NEW CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1 Issuer and DEUTSCHE BANK NATIONAL TRUST COMPANY Indenture Trustee INDENTURE Dated as of June 22, 2006 ASSET-BACKED NOTES, SERIES 2006-ALT1
Issuer
and
DEUTSCHE
BANK NATIONAL TRUST COMPANY
Indenture
Trustee
_____________________________
Dated
as
of June 22, 2006
_____________________________
ASSET-BACKED
NOTES, SERIES 2006-ALT1
________________
TABLE
OF CONTENTS
|
ARTICLE
I
|
|
|
DEFINITIONS
|
|
|
Section
1.01.
|
Definitions
|
|
Section
1.02.
|
Incorporation
by Reference of Trust Indenture Act
|
|
Section
1.03.
|
Rules
of Construction
|
|
ARTICLE
II
|
|
|
ORIGINAL
ISSUANCE OF THE NOTES
|
|
|
Section
2.01.
|
Form
|
|
Section
2.02.
|
Execution,
Authentication and Delivery
|
|
Section
2.03.
|
Acceptance
of Mortgage Loans by Indenture Trustee.
|
|
ARTICLE
III
|
|
|
COVENANTS
|
|
|
Section
3.01.
|
Collection
of Payments with respect to the Mortgage Loans
|
|
Section
3.02.
|
Maintenance
of Office or Agency
|
|
Section
3.03.
|
Money
for Payments To Be Held in Trust; Paying Agent
|
|
Section
3.04.
|
Existence
|
|
Section
3.05.
|
Payment
of Principal and Interest.
|
|
Section
3.06.
|
Protection
of Trust Estate.
|
|
Section
3.07.
|
Opinions
as to Trust Estate.
|
|
Section
3.08.
|
Performance
of Obligations.
|
|
Section
3.09.
|
Negative
Covenants
|
|
Section
3.10.
|
[Reserved.]
|
|
Section
3.11.
|
[Reserved.]
|
|
Section
3.12.
|
Representations
and Warranties Concerning the Mortgage Loans
|
|
Section
3.13.
|
Amendments
to Servicing Agreement
|
|
Section
3.14.
|
Servicer
as Agent and Bailee of the Indenture Trustee
|
|
Section
3.15.
|
Investment
Company Act
|
|
Section
3.16.
|
Issuer
May Consolidate, etc.
|
|
Section
3.17.
|
Successor
or Transferee.
|
|
Section
3.18.
|
No
Other Business
|
|
Section
3.19.
|
No
Borrowing
|
|
Section
3.20.
|
Guarantees,
Loans, Advances and Other Liabilities
|
|
Section
3.21.
|
Capital
Expenditures
|
|
Section
3.22.
|
Determination
of Note Rate
|
|
Section
3.23.
|
Restricted
Payments
|
|
Section
3.24.
|
Notice
of Events of Default
|
|
Section
3.25.
|
Further
Instruments and Acts
|
|
Section
3.26.
|
Statements
to Noteholders
|
|
Section
3.27.
|
[Reserved].
|
|
Section
3.28.
|
Certain
Representations Regarding the Trust Estate.
|
|
Section
3.29.
|
Allocation
of Realized Losses.
|
|
ARTICLE
IV
|
|
|
THE
NOTES; SATISFACTION AND DISCHARGE OF INDENTURE
|
|
|
Section
4.01.
|
The
Notes
|
|
Section
4.02.
|
Registration
of and Limitations on Transfer and Exchange of Notes; Appointment
of Note
Registrar and Certificate.
|
|
Section
4.03.
|
Mutilated,
Destroyed, Lost or Stolen Notes
|
|
Section
4.04.
|
Persons
Deemed Owners
|
|
Section
4.05.
|
Cancellation
|
|
Section
4.06.
|
Book-Entry
Notes
|
|
Section
4.07.
|
Notices
to Depository
|
|
Section
4.08.
|
Definitive
Notes
|
|
Section
4.09.
|
Tax
Treatment
|
|
Section
4.10.
|
Satisfaction
and Discharge of Indenture
|
|
Section
4.11.
|
Application
of Trust Money
|
|
Section
4.12.
|
Derivative
Contracts for Benefit of the Certificates
|
|
Section
4.13.
|
Repayment
of Monies Held by Paying Agent
|
|
Section
4.14.
|
Temporary
Notes
|
|
Section
4.15.
|
Representation
Regarding ERISA
|
|
ARTICLE
V
|
|
|
DEFAULT
AND REMEDIES
|
|
|
Section
5.01.
|
Events
of Default
|
|
Section
5.02.
|
Acceleration
of Maturity; Rescission and Annulment
|
|
Section
5.03.
|
Collection
of Indebtedness and Suits for Enforcement by Indenture
Trustee.
|
|
Section
5.04.
|
Remedies;
Priorities.
|
|
Section
5.05.
|
Optional
Preservation of the Trust Estate
|
|
Section
5.06.
|
Limitation
of Suits
|
|
Section
5.07.
|
Unconditional
Rights of Noteholders To Receive Principal and
Interest.
|
|
Section
5.08.
|
Restoration
of Rights and Remedies
|
|
Section
5.09.
|
Rights
and Remedies Cumulative
|
|
Section
5.10.
|
Delay
or Omission Not a Waiver
|
|
Section
5.11.
|
Control
By Noteholders
|
|
Section
5.12.
|
Waiver
of Past Defaults
|
|
Section
5.13.
|
Undertaking
for Costs
|
|
Section
5.14.
|
Waiver
of Stay or Extension Laws
|
|
Section
5.15.
|
Sale
of Trust Estate.
|
|
Section
5.16.
|
Action
on Notes
|
|
Section
5.17.
|
Performance
and Enforcement of Certain Obligations.
|
|
ARTICLE
VI
|
|
|
THE
INDENTURE TRUSTEE
|
|
|
Section
6.01.
|
Duties
of Indenture Trustee.
|
|
Section
6.02.
|
Rights
of Indenture Trustee.
|
|
Section
6.03.
|
Individual
Rights of Indenture Trustee
|
|
Section
6.04.
|
Indenture
Trustee’s Disclaimer
|
|
Section
6.05.
|
Notice
of Event of Default
|
|
Section
6.06.
|
Reports
by Indenture Trustee to Holders and Tax Administration.
|
|
Section
6.07.
|
Compensation
and Indemnity
|
|
Section
6.08.
|
Replacement
of Indenture Trustee
|
|
Section
6.09.
|
Successor
Indenture Trustee by Xxxxxx
|
|
Section
6.10.
|
Appointment
of Co-Indenture Trustee or Separate Indenture Trustee.
|
|
Section
6.11.
|
Eligibility;
Disqualification
|
|
Section
6.12.
|
Preferential
Collection of Claims Against Issuer
|
|
Section
6.13.
|
Representations
and Warranties
|
|
Section
6.14.
|
Directions
to Indenture Trustee
|
|
Section
6.15.
|
The
Agents
|
|
ARTICLE
VII
|
|
|
NOTEHOLDERS’
LISTS AND REPORTS
|
|
|
Section
7.01.
|
Issuer
To Furnish Indenture Trustee Names and Addresses of
Noteholders.
|
|
Section
7.02.
|
Preservation
of Information; Communications to Noteholders.
|
|
Section
7.03.
|
Reports
of Issuer.
|
|
Section
7.04.
|
Reports
by Indenture Trustee
|
|
Section
7.05.
|
Statements
to Noteholders.
|
|
ARTICLE
VIII
|
|
|
ACCOUNTS,
DISBURSEMENTS AND RELEASES
|
|
|
Section
8.01.
|
Collection
of Money
|
|
Section
8.02.
|
Trust
Accounts.
|
|
Section
8.03.
|
Officer’s
Certificate
|
|
Section
8.04.
|
Termination
Upon Distribution to Noteholders
|
|
Section
8.05.
|
Release
of Trust Estate.
|
|
Section
8.06.
|
Surrender
of Notes Upon Final Payment
|
|
Section
8.07.
|
Optional
Redemption of the Notes.
|
|
ARTICLE
IX
|
|
|
SUPPLEMENTAL
INDENTURES
|
|
|
Section
9.01.
|
Supplemental
Indentures Without Consent of Noteholders.
|
|
Section
9.02.
|
Supplemental
Indentures With Consent of Noteholders
|
|
Section
9.03.
|
Execution
of Supplemental Indentures
|
|
Section
9.04.
|
Effect
of Supplemental Indenture
|
|
Section
9.05.
|
Conformity
with Trust Indenture Act
|
|
Section
9.06.
|
Reference
in Notes to Supplemental Indentures
|
|
ARTICLE
X
|
|
|
MISCELLANEOUS
|
|
|
Section
10.01.
|
Compliance
Certificates and Opinions, etc.
|
|
Section
10.02.
|
Form
of Documents Delivered to Indenture Trustee
|
|
Section
10.03.
|
Acts
of Noteholders.
|
|
Section
10.04.
|
Notices
etc., to Indenture Trustee Issuer and Rating Agencies.
|
|
Section
10.05.
|
Notices
to Noteholders; Waiver
|
|
Section
10.06.
|
Conflict
with Trust Indenture Act
|
|
Section
10.07.
|
Effect
of Headings
|
|
Section
10.08.
|
Successors
and Assigns
|
|
Section
10.09.
|
Separability
|
|
Section
10.10.
|
[Reserved.]
|
|
Section
10.11.
|
Legal
Holidays
|
|
Section
10.12.
|
GOVERNING
LAW
|
|
Section
10.13.
|
Counterparts
|
|
Section
10.14.
|
Recording
of Indenture
|
|
Section
10.15.
|
Issuer
Obligation
|
|
Section
10.16.
|
No
Petition
|
|
Section
10.17.
|
Inspection
|
|
Section
10.18.
|
No
Recourse to Owner Trustee
|
|
Section
10.19.
|
Proofs
of Claim
|
EXHIBITS
|
Exhibit
A-1
|
Form
of Class AV-1 Note
|
|
Exhibit
A-2
|
Form
of Class AF-2 Note
|
|
Exhibit
A-3
|
Form
of Class AF-3 Note
|
|
Exhibit
A-4
|
Form
of Class AF-4 Note
|
|
Exhibit
A-5
|
Form
of Class AF-5 Note
|
|
Exhibit
A-6
|
Form
of Class AF-6 Note
|
|
Exhibit
A-7
|
Form
of Class M-1 Note
|
|
Exhibit
A-8
|
Form
of Class M-2 Note
|
|
Exhibit
A-9
|
Form
of Class M-3 Note
|
|
Exhibit
A-10
|
Form
of Class M-4 Note
|
|
Exhibit
A-11
|
Form
of Class M-5 Note
|
|
Exhibit
A-12
|
Form
of Class M-6 Note
|
|
Exhibit
B
|
Mortgage
Loan Schedule
|
|
Exhibit
C-1
|
Form
of Indenture Trustee’s Initial Certification
|
|
Exhibit
C-2
|
Form
of Indenture Trustee’s Final Certification
|
|
Exhibit
D
|
Reserved
|
|
Appendix
A
|
Definitions
|
This
Indenture, dated as of June 22, 2006, is entered into between New Century
Alternative Mortgage Loan Trust 2006-ALT1, a Delaware statutory trust, as Issuer
(the “Issuer”), and Deutsche Bank National Trust Company, a national banking
association, as Indenture Trustee (the “Indenture Trustee”).
WITNESSETH
THAT:
Each
party hereto agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Issuer’s Asset-Backed Notes,
Series 2006-ALT1 (the “Notes”).
GRANTING
CLAUSE
The
Issuer hereby Grants to the Indenture Trustee at the Closing Date, as trustee
for the benefit of the Holders of the Notes, all of the Issuer’s right, title
and interest in and to whether now existing or hereafter created by (a) the
Mortgage Loans, Qualified Substitute Mortgage Loans and the proceeds thereof
and
all rights under the Related Documents; (b) all funds on deposit from time
to
time in the Collection Account allocable to the Mortgage Loans excluding any
investment income from such funds; (c) all funds on deposit from time to time
in
the Payment Account and in all proceeds thereof; (d) all rights under (i) the
Mortgage Loan Purchase Agreement as assigned to the Issuer, (ii) the Servicing
Agreement and (iii) any title, hazard and primary insurance policies with
respect to the Mortgaged Properties; (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 Issuer (collectively, the “Trust
Estate” or the “Collateral”).
The
foregoing Grant is made in trust to secure the payment of principal of and
interest on, and any other amounts owing in respect of, the Notes, equally
and
ratably without prejudice, priority or distinction, and to secure compliance
with the provisions of this Indenture, all as provided in this
Indenture.
The
Indenture Trustee, as trustee on behalf of the Holders of the Notes,
acknowledges such Xxxxx, accepts the trust under this Indenture in accordance
with the provisions hereof and agrees to perform its duties as Indenture Trustee
as required herein.
