NEWCASTLE MORTGAGE SECURITIES TRUST 2007-1
Issuing Entity
XXXXX FARGO BANK, N.A.
Securities Administrator
and
THE BANK OF NEW YORK
Indenture Trustee
_____________________________
INDENTURE
Dated as of July 12, 2007
_____________________________
ASSET-BACKED NOTES, SERIES 2007-1
________________
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
ORIGINAL ISSUANCE OF THE NOTES
Section 2.01. Form.........................................................................................4
Section 2.02. Execution, Authentication and Delivery.......................................................4
Section 2.03. Authorization to Enter into the Interest Rate Cap Agreement and the Interest Rate Swap
Agreement....................................................................................5
ARTICLE III
COVENANTS
Section 3.01. Collection of Payments with respect to the Mortgage Loans....................................6
Section 3.02. Maintenance of Office or Agency..............................................................6
Section 3.03. Money for Payments To Be Held in Trust; Paying Agent.........................................6
Section 3.04. Existence....................................................................................7
Section 3.05. Payment of Principal and Interest............................................................8
Section 3.06. Protection of Trust Estate..................................................................14
Section 3.07. Opinions as to Trust Estate.................................................................15
Section 3.08. Performance of Obligations..................................................................16
Section 3.09. Negative Covenants..........................................................................16
Section 3.10. [Reserved]..................................................................................17
Section 3.11. [Reserved.].................................................................................17
Section 3.12. Representations and Warranties Concerning the Mortgage Loans................................17
Section 3.13. Amendments to Sale and Servicing Agreement..................................................17
Section 3.14. Servicer as Agent and Bailee of the Indenture Trustee.......................................17
Section 3.15. Investment Company Act......................................................................18
Section 3.16. Issuing Entity May Consolidate, etc.........................................................18
Section 3.17. Successor or Transferee.....................................................................19
Section 3.18. No Other Business...........................................................................19
Section 3.19. No Borrowing................................................................................19
Section 3.20. Guarantees, Loans, Advances and Other Liabilities...........................................19
Section 3.21. Capital Expenditures........................................................................20
Section 3.22. Determination of Note Rate..................................................................20
Section 3.23. Restricted Payments.........................................................................20
Section 3.24. Notice of Events of Default.................................................................20
Section 3.25. Further Instruments and Acts................................................................20
Section 3.26. Statements to Noteholders...................................................................21
Section 3.27. [Reserved]..................................................................................21
Section 3.28. Certain Representations Regarding the Trust Estate..........................................21
Section 3.29. Allocation of Realized Losses...............................................................22
ARTICLE IV
THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE
Section 4.01. The Notes...................................................................................24
Section 4.02. Registration of and Limitations on Transfer and Exchange of Notes; Appointment of Note
Registrar and Certificate Registrar.........................................................24
Section 4.03. Xxxxxxxxx, Xxxxxxxxx, Lost or Stolen Notes..................................................25
Section 4.04. Persons Deemed Owners.......................................................................26
Section 4.05. Cancellation................................................................................26
Section 4.06. Book-Entry Notes............................................................................27
Section 4.07. Notices to Depository.......................................................................28
Section 4.08. Definitive Notes............................................................................28
Section 4.09. Tax Treatment...............................................................................28
Section 4.10. Satisfaction and Discharge of Indenture.....................................................28
Section 4.11. Application of Trust Money..................................................................29
Section 4.12. [Reserved]..................................................................................30
Section 4.13. Repayment of Monies Held by Paying Agent....................................................30
Section 4.14. Temporary Notes.............................................................................30
Section 4.15. Representation Regarding ERISA..............................................................30
ARTICLE V
DEFAULT AND REMEDIES
Section 5.01. Events of Default...........................................................................32
Section 5.02. Acceleration of Maturity; Rescission and Annulment..........................................32
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...................................................38
Section 5.06. Limitation of Suits.........................................................................38
Section 5.07. Unconditional Rights of Noteholders To Receive Principal and Interest.......................39
Section 5.08. Restoration of Rights and Remedies..........................................................39
Section 5.09. Rights and Remedies Cumulative..............................................................39
Section 5.10. Delay or Omission Not a Waiver..............................................................39
Section 5.11. Control By Noteholders......................................................................39
Section 5.12. Waiver of Past Defaults.....................................................................40
Section 5.13. Undertaking for Costs.......................................................................40
Section 5.14. Waiver of Stay or Extension Laws............................................................41
Section 5.15. Sale of Trust Estate........................................................................41
Section 5.16. Action on Notes.............................................................................43
Section 5.17. Performance and Enforcement of Certain Obligations..........................................43
ARTICLE VI
THE INDENTURE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 6.01. Duties of Indenture Trustee and Securities Administrator....................................45
Section 6.02. Rights of Indenture Trustee and Securities Administrator....................................48
Section 6.03. Individual Rights of Indenture Trustee and Securities Administrator.........................49
Section 6.04. Indenture Trustee's and Securities Administrator's Disclaimer...............................49
Section 6.05. Notice of Event of Default..................................................................50
Section 6.06. Reports by the Securities Administrator to Holders and Tax Administration...................50
Section 6.07. Compensation and Indemnity..................................................................50
Section 6.08. Replacement of Indenture Trustee or Securities Administrator................................51
Section 6.09. Successor Indenture Trustee or Securities Administrator by Xxxxxx...........................53
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee...........................53
Section 6.11. Eligibility; Disqualification...............................................................54
Section 6.12. Preferential Collection of Claims Against Issuing Entity....................................55
Section 6.13. Representations and Warranties..............................................................55
Section 6.14. Directions to Indenture Trustee and Securities Administrator................................55
Section 6.15. The Agents..................................................................................55
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuing Entity To Furnish Securities Administrator Names and Addresses of Noteholders.......57
Section 7.02. Preservation of Information; Communications to Noteholders..................................57
Section 7.03. Reports of Issuing Entity...................................................................57
Section 7.04. Reports by Securities Administrator.........................................................59
Section 7.05. Statements to Noteholders...................................................................59
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money.........................................................................63
Section 8.02. Trust Accounts..............................................................................63
Section 8.03. Officer's Certificate.......................................................................63
Section 8.04. Termination Upon Payment to Noteholders.....................................................63
Section 8.05. Release of Trust Estate.....................................................................64
Section 8.06. Surrender of Notes Upon Final Payment.......................................................64
Section 8.07. Optional Redemption of the Notes............................................................64
Section 8.08. Collateral Account..........................................................................66
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders......................................68
Section 9.02. Supplemental Indentures With Consent of Noteholders.........................................69
Section 9.03. Execution of Supplemental Indentures........................................................71
Section 9.04. Effect of Supplemental Indenture............................................................71
Section 9.05. Conformity with Trust Indenture Act.........................................................72
Section 9.06. Reference in Notes to Supplemental Indentures...............................................72
ARTICLE X
MISCELLANEOUS
Section 10.01. Compliance Certificates and Opinions, etc...................................................73
Section 10.02. Form of Documents Delivered to Indenture Trustee............................................74
Section 10.03. Acts of Noteholders.........................................................................75
Section 10.04. Notices etc., to Indenture Trustee, Securities Administrator, Issuing Entity and Rating
Agencies....................................................................................76
Section 10.05. Notices to Noteholders; Xxxxxx..............................................................76
Section 10.06. Conflict with Trust Indenture Act...........................................................77
Section 10.07. Effect of Headings..........................................................................77
Section 10.08. Successors and Assigns......................................................................77
Section 10.09. Separability................................................................................77
Section 10.10. Third Party Beneficiaries...................................................................77
Section 10.11. Legal Holidays..............................................................................78
Section 10.12. GOVERNING LAW...............................................................................78
Section 10.13. Counterparts................................................................................78
Section 10.14. Recording of Indenture......................................................................78
Section 10.15. Issuing Entity Obligation...................................................................78
Section 10.16. No Petition.................................................................................79
Section 10.17. Inspection..................................................................................79
Section 10.18. No Recourse to Owner Trustee................................................................79
Section 10.19. Proofs of Claim.............................................................................80
EXHIBITS
Exhibit A-1 Form of Class A Note
Exhibit A-2 Form of Class M Note
Exhibit B Mortgage Loan Schedule
Exhibit C Interest Rate Swap Agreement
Exhibit D Interest Rate Cap Agreement
Appendix A Definitions
This Indenture, dated as of July 12, 2007, is entered into among Newcastle Mortgage Securities
Trust 2007-1, a Delaware statutory trust, as Issuing Entity (the "Issuing Entity"), Xxxxx Fargo Bank, N.A., a
national banking association, as Securities Administrator (the "Securities Administrator", which term includes
any successor Securities Administrator under the Indenture") and The Bank of New York, a New York banking
corporation, as Indenture Trustee (the "Indenture Trustee").
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the other party and for the equal and
ratable benefit of the Holders of the Issuing Entity's Asset-Backed Notes, Series 2007-1 (the "Notes").
GRANTING CLAUSE
The Issuing Entity hereby Grants to the Indenture Trustee at the Closing Date, as trustee for
the benefit of the Holders of the Notes, all of the Issuing Entity's right, title and interest, whether now owned
or hereafter acquired, in, to and under (a) the Mortgage Loans, Qualified Substitute Mortgage Loans and the
proceeds thereof; (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 Note
Account and in all proceeds thereof; (d) all rights under (i) the Assignment Agreement as assigned to the Issuing
Entity, (ii) the Sale and Servicing Agreement, (iii) any title, hazard and primary insurance policies with
respect to the Mortgaged Properties, (iv) the rights with respect to the Interest Rate Swap Agreement and (v) the
rights with respect to the Interest Rate Cap Agreement; (e) all present and future claims, demands, causes and
choses in action in respect of any or all of the foregoing and all payments on or under, and all proceeds of
every kind and nature whatsoever in respect of, any or all of the foregoing and all payments on or under, and all
proceeds of every kind and nature whatsoever in the conversion thereof, voluntary or involuntary, into cash or
other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks,
deposit accounts, rights to payment of any and every kind, and other forms of obligations and receivables,
instruments and other property which at any time constitute all or part of or are included in the proceeds of any
of the foregoing and (f) all other property of the Issuing Entity (collectively, the "Trust Estate" or the
"Collateral").
The foregoing Grant is made in trust to secure the payment of principal of and interest on, and
any other amounts owing in respect of, the Notes, equally and ratably without prejudice, priority or distinction,
and to secure compliance with the provisions of this Indenture, all as provided in this Indenture.
The Indenture Trustee, as trustee on behalf of the Holders of the Notes, acknowledges such
Xxxxx, accepts the trust under this Indenture in accordance with the provisions hereof and each of the Indenture
Trustee and the Securities Administrator agree to perform their respective duties as Indenture Trustee and
Securities Administrator as required herein.
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided herein or unless the
context otherwise requires, capitalized terms not otherwise defined herein shall have the meanings assigned to
such terms in the Definitions attached hereto as Appendix A which is incorporated by reference herein. All other
capitalized terms used herein shall have the meanings specified herein.
Section 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture Act (the "TIA"), the
provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"Indenture Securities" means the Notes.
"Indenture Security Holder" means a Noteholder.
"Indenture to be Qualified" means this Indenture.
"Indenture Trustee" or "Institutional Trustee" means the Indenture Trustee.
"Obligor" on the indenture securities means the Issuing Entity and any other obligor on the
indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by Commission rules and have the meanings assigned to them by such
definitions.
Section 1.03. Rules of Construction.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned to it in accordance
with generally accepted accounting principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the plural include the
singular; and
(vi) any agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement, instrument or statute
as from time to time amended, modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
ARTICLE II
ORIGINAL ISSUANCE OF THE NOTES
Section 2.01. Form.
The Notes, together with the Securities Administrator's certificate of authentication, shall be
in substantially the form set forth in Exhibits A-1 or A-2 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 and A-2 to this Indenture are part of the
terms of this Indenture. To the extent the Notes and the terms of the Indenture are inconsistent, the terms of
the Indenture shall control.
Section 2.02. Execution, Authentication and Delivery.
The Notes shall be executed on behalf of the Issuing Entity by any of its Authorized Officers.
The signature of any such Authorized Officer on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signature of individuals who were at any time Authorized
Officers of the Issuing Entity shall bind the Issuing Entity, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such
offices at the date of such Notes.
The Securities Administrator shall upon Issuing Entity Request authenticate and deliver the
Notes for original issue in an aggregate initial principal amount of $1,036,250,000. The Classes of Notes shall
have the following Initial Note Balances:
Class Initial Note Balance
____________________________________________
1-A-1 $ 370,224,000
2-A-1 $ 285,332,000
2-A-2 $ 27,683,000
2-A-3 $ 77,257,000
2-A-4 $ 39,130,000
M-1 $ 42,429,000
M-2 $ 41,341,000
M-3 $ 25,022,000
M-4 $ 22,846,000
M-5 $ 21,215,000
M-6 $ 18,495,000
M-7-A $ 5,000,000
M-7-B $ 12,407,000
M-8-A $ 3,500,000
M-8-B $ 12,275,000
M-9 $ 14,143,000
M-10 $ 17,951,000
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; provided that the Notes must be purchased in minimum total
investments of $100,000 per class.
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 Securities Administrator 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. Authorization to Enter into the Interest Rate Cap Agreement and the Interest
Rate Swap Agreement.
The Securities Administrator is hereby directed to perform the Issuing Entity's obligations
under the Interest Rate Cap Agreement and the Interest Rate Swap Agreement, exercise the rights and perform the
obligations on behalf of Party B (each as defined therein) and not in its individual capacity. The Issuing
Entity acknowledges and agrees that (i) the Securities Administrator shall perform the Owner Trustee's
obligations under the Interest Rate Cap Agreement and the Interest Rate Swap Agreement on behalf of Party B (each
as defined therein) and (ii) the Securities Administrator shall exercise the rights and perform the obligations
of Party B thereunder, solely in its capacity as Securities Administrator on behalf of Party B (each as defined
therein) and not in its individual capacity.
Every provision of this Indenture affording protection to the Securities Administrator shall
apply to the Securities Administrator's delivery of the Interest Rate Cap Agreement and the Interest Rate Swap
Agreement and the performance of its duties and satisfaction of its obligations thereunder.
ARTICLE III
COVENANTS
Section 3.01. Collection of Payments with respect to the Mortgage Loans.
The Securities Administrator 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 Note Account.
Section 3.02. Maintenance of Office or Agency.
The Issuing Entity will maintain an office or agency where, subject to satisfaction of
conditions set forth herein, Notes may be surrendered for registration of transfer or exchange, and where notices
and demands to or upon the Issuing Entity in respect of the Notes and this Indenture may be served. The Issuing
Entity hereby initially appoints the Securities Administrator to serve as its agent for the foregoing purposes.
If at any time the Issuing Entity shall fail to maintain any such office or agency or shall fail to furnish the
Indenture Trustee with the address thereof, such surrenders may be made at the office designated by the
Securities Administrator for such purpose.
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 Note Account pursuant to Section 3.01 shall be made on behalf
of the Issuing Entity by the Securities Administrator or by the Paying Agent, and no amounts so withdrawn from
the Note Account for payments of Notes shall be paid over to the Issuing Entity except as provided in this
Section 3.03. The Issuing Entity hereby appoints the Securities Administrator as its Paying Agent.
The Securities Administrator will cause each Paying Agent other than the Securities
Administrator to execute and deliver to the Securities Administrator an instrument in which such Paying Agent
shall agree with the Securities Administrator (and if the Securities Administrator 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 Securities Administrator notice of any default by the Issuing Entity
of which it has actual knowledge in the making of any payment required to be made with respect
to the Notes;
(iii) at any time during the continuance of any such default, upon the written
request of the Securities Administrator, forthwith pay to the Securities Administrator all sums
so held in trust by such Paying Agent;
(iv) immediately resign as Paying Agent and forthwith pay to the Securities
Administrator all sums held by it in trust for the payment of Notes if at any time it ceases to
meet the standards required to be met by a Paying Agent at the time of its appointment;
(v) comply with all requirements of the Code with respect to the withholding from
any payments made by it on any Notes of any applicable withholding taxes imposed thereon and
with respect to any applicable reporting requirements in connection therewith; and
(vi) not commence a bankruptcy proceeding against the Issuing Entity in connection
with this Indenture.
The Issuing Entity may at any time, for the purpose of obtaining the satisfaction and discharge
of this Indenture or for any other purpose, by Issuing Entity Request direct any Paying Agent to pay to the
Securities Administrator all sums held in trust by such Paying Agent, such sums to be held by the Securities
Administrator 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 Securities Administrator, 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 Securities
Administrator or any Paying Agent in trust for the payment of any amount due with respect to any Note and
remaining unclaimed for one year after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuing Entity on Issuing Entity Request; and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Issuing Entity for payment thereof (but only to the extent of the
amounts so paid to the Issuing Entity), and all liability of the Securities Administrator or such Paying Agent
with respect to such trust money shall thereupon cease; provided, however, that the Securities Administrator or
such Paying Agent, before being required to make any such repayment, shall at the expense and direction of the
Issuing Entity cause to be published once, in an Authorized Newspaper published in the English language, notice
that such money remains unclaimed and that, after a date specified therein which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the
Issuing Entity. The Securities Administrator may also adopt and employ, at the expense and direction of the
Issuing Entity, any other reasonable means of notification of such repayment (including, but not limited to,
mailing notice of such repayment to Holders whose Notes have been called but have not been surrendered for
redemption or whose right to or interest in monies due and payable but not claimed is determinable from the
records of the Securities Administrator or of any Paying Agent, at the last address of record for each such
Holder).
Section 3.04. Existence.
The Issuing Entity will keep in full effect its existence, rights and franchises as a statutory
trust under the laws of the State of Delaware (unless it becomes, or any successor Issuing Entity hereunder is or
becomes, organized under the laws of any other state or of the United States of America, in which case the
Issuing Entity will keep in full effect its existence, rights and franchises under the laws of such other
jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes,
the Mortgage Loans and each other instrument or agreement included in the Trust Estate.
Section 3.05. Payment of Principal and Interest.
(a) On each Payment Date from amounts on deposit in the Note Account in accordance with
Section 8.02 hereof, the Securities Administrator shall pay (i) to the Swap Provider, any Net Swap Payment or
Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event)
owed to the Swap Provider and (ii) to the Persons specified below, to the extent provided therein, the Available
Funds for such Payment Date in the following order of priority:
(A) On each Payment Date, the Group 1 Interest Remittance Amount for such Payment Date
will be distributed by the Securities Administrator as follows:
first, to the Class 1-A-1 Notes, the Class Monthly Interest Amount and any Class Interest
Carryover Shortfall for such class and such Payment Date;
second, to the extent not paid pursuant to priority (B) below, to the Class 2-A-1 Notes, the
Class 2-A-2 Notes, the Class 2-A-3 Notes and the Class 2-A-4 Notes, the related Class Monthly Interest
Amount and any related Class Interest Carryover Shortfall for each such class and that Payment Date,
allocated among each such class of notes on a pro rata basis based on each note's Class Monthly Interest
Amount and Class Interest Carryover Shortfall;
(B) On each Payment Date, the Group 2 Interest Remittance Amount for such Payment Date
will be distributed as follows:
first, to the Class 2-A-1 Notes, the Class 2-A-2 Notes, the Class 2-A-3 Notes and the Class
2-A-4 Notes, the related Class Monthly Interest Amount and any related Class Interest Carryover
Shortfall for each such class and that Payment Date, allocated among each such class of notes on a pro
rata basis based on each note's Class Monthly Interest Amount and Class Interest Carryover Shortfall;
second, to the extent not paid pursuant to priority (A) above, to the Class 1-A-1 Notes, the
Class Monthly Interest Amount and any Class Interest Carryover Shortfall for such class and such Payment
Date;
(C) On each Payment Date, the Interest Remittance Amount remaining for such Payment Date
will be distributed as follows:
first, sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class M-7 (allocated among the Class M-7 Notes, pro rata based on their respective Note Balances), Class
M-8 (allocated among the Class M-8 Notes, pro rata based on their respective Note Balances), Class M-9
and M-10 Notes, in that order, the Class Monthly Interest Amount for each such class and that Payment
Date;
(D) On each Payment Date, (1) prior to the Stepdown Date or (2) on which a Trigger Event
is in effect, concurrently as follows:
(i) from the Group 1 Principal Remittance Amount,
first, to the Class 1-A-1 Notes, the Group 1 Principal Distribution Amount for that Payment
Date (excluding any Overcollateralization Increase Amount included therein), until the Note Balance
thereof has been reduced to zero;
second and following the payments pursuant to priority (D)(ii) below, sequentially to the Class
2-A-1 Notes, the Class 2-A-2 Notes, the Class 2-A-3 Notes and the Class 2-A-4 Notes, in that order, the
remaining Group 1 Principal Distribution Amount (excluding any Overcollateralization Increase Amount
included therein) in reduction of the Note Balances, until the Note Balances thereof have been reduced
to zero; provided, that notwithstanding the foregoing order of priority, if on any Payment Date, the
aggregate Note Balance of the Subordinate Notes as of the day prior to such Payment Date is equal to
zero and the Overcollateralization Amount for the prior Payment Date is equal to zero, then such amount
shall be paid to the Group 2 Notes, pro rata, based on their respective Note Balances;
(ii) from the Group 2 Principal Remittance Amount,
first, sequentially to the Class 2-A-1 Notes, the Class 2-A-2 Notes, the Class 2-A-3 Notes and
the Class 2-A-4 Notes, in that order, the Group 2 Principal Distribution Amount (excluding any
Overcollateralization Increase Amount included therein) in reduction of the Note Balances, until the
Note Balances thereof have been reduced to zero; provided, that notwithstanding the foregoing order of
priority, if on any Payment Date, the aggregate Note Balance of the Subordinate Notes as of the day
prior to such Payment Date is equal to zero and the Overcollateralization Amount for the prior Payment
Date is equal to zero, then such amount shall be paid to the Group 2 Notes, pro rata, based on their
respective Note Balances;
second and following the payments pursuant to priority (D)(i) above, to the Class 1-A-1 Notes,
the remaining Group 2 Principal Distribution Amount (excluding any Overcollateralization Increase Amount
included therein) for that Payment Date, until the Note Balance thereof has been reduced to zero;
(iii) from the Principal Remittance Amount remaining, sequentially, to the Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7 (allocated among the Class M-7 Notes, pro
rata based on their respective Note Balances), Class M-8 (allocated among the Class M-8 Notes, pro rata
based on their respective Note Balances), Class M-9 and M-10 Notes, in that order, the Principal
Distribution Amount remaining (excluding any Overcollateralization Increase Amount included therein) in
reduction of the Note Balances, until the Note Balances thereof have been reduced to zero;
(E) On each Payment Date, (1) on or after the Stepdown Date or (2) on which a Trigger
Event is not in effect, concurrently as follows:
(i) from the Group 1 Principal Remittance Amount,
first, to the Class 1-A-1 Notes, the Group 1 Senior Principal Distribution Amount for that
Payment Date, until the Note Balance thereof has been reduced to zero;
second and following the payments pursuant to priority (E)(ii) below, sequentially to the Class
2-A-1 Notes, the Class 2-A-2 Notes, the Class 2-A-3 Notes and the Class 2-A-4 Notes, in that order, the
Group 2 Senior Principal Distribution Amount remaining unpaid in reduction of the Note Balances, until
the Note Balances thereof have been reduced to zero; provided, that notwithstanding the foregoing order
of priority, if on any Payment Date, the aggregate Note Balance of the Subordinate Notes as of the day
prior to such Payment Date is equal to zero and the Overcollateralization Amount for the prior Payment
Date is equal to zero, then such amount shall be paid to the Group 2 Notes, pro rata, based on their
respective Note Balances;
(ii) from the Group 2 Principal Remittance Amount,
first, sequentially to the Class 2-A-1 Notes, the Class 2-A-2 Notes, the Class 2-A-3 Notes and
the Class 2-A-4 Notes, in that order, the Group 2 Senior Principal Distribution Amount in reduction of
the Note Balances, until the Note Balances thereof have been reduced to zero; provided, that
notwithstanding the foregoing order of priority, if on any Payment Date, the aggregate Note Balance of
the Subordinate Notes as of the day prior to such Payment Date is equal to zero and the
Overcollateralization Amount for the prior Payment Date is equal to zero, then such amount shall be paid
to the Group 2 Notes, pro rata, based on their respective Note Balances;
second and following the payments pursuant to priority (E)(i) above, to the Class 1-A-1 Notes,
the Group 1 Senior Principal Distribution Amount remaining unpaid for that Payment Date, until the Note
Balance thereof has been reduced to zero;
(iii) from the Principal Remittance Amount remaining, as follows
first, to the Class M-1 Notes, the Class M-1 Principal Distribution Amount for such Payment
Date, until the Note Balance thereof has been reduced to zero;
second, to the Class M-2 Notes, the Class M-2 Principal Distribution Amount for such Payment
Date, until the Note Balance thereof has been reduced to zero;
third, to the Class M-3 Notes, the Class M-3 Principal Distribution Amount for such Payment
Date, until the Note Balance thereof has been reduced to zero;
fourth, to the Class M-4 Notes, the Class M-4 Principal Distribution Amount for such Payment
Date, until the Note Balance thereof has been reduced to zero;
fifth, to the Class M-5 Notes, the Class M-5 Principal Distribution Amount for such Payment
Date, until the Note Balance thereof has been reduced to zero;
sixth, to the Class M-6 Notes, the Class M-6 Principal Distribution Amount for such Payment
Date, until the Note Balance thereof has been reduced to zero;
seventh, to the Class M-7 Notes, the Class M-7 Principal Distribution Amount for such Payment
Date (allocated among the Class M-7 Notes, pro rata based on their respective Note Balances), until the
Note Balances thereof has been reduced to zero;
eighth, to the Class M-8 Notes, the Class M-8 Principal Distribution Amount for such Payment
Date (allocated among the Class M-8 Notes, pro rata based on their respective Note Balances), until the
Note Balances thereof have been reduced to zero;
ninth, to the Class M-9 Notes, the Class M-9 Principal Distribution Amount for such Payment
Date, until the Note Balance thereof has been reduced to zero; and
tenth, to the Class M-10 Notes, the Class M-10 Principal Distribution Amount for such Payment
Date, until the Note Balance thereof has been reduced to zero;
(F) From the Available Funds remaining for such Payment Date as follows:
first, to the Notes, the Overcollateralization Increase Amount for such Payment Date, in the
following order of priority:
(i) the Group 1 Allocation Percentage of the Overcollateralization Increase Amount
to the Group 1 Notes in reduction of the Note Balance, until the Note Balance thereof has been
reduced to zero;
(ii) the Group 2 Allocation Percentage of the Overcollateralization Increase Amount
to the Group 2 Notes (allocated among such notes in the order of priority set forth in clause
(D) above) in reduction of the Note Balance, until the Note Balances thereof have been reduced
to zero;
(iii) any remaining Overcollateralization Increase Amount, pro rata, to the Group 1
Notes and Group 2 Notes then entitled to principal in reduction of the Note Balance, until the
Note Balances thereof have been reduced to zero;
(iv) any remaining Overcollateralization Increase Amount sequentially, to the Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7 (allocated among the
Class M-7 Notes, pro rata based on their respective Note Balances), Class M-8 (allocated among
the Class M-8 Notes, pro rata based on their respective Note Balances), Class M-9 and M-10
Notes, in that order, in each case in reduction of the Note Balance thereof, until the Note
Balance thereof has been reduced to zero;
second, sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class M-7 (allocated among the Class M-7 Notes, pro rata based on their respective Note Balances), Class
M-8 (allocated among the Class M-8 Notes, pro rata based on their respective Note Balances), Class M-9
and M-10 Notes, in that order, in each case, first (a) any related Class Interest Carryover Shortfall
and then (b) any related Allocated Realized Loss Amount;
third, concurrently and pro rata based on the related Basis Risk Shortfall Amount due to each
group, (i) to the Class 1-A-1 Notes, the related Basis Risk Shortfall Amount and (ii) to the Group 2
Notes, pro rata among the Group 2 Notes, the related Basis Risk Shortfall Amount
fourth, sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class M-7 (allocated among the Class M-7 Notes, pro rata based on their respective Note Balances), Class
M-8 (allocated among the Class M-8 Notes, pro rata based on their respective Note Balances), Class M-9
and M-10 Notes, in that order, the related Basis Risk Shortfall Amount;
fifth, to the Swap Provider, any Swap Termination Payments resulting from a Swap Provider
Trigger event; and
sixth, to the Certificate Paying Agent for deposit in the Certificate Distribution Account and
distribution pursuant to the Trust Agreement.
(b) On each Payment Date, all amounts representing Prepayment Charges in respect of the
Mortgage Loans received during the related Prepayment Period shall be remitted to the Certificate Paying Agent
for deposit in the Certificate Distribution Account and distribution pursuant to the Trust Agreement and shall not
be available for payment to the Holders of any Class of Notes.
(c) Following the foregoing payments, an amount equal to the amount of Subsequent
Recoveries deposited into the Collection Account pursuant to Section 3.10(a)(iii) of the Sale and Servicing
Agreement shall be applied to increase the Note Balance of the Class of Notes with the Highest Priority up to the
extent of such Realized Losses previously unreimbursed to that Class of Notes pursuant to Section 3.29. An
amount equal to the amount of any remaining Subsequent Recoveries shall be applied to increase the Note Balance
of the Class of Notes with the next Highest Priority, up to the amount of such Realized Losses previously
allocated to that Class of Notes pursuant to Section 3.29. Holders of such Notes will not be entitled to any
distribution in respect of interest on the amount of such increases for any Interest Accrual Period preceding the
Payment Date on which such increase occurs. Any such increases shall be applied to the Note Balance of each Note
of such Class in accordance with its respective Percentage Interest.
