-BACKED NOTES, SERIES 2004-2
CLASS M-9
AGGREGATE NOTE BALANCE: NOTE RATE: Variable
$_____________________
INITIAL NOTE BALANCE OF THIS BOND: BOND NO. 1
$_____________________
PERCENTAGE INTEREST: 100% CUSIP NO. [ ]
New Century Home Equity Loan Trust 2004-2 (the "Issuer"), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) 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 July 2004 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 Issuer's Asset-Backed
Notes, Series 2004-2 (the "Notes"), issued under an Indenture dated as of June
29, 2004 (the "Indenture"), between the Issuer 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 Issuer, 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 Issuer 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.
A-13-2
The Notes are subject to redemption in whole, but not in part, by the
Master 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 Issuer 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
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Master Servicer or any of their respective affiliates, or to the assets of any
of the foregoing entities, except the assets of the Issuer pledged to secure the
Class M-9 Notes pursuant to the Indenture and the rights conveyed to the Issuer
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 Issuer
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.
A-13-3
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 Issuer, the Seller, NC Capital, any Underwriter, the Owner Trustee, the
Indenture Trustee, the Master 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 Issuer, the Seller, NC Capital, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Master 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 Issuer. 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 Issuer 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 Issuer, the Indenture Trustee and any agent of the Issuer 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 Issuer, the Indenture Trustee nor any such agent of the Issuer
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
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer 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 Issuer and the
Indenture Trustee to amend or waive
A-13-4
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-13-5
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: June __ 2004
NEW CENTURY HOME EQUITY LOAN TRUST
2004-2
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
A-13-6
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.
A-13-7
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.
A-13-8
EXHIBIT B
MORTGAGE LOAN SCHEDULE
(Filed Manually)
B-1
EXHIBIT C-1
FORM OF INITIAL CERTIFICATION
June 29, 2004
New Century Home Equity Loan Trust 2004-2 New Century Mortgage Corporation
c/o Wilmington Trust Company 00000 Xxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx Xxxxxx, Xxxxxxxxxx 00000
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Re: Indenture dated as of June 29, 2004, between New Century Home EQUITY
LOAN TRUST 2004-2 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 Sale and Contribution Agreement,
dated as of June 29, 2004 (the "MLSCA"; and together with the Indenture, the
"Agreements"), among NC Residual II Corporation, NC Capital Corporation and New
Century Mortgage Securities, Inc., 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 MLSCA) 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), (iii), (xi), (xii), (xv) and (xvii) (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
MLSCA.
C-1-1
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:
C-1-2
EXHIBIT C-2
FORM OF FINAL CERTIFICATION
____________________, 200__
New Century Home Equity Loan Trust 2004-2 New Century Mortgage Corporation
c/o Wilmington Trust Company 00000 Xxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx Xxxxxx, Xxxxxxxxxx 00000
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Re: Indenture dated as of June 29, 2004, between New Century Home EQUITY
LOAN TRUST 2004-2 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 Sale and Contribution Agreement, dated as of
June 29, 2004, (the "MLSCA"; and together with the Indenture, the "Agreements"),
among NC Residual II Coporation, NC Capital Corporation and New Century Mortgage
Securities, Inc., 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 MLSCA.
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.
C-2-1
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:
C-2-2
EXHIBIT D
CAP CONTRACTS
(Provided Upon Request)
D-1
APPENDIX A
DEFINITIONS
"Accepted Servicing Practices": The servicing standards set forth in
Section 3.01 of the Servicing Agreement.
"Accrued Note Interest": With respect to any Class A Note or Mezzanine
Note and each Payment Date, interest accrued during the related Interest Accrual
Period at the Note Rate for such Note for such Payment Date on the Note Balance
immediately prior to such Payment Date. All payments of interest on the Class A
Notes and the Mezzanine Notes will be calculated on the basis of a 360-day year
and the actual number of days in the applicable Interest Accrual Period. Accrued
Note Interest with respect to each Payment Date, as to any Class A Note or
Mezzanine Note, shall be reduced by an amount equal to the portion allocable to
such Note pursuant to Section 3.30 of the Indenture of the sum of (a) the
aggregate Prepayment Interest Shortfall, if any, for such Payment Date to the
extent not covered by payments pursuant to Section 3.24 of the Servicing
Agreement and (b) the aggregate amount of any Relief Act Interest Shortfall, if
any, for such Payment Date.
"Adjustable-Rate Mortgage Loan": Each of the Mortgage Loans identified in
the Mortgage Loan Schedule as having a Mortgage Rate that is subject to
adjustment.
"Adjustment Date": With respect to each Adjustable-Rate Mortgage Loan, the
first day of the month in which the Mortgage Rate of such Mortgage Loan changes
pursuant to the related Mortgage Note. The first Adjustment Date following the
Cut-off Date as to each Adjustable-Rate Mortgage Loan is set forth in the
Mortgage Loan Schedule.
"Advancing Person": As defined in Section 3.26(a) of the Servicing
Agreement.
"Administrator": New Century Mortgage Corporation in the performance of
its duties pursuant to Article VIII under the Servicing Agreement.
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Allocated Realized Loss Amount": With respect to any Payment Date and any
Class of Mezzanine Notes, the sum of (i) any Realized Losses allocated to such
Class of Notes on such Payment Date and (ii) the amount of any Allocated
Realized Loss Amount for such Class of Notes remaining unpaid from the previous
Payment Date minus the amount of the increase in the related Note Balance due to
the receipt of Subsequent Recoveries as provided in Section 3.05 of the
Indenture.
"Assignment": An assignment of Mortgage, notice of transfer or equivalent
instrument, in recordable form (excepting therefrom, if applicable, the mortgage
recordation information which has not been required pursuant to Section 2.01 of
the Mortgage Loan Sale and Contribution Agreement or returned by the applicable
recorder's office), which is sufficient under the laws of the jurisdiction
wherein the related Mortgaged Property is located to reflect of record the sale
of the Mortgage, which assignment, notice of transfer or equivalent instrument
may be in the form of one or more blanket assignments covering Mortgages secured
by Mortgaged Properties located in the same county, if permitted by law.
"Authorized Newspaper": A newspaper of general circulation in the Borough
of Manhattan, The City of New York, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays.
"Authorized Officer": With respect to the Issuer, any officer of the Owner
Trustee who is authorized to act for the Owner Trustee in matters relating to
the Issuer and who is identified on the list of Authorized Officers delivered by
the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may
be modified or supplemented from time to time thereafter) and any authorized
officer of the Master Servicer in its capacity as administrator of the Issuer
pursuant to Article VIII of the Servicing Agreement.
"Available Funds Rate": For any Payment Date with respect to the Class A-1
Notes, a per annum rate equal to the product of (x) the weighted average of the
Expense Adjusted Mortgage Rates of the then outstanding Group I Mortgage Loans,
weighted based on their Stated Principal Balances as of the first day of the
calendar month preceding the month in which the Payment Date occurs multiplied
by a fraction the numerator of which is the aggregate Stated Principal Balance
of the Group I Mortgage Loans and the Group II Mortgage Loans as of the last day
of the prior Due Period and the denominator of which is the aggregate Note
Balance of the Class A Notes and the Mezzanine Notes immediately prior to such
Payment Date and (y) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days elapsed in the related
Interest Accrual Period.
For any Payment Date with respect to the Group II Notes, a per annum rate
equal to the product of (x) the weighted average of the Expense Adjusted
Mortgage Rates of the then outstanding Group II Mortgage Loans, weighted based
on their Stated Principal Balances as of the first day of the calendar month
preceding the month in which the Payment Date occurs multiplied by a fraction
the numerator of which is the aggregate Stated Principal Balance of the Group I
Mortgage Loans and the Group II Mortgage Loans as of the last day of the prior
Due Period and the denominator of which is the aggregate Note Balance of the
Class A Notes and the Mezzanine Notes immediately prior to such Payment Date and
(y) a fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period.
For any Payment Date with respect to the Mezzanine Notes, a per annum rate
equal to the product of (x) the product of (A) weighted average of the Expense
Adjusted Mortgage Rates of the then outstanding Group I Mortgage Loans and Group
II Mortgage Loans, weighted based on their Stated Principal Balances as of the
first day of the calendar month preceding the month in which the Payment Date
occurs less the sum of (i) the Note Rate for the Class A-1 Notes multiplied
2
by a fraction, the numerator of which is the Note Balance of the Class A-1 Notes
immediately prior to such Payment Date and the denominator of which is the
Stated Principal Balance of the Group I Mortgage Loans and the Group II Mortgage
Loans as of the last day of the prior Due Period and (ii) the weighted average
Note Rate for the Group II Notes for such Payment Date multiplied by a fraction,
the numerator of which is the aggregate Note Balance of the Group II Notes
immediately prior to such Payment Date and the denominator of which is the
Stated Principal Balance of the Group I Mortgage Loans and the Group II Mortgage
Loans as of the last day of the prior Due Period and (B) a fraction, the
numerator of which is the aggregate Stated Principal Balance of the Group I
Mortgage Loans and Group II Mortgage Loans as of the last day of the prior Due
Period and the denominator of which is the aggregate Note Balance of the
Mezzanine Notes immediately prior to such Payment Date and (y) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days elapsed in the related Interest Accrual Period.
"Available Payment Amount": With respect to any Payment Date, an amount
equal to (1) the sum of (a) the aggregate of the amounts on deposit in the
Collection Account and Payment Account as of the close of business on the
related Determination Date, including any Subsequent Recoveries, (b) the
aggregate of any amounts received in respect of an REO Property withdrawn from
any REO Account and deposited in the Payment Account for such Payment Date
pursuant to Section 3.23 of the Servicing Agreement, (c) the aggregate of any
amounts deposited in the Payment Account by the Master Servicer in respect of
Prepayment Interest Shortfalls for such Payment Date pursuant to Section 3.24 of
the Servicing Agreement, (d) the aggregate of any P&I Advances made by the
Master Servicer for such Payment Date pursuant to Section 4.01 of the Servicing
Agreement, (e) the aggregate of any advances made by the Indenture Trustee as
successor Master Servicer or any other successor Master Servicer for such
Payment Date pursuant to Section 6.02 of the Servicing Agreement and (f) the
amount of any Prepayment Charges collected by the Master Servicer in connection
with the Principal Prepayment of any of the Mortgage Loans, reduced (to not less
than zero), by (2) the portion of the amount described in clause (1)(a) above
that represents (i) Monthly Payments on the Mortgage Loans received from a
Mortgagor on or prior to the Determination Date but due during any Due Period
subsequent to the related Due Period, (ii) Principal Prepayments on the Mortgage
Loans received after the related Prepayment Period (together with any interest
payments received with such Principal Prepayments to the extent they represent
the payment of interest accrued on the Mortgage Loans during a period subsequent
to the related Prepayment Period), (iii) Liquidation Proceeds and Insurance
Proceeds received in respect of the Mortgage Loans after the related Prepayment
Period, (iv) amounts reimbursable or payable to the Depositor, the Master
Servicer, the Indenture Trustee, the Owner Trustee, the Seller or any
Sub-Servicer pursuant to Section 3.11 or Section 3.12 of the Servicing
Agreement, (v) the Indenture Trustee Fee, the Owner Trustee Fee (beginning on
the 13th Payment Date) and other amounts payable from the Payment Account
pursuant to Section 6.07 of the Indenture and (vi) amounts deposited in the
Collection Account or the Payment Account in error.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"Bankruptcy Loss": With respect to any Mortgage Loan, a Realized Loss
resulting from a Deficient Valuation or Debt Service Reduction.
3
"Basic Documents": The Trust Agreement, the Certificate of Trust, the
Indenture, the Servicing Agreement, the Mortgage Loan Sale and Contribution
Agreement, the Cap Contracts, and the other documents and certificates delivered
in connection with any of the above.