ARTICLE
I
DEFINITIONS
Section
1.01. Definitions.
For all
purposes of this Indenture, except as otherwise expressly provided herein or
unless the context otherwise requires, capitalized terms not otherwise defined
herein shall have the meanings assigned to such terms in the Definitions
attached hereto as Appendix A which is incorporated by reference herein. All
other capitalized terms used herein shall have the meanings specified
herein.
Section
1.02. Incorporation
by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture Act (the
“TIA”), the provision is incorporated by reference in and made a part of this
Indenture. The following TIA terms used in this Indenture have the following
meanings:
“Commission”
means the Securities and Exchange Commission.
“indenture
securities” means the Notes.
“indenture
security holder” means a Noteholder.
“indenture
to be qualified” means this Indenture.
“indenture
trustee” or “institutional trustee” means the Indenture Trustee.
“obligor”
on the indenture securities means the Issuer and any other obligor on the
indenture securities.
All
other
TIA terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by Commission rules and have the
meanings assigned to them by such definitions.
Section
1.03. Rules
of Construction.
Unless
the context otherwise requires:
(i) a
term
has the meaning assigned to it;
(ii) an
accounting term not otherwise defined has the meaning assigned to it in
accordance with generally accepted accounting principles as in effect from
time
to time;
(iii) “or”
is
not exclusive;
(iv) “including”
means including without limitation;
(v) words
in
the singular include the plural and words in the plural include the singular;
and
(vi) any
agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented
and
includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein; references to a Person
are also to its permitted successors and assigns.
ARTICLE
II
ORIGINAL
ISSUANCE OF THE NOTES
Section
2.01. Form.
The
Class A Notes and the Mezzanine Notes, together with the Indenture Trustee’s
certificate of authentication, shall be in substantially the form set forth
in
Exhibits A-1 through A-12 to this Indenture, respectively, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture.
The
Notes
shall be typewritten, printed, lithographed or engraved or produced by any
combination of these methods (with or without steel engraved
borders).
The
terms
of the Notes set forth in Exhibits A-1 through A-12 to this Indenture are part
of the terms of this Indenture.
Section
2.02. Execution,
Authentication and Delivery. The
Notes shall be executed on behalf of the Issuer by any of its Authorized
Officers. The signature of any such Authorized Officer on the Notes may be
manual or facsimile.
Notes
bearing the manual or facsimile signature of individuals who were at any time
Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Notes or did not hold such offices at the
date of such Notes.
The
Indenture Trustee shall upon Issuer Request authenticate and deliver the Class
A
Notes and the Mezzanine Notes for original issue in an aggregate initial
principal amount of $511,373,000. The
Classes of Notes shall have the following Initial Note Balances:
|
Class
|
Initial
Note Balance
|
||
|
AV-1
|
$
|
176,827,000
|
|
|
AF-2
|
$
|
49,143,000
|
|
|
AF-3
|
$
|
74,436,000
|
|
|
AF-4
|
$
|
77,025,000
|
|
|
AF-5
|
$
|
64,489,000
|
|
|
AF-6
|
$
|
49,102,000
|
|
|
M-1
|
$
|
7,301,000
|
|
|
M-2
|
$
|
2,610,000
|
|
|
M-3
|
$
|
2,610,000
|
|
|
M-4
|
$
|
2,610,000
|
|
|
M-5
|
$
|
2,610,000
|
|
|
M-6
|
$
|
2,610,000
|
|
Each
of
the Notes shall be dated the date of its authentication. The Notes shall be
issuable as registered Notes and the Notes shall be issuable in the minimum
initial Note Balances of $25,000 and in integral multiples of $1 in excess
thereof.
No
Note
shall be entitled to any benefit under this Indenture or be valid or obligatory
for any purpose, unless there appears on such Note a certificate of
authentication substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized signatories,
and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered
hereunder.
Section
2.03. Acceptance
of Mortgage Loans by Indenture Trustee.
(a) The
Indenture Trustee acknowledges receipt of, subject to the exceptions it notes
pursuant to the procedures described below, the documents (or certified copies
thereof) referred to in Section 2.1(b) of the Mortgage Loan Purchase Agreement,
and declares that it holds and will continue to hold those documents and any
amendments, replacements or supplements thereto and all other assets of the
Trust Estate as Indenture Trustee in trust for the use and benefit of all
present and future Holders of the Notes.
The
parties hereto understand and agree that it is not intended that any Mortgage
Loan be included in the Trust that is a “High-Cost Home Loan” as defined by the
Homeownership and Equity Protection Act of 1994 or any other applicable federal,
state and local predatory or abusive lending laws.
The
Indenture Trustee agrees, for the benefit of the Noteholders, to review each
Mortgage File on or before the Closing Date and to certify in substantially
the
form attached hereto as Exhibit C-1 (the “Initial Certification”) that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan specifically identified in the exception report annexed thereto as not
being covered by such certification), (i) all documents constituting part of
such Mortgage File (other than such documents described in Section 2.1(b)(v)
of
the Mortgage Loan Purchase Agreement) required to be delivered to it pursuant
to
the Mortgage Loan Purchase Agreement are in its possession, (ii) such documents
have been reviewed by it and appear regular on their face and relate to such
Mortgage Loan and (iii) based on its examination and only as to the foregoing,
the information set forth in the Mortgage Loan Schedule that corresponds to
items (i), (ii), (x), (xi) and (xiv) of the definition of “Mortgage Loan
Schedule” accurately reflects information set forth in the Mortgage File. It is
herein acknowledged that, in conducting such review, the Indenture Trustee
was
under no duty or obligation (i) to inspect, review or examine any such
documents, instruments, certificates or other papers to determine whether they
are genuine, enforceable, or appropriate for the represented purpose or whether
they have actually been recorded or that they are other than what they purport
to be on their face or (ii) to determine whether any Mortgage File should
include any of the documents specified in clause (v) of Section 2.1(b) of the
Mortgage Loan Purchase Agreement. After delivery of the Initial Certification,
the Indenture Trustee will send a monthly report noting any Mortgage Files
that
are not complete to the Servicer. The Indenture Trustee shall send such reports
until all Mortgage Files are complete.
Prior
to
the first anniversary date of this Indenture the Indenture Trustee shall deliver
to the Depositor and the Servicer a final certification in the form annexed
hereto as Exhibit C-2 evidencing the completeness of the Mortgage Files, with
any applicable exceptions noted thereon, and the Servicer shall forward a copy
thereof to any Sub-Servicer.
If
in the
process of reviewing the Mortgage Files and making or preparing, as the case
may
be, the certifications referred to above, the Indenture Trustee finds any
document or documents constituting a part of a Mortgage File to be missing
or
defective in any material respect, at the conclusion of its review the Indenture
Trustee shall so notify the Depositor and the Servicer. In addition, upon the
discovery by the Indenture Trustee of a breach of any of the representations
and
warranties made by NC Capital in the Mortgage Loan Purchase Agreement in respect
of any Mortgage Loan which materially adversely affects such Mortgage Loan
or
the interests of the related Noteholders in such Mortgage Loan, the Indenture
Trustee or any other party discovering such breach shall give prompt written
notice to the Depositor, the Servicer and NC Capital.
(b) Upon
deposit of the Purchase Price in the Payment Account, the Indenture Trustee
shall release and deliver to NC Capital (at the expense of the Servicer) the
related Mortgage File and shall execute and deliver all instruments of transfer
or assignment, without recourse, furnished to it by NC Capital as are necessary
to vest in NC Capital title to and rights under the related Mortgage Loan.
Such
purchase shall be deemed to have occurred on the date on which certification
of
the deposit of the Purchase Price in the Payment Account was received by the
Indenture Trustee.
ARTICLE
III
COVENANTS
Section
3.01. Collection
of Payments with respect to the Mortgage Loans.
The
Indenture Trustee shall establish and maintain an Eligible Account (the “Payment
Account”) in which the Indenture Trustee shall deposit, on the same day as it is
received from the Servicer, each remittance received by the Indenture Trustee
with respect to the Mortgage Loans. The Indenture Trustee shall make all
payments of principal of and interest on the Notes, subject to Section 3.03
as
provided in Section 3.05 herein from monies on deposit in the Payment
Account.
Section
3.02. Maintenance
of Office or Agency.
The
Issuer will maintain an office or agency where, subject to satisfaction of
conditions set forth herein, Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. If at any time the Issuer shall fail to maintain any such office
or
agency or shall fail to furnish the Indenture Trustee with the address thereof,
such surrenders may be made at the office of the Indenture Trustee’s agent
located at DB Services Tennessee, 000 Xxxxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx
00000-0000, Attention: Transfer Unit, and notices and demands may be made or
served at the Corporate Trust Office.
Section
3.03. Money
for Payments To Be Held in Trust; Paying Agent.
As
provided in Section 3.01, all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Payment Account
pursuant to Section 3.01 shall be made on behalf of the Issuer by the Indenture
Trustee or by the Paying Agent, and no amounts so withdrawn from the Payment
Account for payments of Notes shall be paid over to the Issuer except as
provided in this Section 3.03. The Issuer hereby appoints the Indenture Trustee
as its Paying Agent.
The
Issuer will cause each Paying Agent other than the Indenture Trustee to execute
and deliver to the Indenture Trustee an instrument in which such Paying Agent
shall agree with the Indenture Trustee (and if the Indenture Trustee acts as
Paying Agent it hereby so agrees), subject to the provisions of this Section
3.03, that such Paying Agent will:
(i) hold
all
sums held by it for the payment of amounts due with respect to the Notes in
trust for the benefit of the Persons entitled thereto until such sums shall
be
paid to such Persons or otherwise disposed of as herein provided and pay such
sums to such Persons as herein provided;
(ii) give
the
Indenture Trustee notice of any default by the Issuer of which it has actual
knowledge in the making of any payment required to be made with respect to
the
Notes;
(iii) at
any
time during the continuance of any such default, upon the written request of
the
Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held
in
trust by such Paying Agent;
(iv) immediately
resign as Paying Agent and forthwith pay to the Indenture Trustee all sums
held
by it in trust for the payment of Notes if at any time it ceases to meet the
standards required to be met by a Paying Agent at the time of its
appointment;
(v) comply
with all requirements of the Code with respect to the withholding from any
payments made by it on any Notes of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting requirements in connection
therewith; and
(vi) not
commence a bankruptcy proceeding against the Issuer in connection with this
Indenture.
The
Issuer may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, by Issuer Request direct
any Paying Agent to pay to the Indenture Trustee all sums held in trust by
such
Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts
as those upon which the sums were held by such Paying Agent; and upon such
payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall
be
released from all further liability with respect to such money.
Subject
to applicable laws with respect to escheat of funds, any money held by the
Indenture Trustee or any Paying Agent in trust for the payment of any amount
due
with respect to any Note and remaining unclaimed for one year after such amount
has become due and payable shall be discharged from such trust and be paid
to
the Issuer on Issuer Request; and the Holder of such Note shall thereafter,
as
an unsecured general creditor, look only to the Issuer for payment thereof
(but
only to the extent of the amounts so paid to the Issuer), and all liability
of
the Indenture Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; provided,
however,
that the
Indenture Trustee or such Paying Agent, before being required to make any such
repayment, shall at the expense and direction of the Issuer cause to be
published once, in an Authorized Newspaper published in the English language,
notice that such money remains unclaimed and that, after a date specified
therein which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the Issuer.
The Indenture Trustee may also adopt and employ, at the expense and direction
of
the Issuer, any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment to Holders
whose Notes have been called but have not been surrendered for redemption or
whose right to or interest in monies due and payable but not claimed is
determinable from the records of the Indenture Trustee or of any Paying Agent,
at the last address of record for each such Holder).
Section
3.04. Existence.
The
Issuer will keep in full effect its existence, rights and franchises as a
statutory trust under the laws of the State of Delaware (unless it becomes,
or
any successor Issuer hereunder is or becomes, organized under the laws of any
other state or of the United States of America, in which case the Issuer will
keep in full effect its existence, rights and franchises under the laws of
such
other jurisdiction) and will obtain and preserve its qualification to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Notes, the Mortgage Loans and each other instrument or agreement included in
the
Trust Estate.
Section
3.05. Payment
of Principal and Interest.
(a) On
each
Payment Date from amounts on deposit in the Payment Account in accordance with
Section 8.02 hereof, the Indenture Trustee shall pay to the Persons specified
below, to the extent provided therein, the Available Payment Amount for such
Payment Date.