(d) On each Payment Date, after making the payments of the Available Funds as set forth
above, the Securities Administrator shall pay the amount on deposit in the Swap Account as follows:
first, concurrently, to the Class A Notes, any related Class Monthly Interest Amount and Class
Interest Carryover Shortfall, pro rata, to the extent remaining unpaid; provided, that for this purpose no Notes
held by the Seller, the Sponsor or any Affiliate shall receive such distribution;
second, sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class M-7-A and Class M-8-A Notes, in that order, any related Class Monthly Interest Amount and Class Interest
Carryover Shortfall, to the extent remaining unpaid;
third, to the Class A Notes and Subordinate Notes (other than the Class M-7-B, Class M-8-B,
Class M-9 and Class M-10 Notes), the Overcollateralization Deficiency Amount for such Payment Date, to the extent
remaining unpaid; provided, that for this purpose no Notes held by the Seller, the Sponsor or any Affiliate shall
receive such distribution;
fourth, sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class M-7-A and Class M-8-A Notes, in that order, any related Allocated Realized Loss Amount, to the extent
remaining unpaid;
fifth, to the Class A Notes and Subordinate Notes (other than the Class M-7-B, Class M-8-B,
Class M-9 and Class M-10 Notes) any related Basis Risk Shortfall Amount to the extent remaining unpaid; and
sixth, any remaining amounts to the Certificate Paying Agent for deposit in the Certificate
Distribution Account and distribution pursuant to the Trust Agreement
(e) On each Payment Date, the Securities Administrator shall deposit into the Cap Account,
amounts if any, received from the Cap Provider. On each Payment Date, following the payments on the Notes from
amounts on deposit in the Swap Account as described above, the Securities Administrator will withdraw from
amounts in the Cap Account to make the following payments in the following order of priority:
first, concurrently, to the Class A Notes, any related Class Monthly Interest Amount and Class
Interest Carryover Shortfall, pro rata, to the extent remaining unpaid; provided, that for this purpose no Notes
held by the Seller, the Sponsor or any Affiliate shall receive such distribution;
second, sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class M-7-A and Class M-8-A Notes, in that order, any related Class Monthly Interest Amount and Class Interest
Carryover Shortfall, to the extent remaining unpaid;
third, to the Class A Notes and Subordinate Notes (other than the Class M-7-B, Class M-8-B,
Class M-9 and Class M-10 Notes), the Overcollateralization Deficiency Amount for such Payment Date, to the extent
remaining unpaid; provided, that for this purpose no Notes held by the Seller, the Sponsor or any Affiliate shall
receive such distribution;
fourth, sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class M-7-A and Class M-8-A Notes, in that order, any related Allocated Realized Loss Amount, to the extent
remaining unpaid;
fifth, to the Class A Notes and Subordinate Notes (other than the Class M-7-B, Class M-8-B,
Class M-9 and Class M-10 Notes) any related Basis Risk Shortfall Amount to the extent remaining unpaid; provided,
that for this purpose no Notes held by the Seller, the Sponsor or any Affiliate shall receive such distribution;
and
sixth, any remaining amounts to the Certificate Paying Agent for deposit in the Certificate
Distribution Account and distribution pursuant to the Trust Agreement
(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 Securities
Administrator, the Indenture Trustee, the Note Registrar, the Paying Agent, the Depositor, the Servicer 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 Issuing Entity on the applicable Payment Date shall, if such Holder
shall have so requested at least five Business Days prior to the related Record Date, be paid to each Holder of
record on the preceding Record Date, by wire transfer to an account specified in writing by such Holder as of the
preceding Record Date or in all other cases or if no such instructions have been delivered to the Securities
Administrator, 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 Securities Administrator shall not pay to such Holders any amount required to be withheld from
a payment to such Holder by the Code.
(i) The principal of each Note shall be due and payable in full on the Final Stated
Maturity Date for such Note. 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 Securities Administrator
shall notify the Person in whose name a Note is registered at the close of business on the Record Date preceding
the Final Stated Maturity Date or other final Payment Date (including any final Payment Date resulting from any
redemption pursuant to Section 8.07 hereof). Such notice shall to the extent practicable be mailed no later than
five Business Days prior to such Final Stated Maturity Date or other final Payment Date and shall specify that
payment of the principal amount and any interest due with respect to such Note at the Final Stated Maturity Date
or other final Payment Date will be payable only upon presentation and surrender of such Note and shall specify
the place where such Note may be presented and surrendered for such final payment. No interest shall accrue on
the Notes on or after the Final Stated Maturity Date or any such other final Payment Date.
Section 3.06. Protection of Trust Estate.
(a) The Issuing Entity will from time to time prepare, execute and deliver all such
supplements and amendments hereto and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the priority thereof)
of this Indenture or carry out more effectively the purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant made or to be
made by this Indenture;
(iii) cause the Issuing Entity, the Servicer or the 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 Securities Administrator 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 Securities Administrator shall
have first received an Opinion of Counsel to the effect that the lien and security interest created by this
Indenture with respect to such property will continue to be maintained after giving effect to such action or
actions).
The Issuing Entity hereby designates the Securities Administrator its agent and
attorney-in-fact to sign any financing statement, continuation statement or other instrument required to be
signed pursuant to this Section 3.06 upon the Issuing Entity's preparation thereof and delivery to the Securities
Administrator.
Section 3.07. Opinions as to Trust Estate.
(a) On the Closing Date, the Issuing Entity shall furnish to the Indenture Trustee, the
Securities Administrator 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 2008, the Issuing Entity,
upon request, shall furnish to the Indenture Trustee and the Securities Administrator an Opinion of Counsel at
the expense of the Issuing Entity either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording, filing, re-recording and re-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 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 re-filing of this Indenture, any indentures supplemental hereto and any other
requisite documents and the execution and filing of any financing statements and continuation statements that
will, in the opinion of such counsel, be required to maintain the lien and security interest in the Collateral
until December 31st in the following calendar year.
Section 3.08. Performance of Obligations.
The Issuing Entity will punctually perform and observe all of its obligations and agreements
contained in this Indenture, the Basic Documents and in the instruments and agreements included in the Trust
Estate.
The Issuing Entity may contract with other Persons to assist it in performing its duties under
this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee in an
Officer's Certificate of the Issuing Entity shall be deemed to be action taken by the Issuing Entity.
The Issuing Entity will not take any action or permit any action to be taken by others which
would release any Person from any of such Person's covenants or obligations under any of the documents relating
to the Mortgage Loans or under any instrument included in the Trust Estate, or which would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of,
any of the documents relating to the Mortgage Loans or any such instrument, except such actions as the Servicer
or the Master Servicer is expressly permitted to take in the Sale and Servicing Agreement. The Indenture Trustee
and the Securities Administrator may exercise the rights of the Issuing Entity to direct the actions of the
Servicer and/or the Master Servicer pursuant to the Sale and Servicing Agreement.
The Issuing Entity may retain an administrator and may enter into contracts with other Persons
for the performance of the Issuing Entity's obligations hereunder, and performance of such obligations by such
Persons shall be deemed to be performance of such obligations by the Issuing Entity.
Section 3.09. Negative Covenants. So long as any Notes are Outstanding, the Issuing Entity
shall not:
(i) except as expressly permitted by this Indenture, sell, transfer, exchange or
otherwise dispose of the Trust Estate;
(ii) claim any credit on, or make any deduction from the principal or interest
payable in respect of, the Notes (other than amounts properly withheld from such payments under
the Code) or assert any claim against any present or former Noteholder by reason of the payment
of the taxes levied or assessed upon any part of the Trust Estate;
(iii) (A) permit the validity or effectiveness of this Indenture to be impaired, or
permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants or obligations with respect
to the Notes under this Indenture except as may be expressly permitted hereby, (B) permit any
lien, charge, excise, claim, security interest, mortgage or other encumbrance (other than the
lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the
Trust Estate or any part thereof or any interest therein or the proceeds thereof or (C) permit
the lien of this Indenture not to constitute a valid first priority security interest in the
Trust Estate; or
(iv) waive or impair, or fail to assert rights under, the Mortgage Loans, or impair
or cause to be impaired the Issuing Entity's interest in the Mortgage Loans, the Assignment
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 the Originator in the Purchase Agreement concerning the Originator 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 or the Securities Administrator has actual knowledge of any breach
of any representation or warranty made by the Originator in the Purchase Agreement, the Indenture Trustee or the
Securities Administrator shall promptly notify the Originator of such finding and the Originator's obligation to
cure such defect or repurchase or substitute for the related Mortgage Loan.
Section 3.13. Amendments to Sale and Servicing Agreement.
The Issuing Entity covenants with the Indenture Trustee and the Securities Administrator that
it will not enter into any amendment or supplement to the Sale and Servicing Agreement without the prior written
consent of the Indenture Trustee and the Securities Administrator.
Section 3.14. Servicer as Agent and Bailee of the Indenture Trustee.
Solely for purposes of perfection under Section 9-305 of the UCC or other similar applicable
law, rule or regulation of the state in which such property is held by the Servicer, the Issuing Entity, the
Indenture Trustee and the Securities Administrator hereby acknowledge that the Servicer is acting as bailee of
the Indenture Trustee in holding amounts on deposit in the Collection Account, as well as its bailee in holding
any related documents released to the Servicer, and any other items constituting a part of the Trust Estate which
from time to time come into the possession of the Servicer. It is intended that, by the Servicer's acceptance of
such bailee arrangement, the Indenture Trustee, as a secured party of the Mortgage Loans, will be deemed to have
possession of such related documents, such monies and such other items for purposes of Section 9-305 of the UCC
of the state in which such property is held by the Servicer. Neither the Indenture Trustee nor the Securities
Administrator shall be liable with respect to such documents, monies or items while in possession of the Servicer.
Section 3.15. Investment Company Act.
The Issuing Entity shall not become an "investment company" or be under the "control" of an
"investment company" as such terms are defined in the Investment Company Act of 1940, as amended (or any successor
or amendatory statute), and the rules and regulations thereunder (taking into account not only the general
definition of the term "investment company" but also any available exceptions to such general definition);
provided, however, that the Issuing Entity shall be in compliance with this Section 3.15 if it shall have
obtained an order exempting it from regulation as an "investment company" so long as it is in compliance with the
conditions imposed in such order.
Section 3.16. Issuing Entity May Consolidate, etc.
(a) The Issuing Entity shall not consolidate or merge with or into any other Person,
unless:
(i) the Person (if other than the Issuing Entity) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the laws of the United
States of America or any state or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Indenture Trustee and the
Securities Administrator, in form reasonably satisfactory to the Indenture Trustee and the
Securities Administrator, the due and punctual payment of the principal of and interest on all
Notes, and all amounts payable to the Indenture Trustee and the Securities Administrator, the
payment to the Certificate Paying Agent of all amounts due to the Certificateholders, and the
performance or observance of every agreement and covenant of this Indenture on the part of the
Issuing Entity to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no Event of Default shall
have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuing Entity that such
transaction shall not cause the rating of the Notes to be reduced, suspended or withdrawn or to
be considered by either Rating Agency to be below investment grade;
(iv) the Issuing Entity shall have received an Opinion of Counsel (and shall have
delivered a copy thereof to the Indenture Trustee and the Securities Administrator) 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 a REIT, a "qualified REIT subsidiary" or by an entity that is wholly-owned by a REIT or a
"qualified REIT subsidiary" and disregarded for federal income tax purposes, 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;
(vi) the Issuing Entity shall have delivered to the Indenture Trustee and the
Securities Administrator 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; and
(vii) the consent of the Holders of not less than 50% of the aggregate Note Balance
of the Notes has been obtained.
Section 3.17. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuing Entity in accordance with Section
3.16(a), the Person formed by or surviving such consolidation or merger (if other than the Issuing Entity) shall
succeed to, and be substituted for, and may exercise every right and power of, the Issuing Entity under this
Indenture with the same effect as if such Person had been named as the Issuing Entity herein.
(b) Upon a conveyance or transfer of all the assets and properties of the Issuing Entity
as permitted under this Agreement, the Issuing Entity will be released from every covenant and agreement of this
Indenture to be observed or performed on the part of the Issuing Entity with respect to the Notes immediately
upon the delivery of written notice to the Indenture Trustee and the Securities Administrator of such conveyance
or transfer.
Section 3.18. No Other Business.
The Issuing Entity shall not engage in any business other than financing, purchasing, owning
and selling and managing the Mortgage Loans and the issuance of the Notes and Certificates in the manner
contemplated by this Indenture and the Basic Documents and all activities incidental thereto.
Section 3.19. No Borrowing.
The Issuing Entity shall not issue, incur, assume, guarantee or otherwise become liable,
directly or indirectly, for any indebtedness except for the Notes under this Indenture.
Section 3.20. Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by this Indenture or the Basic Documents, the Issuing Entity shall not
make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect
of assuring another's payment or performance on any obligation or capability of so doing or otherwise), endorse
or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or
dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations,
assets or securities of, or any other interest in, or make any capital contribution to, any other Person.
Section 3.21. Capital Expenditures.
The Issuing Entity shall not make any expenditure (by long-term or operating lease or
otherwise) for capital assets (either realty or personalty).
Section 3.22. Determination of Note Rate.
On each Interest Determination Date, the Securities Administrator shall determine LIBOR and the
related Note Rate for each Class of Notes for the following Interest Accrual Period. The establishment of LIBOR
on each Interest Determination Date by the Securities Administrator and the Securities Administrator's
calculation of the rate of interest applicable to each Class of Notes for the related Interest Accrual Period
shall (in the absence of manifest error) be final and binding.
Section 3.23. Restricted Payments.
The Issuing Entity shall not, directly or indirectly, (i) pay any dividend or make any
distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuing Entity or otherwise with
respect to any ownership or equity interest or security in or of the Issuing Entity, (ii) redeem, purchase,
retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose; provided, however, that the Issuing Entity may make, or
cause to be made, (x) distributions and payments to the Owner Trustee, the Indenture Trustee, the Securities
Administrator, the Master Servicer, the Servicer, the Certificate Registrar, the Certificate Paying Agent, the
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 or the Servicer pursuant to
the terms of the Sale and Servicing Agreement. The Issuing Entity will not, directly or indirectly, make
payments to or distributions from the Note Account except in accordance with this Indenture and the Basic
Documents.
Section 3.24. Notice of Events of Default.
The Issuing Entity shall give the Indenture Trustee, the Securities Administrator and each
Rating Agency 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 or the Securities Administrator, the Issuing Entity will
execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Indenture.
Section 3.26. Statements to Noteholders.
On each Payment Date, the Securities Administrator and the Certificate Registrar shall prepare
and make available on the Securities Administrator's website, xxxxx://xxx.xxxxxxx.xxx (or deliver at the
recipient's option), to each Noteholder and Certificateholder the most recent statement prepared by the Securities
Administrator pursuant to Section 7.05 hereof.
Section 3.27. [Reserved].
Section 3.28. Certain Representations Regarding the Trust Estate.
(a) With respect to that portion of the Collateral described in clauses (a) through (d) of
the definition of Trust Estate, the Issuing Entity represents to the Indenture Trustee and the Securities
Administrator that:
(i) This Indenture creates a valid and continuing security interest (as defined in
the applicable UCC) in the Collateral in favor of the Indenture Trustee, which security
interest is prior to all other liens, and is enforceable as such as against creditors of and
purchasers from the Issuing Entity.
(ii) The Collateral constitutes "deposit accounts" or "instruments," as applicable,
within the meaning of the applicable UCC.
(iii) The Issuing Entity owns and has good and marketable title to the Collateral,
free and clear of any lien, claim or encumbrance of any Person.
(iv) The Issuing Entity has taken all steps necessary to cause the Indenture
Trustee to become the account holder of the Collateral.
(v) Other than the security interest granted to the Indenture Trustee pursuant to
this Indenture, the Issuing Entity has not pledged, assigned, sold, granted a security interest
in, or otherwise conveyed any of the Collateral.
(vi) The Collateral is not in the name of any Person other than the Issuing Entity
or the Indenture Trustee. The Issuing Entity has not consented to the bank maintaining the
Collateral to comply with instructions of any Person other than the Indenture Trustee.
(b) With respect to that portion of the Collateral described in clause (e), the Issuing
Entity represents to the Indenture Trustee and the Securities Administrator that:
(i) This Indenture creates a valid and continuing security interest (as defined in
the applicable UCC) in the Collateral in favor of the Indenture Trustee, which security
interest is prior to all other liens, and is enforceable as such as against creditors of and
purchasers from the Issuing Entity.
(ii) The Collateral constitutes "general intangibles" within the meaning of the
applicable UCC.
(iii) The Issuing Entity owns and has good and marketable title to the Collateral,
free and clear of any lien, claim or encumbrance of any Person.
(iv) Other than the security interest granted to the Indenture Trustee pursuant to
this Indenture, the Issuing Entity has not pledged, assigned, sold, granted a security interest
in, or otherwise conveyed any of the Collateral.
(c) With respect to any Collateral in which a security interest may be perfected by
filing, the Issuing Entity has not authorized the filing of, and is not aware of any financing statements
against, the Issuing Entity, that include a description of collateral covering such Collateral, other than any
financing statement relating to the security interest granted to the Indenture Trustee hereunder or that has been
terminated. The Issuing Entity is not aware of any judgment or tax lien filings against the Issuing Entity.
(d) The Issuing Entity has caused or will have caused, within ten days, the filing of all
appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable
law in order to perfect the security interest in all Collateral granted to the Indenture Trustee hereunder in
which a security interest may be perfected by filing and the Issuing Entity will cause such security interest to
be maintained. Any financing statement that is filed in connection with this Section 3.28 shall contain a
statement that a purchase or security interest in any collateral described therein will violate the rights of the
secured party named in such financing statement.
(e) The foregoing representations may not be waived and shall survive the issuance of the
Notes.
Section 3.29. Allocation of Realized Losses.
(a) Any Realized Losses on the Mortgage Loans will have the effect of first reducing the
Excess Interest for the related Payment Date and second, reducing the Overcollateralization Amount. If on any
Payment Date the aggregate Note Balance of the Notes (after all payments of principal on such Payment Date have
been made) exceed the aggregate Principal Balance of the Mortgage Loans (as of the last day of the related Due
Period and after giving effect to principal prepayments received during the related Prepayment Period) the
Securities Administrator shall allocate such excess first, to the Class M-10 Notes, in reduction of the Note
Balance thereof, until reduced to zero, second, to the Class M-9 Notes, in reduction of the Note Balance thereof,
until reduced to zero, third, to the Class M-8 Notes, in reduction of the Note Balance thereof (allocated among
the Class M-8 Notes, pro rata based on their respective Note Balances), until reduced to zero, fourth, to the
Class M-7 Notes, in reduction of the Note Balance thereof (allocated among the Class M-7 Notes, pro rata based on
their respective Note Balances), until reduced to zero, fifth, to the Class M-6 Notes, in reduction of the Note
Balance thereof, until reduced to zero, sixth, to the Class M-5 Notes, in reduction of the Note Balance thereof,
until reduced to zero, seventh, to the Class M-4 Notes, in reduction of the Note Balance thereof, until reduced
to zero, eighth, to the Class M-3 Notes, in reduction of the Note Balance thereof, until reduced to zero, ninth,
to the Class M-2 Notes, in reduction of the Note Balance thereof, until reduced to zero and tenth, to the Class
M-1 Notes, in reduction of the Note Balance thereof, until 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 Subordinate Note on any Payment Date shall be made by
reducing the Note Balance thereof by the amount so allocated. No allocations of any Realized Losses shall be
made to the Note Balances of the Class A Notes.
As used herein, an allocation of a Realized Loss on a "pro rata basis" among two or more
specified Classes of Notes means an allocation on a pro rata basis, among the various Classes so specified, to
each such Class of Notes on the basis of their then outstanding Note Balances prior to giving effect to payments
to be made on such Payment Date. All Realized Losses and all other losses allocated to a Class of Notes
hereunder will be allocated among the Notes of such Class in proportion to the Percentage Interests evidenced
thereby.
ARTICLE IV
THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE
Section 4.01. The Notes.
Each Class of Notes shall be registered in the name of a nominee designated by the Depository.
Beneficial Owners will hold interests in the Notes through the book-entry facilities of the Depository in minimum
initial Note Balances of $25,000 and integral multiples of $1 in excess thereof; provided that the Notes must be
purchased in minimum total investments of $100,000 per Class.
The Securities Administrator 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 Securities Administrator may establish a reasonable record date in connection
with solicitations of consents from or voting by Noteholders and give notice to the Depository of such record
date. Without the consent of the Issuing Entity and the Securities Administrator, no Note may be transferred by
the Depository except to a successor Xxxxxxxxxx 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 Securities
Administrator with the approval of the Issuing Entity may appoint a successor Depository. If no successor
Depository has been appointed within 30 days of the effective date of the Depository's resignation or removal,
each Beneficial Owner shall be entitled to certificates representing the Notes it beneficially owns in the manner
prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of the Issuing Entity by the Owner
Trustee, not in its individual capacity but solely as Owner Trustee, authenticated by the Securities
Administrator and delivered by the Securities Administrator to or upon the order of the Issuing Entity.
Section 4.02. Registration of and Limitations on Transfer and Exchange of Notes; Appointment
of Note Registrar and Certificate Registrar.
The Securities Administrator shall cause to be kept at the Corporate Trust Office a Note
Register in which, subject to such reasonable regulations as it may prescribe, the Note Registrar shall provide
for the registration of Notes and of transfers and exchanges of Notes as herein provided.
Subject to the restrictions and limitations set forth below, upon surrender for registration of
transfer of any Note at the Corporate Trust Office, the Issuing Entity shall execute and the Note Registrar shall
authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes in
authorized initial Note Balances evidencing the same Class and aggregate Percentage Interests.
Subject to the foregoing, at the option of the Noteholders, Notes may be exchanged for other
Notes of like tenor and in authorized initial Note Balances evidencing the same Class and aggregate Percentage
Interests upon surrender of the Notes to be exchanged at the Corporate Trust Office of the Note Registrar.
Whenever any Notes are so surrendered for exchange, the Issuing Entity shall execute and the Securities
Administrator 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.
Notwithstanding anything to the contrary contained herein, the Securities Administrator shall
not register transfer of any of the Notes owned by the Issuing Entity or by the direct or indirect owner of the
Owner Trust Certificates on the Closing Date when such entity or owner proposes to transfer such Notes unless in
connection with such proposed transfer, the Issuing Entity and the Indenture Trustee have received an Opinion of
Counsel, satisfactory to the Indenture Trustee, that such Notes will be treated as indebtedness for U.S. federal
income tax purposes.
No service charge shall be made for any registration of transfer or exchange of Notes, but the
Note Registrar shall require payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any registration of transfer or exchange of Notes.
The Issuing Entity hereby appoints the Securities Administrator 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 Securities Administrator hereby accepts such
appointments.
Section 4.03. Mutilated, Destroyed, Lost or Stolen Notes.
If (i) any mutilated Note is surrendered to the Securities Administrator, or the Securities
Administrator receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there
is delivered to the Securities Administrator such security or indemnity as may be required by it to hold the
Issuing Entity, the Indenture Trustee and the Securities Administrator harmless, then, in the absence of notice
to the Issuing Entity, the Note Registrar, the Indenture Trustee or the Securities Administrator that such Note
has been acquired by a bona fide purchaser, and provided that the requirements of Section 8-405 of the UCC are
met, the Issuing Entity shall execute, and upon its request the Securities Administrator shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note;
provided, however, that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become
or within seven days shall be due and payable, instead of issuing a replacement Note, the Issuing Entity may pay
such destroyed, lost or stolen Note when so due or payable without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such replacement Note was issued presents
for payment such original Note, the Issuing Entity and the Securities Administrator shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered or any Person taking such
replacement Note from such Person to whom such replacement Note was delivered or any assignee of such Person,
except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor
to the extent of any loss, damage, cost or expense incurred by the Issuing Entity, the Indenture Trustee or the
Securities Administrator in connection therewith.
Upon the issuance of any replacement Note under this Section 4.03, the Issuing Entity may
require the payment by the Holder of such Note of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the
Indenture Trustee and the Securities Administrator) connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in replacement of any mutilated,
destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuing
Entity, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other
Notes duly issued hereunder.
The provisions of this Section 4.03 are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen
Notes.
Section 4.04. Persons Deemed Owners.
Prior to due presentment for registration of transfer of any Note, the Issuing Entity, the
Indenture Trustee, the Securities Administrator, the Paying Agent and any agent of any of them may treat the
Person in whose name any Note is registered (as of the day of determination) as the owner of such Note for the
purpose of receiving payments of principal of and interest, if any, on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and neither the Issuing Entity, the Indenture Trustee, the
Securities Administrator the Paying Agent nor any agent of any of them 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 Securities Administrator, be delivered to the Securities Administrator
and shall be promptly cancelled by the Securities Administrator. The Issuing Entity may at any time deliver to
the Securities Administrator for cancellation any Notes previously authenticated and delivered hereunder which
the Issuing Entity may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly
cancelled by the Securities Administrator. 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 Securities Administrator in accordance with its standard retention or
disposal policy as in effect at the time unless the Issuing Entity shall direct by an Issuing Entity Request that
they be destroyed or returned to it; provided, however, that such Issuing Entity Request is timely and the Notes
have not been previously disposed of by the Securities Administrator.
Section 4.06. Book-Entry Notes.
The Notes, upon original issuance, will be issued in the form of typewritten Notes representing
the Book-Entry Notes, to be delivered to The Depository Trust Company, the initial Depository, by, or on behalf
of, the Issuing Entity. The Notes shall initially be registered on the Note Register in the name of Cede & Co.,
the nominee of the initial Depository, and no Beneficial Owner will receive a Definitive Note representing such
Beneficial Owner's interest in such Note, except as provided in Section 4.08. With respect to such Notes, unless
and until definitive, fully registered Notes (the "Definitive Notes") have been issued to Beneficial Owners
pursuant to Section 4.08:
(i) the provisions of this Section 4.06 shall be in full force and effect;
(ii) the Note Registrar, the Paying Agent, the Indenture Trustee and the Securities
Administrator shall be entitled to deal with the Depository for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and the giving of instructions
or directions hereunder) as the sole holder of the Notes, and shall have no obligation to the
Beneficial Owners of the Notes;
(iii) to the extent that the provisions of this Section 4.06 conflict with any other
provisions of this Indenture, the provisions of this Section 4.06 shall control;
(iv) the rights of Beneficial Owners shall be exercised only through the Depository
and shall be limited to those established by law and agreements between such Owners of Notes
and the Depository and/or the Depository Participants. Unless and until Definitive Notes are
issued pursuant to Section 4.08, the initial Depository will make book-entry transfers among
the Depository Participants and receive and transmit payments of principal of and interest on
the Notes to such Depository Participants; and
(v) whenever this Indenture requires or permits actions to be taken based upon
instructions or directions of Holders of Notes evidencing a specified percentage of the
aggregate Note Balance 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 Securities Administrator and 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
Securities Administrator 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 Securities Administrator determines that the Depository is no longer willing or able
to properly discharge its responsibilities with respect to the Notes and the Securities Administrator 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 Balance 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
Securities Administrator of the occurrence of any such event and of the availability of Definitive Notes to
Beneficial Owners requesting the same. Upon surrender to the Securities Administrator of the typewritten Notes
representing the Book-Entry Notes by the Depository, accompanied by registration instructions, the Issuing Entity
shall execute and the Securities Administrator shall authenticate the Definitive Notes in accordance with the
instructions of the Depository. None of the Issuing Entity, the Note Registrar, the Indenture Trustee or the
Securities Administrator 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
Securities Administrator shall recognize the Holders of the Definitive Notes as Noteholders.
Section 4.09. Tax Treatment.
The Issuing Entity has entered into this Indenture, and the Notes will be issued with the
intention that, for federal, state and local income, single business and franchise tax purposes, the Notes will
qualify as indebtedness. The Issuing Entity, the Indenture Trustee and the Securities Administrator (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 and
the Securities Administrator hereunder (including the rights of the Indenture Trustee and the Securities
Administrator under Section 6.07 and the obligations of the Securities Administrator under Section 4.11) and (vi)
the rights of Noteholders as beneficiaries hereof with respect to the property so deposited with the Indenture
Trustee payable to all or any of them, and the Indenture Trustee, on demand of and at the expense of the Issuing
Entity, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect
to the Notes and shall release and deliver the Collateral to or upon the order of the Issuing Entity, when:
(A) either
(1) all Notes theretofore authenticated and delivered (other than (i) Notes that have been
destroyed, lost or stolen and that have been replaced or paid as provided in Section 4.03 hereof and
(ii) Notes for whose payment money has theretofore been deposited in trust or segregated and held in
trust by the Issuing Entity and thereafter repaid to the Issuing Entity or discharged from such trust,
as provided in Section 3.03) have been delivered to the Securities Administrator for cancellation; or
(2) all Notes not theretofore delivered to the Securities Administrator for cancellation
(a) have become due and payable, (b) will become due and payable at the Final Stated Maturity Date
within one year, or (c) have been called for early redemption pursuant to Section 8.07 hereof, and the
Issuing Entity, in the case of (a) or (b) above, has irrevocably deposited or caused to be irrevocably
deposited with the Securities Administrator cash (which cash shall come from payments received on the
Mortgage Loans), 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 Securities Administrator
for cancellation when due on the Final Stated Maturity Date or other final Payment Date, or, in the case
of (c) above, the Issuing Entity shall have complied with all requirements of Section 8.07 hereof,
(B) the Issuing Entity has paid or caused to be paid all other sums payable hereunder,
pursuant to the terms of this Indenture; and
(C) the Issuing Entity has delivered to the Indenture Trustee and the Securities
Administrator an Officer's Certificate and an Opinion of Counsel, each meeting the applicable
requirements of Section 10.01 hereof, each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been complied with and, if the Opinion
of Counsel relates to a deposit made in connection with Section 4.10(A)(2)(b) above, such opinion shall
further be to the effect that such deposit will constitute an "in-substance defeasance" within the
meaning of Revenue Ruling 85-42, 1985-1 C.B. 36, and in accordance therewith, the Issuing Entity will be
the owner of the assets deposited in trust for federal income tax purposes.
Section 4.11. Application of Trust Money.
All monies deposited with the Securities Administrator pursuant to Section 4.10 hereof shall be
held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent or the Issuing Entity, Certificate Paying Agent as designee
of the Issuing Entity, as the Securities Administrator 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. [Reserved].
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 Securities Administrator under the provisions of this Indenture
with respect to such Notes shall, upon demand of the Issuing Entity, be paid to the Securities Administrator to
be held and applied according to Section 3.05 and thereupon such Person shall be released from all further
liability with respect to such monies.
Section 4.14. Temporary Notes.
Pending the preparation of any Definitive Notes, the Issuing Entity may execute and upon its
written direction, the Securities Administrator may authenticate and make available for delivery, temporary Notes
that are printed, lithographed, typewritten, photocopied or otherwise produced, in any denomination,
substantially of the tenor of the Definitive Notes in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers executing such Notes may determine, as
evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuing Entity will cause Definitive Notes to be prepared
without unreasonable delay. After the preparation of the Definitive Notes, the temporary Notes shall be
exchangeable for Definitive Notes upon surrender of the temporary Notes at the Corporate Trust Office of the
Securities Administrator, without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Notes, the Issuing Entity shall execute and the Securities Administrator shall authenticate and make
available for delivery, in exchange therefor, Definitive Notes of authorized denominations and of like tenor,
class and aggregate principal amount. Until so exchanged, such temporary Notes shall in all respects be entitled
to the same benefits under this Indenture as Definitive Notes.