"Basis Risk Shortfall": With respect to any Class of Notes and any Payment
Date, the sum of (i) the excess, if any, of (x) the aggregate Accrued Note
Interest thereon for such Payment Date calculated pursuant to the lesser of
clause (a)(i) or (ii) of the definition of Note Rate over (y) interest accrued
on such Class of Notes at the related Available Funds Rate and (ii) the unpaid
portion of any related Basis Risk Shortfall from the prior Payment Date together
with interest accrued on such unpaid portion for the most recently ended
Interest Accrual Period at the related Note Rate, without regard to the related
Available Funds Rate.
"Beneficial Owner": With respect to any Note, the Person who is the
beneficial owner of such Note as reflected on the books of the Depository or on
the books of a Person maintaining an account with such Depository (directly as a
Depository Participant or indirectly through a Depository Participant, in
accordance with the rules of such Depository).
"Book-Entry Notes": Beneficial interests in the Notes, ownership and
transfers of which shall be made through book entries by the Depository as
described in Section 4.06 of the Indenture.
"Business Day": Any day other than a Saturday, a Sunday or a day on which
banking or savings institutions in the State of Delaware, the State of New York,
the State of California, or in the city in which the Corporate Trust Office of
the Indenture Trustee is located are authorized or obligated by law or executive
order to be closed.
"Cap Contracts": Together, the Group II Cap Contract and the Mezzanine Cap
Contract.
"Cash-Out Refinancing": A Refinanced Mortgage Loan the proceeds of which
are more than a nominal amount in excess of the principal balance of any
existing first mortgage or subordinate mortgage on the related Mortgaged
Property and related closing costs.
"Certificate Distribution Account": The account or accounts created and
maintained pursuant to Section 3.10(c) of the Trust Agreement. The Certificate
Distribution Account shall be an Eligible Account.
"Certificate Paying Agent": The meaning specified in Section 3.10 of the
Trust Agreement.
"Certificate Percentage Interest": With respect to each Certificate, the
Certificate Percentage Interest stated on the face thereof.
"Certificate Register": The register maintained by the Certificate
Registrar in which the Certificate Registrar shall provide for the registration
of Certificates and of transfers and exchanges of Certificates.
4
"Certificate Registrar": Initially, the Indenture Trustee, in its capacity
as Certificate Registrar, or any successor to the Indenture Trustee in such
capacity.
"Certificate of Trust": The Certificate of Trust filed for the Trust
pursuant to Section 3810(a) of the Statutory Trust Statute.
"Certificates" or "Trust Certificates": The New Century Home Equity Loan
Trust 2004-2 Trust Certificates, evidencing the beneficial ownership interest in
the Issuer and executed by the Owner Trustee in substantially the form set forth
in Exhibit A to the Trust Agreement.
"Certificateholder" or "Holder": The Person in whose name a Certificate is
registered in the Certificate Register. Owners of Certificates that have been
pledged in good faith may be regarded as Holders if the pledgee establishes to
the satisfaction of the Indenture Trustee or the Owner Trustee, as the case may
be, the pledgee's right so to act with respect to such Certificates and that the
pledgee is not the Issuer, any other obligor upon the Certificates or any
Affiliate of any of the foregoing Persons.
"Class": Collectively, all of the Notes bearing the same class
designation.
"Class A Notes": Any of the Class A-1 Notes or the Group II Notes.
"Class A-1 Notes": Any one of the Class A-1 Notes executed, authenticated
and delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit A-1 to the Indenture.
"Class A-2 Notes": Any one of the Class A-2 Notes executed, authenticated
and delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit A-2 to the Indenture.
"Class A-2 Allocation Percentage": With respect to any Payment Date, the
percentage equivalent of a fraction, the numerator of which is (i) the Note
Balance of the Class A-2 Notes immediately prior to such Payment Date, and the
denominator of which is (ii) the aggregate Note Balance of the Group II Notes
immediately prior to such Payment Date.
"Class A-3/4 Allocation Percentage": With respect to any Payment Date, the
percentage equivalent of a fraction, the numerator of which is (i) the aggregate
Note Balance of the Class A-3 Notes and the Class A-4 Notes immediately prior to
such Payment Date, and the denominator of which is (ii) the aggregate Note
Balance of the Group II Notes immediately prior to such Payment Date.
"Class A-3 Notes": Any one of the Class A-3 Notes executed, authenticated
and delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit A-3 to the Indenture.
"Class A-4 Notes": Any one of the Class A-4 Notes executed, authenticated
and delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit A-4 to the Indenture.
5
"Class M-1 Note": Any one of the Class M-1 Notes executed, authenticated
and delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit A-5 to the Indenture.
"Class M-1 Principal Payment Amount": With respect to any Payment Date,
the excess of (x) the sum of (i) the aggregate Note Balance of the Class A Notes
(after taking into account the payment of the Senior Principal Payment Amount on
such Payment Date) and (ii) the Note Balance of the Class M-1 Notes immediately
prior to such Payment Date over (y) the lesser of (A) the product of (i) 69.10%
and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period minus
$9,687,336.88.
"Class M-2 Note": Any one of the Class M-2 Notes executed, authenticated
and delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit A-6 to the Indenture.
"Class M-2 Principal Payment Amount": With respect to any Payment Date,
the excess of (x) the sum of (i) the aggregate Note Balance of the Class A Notes
(after taking into account the payment of the Senior Principal Payment Amount on
such Payment Date), (ii) the Note Balance of the Class M-1 Notes (after taking
into account the payment of the Class M-1 Principal Payment Amount on such
Payment Date) and (iii) the Note Balance of the Class M-2 Notes immediately
prior to such Payment Date over (y) the lesser of (A) the product of (i) 74.70%
and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period minus
$9,687,336.88.
"Class M-3 Note": Any one of the Class M-3 Notes executed, authenticated
and delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit A-7 to the Indenture.
"Class M-3 Principal Payment Amount": With respect to any Payment Date,
the excess of (x) the sum of (i) the aggregate Note Balance of the Class A Notes
(after taking into account the payment of the Senior Principal Payment Amount on
such Payment Date), (ii) the Note Balance of the Class M-1 Notes (after taking
into account the payment of the Class M-1 Principal Payment Amount on such
Payment Date), (iii) the Note Balance of the Class M-2 Notes (after taking into
account the payment of the Class M-2 Principal Payment Amount on such Payment
Date) and (iv) the Note Balance of the Class M-3 Notes immediately prior to such
Payment Date over (y) the lesser of (A) the product of (i) 78.70% and (ii) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period minus $9,687,336.88.
"Class M-4 Note": Any one of the Class M-4 Notes executed, authenticated
and delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit A-8 to the Indenture.
"Class M-4 Principal Payment Amount": With respect to any Payment Date,
the excess of (x) the sum of (i) the aggregate Note Balance of the Class A Notes
(after taking into account the payment of the Senior Principal Payment Amount on
such Payment Date), (ii) the Note Balance of the Class M-1 Notes (after taking
into account the payment of the Class M-1 Principal Payment Amount on such
Payment Date), (iii) the Note Balance of the Class M-2 Notes (after taking
6
into account the payment of the Class M-2 Principal Payment Amount on such
Payment Date), (iv) the Note Balance of the Class M-3 Notes (after taking into
account the payment of the Class M-3 Principal Payment Amount on such Payment
Date) and (v) the Note Balance of the Class M-4 Notes immediately prior to such
Payment Date over (y) the lesser of (A) the product of (i) 81.60% and (ii) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period minus $9,687,336.88.
"Class M-5 Note": Any one of the Class M-5 Notes executed, authenticated
and delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit A-9 of the Indenture.
"Class M-5 Principal Payment Amount": With respect to any Payment Date,
the excess of (x) the sum of (i) the aggregate Note Balance of the Class A Notes
(after taking into account the payment of the Senior Principal Payment Amount on
such Payment Date), (ii) the Note Balance of the Class M-1 Notes (after taking
into account the payment of the Class M-1 Principal Payment Amount on such
Payment Date), (iii) the Note Balance of the Class M-2 Notes (after taking into
account the payment of the Class M-2 Principal Payment Amount on such Payment
Date), (iv) the Note Balance of the Class M-3 Notes (after taking into account
the payment of the Class M-3 Principal Payment Amount on such Payment Date), (v)
the Note Balance of the Class M-4 Notes (after taking into account the payment
of the Class M-4 Principal Payment Amount on such Payment Date) and (vi) the
Note Balance of the Class M-5 Notes immediately prior to such Payment Date over
(y) the lesser of (A) the product of (i) 84.50% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period minus $9,687,336.88.
"Class M-6 Note": Any one of the Class M-6 Notes executed, authenticated
and delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit A-10 of the Indenture.
"Class M-6 Principal Payment Amount": With respect to any Payment Date,
the excess of (x) the sum of (i) the aggregate Note Balance of the Class A Notes
(after taking into account the payment of the Senior Principal Payment Amount on
such Payment Date), (ii) the Note Balance of the Class M-1 Notes (after taking
into account the payment of the Class M-1 Principal Payment Amount on such
Payment Date), (iii) the Note Balance of the Class M-2 Notes (after taking into
account the payment of the Class M-2 Principal Payment Amount on such Payment
Date), (iv) the Note Balance of the Class M-3 Notes (after taking into account
the payment of the Class M-3 Principal Payment Amount on such Payment Date), (v)
the Note Balance of the Class M-4 Notes (after taking into account the payment
of the Class M-4 Principal Payment Amount on such Payment Date), (vi) the Note
Balance of the Class M-5 Notes (after taking into account the payment of the
Class M-5 Principal Payment Amount on such Payment Date) and (vii) the Note
Balance of the Class M-6 Notes immediately prior to such Payment Date over (y)
the lesser of (A) the product of (i) 86.90% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period minus $9,687,336.88.
7
"Class M-7 Note": Any one of the Class M-7 Notes executed, authenticated
and delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit A-11 of the Indenture.
"Class M-7 Principal Payment Amount": With respect to any Payment Date,
the excess of (x) the sum of (i) the aggregate Note Balance of the Class A Notes
(after taking into account the payment of the Senior Principal Payment Amount on
such Payment Date), (ii) the Note Balance of the Class M-1 Notes (after taking
into account the payment of the Class M-1 Principal Payment Amount on such
Payment Date), (iii) the Note Balance of the Class M-2 Notes (after taking into
account the payment of the Class M-2 Principal Payment Amount on such Payment
Date), (iv) the Note Balance of the Class M-3 Notes (after taking into account
the payment of the Class M-3 Principal Payment Amount on such Payment Date), (v)
the Note Balance of the Class M-4 Notes (after taking into account the payment
of the Class M-4 Principal Payment Amount on such Payment Date), (vi) the Note
Balance of the Class M-5 Notes (after taking into account the payment of the
Class M-5 Principal Payment Amount on such Payment Date), (vii) the Note Balance
of the Class M-6 Notes (after taking into account the payment of the Class M-7
Principal Payment Amount on such Payment Date) and (viii) the Note Balance of
the Class M-6 Notes immediately prior to such Payment Date over (y) the lesser
of (A) the product of (i) 89.30% and (ii) the aggregate Stated Principal Balance
of the Mortgage Loans as of the last day of the related Due Period and (B) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $9,687,336.88.
"Class M-8 Note": Any one of the Class M-8 Notes executed, authenticated
and delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit A-12 of the Indenture.
"Class M-8 Principal Payment Amount": With respect to any Payment Date,
the excess of (x) the sum of (i) the aggregate Note Balance of the Class A Notes
(after taking into account the payment of the Senior Principal Payment Amount on
such Payment Date), (ii) the Note Balance of the Class M-1 Notes (after taking
into account the payment of the Class M-1 Principal Payment Amount on such
Payment Date), (iii) the Note Balance of the Class M-2 Notes (after taking into
account the payment of the Class M-2 Principal Payment Amount on such Payment
Date), (iv) the Note Balance of the Class M-3 Notes (after taking into account
the payment of the Class M-3 Principal Payment Amount on such Payment Date), (v)
the Note Balance of the Class M-4 Notes (after taking into account the payment
of the Class M-4 Principal Payment Amount on such Payment Date), (vi) the Note
Balance of the Class M-5 Notes (after taking into account the payment of the
Class M-5 Principal Payment Amount on such Payment Date), (vii) the Note Balance
of the Class M-6 Notes (after taking into account the payment of the Class M-6
Principal Payment Amount on such Payment Date), (viii) the Note Balance of the
Class M-7 Notes (after taking into account the payment of the Class M-7
Principal Payment Amount on such Payment Date) and (ix) the Note Balance of the
Class M-8 Notes immediately prior to such Payment Date over (y) the lesser of
(A) the product of (i) 91.40% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period and (B) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $9,687,336.88.