(b) On
each
Payment Date, the Indenture Trustee shall withdraw from the Payment Account
an
amount equal to the Interest Remittance Amount and pay to the Noteholders the
following amounts, in the following order of priority:
(i) concurrently,
to the Holders of each Class of Class A Notes, on a pro
rata basis
based on the entitlement of each such Class, an amount equal to the Senior
Interest Payment Amount allocable to each such Class of Notes; and
(ii) sequentially,
to the Holders of the Class M-1 Notes, the Class M-2 Notes, the Class M-3 Notes,
the Class M-4 Notes, the Class M-5 Notes and the Class M-6 Notes in that order,
in an amount equal to the Interest Payment Amount allocable to each such Class
of Notes.
(c) (I)
On
each Payment Date (a) prior to the Stepdown Date or (b) on which a Trigger
Event
is in effect, the Principal Payment Amount shall be paid in the following order
of priority:
(i) to
the
Holders of the Classes of Class A Notes (allocated among the Classes of Class
A
Notes in the priority described below), until the Note Balances thereof have
been reduced to zero; and
(ii) sequentially,
to the Holders of the Class M-1 Notes, the Class M-2 Notes, the Class M-3 Notes,
the Class M-4 Notes, the Class M-5 Notes and the Class M-6 Notes in that order,
until the respective Note Balance of each such Class has been reduced to
zero.
(II) On
each
Payment Date (a) on or after the Stepdown Date and (b) on which a Trigger Event
is not in effect, the Principal Payment Amount shall be paid in the following
order of priority;
(i) to
the
Holders of the Classes of Class A Notes (allocated among the Classes of Class
A
Notes in the priority described below), the Senior Principal Payment Amount,
until the Note Balances thereof have been reduced to zero;
(ii) to
the
holders of the Class M-1 Notes, the Class M-1 Principal Payment Amount until
the
Note Balance thereof has been reduced to zero;
(iii) to
the
holders of the Class M-2 Notes, the Class M-2 Principal Payment Amount until
the
Note Balance thereof has been reduced to zero;
(iv) to
the
holders of the Class M-3 Notes, the Class M-3 Principal Payment Amount until
the
Note Balance thereof has been reduced to zero;
(v) to
the
holders of the Class M-4 Notes, the Class M-4 Principal Payment Amount until
the
Note Balance thereof has been reduced to zero;
(vi) to
the
holders of the Class M-5 Notes, the Class M-5 Principal Payment Amount until
the
Note Balance thereof has been reduced to zero; and
(vii) to
the
holders of the Class M-6 Notes, the Class M-6 Principal Payment Amount until
the
Note Balance thereof has been reduced to zero.
With
respect to the Class A Notes, all principal payments will be paid sequentially,
first, to the Class AF-6 Notes, the Lockout Payment Percentage of such principal
payments, until the Note Balance of the Class AF-6 Notes has been reduced to
zero; second, to the Class AV-1 Notes, until the Note Balance of the Class
AV-1
Notes has been reduced to zero; third, to the Class AF-2 Notes, until the Note
Balance of the Class AF-2 Notes has been reduced to zero; fourth, to the Class
AF-3 Notes, until the Note Balance of the Class AF-3 Notes has been reduced
to
zero; fifth, to the Class AF-4 Notes, until the Note Balance of the Class AF-4
Notes has been reduced to zero; sixth, to the Class AF-5 Notes, until the Note
Balance of the Class AF-5 Notes has been reduced to zero and seventh, to the
Class AF-6 Notes, until the Note Balance of the Class AF-6 Notes has been
reduced to zero; provided, however, on any Payment Date on which the aggregate
Note Balance of the Mezzanine Notes and the Overcollateralization Amount has
been reduced to zero, principal payments will be paid, concurrently, to the
Class A Notes, on a pro
rata
basis
based on the Note Balance of each such Class, until their respective Note
Balances have been reduced to zero.
(d) On
each
Payment Date, the Net Monthly Excess Cashflow shall be paid by the Indenture
Trustee as follows:
(i) to
the
Holders of the Class or Classes of Notes then entitled to receive payments
in
respect of principal, as part of the Principal Payment Amount in an amount
equal
to the Overcollateralization Increase Amount for the Notes, applied to reduce
the Note Balance of such Notes until the aggregate Note Balance of such Notes
is
reduced to zero;
(ii) sequentially,
to the Holders of the Class M-1 Notes, the Class M-2 Notes, the Class M-3 Notes,
the Class M-4 Notes, the Class M-5 Notes and the Class M-6 Notes, in that order,
first, in an amount equal to the Interest Carry Forward Amount allocable to
each
such Class of Notes and second, in an amount equal to the Allocated Realized
Loss Amount allocable to each such Class of Notes;
(iii) to
the
Holders of the Class A Notes and Mezzanine Notes (in the priority described
below), any Basis Risk Shortfalls for such Payment Date;
(iv) sequentially,
to the Holders of the Class M-1 Notes, the Class M-2 Notes, the Class M-3 Notes,
the Class M-4 Notes, the Class M-5 Notes and the Class M-6 Notes, in that order,
in an amount equal to the Deferred Interest allocated to each such Class of
Notes; and
(v) to
the
Owner Trustee, any fees, expenses and indemnities not otherwise paid and then,
to the Holders of the Certificates, any remaining amounts.
On
each
Payment Date, all amounts representing Prepayment Charges in respect of the
Mortgage Loans received during the related Prepayment Period that were not
otherwise used to absorb Realized Losses as set forth in Section 3.29 shall
be
withdrawn from the Payment Account and distributed by the Indenture Trustee
to
the Holders of the Certificates and shall not be available for payment to the
Holders of any Class of Notes.
Following
the foregoing payments, an amount equal to the amount of Subsequent Recoveries
deposited into the Collection Account pursuant to Section 3.10 of the Servicing
Agreement shall be applied to increase the Note Balance of the Class of Notes
with the Highest Priority up to the extent of such Realized Losses previously
unreimbursed to that Class of Notes pursuant to Section 3.29. An amount equal
to
the amount of any remaining Subsequent Recoveries shall be applied to increase
the Note Balance of the Class of Notes with the next Highest Priority, up to
the
amount of such Realized Losses previously allocated to that Class of Notes
pursuant to Section 3.29. Holders of such Notes will not be entitled to any
distribution in respect of interest on the amount of such increases for any
Interest Accrual Period preceding the Payment Date on which such increase
occurs. Any such increases shall be applied to the Note Balance of each Note
of
such Class in accordance with its respective Percentage Interest.
(e) On
each
Payment Date, after making the distributions of the Available Payment Amount
as
set forth above, the Indenture Trustee will determine the amount of any Basis
Risk Shortfalls with respect to the Class A Notes and Mezzanine Notes for such
Payment Date and pay such amount to the extent of the applicable Basis Risk
Shortfall in the following order of priority:
(i) concurrently
to each Class of Class A Notes, on a pro
rata
basis
based on the Basis Risk Shortfall for each such Class, until the unpaid Basis
Risk Shortfall for each such class has been reduced to zero; and
(ii) sequentially,
to the Class M-1 Notes, the Class M-2 Notes, the Class M-3 Notes, the Class
M-4
Notes, the Class M-5 Notes and the Class M-6 Notes, in that order, until the
unpaid Basis Risk Shortfall for each such class has been reduced to
zero.
(f) Each
payment with respect to a Book-Entry Note shall be paid to the Depository,
as
Holder thereof, and the Depository shall be responsible for crediting the amount
of such payment to the accounts of its Depository Participants in accordance
with its normal procedures. Each Depository Participant shall be responsible
for
disbursing such payment to the Note Owners that it represents and to each
indirect participating brokerage firm (a “brokerage firm” or “indirect
participating firm”) for which it acts as agent. Each brokerage firm shall be
responsible for disbursing funds to the Note Owners that it represents. None
of
the Indenture Trustee, the Note Registrar, the Paying Agent, the Depositor
or
the Servicer shall have any responsibility therefor except as otherwise provided
by this Indenture or applicable law.
(g) On
each
Payment Date, the Certificate Paying Agent shall deposit in the Certificate
Distribution Account all amounts it received pursuant to this Section 3.05
for
the purpose of distributing such funds pursuant to the Trust
Agreement.
(h) Any
installment of interest or principal, if any, payable on any Note that is
punctually paid or duly provided for by the Issuer on the applicable Payment
Date shall, if such Holder shall have so requested at least five Business Days
prior to the related Record Date, be paid to each Holder of record on the
preceding Record Date, by wire transfer to an account specified in writing
by
such Holder reasonably satisfactory to the Indenture Trustee as of the preceding
Record Date or in all other cases or if no such instructions have been delivered
to the Indenture Trustee, by check to such Noteholder mailed to such Holder’s
address as it appears in the Note Register in the amount required to be paid
to
such Holder on such Payment Date pursuant to such Holder’s Notes; provided,
however,
that
the Indenture Trustee shall not pay to such Holders any amount required to
be
withheld from a payment to such Holder by the Code.
(i) The
principal of each Note shall be due and payable in full on the Final Stated
Maturity Date for such Note as provided in the forms of Notes set forth in
Exhibits A-1 through A-12 to this Indenture. All principal payments on the
Notes
shall be made to the Noteholders entitled thereto in accordance with the
Percentage Interests represented by such Notes. The Indenture Trustee shall
notify the Person in whose name a Note is registered at the close of business
on
the Record Date preceding the Final Stated Maturity Date or other final Payment
Date (including any final Payment Date resulting from any redemption pursuant
to
Section 8.07 hereof). Such notice shall to the extent practicable be mailed
no
later than five Business Days prior to such Final Stated Maturity Date or other
final Payment Date and shall specify that payment of the principal amount and
any interest due with respect to such Note at the Final Stated Maturity Date
or
other final Payment Date will be payable only upon presentation and surrender
of
such Note and shall specify the place where such Note may be presented and
surrendered for such final payment. No interest shall accrue on the Notes on
or
after the Final Stated Maturity Date or any such other final Payment
Date.
Section
3.06. Protection
of Trust Estate.
(a) The
Issuer will from time to time prepare, execute and deliver all such supplements
and amendments hereto and all such financing statements, continuation
statements, instruments of further assurance and other instruments, and will
take such other action necessary or advisable to:
(i) maintain
or preserve the lien and security interest (and the priority thereof) of this
Indenture or carry out more effectively the purposes hereof;
(ii) perfect,
publish notice of or protect the validity of any Grant made or to be made by
this Indenture;
(iii) cause
the
Issuer or Servicer to enforce any of the rights to the Mortgage Loans;
or
(iv) preserve
and defend title to the Trust Estate and the rights of the Indenture Trustee
and
the Noteholders in such Trust Estate against the claims of all persons and
parties.
(b) Except
as
otherwise provided in this Indenture, the Indenture Trustee shall not remove
any
portion of the Trust Estate that consists of money or is evidenced by an
instrument, certificate or other writing from the jurisdiction in which it
was
held at the date of the most recent Opinion of Counsel delivered pursuant to
Section 3.07 hereof (or from the jurisdiction in which it was held as described
in the Opinion of Counsel delivered on the Closing Date pursuant to Section
3.07(a) hereof, or if no Opinion of Counsel has yet been delivered pursuant
to
Section 3.07(b) hereof, unless the Indenture Trustee shall have first received
an Opinion of Counsel to the effect that the lien and security interest created
by this Indenture with respect to such property will continue to be maintained
after giving effect to such action or actions).
The
Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact
to
sign any financing statement, continuation statement or other instrument
required to be signed pursuant to this Section 3.06 upon the Issuer’s
preparation thereof and delivery to the Indenture Trustee.
Section
3.07. Opinions
as to Trust Estate.
(a) On
the
Closing Date, the Issuer shall furnish to the Indenture Trustee and the Owner
Trustee an Opinion of Counsel either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording and filing
of
this Indenture, any indentures supplemental hereto, and any other requisite
documents, and with respect to the execution and filing of any financing
statements and continuation statements, as are necessary to perfect and make
effective the lien and first priority security interest in the Collateral and
reciting the details of such action, or stating that, in the opinion of such
counsel, no such action is necessary to make such lien and first priority
security interest effective.
(b) On
or
before April 15th
in each
calendar year, beginning in 2007, the Issuer shall furnish to the Indenture
Trustee an Opinion of Counsel at the expense of the Issuer either stating that,
in the opinion of such counsel, such action has been taken with respect to
the
recording, filing, re-recording and refiling of this Indenture, any indentures
supplemental hereto and any other requisite documents and with respect to the
execution and filing of any financing statements and continuation statements
as
is necessary to maintain the lien and first priority security interest in the
Collateral and reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to maintain such lien and
security interest. Such Opinion of Counsel shall also describe the recording,
filing, re-recording and refiling of this Indenture, any indentures supplemental
hereto and any other requisite documents and the execution and filing of any
financing statements and continuation statements that will, in the opinion
of
such counsel, be required to maintain the lien and security interest in the
Collateral until December 31st
in the
following calendar year.