Section 4.15. Representation Regarding ERISA.
By acquiring an Offered 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 ("DOL") regulation 29 C.F.R. § 2510.3-101, and agrees to so
treat the Notes. Alternatively, regardless of the rating of the Notes, such person may provide the Securities
Administrator with an Opinion of Counsel, which Opinion of Counsel will not be at the expense of the Trust, the
Issuing Entity, the Seller, the Depositor, the Underwriter, the Owner Trustee, the Indenture Trustee, the
Securities Administrator, the Master Servicer, the Servicer or any successor Servicer which opines that the
acquisition, holding and transfer of such Note or interest therein is permissible under applicable law, will not
constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the Trust, the Issuing Entity, the Seller, the Depositor, the Underwriter, the Owner Trustee, the
Indenture Trustee, the Securities Administrator, the Master Servicer, the Servicer or any successor Servicer to
any obligation in addition to those undertaken in the Indenture.
ARTICLE V
DEFAULT AND REMEDIES
Section 5.01. Events of Default.
The Issuing Entity shall deliver to the Indenture Trustee and the Securities Administrator,
written notice in the form of an Officer's Certificate, within five days after learning of the occurrence of any
event which with the giving of notice and the lapse of time would become an Event of Default under clause (iii),
(iv) or (v) of the definition of "Event of Default," its status and what action the Issuing Entity is taking or
proposes to take with respect thereto. Neither the Indenture Trustee nor the Securities Administrator shall 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 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 shall, at the written direction of the Holders of Notes representing not less than a majority
of the aggregate Note Balance of the Notes, declare the Notes to be immediately due and payable, by a notice in
writing to the Issuing Entity (and to the Indenture Trustee and the Securities Administrator if such notice is
given by the Noteholders), and upon any such declaration the unpaid aggregate Note Balance, 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
Securities Administrator as hereinafter in this Article V provided, Holders of the Notes representing not less
than a majority of the aggregate Note Balance of the Notes, by written notice to the Issuing Entity, the
Indenture Trustee and the Securities Administrator, may waive the related Event of Default and rescind and annul
such declaration and its consequences if:
(i) the Issuing Entity has paid or deposited with the Securities Administrator a
sum (which sum shall come from payments received on the Mortgage Loans) 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 Securities Administrator and the
Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and the Securities Administrator and its respective agents
and counsel; and
(ii) all Events of Default, other than the nonpayment of the principal of the Notes
that has become due solely by such acceleration, have been cured or waived as provided in
Section 5.12.
No such rescission shall affect any subsequent default or impair any right consequent thereto.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.
(a) The Issuing Entity covenants that if (i) default is made in the payment of any
interest on any Note when the same becomes due and payable, and such default continues for a
period of five days, or (ii) default is made in the payment of the principal of or any
installment of the principal of any Note when the same becomes due and payable, the Issuing
Entity shall, upon demand of the Securities Administrator, at the direction of the Holders of a
majority of the aggregate Note Balance of the Notes, pay to the Securities Administrator, 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 the Securities Administrator and its respective agents
and counsel.
(b) In case the Issuing Entity shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express trust, subject to
the provisions of Section 10.16 hereof may institute a Proceeding for the collection of the
sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuing Entity or other obligor upon the Notes and collect in the
manner provided by law out of the property of the Issuing Entity or other obligor the Notes,
wherever situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture Trustee,
subject to the provisions of Section 10.16 hereof may, as more particularly provided in Section
5.04 hereof, in its discretion, proceed to protect and enforce its rights and the rights of the
Noteholders, by such appropriate Proceedings, as directed in writing by Holders of a majority
of the aggregate Note Balance of the Notes, to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuing Entity or any other
obligor upon the Notes or any Person having or claiming an ownership interest in the Trust
Estate, Proceedings under Title 11 of the United States Code or any other applicable federal or
state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee
in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuing Entity or its property or such other obligor
or Person, or in case of any other comparable judicial Proceedings relative to the Issuing
Entity or other obligor upon the Notes, or to the creditors or property of the Issuing Entity
or such other obligor, the Indenture Trustee, as directed in writing by Holders of a majority
of the aggregate Note Balance of the Notes, irrespective of whether the principal of any Notes
shall then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Indenture Trustee shall have made any demand pursuant to the
provisions of this Section, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of principal and
interest owing and unpaid in respect of the Notes and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture Trustee (including
any claim for reasonable compensation to the Indenture Trustee, the Securities Administrator
and each predecessor Indenture Trustee and Securities Administrator, and their respective
agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and Securities Administrator and each
predecessor Indenture Trustee and Securities Administrator, 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 direct the Securities Administrator to collect and receive any monies or
other property payable or deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders and of the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Indenture Trustee or the Holders of Notes
allowed in any judicial proceedings relative to the Issuing Entity, its creditors and its
property; and any trustee, receiver, liquidator, custodian or other similar official in any
such Proceeding is hereby authorized by each of such Noteholders to make payments to the
Securities Administrator 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 and the
Securities Administrator such amounts as shall be sufficient to cover reasonable compensation
to the Indenture Trustee and the Securities Administrator, each predecessor Indenture Trustee
and Securities Administrator and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Indenture Trustee and the
Securities Administrator and each predecessor Indenture Trustee and Securities Administrator.
(e) Nothing herein contained shall be deemed to authorize the Indenture Trustee or
the Securities Administrator 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
or the Securities Administrator 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 and the Securities
Administrator, each predecessor Indenture Trustee and Securities Administrator and their
respective agents and attorneys, shall be for the ratable benefit of the Holders of the Notes,
subject to Section 5.05 hereof.
(g) In any Proceedings brought by the Indenture Trustee (and also any Proceedings
involving the interpretation of any provision of this Indenture to which the Indenture Trustee
shall be a party), the Indenture Trustee shall be held to represent all the Holders of the
Notes, and it shall not be necessary to make any Noteholder a party to any such Proceedings.
Section 5.04. Remedies; Priorities.
(a) If an Event of Default shall have occurred and be continuing and if an
acceleration has been declared and not rescinded pursuant to Section 5.02 hereof, the Indenture
Trustee subject to the provisions of Section 10.16 hereof may, and shall, at the written
direction of the Holders of a majority of the aggregate Note Balance of the Notes, do one or
more of the following (subject to Section 5.05 hereof):
(i) institute Proceedings in its own name and as trustee of an express trust for
the collection of all amounts then payable on the Notes or under this Indenture with respect
thereto, whether by declaration or otherwise enforce any judgment obtained, and collect from
the Issuing Entity and any other obligor upon such Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and take any other
appropriate action to protect and enforce the rights and remedies of the Indenture Trustee and
the Holders of the Notes; and
(iv) sell the Trust Estate or any portion thereof or rights or interest therein, at
one or more public or private sales called and conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise liquidate the Trust
Estate following an Event of Default, unless (A) the Indenture Trustee obtains the consent of
the Holders of 100% of the aggregate Note Balance of the Notes, (B) the proceeds of such sale
or liquidation distributable to the Holders of the Notes are sufficient to discharge in full
all amounts then due and unpaid upon such Notes for principal and interest or (C) the Indenture
Trustee determines that the Mortgage Loans will not continue to provide sufficient funds for
the payment of principal of and interest on the applicable Notes as they would have become due
if the Notes had not been declared due and payable, and the Indenture Trustee obtains the
consent of the Holders of a majority of the aggregate Note Balance of the Notes. In determining
such sufficiency or insufficiency with respect to clause (B) and (C), the Indenture Trustee
may, but need not, obtain and rely upon written advice or an opinion (obtained at the expense
of the Trust) of an Independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for
such purpose. Notwithstanding the foregoing, so long as a Servicer Event of Termination has
not occurred, any sale of the Trust Estate shall be made subject to the continued servicing of
the Mortgage Loans by the Servicer as provided in the Sale and Servicing Agreement.
(b) If the Indenture Trustee collects any money or property pursuant to this
Article V, the Indenture Trustee shall forward such funds to the Securities Administrator and
the Securities Administrator shall pay out the money or property in the following order:
(i) to the Indenture Trustee, the Securities Administrator, Master Servicer, the
Owner Trustee, the Custodian and the Servicer for amounts due and not previously paid pursuant
to the Indenture (including Section 6.07 hereof) and the other Basic Documents;
(ii) to the Swap Provider, any remaining Net Swap Payment or Swap Termination
Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event)
owed to the Swap Provider pursuant to the Interest Rate Swap Agreement;
(iii) to the Noteholders for amounts due and unpaid on the Notes (including Class
Interest Carryover Shortfalls but not including any Basis Risk Shortfall Amount) with respect
to interest, first, concurrently, to the Holders of each Class of Class A Notes, on a pro rata
basis based on the entitlement of each such Class, second, to the Holders of the Class M-1
Notes, third, to the Holders of the Class M-2 Notes, fourth, to the Holders of the Class M-3
Notes, fifth, to the Holders of the Class M-4 Notes, sixth, to the Holders of the Class M-5
Notes, seventh, to the Holders of the Class M-6 Notes, eighth, to the Holders of the Class M-7
Notes (allocated among the Class M-7 Notes, pro rata based on their respective Note Balances),
ninth, to the Holders of the Class M-8 Notes (allocated among the Class M-8 Notes, pro rata
based on their respective Note Balances), tenth, to the Holders of the Class M-9 Notes and
eleventh, to the Holders of the Class M-10 Notes according to the amounts due and payable on
the Notes for interest;
(iv) 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 (allocated among the Class M-7 Notes, pro rata based on their respective Note Balances),
ninth, to the Holders of the Class M-8 Notes (allocated among the Class M-8 Notes, pro rata
based on their respective Note Balances), tenth, to the Holders of the Class M-9 Notes and
eleventh, to the Holders of the Class M-10 Notes according to the amounts due and payable on
the Notes for interest according to the amounts due and payable on such Notes for principal, in
each case, until the Note Balance of each such Class is reduced to zero;
(v) 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 (allocated among
the Class M-7 Notes, pro rata based on their respective Note Balances), ninth, to the Holders
of the Class M-8 Notes (allocated among the Class M-8 Notes, pro rata based on their respective
Note Balances), ninth, to the Holders of the Class M-9 Notes and tenth, to the Holders of the
Class M-10 Notes;
(vi) to the Noteholders for amounts due and unpaid on the Notes with respect to any
related Basis Risk Shortfall Amount, first, concurrently, to the Holders of each Class of Class
A Notes, on a pro rata basis based on the Basis Risk Shortfall Amount 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 (allocated among the Class M-7 Notes, pro rata
based on their respective Note Balances), ninth, to the Holders of the Class M-8 Notes
(allocated among the Class M-8 Notes, pro rata based on their respective Note Balances), tenth,
to the Holders of the Class M-9 Notes and eleventh, to the Holders of the Class M-10 Notes;
(vii) to the Swap Provider, any remaining Swap Termination Payment resulting from a
Swap Provider Trigger Event; and
(viii) to the payment of the remainder, if any to the Certificate Paying Agent on
behalf of the Issuing Entity or to any other person legally entitled thereto.
The Securities Administrator 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 Securities
Administrator shall mail to each Noteholder a notice that states the record date, the Payment Date and the amount
to be paid.
Section 5.05. Optional Preservation of the Trust Estate.
If the Notes have been declared to be due and payable under Section 5.02 following an Event of
Default and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may
elect to take and maintain possession of the Trust Estate. It is the desire of the parties hereto and the
Noteholders that there be at all times sufficient funds for the payment of principal of and interest on the Notes
and other obligations of the Issuing Entity, the Indenture Trustee and the Securities Administrator 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 aggregate Note
Balance of the Notes.
It is understood and intended that no one or more Holders of Notes shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other Holders of Notes or to obtain or to seek to obtain priority or preference over any other
Holders or to enforce any right under this Indenture, except in the manner herein provided.
Section 5.07. Unconditional Rights of Noteholders To Receive Principal and Interest.
Notwithstanding any other provisions in this Indenture, the Holder of any Note shall have the
right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such
Note on or after the respective due dates thereof expressed in such Note or in this Indenture and to institute
suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such
Holder.
Section 5.08. Restoration of Rights and Remedies.
If the Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any right
or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason or has been
determined adversely to the Indenture Trustee or to such Noteholder, then and in every such case the Issuing
Entity, the Indenture Trustee and the Noteholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies
of the Indenture Trustee and the Noteholders shall continue as though no such Proceeding had been instituted.
Section 5.09. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Indenture Trustee, the Securities
Administrator 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 aggregate Note Balance 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 aggregate Note Balance of the Notes.
Notwithstanding the rights of Noteholders set forth in this Section 5.11 the Indenture Trustee
need not take any action that it determines might involve it in liability.
Section 5.12. Waiver of Past Defaults.
Prior to the declaration of the acceleration of the maturity of the Notes as provided in
Section 5.02 hereof, the Holders of Notes representing not less than a majority of the aggregate Note Balance of
the Notes may waive any past Event of Default and its consequences except an Event of Default (a) with respect to
payment of principal of or interest on any of the Notes or (b) in respect of a covenant or provision hereof which
cannot be modified or amended without the consent of the Holder of each Note. In the case of any such waiver,
the Issuing Entity, the Indenture Trustee, the Securities Administrator 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 Holder'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 or the Securities Administrator for any action taken,
suffered or omitted by it as Indenture Trustee or Securities Administrator, 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 or the Securities
Administrator, (b) any suit instituted by any Noteholder, or group of Noteholders, in each case holding more than
10% of the aggregate Note Balance of the Notes or (c) any suit instituted by any Noteholder for the enforcement
of the payment of principal of or interest on any Note on or after the respective due dates expressed in such
Note and in this Indenture.
Section 5.14. Waiver of Stay or Extension Laws.
The Issuing Entity covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead or in any manner whatsoever, claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Issuing Entity (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it shall not hinder, delay or impede the
execution of any power herein granted to the Indenture Trustee or the Securities Administrator, but will suffer
and permit the execution of every such power as though no such law had been enacted.
Section 5.15. Sale of Trust Estate.
(a) The power to effect any sale or other disposition (a "Sale") of any portion of
the Trust Estate pursuant to Section 5.04 hereof is expressly subject to the provisions of
Section 5.05 hereof and this Section 5.15. The power to effect any such Sale shall not be
exhausted by any one or more Sales as to any portion of the Trust Estate remaining unsold, but
shall continue unimpaired until the entire Trust Estate shall have been sold or all amounts
payable on the Notes and under this Indenture shall have been paid. The Indenture Trustee may
from time to time postpone any public Sale by public announcement made at the time and place of
such Sale. The Indenture Trustee hereby expressly waives its right to any amount fixed by law
as compensation for any Sale.
(b) The Indenture Trustee shall not in any private Sale sell the Trust Estate, or
any portion thereof, unless:
(i) the Holders of all Notes consent to or direct the Indenture Trustee to make,
such Sale, or
(ii) the proceeds of such Sale would be not less than the entire amount which would
be payable to the Noteholders under the Notes, in full payment thereof in accordance with
Section 5.02 hereof, on the Payment Date next succeeding the date of such Sale, or
(iii) the Indenture Trustee determines that the conditions for retention of the
Trust Estate set forth in Section 5.05 hereof cannot be satisfied (in making any determination
under this Section 5.15, the Indenture Trustee may rely upon written advice or an opinion of an
Independent investment banking firm obtained and delivered as provided in Section 5.05 hereof),
the Holders of Notes representing at least 100% of the aggregate Note Balance of the Notes
consent to such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate at a private
Sale shall not be deemed a Sale or other disposition thereof for purposes of this Section 5.15(b).
(c) [Reserved].
(d) In connection with a Sale of all or any portion of the Trust Estate,
(i) any Holder or Holders of Notes may bid for and purchase the property offered
for sale, and upon compliance with the terms of sale may hold, retain and possess and dispose
of such property, without further accountability, and may, in paying the purchase money
therefor, deliver any Notes or claims for interest thereon in lieu of cash up to the amount
which shall, upon distribution of the net proceeds of such sale, be payable thereon, and such
Notes, in case the amounts so payable thereon shall be less than the amount due thereon, shall
be returned to the Holders thereof after being appropriately stamped to show such partial
payment;
(ii) the Indenture Trustee, may bid for and acquire the property offered for Sale
in connection with any Sale thereof, and, subject to any requirements of, and to the extent
permitted by, applicable law in connection therewith, may purchase all or any portion of the
Trust Estate in a private sale, and, in lieu of paying cash therefor, may make settlement for
the purchase price by crediting the gross Sale price against the sum of (A) the amount which
would be payable to the Holders of the Notes and Holders of Certificates on the Payment Date
next succeeding the date of such Sale and (B) the expenses of the Sale and of any Proceedings
in connection therewith which are reimbursable to it, without being required to produce the
Notes in order to complete any such Sale or in order for the net Sale price to be credited
against such Notes, and any property so acquired by the Indenture Trustee shall be held and
dealt with by it in accordance with the provisions of this Indenture;
(iii) the Indenture Trustee shall execute and deliver an appropriate instrument of
conveyance, prepared by the Issuing Entity and satisfactory to the Indenture Trustee,
transferring its interest in any portion of the Trust Estate in connection with a Sale thereof;
(iv) the Indenture Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Issuing Entity to transfer and convey its interest in any portion of
the Trust Estate in connection with a Sale thereof, and to take all action necessary to effect
such Sale; and
(v) no purchaser or transferee at such a Sale shall be bound to ascertain the
Indenture Trustee's authority, inquire into the satisfaction of any conditions precedent or see
to the application of any monies.
Section 5.16. Action on Notes.
The Indenture Trustee's right to seek and recover judgment on the Notes or under this Indenture
shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this
Indenture. Neither the lien of this Indenture nor any rights or remedies of the Indenture Trustee or the
Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuing Entity
or by the levy of any execution under such judgment upon any portion of the Trust Estate or upon any of the
assets of the Issuing Entity. Any money or property collected by the Indenture Trustee or the Securities
Administrator shall be applied by the Securities Administrator in accordance with Section 5.04(b) hereof.
Section 5.17. Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Indenture Trustee to do so, the Issuing
Entity in its capacity as holder of the Mortgage Loans, shall take all such lawful action as
the Indenture Trustee may request to cause the Issuing Entity to compel or secure the
performance and observance by the Seller, the Originator, the Master Servicer and the Servicer,
as applicable, of each of their obligations to the Issuing Entity under or in connection with
the Assignment Agreement, the Purchase Agreement and the Sale and Servicing Agreement, and to
exercise any and all rights, remedies, powers and privileges lawfully available to the Issuing
Entity under or in connection with the Assignment Agreement, the Purchase Agreement and the
Sale and 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, the Originator, the Master Servicer or the Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or secure performance
by the Seller, the Originator, the Master Servicer or the Servicer of each of their obligations
under the Assignment Agreement and the Sale and 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 aggregate Note Balance of the Notes, shall
exercise all rights, remedies, powers, privileges and claims of the Issuing Entity against the
Seller, the Originator, the Master Servicer or the Servicer under or in connection with the
Assignment Agreement, the Purchase Agreement and the Sale and Servicing Agreement, including
the right or power to take any action to compel or secure performance or observance by the
Seller, the Originator, the Master Servicer or the Servicer, as the case may be, of each of
their obligations to the Issuing Entity thereunder and to give any consent, request, notice,
direction, approval, extension or waiver under the Assignment Agreement, the Purchase Agreement
and the Sale and Servicing Agreement, as the case may be, and any right of the Issuing Entity
to take such action shall not be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 6.01. Duties of Indenture Trustee and Securities Administrator.
(a) If an Event of Default has occurred and is continuing, each of the Indenture Trustee
and the Securities Administrator 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) each of the Indenture Trustee and the Securities Administrator 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 or the Securities Administrator; and
(ii) in the absence of bad faith on its part, each of the Indenture Trustee and the
Securities Administrator 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 or the Securities Administrator and conforming to the requirements of this
Indenture; however, each of the Indenture Trustee and the Securities Administrator shall
examine the certificates and opinions to determine whether or not they conform on their face to
the requirements of this Indenture.
(c) Neither the Indenture Trustee nor the Securities Administrator may 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) neither the Indenture Trustee nor the Securities Administrator shall be liable
for any error of judgment made in good faith by a Responsible Officer unless it is proved that
the Indenture Trustee or the Securities Administrator, as applicable, was negligent in
ascertaining the pertinent facts; and
(iii) neither the Indenture Trustee nor the Securities Administrator shall be liable
with respect to any action it takes or omits to take in good faith in accordance with a
direction received by it from Noteholders or from the Issuing Entity, which they are entitled
to give under the Basic Documents.
(d) Neither the Indenture Trustee nor the Securities Administrator shall be liable for
interest on any money received by it.
(e) Money held in trust by the Indenture Trustee or the Securities Administrator
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 or the
Securities Administrator to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such funds or
indemnity satisfactory to it against such risk or liability is not reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Indenture Trustee and the Securities Administrator
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 Section 6.07 of the Sale
and Servicing Agreement and shall act as successor to the Master Servicer or appoint a
successor Master Servicer in accordance with Section 6.07 of the Sale and Servicing Agreement.
(i) In order to comply with the U.S.A. Patriot Act, the Securities Administrator
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 identifying information.
(j) The Securities Administrator agrees to notify the Master Servicer on each
Servicer Remittance Date of the aggregate dollar amount of the funds received by the Securities
Administrator from the Servicer on such Servicer Remittance Date and any other information
reasonably requested by the Master Servicer, so as to enable the Master Servicer to make the
reconciliations and verifications required to be made by it pursuant to Section 4.01 of the
Sale and Servicing Agreement.
(j) (i) In the event that the Swap Provider fails to perform any of its obligations under the
Interest Rate Swap Agreement (including, without limitation, its obligation to make any payment or transfer
collateral), or breaches any of its representations and warranties thereunder, or in the event that any Event of
Default, Termination Event, or Additional Termination Event (each as defined in the Interest Rate Swap Agreement)
occurs with respect to the Interest Rate Swap Agreement, the Securities Administrator shall, promptly following
actual notice of such failure, breach or event, notify the Depositor and send any notices and make any demands,
on behalf of the Issuing Entity, as required under the Interest Rate Swap Agreement to enforce the rights of the
Issuing Entity under the Interest Rate Swap Agreement.
In the event that the Swap Provider's obligations are guaranteed by a third party under a guaranty relating to
the Interest Rate Swap Agreement (such guaranty the "Swap Guaranty" and such third party the "Swap Guarantor"),
then to the extent that the Swap Provider fails to make any payment by the close of business on the day it is
required to make payment under the terms of the Interest Rate Swap Agreement, the Securities Administrator shall,
promptly following actual notice of the Swap Provider's failure to pay, demand that the Swap Guarantor make any
and all payments then required to be made by the Swap Guarantor pursuant to such Swap Guaranty; provided, that
the Securities Administrator shall in no event be liable for any failure or delay in the performance by the Swap
Provider or any Swap Guarantor of its obligations hereunder or pursuant to the Interest Rate Swap Agreement and
the Swap Guaranty, nor for any special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits) in connection therewith.
(ii) In the event that the Cap Provider fails to perform any of its obligations under the
Interest Rate Cap Agreement (including, without limitation, its obligation to make any payment or transfer
collateral), or breaches any of its representations and warranties thereunder, or in the event that any Event of
Default, Termination Event, or Additional Termination Event (each as defined in the Interest Rate Cap Agreement)
occurs with respect to the Interest Rate Cap Agreement, the Securities Administrator shall, promptly following
actual notice of such failure, breach or event, notify the Depositor and send any notices and make any demands,
on behalf of the Issuing Entity, as required under the Interest Rate Cap Agreement to enforce the rights of the
Issuing Entity under the Interest Rate Cap Agreement.
In the event that the Cap Provider's obligations are guaranteed by a third party under a
guaranty relating to the Interest Rate Cap Agreement (such guaranty the "Cap Guaranty" and such third party the
"Cap Guarantor"), then to the extent that the Cap Provider fails to make any payment by the close of business on
the day it is required to make payment under the terms of the Interest Rate Cap Agreement, the Securities
Administrator shall, promptly following actual notice of the Cap Provider's failure to pay, demand that the Cap
Guarantor make any and all payments then required to be made by the Cap Guarantor pursuant to such Cap Guaranty;
provided, that the Securities Administrator shall in no event be liable for any failure or delay in the
performance by the Cap Provider or any Cap Guarantor of its obligations hereunder or pursuant to the Interest
Rate Cap Agreement and the Cap Guaranty, nor for any special, indirect or consequential loss or damage of any
kind whatsoever (including but not limited to lost profits) in connection therewith.Please modify Section 6.01 as
follows:
(iii) Upon an early termination of the Interest Rate Swap Agreement other than in connection
with the optional redemption of the Notes, the Securities Administrator, at the direction and guidance of the
Majority Certificateholder of the Owner Trust Certificates, will use reasonable efforts to appoint a successor
swap provider to enter into a new interest rate swap agreement on terms substantially similar to the Interest
Rate Swap Agreement, with a successor swap provider meeting all applicable eligibility requirements. If the
Securities Administrator receives a termination payment from the Swap Provider in connection with such early
termination, the Securities Administrator will apply such termination payment to any upfront payment required to
appoint the successor swap provider. If the Securities Administrator is required to pay a termination payment to
the Swap Provider in connection with such early termination, the Securities Administrator will apply any upfront
payment received from the successor swap provider to pay such termination payment.
If the Securities Administrator is unable to appoint a successor swap provider within 30 days
of the early termination, then the Securities Administrator (acting on behalf of the Issuing Entity) will deposit
any termination payment received from the original Swap Provider into a separate, non-interest bearing reserve
account and will, on each subsequent Payment Date, withdraw from the amount then remaining on deposit in such
reserve account an amount equal to the Net Swap Payment, if any, that would have been paid to the Issuing Entity
by the original Swap Provider calculated in accordance with the terms of the original Interest Rate Swap
Agreement, and distribute such amount in accordance with the terms of Section 3.04 hereof.
Upon an early termination of the Interest Rate Swap Agreement in connection with the optional
redemption of the Notes, if the Securities Administrator receives a termination payment from the Swap Provider,
such termination payment will be distributed in accordance with Section 3.05 hereof.
(iv) Upon an early termination of the Interest Rate Cap Agreement other than in connection with
the optional redemption of the Notes, the Securities Administrator, at the direction and guidance of the Majority
Certificateholder of the Owner Trust Certificates, will use reasonable efforts to appoint a successor cap
provider to enter into a new interest rate cap agreement on terms substantially similar to the Interest Rate Cap
Agreement, with a successor cap provider meeting all applicable eligibility requirements. The Securities
Administrator will apply any termination payment received from the original Cap Provider in connection with such
early termination to the upfront payment required to appoint the successor cap provider.
If the Securities Administrator is unable to appoint a successor cap provider within 30 days of
the early termination, then the Securities Administrator (acting on behalf of the Issuing Entity) will deposit
any termination payment received from the original Cap Provider into a separate, non-interest bearing reserve
account and will, on each subsequent Payment Date, withdraw from the amount then remaining on deposit in such
reserve account an amount equal to the Cap Payment, if any, that would have been paid to the Issuing Entity by
the original Cap Provider calculated in accordance with the terms of the original Interest Rate Cap Agreement,
and distribute such amount in accordance with the terms of Section 3.05 hereof.
Upon an early termination of the Interest Rate Cap Agreement in connection with the optional
redemption of the Notes, if the Securities Administrator receives a termination payment from the Cap Provider,
such termination payment will be distributed in accordance with Section 3.05 hereof.
Section 6.02. Rights of Indenture Trustee and Securities Administrator.
(a) Each of the Indenture Trustee and the Securities Administrator 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. Neither the Indenture Trustee nor the
Securities Administrator need investigate any fact or matter stated in the document.
(b) Before the Indenture Trustee or the Securities Administrator acts or refrains
from acting, it may require an Officer's Certificate or an Opinion of Counsel. Neither the
Indenture Trustee nor the Securities Administrator shall be liable for any action it takes or
omits to take in good faith in reliance on and in accordance with an Officer's Certificate or
Opinion of Counsel.
(c) Neither the Indenture Trustee nor the Securities Administrator shall 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 or the Securities
Administrator's conduct does not constitute willful misconduct, negligence or bad faith.
(d) Each of the Indenture Trustee and the Securities Administrator 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) Each of the Indenture Trustee and the Securities Administrator 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) In no event shall the Indenture Trustee be liable, directly or indirectly, for
any special, indirect or consequential damages, even if the Indenture Trustee has been advised
of the possibility of such damages.
(g) Any permissive right of the Indenture Trustee enumerated in this Indenture
shall not be construed as a duty.
(h) The Securities Administrator shall be entitled to all of the same rights,
protections, immunities and indemnities of the Indenture Trustee set forth herein.
Section 6.03. Individual Rights of Indenture Trustee and Securities Administrator.
The Indenture Trustee or the Securities Administrator in its individual or any other capacity
may become the owner or pledgee of Notes and may otherwise deal with the Issuing Entity or its Affiliates with
the same rights it would have if it were not Indenture Trustee or the Securities Administrator, as applicable,
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, each of the Indenture Trustee and the Securities Administrator must
comply with Sections 6.11 and 6.12 hereof.
Section 6.04. Indenture Trustee's and Securities Administrator's Disclaimer.
Neither the Indenture Trustee nor the Securities Administrator shall be responsible for and
makes no representation as to the validity or adequacy of this Indenture, the Notes or any other Basic Document,
it shall not be accountable for the Issuing Entity's use of the proceeds from the Notes, and it shall not be
responsible for any statement of the Issuing Entity in the Indenture or in any document issued in connection with
the sale of the Notes or in the Notes other than the Securities Administrator's certificate of authentication.
Section 6.05. Notice of Event of Default.
Subject to Section 5.01, the Indenture Trustee or the Securities Administrator 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 or the Securities Administrator, 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 or the Securities Administrator 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 the Securities Administrator to Holders and Tax Administration.
The Securities Administrator shall deliver to each Noteholder such information as may be
required by the Internal Revenue Service or by federal or state law or rules or regulations to enable such holder
to prepare its federal and state income tax returns. The Securities Administrator shall prepare and file (or
cause to be prepared and filed), on behalf of the Owner Trustee or the Issuing Entity, all tax returns (if any)
and information reports, tax elections and such annual or other reports of the Issuing Entity as are necessary
for preparation of tax returns and information reports as provided in Section 5.03 of the Trust Agreement,
including without limitation Form 1099. All tax returns and information reports shall be signed by the
Securities Administrator, as provided in Section 5.03 of the Trust Agreement.