8
"Class M-9 Note": Any one of the Class M-9 Notes executed, authenticated
and delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit A-13 of the Indenture.
"Class M-9 Principal Payment Amount": With respect to any Payment Date,
the excess of (x) the sum of (i) the aggregate Note Balance of the Class A Notes
(after taking into account the payment of the Senior Principal Payment Amount on
such Payment Date), (ii) the Note Balance of the Class M-1 Notes (after taking
into account the payment of the Class M-1 Principal Payment Amount on such
Payment Date), (iii) the Note Balance of the Class M-2 Notes (after taking into
account the payment of the Class M-2 Principal Payment Amount on such Payment
Date), (iv) the Note Balance of the Class M-3 Notes (after taking into account
the payment of the Class M-3 Principal Payment Amount on such Payment Date), (v)
the Note Balance of the Class M-4 Notes (after taking into account the payment
of the Class M-4 Principal Payment Amount on such Payment Date), (vi) the Note
Balance of the Class M-5 Notes (after taking into account the payment of the
Class M-5 Principal Payment Amount on such Payment Date), (vii) the Note Balance
of the Class M-6 Notes (after taking into account the payment of the Class M-6
Principal Payment Amount on such Payment Date), (viii) the Note Balance of the
Class M-7 Notes (after taking into account the payment of the Class M-7
Principal Payment Amount on such Payment Date), (ix) the Note Balance of the
Class M-8 Notes (after taking into account the payment of the Class M-8
Principal Payment Amount on such Payment Date) and (x) the Note Balance of the
Class M-9 Notes immediately prior to such Payment Date over (y) the lesser of
(A) the product of (i) 93.40% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period and (B) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $9,687,336.88.
"Closing Date": June 29, 2004.
"Code": The Internal Revenue Code of 1986.
"Collateral": The meaning specified in the Granting Clause of the
Indenture.
"Collection Account": The account or accounts created and maintained, or
caused to be created and maintained, by the Master Servicer pursuant to Section
3.10(a) of the Servicing Agreement, which shall be entitled "New Century
Mortgage Corporation, as Master Servicer for Deutsche Bank National Trust
Company, as Indenture Trustee, in trust for the registered holders of New
Century Home Equity Loan Trust 2004-2, Asset Backed Notes, Series 2004-2." The
Collection Account must be an Eligible Account.
"Commission": The Securities and Exchange Commission.
"Corporate Trust Office": With respect to the Indenture Trustee,
Certificate Registrar, Certificate Paying Agent and Paying Agent, the principal
corporate trust office of the Indenture Trustee and Note Registrar at which at
any particular time its corporate trust business shall be administered, which
office at the date of the execution of this instrument is located at 0000 Xxxx
Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attention: Trust Administration,
NC0402. With respect to the Owner Trustee, the principal corporate trust office
of the Owner Trustee at which at any
9
particular time its corporate trust business shall be administered, which office
at the date of the execution of this Trust Agreement is located at Wilmington
Trust Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, Attention: New Century Home Equity Loan Trust 2004-2 (NC0401).
"Credit Enhancement Percentage": For any Payment Date, the percentage
equivalent of a fraction, the numerator of which is the sum of the aggregate
Note Balance of the Mezzanine Notes and the Overcollateralization Amount
calculated after taking into account payments of principal on the Mortgage Loans
and payment of the Group I Principal Payment Amount and the Group II Principal
Payment Amount to the Notes then entitled to payments of principal on such
Payment Date, and the denominator of which is the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period.
"Cut-off Date": The close of business on June 1, 2004.
"Debt Service Reduction": With respect to any Mortgage Loan, a reduction
in the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
constituting a Deficient Valuation or any reduction that results in a permanent
forgiveness of principal.
"Default": Any occurrence which is or with notice or the lapse of time or
both would become an Event of Default.
"Deficient Valuation": With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then outstanding indebtedness under the Mortgage Loan, or any reduction in
the amount of principal to be paid in connection with any scheduled Monthly
Payment that constitutes a permanent forgiveness of principal, which valuation
or reduction results from a proceeding under the Bankruptcy Code.
"Definitive Notes": The meaning specified in Section 4.06 of the
Indenture.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced with
an Qualified Substitute Mortgage Loan.
"Delinquency Percentage": As of any Distribution Date, the percentage
equivalent of a fraction, the numerator of which is the aggregate Stated
Principal Balance of all Mortgage Loans that, as of the last day of the previous
calendar month, are 60 or more days delinquent, are in foreclosure, have been
converted to REO Properties or have been discharged by reason of bankruptcy, and
the denominator of which is the aggregate Stated Principal Balance of the
Mortgage Loans and REO Properties as of the last day of the previous calendar
month; provided, however, that any Mortgage Loan purchased by the Master
Servicer pursuant to Section 3.16(c) of the Servicing Agreement shall not be
included in either the numerator or the denominator for purposes of calculating
the Delinquency Percentage.
"Depositor": New Century Mortgage Securities, Inc., a Delaware
corporation, or its successor in interest.
10
"Depository" or "Depository Agency": The Depository Trust Company or a
successor appointed by the Indenture Trustee. Any successor to the Depository
shall be an organization registered as a "clearing agency" pursuant to Section
17A of the Exchange Act and the regulations of the Securities and Exchange
Commission thereunder.
"Depository Institution": Any depository institution or trust company,
including the Indenture Trustee that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations (or,
in the case of a depository institution that is the principal subsidiary of a
holding company, such holding company has unsecured commercial paper or other
short-term unsecured debt obligations) that are rated at least P-1 by Xxxxx'x,
F-1 by Fitch (if rated by Fitch) and A-1+ by S&P.
"Depository Participant": A Person for whom, from time to time, the
Depository effects book-entry transfers and pledges of securities deposited with
the Depository.
"Determination Date": With respect to any Payment Date, the 15th day of
the calendar month in which such Payment Date occurs, or if such 15th day is not
a Business Day, the Business Day immediately preceding such 15th day.
"Due Date": With respect to each Mortgage Loan, the day of the month on
which each scheduled Monthly Payment is due.
"Due Period": With respect to each Payment Date, the first day of the
calendar month in which such Payment Date occurs, which is generally the day of
the month on which the Monthly Payment is due on a Mortgage Loan, exclusive of
any days of grace.
"Eligible Account": Any of (i) an account or accounts maintained with a
Depository Institution, (ii) an account or accounts the deposits in which are
fully insured by the FDIC or (iii) a segregated, non-interest bearing trust
account or accounts maintained with the corporate trust department of a federal
or state chartered depository institution or trust company acting in its
fiduciary capacity. Eligible Accounts may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974, as amended.
"Escrow Payment": As defined in Section 3.09 of the Servicing Agreement.
"Estate in Real Property": A fee simple estate in a parcel of land.
"Event of Default": With respect to the Indenture, any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
11
(i) a failure by the Issuer to pay Accrued Note Interest on any of
the Notes or the Group I Principal Payment Amount or the Group II
Principal Payment Amount on any Payment Date; or
(ii) the failure by the Issuer on the Final Stated Maturity Date to
reduce the Note Balance of any of the Notes to zero; or
(iii) there occurs a default in the observance or performance of any
covenant or agreement of the Issuer made in the Indenture, or any
representation or warranty of the Issuer made in the Indenture or in any
certificate or other writing delivered pursuant hereto or in connection
herewith proving to have been incorrect in any material respect as of the
time when the same shall have been made, and such default shall continue
or not be cured, or the circumstance or condition in respect of which such
representation or warranty was incorrect shall not have been eliminated or
otherwise cured, for a period of 30 days after there shall have been
given, by registered or certified mail, to the Issuer by the Indenture
Trustee or to the Issuer and the Indenture Trustee by the Holders of at
least 25% of the aggregate Note Balance of the Outstanding Notes, a
written notice specifying such default or incorrect representation or
warranty and requiring it to be remedied and stating that such notice is a
notice of default hereunder; or
(iv) there occurs the filing of a decree or order for relief by a
court having jurisdiction in the premises in respect of the Issuer or any
substantial part of the Trust Estate in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Trust Estate, or ordering the
winding-up or liquidation of the Issuer's affairs, and such decree or
order shall remain unstayed and in effect for a period of 60 consecutive
days; or
(v) there occurs the commencement by the Issuer of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Issuer to
the entry of an order for relief in an involuntary case under any such
law, or the consent by the Issuer to the appointment or taking possession
by a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the assets
of the Trust Estate, or the making by the Issuer of any general assignment
for the benefit of creditors, or the failure by the Issuer generally to
pay its debts as such debts become due, or the taking of any action by the
Issuer in furtherance of any of the foregoing.
"Excess Overcollateralized Amount": With respect to the Class A Notes and
the Mezzanine Notes and any Payment Date, the excess, if any, of (i) the
Overcollateralized Amount for such Payment Date (calculated for this purpose
only after assuming that 100% of the Principal Remittance Amount on such Payment
Date has been paid) over (ii) the Overcollateralization Target Amount for such
Payment Date.
"Exchange Act": The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
12
"Expense Adjusted Mortgage Rate": With respect to any Mortgage Loan (or
the related REO Property), as of any date of determination, a per annum rate of
interest equal to the applicable Mortgage Rate thereon as of the close of
business on the first day of the calendar month preceding the month in which the
Payment Date occurs minus the sum of (i) the Indenture Trustee Fee Rate and (ii)
the Servicing Fee Rate.
"Expenses": The meaning specified in Section 7.02 of the Trust Agreement.
"Xxxxxx Xxx": Xxxxxx Xxx, formerly known as the Federal National Mortgage
Association, or any successor thereto.
"FDIC": The Federal Deposit Insurance Corporation or any successor
thereto.
"Final Stated Maturity Date": The Payment Date in August 2034.
"Final Recovery Determination": With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property (i)
purchased by NC Capital, the Depositor or the Master Servicer pursuant to or as
contemplated by Section 2.03 of the Indenture, Section 3.16(c) of the Servicing
Agreement or (ii) removed from the Trust pursuant to Section 8.07 of the
Indenture ), a determination made by the Master Servicer that all Insurance
Proceeds, Liquidation Proceeds and other payments or recoveries which the Master
Servicer, in its reasonable good faith judgment, expects to be finally
recoverable in respect thereof have been so recovered. The Master Servicer shall
maintain records, prepared by a Servicing Officer, of each Final Recovery
Determination made thereby.
"Fitch": Fitch Ratings, or its successor in interest.
"Freddie Mac": Freddie Mac, formerly known as the Federal Home Loan
Mortgage Corporation, or any successor thereto.
"Grant": Pledge, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, create, and xxxxx x xxxx upon and a security interest
in and right of set-off against, deposit, set over and confirm pursuant to the
Indenture. A Grant of the Collateral or of any other agreement or instrument
shall include all rights, powers and options (but none of the obligations) of
the granting party thereunder, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of such collateral or other agreement or instrument and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring proceedings in the name of the granting party or otherwise, and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
"Gross Margin": With respect to each Adjustable-Rate Mortgage Loan, the
fixed percentage set forth in the related Mortgage Note that is added to the
Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Adjustable-Rate
Mortgage Loan.
13
"Group I Allocation Percentage": With respect to any Payment Date, the
percentage equivalent of a fraction, the numerator of which is (x) the Group I
Principal Remittance Amount for such Payment Date and the denominator of which
is (y) the Principal Remittance Amount for such Payment Date.
"Group I Interest Remittance Amount": With respect to any Payment Date,
that portion of the Available Payment Amount for such Payment Date allocable to
interest on the Group I Mortgage Loans.