Section
3.08. Performance
of Obligations.
The
Issuer will punctually perform and observe all of its obligations and agreements
contained in this Indenture, the Basic Documents and in the instruments and
agreements included in the Trust Estate.
The
Issuer may contract with other Persons to assist it in performing its duties
under this Indenture, and any performance of such duties by a Person identified
to the Indenture Trustee in an Officer’s Certificate of the Issuer shall be
deemed to be action taken by the Issuer.
The
Issuer will not take any action or permit any action to be taken by others
which
would release any Person from any of such Person’s covenants or obligations
under any of the documents relating to the Mortgage Loans or under any
instrument included in the Trust Estate, or which would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any of the documents relating to the Mortgage
Loans or any such instrument, except such actions as the Servicer is expressly
permitted to take in the Servicing Agreement. The Indenture Trustee may exercise
the rights of the Issuer to direct the actions of the Servicer pursuant to
the
Servicing Agreement.
The
Issuer may retain an administrator and may enter into contracts with other
Persons for the performance of the Issuer’s obligations hereunder, and
performance of such obligations by such Persons shall be deemed to be
performance of such obligations by the Issuer.
Section
3.09. Negative
Covenants. So
long as any Notes are Outstanding, the Issuer shall not:
(i) except
as
expressly permitted by this Indenture, sell, transfer, exchange or otherwise
dispose of the Trust Estate, unless directed to do so by the Indenture
Trustee;
(ii) claim
any
credit on, or make any deduction from the principal or interest payable in
respect of, the Notes (other than amounts properly withheld from such payments
under the Code) or assert any claim against any present or former Noteholder
by
reason of the payment of the taxes levied or assessed upon any part of the
Trust
Estate;
(iii) (A)
permit the validity or effectiveness of this Indenture to be impaired, or permit
the lien of this Indenture to be amended, hypothecated, subordinated, terminated
or discharged, or permit any Person to be released from any covenants or
obligations with respect to the Notes under this Indenture except as may be
expressly permitted hereby, (B) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien of this Indenture)
to be created on or extend to or otherwise arise upon or burden the Trust Estate
or any part thereof or any interest therein or the proceeds thereof or (C)
permit the lien of this Indenture not to constitute a valid first priority
security interest in the Trust Estate; or
(iv) waive
or
impair, or fail to assert rights under, the Mortgage Loans, or impair or cause
to be impaired the Issuer’s interest in the Mortgage Loans, the Mortgage Loan
Purchase Agreement or in any Basic Document, if any such action would materially
and adversely affect the interests of the Noteholders.
Section
3.10. [Reserved.]
Section
3.11. [Reserved.]
Section
3.12. Representations
and Warranties Concerning the Mortgage Loans.
The
Indenture Trustee, as pledgee of the Mortgage Loans, has the benefit of the
representations and warranties made by NC Capital in the Mortgage Loan Purchase
Agreement concerning NC Capital, the Seller and the Mortgage Loans to the same
extent as though such representations and warranties were made directly to
the
Indenture Trustee. If a Responsible Officer of the Indenture Trustee has actual
knowledge of any breach of any representation or warranty made by NC Capital
in
the Mortgage Loan Purchase Agreement, the Indenture Trustee shall promptly
notify NC Capital of such finding and NC Capital’s obligation to cure such
defect or repurchase or substitute for the related Mortgage Loan.
Section
3.13. Amendments
to Servicing Agreement.
The
Issuer covenants with the Indenture Trustee that it will not enter into any
amendment or supplement to the Servicing Agreement without the prior written
consent of the Indenture Trustee.
Section
3.14. 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 Issuer and the Indenture Trustee hereby acknowledge that
the Servicer is acting as bailee of the Indenture Trustee in holding amounts
on
deposit in the Collection Account, as well as its bailee in holding any Related
Documents released to the Servicer, and any other items constituting a part
of
the Trust Estate which from time to time come into the possession of the
Servicer. It is intended that, by the Servicer’s acceptance of such bailee
arrangement, the Indenture Trustee, as a secured party of the Mortgage Loans,
will be deemed to have possession of such Related Documents, such monies and
such other items for purposes of Section 9-305 of the UCC of the state in which
such property is held by the Servicer. The Indenture Trustee shall not be liable
with respect to such documents, monies or items while in possession of the
Servicer.
Section
3.15. Investment
Company Act.
The
Issuer shall not become an “investment company” or be under the “control” of an
“investment company” as such terms are defined in the Investment Company Act of
1940, as amended (or any successor or amendatory statute), and the rules and
regulations thereunder (taking into account not only the general definition
of
the term “investment company” but also any available exceptions to such general
definition); provided,
however,
that the
Issuer shall be in compliance with this Section 3.15 if it shall have obtained
an order exempting it from regulation as an “investment company” so long as it
is in compliance with the conditions imposed in such order.
Section
3.16. Issuer
May Consolidate, etc.
(a) The
Issuer shall not consolidate or merge with or into any other Person,
unless:
(i) the
Person (if other than the Issuer) formed by or surviving such consolidation
or
merger shall be a Person organized and existing under the laws of the United
States of America or any state or the District of Columbia and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form reasonably satisfactory to the Indenture Trustee,
the
due and punctual payment of the principal of and interest on all Notes, and
all
other amounts payable to the Indenture Trustee, the payment to the Certificate
Paying Agent of all amounts due to the Certificateholders, and the performance
or observance of every agreement and covenant of this Indenture on the part
of
the Issuer to be performed or observed, all as provided herein;
(ii) immediately
after giving effect to such transaction, no Event of Default shall have occurred
and be continuing;
(iii) the
Rating Agencies shall have notified the Issuer that such transaction shall
not
cause the rating of the Notes to be reduced, suspended or withdrawn or to be
considered by either Rating Agency to be below investment grade;
(iv) the
Issuer shall have received an Opinion of Counsel (and shall have delivered
a
copy thereof to the Indenture Trustee) to the effect that such transaction
will
not (A) result in a “substantial modification” of the Notes under Treasury
Regulation section 1.1001-3, or adversely affect the status of the Notes as
indebtedness for federal income tax purposes, or (B) if 100% of the Certificates
are not owned by the Seller, cause the Trust to be subject to an entity level
tax for federal income tax purposes;
(v) any
action that is necessary to maintain the lien and security interest created
by
this Indenture shall have been taken; and
(vi) the
Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate
and an Opinion of Counsel each stating that such consolidation or merger and
such supplemental indenture comply with this Article III and that all conditions
precedent herein provided for or relating to such transaction have been complied
with (including any filing required by the Exchange Act), and that such
supplemental indenture is enforceable.
(b) The
Issuer shall not convey or transfer any of its properties or assets, including
those included in the Trust Estate, to any Person, unless:
(i) the
Person that acquires by conveyance or transfer the properties and assets of the
Issuer, the conveyance or transfer of which is hereby restricted, shall (A)
be a
United States citizen or a Person organized and existing under the laws of
the
United States of America or any state thereof, (B) expressly assume, by an
indenture supplemental hereto, executed and delivered to the Indenture Trustee,
in form satisfactory to the Indenture Trustee, the due and punctual payment
of
the principal of and interest on all Notes and the performance or observance
of
every agreement and covenant of this Indenture on the part of the Issuer to
be
performed or observed, all as provided herein, (C) expressly agree by means
of
such supplemental indenture that all right, title and interest so conveyed
or
transferred shall be subject and subordinate to the rights of the Holders of
the
Notes, (D) unless otherwise provided in such supplemental indenture, expressly
agree to indemnify, defend and hold harmless the Issuer and the Indenture
Trustee against and from any loss, liability or expense arising under or related
to this Indenture and the Notes and (E) expressly agree by means of such
supplemental indenture that such Person (or if a group of Persons, then one
specified Person) shall make all filings with the Commission (and any other
appropriate Person) required by the Exchange Act in connection with the
Notes;
(ii) immediately
after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing;
(iii) the
Rating Agencies shall have notified the Issuer that such transaction shall
not
cause the rating of the Notes to be reduced, suspended or
withdrawn;
(iv) the
Issuer shall have received an Opinion of Counsel (and shall have delivered
a
copy thereof to the Indenture Trustee) to the effect that such transaction
will
not (A) result in a “substantial modification” of the Notes under Treasury
Regulation section 1.1001-3, or adversely affect the status of the Notes as
indebtedness for federal income tax purposes, or (B) if 100% of the Certificates
are not owned by the Seller, cause the Trust to be subject to an entity level
tax for federal income tax purposes;
(v) any
action that is necessary to maintain the lien and security interest created
by
this Indenture shall have been taken; and
(vi) the
Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate
and an Opinion of Counsel each stating that such conveyance or transfer and
such
supplemental indenture comply with this Article III and that all conditions
precedent herein provided for relating to such transaction have been complied
with (including any filing required by the Exchange Act).
Section
3.17. Successor
or Transferee.
(a) Upon
any
consolidation or merger of the Issuer in accordance with Section 3.16(a), the
Person formed by or surviving such consolidation or merger (if other than the
Issuer) shall succeed to, and be substituted for, and may exercise every right
and power of, the Issuer under this Indenture with the same effect as if such
Person had been named as the Issuer herein.
(b) Upon
a
conveyance or transfer of all the assets and properties of the Issuer pursuant
to Section 3.16(b), the Issuer will be released from every covenant and
agreement of this Indenture to be observed or performed on the part of the
Issuer with respect to the Notes immediately upon the delivery of written notice
to the Indenture Trustee of such conveyance or transfer.
Section
3.18. No
Other Business.
The
Issuer shall not engage in any business other than financing, purchasing, owning
and selling and managing the Mortgage Loans and the issuance of the Notes and
Certificates in the manner contemplated by this Indenture and the Basic
Documents and all activities incidental thereto.
Section
3.19. No
Borrowing.
The
Issuer shall not issue, incur, assume, guarantee or otherwise become liable,
directly or indirectly, for any indebtedness except for the Notes under this
Indenture.
Section
3.20. Guarantees,
Loans, Advances and Other Liabilities. Except
as contemplated by this Indenture or the Basic Documents, the Issuer shall
not
make any loan or advance or credit to, or guarantee (directly or indirectly
or
by an instrument having the effect of assuring another’s payment or performance
on any obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire
(or
agree contingently to do so) any stock, obligations, assets or securities of,
or
any other interest in, or make any capital contribution to, any other
Person.
Section
3.21. Capital
Expenditures.
The
Issuer shall not make any expenditure (by long-term or operating lease or
otherwise) for capital assets (either realty or personalty).
Section
3.22. Determination
of Note Rate.
On each
Interest Determination Date, the Indenture Trustee shall determine One-Month
LIBOR and the related Note Rate for each Class of Notes for the following
Interest Accrual Period. The establishment of One-Month LIBOR on each Interest
Determination Date by the Indenture Trustee and the Indenture Trustee’s
calculation of the rate of interest applicable to each Class of Notes for the
related Accrual Period shall (in the absence of manifest error) be final and
binding.
Section
3.23. Restricted
Payments.
The
Issuer shall not, directly or indirectly, (i) pay any dividend or make any
distribution (by reduction of capital or otherwise), whether in cash, property,
securities or a combination thereof, to the Owner Trustee or any owner of a
beneficial interest in the Issuer or otherwise with respect to any ownership
or
equity interest or security in or of the Issuer, (ii) redeem, purchase, retire
or otherwise acquire for value any such ownership or equity interest or security
or (iii) set aside or otherwise segregate any amounts for any such purpose;
provided,
however,
that the
Issuer may make, or cause to be made, (x) distributions and payments to the
Owner Trustee, the Indenture Trustee, Noteholders and the Certificateholders
as
contemplated by, and to the extent funds are available for such purpose under
this Indenture and the Trust Agreement and (y) payments to the Servicer pursuant
to the terms of the Servicing Agreement. The Issuer will not, directly or
indirectly, make payments to or distributions from the Collection Account except
in accordance with this Indenture and the Basic Documents.
Section
3.24. Notice
of Events of Default.
The
Issuer shall give the Indenture Trustee and the Rating Agencies prompt written
notice of each Event of Default hereunder and under the Trust
Agreement.
Section
3.25. Further
Instruments and Acts.
Upon
request of the Indenture Trustee, the Issuer will execute and deliver such
further instruments and do such further acts as may be reasonably necessary
or
proper to carry out more effectively the purpose of this Indenture.
Section
3.26. Statements
to Noteholders.
On each
Payment Date, the Indenture Trustee and the Certificate Registrar shall prepare
and make available on the Indenture Trustee’s website,
xxxxx://xxx.xxx.xx.xxx/xxxx (or deliver at the recipient’s option), to each
Noteholder and Certificateholder the most recent statement prepared by the
Indenture Trustee pursuant to Section 7.05 hereof.