Section 6.07. Compensation and Indemnity.
Each of the Indenture Trustee, Custodian and the Securities Administrator shall be paid by the
Master Servicer from a portion of the Master Servicing Fee as compensation for its services.
The Issuing Entity shall reimburse the Indenture Trustee, the Securities Administrator, the
Custodian and the Owner Trustee for all reasonable out-of-pocket expenses incurred or made by it, including costs
of collection. Such expenses shall include expenses, disbursements and advances of the Indenture Trustee's, the
Securities Administrator's, Custodian's or the Owner Trustee's agents, counsel, accountants and experts. The
Issuing Entity shall indemnify each of the Indenture Trustee, the Securities Administrator, the Custodian and the
Master Servicer and hold each of them 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, the Securities Administrator, the Custodian, the Depositor or the Master Servicer, as applicable, shall
notify the Issuing Entity promptly of any claim for which it may seek indemnity. Failure by the Indenture
Trustee, the Securities Administrator, the Custodian, the Depositor or the Master Servicer to so notify the
Issuing Entity shall not relieve the Issuing Entity of its obligations hereunder, unless the Issuing Entity's
defense of such claim is materially prejudiced thereby. The Issuing Entity shall defend any such claim, and the
Indenture Trustee, the Securities Administrator, the Custodian, the Depositor or the Master Servicer, as
applicable (each an "Indemnified Party") shall have the right to employ separate counsel with respect to any such
claim and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party unless: (i) the employment thereof has been specifically authorized by the
Issuing Entity in writing; (ii) such Indemnified Party shall have been advised by such counsel that there may be
one or more legal defenses available to it which are different from or additional to those available to the
Issuing Entity and in the reasonable judgment of such counsel it is advisable for such Indemnified Party to
employ separate counsel or (iii) the Issuing Entity has failed to assume the defense of such claim within a
reasonable period of time following written notice thereof, it being understood, however, with respect to any
event described in clause (ii) or clause (iii) hereof, that the Issuing Entity shall not, in connection with any
one such claim or separate but substantially similar or related claims in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to local counsel) at any time for all such Indemnified Parties, which
firm shall be designated in writing by the Indemnified Parties. The Issuing Entity is not obligated to reimburse
any expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee, the Securities
Administrator, the Custodian, the Depositor or the Master Servicer through the Indenture Trustee's, the
Securities Administrator's, the Custodian's, the Depositor's or the Master Servicer's own willful misconduct,
negligence or bad faith.
Notwithstanding anything to the contrary contained herein, the Issuing Entity shall not settle
any claim involving the Indenture Trustee without the Indenture Trustee's prior written consent unless such
settlement involves a complete and absolute release of the Indenture Trustee from any and all liability in
connection with such claim.
The Issuing Entity's payment and indemnification obligations to the Indenture Trustee, the
Securities Administrator, the Custodian, the Depositor, the Master Servicer 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, the Securities Administrator, the Custodian, the Depositor or the Master Servicer. When the
Indenture Trustee, the Securities Administrator, the Custodian, the Depositor, the Master Servicer or the Owner
Trustee incurs expenses after the occurrence of an Event of Default with respect to the Issuing Entity, the
expenses are intended to constitute expenses of administration under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or similar law.
Section 6.08. Replacement of Indenture Trustee or Securities Administrator.
No resignation or removal of the Indenture Trustee or the Securities Administrator and no
appointment of a successor Indenture Trustee or Securities Administrator shall become effective until the
acceptance of appointment by the successor Indenture Trustee or Securities Administrator pursuant to this Section
6.08. The Indenture Trustee or the Securities Administrator may resign at any time by so notifying the Issuing
Entity. Holders of a majority of Note Balances of the Notes may remove the Indenture Trustee or the Securities
Administrator by so notifying the Indenture Trustee or the Securities Administrator, as applicable, and may
appoint a successor Indenture Trustee or Securities Administrator. The Issuing Entity shall remove the Indenture
Trustee or the Securities Administrator if:
(i) the Indenture Trustee or the Securities Administrator fails to comply with or
qualify pursuant to the provisions of Section 6.11 hereof;
(ii) the Indenture Trustee or the Securities Administrator is adjudged a bankrupt
or insolvent;
(iii) a receiver or other public officer takes charge of the Indenture Trustee or
the Securities Administrator or its property;
(iv) the Indenture Trustee or the Securities Administrator otherwise becomes
incapable of acting; or
(v) the Master Servicer is terminated pursuant to Section 6.06 of the Sale and
Servicing Agreement.
If the Indenture Trustee or the Securities Administrator resigns or is removed or if a vacancy
exists in the office of the Indenture Trustee or the Securities Administrator for any reason (the Indenture
Trustee in such event being referred to herein as the retiring Indenture Trustee and the Securities Administrator
in such event being referred to herein as the retiring Securities Administrator ), the Issuing Entity shall,
promptly appoint a successor Indenture Trustee or Securities Administrator, as applicable.
A successor Indenture Trustee or Securities Administrator shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee or Securities Administrator, as applicable, and to the Issuing
Entity. Thereupon, the resignation or removal of the retiring Indenture Trustee or Securities Administrator
shall become effective, and the successor Indenture Trustee or Securities Administrator shall have all the
rights, powers and duties of the Indenture Trustee or Securities Administrator, as applicable, under this
Indenture. The successor Indenture Trustee or Securities Administrator shall mail a notice of its succession to
Noteholders and the Rating Agencies. The retiring Indenture Trustee or Securities Administrator shall promptly
transfer all property held by it as Indenture Trustee or Securities Administrator to the successor Indenture
Trustee or Securities Administrator, as applicable.
If a successor Indenture Trustee or Securities Administrator does not take office within 30
days after the retiring Indenture Trustee or Securities Administrator resigns or is removed, the retiring
Indenture Trustee or Securities Administrator, as applicable, the Issuing Entity or the Holders of a majority of
Note Balances of the Notes may petition any court of competent jurisdiction for the appointment of a successor
Indenture Trustee or Securities Administrator.
Notwithstanding the replacement of the Indenture Trustee or Securities Administrator pursuant
to this Section, the Issuing Entity's obligations under Section 6.07 shall continue for the benefit of the
retiring Indenture Trustee or Securities Administrator.
Section 6.09. Successor Indenture Trustee or Securities Administrator by Xxxxxx.
If either the Indenture Trustee or the Securities Administrator 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 or Securities Administrator, as applicable; provided, that such
corporation or banking association shall be otherwise qualified and eligible under Section 6.11 hereof. The
Indenture Trustee or the Securities Administrator, as applicable, 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
Securities Administrator 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 Securities Administrator 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 Securities Administrator may
authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the
Securities Administrator; 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 Securities Administrator shall have.
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part of the Trust
Estate may at the time be located, the Indenture Trustee shall have the power and may execute
and deliver all instruments to appoint one or more Persons to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any part of the Trust Estate,
and to vest in such Person or Persons, in such capacity and for the benefit of the Noteholders,
such title to the Trust Estate, or any part hereof, and, subject to the other provisions of
this Section, such powers, duties, obligations, rights and trusts as the Indenture Trustee may
consider necessary or desirable. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 6.11 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed upon the
Indenture Trustee shall be conferred or imposed upon and exercised or performed by the
Indenture Trustee and such separate trustee or co-trustee jointly (it being understood that
such separate trustee or co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed the Indenture Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Estate or any portion thereof in any
such jurisdiction) shall be exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of or remove any
separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees, as effectively
as if given to each of them. Every instrument appointing any separate trustee or co-trustee
shall refer to this Indenture and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the Indenture Trustee
or separately, as may be provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the conduct of, affecting
the liability of, or affording protection to, the Indenture Trustee. Every such instrument
shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the Indenture
Trustee, its agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Indenture on its behalf and
in its name. If any separate trustee or co-trustee shall die, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in
and be exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11. Eligibility; Disqualification.
The Indenture Trustee shall at all times satisfy the requirements of TIA § 310(a). The
Indenture Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition and it or its parent shall have a long-term debt rating of "Baa3" or
better by Xxxxx'x and "BBB" or better by S&P and Fitch. The Indenture Trustee shall comply with TIA § 310(b),
including the optional provision permitted by the second sentence of TIA § 310(b)(9); provided, however, that
there shall be excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other
securities of the Issuing Entity are outstanding if the requirements for such exclusion set forth in TIA §
310(b)(1) are met.
Section 6.12. Preferential Collection of Claims Against Issuing Entity.
The Indenture Trustee shall comply with TIA § 311(a), excluding any creditor relationship
listed in TIA § 311(b). An Indenture Trustee who has resigned or been removed shall be subject to TIA § 311(a)
to the extent indicated.
Section 6.13. Representations and Warranties.
The Indenture Trustee hereby represents that:
(i) It is a banking corporation duly organized, validly existing and in good
standing under the laws of the State of New York.
(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 organizational
documents.
(iii) It has the full power and authority to enter into and consummate all
transactions contemplated by this Indenture has duly authorized the execution, delivery and
performance of this Indenture, and has duly executed and delivered this Indenture.
(iv) This Indenture, assuming due authorization, execution and delivery by the
Issuing Entity, constitutes a valid, legal and binding obligation of it, enforceable against it
in accordance with the terms hereof, subject to (A) applicable bankruptcy, insolvency,
receivership, reorganization, moratorium and other laws affecting the enforcement of creditors'
rights generally, and (B) general principles of equity, regardless of whether such enforcement
is considered in a proceeding in equity or at law.
Section 6.14. Directions to Indenture Trustee and Securities Administrator.
Each of the Indenture Trustee and the Securities Administrator are hereby directed:
(i) in the case of the Indenture Trustee, to accept the pledge of the Mortgage
Loans;
(ii) in the case of the Securities Administrator, to cause the Custodian to hold
the assets of the Trust in trust for the Noteholders and to authenticate and deliver the Notes
substantially in the form prescribed by Exhibits A-1 through A-2 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 it under the
terms of this Indenture.
Section 6.15. The Agents.
The provisions of this Indenture relating to the limitations of the Indenture Trustee's and the
Securities Administrator's liability and to its indemnity, rights and protections shall inure also to the Paying
Agent and Note Registrar.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuing Entity To Furnish Securities Administrator Names and Addresses of
Noteholders.
The Issuing Entity will furnish or cause to be furnished to the Securities Administrator (a)
not more than five days after each Record Date, a list, in such form as the Securities Administrator may
reasonably require, of the names and addresses of the Holders of Notes as of such Record Date, and (b) at such
other times as the Securities Administrator may request in writing, within 30 days after receipt by the Issuing
Entity of any such request, a list of similar form and content as of a date not more than 10 days prior to the
time such list is furnished; provided, however, that so long as the Securities Administrator is the Note
Registrar, no such list shall be required to be furnished to the Securities Administrator.
Section 7.02. Preservation of Information; Communications to Noteholders.
(a) The Securities Administrator 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 Securities Administrator in its capacity as Note Registrar. The Securities Administrator may destroy any
list furnished to it as provided in such Section 7.01 upon receipt of a new list so furnished.
(b) Noteholders or Note Owners may communicate pursuant to TIA § 312(b) with other
Noteholders or Note Owners with respect to their rights under this Indenture or under the Notes.
(c) The Issuing Entity, the Indenture Trustee, the Securities Administrator and the Note
Registrar shall have the protection of TIA § 312(c).
Section 7.03. Reports of Issuing Entity.
(a) Solely in accordance with Section 4.02 of the Sale and Servicing Agreement,
(i) The Securities Administrator shall file with the Commission on behalf of the
Issuing Entity, with a copy to the Issuing Entity and the Depositor upon filing, the annual
reports and the information, documents and other reports (or such portions of any of the
foregoing as the Commission may from time to time by rules and regulations prescribe) that the
Issuing Entity may be required to file with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act;
(ii) The Securities Administrator shall file with the Commission, on behalf of the
Issuing Entity, in accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect to compliance by the
Issuing Entity with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations; and
(iii) The Securities Administrator shall supply (and the Securities Administrator
shall transmit by mail to all Noteholders described in TIA § 313(c)) such summaries of any
information, documents and reports required to be filed by the Issuing Entity pursuant to
clauses (i) and (ii) of this Section 7.03(a) and by rules and regulations prescribed from time
to time by the Commission.
(iv) For each Distribution Date, through and including the Distribution Date in
December 2007, the Securities Administrator shall calculate the Significance Percentage of the
Interest Rate Swap Agreement and the Interest Rate Cap Agreement. If on any such Distribution
Date, the aggregate Significance Percentage is equal to or greater than 10%, the Securities
Administrator shall promptly notify the Depositor and the Depositor, on behalf of the
Securities Administrator, shall obtain the financial information required to be delivered by
the Swap Provider and the Cap Provider, pursuant to the terms of the Interest Rate Swap
Agreement and the Interest Rate Cap Agreement, as applicable. If, on any Distribution Date
through and including the Distribution Date in December 2007, the Significance Percentage of
the Interest Rate Swap Agreement and the Interest Rate Cap Agreement is equal to or greater
than 10%, the Securities Administrator shall promptly notify the Depositor and the Depositor
shall, within 5 Business Days of such Distribution Date, deliver to the Securities
Administrator the financial information provided to it by the Swap Provider and Cap Provider
for inclusion in the Form 10-D relating to such Distribution Date.
With respect to any Payment Date, for purposes of determining the numerator of the fraction
that constitutes the Significance Percentage, the interest rate used to project future amounts payable under the
Interest Rate Swap Agreement shall be equal to the highest rate reflected on the Implied Forwards Curve available
at Bloomberg Financial Markets, L.P. for the remaining term of the Interest Rate Swap Agreement plus the
percentage equivalent of a fraction, the numerator of which is 3.00% and the denominator of which is the
remaining Payment Dates on which the Securities Administrator is entitled to receive payments under the Interest
Rate Swap Agreement). The discount rate used to determine the net present value of the estimated future amounts
payable shall be equal to the lowest rate reflected on the Implied Forwards Curve. The Securities Administrator
shall obtain the Implied Forwards Curve from Bloomberg within 15 Business Days of the respective Payment Date.
To determine the Implied Forwards Curve for such Payment Date, the Securities Administrator shall take the
following steps on the Bloomberg terminal: (1) the following keystrokes shall be entered: fwcv <enter>, 32
(or any such other number as represents the United States) <enter>, 3 <enter>; (2) the Forwards shall
be set to "1-Mo"; (3) the Intervals shall be set to "1-Mo"; and (4) the Points shall be set to equal the
remaining term of the Interest Rate Swap Agreement in months and the Securities Administrator shall click
<enter>. For purposes of estimating future amounts payable under the Interest Rate Swap Agreement, the
accrual period for both the Fixed Amounts and the Floating Amounts (as defined in the Confirmation) shall be
assumed to be a 30-day period in a 360-day year.
(b) Unless the Issuing Entity otherwise determines, the fiscal year of the Issuing Entity
shall end on December 31st of each year.
Section 7.04. Reports by Securities Administrator.
If required by TIA § 313(a), within 60 days after each January 30th beginning with March 31,
2008, the Securities Administrator (on behalf of the Indenture Trustee) shall mail to each Noteholder as required
by TIA § 313(c) a brief report dated as of such date that complies with TIA § 313(a). The Securities
Administrator (on behalf of the Indenture Trustee) also shall comply with TIA § 313(b).
A copy of each report at the time of its mailing to Noteholders shall be filed by the
Securities Administrator with the Commission via XXXXX and each stock exchange, if any, on which the Notes are
listed. The Issuing Entity shall notify the Indenture Trustee and the Securities Administrator 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 Securities Administrator shall prepare a
statement (the "Remittance Report") containing the information set forth below with respect to such Payment Date,
which information shall be based solely upon the loan level information furnished by the Servicer and, if the
Securities Administrator is not the Master Servicer, the Master Servicer, as applicable, upon which the
Securities Administrator shall conclusively rely without independent verification thereof:
(i) the Available Funds and the Note Rate for each Class for the related Payment
Date;
(ii) the aggregate amount of the payment to each Class of Notes on such Payment
Date;
(iii) the amount of the payment set forth in paragraph (ii) above in respect of
interest, the amount thereof in respect of any Class Interest Carryover Shortfall, and the
amount of any Class Interest Carryover Shortfall remaining;
(iv) the amount of the payment set forth in paragraph (ii) above in respect of
principal and the amount thereof in respect of the Class Principal Carryover Shortfall, and any
remaining Class Principal Carryover Shortfall;
(v) the amount of Excess Interest paid as principal;
(vi) the aggregate amount of the Servicing Fee and the Master Servicing Fee for
such Payment Date;
(vii) the Pool Balance and the aggregate Principal Balance of the Mortgage Loans in
each Loan Group as of the close of business on the last day of the preceding Due Period;
(viii) the Class Note Balance of each Class of Notes after giving effect to payments
allocated to principal;
(ix) the Overcollateralization Amount and the Required Overcollateralization Amount
as of the close of business on the Payment Date, after giving effect to payments of principal
on such Payment Date;
(x) whether a Cumulative Loss Event or a Delinquency Event has occurred and is
continuing and the calculation thereof;
(xi) the aggregate amount of Principal Prepayments received during the related
Prepayment Period;
(xii) the amount of all Curtailments that were received during the Due Period;
(xiii) the principal portion of all Monthly Payments received during the Due Period;
(xiv) the interest portion of all Monthly Payments received on the Mortgage Loans
during the Due Period;
(xv) the amount of the Monthly Advances and the Compensating Interest payment to be
made on the Determination Date;
(xvi) the amount to be distributed to the Certificates for the Payment Date;
(xvii) the weighted average remaining term to maturity of the Mortgage Loans and the
weighted average Loan Rate as of the first day of the related Due Period;
(xviii) the amount of all payments or reimbursements to the Servicer pursuant to
Sections 3.03(ii) and (vi) of the Sale and Servicing Agreement (as reported by the Servicer);
(xix) the number of Mortgage Loans outstanding at the beginning and at the end of
the related Due Period;
(xx) the amount of Liquidation Loan Losses experienced during the preceding Due
Period and the Cumulative Net Losses as a percentage of the Cut-Off Date Pool Balance;
(xxi) as of the end of the preceding calendar month, the number and Principal
Balance of Mortgage Loans which are 30-59 days delinquent; the number and Principal Balance of
Mortgage Loans which are 60-89 days delinquent; the number and Principal Balance of Mortgage
Loans which are 90 or more days delinquent (including the number and Principal Balance of
Mortgage Loans which are in foreclosure; the number and Principal Balance of Mortgage Loans in
bankruptcy; and the number and Principal Balance of Mortgage Loans which are REO Property, each
separately set forth) (for the avoidance of doubt, delinquencies in this clause (xxi) are
measured in accordance with the OTS method);
(xxii) the amounts of Applied Realized Loss Amounts for the applicable Due Period and
the cumulative amount of Applied Realized Loss Amounts to date;
(xxiii) the number and aggregate Principal Balance of Mortgage Loans, other than
Mortgage Loans in default or imminent default, that were modified by the Servicer during the
related Due Period (as reported by the Servicer)
(xxiv) the amount of Basis Risk Shortfall Amount paid to each Class of Group I Notes;
(xxv) the amount of any Net Swap Payments or Swap Termination Payments;
(xxvi) whether a Stepdown Date or Trigger Event is in effect on such Payment Date; and
(xxvii) the applicable Record Dates, Interest Accrual Periods and determination dates
for calculating payments for such Payment Date.
(b) The Securities Administrator shall make available such report to the Servicer, the
Master Servicer, the Indenture Trustee, the Seller, the Noteholders, the Rating Agencies, Bloomberg (at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxx) and Intex Solutions (at 00 Xxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxxxxx Xxxxxxxx) on the Payment Date. The Securities Administrator may fully
rely upon and shall have no liability with respect to information provided by the Servicer or, if the Securities
Administrator is not the Master Servicer, the Master Servicer. In the case of information furnished pursuant to
subclauses (ii), (iii) and (iv) above, the amounts shall be expressed in a separate section of the report as a
dollar amount for each Class for each $1,000 original dollar amount as of the related Cut-Off Date.
(c) The Securities Administrator will make the Remittance Report (and, at its option, any
additional files containing the same information in an alternative format) available each month to Noteholders
and the parties to this Indenture via the Securities Administrator's internet website. The Securities
Administrator's internet website shall initially be located at "xxx.xxxxxxx.xxx". Assistance in using the
website can be obtained by calling the Securities Administrator's customer service desk at 0-000-000-0000.
Parties that are unable to use the above distribution options are entitled to have a paper copy mailed to them
via first class mail by calling the customer service desk and indicating such. The Securities Administrator
shall have the right to change the way Remittance Reports are distributed in order to make such distribution more
convenient and/or more accessible to the above parties and the Securities Administrator shall provide timely and
adequate notification to all above parties regarding any such changes. As a condition to access the Securities
Administrator's internet website, the Securities Administrator may require registration and the acceptance of a
disclaimer. The Securities Administrator will not be liable for the dissemination of information in accordance
with this Agreement. The Securities Administrator shall also be entitled to rely on but shall not be responsible
for the content or accuracy of any information provided by third parties (other than the Master Servicer and the
Custodian if such parties are the same entity as the Securities Administrator) for purposes of preparing the
Remittance Report and may affix thereto any disclaimer it deems appropriate in its reasonable discretion (without
suggesting liability on the part of any other party hereto).
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money.
Except as otherwise expressly provided herein, the Securities Administrator, on behalf of 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 or the Securities Administrator pursuant to this Indenture. The Securities
Administrator 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, the Indenture Trustee may take such action as may be
appropriate to enforce such payment or performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim a Default or Event of Default
under this Indenture and any right to proceed thereafter as provided in Article V.
Section 8.02. Trust Accounts.
(a) On or prior to the Closing Date, the Issuing Entity shall cause the Securities
Administrator to establish and maintain, in the name of the Indenture Trustee, for the benefit of the
Noteholders, the Note Account as provided in Section 3.01 hereof.
(b) On each Payment Date, the Securities Administrator shall pay all remaining amounts on
deposit in the Note 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 Sale and Servicing Agreement, funds in the Note
Account shall be invested as set forth therein.
Section 8.03. Officer's Certificate.
The Indenture Trustee shall receive at least seven Business Days' written notice when requested
by the Issuing Entity to take any action pursuant to Section 8.05(a) hereof, accompanied by copies of any
instruments to be executed, and the Indenture Trustee shall also require, as a condition to such action, an
Officer's Certificate, in form and substance satisfactory to the Indenture Trustee, stating the legal effect of
any such action, outlining the steps required to complete the same, and concluding that all conditions precedent
to the taking of such action have been complied with.
Section 8.04. Termination Upon Payment to Noteholders.
This Indenture and the respective obligations and responsibilities of the Issuing Entity, the
Indenture Trustee and the Securities Administrator created hereby shall terminate upon the payment to
Noteholders, the Certificate Paying Agent on behalf of the Owner Trustee, the Certificateholders, the Indenture
Trustee and the Securities Administrator of all amounts required to be paid pursuant to Article III and Section
6.07 hereof; provided, however, that in no event shall the trust created hereby continue beyond the expiration of
21 years from the death of the survivor of the descendants of 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, expenses and indemnity payments, and the fees,
expenses and indemnity payments of the Securities Administrator, the Master Servicer and the Custodian, 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 of a Mortgage Loan pursuant to Section 3.16 of the Sale and 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 and the Securities Administrator pursuant to this Indenture have been
paid, release any remaining portion of the Trust Estate that secured the Notes from the lien of this Indenture.
(c) The Indenture Trustee shall release property from the lien of this Indenture pursuant
to this Section 8.05 only upon receipt of a request from the Issuing Entity accompanied by an Officers'
Certificate and an Opinion of Counsel stating that all applicable requirements have been satisfied.
Section 8.06. Surrender of Notes Upon Final Payment.
By acceptance of any Note, the Holder thereof agrees to surrender such Note to the Securities
Administrator promptly, prior to such Noteholder's receipt of the final payment thereon.
Section 8.07. Optional Redemption of the Notes.
(a) The Majority Certificateholder shall have the option to purchase the Mortgage Loans
and REO Property on any Payment Date on or after the Payment Date on which the aggregate Stated Principal Balance
of the Mortgage Loans as of the end of the prior Due Period is less than or equal to 10% of the aggregate Stated
Principal Balance of the Mortgage Loans as of Cut-off Date (the "Optional Redemption Date"). The aggregate
purchase price will be equal to the greater of (A) the sum of (x) the aggregate outstanding Stated Principal
Balance of the Mortgage Loans (other than those referred to in clause (y) below), including accrued interest
thereon, and (y) in the case of any REO property and any Mortgage Loans with respect to which foreclosure
proceedings have been initiated or are otherwise 120 days or more delinquent, the fair market value of such REO
property and mortgage loans (disregarding accrued interest thereon) and (B) the sum of the aggregate unpaid Note
Balance of the Notes (other than any Allocated Realized Loss Amounts), all accrued and unpaid interest thereon
(other than any Basis Risk Shortfall Amounts), any unreimbursed Monthly Advances and Servicing Advances and any
Swap Termination Payment payable to the Swap Provider then remaining unpaid or which is due to the exercise of
such option (the "Redemption Price"); provided, however, that the Majority Certificateholder will not be
permitted to purchase the Mortgage Loans unless the Redemption Price is sufficient to pay the Indenture Trustee
all amounts owing to it hereunder and to retire the Note Balance of the remaining Notes to zero.
(b) In order to exercise the foregoing option, the Majority Certificateholder shall
provide written notice of its exercise of such option to the Indenture Trustee, the Securities Administrator, the
Swap Provider and the Owner Trustee at least 15 days prior to its exercise. Following receipt of the notice, the
Securities Administrator shall provide notice to the Noteholders of the final payment on the Notes. In addition,
the Majority Certificateholder 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 Securities
Administrator, who shall deposit the aggregate redemption price into the Note 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 the Securities
Administrator of all amounts owing to it hereunder, and this Indenture shall be discharged subject to the
provisions of Section 4.10 hereof. If for any reason the amount deposited by the Majority Certificateholder is
not sufficient to make such redemption or such redemption cannot be completed for any reason, the amount so
deposited by the Majority Certificateholder with the Securities Administrator shall be immediately returned to
the Majority Certificateholder in full and shall not be used for any other purpose or be deemed to be part of the
Trust Estate.
(c) In connection with any redemption pursuant to this Section 8.07:
(i) At least fifteen (15) days prior to the latest date on which notice of such
optional redemption is required to be mailed to the Noteholders, the Seller shall notify in writing
(which may be done in electronic format) the Swap Provider and the Securities Administrator of the final
Payment Date on which the Seller intends to redeem the Notes;
(ii) No later than 4:00 pm (New York City time) four (4) Business Days prior to the
final Payment Date specified in the notices required pursuant to this Section 8.07, the Swap Provider
shall notify in writing (in accordance with the applicable provisions of the Interest Rate Swap
Agreement) (which may be done in electronic format) and by phone, the Seller and the Securities
Administrator of the amount of the Estimated Swap Termination Payment; and
(iii) One (1) Business Day prior to the final Payment Date specified in the notices
required pursuant to Section 8.06, (x) the Seller shall, no later than 1:00 pm (New York City time) on
such day, deliver to the Securities Administrator and the Securities Administrator shall deposit funds
in the Note Account in an amount equal to the sum of the Termination Price (which shall be based on the
Estimated Swap Termination Payment), and (y) if the Securities Administrator shall have received an
Officer's Certificate stating that all of the requirements for optional redemption have been met,
including without limitation the deposit required pursuant to the immediately preceding clause (x) as
well as the requirements specified in this Section 8.07, then the Securities Administrator shall, on the
same Business Day, provide written notice (which may be done in electronic format) to the Seller and the
Swap Provider (in accordance with the applicable provision of the Interest Rate Swap Agreement)
confirming (a) its receipt of the Termination Price (which shall be based on the Estimated Swap
Termination Payment), and (b) that all other requirements specified in this Section 8.07 have been met
(the "Optional Redemption Notice"). Upon the delivery of the Optional Redemption Notice by the
Securities Administrator pursuant to the preceding sentence, (i) the optional redemption shall become
irrevocable, (ii) the notice to Noteholders of such optional redemption provided pursuant to this
Section 8.07 shall become unrescindable, (iii) the Swap Provider shall determine the Swap Termination
Payment in accordance with the Interest Rate Swap Agreement (which shall not exceed the Estimated Swap
Termination Payment), and (iv) the Swap Provider shall provide to the Securities Administrator written
notice of the amount of the Swap Termination Payment not later than two (2) Business Days prior to the
final Payment Date specified in the notices required pursuant to this Section 8.07.
Section 8.08. Collateral Account.
The Securities Administrator is hereby directed to perform the obligations of the Derivatives
Custodian as defined under the Derivatives Credit Support Annex (the "Derivatives Custodian"). On or before the
Closing Date, the Derivatives Custodian shall establish a Derivatives Collateral Account. The Collateral Account
shall be held in the name of the Derivatives Custodian in trust for the benefit of the Noteholders. The
Collateral Account must be an Eligible Account and shall be titled "Collateral Account, Xxxxx Fargo Bank, N.A.,
as Derivatives Custodian for registered Noteholders of Newcastle Mortgage Securities Trust 2007-1, Asset-Backed
Notes, Series 2007-1."
The Derivatives Custodian shall credit to the Collateral Account all collateral (whether in the
form of cash or securities) posted by the Derivatives Provider to secure the obligations of the Derivatives
Provider in accordance with the terms of the Schedule to the ISDA Master Agreement. Except for investment
earnings, the Derivatives Provider shall not have any legal, equitable or beneficial interest in the Collateral
Account other than in accordance with the Schedule to the ISDA Master Agreement and applicable law. The
Derivatives Custodian shall maintain and apply all collateral and earnings thereon on deposit in the Collateral
Account in accordance with Derivatives Credit Support Annex.
Cash collateral posted by the Derivatives Provider in accordance with the Derivatives Credit
Support Annex shall be invested at the direction of the Derivatives Provider in Eligible Investments in
accordance with the requirements of the Derivatives Credit Support Annex. All amounts earned on amounts on
deposit in the Collateral Account (whether cash collateral or securities) shall be for the account of and taxable
to the Derivatives Provider.