"Group I Mortgage Loan": A first lien or second lien fixed-rate Mortgage
Loan or Adjustable-Rate Mortgage Loan with a principal balance at origination
that conforms to Xxxxxx Xxx and Freddie Mac loan limits. The Group I Mortgage
Loans are identified as such on the Mortgage Loan Schedule.
"Group I Principal Payment Amount": With respect to any Payment Date, the
sum of (i) the principal portion of each Monthly Payment on the Group I Mortgage
Loans due during the related Due Period, actually received on or prior to the
related Determination Date or advanced on or before the related Master Servicer
Remittance Date; (ii) the Stated Principal Balance of any Group I Mortgage Loan
that was purchased during the related Prepayment Period pursuant to or as
contemplated by Section 2.03 or Section 3.16(c) of the Servicing Agreement and
the amount of any shortfall deposited in the Collection Account in connection
with the substitution of a Deleted Mortgage Loan in Loan Group I pursuant to
Section 2.03 of the Servicing Agreement during the related Prepayment Period;
(iii) the principal portion of all other unscheduled collections (including,
without limitation, Principal Prepayments, Insurance Proceeds, Liquidation
Proceeds, Subsequent Recoveries and REO Principal Amortization) received during
the related Prepayment Period on the Group I Mortgage Loans, net of any portion
thereof that represents a recovery of principal for which an advance was made by
the Master Servicer pursuant to Section 4.01 of the Servicing Agreement in
respect of a preceding Payment Date; (iv) on the Payment Date on which the Notes
are to be redeemed pursuant to Section 8.07 of the Indenture, that portion of
the Redemption Price, in respect of principal on the Group I Mortgage Loans and
(v) the Group I Allocation Percentage of the amount of any Overcollateralization
Increase Amount for such Payment Date MINUS (vi) the Group I Allocation
Percentage of the amount of any Overcollateralization Reduction Amount for such
Payment Date.
"Group I Principal Remittance Amount": With respect to any Payment Date,
the sum of the amounts set forth in clauses (i) through (iii) of the definition
of Group I Principal Payment Amount.
"Group I Senior Principal Payment Amount": With respect to any Payment
Date, the excess of (x) the Note Balance of the Class A-1 Notes immediately
prior to such Payment Date over (y) the lesser of (A) the product of (i) 63.00%
and (ii) the aggregate Stated Principal Balance of the Group I Mortgage Loans as
of the last day of the related Due Period and (B) the aggregate Stated Principal
Balance of the Group I Mortgage Loans as of the last day of the related Due
Period minus $4,835,945.18.
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"Group II Allocation Percentage": With respect to any Payment Date, the
percentage equivalent of a fraction, the numerator of which is (x) the Group II
Principal Remittance Amount for such Payment Date and the denominator of which
is (y) the Principal Remittance Amount for such Payment Date.
"Group II Cap Contract": The cap contract between the Indenture Trustee
and the counterparty thereunder for the benefit of the Holders of the Group II
Notes.
"Group II Interest Remittance Amount": With respect to any Payment Date,
that portion of the Available Payment Amount for such Payment Date allocable to
interest on the Group II Mortgage Loans.
"Group II Mortgage Loan": A first lien or second lien fixed-rate Mortgage
Loan or Adjustable-Rate Mortgage Loan with a principal balance at origination
that may or may not conform to Xxxxxx Xxx and Freddie Mac loan limits. The Group
II Mortgage Loans are identified as such on the Mortgage Loan Schedule.
"Group II Notes": The Class A-2 Notes, the Class A-3 Notes and the Class
A-4 Notes.
"Group II Principal Payment Amount": With respect to any Payment Date, the
sum of (i) the principal portion of each Monthly Payment on the Group II
Mortgage Loans due during the related Due Period, actually received on or prior
to the related Determination Date or advanced on or before the related Master
Servicer Remittance Date; (ii) the Stated Principal Balance of any Group II
Mortgage Loan that was purchased during the related Prepayment Period pursuant
to or as contemplated by Section 2.03 or Section 3.16(c) of the Servicing
Agreement and the amount of any shortfall deposited in the Collection Account in
connection with the substitution of a Deleted Mortgage Loan in Loan Group II
pursuant to Section 2.03 of the Servicing Agreement during the related
Prepayment Period; (iii) the principal portion of all other unscheduled
collections (including, without limitation, Principal Prepayments, Insurance
Proceeds, Liquidation Proceeds, Subsequent Recoveries and REO Principal
Amortization) received during the related Prepayment Period on the Group II
Mortgage Loans, net of any portion thereof that represents a recovery of
principal for which an advance was made by the Master Servicer pursuant to
Section 4.01 of the Servicing Agreement in respect of a preceding Payment Date;
(iv) on the Payment Date on which the Notes are to be redeemed pursuant to
Section 8.07 of the Indenture, that portion of the Redemption Price, in respect
of principal on the Group II Mortgage Loans and (v) the Group II Allocation
Percentage of the amount of any Overcollateralization Increase Amount for such
Payment Date MINUS (vi) the Group II Allocation Percentage of the amount of any
Overcollateralization Reduction Amount for such Payment Date.
"Group II Principal Remittance Amount": With respect to any Payment Date,
the sum of the amounts set forth in clauses (i) through (iii) of the definition
of Group II Principal Payment Amount.
"Group II Senior Principal Payment Amount": With respect to any Payment
Date, the excess of (x) the aggregate Note Balance of the Group II Notes
immediately prior to such Payment Date over (y) the lesser of (A) the product of
(i) 63.00% and (ii) the aggregate Stated
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Principal Balance of the Group II Mortgage Loans as of the last day of the
related Due Period and (B) the aggregate Stated Principal Balance of the Group
II Mortgage Loans as of the last day of the related Due Period minus
$4,851,391.70.
"Highest Priority": As of any date of determination, the Class of
Mezzanine Notes then outstanding with a Note Balance greater than zero, with the
highest priority for payments pursuant to Section 3.05 of the Indenture, in the
following order: Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6, Class M-7, Class M-8 and Class M-9 Notes.
"Indemnified Party": The meaning specified in Section 7.02 of the Trust
Agreement.
"Indenture": The indenture dated as of June 29, 2004, between the Issuer
and the Indenture Trustee, relating to the New Century Home Equity Loan Trust
2004-2, Asset-Backed Notes, Series 2004-2.
"Indenture Trustee": Deutsche Bank National Trust Company, and its
successors and assigns or any successor indenture trustee appointed pursuant to
the terms of the Indenture.
"Indenture Trustee Fee": With respect to any Payment Date, one month's
interest accrued at the Indenture Trustee Fee Rate on the Stated Principal
Balance of each Mortgage Loan as of the first day of the related Due Period.
"Indenture Trustee Fee Rate": 0.00155% per annum.
"Independent": When used with respect to any specified Person, the Person
(i) is in fact independent of the Issuer, any other obligor on the Notes, the
Seller, the Master Servicer, the Depositor and any Affiliate of any of the
foregoing Persons, (ii) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor, the
Seller, the Master Servicer, the Depositor or any Affiliate of any of the
foregoing Persons and (iii) is not connected with the Issuer, any such other
obligor, the Seller, the Master Servicer, the Depositor or any Affiliate of any
of the foregoing Persons as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
"Independent Certificate": A certificate or opinion to be delivered to the
Indenture Trustee under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 10.01 of the Indenture, made by an
independent appraiser or other expert appointed by an Issuer Request, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
"Index": With respect to each Adjustable-Rate Mortgage Loan and each
related Adjustment Date, the average of the interbank offered rates for
six-month or one-month United States dollar deposits in the London market as
published in THE WALL STREET JOURNAL and as most recently available either (i)
as of the first business day (as defined in the related Mortgage Note) 45 days
prior to such Adjustment Date or (ii) as of the first business day (as defined
in the related
16
Mortgage Note) of the month preceding the month of such Adjustment Date, as
specified in the related Mortgage Note.
"Initial Note Balance": With respect to the Class A-1 Notes, $788,259,000.
With respect to the Class A-2 Notes, $275,000,000. With respect to the Class A-3
Notes, $372,000,000. With respect to the Class A-4 Notes, $143,776,000. With
respect to the Class M-1 Notes, $59,093,000. With respect to the Class M-2
Notes, $54,249,000. With respect to the Class M-3 Notes, $38,750,000. With
respect to the Class M-4 Notes, $28,093,000. With respect to the Class M-5
Notes, $28,093,000. With respect to the Class M-6 Notes, $23,250,000. With
respect to the Class M-7 Notes, $23,249,000. With respect to the Class M-8
Notes, $20,344,000. With respect to the Class M-9 Notes, $19,374,000.
"Insurance Proceeds": Proceeds of any title policy, hazard policy or other
insurance policy covering a Mortgage Loan to the extent such proceeds are not to
be applied to the restoration of the related Mortgaged Property or released to
the Mortgagor in accordance with the procedures that the Master Servicer would
follow in servicing mortgage loans held for its own account, subject to the
terms and conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Payment Date and the Class
A Notes and the Mezzanine Notes, the period commencing on the Payment Date of
the month immediately preceding the month in which such Payment Date occurs (or,
in the case of the first Payment Date, commencing on the Closing Date) and
ending on the day preceding such Payment Date.
"Interest Carry Forward Amount": With respect to any Payment Date and the
Class A Notes or the Mezzanine Notes, the sum of (i) the amount, if any, by
which (a) the Interest Payment Amount for such Class of Notes as of the
immediately preceding Payment Date exceeded (b) the actual amount paid on such
Class of Notes in respect of interest on such immediately preceding Payment
Date, (ii) the amount of any Interest Carry Forward Amount for such Class of
Notes remaining unpaid from the previous Payment Date and (iii) accrued interest
on the sum of (i) and (ii) above calculated at the related Note Rate for the
most recently ended Interest Accrual Period.
"Interest Determination Date": With respect to the Class A Notes and the
Mezzanine Notes and any Interest Accrual Period therefor, the second London
Business Day preceding the commencement of such Interest Accrual Period.
"Interest Payment Amount": With respect to any Payment Date and any Class
A Notes and Mezzanine Notes, the aggregate Accrued Note Interest on the Notes of
such Class for such Payment Date.
"Investment Company Act": The Investment Company Act of 1940, as amended,
and any amendments thereto.
"IRS": The Internal Revenue Service.
"Issuer": New Century Home Equity Loan Trust 2004-2, a Delaware statutory
trust, or its successor in interest.
17
"Issuer Request": A written order or request signed in the name of the
Issuer by any one of its Authorized Officers and delivered to the Indenture
Trustee.
"Late Collections": With respect to any Mortgage Loan and any Due Period,
all amounts received subsequent to the Determination Date immediately following
such Due Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds, Subsequent Recoveries or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously recovered.
"Lien": Any mortgage, deed of trust, pledge, conveyance, hypothecation,
assignment, participation, deposit arrangement, encumbrance, lien (statutory or
other), preference, priority right or interest or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; provided,
however, that any assignment pursuant to Section 6.02 of the Servicing Agreement
shall not be deemed to constitute a Lien.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from the Trust by reason of (A) its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03 of the Indenture or Section
3.16(c) of the Servicing Agreement or (B) the Master Servicer redeeming the
Notes pursuant to Section 8.07 of the Indenture. With respect to any REO
Property, either of the following events: (i) a Final Recovery Determination is
made as to such REO Property; or (ii) such REO Property is removed from the
Trust by reason of the Master Servicer redeeming the Notes pursuant to Section
8.07 of the Indenture.
"Liquidation Proceeds": The amount (other than Insurance Proceeds or
amounts received in respect of the rental of any REO Property prior to REO
Disposition) received by the Master Servicer in connection with (i) the taking
of all or a part of a Mortgaged Property by exercise of the power of eminent
domain or condemnation, (ii) the liquidation of a defaulted Mortgage Loan
through a trustee's sale, foreclosure sale or otherwise, (iii) the repurchase,
substitution or sale of a Mortgage Loan or an REO Property pursuant to or as
contemplated by Section 2.03 of the Indenture or Section 3.16(c) of the
Servicing Agreement, or (iv) the removal from the Trust of a Mortgage Loan or an
REO Property pursuant to Section 8.07 of the Indenture.