Section
3.27. [Reserved].
Section
3.28. Certain
Representations Regarding the Trust Estate.
(a) With
respect to that portion of the Collateral described in clauses (a) through
(d)
of the definition of Trust Estate, the Issuer represents to the Indenture
Trustee that:
(i) This
Indenture creates a valid and continuing security interest (as defined in the
applicable UCC) in the Collateral in favor of the Indenture Trustee, which
security interest is prior to all other liens, and is enforceable as such as
against creditors of and purchasers from the Issuer.
(ii) The
Collateral constitutes “deposit accounts” or “instruments,” as applicable,
within the meaning of the applicable UCC.
(iii) The
Issuer owns and has good and marketable title to the Collateral, free and clear
of any lien, claim or encumbrance of any Person.
(iv) The
Issuer has taken all steps necessary to cause the Indenture Trustee to become
the account holder of the Collateral.
(v) Other
than the security interest granted to the Indenture Trustee pursuant to this
Indenture, the Issuer has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Collateral.
(vi) The
Collateral is not in the name of any Person other than the Issuer or the
Indenture Trustee. The Issuer has not consented to the bank maintaining the
Collateral to comply with instructions of any Person other than the Indenture
Trustee.
(b) With
respect to that portion of the Collateral described in clause (e), the Issuer
represents to the Indenture Trustee that:
(i) This
Indenture creates a valid and continuing security interest (as defined in the
applicable UCC) in the Collateral in favor of the Indenture Trustee, which
security interest is prior to all other liens, and is enforceable as such as
against creditors of and purchasers from the Issuer.
(ii) The
Collateral constitutes “general intangibles” within the meaning of the
applicable UCC.
(iii) The
Issuer owns and has good and marketable title to the Collateral, free and clear
of any lien, claim or encumbrance of any Person.
(iv) Other
than the security interest granted to the Indenture Trustee pursuant to this
Indenture, the Issuer has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Collateral.
(c) With
respect to any Collateral in which a security interest may be perfected by
filing, the Issuer has not authorized the filing of, and is not aware of any
financing statements against, the Issuer, that include a description of
collateral covering such Collateral, other than any financing statement relating
to the security interest granted to the Indenture Trustee hereunder or that
has
been terminated. The Issuer is not aware of any judgment or tax lien filings
against the Issuer.
(d) The
Issuer has caused or will have caused, within ten days, the filing of all
appropriate financing statements in the proper filing office in the appropriate
jurisdictions under 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 Issuer will cause such security
interest to be maintained. Any financing statement that is filed in connection
with this Section 3.28 shall contain a statement that a purchase or security
interest in any collateral described therein will violate the rights of the
secured party named in such financing statement.
(e) The
foregoing representations may not be waived and shall survive the issuance
of
the Notes.
Section
3.29. Allocation
of Realized Losses.
(a) All
Realized Losses on the Mortgage Loans shall be allocated by the Indenture
Trustee on each Payment Date as follows: first, to the Net Monthly Excess
Cashflow for the related Interest Accrual Period; second, to the Prepayment
Charges collected or paid by the Servicer during the related Prepayment Period,
third, to the Overcollateralized Amount, until the Overcollateralized Amount
has
been reduced to zero; fourth, to the Class M-6 Notes until the Note Balance
thereof has been reduced to zero; fifth, to the Class M-5 Notes until the Note
Balance thereof has been reduced to zero; sixth, to the Class M-4 Notes until
the Note Balance thereof has been reduced to zero; seventh, to the Class M-3
Notes until the Note Balance thereof has been reduced to zero; eighth, to the
Class M-2 Notes until the Note Balance thereof has been reduced to zero; and
ninth, to the Class M-1 Notes, until the Note Balance thereof has been reduced
to zero.
(b) All
Realized Losses to be allocated to the Note Balances of all Classes on any
Payment Date shall be so allocated after the actual payments to be made on
such
date as provided above. All references above to the Note Balance of any Class
of
Notes shall be to the Note Balance of such Class immediately prior to the
relevant Payment Date, before reduction thereof by any Realized Losses, in
each
case to be allocated to such Class of Notes, on such Payment Date.
Any
allocation of Realized Losses to a Mezzanine Note on any Payment Date shall
be
made by reducing the Note Balance thereof by the amount so allocated. No
allocations of any Realized Losses shall be made to the Note Balances of the
Class A Notes.
As
used
herein, an allocation of a Realized Loss on a “pro
rata
basis”
among two or more specified Classes of Notes means an allocation on a pro rata
basis, among the various Classes so specified, to each such Class of Notes
on
the basis of their then outstanding Note Balances prior to giving effect to
payments to be made on such Payment Date. All Realized Losses and all other
losses allocated to a Class of Notes hereunder will be allocated among the
Notes
of such Class in proportion to the Percentage Interests evidenced
thereby.
ARTICLE
IV
THE
NOTES; SATISFACTION AND DISCHARGE OF INDENTURE
Section
4.01. The
Notes.
Each
Class of Notes shall be registered in the name of a nominee designated by the
Depository. Beneficial Owners will hold interests in the Notes through the
book-entry facilities of the Depository in minimum initial Note Balances of
$25,000 and integral multiples of $1 in excess thereof.
The
Indenture Trustee may for all purposes (including the making of payments due
on
the Notes) deal with the Depository as the authorized representative of the
Beneficial Owners with respect to the Notes for the purposes of exercising
the
rights of Holders of the Notes hereunder. Except as provided in the next
succeeding paragraph of this Section 4.01, the rights of Beneficial Owners
with
respect to the Notes shall be limited to those established by law and agreements
between such Beneficial Owners and the Depository and Depository Participants.
Except as provided in Section 4.08 hereof, Beneficial Owners shall not be
entitled to definitive notes for the Notes as to which they are the Beneficial
Owners. Requests and directions from, and votes of, the Depository as Holder
of
the Notes shall not be deemed inconsistent if they are made with respect to
different Beneficial Owners. The Indenture Trustee may establish a reasonable
record date in connection with solicitations of consents from or voting by
Noteholders and give notice to the Depository of such record date. Without
the
consent of the Issuer and the Indenture Trustee, no Note may be transferred
by
the Depository except to a successor Depository that agrees to hold such Note
for the account of the Beneficial Owners.
In
the
event the Depository Trust Company resigns or is removed as Depository, the
Indenture Trustee with the approval of the Issuer may appoint a successor
Depository. If no successor Depository has been appointed within 30 days of
the
effective date of the Depository’s resignation or removal, each Beneficial Owner
shall be entitled to certificates representing the Notes it beneficially owns
in
the manner prescribed in Section 4.08.
The
Notes
shall, on original issue, be executed on behalf of the Issuer by the Owner
Trustee, not in its individual capacity but solely as Owner Trustee,
authenticated by the Indenture Trustee and delivered by the Indenture Trustee
to
or upon the order of the Issuer.
Section
4.02. Registration
of and Limitations on Transfer and Exchange of Notes; Appointment of Note
Registrar and Certificate.
The
Issuer shall cause to be kept at the Corporate Trust Office a Note Register
in
which, subject to such reasonable regulations as it may prescribe, the Note
Registrar shall provide for the registration of Notes and of transfers and
exchanges of Notes as herein provided.
Subject
to the restrictions and limitations set forth below, upon surrender for
registration of transfer of any Note at the Corporate Trust Office, the Issuer
shall execute and the Note Registrar shall authenticate and deliver, in the
name
of the designated transferee or transferees, one or more new Notes in authorized
initial Note Balances evidencing the same Class and aggregate Percentage
Interests.
Subject
to the foregoing, at the option of the Noteholders, Notes may be exchanged
for
other Notes of like tenor and in authorized initial Note Balances evidencing
the
same Class and aggregate Percentage Interests upon surrender of the Notes to
be
exchanged at the Corporate Trust Office of the Note Registrar. Whenever any
Notes are so surrendered for exchange, the Issuer shall execute and the
Indenture Trustee shall authenticate and deliver the Notes which the Noteholder
making the exchange is entitled to receive. Each Note presented or surrendered
for registration of transfer or exchange shall (if so required by the Note
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer in form reasonably satisfactory to the Note Registrar duly executed
by
the Holder thereof or his attorney duly authorized in writing with such
signature guaranteed by a commercial bank or trust company located or having
a
correspondent located in the city of New York. Notes delivered upon any such
transfer or exchange will evidence the same obligations, and will be entitled
to
the same rights and privileges, as the Notes surrendered.
No
service charge shall be made for any registration of transfer or exchange of
Notes, but the Note Registrar shall require payment of a sum sufficient to
cover
any tax or governmental charge that may be imposed in connection with any
registration of transfer or exchange of Notes.
The
Issuer hereby appoints the Indenture Trustee as (i) Certificate Registrar to
keep at its Corporate Trust Office a Certificate Register pursuant to Section
3.09 of the Trust Agreement in which, subject to such reasonable regulations
as
it may prescribe, the Certificate Registrar shall provide for the registration
of Certificates and of transfers and exchanges thereof pursuant to Section
3.05
of the Trust Agreement and (ii) Note Registrar under this Indenture. The
Indenture Trustee hereby accepts such appointments.
Section
4.03. Mutilated,
Destroyed, Lost or Stolen Notes.
If (i)
any mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, and (ii) there is delivered to the Indenture Trustee such security
or indemnity as may be required by it to hold the Issuer and the Indenture
Trustee harmless, then, in the absence of notice to the Issuer, the Note
Registrar or the Indenture Trustee that such Note has been acquired by a bona
fide purchaser, and provided that the requirements of Section 8-405 of the
UCC
are met, the Issuer shall execute, and upon its request the Indenture Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note; provided,
however,
that if
any such destroyed, lost or stolen Note, but not a mutilated Note, shall have
become or within seven days shall be due and payable, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when
so
due or payable without surrender thereof. If, after the delivery of such
replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the
proviso to the preceding sentence, a bona fide purchaser of the original Note
in
lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred
by
the Issuer or the Indenture Trustee in connection therewith.
Upon
the
issuance of any replacement Note under this Section 4.03, the Issuer may require
the payment by the Holder of such Note of a sum sufficient to cover any tax
or
other governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Indenture Trustee)
connected therewith.
Every
replacement Note issued pursuant to this Section 4.03 in replacement of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone,
and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The
provisions of this Section 4.03 are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Notes.
Section
4.04. Persons
Deemed Owners.
Prior
to due presentment for registration of transfer of any Note, the Issuer, the
Indenture Trustee, the Paying Agent and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name any Note is registered (as of the
day
of determination) as the owner of such Note for the purpose of receiving
payments of principal of and interest, if any, on such Note and for all other
purposes whatsoever, whether or not such Note be overdue, and neither the
Issuer, the Indenture Trustee, the Paying Agent nor any agent of the Issuer
or
the Indenture Trustee shall be affected by notice to the contrary.
Section
4.05. Cancellation.
All
Notes surrendered for payment, registration of transfer, exchange or redemption
shall, if surrendered to any Person other than the Indenture Trustee, be
delivered to the Indenture Trustee and shall be promptly cancelled by the
Indenture Trustee. The Issuer may at any time deliver to the Indenture Trustee
for cancellation any Notes previously authenticated and delivered hereunder
which the Issuer may have acquired in any manner whatsoever, and all Notes
so
delivered shall be promptly cancelled by the Indenture Trustee. No Notes shall
be authenticated in lieu of or in exchange for any Notes cancelled as provided
in this Section 4.05, except as expressly permitted by this Indenture. All
cancelled Notes may be held or disposed of by the Indenture Trustee in
accordance with its standard retention or disposal policy as in effect at the
time unless the Issuer shall direct by an Issuer Request that they be destroyed
or returned to it; provided,
however,
that
such Issuer Request is timely and the Notes have not been previously disposed
of
by the Indenture Trustee.