Upon the occurrence of an Event of Default or Specified Condition (each as defined in the
Interest Rate Swap Agreement) with respect to the Derivatives Provider or upon occurrence or designation of an
Early Termination Date (as defined in the Schedule to the ISDA Master Agreement) as a result of any such Event of
Default or Specified Condition with respect to the Derivatives Provider, and, in either such case, unless the
Derivatives Provider has paid in full all of its Obligations (as defined in the Derivatives Credit Support Annex)
that are then due, then any collateral posted by the Derivatives Provider in accordance with the Derivatives
Credit Support Annex shall be applied to the payment of any Obligations due to Party B (as defined in the
Schedule to the ISDA Master Agreement) in accordance with the Derivatives Credit Support Annex. Any excess
amounts held in such Collateral Account after payment of all amounts owing to Party B under the Schedule to the
ISDA Master Agreement shall be withdrawn from the Collateral Account and paid to the Derivatives Provider in
accordance with the Derivatives Credit Support Annex.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior notice to the Rating
Agencies, the Issuing Entity, the Indenture Trustee and the Securities Administrator, when authorized by an
Issuing Entity Request, at any time and from time to time, may enter into one or more indentures supplemental
hereto (which shall conform to the provisions of the TIA as in force at the date of the execution thereof), in
form satisfactory to the Indenture Trustee and the Securities Administrator, for any of the following purposes:
(i) to correct or amplify the description of any property at any time subject to the lien
of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property
subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable provisions hereof, of
another person to the Issuing Entity, and the assumption by any such successor of the covenants of the
Issuing Entity herein and in the Notes contained;
(iii) to add to the covenants of the Issuing Entity, for the benefit of the Holders of the
Notes, or to surrender any right or power herein conferred upon the Issuing Entity;
(iv) to convey, transfer, assign, mortgage or pledge any property to or with the Indenture
Trustee;
(v) to cure any ambiguity, to correct or supplement any provision herein or in any
supplemental indenture that may be inconsistent with any other provision herein or in any supplemental
indenture;
(vi) to make any other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; provided, that such action (as evidenced by either (i) an
Opinion of Counsel delivered to the Indenture Trustee and the Securities Administrator or (ii)
confirmation from the Rating Agencies that such amendment will not result in the reduction or withdrawal
of the rating of any Class of Notes) shall not materially and adversely affect the interests of the
Holders of the Notes;
(vii) to evidence and provide for the acceptance of the appointment hereunder by a successor
trustee with respect to the Notes and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts hereunder by more than one trustee,
pursuant to the requirements of Article VI hereof; or
(viii) to modify, eliminate or add to the provisions of this Indenture to such extent as
shall be necessary to effect the qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such other provisions as may be expressly
required by the TIA;
provided, however, that no such indenture supplements shall be entered into unless the Indenture Trustee and the
Securities Administrator shall have received (x) 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 and (y) in the case of (vi) and (viii) above, an Officer's Certificate of the Sponsor
certifying that such supplemental indenture will not cause the Trust to fail to qualify as a "qualified special
purpose entity" under Financial Accounting Standard 140.
Each of the Indenture Trustee and the Securities Administrator is hereby authorized to join in
the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations
that may be therein contained.
(b) The Issuing Entity, the Indenture Trustee and the Securities Administrator, when
authorized by an Issuing Entity Request, may, also without the consent of any of the Holders of the Notes and
prior notice to the Rating Agencies, enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this Indenture; provided, however, that such
action (x) as evidenced by an Opinion of Counsel, (i) is permitted by this Indenture and (ii) shall not (a)
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 (b) if 100% of the Certificates are not owned by a REIT, a "qualified REIT subsidiary" or by
an entity that is wholly-owned by a REIT or a "qualified REIT subsidiary" and disregarded for federal income tax
purposes, cause the Issuing Entity to be subject to an entity level tax for federal income tax purposes and (y)
as evidenced by an Officer's Certificate of the Sponsor certifying as such, will not cause the Trust to fail to
qualify as a "qualified special purpose entity" under Financial Accounting Standard 140.
(c) Notwithstanding any of the other provisions of this Section 9.01, none of the Issuing
Entity, the Indenture Trustee or the Securities Administrator shall enter into any amendment to this Agreement
that could reasonably be expected to have a material adverse effect on the interests of the Swap Provider
hereunder (excluding, for the avoidance of doubt, any supplement indenture to the Indenture that is entered into
solely for the purpose of appointing a successor servicer, master servicer, securities administrator, trustee or
other service provider) without the prior written consent of the Swap Provider, which consent shall not be
unreasonably withheld, conditioned or delayed.
Section 9.02. Supplemental Indentures With Consent of Noteholders.
The Issuing Entity, the Indenture Trustee and the Securities Administrator, when authorized by
an Issuing Entity Request, also may, with prior notice to the Rating Agencies and, with the consent of the Swap
Provider (if materially and adversely affected thereby) and the Holders of not less than a majority of the Note
Balance of each Class of Notes affected thereby, by Act (as defined in Section 10.03 hereof) of such Holders
delivered to the Issuing Entity, the Indenture Trustee and the Securities Administrator, 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 (a) the Holder of each Note affected thereby and (b) the Holders of not less than 50% of the aggregate Note
Balance of the Notes registered in the name of any Person other than the Seller or any of its Affiliates:
(i) change the date of payment of any installment of principal of or interest on any Note,
or reduce the principal amount thereof or the interest rate thereon, change the provisions of this
Indenture relating to the application of collections on, or the proceeds of the sale of, the Trust
Estate to payment of principal of or interest on the Notes, or change any place of payment where, or the
coin or currency in which, any Note or the interest thereon is payable, or impair the right to institute
suit for the enforcement of the provisions of this Indenture requiring the application of funds
available therefor, as provided in Article V, to the payment of any such amount due on the Notes on or
after the respective due dates thereof;
(ii) reduce the percentage of the aggregate Note Balance 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 aggregate Note Balance of the Notes required to direct
the Indenture Trustee to direct the Issuing Entity to sell or liquidate the Trust Estate pursuant to
Section 5.04 hereof;
(v) modify any provision of this Section 9.02 except to increase any percentage specified
herein or to provide that certain additional provisions of this Indenture or the Basic Documents cannot
be modified or waived without the consent of the Holder of each Note affected thereby;
(vi) modify any of the provisions of this Indenture in such manner as to affect the
calculation of the amount of any payment of interest or principal due on any Note on any Payment Date
(including the calculation of any of the individual components of such calculation); or
(vii) permit the creation of any lien ranking prior to or on a parity with the lien of this
Indenture with respect to any part of the Trust Estate or, except as otherwise permitted or contemplated
herein, terminate the lien of this Indenture on any property at any time subject hereto or deprive the
Holder of any Note of the security provided by the lien of this Indenture;
and provided, further, that such action shall not, as evidenced by an Opinion of Counsel, cause the Issuing
Entity (if 100% of the Certificates are not owned by a REIT, a "qualified REIT subsidiary" or by an entity that
is wholly-owned by a REIT or a "qualified REIT subsidiary" and disregarded for federal income tax purposes) 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
Indenture Trustee and the Securities Administrator or (ii) confirmation from the Rating Agencies that such
amendment will not result in the reduction or withdrawal of the rating of any Class of Notes) adversely affect in
any material respect the interest of any Holder (other than a Holder who shall consent to such supplemental
indenture).
It shall not be necessary for any Act of Noteholders under this Section 9.02 to approve the
particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the
substance thereof.
Promptly after the execution by the Issuing Entity, the Indenture Trustee and the Securities
Administrator of any supplemental indenture pursuant to this Section 9.02, the Securities Administrator 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 Securities Administrator 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, each of the
Indenture Trustee and the Securities Administrator 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. Each of the Indenture Trustee and the
Securities Administrator may, but shall not be obligated to, enter into any such supplemental indenture that
affects the Indenture Trustee's or the Securities Administrator'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 Securities Administrator, the Issuing Entity and
the Holders of the Notes shall thereafter be determined, exercised and enforced hereunder subject in all respects
to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall
be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
Section 9.05. Conformity with Trust Indenture Act.
Every amendment of this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then in effect so long as this
Indenture shall then be qualified under the Trust Indenture Act.
Section 9.06. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any supplemental indenture pursuant to
this Article IX may, and if required by the Indenture Trustee or the Securities Administrator shall, bear a
notation in form approved by the Indenture Trustee and the Securities Administrator as to any matter provided for
in such supplemental indenture. If the Issuing Entity, the Indenture Trustee or the Securities Administrator
shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee, the Securities
Administrator and the Issuing Entity, to any such supplemental indenture may be prepared and executed by the
Issuing Entity and authenticated and delivered by the Securities Administrator in exchange for Outstanding Notes.
ARTICLE X
MISCELLANEOUS
Section 10.01. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuing Entity to the Indenture Trustee or the
Securities Administrator to take any action under any provision of this Indenture, the Issuing Entity shall
furnish to the Indenture Trustee or the Securities Administrator, as applicable, (i) an Officer's Certificate
stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action
have been complied with and (ii) an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case of any such application or
request as to which the furnishing of such documents is specifically required by any provision of this Indenture,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion has read or has
caused to be read such covenant or condition and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such signatory has
made such examination or investigation as is necessary to enable such signatory to express an informed
opinion as to whether or not such covenant or condition has been complied with;
(iv) a statement as to whether, in the opinion of each such signatory, such
condition or covenant has been complied with; and
(v) if the signatory of such certificate or opinion is required to be Independent,
the statement required by the definition of the term "Independent Certificate."
(b) (i) Prior to the deposit of any Collateral or other property or securities with the
Indenture Trustee that is to be made the basis for the release of any property or securities subject to the lien
of this Indenture, the Issuing Entity shall, in addition to any obligation imposed in Section 10.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value (within 90 days prior to such deposit) to
the Issuing Entity of the Collateral or other property or securities to be so deposited and a report from a
nationally recognized accounting firm verifying such value.
(ii) Whenever the Issuing Entity is required to furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of any signer thereof as to the matters
described in clause (i) above, the Issuing Entity shall also deliver to the Indenture Trustee an
Independent Certificate from a nationally recognized accounting firm as to the same matters, if the fair
value of the securities to be so deposited and of all other such securities made the basis of any such
withdrawal or release since the commencement of the then current fiscal year of the Issuing Entity, as
set forth in the certificates delivered pursuant to clause (i) above and this clause (ii), is 10% or
more of the aggregate Note Balance 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 aggregate Note Balance of the Notes.
(iii) Whenever any property or securities are to be released from the lien of this
Indenture, the Issuing Entity shall also furnish to the Indenture Trustee an Officer's Certificate
certifying or stating the opinion of each person signing such certificate as to the fair value (within
90 days prior to such release) of the property or securities proposed to be released and stating that in
the opinion of such person the proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(iv) Whenever the Issuing Entity is required to furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of any signer thereof as to the matters
described in clause (iii) above, the Issuing Entity shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of the property or securities and of
all other property or securities released from the lien of this Indenture since the commencement of the
then-current calendar year, as set forth in the certificates required by clause (iii) above and this
clause (iv), equals 10% or more of the aggregate Note Balance 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
aggregate Note Balance of the Notes.
Section 10.02. Form of Documents Delivered to Indenture Trustee.
In any case where several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other such Persons as to other matters,
and any such Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuing Entity may be based, insofar
as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any
such certificate of an Authorized Officer or Opinion of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or officers of the Sponsor or the
Issuing Entity, stating that the information with respect to such factual matters is in the possession of the
Sponsor or the Issuing Entity, unless such counsel knows, or in the exercise of reasonable care should know, that
the certificate or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not,
be consolidated and form one instrument.
Whenever in this Indenture, in connection with any application or certificate or report to the
Indenture Trustee, it is provided that the Issuing Entity shall deliver any document as a condition of the
granting of such application, or as evidence of the Issuing Entity's compliance with any term hereof, it is
intended that the truth and accuracy, at the time of the granting of such application or at the effective date of
such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such
case be conditions precedent to the right of the Issuing Entity to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the
Indenture Trustee's or the Securities Administrator'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 Securities Administrator, and, where it is hereby expressly
required, to the Issuing Entity. Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Noteholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.01 hereof) conclusive in favor of the
Securities Administrator and the Issuing Entity, if made in the manner provided in this Section 10.03 hereof.
(b) The fact and date of the execution by any person of any such instrument or writing may
be proved in any manner that the Securities Administrator 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
Securities Administrator or the Issuing Entity in reliance thereon, whether or not notation of such action is
made upon such Note.
Section 10.04. Notices etc., to Indenture Trustee, Securities Administrator, Issuing Entity
and Rating Agencies.
Any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders or
other documents provided or permitted by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or act of Noteholders is to be made upon, given or furnished to
or filed with:
(i) the Indenture Trustee or the Securities Administrator by any Noteholder or by
the Issuing Entity shall be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Indenture Trustee or the Securities Administrator at the
Corporate Trust Office. The Indenture Trustee or the Securities Administrator, as applicable,
shall promptly transmit any notice received by it from the Noteholders to the Issuing Entity; or
(ii) the Issuing Entity by the Indenture Trustee, the Securities Administrator or
by any Noteholder shall be sufficient for every purpose hereunder if in writing and mailed
first-class, postage prepaid to the Issuing Entity addressed to: Newcastle Mortgage Securities
Trust 2007-1, in care of Wilmington Trust Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, Attention: Corporate Trust Administration, with a copy
to Newcastle Investment Corp., 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxx Xxxx, or at any other address previously furnished in writing to the Indenture
Trustee and the Securities Administrator by the Issuing Entity. The Issuing Entity shall
promptly transmit any notice received by it from the Noteholders to the Indenture Trustee and
the Securities Administrator.
Notices required to be given to the Rating Agencies by the Issuing Entity, the Indenture
Trustee, the Securities Administrator 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 and (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; 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 Securities Administrator 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 Securities Administrator shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure to give such notice
shall not affect any other rights or obligations created hereunder, and shall not under any circumstance
constitute an Event of Default.
Section 10.06. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the TIA, such required provision shall
control.
The provisions of TIA §§ 310 through 317 that impose duties on any Person (including the
provisions automatically deemed included herein unless expressly excluded by this Indenture) are a part of and
govern this Indenture, whether or not physically contained herein.
Section 10.07. Effect of Headings.
The Article and Section headings herein are for convenience only and shall not affect the
construction hereof.
Section 10.08. Successors and Assigns.
All covenants and agreements in this Indenture and the Notes by the Issuing Entity shall bind
its successors and assigns, whether so expressed or not. All agreements of the Indenture Trustee and the
Securities Administrator 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. Third Party Beneficiaries.
The Master Servicer shall be a third party beneficiary for purposes of Section 6.07 of this
Indenture. The Swap Provider shall be an express third-party beneficiary of this Agreement to the extent of its
express rights to receive any payments under this Agreement or any other express rights of the Swap Provider
explicitly stated in this Agreement, and shall have the right to enforce such rights under this Agreement as if
it were a party hereto.
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 (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAWS), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 10.13. Counterparts.
This Indenture may be executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
Section 10.14. Recording of Indenture.
If this Indenture is subject to recording in any appropriate public recording offices, such
recording is to be effected by the Issuing Entity and at its expense accompanied by an Opinion of Counsel at its
expense (which may be counsel to the Indenture Trustee or the Securities Administrator or any other counsel
reasonably acceptable to the Indenture Trustee and the Securities Administrator) to the effect that such
recording is necessary either for the protection of the Noteholders or any other Person secured hereunder or for
the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.
Section 10.15. Issuing Entity Obligation.
No recourse may be taken, directly or indirectly, with respect to the obligations of the
Issuing Entity, the Owner Trustee, the Indenture Trustee or the Securities Administrator on the Notes or under
this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee, the Securities Administrator or the Owner Trustee in its individual capacity, (ii) any owner
of a beneficial interest in the Issuing Entity or (iii) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Indenture Trustee, the Securities Administrator or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuing Entity, the Owner Trustee, the Indenture
Trustee or the Securities Administrator or of any successor or assign of any of them in its individual capacity,
except as any such Person may have expressly agreed (it being understood that the Indenture Trustee, the
Securities Administrator and the Owner Trustee have no such obligations in their individual capacity) and except
that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing
to such entity. For all purposes of this Indenture, in the performance of any duties or obligations of the
Issuing Entity hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Article VI, VII and VIII of the Trust Agreement.
Section 10.16. No Petition.
The Indenture Trustee and the Securities Administrator, by entering into this Indenture, and
each Noteholder, by accepting a Note, hereby covenant and agree that they will not at any time prior to one year
from the date of termination hereof, institute against the Depositor or the Issuing Entity, or join in any
institution against the Depositor or the Issuing Entity of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy
or similar law in connection with any obligations relating to the Notes, this Indenture or any of the Basic
Documents, except for filing proofs of claim.
Section 10.17. Inspection.
The Issuing Entity agrees that, at its expense, on reasonable prior notice, it shall permit any
representative of the Indenture Trustee or the Securities Administrator, during the Issuing Entity's normal
business hours, to examine all the books of account, records, reports and other papers of the Issuing Entity, to
make copies and extracts therefrom, to cause such books to be audited by Independent certified public
accountants, and to discuss the Issuing Entity's affairs, finances and accounts with the Issuing Entity's
officers, employees, and Independent certified public accountants, all at such reasonable times and as often as
may be reasonably requested. The Indenture Trustee or the Securities Administrator, as applicable, 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
Newcastle Mortgage Securities Trust 2007-1, in the exercise of the powers and authority conferred and vested in
it, (b) each of the representations, undertakings and agreements herein made on the part of the Issuing Entity is
made and intended not as personal representations, undertakings and agreements by Wilmington Trust Company but is
made and intended for the purpose for binding only the Issuing Entity, (c) nothing herein contained shall be
construed as creating any liability of Wilmington Trust Company, individually or personally, to perform any
covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the
parties hereto and by any Person claiming by, through or under the parties hereto and (d) under no circumstances
shall Wilmington Trust Company be personally liable for the payment of any indebtedness or expenses of the
Issuing Entity or be liable for the breach or failure of any obligation, representation, warranty or covenant
made or undertaken by the Issuing Entity under this Indenture or any other related documents.
Section 10.19. Proofs of Claim.
The Indenture Trustee is authorized to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel) and the Noteholders allowed in any judicial proceedings relative to the Issuing Entity (or any other
obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive
and distribute any money or other property payable or deliverable on any such claims and any custodian in any
such judicial proceeding is hereby authorized by each Noteholder to make such payments to the Indenture Trustee,
as administrative expenses associated with any such proceeding, and, in the event that the Indenture Trustee
shall consent to the making of such payments directly to the Noteholder to pay to the Indenture Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee,
its agents and counsel, and any other amounts due to the Indenture Trustee under Section 6.07 hereof. To the
extent that the payment of any such compensation, expenses, disbursements and advances of the Indenture Trustee,
its agents and counsel, and any other amounts due the Indenture Trustee under Section 6.07 hereof out of the
estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on,
and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the
Noteholders may be entitled to receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or accept or adopt on behalf of any Noteholder any plan of reorganization,
arrangement, adjustment or composition affecting the Noteholder of the rights of any Noteholder thereof, or to
authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in any such proceeding.
IN WITNESS WHEREOF, the Issuing Entity, the Indenture Trustee and the Securities Administrator
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.
NEWCASTLE MORTGAGE SECURITIES TRUST, 2007-1, as Issuing Entity
By: Wilmington Trust Company, not in its individual capacity
but solely as Owner Trustee
By: ______________________________________________
Name:
Title:
XXXXX FARGO BANK, N.A., as Securities Administrator
By: ______________________________________________
Name:
Title:
THE BANK OF NEW YORK, as Indenture Trustee
By: ______________________________________________
Name:
Title:
For purposes of Section 6.07:
XXXXX FARGO BANK, N.A., as Master Servicer
By: ______________________________________________
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of July, 2007, before me personally appeared _________ to me known, who being by me duly
sworn, did depose and say, that (s)he is _____________ and _______________ to me known, who being by me duly
sworn, did depose and say, that (s)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 NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of July, 2007, before me personally appeared _________ to me known, who being by me duly
sworn, did depose and say, that (s)he is _____________ and _______________ to me known, who being by me duly
sworn, did depose and say, that (s)he is a _________________ of the Securities Administrator, 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 DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
On this ___ day of July, 2007, before me personally appeared _______________ to me known, who being by
me duly sworn, did depose and say, that (s)he is a Financial Services Officer of the Owner Trustee, one of the
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 NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE SECURITIES ADMINISTRATOR 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.
NEWCASTLE MORTGAGE SECURITIES TRUST 2007-1
ASSET-BACKED NOTES, SERIES 2007-1
CLASS [1-A-1] [2-A-1][2-A-2][2-A-3][2-A-4]
AGGREGATE NOTE BALANCE: NOTE RATE: Variable
$[__]
INITIAL NOTE BALANCE OF THIS BOND: $[__] BOND NO. 1
PERCENTAGE INTEREST: 100% CUSIP NO. [__]
Newcastle Mortgage Securities Trust 2007-1 (the "Issuing Entity"), a Delaware statutory trust, for value
received, hereby promises to pay to Cede & Co. or registered assigns, the Aggregate Note Balance 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 2007 and ending on or before the Payment Date occurring
on the Final Stated Maturity Date and to pay interest on the Note Balance of this Note (this "Note") outstanding
from time to time as provided below.
This Note is one of a duly authorized issue of the Issuing Entity's Asset-Backed Notes, Series 2007-1
(the "Notes"), issued under an Indenture dated as of July 12, 2007 (the "Indenture"), among the Issuing Entity,
Xxxxx Fargo Bank, N.A. (the "Securities Administrator", which term includes any successor Securities
Administrator under the Indenture") and The Bank of New York, as indenture trustee (the "Indenture Trustee",
which term includes any successor Indenture Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Issuing
Entity, the Indenture Trustee, the Securities Administrator and the Holders of the Notes and the terms upon which
the Notes are to be authenticated and delivered. All terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Payments of principal and interest on this Note will be made on each Payment Date to the Noteholder of
record as of the related Record Date. The "Note Balance" of a Note as of any date of determination is equal to
the initial Note Balance thereof, reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized Losses allocated to such Note on all
prior Payment Dates.
The principal of, and interest on, this Note are due and payable as described in the Indenture, in such
coin or currency of the United States of America as at the time of payment is legal tender for payment of public
and private debts. All payments made by the Issuing Entity with respect to this Note shall be equal to this
Note's pro rata share of the aggregate payments on all Notes of the same Class as described above, and shall be
applied as between interest and principal as provided in the Indenture.
All principal and interest accrued on the Notes, if not previously paid, will become finally due and
payable at the Final Stated Maturity Date.
The Notes are subject to redemption in whole, but not in part, by the Majority Certificateholder on any
Payment Date on or after the Payment Date on which the aggregate Stated Principal Balance of the Mortgage Loans
as of the end of the prior Due Period is less than or equal to 10% of the aggregate Stated Principal Balance of
the Mortgage Loans as of Cut-off Date.
The Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes except to the extent
of amounts available from the Trust Estate which constitutes security for the payment of the Notes. The assets
included in the Trust Estate will be the sole source of payments on the Notes, and each Holder hereof, by its
acceptance of this Note, agrees that (i) such Note will be limited in right of payment to amounts available from
the Trust Estate as provided in the Indenture and (ii) such Holder shall have no recourse to the Issuing Entity,
the Owner Trustee, the Indenture Trustee, the Securities Administrator, the Seller, the Originator, the Master
Servicer, the Servicer or any of their respective affiliates, or to the assets of any of the foregoing entities,
except the assets of the Issuing Entity pledged to secure the Notes pursuant to the Indenture and the rights
conveyed to the Issuing Entity under the Indenture.
Any payment of principal or interest payable on this Note which is punctually paid on the applicable
Payment Date shall be paid to the Person in whose name such Note is registered at the close of business on the
Record Date for such Payment Date by check mailed to such person's address as it appears in the Note Register on
such Record Date, except for the final installment of principal and interest payable with respect to such Note,
which shall be payable as provided below. Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Securities Administrator at least five Business Days
prior to the Record Date, any payment of principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States designated by such Holder. All
scheduled reductions in the Note Balance of a Note (or one or more predecessor Notes) effected by payments of
principal made on any Payment Date shall be binding upon all Holders of this Note and of any note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted
on such Note. The final payment of this Note shall be payable upon presentation and surrender thereof on or
after the Payment Date thereof at the office or agency of the Issuing Entity maintained by it for such purpose
pursuant to Section 3.02 of the Indenture.
Subject to the foregoing provisions, each Note delivered under the Indenture, upon registration of
transfer of or in exchange for or in lieu of any other Note shall carry the right to unpaid principal and
interest that were carried by such other Note.
If an Event of Default as defined in the Indenture shall occur and be continuing with respect to the
Notes, the Notes may become or be declared due and payable in the manner and with the effect provided in the
Indenture. If any such acceleration of maturity occurs prior to the payment of the entire unpaid Note Balance of
the Notes, the amount payable to the Holder of this Note will be equal to the sum of the unpaid Note Balance of
the Notes, together with accrued and unpaid interest thereon as described in the Indenture. The Indenture
provides that, notwithstanding the acceleration of the maturity of the Notes, under certain circumstances
specified therein, all amounts collected as proceeds of the Trust Estate securing the Notes or otherwise shall
continue to be applied to payments of principal of and interest on the Notes as if they had not been declared due
and payable.
The failure to pay any Class Interest Carryover Shortfall 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 Securities
Administrator with an opinion of counsel, which opinion of counsel will not be at the expense of the Issuing
Entity, the Seller, the Originator, any Underwriter, the Owner Trustee, the Indenture Trustee, the Securities
Administrator, the Master Servicer, the Servicer or any successor servicer which opines that the acquisition,
holding and transfer of this Note or interest herein is permissible under applicable law, will not constitute or
result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code and will not subject the
Issuing Entity, the Seller, the Originator, the Depositor, any Underwriter, the Owner Trustee, the Indenture
Trustee, the Securities Administrator, the Master Servicer, the Servicer or any successor servicer to any
obligation in addition to those undertaken in the Indenture or other Operative Agreements.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this
Note may be registered on the Note Register of the Issuing Entity. Upon surrender for registration of transfer
of, or presentation of a written instrument of transfer for, this Note at the office or agency designated by the
Issuing Entity pursuant to the Indenture, accompanied by proper instruments of assignment in form satisfactory to
the Securities Administrator, one or more new Notes of any authorized denominations and of a like aggregate
initial Note Balance, will be issued to the designated transferee or transferees.
Prior to the due presentment for registration of transfer of this Note, the Issuing Entity, the
Indenture Trustee, the Securities Administrator and any agent of the Issuing Entity, the Indenture Trustee or the
Securities Administrator may treat the Person in whose name this Note is registered as the owner of such Note (i)
on the applicable Record Date for the purpose of making payments and interest of such Note and (ii) on any other
date for all other purposes whatsoever, as the owner hereof, whether or not this Note be overdue, and neither the
Issuing Entity, the Indenture Trustee, the Securities Administrator nor any such agent of the Issuing Entity, the
Indenture Trustee or the Securities Administrator shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Issuing Entity and the rights of the Holders of the Notes under
the Indenture at any time by the Issuing Entity and the Holders of a majority of all Notes at the time
outstanding. The Indenture also contains provisions permitting the Holders of Notes representing specified
percentages of the aggregate Note Balance of the Notes on behalf of the Holders of all the Notes, to waive any
past Default under the Indenture and its consequences. Any such waiver by the Holder, at the time of the giving
thereof, of this Note (or any one or more predecessor Notes) shall bind the Holder of every Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent
or waiver is made upon such Note. The Indenture also permits the Issuing Entity, the Indenture Trustee and the
Securities Administrator to amend or waive certain terms and conditions set forth in the Indenture without the
consent of the Holders of the Notes issued thereunder.
Initially, this Note will be registered in the name of Cede & Co. as nominee of DTC, acting in its
capacity as the Depository for this Note. This Note will be delivered by the clearing agency in denominations as
provided in the Indenture and subject to certain limitations therein set forth. This Note is exchangeable for a
like aggregate initial Note Balance of Notes of different authorized denominations, as requested by the Holder
surrendering same.
Unless the Certificate of Authentication hereon has been executed by the Securities Administrator by
manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
AS PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED THEREIN.
IN WITNESS WHEREOF, the Issuing Entity has caused this instrument to be duly executed by Wilmington
Trust Company, not in its individual capacity but solely as Owner Trustee.
Dated: July ____, 2007
NEWCASTLE MORTGAGE SECURITIES TRUST 2007-1
BY: WILMINGTON TRUST COMPANY, not in its individual capacity
but solely in its capacity as Owner Trustee
By: ___________________________________________
Authorized Signatory
SECURITIES ADMINISTRATOR'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
XXXXX FARGO BANK, N.A.,
as Securities Administrator
By: __________________________________________________
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of the Note, shall be construed as
though they were written out in full according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT -- __________ Custodian
________________________________________
(Cust) (Minor)
under Uniform Gifts to Minor Act
________________________________________
(State)
ADDITIONAL ABBREVIATIONS MAY ALSO BE USED THOUGH NOT IN THE ABOVE LIST.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
(Please print or typewrite name and address, including zip code, of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints
_________________________________ attorney to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ________________________________ ________________________________
Signature Guaranteed by __________________________________
NOTICE: The signature(s) to this assignment must correspond with the name as it appears upon the face of
the within Note in every particular, without alteration or enlargement or any change whatsoever. Signature(s)
must be guaranteed by a commercial bank or by a member firm of the New York Stock Exchange or another national
securities exchange. Notarized or witnessed signatures are not acceptable.
EXHIBIT A-2
FORM OF CLASS M NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE SECURITIES ADMINISTRATOR 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.
NEWCASTLE MORTGAGE SECURITIES TRUST 2007-1
ASSET-BACKED NOTES, SERIES 2007-1
CLASS [M-1][M-2][M-3][M-4][M-5][M-6][M-7-A][M-7-B][M-8-A][M-8-B][M-9][M-10]
AGGREGATE NOTE BALANCE: NOTE RATE: Variable
$
INITIAL NOTE BALANCE OF THIS BOND: $ BOND NO.
PERCENTAGE INTEREST: 100% CUSIP NO.
Newcastle Mortgage Securities Trust 2007-1 (the "Issuing Entity"), a Delaware statutory trust, for value
received, hereby promises to pay to Cede & Co. or registered assigns, the Aggregate Note Balance 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 2007 and ending on or before the Payment Date occurring
on the Final Stated Maturity Date and to pay interest on the Note Balance of this Note (this "Note") outstanding
from time to time as provided below.