"Loan Group": Either Loan Group I or Loan Group II, as the context
requires.
"Loan Group I": The group of Mortgage Loans identified in the Mortgage
Loan Schedule as having been assigned to Loan Group I.
"Loan Group II": The group of Mortgage Loans identified in the Mortgage
Loan Schedule as having been assigned to Loan Group II.
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"Loan-to-Value Ratio": As of any date of determination, the fraction,
expressed as a percentage, the numerator of which is the principal balance of
the related Mortgage Loan at such date (and, with respect to any second lien
Mortgage Loan, the principal balance of the related first lien Mortgage Loan
plus the principal balance of such second lien Mortgage Loan) and the
denominator of which is the Value of the related Mortgaged Property.
"London Business Day": Any day on which banks in the City of London and
New York are open and conducting transactions in United States dollars.
"Majority Certificateholder": A Holder of a 50.01% or greater Certificate
Percentage Interest of the Certificates.
"Master Servicer": New Century Mortgage Corporation, or any successor
master servicer appointed as provided in the Servicing Agreement, in its
capacity as Master Servicer under the Servicing Agreement.
"Master Servicer Event of Default": One or more of the events described in
Section 6.01 of the Servicing Agreement.
"Master Servicer Remittance Date": With respect to any Payment Date, by
1:00 p.m. New York time on the Business Day preceding the related Payment Date.
"Master Servicer Termination Test": The Master Servicer Termination Test
will be failed with respect to any Payment Date if the aggregate amount of
Realized Losses incurred since the Cut-off Date through the last day of the
related Due Period (reduced by the aggregate amount of Subsequent Recoveries
received from the Cut-off Date through the last day of the related Due Period)
divided by aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date exceeds the applicable percentages set forth below with respect to
such Payment Date:
PAYMENT DATE OCCURRING IN PERCENTAGE
--------------------------- ----------
July 2007 through June 2008 5.00%
July 2008 through June 2009 6.75%
July 2009 through June 2010 8.00%
July 2010 and thereafter 8.50%
"Maximum Mortgage Rate": With respect to each Adjustable-Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the maximum
Mortgage Rate thereunder.
"Mezzanine Cap Contract": The cap contract between the Indenture Trustee
and the counterparty thereunder for the benefit of the Holders of the Mezzanine
Notes.
"Mezzanine Note": Any Class M-1 Note, Class M-2 Note, Class M-3 Note,
Class M- 4 Note, Class M-5 Note, Class M-6 Note, Class M-7 Note, Class M-8 Note
or Class M-9 Note.
"Minimum Mortgage Rate": With respect to each Adjustable-Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the minimum
Mortgage Rate thereunder.
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"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related Mortgagor from time to time under the related Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any reduction in
the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Master Servicer pursuant to Section 3.07 of the Servicing Agreement and (c)
on the assumption that all other amounts, if any, due under such Mortgage Loan
are paid when due.
"Moody's": Xxxxx'x Investors Service, Inc. or its successor in interest.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first or second lien on, or first or second priority security interest in, a
Mortgaged Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.1 of the
Mortgage Loan Sale and Contribution Agreement pertaining to a particular
Mortgage Loan and any additional documents required to be added to the Mortgage
File pursuant to the Mortgage Loan Sale and Contribution Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned to the Trust
and delivered to the Trust pursuant to Section 2.1 of the Mortgage Loan Sale and
Contribution Agreement or Section 2.03(b) of the Servicing Agreement, as held
from time to time as a part of the Trust, the Mortgage Loans so held being
identified in the Mortgage Loan Schedule.
"Mortgage Loan Schedule": With respect to any date, the schedule of
Mortgage Loans held by the Issuer on such date. The schedule of Mortgage Loans
as of the Cut-off Date is the schedule set forth in Exhibit B of the Indenture,
which schedule sets forth as to each Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) [reserved];
(iii) the state and zip code of the Mortgaged Property;
(iv) a code indicating whether the Mortgaged Property is
owner-occupied;
(v) the type of Residential Dwelling constituting the Mortgaged
Property;
(vi) the original months to maturity;
(vii) the stated remaining months to maturity from the Cut-off Date
based on the original amortization schedule;
(viii) the Loan-to-Value Ratio at origination;
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(ix) the Mortgage Rate in effect immediately following the Cut-off
Date;
(x) (A) the date on which the first Monthly Payment was due on the
Mortgage Loan and (B) if such date is not consistent with the Due Date
currently in effect, such Due Date;
(xi) the stated maturity date;
(xii) the amount of the Monthly Payment at origination;
(xiii) the amount of the Monthly Payment due on the first Due Date
after the Cut- off Date;
(xiv) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance;
(xv) the original principal amount of the Mortgage Loan;
(xvi) the Stated Principal Balance of the Mortgage Loan as of the
close of business on the Cut-off Date;
(xvii) with respect to each Adjustable-Rate Mortgage Loan, the
Adjustment Dates, the Gross Margin, the Maximum Mortgage Rate, the Minimum
Mortgage Rate, the Periodic Rate Cap and the maximum first Adjustment Date
Mortgage Rate adjustment and the first Adjustment Date immediately
following the origination date;
(xviii) a code indicating the purpose of the Mortgage Loan (i.e.,
purchase financing, Rate/Term Refinancing, Cash-Out Refinancing);
(xix) the Mortgage Rate at origination;
(xx) a code indicating the documentation program (i.e., Full
Documentation, Limited Documentation, Stated Income Documentation);
(xxi) the risk grade;
(xxii) the Value of the Mortgaged Property;
(xxiii) the sale price of the Mortgaged Property, if applicable;
(xxiv) the actual unpaid Stated Principal Balance of the Mortgage
Loan as of the Cut-off Date;
(xxv) the type and term of the related Prepayment Charge;
(xxvi) the rounding code (i.e., nearest 0.125%, next highest
0.125%);
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(xxvii) the program code;
(xxviii) the total amount of points and fees charged such Mortgage
Loan; and
(xxix) a code indicating whether the Mortgage Loan is a first or
second lien Mortgage Loan.
The Mortgage Loan Schedule shall set forth the following information with
respect to the Mortgage Loans in the aggregate and by Loan Group as of the
Cut-off Date: (1) the number of Mortgage Loans; (2) the current Stated Principal
Balance of the Mortgage Loans; (3) the weighted average Mortgage Rate of the
Mortgage Loans and (4) the weighted average maturity of the Mortgage Loans. With
respect to any Qualified Substitute Mortgage Loan, the Cut-off Date shall refer
to the related Cut-off Date for such Mortgage Loan, determined in accordance
with the definition of Cut-off Date herein.
"Mortgage Note": The original executed note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on Exhibit B to
the Indenture and existing from time to time thereafter, and any REO Properties
acquired in respect thereof.
"Mortgage Rate": With respect to each Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan from time to time in accordance
with the provisions of the related Mortgage Note, which rate (i) with respect to
each fixed-rate Mortgage Loan shall remain constant at the rate set forth in the
Mortgage Loan Schedule as the Mortgage Rate in effect immediately following the
Cut-off Date and (ii) with respect to the Adjustable-Rate Mortgage Loans, (A) as
of any date of determination until the first Adjustment Date following the
Cut-off Date shall be the rate set forth in the Mortgage Loan Schedule as the
Mortgage Rate in effect immediately following the Cut-off Date and (B) as of any
date of determination thereafter shall be the rate as adjusted on the most
recent Adjustment Date equal to the sum, rounded as provided in the Mortgage
Note, of the Index, as most recently available as of a date prior to the
Adjustment Date as set forth in the related Mortgage Note, plus the related
Gross Margin; provided that the Mortgage Rate on such Adjustable-Rate Mortgage
Loan on any Adjustment Date shall never be more than the lesser of (i) the sum
of the Mortgage Rate in effect immediately prior to the Adjustment Date plus the
related Periodic Rate Cap, if any, and (ii) the related Maximum Mortgage Rate,
and shall never be less than the greater of (i) the Mortgage Rate in effect
immediately prior to the Adjustment Date less the Periodic Rate Cap, if any, and
(ii) the related Minimum Mortgage Rate. With respect to each Mortgage Loan that
becomes an REO Property, as of any date of determination, the annual rate
determined in accordance with the immediately preceding sentence as of the date
such Mortgage Loan became an REO Property.
"Mortgaged Property": The underlying property securing a Mortgage Loan,
including any REO Property, consisting of an Estate in Real Property improved by
a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
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"NC Capital" or "Responsible Party": NC Capital Corporation, or its
successor in interest.
"Net Monthly Excess Cashflow": With respect to any Payment Date, the sum
of (i) any Overcollateralization Reduction Amount for such Payment Date and (ii)
the excess of (x) the Available Payment Amount for such Payment Date over (y)
the sum for such Payment Date of (A) the Senior Interest Payment Amount paid to
the Holders of the Class A Notes and the Interest Payment Amount paid to the
Holders of the Mezzanine Notes and (B) the Principal Remittance Amount.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the related REO
Property) as of any date of determination, a per annum rate of interest equal to
the then applicable Mortgage Rate for such Mortgage Loan minus the Servicing Fee
Rate.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed or extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.
"Nonrecoverable P&I Advance": Any P&I Advance previously made or proposed
to be made in respect of a Mortgage Loan or REO Property that, in the good faith
business judgment of the Master Servicer, will not or, in the case of a proposed
P&I Advance, would not be ultimately recoverable from related Late Collections,
Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property
as provided herein.
"Nonrecoverable Servicing Advance": Any Servicing Advance previously made
or proposed to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of the Master Servicer, will not or, in the
case of a proposed Servicing Advance, would not be ultimately recoverable from
related Late Collections, Insurance Proceeds or Liquidation Proceeds on such
Mortgage Loan or REO Property as provided herein.
"Note": Any one of the Asset Backed Notes, Series 2004-2, Class A-1, Class
A-2, Class A-3, Class A-4, Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6, Class M-7, Class M-8 and Class M-9 issued under the Indenture.
"Note Balance": With respect to each Class A Note or Mezzanine Note as of
any date of determination, the Note Balance of such Note on the Payment Date
immediately prior to such date of determination plus, with respect to each
Mezzanine Note, any increase in the Note Balance of such Note pursuant to
Section 3.05 of the Indenture due to the receipt of Subsequent Recoveries, minus
all payments of principal made thereon and in the case of a Mezzanine Note,
Realized Losses allocated thereto on such immediately prior Payment Date (or, in
the case of any date of determination up to and including the first Payment
Date, the initial Note Balance of such Note, as stated on the face thereof).
"Note Margin": With respect to the Class A-1 Notes, 0.390% in the case of
the Interest Accrual Period for each Payment Date through and including the
Payment Date on which the aggregate Stated Principal Balance of the Mortgage
Loans (and properties acquired in respect
23
thereof) remaining in the Trust is reduced to less than 10% of the aggregate
Stated Principal Balance of the Mortgage Loans as of the Cut-off Date and 0.780%
in the case of the Interest Accrual Period for each Payment Date thereafter.
With respect to the Class A-2 Notes, 0.370% in the case of the Interest
Accrual Period for each Payment Date through and including the Payment Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust is reduced to
less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date and 0.740% in the case of the Interest Accrual Period for
each Payment Date thereafter.
With respect to the Class A-3 Notes, 0.250% in the case of the Interest
Accrual Period for each Payment Date through and including the Payment Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust is reduced to
less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date and 0.500% in the case of the Interest Accrual Period for
each Payment Date thereafter.
With respect to the Class A-4 Notes, 0.550% in the case of the Interest
Accrual Period for each Payment Date through and including the Payment Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust is reduced to
less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date and 1.100% in the case of the Interest Accrual Period for
each Payment Date thereafter.
With respect to the Class M-1 Notes, 0.590% in the case of the Interest
Accrual Period for each Payment Date through and including the Payment Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust is reduced to
less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date and 0.885% in the case of the Interest Accrual Period for
each Payment Date thereafter.
With respect to the Class M-2 Notes, 0.620% in the case of the Interest
Accrual Period for each Payment Date through and including the Payment Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust is reduced to
less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date and 0.930% in the case of the Interest Accrual Period for
each Payment Date thereafter.