Section
4.06. Book-Entry
Notes. The
Notes, upon original issuance, will be issued in the form of typewritten Notes
representing the Book-Entry Notes, to be delivered to The Depository Trust
Company, the initial Depository, by, or on behalf of, the Issuer. The Notes
shall initially be registered on the Note Register in the name of Cede &
Co., the nominee of the initial Depository, and no Beneficial Owner will receive
a Definitive Note representing such Beneficial Owner’s interest in such Note,
except as provided in Section 4.08. With respect to such Notes, unless and
until
definitive, fully registered Notes (the “Definitive Notes”) have been issued to
Beneficial Owners pursuant to Section 4.08:
(i) the
provisions of this Section 4.06 shall be in full force and effect;
(ii) the
Note
Registrar, the Paying Agent and the Indenture Trustee shall be entitled to
deal
with the Depository for all purposes of this Indenture (including the payment
of
principal of and interest on the Notes and the giving of instructions or
directions hereunder) as the sole holder of the Notes, and shall have no
obligation to the Beneficial Owners of the Notes;
(iii) to
the
extent that the provisions of this Section 4.06 conflict with any other
provisions of this Indenture, the provisions of this Section 4.06 shall
control;
(iv) the
rights of Beneficial Owners shall be exercised only through the Depository
and
shall be limited to those established by law and agreements between such Owners
of Notes and the Depository and/or the Depository Participants. Unless and
until
Definitive Notes are issued pursuant to Section 4.08, the initial Depository
will make book-entry transfers among the Depository Participants and receive
and
transmit payments of principal of and interest on the Notes to such Depository
Participants; and
(v) whenever
this Indenture requires or permits actions to be taken based upon instructions
or directions of Holders of Notes evidencing a specified percentage of the
Note
Balances of the Notes, the Depository shall be deemed to represent such
percentage with respect to the Notes only to the extent that it has received
instructions to such effect from Beneficial Owners and/or Depository
Participants owning or representing, respectively, such required percentage
of
the beneficial interest in the Notes and has delivered such instructions to
the
Indenture Trustee.
Section
4.07. Notices
to Depository.
Whenever a notice or other communication to the Note Holders is required under
this Indenture, unless and until Definitive Notes shall have been issued to
Beneficial Owners pursuant to Section 4.08, the Indenture Trustee shall give
all
such notices and communications specified herein to be given to Holders of
the
Notes to the Depository, and shall have no obligation to the Beneficial
Owners.
Section
4.08. Definitive
Notes.
If (i)
the Indenture Trustee determines that the Depository is no longer willing or
able to properly discharge its responsibilities with respect to the Notes and
the Indenture Trustee is unable to locate a qualified successor or (ii) after
the occurrence of an Event of Default, Beneficial Owners of Notes representing
beneficial interests aggregating at least a majority of the Note Balances of
the
Notes advise the Depository in writing that the continuation of a book-entry
system through the Depository is no longer in the best interests of the
Beneficial Owners, then the Depository shall notify all Beneficial Owners and
the Indenture Trustee of the occurrence of any such event and of the
availability of Definitive Notes to Beneficial Owners requesting the same.
Upon
surrender to the Indenture Trustee of the typewritten Notes representing the
Book-Entry Notes by the Depository, accompanied by registration instructions,
the Issuer shall execute and the Indenture Trustee shall authenticate the
Definitive Notes in accordance with the instructions of the Depository. None
of
the Issuer, the Note Registrar or the Indenture Trustee shall be liable for
any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Notes, the Indenture Trustee shall recognize the Holders of the Definitive
Notes
as Noteholders.
Section
4.09. Tax
Treatment.
The
Issuer has entered into this Indenture, and the Notes will be issued with the
intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness. The Issuer
and
the Indenture Trustee (in accordance with Section 6.06 hereof), by entering
into
this Indenture, and each Noteholder, by its acceptance of its Note (and each
Beneficial Owner by its acceptance of an interest in the applicable Book-Entry
Note), agree to treat the Notes for federal, state and local income, single
business and franchise tax purposes as indebtedness.
Section
4.10. Satisfaction
and Discharge of Indenture.
This
Indenture shall cease to be of further effect with respect to the Notes except
as to (i) rights of registration of transfer and exchange, (ii) substitution
of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections 3.03,
3.04, 3.06, 3.09, 3.17, 3.19 and 3.20, (v) the rights and immunities of the
Indenture Trustee hereunder (including the rights of the Indenture Trustee
under
Section 6.07) and the obligations of the Indenture Trustee under Section 4.11
and (vi) the rights of Noteholders as beneficiaries hereof with respect to
the
property so deposited with the Indenture Trustee payable to all or any of them,
and the Indenture Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Notes and shall release and deliver the Collateral
to or upon the order of the Issuer, when
(A) either
(1) all
Notes
theretofore authenticated and delivered (other than (i) Notes that have been
destroyed, lost or stolen and that have been replaced or paid as provided in
Section 4.03 hereof and (ii) Notes for whose payment money has theretofore
been
deposited in trust or segregated and held in trust by the Issuer and thereafter
repaid to the Issuer or discharged from such trust, as provided in Section
3.03)
have been delivered to the Indenture Trustee for cancellation; or
(2) all
Notes
not theretofore delivered to the Indenture Trustee for cancellation (a) have
become due and payable, (b) will become due and payable at the Final Stated
Maturity Date within one year, or (c) have been called for early redemption
pursuant to Section 8.07 hereof, and the Issuer, in the case of (a) or (b)
above, has irrevocably deposited or caused to be irrevocably deposited with
the
Indenture Trustee cash or direct obligations of or obligations guaranteed by
the
United States of America (which will mature prior to the date such amounts
are
payable), in trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Notes then outstanding not theretofore
delivered to the Indenture Trustee for cancellation when due on the Final Stated
Maturity Date or other final Payment Date, or, in the case of (c) above, the
Issuer shall have complied with all requirements of Section 8.07
hereof,
(B) the
Issuer has paid or caused to be paid all other sums payable hereunder;
and
(C) the
Issuer has delivered to the Indenture Trustee an Officer’s Certificate and an
Opinion of Counsel, each meeting the applicable requirements of Section 10.01
hereof, each stating that all conditions precedent herein provided for relating
to the satisfaction and discharge of this Indenture have been complied with
and,
if the Opinion of Counsel relates to a deposit made in connection with Section
4.10(A)(2)(b) above, such opinion shall further be to the effect that such
deposit will constitute an “in-substance defeasance” within the meaning of
Revenue Ruling 85-42, 1985-1 C.B. 36, and in accordance therewith, the Issuer
will be the owner of the assets deposited in trust for federal income tax
purposes.
Section
4.11. Application
of Trust Money.
All
monies deposited with the Indenture Trustee pursuant to Section 4.10 hereof
shall be held in trust and applied by it, in accordance with the provisions
of
the Notes and this Indenture, to the payment, either directly or through any
Paying Agent or the Issuer, Certificate Paying Agent as designee of the Issuer,
as the Indenture Trustee may determine, to the Holders of Notes or Certificates,
of all sums due and to become due thereon for principal and interest or
otherwise; but such monies need not be segregated from other funds except to
the
extent required herein or required by law.
Section
4.12. Derivative
Contracts for Benefit of the Certificates.
At any
time on or after the Closing Date, the Issuer shall have the right to convey
to
the Trust Estate, solely for the benefit of the Holder of the Certificates,
a
derivative contract or comparable instrument. Any such instrument shall
constitute a fully prepaid agreement. All collections, proceeds and other
amounts in respect of such an instrument shall be distributed to the
Certificates on the Payment Date following receipt thereof by the Indenture
Trustee.
Section
4.13. Repayment
of Monies Held by Paying Agent.
In
connection with the satisfaction and discharge of this Indenture with respect
to
the Notes, all monies then held by any Person other than the Indenture Trustee
under the provisions of this Indenture with respect to such Notes shall, upon
demand of the Issuer, be paid to the Indenture Trustee to be held and applied
according to Section 3.05 and thereupon such Person shall be released from
all
further liability with respect to such monies.
Section
4.14. Temporary
Notes.
Pending
the preparation of any Definitive Notes, the Issuer may execute and upon its
written direction, the Indenture Trustee may authenticate and make available
for
delivery, temporary Notes that are printed, lithographed, typewritten,
photocopied or otherwise produced, in any denomination, substantially of the
tenor of the Definitive Notes in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Notes may determine, as evidenced by their execution
of
such Notes.
If
temporary Notes are issued, the Issuer will cause Definitive Notes to be
prepared without unreasonable delay. After the preparation of the Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office of the Indenture Trustee located
at DB Services Tennessee, 000 Xxxxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx
00000-0000, Attention: Transfer Unit, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and make available for
delivery, in exchange therefor, Definitive Notes of authorized denominations
and
of like tenor, class and aggregate principal amount. Until so exchanged, such
temporary Notes shall in all respects be entitled to the same benefits under
this Indenture as Definitive Notes.
Section
4.15. Representation
Regarding ERISA.
By
acquiring a Note or interest therein, each Holder of such Note or Beneficial
Owner of any such interest will be deemed to represent that either (1) it is
not
acquiring the Note with Plan Assets or (2) (A) the acquisition, holding and
transfer of such Note will not give rise to a non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code and (B) the Notes are
rated investment grade or better and such person believes that the Notes are
properly treated as indebtedness without substantial equity features for
purposes of the Department of Labor regulation 29 C.F.R. § 2510.3-101, and
agrees to so treat the Notes. Alternatively, regardless of the rating of the
Notes, such person may provide the Indenture Trustee and the Owner Trustee
with
an opinion of counsel, which opinion of counsel will not be at the expense
of
the Issuer, the Seller, NC Capital, any Underwriter, the Owner Trustee, the
Indenture Trustee, the Servicer or any successor servicer which opines that
the
acquisition, holding and transfer of such Note or interest therein is
permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the Issuer, the Seller, NC Capital, the Depositor, the Owner Trustee,
the Indenture Trustee, the Servicer or any successor servicer to any obligation
in addition to those undertaken in the Indenture or the other Operative
Agreements.
ARTICLE
V
DEFAULT
AND REMEDIES
Section
5.01. Events
of Default.
The
Issuer shall deliver to the Indenture Trustee, written notice in the form of
an
Officer’s Certificate, within five days after learning of the occurrence of any
event which with the giving of notice and the lapse of time would become an
Event of Default under clause (iii), (iv) or (v) of the definition of “Event of
Default,” its status and what action the Issuer is taking or proposes to take
with respect thereto. The Indenture Trustee shall not be deemed to have
knowledge of any Event of Default unless a Responsible Officer has actual
knowledge thereof or unless written notice of such Event of Default is received
by a Responsible Officer and such notice references the Notes, the Trust Estate
or this Indenture.
Section
5.02. Acceleration
of Maturity; Rescission and Annulment.
If an
Event of Default should occur and be continuing, then and in every such case
the
Indenture Trustee at the written direction of the Holders of Notes representing
not less than a majority of the aggregate Note Balance of the Notes, together
with accrued and unpaid interest thereon through the date of acceleration shall
become immediately due and payable.
At
any
time after such declaration of acceleration of maturity with respect to an
Event
of Default has been made and before a judgment or decree for payment of the
money due has been obtained by the Indenture Trustee as hereinafter in this
Article V provided, Holders of the Notes representing not less than a majority
of the aggregate Note Balance of the Notes, by written notice to the Issuer
and
the Indenture Trustee, may waive the related Event of Default and rescind and
annul such declaration and its consequences if
(i) the
Issuer has paid or deposited with the Indenture Trustee a sum sufficient to
pay
(a) all payments of principal of and interest on the Notes and all other amounts
that would then be due hereunder or upon the Notes if the Event of Default
giving rise to such acceleration had not occurred; and (b) all sums paid or
advanced by the Indenture Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee and its agents
and
counsel; and
(ii) all
Events of Default, other than the nonpayment of the principal of the Notes
that
has become due solely by such acceleration, have been cured or waived as
provided in Section 5.12.
No
such
rescission shall affect any subsequent default or impair any right consequent
thereto.
Section
5.03. Collection
of Indebtedness and Suits for Enforcement by Indenture Trustee.
(a) The
Issuer covenants that if (i) default is made in the payment of any interest
on
any Note when the same becomes due and payable, and such default continues
for a
period of five days, or (ii) default is made in the payment of the principal
of
or any installment of the principal of any Note when the same becomes due and
payable, the Issuer shall, upon demand of the Indenture Trustee, at the
direction of the Holders of a majority of the aggregate Note Balance of the
Notes, pay to the Indenture Trustee, for the benefit of the Holders of Notes,
the whole amount then due and payable on the Notes for principal and interest,
with interest at the applicable Note Rate upon the overdue principal, and in
addition thereto such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its agents and
counsel.
(b) In
case
the Issuer shall fail forthwith to pay such amounts upon such demand, the
Indenture Trustee, in its own name and as trustee of an express trust, subject
to the provisions of Section 10.16 hereof may institute a Proceeding for the
collection of the sums so due and unpaid, and may prosecute such Proceeding
to
judgment or final decree, and may enforce the same against the Issuer or other
obligor upon the Notes and collect in the manner provided by law out of the
property of the Issuer or other obligor the Notes, wherever situated, the monies
adjudged or decreed to be payable.
(c) If
an
Event of Default occurs and is continuing, the Indenture Trustee, subject to
the
provisions of Section 10.16 hereof may, as more particularly provided in Section
5.04 hereof, in its discretion, proceed to protect and enforce its rights and
the rights of the Noteholders, by such appropriate Proceedings, as directed
in
writing by Holders of a majority of the aggregate Note Balance of the Notes,
to
protect and enforce any such rights, whether for the specific enforcement of
any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy or legal or equitable
right vested in the Indenture Trustee by this Indenture or by law.