This Note is one of a duly authorized issue of the Issuing Entity's Asset-Backed Notes, Series 2007-1
(the "Notes"), issued under an Indenture dated as of July 12, 2007 (the "Indenture"), among the Issuing Entity,
Xxxxx Fargo Bank, N.A. (the "Securities Administrator", which term includes any successor Securities
Administrator under the Indenture") and The Bank of New York, as indenture trustee (the "Indenture Trustee",
which term includes any successor Indenture Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Issuing
Entity, the Indenture Trustee, the Securities Administrator and the Holders of the Notes and the terms upon which
the Notes are to be authenticated and delivered. All terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Payments of principal and interest on this Note will be made on each Payment Date to the Noteholder of
record as of the related Record Date. The "Note Balance" of a Note as of any date of determination is equal to
the initial Note Balance thereof, reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized Losses allocated to such Note on all
prior Payment Dates.
The principal of, and interest on, this Note are due and payable as described in the Indenture, in such
coin or currency of the United States of America as at the time of payment is legal tender for payment of public
and private debts. All payments made by the Issuing Entity with respect to this Note shall be equal to this
Note's pro rata share of the aggregate payments on all Notes of the same Class as described above, and shall be
applied as between interest and principal as provided in the Indenture.
All principal and interest accrued on the Notes, if not previously paid, will become finally due and
payable at the Final Stated Maturity Date.
The Notes are subject to redemption in whole, but not in part, by the Majority Certificateholder on any
Payment Date on or after the Payment Date on which the aggregate Stated Principal Balance of the Mortgage Loans
as of the end of the prior Due Period is less than or equal to 10% of the aggregate Stated Principal Balance of
the Mortgage Loans as of Cut-off Date.
The Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes except to the extent
of amounts available from the Trust Estate which constitutes security for the payment of the Notes. The assets
included in the Trust Estate will be the sole source of payments on the Notes, and each Holder hereof, by its
acceptance of this Note, agrees that (i) such Note will be limited in right of payment to amounts available from
the Trust Estate as provided in the Indenture and (ii) such Holder shall have no recourse to the Issuing Entity,
the Owner Trustee, the Indenture Trustee, the Securities Administrator, the Seller, the Originator, the Master
Servicer, the Servicer or any of their respective affiliates, or to the assets of any of the foregoing entities,
except the assets of the Issuing Entity pledged to secure the Notes pursuant to the Indenture and the rights
conveyed to the Issuing Entity under the Indenture.
Any payment of principal or interest payable on this Note which is punctually paid on the applicable
Payment Date shall be paid to the Person in whose name such Note is registered at the close of business on the
Record Date for such Payment Date by check mailed to such person's address as it appears in the Note Register on
such Record Date, except for the final installment of principal and interest payable with respect to such Note,
which shall be payable as provided below. Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Securities Administrator at least five Business Days
prior to the Record Date, any payment of principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States designated by such Holder. All
scheduled reductions in the Note Balance of a Note (or one or more predecessor Notes) effected by payments of
principal made on any Payment Date shall be binding upon all Holders of this Note and of any note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted
on such Note. The final payment of this Note shall be payable upon presentation and surrender thereof on or
after the Payment Date thereof at the office or agency of the Issuing Entity maintained by it for such purpose
pursuant to Section 3.02 of the Indenture.
Subject to the foregoing provisions, each Note delivered under the Indenture, upon registration of
transfer of or in exchange for or in lieu of any other Note shall carry the right to unpaid principal and
interest that were carried by such other Note.
If an Event of Default as defined in the Indenture shall occur and be continuing with respect to the
Notes, the Notes may become or be declared due and payable in the manner and with the effect provided in the
Indenture. If any such acceleration of maturity occurs prior to the payment of the entire unpaid Note Balance of
the Notes, the amount payable to the Holder of this Note will be equal to the sum of the unpaid Note Balance of
the Notes, together with accrued and unpaid interest thereon as described in the Indenture. The Indenture
provides that, notwithstanding the acceleration of the maturity of the Notes, under certain circumstances
specified therein, all amounts collected as proceeds of the Trust Estate securing the Notes or otherwise shall
continue to be applied to payments of principal of and interest on the Notes as if they had not been declared due
and payable.
The failure to pay any Class Interest Carryover Shortfalls 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 Securities
Administrator with an opinion of counsel, which opinion of counsel will not be at the expense of the Issuing
Entity, the Seller, the Originator, any Underwriter, the Owner Trustee, the Indenture Trustee, the Securities
Administrator, the Master Servicer, the Servicer or any successor servicer which opines that the acquisition,
holding and transfer of this Note or interest herein is permissible under applicable law, will not constitute or
result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code and will not subject the
Issuing Entity, the Seller, the Originator, the Depositor, any Underwriter, the Owner Trustee, the Indenture
Trustee, the Securities Administrator, the Master Servicer, the Servicer or any successor servicer to any
obligation in addition to those undertaken in the Indenture or other Operative Agreements.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this
Note may be registered on the Note Register of the Issuing Entity. Upon surrender for registration of transfer
of, or presentation of a written instrument of transfer for, this Note at the office or agency designated by the
Issuing Entity pursuant to the Indenture, accompanied by proper instruments of assignment in form satisfactory to
the Securities Administrator, one or more new Notes of any authorized denominations and of a like aggregate
initial Note Balance, will be issued to the designated transferee or transferees.
Prior to the due presentment for registration of transfer of this Note, the Issuing Entity, the
Indenture Trustee, the Securities Administrator and any agent of the Issuing Entity, the Indenture Trustee or the
Securities Administrator may treat the Person in whose name this Note is registered as the owner of such Note (i)
on the applicable Record Date for the purpose of making payments and interest of such Note and (ii) on any other
date for all other purposes whatsoever, as the owner hereof, whether or not this Note be overdue, and neither the
Issuing Entity, the Indenture Trustee, the Securities Administrator nor any such agent of the Issuing Entity, the
Indenture Trustee or the Securities Administrator shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Issuing Entity and the rights of the Holders of the Notes under
the Indenture at any time by the Issuing Entity and the Holders of a majority of all Notes at the time
outstanding. The Indenture also contains provisions permitting the Holders of Notes representing specified
percentages of the aggregate Note Balance of the Notes on behalf of the Holders of all the Notes, to waive any
past Default under the Indenture and its consequences. Any such waiver by the Holder, at the time of the giving
thereof, of this Note (or any one or more predecessor Notes) shall bind the Holder of every Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent
or waiver is made upon such Note. The Indenture also permits the Issuing Entity, the Indenture Trustee and the
Securities Administrator to amend or waive certain terms and conditions set forth in the Indenture without the
consent of the Holders of the Notes issued thereunder.
Initially, this Note will be registered in the name of Cede & Co. as nominee of DTC, acting in its
capacity as the Depository for this Note. This Note will be delivered by the clearing agency in denominations as
provided in the Indenture and subject to certain limitations therein set forth. This Note is exchangeable for a
like aggregate initial Note Balance of Notes of different authorized denominations, as requested by the Holder
surrendering same.
Unless the Certificate of Authentication hereon has been executed by the Securities Administrator by
manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
AS PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE
WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
THEREIN.
IN WITNESS WHEREOF, the Issuing Entity has caused this instrument to be duly executed by Wilmington
Trust Company, not in its individual capacity but solely as Owner Trustee.
Dated: July ____, 2007
NEWCASTLE MORTGAGE SECURITIES TRUST 2007-1
BY: WILMINGTON TRUST COMPANY, not in its individual capacity
but solely in its capacity as Owner Trustee
By: _____________________________________________
Authorized Signatory
SECURITIES ADMINISTRATOR'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
XXXXX FARGO BANK, N.A.,
as Securities Administrator
By: _____________________________________________
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of the Note, shall be construed as
though they were written out in full according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT -- __________ Custodian
________________________________________
(Cust) (Minor)
under Uniform Gifts to Minor Act
________________________________________
(State)
ADDITIONAL ABBREVIATIONS MAY ALSO BE USED THOUGH NOT IN THE ABOVE LIST.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
(Please print or typewrite name and address, including zip code, of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints
_________________________________ attorney to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ________________________________ ________________________________
Signature Guaranteed by __________________________________
NOTICE: The signature(s) to this assignment must correspond with the name as it appears upon the face of
the within Note in every particular, without alteration or enlargement or any change whatsoever. Signature(s)
must be guaranteed by a commercial bank or by a member firm of the New York Stock Exchange or another national
securities exchange. Notarized or witnessed signatures are not acceptable.
EXHIBIT B
MORTGAGE LOAN SCHEDULE
EXHIBIT C
INTEREST RATE SWAP AGREEMENT
EXHIBIT D
INTEREST RATE CAP AGREEMENT
APPENDIX A
DEFINITIONS
"Accepted Master Servicing Practices": With respect to any Mortgage Loan, as applicable, either (x) those mortgage
master servicing practices of prudent mortgage lending institutions which master service mortgage loans of the same type and quality
as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located to the extent applicable to the Master
Servicer, or (y) as provided in Section 3.30 of the Sale and Servicing Agreement, but in no event below the standard set forth in
clause (x).
"Accounts": Collectively, the Collection Account, the Note Account, the Swap Account and the Cap Account.
"Additional Form 10-D Disclosure": As defined in Section 4.02(a)(i) of the Sale and Servicing Agreement.
"Adjustable-Rate Mortgage Loan": A first lien Mortgage Loan which provides at any period during the life of such
loan for the adjustment of the Mortgage Rate payable in respect thereto. The Adjustable-Rate Mortgage Loans are identified as such
on the Mortgage Loan Schedule.
"Adjusted 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 applicable Mortgage Rate for such Mortgage Loan as of the first day of the
month preceding the month in which the related Payment Date occurs minus the sum of (i) the Master Servicing Fee Rate and (ii) the
Servicing Fee Rate.
"Adjustment Date": With respect to each Adjustable-Rate Mortgage Loan, each adjustment date on 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.
"Administrator": Newcastle Investment Corp. in the performance of its duties pursuant to Article VIII under the
Sale and Servicing Agreement.
"Advance": As to any Mortgage Loan or REO Property, any advance made by the Servicer in respect of any Payment Date
pursuant to Section 4.01 of the Sale and Servicing Agreement.
"Advance Facility": As defined in Section 3.29 of the Sale and Servicing Agreement.
"Advance Facility Trustee": As defined in Section 3.29 of the Sale and Servicing Agreement.
"Advancing Person": As defined in Section 3.29 of the Sale and Servicing Agreement.
"Advance Reimbursement Amounts": As defined in Section 3.29 of the Sale and Servicing Agreement.
"Affiliate": With respect to any Person, any other Person controlling, controlled by or under common control with
such Person. For purposes of this definition, "control" means the power to direct the management and policies of a Person, directly
or indirectly, whether through ownership of voting securities, by contract or otherwise and "controlling" and "controlled" shall have
meanings correlative to the foregoing.
"Allocated Realized Loss Amount": With respect to any Payment Date and any Class of Subordinate Notes, the excess,
if any, of (1) the sum of (x) any Realized Loss allocated to such Class of Notes on such Payment Date and (y) any Realized Loss
allocated to such Class of Notes on prior Payment Dates over (2) the sum of (x) the amount of any Allocated Realized Loss Amount for
such Class of Notes distributed to such Class of Notes on a prior Payment Date and (y) the amount equal to the increase in the
related Note Balance due to the receipt of Subsequent Recoveries.
"Annual Independent Public Accountants' Servicing Report": A report of a firm of independent public accountants
which is a member of the American Institute of Certified Public Accountants to the effect that such firm has examined certain
documents and records relating to the servicing of the Mortgage Loans or mortgage loans similar in nature to the Mortgage Loans by
the Company and that such firm is of the opinion that the provisions of this Agreement or similar servicing agreements have been
complied with, and that, on the basis of such examination conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers, nothing has come to the attention of such firm which would indicate that such servicing has not been
conducted in compliance therewith, except (i) such exceptions such firm shall believe to be immaterial, and (ii) such other
exceptions as shall be set forth in such report. No Annual Independent Public Accountants' Servicing Report shall contain any
provision restricting the use of such report by the Company, including any prohibition on the inclusion of any such report in any
filing with the Commission.
"Assessment of Compliance": As defined in Section 3.21 of the Sale and Servicing Agreement.
"Assignment": An assignment of Mortgage, notice of transfer or equivalent instrument, in recordable form, which is
sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect or record the sale of the
Mortgage.
"Assignment Agreement": The Assignment and Recognition Agreement, dated the Closing Date, among the Seller, the
Originator and the Depositor, pursuant to which certain of the Seller's rights under the Master Agreement were assigned to the
Depositor, substantially in the form attached as Exhibit A to the Sale and Servicing Agreement.
"Attestation Report": As defined in Section 3.21 of the Sale and Servicing Agreement.
"Authorized Officer": With respect to the Issuing Entity, any officer of the Owner Trustee who is authorized to act
for the Owner Trustee in matters relating to the Issuing Entity and who is identified on the list of Authorized Officers delivered by
the Owner Trustee to the Indenture Trustee, the Master Servicer and the Securities Administrator on the Closing Date (as such list
may be modified or supplemented from time to time thereafter) and any authorized officer of the Sponsor in its capacity as
administrator of the Issuing Entity pursuant to Article VIII of the Sale and Servicing Agreement.
"Available Funds": For any Payment Date, the sum of (1) the Interest Remittance Amount for that Payment Date and
(2) the Principal Remittance Amount for that Payment Date.
"Available Funds Rate": For any Payment Date and the Group 1 Notes, a per annum rate equal to the product of (i)
the excess, if any, of (a) the weighted average of the Adjusted Net Mortgage Rates of the then outstanding Group 1 Mortgage Loans
(weighted on the basis of the outstanding Stated Principal Balances of the Group 1 Mortgage Loans as of the first day of the related
Due Period, adjusted to reflect unscheduled principal payments received thereon after such date and included in the Principal
Distribution Amount on the immediately preceding Payment Date) over (b) the Swap Expense Fee Rate, (ii) 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 and (iii) a
fraction the numerator of which is the aggregate Stated Principal Balance of the Mortgage Loans as of the first day of the related
Due Period adjusted to reflect unscheduled principal payments received thereon after such date and included in the Principal
Distribution Amount on the immediately preceding Payment Date and the denominator of which is the aggregate Note Balance of the Notes
immediately prior to such Payment Date.
For any Payment Date and the Group 2 Notes, a per annum rate equal to the product of (i) the excess, if any, of (a)
the weighted average of the Adjusted Net Mortgage Rates of the then outstanding Group 2 Mortgage Loans (weighted on the basis of the
outstanding Stated Principal Balances of the Group 2 Mortgage Loans as of the first day of the related Due Period, adjusted to
reflect unscheduled principal payments received thereon after such date and included in the Principal Distribution Amount on the
immediately preceding Payment Date) over (b) the Swap Expense Fee Rate, (ii) 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 and (iii) a fraction the numerator
of which is the aggregate Stated Principal Balance of the Mortgage Loans as of the first day of the related Due Period adjusted to
reflect unscheduled principal payments received thereon after such date and included in the Principal Distribution Amount on the
immediately preceding Payment Date and the denominator of which is the aggregate Note Balance of the Notes immediately prior to such
Payment Date.
For any Payment Date and the Subordinate Notes, a per annum rate equal to the product of (i) the excess, if any, of
(a) the weighted average of the Adjusted Net Mortgage Rates of the then outstanding Mortgage Loans (weighted on the basis of the
outstanding Stated Principal Balances of the Mortgage Loans as of the first day of the related Due Period, adjusted to reflect
unscheduled principal payments received thereon after such date and included in the Principal Distribution Amount on the immediately
preceding Payment Date) over (b) the Swap Expense Fee Rate, (ii) 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 and (iii) a fraction the numerator of which is the
aggregate Stated Principal Balance of the Mortgage Loans as of the first day of the related Due Period adjusted to reflect
unscheduled principal payments received thereon after such date and included in the Principal Distribution Amount on the immediately
preceding Payment Date and the denominator of which is the aggregate Note Balance of the Notes immediately prior to such Payment Date.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the United States Code), as amended.
"Bankruptcy Loss": Any loss resulting from a bankruptcy court, in connection with a personal bankruptcy of a
mortgagor, (1) establishing the value of a mortgaged property at an amount less than the Stated Principal Balance of the mortgage
loan secured by such mortgaged property or (2) reducing the amount of the monthly payment on the related mortgage loan.
"Basic Documents": The Trust Agreement, the Certificate of Trust, the Indenture, the Sale and Servicing Agreement,
the Assignment Agreement, the Interest Rate Swap Agreement, the Interest Rate Cap Agreement and the other documents and certificates
delivered in connection with any of the above.
"Basis Risk Shortfall Amount": With respect to any Class of Notes and any Payment Date, the sum of (i) the excess,
if any, of (x) the amount of interest such Class of Notes for such Payment Date would have accrued on such Payment Date at its Note
Rate (without regard to the Available Funds Rate) over (y) interest accrued on such Class of Notes at the Available Funds Rate and
(ii) the unpaid portion of any Basis Risk Shortfall Amount from the prior Payment Dates 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 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, the State of Maryland, the State of Minnesota, or in the city in
which the Corporate Trust Office of the Securities Administrator is located are authorized or obligated by law or executive order to
be closed.
"Cap Account": The account or accounts created and maintained pursuant to Section 4.04 of the Sale and Servicing
Agreement. The Cap Account must be an Eligible Account.
"Cap Credit Support Annex": The credit support annex, dated as of July 12, 2007, between the Cap Provider and the
Issuing Entity, which is annexed to and forms part of the Interest Rate Cap Agreement.
"Cap Payment": With respect to any Payment Date, the amount, if any, received from the Cap Provider for such Payment
Date.
"Cap Provider": The cap provider under the Interest Rate Cap Agreement. Initially, the Cap Provider shall be Bear
Xxxxxxx Financial Products Inc.
"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 Percentage Interest": With respect to each Certificate, the Certificate Percentage Interest stated on
the face thereof.
"Certificate Register": The register maintained by the Securities Administrator in which the Securities
Administrator shall provide for the registration of Certificates and of transfers and exchanges of Certificates.
"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 Newcastle Mortgage Securities Trust 2007-1 Trust Certificates, Class C,
Class XS and Class R, collectively evidencing the beneficial ownership interest in the Issuing Entity 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 Securities Administrator 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 Issuing Entity, any other obligor upon the Certificates or any Affiliate of any of the
foregoing Persons.
"Certification": As defined in Section 4.02(a)(iii) of the Sale and Servicing Agreement.
"Class": Collectively, all of the Notes bearing the same class designation.
"Class A Notes": Any of the Class 1-A-1 Notes, Class 2-A-1 Notes, Class 2-A-2 Notes, Class 2-A-3 Notes or the Class
2-A-4 Notes.
"Class 1-A-1 Notes": Any one of the Class 1-A-1 Notes executed by the Issuing Entity and authenticated and delivered
by the Securities Administrator, substantially in the form annexed as Exhibit A-1 to the Indenture.
"Class 2-A-1 Notes": Any one of the Class 2-A-1 Notes executed by the Issuing Entity and authenticated and delivered
by the Securities Administrator, substantially in the form annexed as Exhibit A-1 to the Indenture.
"Class 2-A-2 Notes": Any one of the Class 2-A-2 Notes executed by the Issuing Entity and authenticated and delivered
by the Securities Administrator, substantially in the form annexed as Exhibit A-1 to the Indenture.
"Class 2-A-3 Notes": Any one of the Class 2-A-3 Notes executed by the Issuing Entity and authenticated and delivered
by the Securities Administrator, substantially in the form annexed as Exhibit A-1 to the Indenture.
"Class 2-A-4 Notes": Any one of the Class 2-A-4 Notes executed by the Issuing Entity and authenticated and delivered
by the Securities Administrator, substantially in the form annexed as Exhibit A-1 to the Indenture.
"Class C Distribution Amount": With respect to each Payment Date, the excess, if any, of (I) the sum of (a)(x) the
excess of the Stated Principal Balance of the Mortgage Loans as of the last day of the prior Due Period over the aggregate Note
Balance of the Notes, multiplied by (y) an interest rate equal to the Adjusted Net Mortgage Rate of the Mortgage Loans, divided by
(z) 12, (b) any principal collections in respect of the Mortgage Loans to which the Certificates are entitled and (c) any Prepayment
Charges collected during the related Prepayment Period, over (II) the aggregate amount of all Basis Risk Shortfall Amounts that did
not reduce the Class XS Distribution Amount for such Payment Date.
"Class Interest Carryover Shortfall": With respect to any Class of Notes and any Payment Date, an amount equal to
the sum of (1) the excess of the Class Monthly Interest Amount with respect to such Class of Notes for the preceding Payment Date and
any outstanding Class Interest Carryover Shortfall with respect to such Class of Notes from any preceding Payment Date, over the
Interest Remittance Amount for such Payment Date plus (2) one month's interest on the excess, to the extent permitted by law, at the
Note Rate for such Class of Notes.
"Class M-1 Note": Any one of the Class M-1 Notes executed by the Issuing Entity and authenticated and delivered by
the Securities Administrator, substantially in the form annexed as Exhibit A-2 to the Indenture.
"Class M-1 Principal Distribution 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 Distribution 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) 54.80% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or
advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) minus the Overcollateralization Floor.
"Class M-2 Note": Any one of the Class M-2 Notes executed by the Issuing Entity and authenticated and delivered by
the Securities Administrator, substantially in the form annexed as Exhibit A-2 to the Indenture.
"Class M-2 Principal Distribution 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 Distribution 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
Distribution 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) 62.40% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the Overcollateralization Floor.
"Class M-3 Note": Any one of the Class M-3 Notes executed by the Issuing Entity and authenticated and delivered by
the Securities Administrator, substantially in the form annexed as Exhibit A-2 to the Indenture.
"Class M-3 Principal Distribution 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 Distribution 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
Distribution 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 Distribution 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) 67.00% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related
Prepayment Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment Period) minus the Overcollateralization Floor.
"Class M-4 Note": Any one of the Class M-4 Notes executed by the Issuing Entity and authenticated and delivered by
the Securities Administrator, substantially in the form annexed as Exhibit A-2 to the Indenture.
"Class M-4 Principal Distribution 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 Distribution 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
Distribution 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 Distribution 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 Distribution 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) 71.20% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus the Overcollateralization
Floor.
"Class M-5 Note": Any one of the Class M-5 Notes executed by the Issuing Entity and authenticated and delivered by
the Securities Administrator, substantially in the form annexed as Exhibit A-2 to the Indenture.
"Class M-5 Principal Distribution 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 Distribution 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
Distribution 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 Distribution 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 Distribution 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 Distribution 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) 75.10% and (ii) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus the
Overcollateralization Floor.
"Class M-6 Note": Any one of the Class M-6 Notes executed by the Issuing Entity and authenticated and delivered by
the Securities Administrator, substantially in the form annexed as Exhibit A-2 to the Indenture.
"Class M-6 Principal Distribution 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 Distribution 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
Distribution 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 Distribution 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 Distribution 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 Distribution 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 Distribution 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)
78.50% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related
Prepayment Period) minus the Overcollateralization Floor.
"Class M-7 Note": Collectively, the Class M-7-A Notes and the Class M-7-B Notes.
"Class M-7-A Note": Any one of the Class M-7-A Notes executed by the Issuing Entity and authenticated and delivered
by the Securities Administrator, substantially in the form annexed as Exhibit A-2 to the Indenture.
"Class M-7-B Note": Any one of the Class M-7-B Notes executed by the Issuing Entity and authenticated and delivered
by the Securities Administrator, substantially in the form annexed as Exhibit A-2 to the Indenture.
"Class M-7 Principal Distribution 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 Distribution 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
Distribution 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 Distribution 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 Distribution 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 Distribution 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 Distribution 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 Distribution 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) 81.70% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) minus the Overcollateralization Floor.
"Class M-8 Note": Collectively, the Class M-8-A Notes and the Class M-8-B Notes.
"Class M-8-A Note": Any one of the Class M-8-A Notes executed by the Issuing Entity and authenticated and delivered
by the Securities Administrator, substantially in the form annexed as Exhibit A-2 to the Indenture.
"Class M-8-B Note": Any one of the Class M-8-B Notes executed by the Issuing Entity and authenticated and delivered
by the Securities Administrator, substantially in the form annexed as Exhibit A-2 to the Indenture.
"Class M-8 Principal Distribution 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 Distribution 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
Distribution 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 Distribution 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 Distribution 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 Distribution 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 Distribution 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 Distribution 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 Distribution 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) 84.60% and (ii) the aggregate Stated Principal Balance of the Mortgage
Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period)
and (B) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus the Overcollateralization Floor.
"Class M-9 Note": Any one of the Class M-9 Notes executed by the Issuing Entity and authenticated and delivered by
the Securities Administrator, substantially in the form annexed as Exhibit A-2 to the Indenture.
"Class M-9 Principal Distribution 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 Distribution 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
Distribution 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 Distribution 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 Distribution 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 Distribution 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 Distribution 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 Distribution 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 Distribution 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 Distribution 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) 87.20% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment Period) minus the Overcollateralization Floor.
"Class M-10 Note": Any one of the Class M-10 Notes executed by the Issuing Entity and authenticated and delivered by
the Securities Administrator, substantially in the form annexed as Exhibit A-2 to the Indenture.
"Class M-10 Principal Distribution 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 Distribution 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
Distribution 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 Distribution 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 Distribution 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 Distribution 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 Distribution 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 Distribution 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 Distribution 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 Distribution Amount on such Payment Date), (x) the Note Balance of the Class M-9 Notes (after
taking into account the payment of the Class M-9 Principal Distribution Amount on such Payment Date) and (xi) the Note Balance of the
Class M-10 Notes immediately prior to such Payment Date over (y) the lesser of (A) the product of (i) 90.50% and (ii) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus the
Overcollateralization Floor.
"Class Monthly Interest Amount": With respect to any Payment Date and each Class of Notes, the amount of interest
accrued during the related Interest Accrual Period at the related Note Rate on the Note Balance of such Class immediately prior to
such Payment Date. Class Monthly Interest Amount will be calculated on the basis of the actual number of days in the related
Interest Accrual Period and a 360-day year.
"Class XS Distribution Amount" With respect to each Payment Date, the excess, if any, of (I) the product of (x) a
notional principal balance equal to the aggregate Note Balance of the Notes, (y) an interest rate equal to the excess of (a) the
Adjusted Net Mortgage Rate of the Mortgage Loans over (b) the weighted average Note Rate for such Payment Date, and (z) the actual
number of days in the immediately preceding Due Period divided by 360, over (II) the aggregate of all Basis Risk Shortfall Amounts.
For the first Payment Date, the Class XS Distribution Amount shall be increased by an amount equal to the product of (1) the
aggregate Note Balance of the Notes, (2) the Adjusted Net Mortgage Rate and (3) a fraction, (a) the numerator of which equals 30
minus the actual number of days in the first Interest Accrual Period and (b) the denominator of with is 360.
"Close of Business": As used herein, with respect to any Business Day, 5:00 p.m. (New York time).
"Closing Date": July 12, 2007.
"Code": The Internal Revenue Code of 1986, as amended.
"Collateral": The meaning specified in the Granting Clause of the Indenture.
"Collection Account": The account or accounts created and maintained by the Servicer pursuant to Section 3.10(a) of
the Sale and Servicing Agreement, which shall be entitled "Nationstar Mortgage LLC, as Servicer for The Bank of New York, as
Indenture Trustee, in trust for the registered holders of Newcastle Mortgage Securities Trust 2007-1, Asset Backed Notes, Series
2007-1." The Collection Account must be an Eligible Account.
"Combined Loan-to-Value Ratio": With respect to any Mortgage Loan secured by a second lien, the Stated Principal
Balance of the Mortgage Loan plus the Stated Principal Balance of any related senior mortgage loan at the date of origination,
divided by the Value of the related Mortgaged Property.
"Commission": The Securities and Exchange Commission.
"Compensating Interest": As defined in Section 3.24 of the Sale and Servicing Agreement.
"Corporate Trust Office": With respect to the Indenture Trustee, the principal corporate trust office of the
Indenture Trustee 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 000 Xxxxxxx Xxxxxx, Xxxxx 0X, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance -
Newcastle Mortgage Securities Trust 2007-1. With respect to the Owner Trustee, the principal corporate trust office of the Owner
Trustee at which at any particular time its corporate trust business shall be administered, which office is located at Wilmington
Trust Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Newcastle Mortgage Securities
Trust 2007-1. With respect to the Securities Administrator, Paying Agent and Note Registrar, for certificate transfers an
surrenders: is located at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479; for all other purposes 0000 Xxx Xxxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx 00000, Attn: Corporate Trust - Newcastle 2007-1.
"Coupon Step Up Date": Each Payment Date on which the aggregate Stated Principal Balance of the Mortgage Loans
(after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment Period) and REO Properties is equal to or less than 10%
of the Cut-off Date Principal Balance.
"Cumulative Loss Trigger Event": Shall occur with respect to any Payment Date on which the fraction, expressed as a
percentage, equal to (x) 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 (y) the 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 2009 through June 2010 1.85% for the first month, plus an additional
1/12th of 2.25% for each month thereafter
July 2010 through June 2011 4.10% for the first month, plus an additional
1/12th of 2.35% for each month thereafter
July 2011 through June 2012 6.45% for the first month, plus an additional
1/12th of 1.90% for each month thereafter
July 2012 through June 2013 8.35% for the first month, plus an additional
1/12th of 0.90% for each month thereafter
July 2013 and thereafter 9.25% for each month
"Custodian": The Person acting as custodian under the Sale and Servicing Agreement from time to time. As of the
Closing Date, the initial Custodian shall be Xxxxx Fargo Bank, N.A.
"Custodial Delivery Failure": The failure of the Custodian to produce a Mortgage Note, Assignment of Mortgage or any
other document related to a Mortgage Loan that was in its possession pursuant to the Sale and Servicing Agreement within two (5)
Business Days after the Custodian's receipt of a written request therefor by the Servicer, the Indenture Trustee or the Securities
Administrator in accordance with the terms and conditions of the Sale and Servicing Agreement; provided that (i) the Custodian
previously delivered to the Indenture Trustee, a trust receipt and an exception report which did not list such document as an
exception; (ii) such document is not outstanding pursuant to a Request for Release, and (iii) such document was held by the Custodian
on behalf of the Indenture Trustee.
"Cut-off Date": With respect to each Original Mortgage Loan, on June 1, 2007.
"Cut-off Date Principal Balance": With respect to any Mortgage Loan, the unpaid Stated Principal Balance thereof as
of the Cut-off Date (or as of the applicable date of substitution with respect to a Qualified Substitute Mortgage Loan), after giving
effect to scheduled payments due on or before the Cut-off Date, whether or not received.