With respect to the Class M-3 Notes, 0.670% in the case of the Interest
Accrual Period for each Payment Date through and including the Payment Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust is reduced to
less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date and 1.005% in the case of the Interest Accrual Period for
each Payment Date thereafter.
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With respect to the Class M-4 Notes, 1.200% in the case of the Interest
Accrual Period for each Payment Date through and including the Payment Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust is reduced to
less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date and 1.800% in the case of the Interest Accrual Period for
each Payment Date thereafter.
With respect to the Class M-5 Notes, 1.350% in the case of the Interest
Accrual Period for each Payment Date through and including the Payment Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust is reduced to
less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date and 2.025% in the case of the Interest Accrual Period for
each Payment Date thereafter.
With respect to the Class M-6 Notes, 1.500% in the case of the Interest
Accrual Period for each Payment Date through and including the Payment Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust is reduced to
less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date and 2.250% in the case of the Interest Accrual Period for
each Payment Date thereafter.
With respect to the Class M-7 Notes, 1.950% in the case of the Interest
Accrual Period for each Payment Date through and including the Payment Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust is reduced to
less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date and 2.925% in the case of the Interest Accrual Period for
each Payment Date thereafter.
With respect to the Class M-8 Notes, 2.200% in the case of the Interest
Accrual Period for each Payment Date through and including the Payment Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust is reduced to
less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date and 3.300% in the case of the Interest Accrual Period for
each Payment Date thereafter.
With respect to the Class M-9 Notes, 3.250% in the case of the Interest
Accrual Period for each Payment Date through and including the Payment Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust is reduced to
less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date and 4.875% in the case of the Interest Accrual Period for
each Payment Date thereafter.
"Note Owner": The Beneficial Owner of a Note.
25
"Note Rate": With respect to any Class of Notes and any Payment Date, a
rate per annum equal to the least of (i) One-Month LIBOR plus the related Note
Margin for such Payment Date, (ii) 11.50% per annum and (iii) the related
Available Funds Rate for such Payment Date.
"Note Register": The register maintained by the Note Registrar in which
the Note Registrar shall provide for the registration of Notes and of transfers
and exchanges of Notes.
"Note Registrar": The Indenture Trustee, in its capacity as Note
Registrar, or any successor to the Indenture Trustee in such capacity.
"Noteholder" or "Holder": The Person in whose name a Note is registered in
the Note Register, except that, any Note registered in the name of the
Depositor, the Issuer, the Indenture Trustee, the Seller or the Master Servicer
or any Affiliate of any of them shall be deemed not to be a holder or holders,
nor shall any so owned be considered outstanding, for purposes of giving any
request, demand, authorization, direction, notice, consent or waiver under the
Indenture or the Trust Agreement; provided that, in determining whether the
Indenture Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that a
Responsible Officer of the Indenture Trustee or the Owner Trustee actually knows
to be so owned shall be so disregarded. Owners of Notes that have been pledged
in good faith may be regarded as Holders if the pledgee establishes to the
satisfaction of the Indenture Trustee or the Owner Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not the Issuer, any
other obligor upon the Notes or any Affiliate of any of the foregoing Persons.
"Officer's Certificate": With respect to the Master Servicer, a
certificate signed by the President, Managing Director, a Director, a Vice
President or an Assistant Vice President, of the Master Servicer and delivered
to the Indenture Trustee. With respect to the Issuer, a certificate signed by
any Authorized Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 10.01 of the
Indenture, and delivered to the Indenture Trustee. Unless otherwise specified,
any reference in the Indenture to an Officer's Certificate shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.
"One-Month LIBOR": With respect to the Class A Notes and the Mezzanine
Notes and any Interest Accrual Period therefor, the rate determined by the
Indenture Trustee on the related Interest Determination Date on the basis of the
offered rate for one-month U.S. dollar deposits, as such rate appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on such Interest Determination
Date; provided that if such rate does not appear on Telerate Page 3750, the rate
for such date will be determined on the basis of the offered rates of the
Reference Banks for one-month U.S. dollar deposits, as of 11:00 a.m. (London
time) on such Interest Determination Date. In such event, the Indenture Trustee
will request the principal London office of each of the Reference Banks to
provide a quotation of its rate. If on such Interest Determination Date, two or
more Reference Banks provide such offered quotations, One-Month LIBOR for the
related Interest Accrual Period shall be the arithmetic mean of such offered
quotations (rounded upwards if necessary to the nearest whole multiple of
1/16%). If on such Interest Determination Date, fewer than two Reference Banks
provide such offered quotations, One-Month LIBOR for the related Interest
Accrual Period shall be the higher of (i) LIBOR as determined on the previous
Interest Determination Date and (ii) the Reserve Interest Rate. Notwithstanding
the foregoing, if, under the priorities described above,
26
LIBOR for an Interest Determination Date would be based on LIBOR for the
previous Interest Determination Date for the third consecutive Interest
Determination Date, the Indenture Trustee, after consultation with the Master
Servicer, shall select an alternative comparable index (over which the Indenture
Trustee has no control), used for determining one-month Eurodollar lending rates
that is calculated and published (or otherwise made available) by an independent
party.
"Opinion of Counsel": A written opinion of counsel acceptable to the
Indenture Trustee, in its reasonable discretion which counsel may be in-house
counsel for the Master Servicer if acceptable to the Indenture Trustee and the
Rating Agencies or counsel for the Depositor, as the case may be.
"Originator": New Century Mortgage Corporation, or its successor in
interest, in its capacity as originator of the Mortgage Loans.
"Outstanding": With respect to the Notes, as of the date of determination,
all Notes theretofore executed, authenticated and delivered under this Indenture
except:
(i) Notes theretofore canceled by the Note Registrar or delivered to
the Indenture Trustee for cancellation; and
(ii) Notes in exchange for or in lieu of which other Notes have been
executed, authenticated and delivered pursuant to the Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a holder in due course;
"Overcollateralization Deficiency Amount": With respect to any Payment
Date, the excess, if any, of (a) the Overcollateralization Target Amount
applicable to such Payment Date over (b) the Overcollateralized Amount
applicable to such Payment Date (calculated for this purpose only, after
assuming that 100% of the Principal Remittance Amount on such Payment Date has
been paid).
"Overcollateralization Increase Amount": With respect to any Payment Date,
the lesser of (a) the Overcollateralization Deficiency Amount as of such Payment
Date and (b) the Net Monthly Excess Cashflow Amount with respect to such Payment
Date.
"Overcollateralization Reduction Amount": With respect to any Payment
Date, an amount equal to the lesser of (a) the Excess Overcollateralized Amount
and (b) the Principal Remittance Amount.
"Overcollateralization Target Amount": With respect to any Payment Date
(a) prior to the Stepdown Date, an amount equal to 3.30% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date; (b) on or after
the Stepdown Date provided a Trigger Event is not in effect, the greater of (i)
6.60% of the aggregate outstanding Stated Principal Balance of the Mortgage
Loans as of the last day of the related Due Period and (ii) $9,687,336.88; and
(c) on or after the Stepdown Date and if a Trigger Event is in effect, the
Overcollateralization Target Amount for the immediately preceding Payment Date.
27
"Overcollateralized Amount": With respect to any Payment Date, the excess,
if any, of (a) the aggregate Stated Principal Balances of the Mortgage Loans and
REO Properties as of the last day of the related Due Period over (b) the
aggregate Note Balance of the Class A Notes and the Mezzanine Notes after giving
effect to payments to be made on such Payment Date.
"Owner Trust Estate": The corpus of the Issuer created by the Trust
Agreement which consists of items referred to in Section 3.01 of the Trust
Agreement.
"Owner Trustee": Wilmington Trust Company, acting not in its individual
capacity but solely as Owner Trustee, and its successors and assigns or any
successor owner trustee appointed pursuant to the terms of the Trust Agreement.
Owner Trustee Fee: With respect to each Payment Date beginning on the 13th
Payment Date, $541.67.
"Paying Agent": Any paying agent or co-paying agent appointed pursuant to
Section 3.03 of the Indenture, which initially shall be the Indenture Trustee.
"Payment Account": The trust account or accounts created and maintained by
the Indenture Trustee pursuant to Section 3.01 of the Indenture, which shall be
entitled "Deutsche Bank National Trust Company, as Indenture Trustee, in trust
for the registered holders of New Century Home Equity Loan Trust 2004-2, Asset
Backed Notes." The Payment Account must be an Eligible Account.
"Payment Date": The 25th day of any month, or if such 25th day is not a
Business Day, the Business Day immediately following such 25th day, commencing
in July 2004.
"Percentage Interest": With respect to any Note, the percentage obtained
by dividing the Note Balance of such Note by the aggregate Note Balances of all
Notes of that Class. With respect to any Certificate, the percentage as stated
on the face thereof.
"Periodic Rate Cap": With respect to each Adjustable-Rate Mortgage Loan
and any Adjustment Date therefor, the fixed percentage set forth in the related
Mortgage Note, which is the maximum amount by which the Mortgage Rate for such
Mortgage Loan may increase or decrease (without regard to the Maximum Mortgage
Rate or the Minimum Mortgage Rate) on such Adjustment Date from the Mortgage
Rate in effect immediately prior to such Adjustment Date.
"Permitted Investments": Any one or more of the following obligations or
securities acquired at a purchase price of not greater than par, regardless of
whether issued by the Depositor, the Master Servicer, the Indenture Trustee or
any of their respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed by
the full faith and credit of the United States;
28
(ii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances issued by, any Depository Institution;
(iii) repurchase obligations with respect to any security described
in clause (i) above entered into with a Depository Institution (acting as
principal);
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United States
of America or any state thereof and that are rated by each Rating Agency
that rates such securities in its highest long-term unsecured rating
categories at the time of such investment or contractual commitment
providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition
thereof) that is rated by each Rating Agency that rates such securities in
its highest short-term unsecured debt rating available at the time of such
investment;
(vi) units of money market funds that have been rated "AAAm" or
"AAAm-G" by S&P; and
(viii) if previously confirmed in writing to the Indenture Trustee,
any other demand, money market or time deposit, or any other obligation,
security or investment, as may be acceptable to the Rating Agencies as a
permitted investment of funds backing securities having ratings equivalent
to its highest initial rating of the Class A Notes;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
"Person": Any individual, corporation, partnership, joint venture,
association, joint- stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"P&I Advance": As to any Mortgage Loan or REO Property, any advance made
by the Master Servicer in respect of any Payment Date pursuant to Section 4.01
of the Servicing Agreement.
"Plan": Any employee benefit plan or certain other retirement plans and
arrangements, including individual retirement accounts and annuities, Xxxxx
plans and bank collective investment funds and insurance company general or
separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA or Section 4975 of the Code.
29
"Plan Assets": Assets of a Plan within the meaning of Department of Labor
regulation 29 C.F.R. ss. 2510.3-101.
"Prepayment Assumption": As set forth in the Prospectus Supplement.
"Prepayment Charge": With respect to any Prepayment Period, any prepayment
premium, penalty or charge payable by a Mortgagor in connection with any
Principal Prepayment on a Mortgage Loan pursuant to the terms of the related
Mortgage Note.
"Prepayment Interest Shortfall": With respect to any Payment Date, for
each Mortgage Loan that was during the related Prepayment Period the subject of
a Principal Prepayment in full or in part that was applied by the Master
Servicer to reduce the outstanding Stated Principal Balance of such loan on a
date preceding the Due Date in the succeeding Prepayment Period, an amount equal
to one month's interest at the applicable Net Mortgage Rate less any payments of
interest made by the Mortgagor. The obligations of the Master Servicer in
respect of any Prepayment Interest Shortfall are set forth in Section 3.24 of
the Servicing Agreement.
"Prepayment Period": With respect to any Payment Date, the calendar month
preceding the calendar month in which such Payment Date occurs.
"Principal Prepayment": Any payment of principal made by the Mortgagor on
a Mortgage Loan which is received in advance of its scheduled Due Date and which
is not accompanied by an amount of interest representing the full amount of
scheduled interest due on any Due Date in any month or months subsequent to the
month of prepayment.