(d) In
case
there shall be pending, relative to the Issuer or any other obligor upon the
Notes or any Person having or claiming an ownership interest in the Trust
Estate, Proceedings under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or other similar law, or
in
case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for
or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, as directed in writing by Holders
of a majority of the aggregate Note Balance of the Notes, irrespective of
whether the principal of any Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Indenture Trustee shall have made any demand pursuant to the provisions of
this
Section, shall be entitled and empowered, by intervention in such Proceedings
or
otherwise:
(i) to
file
and prove a claim or claims for the whole amount of principal and interest
owing
and unpaid in respect of the Notes and to file such other papers or documents
as
may be necessary or advisable in order to have the claims of the Indenture
Trustee (including any claim for reasonable compensation to the Indenture
Trustee and each predecessor Indenture Trustee, and their respective agents,
attorneys and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee, except as a result of negligence or bad faith) and of the
Noteholders allowed in such Proceedings;
(ii) unless
prohibited by applicable law and regulations, to vote on behalf of the Holders
of Notes in any election of a trustee, a standby trustee or Person performing
similar functions in any such Proceedings;
(iii) to
collect and receive any monies or other property payable or deliverable on
any
such claims and to distribute all amounts received with respect to the claims
of
the Noteholders and of the Indenture Trustee on their behalf, and
(iv) to
file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee or the Holders
of
Notes allowed in any judicial proceedings relative to the Issuer, its creditors
and its property; and any trustee, receiver, liquidator, custodian or other
similar official in any such Proceeding is hereby authorized by each of such
Noteholders to make payments to the Indenture Trustee and, in the event that
the
Indenture Trustee shall consent to the making of payments directly to such
Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient
to cover reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee.
(e) Nothing
herein contained shall be deemed to authorize the Indenture Trustee to authorize
or consent to or vote for or accept or adopt on behalf of any Noteholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder thereof or to authorize the Indenture Trustee
to vote in respect of the claim of any Noteholder in any such proceeding except,
as aforesaid, to vote for the election of a trustee in bankruptcy or similar
Person.
(f) All
rights of action and of asserting claims under this Indenture, or under any
of
the Notes, may be enforced by the Indenture Trustee without the possession
of
any of the Notes or the production thereof in any trial or other Proceedings
relative thereto, and any such action or proceedings instituted by the Indenture
Trustee shall be brought in its own name as trustee of an express trust, and
any
recovery of judgment, subject to the payment of the expenses, disbursements
and
compensation of the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents and attorneys, shall be for the ratable benefit of
the
Holders of the Notes, subject to Section 5.05 hereof.
(g) In
any
Proceedings brought by the Indenture Trustee (and also any Proceedings involving
the interpretation of any provision of this Indenture to which the Indenture
Trustee shall be a party), the Indenture Trustee shall be held to represent
all
the Holders of the Notes, and it shall not be necessary to make any Noteholder
a
party to any such Proceedings.
Section
5.04. Remedies;
Priorities.
(a) If
an
Event of Default shall have occurred and be continuing and if an acceleration
has been declared and not rescinded pursuant to Section 5.02 hereof, the
Indenture Trustee subject to the provisions of Section 10.16 hereof may, and
shall, at the written direction of the Holders of a majority of the aggregate
Note Balance of the Notes, do one or more of the following (subject to Section
5.05 hereof):
(i) institute
Proceedings in its own name and as trustee of an express trust for the
collection of all amounts then payable on the Notes or under this Indenture
with
respect thereto, whether by declaration or otherwise enforce any judgment
obtained, and collect from the Issuer and any other obligor upon such Notes
monies adjudged due;
(ii) institute
Proceedings from time to time for the complete or partial foreclosure of this
Indenture with respect to the Trust Estate;
(iii) exercise
any remedies of a secured party under the UCC and take any other appropriate
action to protect and enforce the rights and remedies of the Indenture Trustee
and the Holders of the Notes; and
(iv) sell
the
Trust Estate or any portion thereof or rights or interest therein, at one or
more public or private sales called and conducted in any manner permitted by
law; provided,
however,
that
the Indenture Trustee may not sell or otherwise liquidate the Trust Estate
following an Event of Default, unless (A) the Indenture Trustee obtains the
consent of the Holders of 100% of the aggregate Note Balance of the Notes,
(B)
the proceeds of such sale or liquidation distributable to the Holders of the
Notes are sufficient to discharge in full all amounts then due and unpaid upon
such Notes for principal and interest or (C) the Indenture Trustee determines
that the Mortgage Loans will not continue to provide sufficient funds for the
payment of principal of and interest on the applicable Notes as they would
have
become due if the Notes had not been declared due and payable, and the Indenture
Trustee obtains the consent of the Holders of a majority of the aggregate Note
Balance of the Notes. In determining such sufficiency or insufficiency with
respect to clause (B) and (C), the Indenture Trustee may, but need not, obtain
and rely upon written advice or an opinion (obtained at the expense of the
Trust) of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose. Notwithstanding the foregoing,
so long as a Servicer Event of Default has not occurred, any sale of the Trust
Estate shall be made subject to the continued servicing of the Mortgage Loans
by
the Servicer as provided in the Servicing Agreement.
(b) If
the
Indenture Trustee collects any money or property pursuant to this Article V,
it
shall pay out the money or property in the following order:
(i) to
the
Indenture Trustee and the Owner Trustee for amounts due under Section 6.07
hereof and to the Owner Trustee for amounts due pursuant to Article VII of
the
Trust Agreement;
(ii) to
the
Noteholders for amounts due and unpaid on the Notes (including Interest
Carryforward Amount but not including any Basis Risk Shortfalls) with respect
to
interest, first, concurrently, to the Holders of each Class of Class A Notes,
on
a pro
rata
basis
based on the entitlement of each such Class, second, to the Holders of the
Class
M-1 Notes, third, to the Holders of the Class M-2 Notes, fourth, to the Holders
of the Class M-3 Notes, fifth, to the Holders of the Class M-4 Notes, sixth,
to
the Holders of the Class M-5 Notes, seventh, to the Holders of the Class M-6
Notes, eighth, to the Holders of the Class M-7 Notes, and ninth to the Holders
of the Class M-8 Notes according to the amounts due and payable on the Notes
for
interest;
(iii) to
the
Noteholders for amounts due and unpaid on the Notes with respect to principal,
first, concurrently, to the Holders of each Class of Class A Notes, on a
pro
rata
basis
based on the Note Balance of each such Class, second, to the Holders of the
Class M-1 Notes, third, to the Holders of the Class M-2 Notes, fourth, to the
Holders of the Class M-3 Notes, fifth, to the Holders of the Class M-4 Notes,
sixth, to the Holders of the Class M-5 Notes, and seventh, to the Holders of
the
Class M-6 Notes according to the amounts due and payable on the Notes for
interest according to the amounts due and payable on such Notes for principal,
in each case, until the Note Balance of each such Class is reduced to
zero;
(iv) to
the
Noteholders for the amount of any related Allocated Realized Loss Amount and
Deferred Interest not previously paid, first, to the Holders of the Class M-1
Notes, second, to the Holders of the Class M-2 Notes, third, to the Holders
of
the Class M-3 Notes, fourth, to the Holders of the Class M-4 Notes, fifth,
to
the Holders of the Class M-5 Notes, and sixth, to the Holders of the Class
M-6
Notes;
(v) to
the
Noteholders for amounts due and unpaid on the Notes with respect to any related
Basis Risk Shortfalls, first, concurrently, to the Holders of each Class of
Class A Notes, on a pro
rata
basis
based on the Basis Risk Shortfalls for each such Class, second, to the Holders
of the Class M-1 Notes, third, to the Holders of the Class M-2 Notes, fourth,
to
the Holders of the Class M-3 Notes, fifth, to the Holders of the Class M-4
Notes, sixth, to the Holders of the Class M-5 Notes, and seventh, to the Holders
of the Class M-6 Notes according to the amounts due and payable on the Notes
with respect thereto, from amounts available in the Trust Estate for the
Noteholders; and
(vi) to
the
payment of the remainder, if any to the Certificate Paying Agent on behalf
of
the Issuer or to any other person legally entitled thereto.
The
Indenture Trustee may fix a record date and Payment Date for any payment to
Noteholders pursuant to this Section 5.04. At least 15 days before such record
date, the Indenture Trustee shall mail to each Noteholder a notice that states
the record date, the Payment Date and the amount to be paid.
Section
5.05. Optional
Preservation of the Trust Estate.
If the
Notes have been declared to be due and payable under Section 5.02 following
an
Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may elect to take and maintain
possession of the Trust Estate. It is the desire of the parties hereto and
the
Noteholders that there be at all times sufficient funds for the payment of
principal of and interest on the Notes and other obligations of the Issuer
and
the Indenture Trustee shall take such desire into account when determining
whether or not to take and maintain possession of the Trust Estate. In
determining whether and how to take and maintain possession of the Trust Estate,
the Indenture Trustee may, but need not, obtain and rely upon the written advice
or an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to
the
sufficiency of the Trust Estate for such purpose.
Section
5.06. Limitation
of Suits.
No
Holder of any Note shall have any right to institute any Proceeding, judicial
or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless and subject to the
provisions of Section 10.16 hereof
(i) such
Holder has previously given written notice to the Indenture Trustee of a
continuing Event of Default;
(ii) the
Holders of not less than 25% of the aggregate Note Balance of the Notes have
made a written request to the Indenture Trustee to institute such Proceeding
in
respect of such Event of Default in its own name as Indenture Trustee
hereunder;
(iii) such
Holder or Holders have offered to the Indenture Trustee indemnity reasonably
satisfactory to it against the costs, expenses and liabilities to be incurred
in
complying with such request;
(iv) the
Indenture Trustee for 60 days after its receipt of such notice of request and
offer of indemnity has failed to institute such Proceedings; and
(v) no
direction inconsistent with such written request has been given to the Indenture
Trustee during such 60-day period by the Holders of a majority of the Note
Balances of the Notes.
It
is
understood and intended that no one or more Holders of Notes shall have any
right in any manner whatever by virtue of, or by availing of, any provision
of
this Indenture to affect, disturb or prejudice the rights of any other Holders
of Notes or to obtain or to seek to obtain priority or preference over any
other
Holders or to enforce any right under this Indenture, except in the manner
herein provided.
Section
5.07. Unconditional
Rights of Noteholders To Receive Principal and Interest.
Notwithstanding
any other provisions in this Indenture, the Holder of any Note shall have the
right, which is absolute and unconditional, to receive payment of the principal
of and interest, if any, on such Note on or after the respective due dates
thereof expressed in such Note or in this Indenture and to institute suit for
the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder.
Section
5.08. Restoration
of Rights and Remedies.
If the
Indenture Trustee or any Noteholder has instituted any Proceeding to enforce
any
right or remedy under this Indenture and such Proceeding has been discontinued
or abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had
been
instituted.
Section
5.09. Rights
and Remedies Cumulative.
No
right or remedy herein conferred upon or reserved to the Indenture Trustee
or to
the Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative
and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section
5.10. Delay
or Omission Not a Waiver.
No
delay or omission of the Indenture Trustee or any Holder of any Note to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by
law
to the Indenture Trustee or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee or
by
the Noteholders, as the case may be.
Section
5.11. Control
By Noteholders. The
Holders of a majority of the aggregate Note Balance of Notes shall have the
right to direct the time, method and place of conducting any Proceeding for
any
remedy available to the Indenture Trustee with respect to the Notes or
exercising any trust or power conferred on the Indenture Trustee; provided
that:
(i) such
direction shall not be in conflict with any rule of law or with this
Indenture;
(ii) any
direction to the Indenture Trustee to sell or liquidate the Trust Estate shall
be by Holders of Notes representing not less than 100% of the Note Balances
of
the Notes;
(iii) the
Indenture Trustee has been provided with indemnity satisfactory to it;
and
(iv) the
Indenture Trustee may take any other action deemed proper by the Indenture
Trustee that is not inconsistent with such direction of the Holders of Notes
representing a majority of the Note Balances of the Notes.
Notwithstanding
the rights of Noteholders set forth in this Section 5.11 the Indenture Trustee
need not take any action that it determines might involve it in
liability.
Section
5.12. Waiver
of Past Defaults. Prior
to the declaration of the acceleration of the maturity of the Notes as provided
in Section 5.02 hereof, the Holders of Notes representing not less than a
majority of the aggregate Note Balance of the Notes may waive any past Event
of
Default and its consequences except an Event of Default (a) with respect to
payment of principal of or interest on any of the Notes or (b) in respect of
a
covenant or provision hereof which cannot be modified or amended without the
consent of the Holder of each Note. In the case of any such waiver, the Issuer,
the Indenture Trustee and the Holders of the Notes shall be restored to their
former positions and rights hereunder, respectively, but no such waiver shall
extend to any subsequent or other Event of Default or impair any right
consequent thereto.