"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 of the related Mortgaged Property by a court
of competent jurisdiction in an amount less than the then outstanding Stated Principal Balance of the Mortgage Loan, which valuation
results from a proceeding initiated 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 one or more Qualified Substitute Mortgage
Loans.
"Delinquency Amount": For any Due Period, the sum, without duplication, of the aggregate Stated Principal Balance
of Mortgage Loans that are Delinquent 60 days or more (including any Mortgage Loan in bankruptcy and Delinquent 60 days or more),
that are in foreclosure or that are REO Properties, each as of the last day of the related Due Period.
"Delinquency Event": On any Payment Date, the 60+ Delinquency Percentage (Rolling Three Month) exceeds 29.52% of
the Senior Enhancement Percentage for the prior Payment Date.
"Delinquent": A Mortgage Loan is "Delinquent" if any payment due thereon is not made by the Mortgagor by the close
of business on the related Due Date. A Mortgage Loan is "30 days Delinquent" if such payment has not been received by the close of
business on the corresponding day of the month immediately succeeding the month in which such payment was due, or, if there is no
such corresponding day (e.g., as when a 30-day month follows a 31-day month in which a payment was due on the 31st day of such month)
then on the last day of such immediately succeeding month. Similarly for "60 days Delinquent," "90 days Delinquent" and so on.
"Depositor": Bear Xxxxxxx Asset Backed Securities I LLC, a Delaware limited liability company, or its successor in
interest.
"Depository" or "Depository Agency": The Depository Trust Company or a successor appointed by the Securities
Administrator. 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 Participant": A Person for whom, from time to time, the Depository effects book-entry transfers and
pledges of securities deposited with the Depository.
"Derivatives Provider": Either or both of the Cap Provider and the Swap Provider, as the context so requires.
"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.
"Directly Operate": With respect to any REO Property, the furnishing or rendering of services to the tenants
thereof, the management or operation of such REO Property, the holding of such REO Property primarily for sale to customers, the
performance of any construction work thereon or any use of such REO Property in a trade or business conducted by the Issuing Entity
other than through an Independent Contractor; provided, however, that the Indenture Trustee (or the Servicer on behalf of the
Indenture Trustee) shall not be considered to Directly Operate an REO Property solely because the Indenture Trustee (or the Servicer
on behalf of the Indenture Trustee) establishes rental terms, chooses tenants, enters into or renews leases, deals with taxes and
insurance, or makes decisions as to repairs or capital expenditures with respect to such REO Property
"Due Date": With respect to each Mortgage Loan and any Payment Date, the first day of the calendar month in which
such Payment Date occurs on which the Monthly Payment for such Mortgage Loan was due (or, in the case of any Mortgage Loan under the
terms of which the Monthly Payment for such Mortgage Loan was due on a day other than the first day of the calendar month in which
such Payment Date occurs, the Due Date shall be deemed to be the first day of the following calendar month), exclusive of any days of
grace.
"Due Period": With respect to any Payment Date, the period commencing on the second day of the month immediately
preceding the month in which such Payment Date occurs and ending on the first day of the month in which such Payment Date occurs.
"Eligible Account": Any of (i) an account or accounts maintained with a federal or state chartered depository
institution or trust company the short-term unsecured debt obligations of which (or, in the case of a depository institution or trust
company that is the principal subsidiary of a holding company, the short-term unsecured debt obligations of such holding company) are
rated A-1 by S&P and P-1 by Xxxxx'x (or comparable ratings if S&P, Xxxxx'x and Fitch are not the Rating Agencies) at the time any
amounts are held on deposit therein; provided, that following a downgrade, withdrawal, or suspension of such institution's rating
above, each account shall promptly (and in any case within not more than 30 calendar days) be moved to one or more segregated trust
accounts in the trust department of such institution, or to an account at another institution that complies with the above
requirements, (ii) a trust account or accounts maintained with the trust department of a federal or state chartered depository
institution, national banking association or trust company acting in its fiduciary capacity or (iii) an account otherwise acceptable
to each Rating Agency without reduction or withdrawal of their then current ratings of the Notes as evidenced by a letter from each
Rating Agency to the Indenture Trustee. Eligible Accounts may bear interest. Notwithstanding Section 9.01, the Indenture may be
amended to reduce the rating requirements in clause (i) above, without the consent of any of the Noteholders, provided that the
Person requesting such amendment obtains a letter from each Rating Agency stating that such amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the Notes.
"ERISA": The Employee Retirement Income Security Act of 1974, as amended.
"Escrow Account": The account or accounts created and maintained pursuant to Section 3.09 of the Sale and Servicing
Agreement.
"Escrow Payments": The amounts constituting ground rents, taxes, assessments, water rates, fire and hazard insurance
premiums and other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to any Mortgage Loan.
"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):
(i) a failure by the Issuing Entity to pay the Class Monthly Interest Amount on any of the Class A Notes on any
Payment Date, or if the Note Balance of the Class A Notes has been reduced to zero, a failure by the Issuing Entity to pay
on any Payment Date the Class Monthly Interest Amount due on any of the most senior Class of Notes outstanding on such
Payment Date; or
(ii) the failure by the Issuing Entity on a respective 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 Issuing Entity
made in the Indenture, or any representation or warranty of the Issuing Entity 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 Issuing Entity by
the Indenture Trustee or to the Issuing Entity 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 Issuing Entity 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 Issuing Entity or for any substantial part
of the Trust Estate, or ordering the winding-up or liquidation of the Issuing Entity'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 Issuing Entity 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 Issuing Entity to the
entry of an order for relief in an involuntary case under any such law, or the consent by the Issuing Entity to the
appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuing Entity or for any substantial part of the assets of the Trust Estate, or the making by the Issuing Entity of
any general assignment for the benefit of creditors, or the failure by the Issuing Entity generally to pay its debts as such
debts become due, or the taking of any action by the Issuing Entity in furtherance of any of the foregoing; or
(vi) the Issuing Entity becomes subject to federal income tax.
"Excess Interest": With respect to any Payment Date, the amounts remaining in the Note Account, if any, after the
application of payments pursuant to clauses (A) through (E) of section 3.05(a) of the Indenture.
"Excess Overcollateralization Amount": With respect to any Payment Date, the lesser of (1) the Principal Remittance
Amount for the Payment Date and (2) the excess, if any, of (x) the Overcollateralization Amount for such Payment Date, assuming 100%
of the Principal Remittance Amount is distributed on the Notes, over (y) the Required Overcollateralization Amount for such Payment
Date.
"Exchange Act": The Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
"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": With respect to each Class of Notes, the Payment Date in April 2037.
"Final Recovery Determination": With respect to any defaulted Mortgage Loan or any REO Property (other than a
Mortgage Loan or REO Property (i) repurchased by the Originator or purchased by the Servicer pursuant to or as contemplated by
Section 2.03 of the Sale and Servicing Agreement or (ii) removed from the Trust pursuant to Section 8.07 of the Indenture), a
determination made by the Servicer that all Insurance Proceeds, Net Liquidation Proceeds and other payments or recoveries which the
Servicer, in its reasonable good faith judgment, expects to be finally recoverable in respect thereof have been so recovered. The
Servicer shall maintain records, prepared by a Servicing Officer, of each Final Recovery Determination made thereby.
"Fixed-Rate Mortgage Loan": A first or second lien Mortgage Loan which provides for a fixed Mortgage Rate payable
with respect thereto. The Fixed-Rate Mortgage Loans are identified as such on the Mortgage Loan Schedule.
"Fixed Swap Payment": With respect to any Payment Date, a fixed amount equal to the product of (x) 5.074% per
annum, (y) the product of (i) the related Notional Amount (as defined in the Interest Rate Swap Agreement) and (ii) 250, and (z) a
fraction, the numerator of which is 30 (or, in the case of the first payment date, the number of days from and including the
effective date (as defined in the Interest Rate Swap Agreement) to but excluding such payment date, determined on a 30/360 basis) and
the denominator of which is 360.
"Floating Swap Payment": With respect to any Payment Date, a floating amount equal to the product of (i) Swap
LIBOR, (ii) the related Notional Amount (as defined in the Interest Rate Swap Agreement), (iii) 250 and (iv) a fraction, the
numerator of which is the actual number of days elapsed from and including the previous Floating Rate Payer Payment Date (as defined
in the Interest Rate Swap Agreement) to but excluding the current Floating Rate Payer Payment Date, and the denominator of which is
360.
"Form 8-K Disclosure Information": As defined in Section 4.02(a)(ii) of the Sale and Servicing Agreement.
"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, xxxxx x xxxx upon and
a security interest in, create a 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.
"Group 1 Allocation Percentage": With respect to any Payment Date, a fraction expressed as a percentage, the
numerator of which is the Group 1 Principal Remittance Amount for that Payment Date and the denominator of which is the Principal
Remittance Amount for that Payment Date.
"Group 1 Interest Remittance Amount": With respect to a Payment Date and Loan Group 1 an amount equal to (A) the
sum, without duplication, of (i) all scheduled interest received on the mortgage loans in Loan Group 1 during the related Due Period,
less the Servicing Fee and Master Servicing Fee for such mortgage loans, (ii) the interest portion of all Monthly Advances for such
Payment Date on the Group 1 Mortgage Loans, (iii) all Compensating Interest for such Payment Date related to the Group 1 Mortgage
Loans, (iv) Liquidation Proceeds and Subsequent Recoveries received during the related Prepayment Period, to the extent such
Liquidation Proceeds and Subsequent Recoveries related to interest on the Group 1 Mortgage Loans and less all non-recoverable
advances relating to interest and certain expenses on the Group 1 Mortgage Loans reimbursed during the related Prepayment Period, (v)
the interest portion of proceeds of the repurchase of any Group 1 Mortgage Loans during the related Due Period, and (vi) such Loan
Group's pro rata share (based on the aggregate Stated Principal Balance) of the interest portion of the purchase price of the assets
of the Issuing Entity upon exercise on such Payment Date by the majority holder of the owner trust certificates of its optional
redemption right, minus (B) the sum of (i) amounts payable or reimbursable to the Servicer, the Depositor, the Master Servicer, the
Securities Administrator, the Indenture Trustee and the Custodian during the related Due Period as provided in Section 5.03 of the
Sale and Servicing Agreement or Section 6.07 of the Indenture to the extent related to such Loan Group and (ii) the product of (1)
the sum of (x) such reimbursement or payments to the Servicer, the Master Servicer, the Depositor, the Securities Administrator, the
Indenture Trustee and the Custodian during the related Due Period as provided in Section 5.03 of the Sale and Servicing Agreement or
Section 6.07 of the Indenture and not related to a Loan Group and (y) any Net Swap Payment or Swap Termination Payment owed to the
Swap Provider (other than any swap termination payment resulting from a swap provider trigger event) on such Payment Date and (2) a
fraction, the numerator of which is the amount of interest collected or advanced in respect of the Group 1 Mortgage Loans for such
Payment Date and the denominator of which is the amount of interest collected or advanced in respect of the Group 1 Mortgage Loans
and Group 2 Mortgage Loans for such Payment Date.
"Group 1 Mortgage Loans": A Mortgage Loan assigned to Loan Group 1.
"Group 1 Notes": The Class 1-A-1 Notes.
"Group 1 Principal Remittance Amount": With respect to a Payment Date and Loan Group 1, an amount equal to (A) the
sum, without duplication, of (i) the scheduled principal collected on the mortgage loans in the related Loan Group during the related
Due Period or advanced by the Servicer or Master Servicer, (ii) prepayments of principal in respect of the Group 1 Mortgage Loans,
exclusive of any prepayment charges, collected in the related Prepayment Period, (iii) the Outstanding Principal Balance received
with respect to each Group 1 Mortgage Loan that was repurchased by the Originator and the amount, if any, by which the aggregate
unpaid principal balance of any replacement mortgage loans in the Loan Group 1 is less than the aggregate unpaid principal balance of
any deleted mortgage loans in the Loan Group 1 delivered by the Originator in connection with a substitution of a mortgage loan in
the related Loan Group, (iv) all Liquidation Proceeds and Subsequent Recoveries collected during the related Prepayment Period on the
Group 1 Mortgage Loans, to the extent such Liquidation Proceeds and Subsequent Recoveries relate to principal, less all
non-recoverable advances relating to principal reimbursed during the related Due Period, and (v) such Loan Group's pro rata share
(based on the aggregate Stated Principal Balance) of the principal portion of the purchase price of the assets of the Issuing Entity
upon the exercise by the majority holder of the owner trust certificates of its optional redemption right; minus (B) the amount by
which the sum of (i) amounts payable or reimbursable to the Servicer, the Depositor, the Master Servicer, the Securities
Administrator, the Indenture Trustee and the Custodian during the related Due Period as provided in the Indenture to the extent
related to such Loan Group including all non-recoverable advances relating to interest and certain expenses reimbursed during the
related Prepayment Period and (ii) the product of (1) the sum of (x) such reimbursement or payments to the Servicer, the Master
Servicer, the Securities Administrator, the Indenture Trustee and the Custodian during the related Due Period as provided in the
Indenture and not related to a Loan Group and (y) any Net Swap Payment or Swap Termination Payment owed to the Swap Provider (other
than any swap termination payment resulting from a swap provider trigger event) on such Payment Date and (2) a fraction, the
numerator of which is the amount of interest collected or advanced in respect of the Group 1 Mortgage Loans for such Payment Date and
the denominator of which is the amount of interest collected or advanced in respect of the Group 1 Mortgage Loans and Group 2
Mortgage Loans for such Payment Date exceed the Group 1 Interest Remittance Amount for such Payment Date.
"Group 1 Principal Distribution Amount": The product of (i) the Principal Distribution Amount for that Payment Date
and (ii) the Group 1 Allocation Percentage.
"Group 1 Senior Principal Distribution Amount": With respect to any Payment Date, the excess, if any, of (1)
the aggregate Note Balances of the Group 1 Notes immediately prior to that Payment Date over (i) the lesser of (a) 47.00% of the
aggregate Stated Principal Balance of the Group 1 Mortgage Loans as of the last day of the related Due Period and after giving effect
to principal prepayments received during the related Prepayment Period and (b) the aggregate Stated Principal Balance of the Group 1
Mortgage Loans as of the last date of the related Due Period and after giving effect to principal prepayments received during the
related Prepayment Period minus 0.50% of the aggregate Stated Principal Balance of the Group 1 Mortgage Loans as of the Cut-Off Date.
"Group 2 Allocation Percentage": With respect to any Payment Date, a fraction expressed as a percentage, the
numerator of which is the Group 2 Principal Remittance Amount for that Payment Date and the denominator of which is the Principal
Remittance Amount for that Payment Date.
"Group 2 Interest Remittance Amount": With respect to a Payment Date and Loan Group 2, an amount equal to (A)
the sum, without duplication, of (i) all scheduled interest received on the mortgage loans in Loan Group 2 during the related Due
Period, less the Servicing Fee and Master Servicing Fee for such mortgage loans, (ii) the interest portion of all Monthly Advances
for such Payment Date on the Group 2 Mortgage Loans, (iii) all Compensating Interest for such Payment Date related to the Group 2
Mortgage Loans, (iv) Liquidation Proceeds and Subsequent Recoveries received during the related Prepayment Period, to the extent such
Liquidation Proceeds and Subsequent Recoveries related to interest on the Group 2 Mortgage Loans and less all non-recoverable
advances relating to interest and certain expenses on the Group 1 Mortgage Loans reimbursed during the related Prepayment Period,,
(v) the interest portion of proceeds of the repurchase of any Group 2 Mortgage Loans during the related Due Period, and (vi) such
Loan Group's pro rata share (based on the aggregate Stated Principal Balance) of the interest portion of the purchase price of the
assets of the Issuing Entity upon exercise on such Payment Date by the majority holder of the owner trust certificates of its
optional redemption right, minus (B) the sum of (i) amounts payable or reimbursable to the Servicer, the Master Servicer, the
Depositor, the Securities Administrator, the Indenture Trustee and the Custodian during the related Due Period as provided in Section
5.03 of the Sale and Servicing Agreement or in Section 6.07 of the Indenture to the extent related to such Loan Group and (ii) the
product of (1) the sum of (x) such reimbursement or payments to the Servicer, the Master Servicer, the Depositor, the Securities
Administrator, the Indenture Trustee and the Custodian during the related Due Period as provided in Section 5.03 of the Sale and
Servicing Agreement or in Section 6.07 of the Indenture and not related to a Loan Group and (y) any Net Swap Payment or Swap
Termination Payment owed to the Swap Provider (other than any swap termination payment resulting from a swap provider trigger event)
on such Payment Date and (2) a fraction, the numerator of which is the amount of interest collected or advanced in respect of the
Group 2 Mortgage Loans for such Payment Date and the denominator of which is the amount of interest collected or advanced in respect
of the Group 1 Mortgage Loans and Group 2 Mortgage Loans for such Payment Date.
"Group 2 Mortgage Loans": A Mortgage Loan assigned to Loan Group 2.
"Group 2 Notes": Collectively, the Class 2-A-1 Notes, the Class 2-A-2 Notes, the Class 2-A-3 Notes and the Class
2-A-4 Notes.
"Group 2 Principal Distribution Amount": - The product of (i) the Principal Distribution Amount for that Payment
Date and (ii) the Group 2 Allocation Percentage.
"Group 2 Principal Remittance Amount:": With respect to a Payment Date and Loan Group 2, will generally be equal to
(A) the sum, without duplication, of (i) the scheduled principal collected on the mortgage loans in the related Loan Group during the
related Due Period or advanced by the Servicer or Master Servicer, (ii) prepayments of principal in respect of the Group 2 Mortgage
Loans, exclusive of any prepayment charges, collected in the related Prepayment Period, (iii) the Outstanding Principal Balance
received with respect to each Group 2 Mortgage Loan that was repurchased by the Originator and the amount, if any, by which the
aggregate unpaid principal balance of any replacement mortgage loans in the Loan Group 2 is less than the aggregate unpaid principal
balance of any deleted mortgage loans in the Loan Group 2 delivered by the Originator in connection with a substitution of a mortgage
loan in the related Loan Group, (iv) all Liquidation Proceeds and Subsequent Recoveries collected during the related Prepayment
Period on the Group 2 Mortgage Loans, to the extent such Liquidation Proceeds and Subsequent Recoveries relate to principal, less all
non-recoverable advances relating to principal reimbursed during the related Due Period, and (v) such Loan Group's pro rata share
(based on the aggregate Stated Principal Balance) of the principal portion of the purchase price of the assets of the Issuing Entity
upon the exercise by the majority holder of the owner trust certificates of its optional redemption right; minus (B) the amount by
which the sum of (i) amounts payable or reimbursable to the Servicer, the Master Servicer, the Securities Administrator, the
Indenture Trustee and the Custodian during the related Due Period as provided in the Indenture to the extent related to such Loan
Group including all non-recoverable advances relating to interest and certain expenses reimbursed during the related Prepayment
Period and (ii) the product of (1) the sum of (x) such reimbursement or payments to the Servicer, the Master Servicer, the Securities
Administrator, the Indenture Trustee and the Custodian during the related Due Period as provided in the Indenture and not related to
a Loan Group and (y) any Net Swap Payment or Swap Termination Payment owed to the Swap Provider (other than any swap termination
payment resulting from a swap provider trigger event) on such Payment Date and (2) a fraction, the numerator of which is the amount
of interest collected or advanced in respect of the Group 2 Mortgage Loans for such Payment Date and the denominator of which is the
amount of interest collected or advanced in respect of the Group 1 Mortgage Loans and Group 2 Mortgage Loans for such Payment Date
exceed the Group 2 Interest Remittance Amount for such Payment Date.
"Group 2 Senior Principal Distribution Amount": With respect to any Payment Date, the excess, if any, of (1) the
aggregate Note Balances of the Group 2 Notes immediately prior to that Payment Date over (i) the lesser of (a) 47.00% of the
aggregate Stated Principal Balance of the Group 2 Mortgage Loans as of the last day of the related Due Period and after giving effect
to principal prepayments received during the related Prepayment Period and (b) the aggregate Stated Principal Balance of the Group 2
Mortgage Loans as of the last date of the related Due Period and after giving effect to principal prepayments received during the
related Prepayment Period minus 0.50% of the aggregate Stated Principal Balance of the Group 2 Mortgage Loans as of the Cut-Off Date.
"Guarantor": Fremont General Corporation, or its successor in interest.
"Highest Priority": As of any date of determination, the Class of Subordinate 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, Class M-9 and Class M-10 Notes.
"Indemnified Parties": The meaning specified in Section 7.02 of the Trust Agreement.
"Indenture": The indenture dated as of July 12, 2007, among the Issuing Entity, the Securities Administrator and the
Indenture Trustee, relating to the Newcastle Mortgage Securities Trust 2007-1, Asset-Backed Notes, Series 2007-1.
"Indenture Trustee": The Bank of New York, and its successors and assigns or any successor indenture trustee
appointed pursuant to the terms of the Indenture.
"Independent": When used with respect to any specified Person, the Person (i) is in fact independent of the Issuing
Entity, any other obligor on the Notes, the Seller, the 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 Issuing Entity, any such other
obligor, the Seller, the Servicer, the Depositor or any Affiliate of any of the foregoing Persons and (iii) is not connected with the
Issuing Entity, any such other obligor, the Seller, the 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 Issuing Entity 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.
"Independent Contractor": Either (i) any Person (other than the Servicer) that would be an "independent contractor"
with respect to the Issuing Entity within the meaning of Section 856(d)(3) of the Code if the Issuing Entity were a real estate
investment trust (except that the ownership tests set forth in that section shall be considered to be met by any Person that owns,
directly or indirectly, 35% or more of any Class of Notes), so long as the Issuing Entity does not receive or derive any income from
such Person and provided that the relationship between such Person and the Issuing Entity is at arm's length, all within the meaning
of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person (including the Servicer) if the Indenture Trustee has received
an Opinion of Counsel to the effect that the taking of any action in respect of any REO Property by such Person, subject to any
conditions therein specified, that is otherwise herein contemplated to be taken by an Independent Contractor will not cause such REO
Property to cease to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code (determined without
regard to the exception applicable for purposes of Section 860D(a) of the Code), or cause any income realized in respect of such REO
Property to fail to qualify as Rents from Real Property.
"Index": With respect to each Adjustable-Rate Mortgage Loan and with respect to each related Adjustment Date, the
index as specified in the related Mortgage Note.
"Initial Note Balance": As set forth in Section 2.02 of the Indenture.
"Insurance Proceeds": Proceeds of any title policy, hazard policy or other insurance policy covering a Mortgage
Loan to the extent such proceeds are received by the Servicer and 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 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 the Notes and each Payment Date, the period commencing on the preceding
Payment Date (or in the case of the first such Interest Accrual Period, commencing on the Closing Date) and ending on the day
immediately preceding such Payment Date.
"Interest Determination Date": With respect to the Notes and each Interest Accrual Period, the second LIBOR
Business Day preceding the commencement of such Interest Accrual Period.
"Interest Rate Cap Agreement": The interest rate cap agreement, dated as of July 12, 2007, between the Cap Provider
and the Issuing Entity, including any schedule, confirmations, credit support annex or other credit support document relating
thereto.
"Interest Rate Swap Agreement": The interest rate swap agreement, dated as of July 12, 2007, between the Swap
Provider and the Issuing Entity, including any schedule, confirmations, credit support annex or other credit support document
relating thereto.
"Interest Remittance Amount": With respect to any Payment Date, the sum of the Group 1 Interest Remittance Amount
and the Group 2 Interest Remittance Amount for such Payment Date.
"Investment Company Act": The Investment Company Act of 1940, as amended, and any amendments thereto.
"IRS": The Internal Revenue Service.
"Issuing Entity Request": A written order or request signed in the name of the Issuing Entity by any one of its
Authorized Officers and delivered to the Indenture Trustee.
"Issuing Entity": Newcastle Mortgage Securities Trust 2007-1, a Delaware statutory trust, or its successor in
interest.
"Late Collections": With respect to any Mortgage Loan, all amounts received subsequent to the Determination Date
immediately following any related Due Period, whether as late payments of Monthly Payments or as Insurance Proceeds, Liquidation
Proceeds or otherwise, which represent late payments or collections of principal and/or interest due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) but delinquent on a contractual basis for such Due Period and
not previously recovered.
"LIBOR": With respect to each Interest Accrual Period, the rate determined by the Securities Administrator on the
related Interest Determination Date on the basis of the London interbank offered rate for one-month United States dollar deposits, as
such rate appears on the Reuters Screen LIBOR01 Page, as of 11:00 a.m. (London time) on such Interest Determination Date. If such
rate does not appear on Telerate Page 3750, the rate for such Interest Determination Date will be determined on the basis of the
offered rates of the Reference Banks for one-month United States dollar deposits, as of 11:00 a.m. (London time) on such Interest
Determination Date. The Securities Administrator will request the principal London office of each of the Reference Banks to provide a
quotation of its rate. On such Interest Determination Date, LIBOR for the related Interest Accrual Period will be established by the
Securities Administrator as follows:
(1) If on such Interest Determination Date two or more Reference Banks provide such offered quotations, 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 of 1%); and
(2) If on such Interest Determination Date fewer than two Reference Banks provide such offered quotations,
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.
"LIBOR Business Day": Any day on which banks in London, England and The City of New York are open and conducting
transactions in foreign currency and exchange.
"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 Sale and
Servicing Agreement shall not be deemed to constitute a Lien.
"Liquidated Mortgage Loan": As to any Payment Date, any Mortgage Loan in respect of which the Servicer has
determined, in its reasonable judgment, as of the end of the related Prepayment Period, that all Liquidation Proceeds which it
expects to recover with respect to the liquidation of the Mortgage Loan or disposition of the related REO Property have been
recovered.
"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 Sale and Servicing
Agreement or (B) the redeeming of 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 its being sold or purchased pursuant to Section 3.23 of the Sale and Servicing Agreement or the redeeming of
the Notes pursuant to Section 8.07 of the Indenture.
"Liquidation Proceeds": The amount (other than amounts received in respect of the rental of any REO Property prior
to REO Disposition) received by the 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 by means of a trustee's sale,
foreclosure sale or otherwise or (iii) the repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant to or as
contemplated by Section 2.03 or Section 3.23 of the Sale and Servicing Agreement or Section 8.07 of the Indenture.
"Loan Group": Loan Group 1 or Loan Group 2, as the context requires.
"Loan Group 1": The group of Mortgage Loans identified in the Mortgage Loan Schedule as having been assigned to Loan
Group 1.
"Loan Group 2": The group of Mortgage Loans identified in the Mortgage Loan Schedule as having been assigned to Loan
Group 2.
"Loan-to-Value Ratio": As of any date and as to any Mortgage Loan, the fraction, expressed as a percentage, the
numerator of which is the Stated Principal Balance of the Mortgage Loan at origination and the denominator of which is the Value of
the related Mortgaged Property.
"Lost Note Affidavit": With respect to any Mortgage Loan as to which the original Mortgage Note has been permanently
lost, misplaced or destroyed and has not been replaced, an affidavit from the Originator certifying that the original Mortgage Note
has been lost, misplaced or destroyed (together with a copy of the related Mortgage Note) and indemnifying the Trust against any
loss, cost or liability resulting from the failure to deliver the original Mortgage Note in the form of Exhibit E to the Sale and
Servicing Agreement.
"Majority Certificateholder": A Holder of a 50.01% or greater Certificate Percentage Interest of the Certificates.
"Master Servicer": Xxxxx Fargo Bank, N.A., or its successor in interest.
"Master Servicer Event of Termination": One or more of the events described in Section 6.06 of the Sale and
Servicing Agreement.
"Master Servicing Fee": With respect to each Mortgage Loan and for any calendar month, an amount equal to the Master
Servicing Fee Rate accrued for such month on the same principal amount on which interest on such Mortgage Loan accrues for such
month.
"Master Servicing Fee Rate": 0.010% per annum.
"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.
"Maximum Probable Exposure": With respect to each Payment Date, the amount calculated by the Depositor in accordance
with the Depositor's internal risk management process in respect of similar instruments, such calculation to be performed as agreed by
the Trust Administrator and the Depositor.
"MERS": Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the
State of Delaware, or any successor thereto.
"MERS® System": The system of recording transfers of Mortgages electronically maintained by MERS.
"MIN": The Mortgage Identification Number for Mortgage Loans registered with MERS on the MERS® System.
"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.
"MOM Loan": With respect to any Mortgage Loan, MERS acting as the mortgagee of such Mortgage Loan, solely as
nominee for the originator of such Mortgage Loan and its successors and assigns, at the origination thereof.
"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
modifications to a Mortgage Loan pursuant to Section 3.07 of the Sale and Servicing Agreement and (iii) 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 Servicer pursuant to Section 3.07 of the Sale and 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 2.01 or Section 2.03(d) of the Sale and Servicing
Agreement pertaining to a particular Mortgage Loan and any additional documents required to be added to the Mortgage File pursuant to
the Sale and Servicing Agreement.
"Mortgage Loan": Each mortgage loan identified in the Mortgage Loan Schedule.
"Mortgage Loan Schedule": As of any date, the list of mortgage loans, attached hereto as Exhibit B. The Mortgage
Loan Schedule shall be prepared by the Depositor and shall set forth the following information with respect to each Mortgage Loan, as
applicable:
(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 was represented by the borrower, at the time of
origination, as being 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 or Combined Loan-to-Value at origination;
(ix) the Mortgage Rate in effect immediately following the Cut-off Date;
(x) the date on which the first Monthly Payment was due on the Mortgage Loan;
(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 balance 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) a code indicating the purpose of the Mortgage Loan (i.e., purchase financing, rate/term refinancing,
cash-out refinancing);
(xviii) the Mortgage Rate at origination;
(xix) a code indicating the documentation program (i.e., full documentation, limited income verification, no
income verification, alternative income verification);
(xx) the Value of the Mortgaged Property;
(xxi) the sale price of the Mortgaged Property, if applicable; and
(xxii) with respect to any Adjustable-Rate Mortgage Loan, the rounding code, the Minimum Mortgage Rate, the
Maximum Mortgage Rate, the Gross Margin, the next Adjustment Date and the Periodic Rate Cap.
The Mortgage Loan Schedule shall set forth the following information, with respect to the Mortgage Loans as of the
Cut-off Date: (1) the number of Mortgage Loans (separately identifying the number of Fixed-Rate Mortgage Loans and the number of
Adjustable-Rate 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 remaining term to maturity of the Mortgage Loans. The Mortgage Loan Schedule
shall be amended from time to time by the Seller in accordance with the provisions of the Sale and Servicing Agreement. With respect
to any Qualified Substitute Mortgage Loan, Cut-off Date shall refer to the related Cut-off Date for such Mortgage Loan.