"Principal Remittance Amount": With respect to any Payment Date, the sum
of (i) the Group I Principal Remittance Amount and (ii) the Group II Principal
Remittance Amount.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Prospectus Supplement": That certain Prospectus Supplement dated June 25,
2004 relating to the public offering of the Class A Notes and the Mezzanine
Notes.
"Purchase Price": With respect to any Mortgage Loan or REO Property to be
purchased pursuant to or as contemplated by Section 2.03 of the Indenture or
Section 3.16(c) of the Servicing Agreement, and as confirmed by an Officer's
Certificate from the Master Servicer to the Indenture Trustee, an amount equal
to the sum of (i) 100% of the Stated Principal Balance thereof as of the date of
purchase, (ii) in the case of (x) a Mortgage Loan, accrued interest on such
Stated Principal Balance at the applicable Mortgage Rate in effect from time to
time from the Due Date as to which interest was last covered by a payment by the
Mortgagor or an advance by the Master Servicer, which payment or advance had as
of the date of purchase been paid pursuant to Section 3.05 of the Indenture,
through the end of the calendar month in which the purchase is to be effected
and (y) an REO Property, the sum of (1) accrued interest on such Stated
Principal Balance at the applicable Mortgage Rate in effect from time to time
from the Due Date as to which interest was last covered by a payment by the
Mortgagor or an advance by the Master Servicer through the end of the
30
calendar month immediately preceding the calendar month in which such REO
Property was acquired, plus (2) REO Imputed Interest for such REO Property for
each calendar month commencing with the calendar month in which such REO
Property was acquired and ending with the calendar month in which such purchase
is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and P&I Advances that as of the date of purchase
had been paid as or to cover REO Imputed Interest pursuant to Section 3.05 of
the Indenture, (iii) any unreimbursed Servicing Advances and P&I Advances
(including Nonrecoverable P&I Advances and Nonrecoverable Servicing Advances)
and any unpaid Servicing Fees allocable to such Mortgage Loan or REO Property,
(iv) any amounts previously withdrawn from the Collection Account in respect of
such Mortgage Loan or REO Property pursuant to Section 3.11(a)(ix) and Section
3.16(b) of the Servicing Agreement, and (v) in the case of a Mortgage Loan
required to be purchased pursuant to Section 2.03 of the Indenture or purchased
by the Master Servicer pursuant to Section 3.16(c) of the Servicing Agreement,
expenses reasonably incurred or to be incurred by the Master Servicer or the
Indenture Trustee in respect of the breach or defect giving rise to the purchase
obligation including any costs and damages incurred by the Trust in connection
with any violation by such loan of any predatory or abusive lending law.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted for a
Deleted Mortgage Loan which must, on the date of such substitution, (i) have an
outstanding Stated Principal Balance, after application of all scheduled
payments of principal and interest due during or prior to the month of
substitution, not in excess of the Stated Principal Balance of the Deleted
Mortgage Loan as of the Due Date in the calendar month during which the
substitution occurs, (ii) have a Mortgage Rate not less than (and not more than
one percentage point in excess of) the Mortgage Rate of the Deleted Mortgage
Loan, (iii) with respect to any Adjustable-Rate Mortgage Loan, have a Maximum
Mortgage Rate not less than the Maximum Mortgage Rate on the Deleted Mortgage
Loan, (iv) with respect to any Adjustable-Rate Mortgage Loan, have a Minimum
Mortgage Rate not less than the Minimum Mortgage Rate of the Deleted Mortgage
Loan, (v) with respect to any Adjustable- Rate Mortgage Loan, have a Gross
Margin equal to the Gross Margin of the Deleted Mortgage Loan, (vi) with respect
to any Adjustable-Rate Mortgage Loan, have a next Adjustment Date not more than
two months later than the next Adjustment Date on the Deleted Mortgage Loan,
(vii) have a remaining term to maturity not greater than (and not more than one
year less than) that of the Deleted Mortgage Loan, (viii) have the same Due Date
as the Due Date on the Deleted Mortgage Loan, (ix) have a Loan-to-Value Ratio as
of the date of substitution equal to or lower than the Loan-to-Value Ratio of
the Deleted Mortgage Loan as of such date, (x) have a risk grading determined by
the Originator at least equal to the risk grading assigned on the Deleted
Mortgage Loan and (xi) conform to each representation and warranty set forth in
Mortgage Loan Sale and Contribution Agreement applicable to the Deleted Mortgage
Loan. In the event that one or more mortgage loans are substituted for one or
more Deleted Mortgage Loans, the amounts described in clause (i) hereof shall be
determined on the basis of aggregate Stated Principal Balances, the Mortgage
Rates described in clause (ii) hereof shall be determined on the basis of
weighted average Mortgage Rates, the terms described in clause (vii) hereof
shall be determined on the basis of weighted average remaining term to maturity,
the Loan-to-Value Ratios described in clause (ix) hereof shall be satisfied as
to each such mortgage loan, the risk gradings described in clause (x) hereof
shall be satisfied as to each such mortgage loan and, except to the extent
otherwise provided in this sentence, the representations and warranties
described in clause (xi) hereof must be satisfied as to each Qualified
Substitute Mortgage Loan or in the aggregate, as the case may be.
31
"Rate/Term Refinancing": A Refinanced Mortgage Loan, the proceeds of which
are not more than a nominal amount in excess of the existing first mortgage loan
and any subordinate mortgage loan on the related Mortgaged Property and related
closing costs, and were used exclusively (except for such nominal amount) to
satisfy the then existing first mortgage loan and any subordinate mortgage loan
of the Mortgagor on the related Mortgaged Property and to pay related closing
costs.
"Rating Agency" or "Rating Agencies": Fitch, Xxxxx's, S&P or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be such nationally recognized statistical rating
agencies, or other comparable Persons, designated by the Depositor, notice of
which designation shall be given to the Indenture Trustee and the Master
Servicer.
"Realized Loss": With respect to each Mortgage Loan as to which a Final
Recovery Determination has been made, an amount (not less than zero) equal to
(i) the unpaid Stated Principal Balance of such Mortgage Loan as of the
commencement of the calendar month in which the Final Recovery Determination was
made, plus (ii) accrued interest from the Due Date as to which interest was last
paid by the Mortgagor through the end of the calendar month in which such Final
Recovery Determination was made, calculated in the case of each calendar month
during such period (A) at an annual rate equal to the annual rate at which
interest was then accruing on such Mortgage Loan and (B) on a principal amount
equal to the Stated Principal Balance of such Mortgage Loan as of the close of
business on the Payment Date during such calendar month, plus (iii) any amounts
previously withdrawn from the Collection Account in respect of such Mortgage
Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b) of the Servicing
Agreement, minus (iv) the proceeds, if any, received in respect of such Mortgage
Loan during the calendar month in which such Final Recovery Determination was
made, net of amounts that are payable therefrom to the Master Servicer with
respect to such Mortgage Loan pursuant to Section 3.11(a)(iii) of the Servicing
Agreement.
If the Master Servicer receives Subsequent Recoveries with respect to any
Mortgage Loan, the amount of the Realized Loss with respect to that Mortgage
Loan will be reduced to the extent such recoveries are applied to principal
payments on any Payment Date.
With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of the Trust, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Payment Date during such calendar month, plus (iii) REO Imputed Interest for
such REO Property for each calendar month commencing with the calendar month in
which such REO Property was acquired and ending with the calendar month in which
such Final Recovery Determination was made, plus (iv) any amounts previously
withdrawn from the Collection Account in respect of the related Mortgage Loan
pursuant to Section 3.11(a)(ix) and Section 3.16(b) of the Servicing Agreement,
minus (v) the aggregate of
32
all P&I Advances and Servicing Advances (in the case of Servicing Advances,
without duplication of amounts netted out of the rental income, Insurance
Proceeds and Liquidation Proceeds described in clause (vi) below) made by the
Master Servicer in respect of such REO Property or the related Mortgage Loan for
which the Master Servicer has been or, in connection with such Final Recovery
Determination, will be reimbursed pursuant to Section 3.23 out of rental income,
Insurance Proceeds and Liquidation Proceeds received in respect of such REO
Property, minus (vi) the total of all net rental income, Insurance Proceeds and
Liquidation Proceeds received in respect of such REO Property that has been, or
in connection with such Final Recovery Determination, will be transferred to the
Payment Account pursuant to Section 3.23 of the Servicing Agreement.
With respect to each Mortgage Loan which has become the subject of a
Deficient Valuation, the difference between the principal balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and the
Stated Principal Balance of the Mortgage Loan as reduced by the Deficient
Valuation.
With respect to each Mortgage Loan which has become the subject of a Debt
Service Reduction, the portion, if any, of the reduction in each affected
Monthly Payment attributable to a reduction in the Mortgage Rate imposed by a
court of competent jurisdiction. Each such Realized Loss shall be deemed to have
been incurred on the Due Date for each affected Monthly Payment.
"Record Date": With respect to each Payment Date and any Book-Entry Note,
the Business Day immediately preceding such Payment Date. With respect to each
Payment Date and any other Notes, including any Definitive Notes, the last
Business Day of the month immediately preceding the month in which such Payment
Date occurs.
"Redemption Price": As defined in Section 8.07 of the Indenture.
"Reference Banks": Deutsche Bank AG, Xxxxxxx'x Bank PLC, The Tokyo
Mitsubishi Bank and National Westminster Bank PLC and their successors in
interest; provided, however, that if any of the foregoing banks are not suitable
to serve as a Reference Bank, then any leading banks selected by the Indenture
Trustee, after consultation with the Depositor, which are engaged in
transactions in Eurodollar deposits in the international Eurocurrency market (i)
with an established place of business in London and (ii) not controlling, under
the control of or under common control with the Depositor or any Affiliate
thereof.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of which were not
used to purchase the related Mortgaged Property.
"Registered Holder": The Person in whose name a Note is registered in the
Note Register on the applicable Record Date.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of which were not
used to purchase the related Mortgaged Property.
"Related Documents": With respect to each Mortgage Loan, the documents
specified in Section 2.1(b) of the Mortgage Loan Sale and Contribution Agreement
and any documents
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required to be added to such documents pursuant to the Mortgage Loan Sale and
Contribution Agreement, the Trust Agreement, Indenture or the Servicing
Agreement.
"Relief Act": The Servicemembers Civil Relief Act.
"Relief Act Interest Shortfall": With respect to any Payment Date and any
Mortgage Loan, any reduction in the amount of interest collectible on such
Mortgage Loan for the most recently ended calendar month as a result of the
application of the Relief Act.
"Remittance Report": A report in form and substance acceptable to the
Indenture Trustee on a magnetic disk or tape prepared by the Master Servicer
pursuant to Section 4.01 of the Servicing Agreement with such additions,
deletions and modifications as agreed to by the Indenture Trustee and the Master
Servicer.
"Rents from Real Property": With respect to any REO Property, gross income
of the character described in Section 856(d) of the Code as being included in
the term "rents from real property."
"REO Account": The account or accounts maintained, or caused to be
maintained, by the Master Servicer in respect of an REO Property pursuant to
Section 3.23 of the Servicing Agreement.
"REO Disposition": The sale or other disposition of an REO Property on
behalf of the Trust.
"REO Imputed Interest": As to any REO Property, for any calendar month
during which such REO Property was at any time part of the Trust, one month's
interest at the applicable Net Mortgage Rate on the Stated Principal Balance of
such REO Property (or, in the case of the first such calendar month, of the
related Mortgage Loan, if appropriate) as of the close of business on the
Payment Date in such calendar month.
"REO Principal Amortization": With respect to any REO Property, for any
calendar month, the excess, if any, of (a) the aggregate of all amounts received
in respect of such REO Property during such calendar month, whether in the form
of rental income, sale proceeds (including, without limitation, that portion of
the proceeds paid in connection with a purchase of all of the Notes pursuant to
Section 8.07 of the Indenture that is allocable to such REO Property) or
otherwise, net of any portion of such amounts (i) payable pursuant to Section
3.23(c) of the Servicing Agreement in respect of the proper operation,
management and maintenance of such REO Property or (ii) payable or reimbursable
to the Master Servicer pursuant to Section 3.23(d) of the Servicing Agreement
for unpaid Servicing Fees in respect of the related Mortgage Loan and
unreimbursed Servicing Advances and P&I Advances in respect of such REO Property
or the related Mortgage Loan, over (b) the REO Imputed Interest in respect of
such REO Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Master Servicer on
behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.23 of the Servicing Agreement.