"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 of the Sale and Servicing Agreement from time
to time, and any REO Properties acquired in respect thereof.
"Mortgage Rate": With respect to each Fixed-Rate Mortgage Loan, the rate set forth in the related Mortgage Note.
With respect to each Adjustable-Rate 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 (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, to equal the sum, rounded to the next highest or nearest 0.125% (as provided in the Mortgage Note), of the
Index, determined as set forth in the related Mortgage Note, plus the related Gross Margin subject to the limitations set forth in
the related Mortgage Note. 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 a
fee simple estate in a parcel of real property improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage Loan or any other disposition of related
Mortgaged Property (including REO Property), the related Liquidation Proceeds and Insurance Proceeds net of Advances, Servicing
Advances, Servicing Fees and any other accrued and unpaid servicing fees or ancillary income received and retained in connection with
the liquidation of such Mortgage Loan or Mortgaged Property.
"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 Master
Servicing Fee Rate and the Servicing Fee Rate.
"Net Prepayment Interest Shortfall": With respect to any Payment Date, the excess, if any, of any Prepayment
Interest Shortfalls for such date over the related Compensating Interest.
"Net Swap Payment": In the case of payments made by the Issuing Entity, the excess, if any, of (x) the Fixed Swap
Payment over (y) the Floating Swap Payment and in the case of payments made by the Swap Provider, the excess, if any, of (x) the
Floating Swap Payment over (y) the Fixed Swap Payment. In each case, the Net Swap Payment shall not be less than zero.
"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, which lease shall not be more than 30 days
in length.
"Nonrecoverable Advance": Any Advance or 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 Servicer, will not be ultimately recoverable from Late
Collections, Insurance Proceeds, Liquidation Proceeds or condemnation proceeds on such Mortgage Loan or REO Property as provided
herein.
"Note": Any one of the Asset Backed Notes, Series 2007-1, Class 1-A-1, Class 2-A-1, Class 2-A-2, Class 2-A-3,
Class 2-A-4, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7-A, Class M-7-B, Class M-8-A, Class M-8-B,
Class M-9 and Class M-10 issued under the Indenture.
"Note Account": The trust account or accounts created and maintained by the Securities Administrator pursuant to
Section 3.01 of the Indenture, which shall be entitled "Note Account, Xxxxx Fargo Bank, N.A., as Securities Administrator, in trust
for the registered holders of Newcastle Mortgage Securities Trust 2007-1, Asset-Backed Notes." The Note Account must be an Eligible
Account.
"Note Balance": With respect to any Note immediately prior to any Payment Date, an amount equal to the Initial
Note Balance thereof plus any Subsequent Recoveries added to the Note Balance of such Note pursuant to Section 3.05 of the Indenture,
reduced by (A) the sum of all amounts actually distributed in respect of principal of such Class and (B) Realized Losses allocated
thereto on all prior Payment Dates.
"Note Margin": With respect to each Class of Notes, the margin set forth below:
Note Margin
_________________________
Class (1) (%) (2) (%)
___________________________________
1-A-1 0.190% 0.380%
2-A-1 0.130% 0.260%
2-A-2 0.160% 0.320%
2-A-3 0.230% 0.460%
2-A-4 0.340% 0.680%
M-1 0.500% 0.750%
M-2 0.650% 0.975%
M-3 0.750% 1.125%
M-4 1.150% 1.725%
M-5 1.250% 1.875%
M-6 1.800% 2.700%
M-7-A 2.000% 3.000%
M-7-B 2.000% 3.000%
M-8-A 2.000% 3.000%
M-8-B 2.000% 3.000%
M-9 2.000% 3.000%
M-10 2.000% 3.000%
_______________
(1) For the Interest Accrual Period for each Payment Date on or prior to the Coupon Step Up Date.
(2) For the Interest Accrual Period for each Payment Date thereafter.
"Note Owner": The Beneficial Owner of a Note.
"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) 11.500% per annum and (iii) the Available Funds Rate for
such Class and 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 Securities Administrator, in its capacity as Note Registrar, or any successor to the
Securities Administrator 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 Issuing Entity, the Indenture Trustee (in its capacity as indenture trustee under the Indenture), the
Seller 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 Securities Administrator 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 Securities Administrator or the Owner Trustee the pledgee's
right so to act with respect to such Notes and that the pledgee is not the Issuing Entity, any other obligor upon the Notes or any
Affiliate of any of the foregoing Persons.
"Officers' Certificate": A certificate signed by the Chairman of the Board, the Vice Chairman of the Board, the
President or a vice president (however denominated), and by the Treasurer, the Secretary, or one of the assistant treasurers or
assistant secretaries of the Servicer, the Originator or the Depositor, as applicable.
"Opinion of Counsel": A written opinion of counsel acceptable to the Indenture Trustee or the Securities
Administrator, as applicable, in its reasonable discretion which counsel may be in-house counsel for the Servicer if acceptable to
the Indenture Trustee and the Rating Agencies or counsel for the Depositor, as the case may be.
"Optional Redemption Date": The first Payment Date on which the Majority Certificateholder may opt to redeem the
Notes pursuant to Section 8.07 of the Indenture.
"Original Mortgage Loan": Any of the Mortgage Loans included in the Trust Fund as of the Closing Date. The
aggregate principal balance of the Original Mortgage Loans as of the Cut-off Date is equal to $1,087,942,488.90.
"Original Subordinate Principal Balance": The aggregate Note Balance of the Subordinate Notes as of the Closing
Date.
"Originator": Fremont Investment & Loan, 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 Securities Administrator 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 Securities Administrator is presented that any such Notes are
held by a holder in due course;
"Overcollateralization Amount": For any Payment Date, the amount equal to (i) the aggregate Stated Principal Balance
of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related
Prepayment Period) minus (ii) the aggregate Note Balance of the Notes as of such Payment Date after giving effect to payments to be
made on such Payment Date.
"Overcollateralization Deficiency Amount": With respect to any Payment Date, the amount, if any, by which the
Required Overcollateralization Amount exceeds the Overcollateralization Amount on such Payment Date (assuming that 100% of the
Principal Remittance Amount is applied as a principal payment on such Payment Date).
"Overcollateralization Floor": With respect to the Notes, $5,439,712.44.
"Overcollateralization Increase Amount": With respect to any Payment Date, the lesser of (x) the Excess Interest for
such Payment Date and (y) the Overcollateralization Deficiency Amount for such Payment Date.
"Owner Trust Estate": The corpus of the Issuing Entity 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.
"Paying Agent": Any paying agent or co-paying agent appointed pursuant to Section 3.03 of the Indenture, which
initially shall be the Securities Administrator.
"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 2007.
"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 or managed by the Depositor, the Servicer, the Master Servicer, the Indenture
Trustee or any of their respective Affiliates or for which an Affiliate of the Indenture Trustee or the Master Servicer serves as an
advisor:
(1) 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;
(2) (A) demand and time deposits in, certificates of deposit of, bankers' acceptances issued by or federal
funds sold by any depository institution or trust company (including the Indenture Trustee or the Master Servicer or its
agent acting in their respective commercial capacities) incorporated under the laws of the United States of America or any
state thereof and subject to supervision and examination by federal and/or state authorities, so long as, at the time of
such investment or contractual commitment providing for such investment, such depository institution or trust company (or,
if the only Rating Agency is S&P, in the case of the principal depository institution in a depository institution holding
company, debt obligations of the depository institution holding company) or its ultimate parent has a short-term uninsured
debt rating in one of the two highest available ratings of Xxxxx'x and the highest available rating category of Fitch and
S&P and provided that each such investment has an original maturity of no more than 365 days; and provided further that, if
the only Rating Agency is S&P and if the depository or trust company is a principal subsidiary of a bank holding company and
the debt obligations of such subsidiary are not separately rated, the applicable rating shall be that of the bank holding
company; and provided further that, if the original maturity of such short-term obligations of a domestic branch of a
foreign depository institution or trust company shall exceed 30 days, the short-term rating of such institution shall be
A-1+ in the case of S&P if S&P is the Rating Agency; and (B) any other demand or time deposit or deposit which is fully
insured by the FDIC;
(3) repurchase obligations with a term not to exceed 30 days with respect to any security described in clause
(i) above and entered into with a depository institution or trust company (acting as principal) rated F-1+ or higher by
Fitch, P-1 by Xxxxx'x and rated A-1+ or higher by S&P, provided, however, that collateral transferred pursuant to such
repurchase obligation must be of the type described in clause (i) above and must (A) be valued daily at current market
prices plus accrued interest, (B) pursuant to such valuation, be equal, at all times, to 105% of the cash transferred by the
Indenture Trustee in exchange for such collateral and (C) be delivered to the Indenture Trustee or, if the Indenture Trustee
is supplying the collateral, an agent for the Indenture Trustee, in such a manner as to accomplish perfection of a security
interest in the collateral by possession of certificated securities; provided, that, such repurchase obligations are
accounted for by the Trust as secured loans to the repurchase counterparty in accordance with Financial Accounting Standard
140;
(4) 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 a Rating Agency in its highest long-term
unsecured rating category at the time of such investment or contractual commitment providing for such investment;
(5) 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 a
Rating Agency in its highest short-term unsecured debt rating available at the time of such investment;
(6) units of money market funds, including those money market funds managed or advised by the Indenture Trustee
or the Master Servicer or its Affiliates, that have been rated "AAA" by Fitch (if rated by Fitch), "Aaa" by Xxxxx'x and
"AAA" by S&P; and
(7) if previously confirmed in writing to the Indenture Trustee or the Master Servicer, any other demand, money
market or time deposit, or any other obligation, security or investment, as may be acceptable to the Rating Agencies in
writing as a permitted investment of funds backing securities having ratings equivalent to its highest initial rating of the
Class A Notes;
provided, 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 and provided, further, that the Trust shall not vote any such
Permitted Investments unless such vote is on matters that are "protective rights" under United States Generally Accepted Accounting
Principles.
"Person": Any individual, corporation, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision thereof.
"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.
"Plan Assets": Assets of a Plan as determined pursuant to the Department of Labor regulations promulgated at
Section 2510.3-101.
"Pool Balance": As of any date of determination, the aggregate Stated Principal Balance of the Mortgage Loans in the
Mortgage Pool as of such date.
"Prepayment Assumption": As set forth in the Prospectus Supplement.
"Prepayment Charge": With respect to any Mortgage Loan, the charges or premiums, if any, due in connection with a
full or partial Principal Prepayment of such Mortgage Loan in accordance with the terms thereof.
"Prepayment Interest Excess": With respect to any Payment Date, for each Mortgage Loan that was the subject of a
voluntary Principal Prepayment in full on the first day of the calendar month in which such Payment Date occurs, an amount equal to
interest (to the extent received) at the applicable Net Mortgage Rate on the amount of such Principal Prepayment for the number of
days commencing on the first day of the calendar month in which such Payment Date occurs and ending on the date on which such
prepayment is so applied.
"Prepayment Interest Shortfall": With respect to any Payment Date, for each Mortgage Loan that was the subject of a
Principal Prepayment in full during the portion of the related Prepayment Period occurring from the first day of the related
Prepayment Period through the last day of the calendar month preceding the month in which such Payment Date occurs, an amount equal
to interest on the amount of such Principal Prepayment for the number of days commencing on the date such Principal Prepayment was
applied and ending on the last day of the calendar month preceding the month in which such Payment Date occurs.
"Prepayment Period": With respect to any Payment Date, the period commencing on the 16th day of the month preceding
the month in which such Payment Date falls (or, in the case of the first Payment Date, from June 1, 2007) and ending on the 15th day
of the calendar month in which such Payment Date occurs.
"Principal Balance": As to any Mortgage Loan other than a Liquidated Mortgage Loan, and any day, the related
Cut-off Date Principal Balance, minus all collections credited against the Cut-off Date Principal Balance of any such Mortgage Loan.
For purposes of this definition, a Liquidated Mortgage Loan shall be deemed to have a Principal Balance equal to the Principal
Balance of the related Mortgage Loan as of the final recovery of related Liquidation Proceeds and a Principal Balance of zero
thereafter. As to any REO Property and any day, the Principal Balance of the related Mortgage Loan immediately prior to such Mortgage
Loan becoming REO Property minus any REO Principal Amortization received with respect thereto on or prior to such day.
"Principal Distribution Amount": With respect to any Payment Date, the sum of (i) the Group 1 Principal Remittance
Amount and the Group 2 Principal Remittance Amount minus the Excess Overcollateralization Amount, if any for such Payment Date and
(ii) the Overcollateralization Increase Amount, if any, for such Payment Date.
"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 the Group 1 Principal Remittance Amount
and the Group 2 Principal Remittance Amount for such Payment Date.
"Proceeding": Any suit in equity, action at law or other judicial or administrative proceeding.
"Prospectus Supplement": That certain Prospectus Supplement dated July 11, 2007, relating to the public offering of
the Notes.
"Purchase Agreement": The Master Mortgage Loan Purchase and Interim Servicing Agreement, dated March 15, 2007,
between the Originator and the Seller.
"Purchase Price": With respect to any Mortgage Loan or REO Property to be purchased by the Seller or the Servicer
pursuant to or as contemplated by Section 2.03 of the Sale and Servicing Agreement, and as confirmed by an Officers' Certificate from
the party purchasing the Mortgage Loan to the Indenture Trustee and the Master Servicer, 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 Servicer, which payment or Advance had as of the date of purchase been
paid pursuant to 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 Servicer through the
end of the 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, Net Liquidation Proceeds and 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 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 3.23 of the Sale and Servicing Agreement and (v) in the case of a Mortgage Loan
required to be purchased pursuant to Section 2.03 of the Sale and Servicing Agreement, expenses reasonably incurred or to be incurred
by the 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. With
respect to the Originator and any Mortgage Loan or REO Property to be purchased pursuant to or as contemplated by Section 2.03 of the
Sale and Servicing Agreement, and as confirmed by an Officer's Certificate to the Indenture Trustee and the Master Servicer, an
amount equal to the amount set forth pursuant to the terms of the Master Agreement, and to the extent that the amount payable
pursuant to the Master Agreement relates to a portion of the Mortgage Loan not conveyed pursuant to the Assignment Agreement (i.e.,
collections in respect of interest and principal due on or before the Cut-off Date), such amount shall be payable by the Originator
to the Assignor in accordance with the Master Agreement and collections of interest accrued prior to the Cut-off Date.
"Qualified Insurer": Any insurance company acceptable to Xxxxxx Xxx.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted for a Deleted Mortgage Loan pursuant to the terms
of the Sale and Servicing Agreement which must, on the date of such substitution, (i) have an outstanding 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
and not more than five percent (5%) less than 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 Interest Rate not less than (and not more than one
percentage point in excess of) the Mortgage Interest Rate of the Deleted Mortgage Loan, (iii) have a Net Mortgage Rate not less than
(and not more than one percentage point in excess of) the Net Mortgage Rate of the Deleted Mortgage Loan, (iv) have a remaining term
to maturity not greater than (and not more than one year less than) that of the Deleted Mortgage Loan, (v) have the same Due Date as
the Due Date on the Deleted Mortgage Loan, (vi) have a Loan-to-Value Ratio, and in the case of a second lien Mortgage Loan, a
Combined Loan-to-Value Ratio as of the date of substitution equal to or lower than the Loan-to-Value Ratio and Combined Loan-to-Value
Ratio of the Deleted Mortgage Loan as of such date, (vii) have a Credit Score for the related Mortgagor not lower than that of the
Mortgagor under the Deleted Mortgage Loan; (viii) conform to each representation and warranty set forth in Subsection 7.02 of the
Purchase Agreement; (ix) have a risk grading determined by the Originator at least equal to the risk grading assigned to the Deleted
Mortgage Loan, (x) have been underwritten pursuant to the same or more restrictive underwriting criteria on the Deleted Mortgage
Loan and (xi) be the same type of mortgage loan (i.e., lien status, fixed or adjustable rate with the same Gross Margin, Periodic
Rate Cap and Index as the Deleted Mortgage Loan, and if an Adjustable Rate Mortgage Loan, the same type (e.g., 3/1, 5/1).
"Rating Agency or Rating Agencies": Xxxxx'x and 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 Servicer.
"Realized Loss": With respect to any Liquidated Mortgage Loan, the amount of loss realized equal to the portion of
the Stated Principal Balance remaining unpaid after application of all Net Liquidation Proceeds in respect of such Mortgage Loan. If
the 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.
"Record Date": With respect to each Payment Date and any Notes that are Book-Entry Notes, the Business Day
immediately preceding such Payment Date. With respect to each Payment Date and 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": Those banks (i) with an established place of business in London, England, (ii) not controlling,
under the control of or under common control with the Originator or the Servicer or any Affiliate thereof and (iii) which have been
designated as such by the Securities Administrator after consultation with the Depositor and the Majority Certificateholder;
provided, however, that if fewer than two of such banks provide a LIBOR rate, then any leading banks selected by the Securities
Administrator which are engaged in transactions in United States dollar deposits in the international Eurocurrency market.
"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.
"Regulation AB": Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such
may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the
adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission and publicly available, or as may be provided by the Commission or its staff from time to time and publicly
available.
"Relevant Servicing Criteria": The Servicing Criteria applicable to the various parties, as set forth on Exhibit I
to the Sale and Servicing Agreement. For clarification purposes, multiple parties can have responsibility for the same Relevant
Servicing Criteria. With respect to a Servicing Function Participant engaged by the Servicer, the Master Servicer, the Securities
Administrator, the Indenture Trustee, and the Custodian, the term "Relevant Servicing Criteria" may refer to a portion of the
Relevant Servicing Criteria applicable to such parties.
"REIT": Real Estate Investment Trust.
"Relief Act": The Servicemembers Civil Relief Act, as amended, or any similar state or local laws providing for
similar relief.
"Relief Act Interest Shortfall": With respect to any Payment Date, for any Mortgage Loan with respect to which there
has been a reduction in the amount of interest collectible thereon for the most recently ended Due Period as a result of the
application of the Relief Act, the amount by which (i) interest collectible on such Mortgage Loan during such Due Period is less than
(ii) one month's interest on the Stated Principal Balance of such Mortgage Loan at the Mortgage Rate for such Mortgage Loan before
giving effect to the application of the Relief Act.
"Remittance Report": A report prepared by the Servicer and delivered to the Master Servicer pursuant to Section 4.01
of the Sale and Servicing Agreement.
"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 Servicer in respect of an REO
Property pursuant to Section 3.23 of the Sale and 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 Sale and Servicing Agreement in respect of the proper operation, management
and maintenance of such REO Property or (ii) payable or reimbursable to the Servicer pursuant to Section 3.23(d) of the Sale and
Servicing Agreement for unpaid Servicing Fees in respect of the related Mortgage Loan and unreimbursed Servicing Advances and
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 Servicer on behalf of the Trust through foreclosure or
deed-in-lieu of foreclosure, as described in Section 3.23 of the Sale and Servicing Agreement.
"Reportable Event": As defined in Section 4.02(a)(ii) of the Sale and Servicing Agreement.
"Request for Release": A release signed by a Servicing Officer, in the form of Exhibit C attached to the Sale and
Servicing Agreement.
"Required Overcollateralization Amount": With respect to any Payment Date, (i) prior to the Stepdown Date, 4.75% of
the aggregate Stated Principal Balance of the Original Mortgage Loans as of the Cut-off Date, (ii) on or after the Stepdown Date
provided a Trigger Event is not in effect, the greater of (1) the lesser of (A) 4.75% of the aggregate Stated Principal Balance of
the Original Mortgage Loans as of the Cut-off Date and (B) 9.50% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period,
to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (2)
the Overcollateralization Floor and (iii) on or after the Stepdown Date if a Trigger Event is in effect, the Required
Overcollateralization Amount for the immediately preceding Payment Date. Notwithstanding the foregoing, on and after any Payment
Date following the reduction of the aggregate Note Balance of the Notes to zero, the Required Overcollateralization Amount shall be
zero.
"Reserve Interest Rate": With respect to any Interest Determination Date, the rate per annum that the Securities
Administrator determines to be either (i) the arithmetic mean (rounded upwards if necessary to the nearest whole multiple of 1/16 of
1%) of the one-month United States dollar lending rates which banks in The City of New York selected by the Sponsor 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 Securities Administrator can determine no such arithmetic mean, in the case of any Interest Determination Date
after the initial Interest Determination Date, the lowest one-month United States dollar lending rate which such New York banks
selected by the Sponsor 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, (iv) an attached, detached or semi-detached one-family dwelling in a planned unit development, none of which is
a co-operative, mobile home (as defined in 42 United States Code, Section 5402(6)) or manufactured home (other than a manufactured
home which is considered to be real property under the laws of state in which such property is located).
"Responsible Officer": When used with respect to the Indenture Trustee, the Owner Trustee, the Master Servicer or
the Securities Administrator, any vice president, any assistant vice president, the Secretary, any assistant secretary, the
Treasurer, any assistant treasurer, the Cashier, any assistant cashier, any trust officer or assistant trust officer, the Controller
and any assistant controller, in each case, with direct responsibility for the transactions contemplated hereby 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.
"Reuters Screen LIBOR01 Page": The display page currently so designated on the Reuters Monitor Money Rates Service
(or such other page as may replace that page on that service for the purpose of displaying comparable rates or prices).
"S&P": Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc., or its successor in
interest.
"Sale and Servicing Agreement": The Sale and Servicing Agreement dated as of July 12, 2007, among the Depositor, the
Servicer, the Master Servicer, the Securities Administrator, the Issuing Entity and the Indenture Trustee.
"Xxxxxxxx-Xxxxx Act": The Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations of the Commission promulgated
thereunder (including any published interpretations thereof by the Commission's staff).
"Securities Act": The Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
"Securities Administrator": Xxxxx Fargo Bank, N.A., a national banking association or any successor thereto or any
successor hereunder.
"Seller": NIC XX XX LLC, and its successors and assigns, in its capacity as seller under the Assignment and
Recognition Agreement.
"Senior Credit Enhancement Percentage": For any Payment Date, the percentage equivalent of a fraction, the numerator
of which is the sum of (x) the aggregate Note Balance of the Subordinate Notes and (y) the Overcollateralization Amount, in each case
after taking into account payments of the Principal Distribution Amount to the Holders of 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,
calculated as of the last day of the related Due Period and after giving effect to unscheduled payments of principal received during
the related Prepayment Period.
"Senior Notes": The Class A Notes.
"Senior Principal Distribution Amount": With respect to any Payment Date, the sum of the Group 1 Senior Principal
Distribution Amount and the Group 2 Senior Principal Distribution Amount for such Payment Date.
"Servicer": Nationstar Mortgage LLC, or any successor servicer appointed as provided in the Sale and Servicing
Agreement, in its capacity as Servicer under the Sale and Servicing Agreement.
"Servicer Event of Termination": One or more of the events described in Section 6.01 of the Sale and Servicing
Agreement.
"Servicer Remittance Date": With respect to any Payment Date, the 18th day of the calendar month in which the
Payment Date occurs or, if such 18th day is not a Business Day, the Business Day preceding such 18th day.
"Servicing Advance Reimbursement Amount": As defined in Section 3.29 of the Sale and Servicing Agreement.
"Servicing Advances": The reasonable "out-of-pocket" costs and expenses incurred by the Servicer in connection with
a default, delinquency or other unanticipated event by the Servicer in the performance of its servicing obligations, including, but
not limited to, the cost 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 Sale and Servicing Agreement. The Servicer
shall not be required to make any Nonrecoverable Advances.
"Servicing Fee": With respect to each Mortgage Loan and for any calendar month, an amount equal to the Servicing Fee
Rate accrued for such month (or in the event of any Principal Prepayment in full made by the Mortgagor during such month, the
Servicing Fee Rate accrued for the number of days covered by the payment of interest accompanying the Principal Prepayment in full),
on the same principal amount on which interest on such Mortgage Loan accrues for such month. 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 Function Participant": Any Sub-Servicer, Subcontractor or any other Person, other than the Servicer, the
Master Servicer, the Indenture Trustee, the Custodian and the Securities Administrator, that is determined to be "participating in
the servicing function" within the meaning of Item 1122 of Regulation AB, without regard to any threshold referenced therein.
"Servicing Officer": Any officer of the 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 Servicer to the
Indenture Trustee and the Depositor on the Closing Date, as such list may from time to time be amended.
"Servicing Standard": Shall mean the standards set forth in Section 3.01 of the Sale and Servicing Agreement.
"Servicing Transfer Costs": Shall mean all reasonable costs and expenses incurred by the Master Servicer in
connection with the transfer of servicing from a predecessor servicer, including, without limitation, any reasonable costs or
expenses associated with the complete transfer of all servicing data and the completion, correction or manipulation of such servicing
data as may be required by the Master Servicer to correct any errors or insufficiencies in the servicing data or otherwise to enable
the Master Servicer (or any successor servicer appointed pursuant to Section 6.02 of the Sale and Servicing Agreement) to service the
Mortgage Loans properly and effectively and any fees associated with MERS.
"Significance Estimate": With respect to any Payment Date, and in accordance with Item 1115 of Regulation AB, shall
be an amount determined based on the reasonable goodfaith estimate by the Depositor or its affiliate of the aggregate Maximum Probable
Exposure of the outstanding Notes to the Interest Rate Swap Agreement and the Interest Rate Cap Agreement.
"Significance Percentage": With respect to any Payment Date, and in accordance with Item 1115 of Regulation AB, shall
be a percentage equal to the Significance Estimate divided by the aggregate outstanding Principal Balance of the Notes, prior to the
distribution of the Principal Distribution Amount on such Payment Date.
"60+ Delinquency Percentage (Rolling Three Month)": With respect to any Payment Date, the average of the percentage
equivalents of the fractions determined for each of the three immediately preceding Due Periods, the numerator of each of which is
equal to the Delinquency Amount for such Due Period, and the denominator of each of which is the aggregate Stated Principal Balance
of the Mortgage Loans as of the end of such Due Period.
"Sponsor": Newcastle Investment Corp., a Maryland corporation.
"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 outstanding 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 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 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 Due 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 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 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 §§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 2010 and (b) the first Payment
Date on which the Senior 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 Principal Distribution Amount on the Notes then entitled to payments
of principal on such Payment Date) is equal to or greater than 53.00%.
"Subordinate 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-A Note, Class M-7-B, Class M-8-A Note, Class M-8-B, Class M-9 Note or Class M-10 Note.
"Sub-Servicer": Any Person with which the Servicer has entered into a Sub-Servicing Agreement and which meets the
qualifications of a Sub-Servicer pursuant to Section 3.02 of the Sale and Servicing Agreement.
"Sub-Servicing Account": An account established by a Sub-Servicer which meets the requirements set forth in Section
3.08 of the Sale and Servicing Agreement and is otherwise acceptable to the Servicer.
"Sub-Servicing Agreement": The written contract between the Servicer and a Sub-Servicer relating to servicing and
administration of certain Mortgage Loans as provided in Section 3.02 of the Sale and Servicing Agreement.
"Subsequent Recoveries": As of any Payment Date, unanticipated amounts received by the Servicer (net of any related
expenses permitted to be reimbursed pursuant to Section 3.11 of the Sale and 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 Adjustment": As defined in Section 2.03(c) of the Sale and Servicing Agreement.
"Successor Servicer": As defined in Section 6.02 of the Sale and Servicing Agreement.
"Successor Master Servicer": As defined in Section 6.06 of the Sale and Servicing Agreement.
"Swap Account": The account or accounts created and maintained pursuant to Section 4.03 of the Sale and Servicing
Agreement. The Swap Account must be an Eligible Account.
"Swap Credit Support Annex": The credit support annex, dated as of July 12, 2007, between the Swap Provider and the
Trust, which is annexed to and forms part of the Interest Rate Swap Agreement.
"Swap Expense Fee Rate": With respect to each Payment Date, a per annum rate, equal to the product of (x) the sum
of (i) any Net Swap Payment owed to the Swap Provider for that Payment Date and (ii) any Swap Termination Payment for that Payment
Date (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) payable by the Securities Administrator
on behalf of the trust, and (y) 12 divided by the aggregate Stated Principal Balance of the Mortgage Loans as of the first day of the
related Due Period, adjusted to reflect unscheduled payments of principal received thereon after such date and included in the
Principal Distribution Amount on the immediately preceding Payment Date.
"Swap LIBOR": A per annum rate equal to the floating rate payable by the Swap Provider under the Interest Rate Swap
Agreement.
"Swap Provider": The swap provider under the Interest Rate Swap Agreement. Initially, the Swap Provider shall be
Bear Xxxxxxx Financial Products Inc.
"Swap Provider Trigger Event": A Swap Termination Payment that is triggered upon: (i) an Event of Default under the
Interest Rate Swap Agreement with respect to which the Swap Provider is a Defaulting Party (as defined in the Interest Rate Swap
Agreement), (ii) a Termination Event (as defined in the Interest Rate Swap Agreement) with respect to which the Swap Provider is the
sole Affected Party (as defined in the Interest Rate Swap Agreement) or (iii) an Additional Termination Event (as defined in the
Interest Rate Swap Agreement) with respect to which the Swap Provider is the sole Affected Party.
"Swap Termination Payment": The payment due to either party under the Interest Rate Swap Agreement upon the early
termination of the Interest Rate Swap Agreement.
"Trigger Event": A Trigger Event is in effect with respect to any Payment Date if a Delinquency Event or a
Cumulative Loss Trigger Event exists.
"Trust": The Newcastle Mortgage Securities Trust 2007-1 to be created pursuant to the Trust Agreement.
"Trust Agreement": The Trust Agreement, dated July 11, 2007, among the Owner Trustee, the Sponsor and the Depositor
together with the Amended and Restated Trust Agreement dated as of July 12, 2007, among the Owner Trustee, the Depositor and the
Securities Administrator, 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.
"Underwriter": Bear Xxxxxxx & Co. Inc., or its 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 Sale and
Servicing Agreement.
"Value": With respect to any Mortgaged Property, the lesser of (i) 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 a qualified appraiser, duly appointed
by the Originator, who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof, and
whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfied
the requirements of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was originated, and (ii) the purchase price paid for the related Mortgaged
Property by the Mortgagor with the proceeds of the Mortgage Loan, provided, however, in the case of a Refinanced Mortgage Loan, such
value of the Mortgaged Property is based solely upon 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 a qualified appraiser, duly appointed by the
Originator, who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfied the
requirements of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations promulgated thereunder.