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"Request for Release": A release signed by a Servicing Officer, in the
form of Exhibit B attached to the Servicing Agreement.
"Reserve Interest Rate": With respect to any Interest Determination Date,
the rate per annum that the Indenture Trustee determines to be either (i) the
arithmetic mean (rounded upwards if necessary to the nearest whole multiple of
1/16%) of the one-month U.S. dollar lending rates which New York City banks
selected by the Indenture Trustee, after consultation with the Master Servicer,
are quoting on the relevant Interest Determination Date to the principal London
offices of leading banks in the London interbank market or (ii) in the event
that the Indenture Trustee can determine no such arithmetic mean, the lowest
one-month U.S. dollar lending rate which New York City banks selected by the
Indenture Trustee, after consultation with the Master Servicer, are quoting on
such Interest Determination Date to leading European banks.
"Residential Dwelling": Any one of the following: (i) an attached,
detached or semi- detached one-family dwelling, (ii) an attached, detached or
semi-detached two-to four-family dwelling, (iii) a one-family dwelling unit in a
Xxxxxx Xxx eligible condominium project, or (iv) an attached, detached or
semi-detached one-family dwelling in a planned unit development, none of which
is a co-operative or mobile home (as defined in 42 United States Code, Section
5402(6)).
"Responsible Officer": When used with respect to the Indenture Trustee or
the Owner Trustee, any vice president, managing director, director, any
assistant vice president, the Secretary, any assistant secretary, the Treasurer,
any assistant treasurer, any associate, any trust officer or assistant trust
officer or any other officer of the Trustee having direct responsibility over
this Agreement or otherwise engaged in performing functions similar to those
performed by any of the above designated officers and, with respect to a
particular matter, to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Securities Act": The Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
"Seller": NC Residual II Corporation, and its successors and assigns, in
its capacity as seller under the Mortgage Loan Sale and Contribution Agreement.
"Senior Interest Payment Amount": With respect to any Payment Date, an
amount equal to the sum of (i) the Interest Payment Amount for such Payment Date
for the Class A Notes and (ii) the Interest Carry Forward Amount, if any, for
such Payment Date for the Class A Notes.
"Senior Principal Payment Amount": The sum of (i) the Group I Senior
Principal Payment Amount and (ii) the Group II Senior Principal Payment Amount.
"Servicing Account": The account or accounts created and maintained
pursuant to Section 3.09 of the Servicing Agreement.
"Servicing Advances": The reasonable "out-of-pocket" costs and expenses
incurred by the Master Servicer in connection with a default, delinquency or
other unanticipated event by the Master Servicer in the performance of its
servicing obligations, including, but not limited to, the cost
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of (i) the preservation, restoration and protection of a Mortgaged Property,
(ii) any enforcement or judicial proceedings, including but not limited to
foreclosures, in respect of a particular Mortgage Loan, (iii) the management
(including reasonable fees in connection therewith) and liquidation of any REO
Property and (iv) the performance of its obligations under Section 3.01, Section
3.09, Section 3.14, Section 3.16 and Section 3.23 of the Servicing Agreement.
The Master Servicer shall not be required to make any Nonrecoverable Servicing
Advances.
"Servicing Agreement": The Servicing Agreement dated as of June 29, 2004,
among the Master Servicer, the Issuer and the Indenture Trustee.
"Servicing Fee": With respect to each Mortgage Loan and for any calendar
month, an amount equal to the Servicing Fee Rate accrued for one month (or in
the event of any payment of interest which accompanies a Principal Prepayment in
full or in part made by the Mortgagor during such calendar month, interest for
the number of days covered by such payment of interest) on the same principal
amount on which interest on such Mortgage Loan accrues for such calendar month,
calculated on the basis of a 360-day year consisting of twelve 30-day months. A
portion of such Servicing Fee may be retained by any Sub-Servicer as its
servicing compensation.
"Servicing Fee Rate": 0.50% per annum.
"Servicing Officer": Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of Mortgage Loans, whose name
and specimen signature appear on a list of Servicing Officers furnished by the
Master Servicer to the Indenture Trustee and the Depositor on the Closing Date,
as such list may from time to time be amended.
"S&P": Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.,
or its successor in interest.
"Stated Principal Balance": With respect to any Mortgage Loan: (a) as of
any date of determination up to but not including the Payment Date on which the
proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan
would be paid, the principal balance of such Mortgage Loan as of the Cut-off
Date, as shown in the Mortgage Loan Schedule, minus the sum of (i) the principal
portion of each Monthly Payment due on a Due Date subsequent to the Cut-off
Date, to the extent received from the Mortgagor or advanced by the Master
Servicer and paid pursuant to Section 3.05 of the Indenture on or before such
date of determination, (ii) all Principal Prepayments received after the Cut-off
Date, to the extent paid pursuant to Section 3.05 of the Indenture on or before
such date of determination, (iii) all Liquidation Proceeds and Insurance
Proceeds applied by the Master Servicer as recoveries of principal in accordance
with the provisions of Section 3.16 of the Servicing Agreement, to the extent
paid pursuant to Section 3.05 of the Indenture on or before such date of
determination, and (iv) any Realized Loss incurred with respect thereto as a
result of a Deficient Valuation made during or prior to the Prepayment Period
for the most recent Payment Date coinciding with or preceding such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Payment Date on which the proceeds, if any, of a Liquidation
Event with respect to such Mortgage Loan would be paid, zero. With respect to
any REO Property: (a) as of any date of determination up to but not including
the Payment Date on which the proceeds, if any, of a Liquidation Event with
respect to such REO Property would be paid, an amount (not less
36
than zero) equal to the Stated Principal Balance of the related Mortgage Loan as
of the date on which such REO Property was acquired on behalf of the Trust,
minus the sum of (i) if such REO Property was acquired before the Payment Date
in any calendar month, the principal portion of the Monthly Payment due on the
Due Date in the calendar month of acquisition, to the extent advanced by the
Master Servicer and paid pursuant to Section 3.05 of the Indenture on or before
such date of determination, and (ii) the aggregate amount of REO Principal
Amortization in respect of such REO Property for all previously ended calendar
months, to the extent paid pursuant to Section 3.05 of the Indenture on or
before such date of determination; and (b) as of any date of determination
coinciding with or subsequent to the Payment Date on which the proceeds, if any,
of a Liquidation Event with respect to such REO Property would be paid, zero.
"Statutory Trust Statute": Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code ss.ss.3801 et seq., as the same may be amended from time to time.
"Stepdown Date": The earlier to occur of (i) the Payment Date on which the
aggregate Note Balance of the Class A Notes has been reduced to zero and (ii)
the later to occur of (a) the Payment Date occurring in July 2007 and (b) the
first Payment Date on which the Credit Enhancement Percentage (calculated for
this purpose only after taking into account payments of principal on the
Mortgage Loans but prior to any payment of the Group I Principal Payment Amount
and the Group II Principal Payment Amount on the Notes then entitled to payments
of principal on such Payment Date) is equal to or greater than 37.00%.
"Sub-Servicer": Any Person with which the Master Servicer has entered into
a Sub- Servicing Agreement and which meets the qualifications of a Sub-Servicer
pursuant to Section 3.02 of the Servicing Agreement.
"Sub-Servicing Account": An account established by a Sub-Servicer which
meets the requirements set forth in Section 3.08 of the Servicing Agreement and
is otherwise acceptable to the Master Servicer.
"Sub-Servicing Agreement": The written contract between the Master
Servicer and a Sub-Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.02 of the Servicing Agreement.
"Subsequent Recoveries": As of any Payment Date, unanticipated amounts
received by the Master Servicer (net of any related expenses permitted to be
reimbursed pursuant to Section 3.11 of the Servicing Agreement) specifically
related to a Mortgage Loan that was the subject of a liquidation or an REO
Disposition prior to the related Prepayment Period that resulted in a Realized
Loss.
"Substitution Shortfall Amount": As defined in Section 2.03(b) of the
Servicing Agreement.
"Telerate Screen Page 3750": The display designated as page "3750" on the
Dow Xxxxx Telerate Capital Markets Report (or such other page as may replace
page 3750 on that report for the purpose of displaying London interbank offered
rates of major banks).
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"Trigger Event": A Trigger Event is in effect with respect to any Payment
Date on or after the Stepdown Date if:
(a) the Delinquency Percentage exceeds 40.00% of the Credit Enhancement
Percentage for the prior Payment Date; or
(b) the aggregate amount of Realized Losses incurred since the Cut-off
Date through the last day of the related Due Period (reduced by the aggregate
amount of Subsequent Recoveries received from the Cut-off Date through the last
day of the related Due Period) divided by aggregate Stated Principal Balance of
the Mortgage Loans as of the Cut-off Date exceeds the applicable percentages set
forth below with respect to such Payment Date:
PAYMENT DATE OCCURRING IN PERCENTAGE
--------------------------- ----------
July 2007 through May 2008 3.50%
July 2008 through May 2009 5.25%
July 2009 through May 2010 6.50%
July 2010 and thereafter 7.00%
"Trust": The New Century Home Equity Loan Trust 2004-2 to be created
pursuant to the Trust Agreement.
"Trust Agreement": The Trust Agreement, dated June 25, 2004, between the
Owner Trustee and the Depositor together with the Amended and Restated Trust
Agreement dated as of June 29, 2004, among the Owner Trustee, the Depositor and
Deutsche Bank National Trust Company, as Certificate Registrar and Certificate
Paying Agent, relating to the Trust.
"Trust Estate": The meaning specified in the Granting Clause of the
Indenture.
"Trust Indenture Act" or "TIA": The Trust Indenture Act of 1939, as
amended from time to time, as in effect on any relevant date.
"UCC": The Uniform Commercial Code, as amended from time to time, as in
effect in any specified jurisdiction.
"Underwriters": Xxxxxx Xxxxxxx & Co. Incorporated, UBS Securities LLC,
Banc of America Securities, LLC and Bear, Xxxxxxx & Co. Inc., or their
successors.
"Uninsured Cause": Any cause of damage to a Mortgaged Property such that
the complete restoration of such property is not fully reimbursable by the
hazard insurance policies required to be maintained pursuant to Section 3.14 of
the Servicing Agreement.
"Value": With respect to any Mortgaged Property, the lesser of (i) the
lesser of (a) the value thereof as determined by an appraisal made for the
Originator of the Mortgage Loan at the time of origination of the Mortgage Loan
by an appraiser who met the minimum requirements of Xxxxxx Xxx and Freddie Mac
and (b) the value thereof as determined by a review appraisal conducted by the
Originator in accordance with the Originator's underwriting guidelines, and (ii)
the
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purchase price paid for the related Mortgaged Property by the Mortgagor with the
proceeds of the Mortgage Loan; provided, however, (A) in the case of a
Refinanced Mortgage Loan, such value of the Mortgaged Property is based solely
upon the lesser of (1) the value determined by an appraisal made for the
Originator of such Refinanced Mortgage Loan at the time of origination of such
Refinanced Mortgage Loan by an appraiser who met the minimum requirements of
Xxxxxx Xxx and Freddie Mac and (2) the value thereof as determined by a review
appraisal conducted by the Originator in accordance with the Originator's
underwriting guidelines, and (B) in the case of a Mortgage Loan originated in
connection with a "lease-option purchase," such value of the Mortgaged Property
is based on the lower of the value determined by an appraisal made for the
Originator of such Mortgage Loan at the time of origination or the sale price of
such Mortgaged Property if the "lease option purchase price" was set less than
12 months prior to origination, and is based on the value determined by an
appraisal made for the Originator of such Mortgage Loan at the time of
origination if the "lease option purchase price" was set 12 months or more prior
to origination.
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