Upon
any
such waiver, any Event of Default arising therefrom shall be deemed to have
been
cured and not to have occurred, for every purpose of this Indenture; but no
such
waiver shall extend to any subsequent or other Event of Default or impair any
right consequent thereto.
Section
5.13. Undertaking
for Costs.
All
parties to this Indenture agree, and each Holder of any Note and each Beneficial
Owner of any interest therein by such Xxxxxx’s or Beneficial Owner’s acceptance
thereof shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Indenture Trustee for any action taken,
suffered or omitted by it as Indenture Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys’ fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 5.13 shall not apply to (a) any suit
instituted by the Indenture Trustee, (b) any suit instituted by any Noteholder,
or group of Noteholders, in each case holding in the aggregate more than 10%
of
the Note Balances of the Notes or (c) any suit instituted by any Noteholder
for
the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this
Indenture.
Section
5.14. Waiver
of Stay or Extension Laws.
The
Issuer covenants (to the extent that it may lawfully do so) that it will not
at
any time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or
at
any time hereafter in force, that may affect the covenants or the performance
of
this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it
shall not hinder, delay or impede the execution of any power herein granted
to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
Section
5.15. Sale
of Trust Estate.
(a) The
power
to effect any sale or other disposition (a “Sale”) of any portion of the Trust
Estate pursuant to Section 5.04 hereof is expressly subject to the provisions
of
Section 5.05 hereof and this Section 5.15. The power to effect any such Sale
shall not be exhausted by any one or more Sales as to any portion of the Trust
Estate remaining unsold, but shall continue unimpaired until the entire Trust
Estate shall have been sold or all amounts payable on the Notes and under this
Indenture shall have been paid. The Indenture Trustee may from time to time
postpone any public Sale by public announcement made at the time and place
of
such Sale. The Indenture Trustee hereby expressly waives its right to any amount
fixed by law as compensation for any Sale.
(b) The
Indenture Trustee shall not in any private Sale sell the Trust Estate, or any
portion thereof, unless
(i) the
Holders of all Notes consent to or direct the Indenture Trustee to make, such
Sale, or
(ii) the
proceeds of such Sale would be not less than the entire amount which would
be
payable to the Noteholders under the Notes, in full payment thereof in
accordance with Section 5.02 hereof, on the Payment Date next succeeding the
date of such Sale, or
(iii) the
Indenture Trustee determines that the conditions for retention of the Trust
Estate set forth in Section 5.05 hereof cannot be satisfied (in making any
determination under this Section 5.15, the Indenture Trustee may rely upon
written advice or an opinion of an Independent investment banking firm obtained
and delivered as provided in Section 5.05 hereof), the Holders of Notes
representing at least 100% of the Note Balances of the Notes consent to such
Sale.
The
purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a
private Sale shall not be deemed a Sale or other disposition thereof for
purposes of this Section 5.15(b).
(c) [Reserved].
(d) In
connection with a Sale of all or any portion of the Trust Estate,
(i) any
Holder or Holders of Notes may bid for and purchase the property offered for
sale, and upon compliance with the terms of sale may hold, retain and possess
and dispose of such property, without further accountability, and may, in paying
the purchase money therefor, deliver any Notes or claims for interest thereon
in
lieu of cash up to the amount which shall, upon distribution of the net proceeds
of such sale, be payable thereon, and such Notes, in case the amounts so payable
thereon shall be less than the amount due thereon, shall be returned to the
Holders thereof after being appropriately stamped to show such partial
payment;
(ii) the
Indenture Trustee, may bid for and acquire the property offered for Sale in
connection with any Sale thereof, and, subject to any requirements of, and
to
the extent permitted by, applicable law in connection therewith, may purchase
all or any portion of the Trust Estate in a private sale, and, in lieu of paying
cash therefor, may make settlement for the purchase price by crediting the
gross
Sale price against the sum of (A) the amount which would be payable to the
Holders of the Notes and Holders of Certificates on the Payment Date next
succeeding the date of such Sale and (B) the expenses of the Sale and of any
Proceedings in connection therewith which are reimbursable to it, without being
required to produce the Notes in order to complete any such Sale or in order
for
the net Sale price to be credited against such Notes, and any property so
acquired by the Indenture Trustee shall be held and dealt with by it in
accordance with the provisions of this Indenture;
(iii) the
Indenture Trustee shall execute and deliver an appropriate instrument of
conveyance, prepared by the Issuer and satisfactory to the Indenture Trustee,
transferring its interest in any portion of the Trust Estate in connection
with
a Sale thereof;
(iv) the
Indenture Trustee is hereby irrevocably appointed the agent and attorney-in-fact
of the Issuer to transfer and convey its interest in any portion of the Trust
Estate in connection with a Sale thereof, and to take all action necessary
to
effect such Sale; and
(v) no
purchaser or transferee at such a Sale shall be bound to ascertain the Indenture
Trustee’s authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
Section
5.16. Action
on Notes.
The
Indenture Trustee’s right to seek and recover judgment on the Notes or under
this Indenture shall not be affected by the seeking, obtaining or application
of
any other relief under or with respect to this Indenture. Neither the lien
of
this Indenture nor any rights or remedies of the Indenture Trustee or the
Noteholders shall be impaired by the recovery of any judgment by the Indenture
Trustee against the Issuer or by the levy of any execution under such judgment
upon any portion of the Trust Estate or upon any of the assets of the Issuer.
Any money or property collected by the Indenture Trustee shall be applied in
accordance with Section 5.04(b) hereof.
Section
5.17. Performance
and Enforcement of Certain Obligations.
(a) Promptly
following a request from the Indenture Trustee to do so, the Issuer in its
capacity as holder of the Mortgage Loans, shall take all such lawful action
as
the Indenture Trustee may request to cause the Issuer to compel or secure the
performance and observance by the Seller, NC Capital and the Servicer, as
applicable, of each of their obligations to the Issuer under or in connection
with the Mortgage Loan Purchase Agreement and the Servicing Agreement, and
to
exercise any and all rights, remedies, powers and privileges lawfully available
to the Issuer under or in connection with the Mortgage Loan Purchase Agreement
and the Servicing Agreement to the extent and in the manner directed by the
Indenture Trustee, as pledgee of the Mortgage Loans, including the transmission
of notices of default on the part of the Seller, NC Capital or the Servicer
thereunder and the institution of legal or administrative actions or proceedings
to compel or secure performance by the Seller, NC Capital or the Servicer of
each of their obligations under the Mortgage Loan Purchase Agreement and the
Servicing Agreement.
(b) The
Indenture Trustee, as pledgee of the Mortgage Loans, may, and at the direction
(which direction shall be in writing or by telephone (confirmed in writing
promptly thereafter)) of the Holders of 66-2/3% of the Note Balances of the
Notes, shall exercise all rights, remedies, powers, privileges and claims of
the
Issuer against the Seller, NC Capital or the Servicer under or in connection
with the Mortgage Loan Purchase Agreement and the Servicing Agreement, including
the right or power to take any action to compel or secure performance or
observance by the Seller, NC Capital or the Servicer, as the case may be, of
each of their obligations to the Issuer thereunder and to give any consent,
request, notice, direction, approval, extension or waiver under the Mortgage
Loan Purchase Agreement and the Servicing Agreement, as the case may be, and
any
right of the Issuer to take such action shall not be suspended.
ARTICLE
VI
THE
INDENTURE TRUSTEE
Section
6.01. Duties
of Indenture Trustee.
(a) If
an
Event of Default has occurred and is continuing, the Indenture Trustee shall
exercise the rights and powers vested in it by this Indenture and use the same
degree of care and skill in their exercise as a prudent person would exercise
or
use under the circumstances in the conduct of such person’s own
affairs.
(b) Except
during the continuance of an Event of Default:
(i) the
Indenture Trustee undertakes to perform such duties and only such duties as
are
specifically set forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Indenture Trustee;
and
(ii) in
the
absence of bad faith on its part, the Indenture Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture; however, the Indenture Trustee
shall examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The
Indenture Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(i) this
paragraph does not limit the effect of paragraph (b) of this Section
6.01;
(ii) the
Indenture Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer unless it is proved that the Indenture Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the
Indenture Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it from
Noteholders or from the Issuer, which they are entitled to give under the Basic
Documents.
(d) The
Indenture Trustee shall not be liable for interest on any money received by
it.
(e) Money
held in trust by the Indenture Trustee need not be segregated from other trust
funds except to the extent required by law or the terms of this Indenture or
the
Trust Agreement.
(f) No
provision of this Indenture shall require the Indenture Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds to believe that repayment of such funds
or
indemnity satisfactory to it against such risk or liability is not reasonably
assured to it.
(g) Every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Indenture Trustee shall be subject to the
provisions of this Section and to the provisions of the TIA.
(h) The
Indenture Trustee shall act in accordance with Sections 6.03 of the Servicing
Agreement and shall act as successor to the Servicer or appoint a successor
Servicer in accordance with Section 6.02 of the Servicing
Agreement.
(i) In
order
to comply with laws, rules, regulations and executive orders in effect from
time
to time applicable to banking institutions, including those relating to the
funding of terrorist activities and money laundering (“Applicable Law”), the
Trustee is required to obtain, verify and record certain information relating
to
individuals and entities which maintain a business relationship with the
Trustee. Accordingly, each of the parties agrees to provide to the Trustee
upon
its request from time to time such identifying information and documentation
as
may be available for such party in order to enable the Trustee to comply with
Applicable Law.
Section
6.02. Rights
of Indenture Trustee.
(a) The
Indenture Trustee may conclusively rely on, and shall be fully protected from
acting or refraining from acting upon, any document believed by it to be genuine
and to have been signed or presented by the proper person. The Indenture Trustee
need not investigate any fact or matter stated in the document.
(b) Before
the Indenture Trustee acts or refrains from acting, it may require an Officer’s
Certificate or an Opinion of Counsel. The Indenture Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on an
Officer’s Certificate or Opinion of Counsel.
(c) The
Indenture Trustee shall not be liable for any action it takes or omits to take
in good faith which it believes to be authorized or within its rights or powers;
provided,
however,
that
the Indenture Trustee’s conduct does not constitute willful misconduct,
negligence or bad faith.
(d) The
Indenture Trustee may consult with counsel, and the advice or Opinion of Counsel
with respect to legal matters relating to the Basic Documents and the Notes
shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder or in
connection herewith in good faith and in accordance with the advice or opinion
of such counsel.
(e) The
Indenture Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder, either directly or by or through agents, attorneys,
custodians or nominees appointed with due care, and shall not be responsible
for
any willful misconduct or negligence on the part of any agent, attorney,
custodian or nominee so appointed.
(f) The
Indenture Trustee or its Affiliates are permitted to receive additional
compensation that could be deemed to be in the Indenture Trustee’s economic
self-interest for (i) serving as investment adviser, administrator, shareholder,
servicing agent, custodian or sub-custodian with respect to certain of the
Permitted Investments, (ii) using Affiliates to effect transactions in certain
Permitted Investments and (iii) effecting transactions in certain Permitted
Investments. Such compensation shall not be considered an amount that is
reimbursable or payable to the Indenture Trustee (i) as part of the Indenture
Trustee Fee, (ii) pursuant to Sections 3.05(d), 3.05(h), 5.04(b), 6.07 or
8.02(c) hereunder or (iii) out of the Available Payment Amount.
Section
6.03. Individual
Rights of Indenture Trustee.
The
Indenture Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates
with the same rights it would have if it were not Indenture Trustee, subject
to
the requirements of the Trust Indenture Act. Any Note Registrar, co-registrar
or
co-paying agent may do the same with like rights. However, the Indenture Trustee
must comply with Sections 6.11 and 6.12 hereof.
Section
6.04. Indenture
Trustee’s Disclaimer.
The
Indenture Trustee shall not be responsible for and makes no representation
as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Issuer’s use of the proceeds from the Notes, and it shall
not be responsible for any statement of the Issuer in the Indenture or in any
document issued in connection with the sale of the Notes or in the Notes other
than the Indenture Trustee’s certificate of authentication.
Section
6.05. Notice
of Event of Default.
Subject
to Section 5.01, the Indenture Trustee shall promptly mail to each Noteholder
notice of the Event of Default after it is actually known to a Responsible
Officer
of
the Indenture Trustee, unless such Event of Default shall have been waived
or
cured. Except in the case of an Event of Default in payment of principal of
or
interest on any Note, the Indenture Trustee may withhold the notice if and
so
long as it in good faith determines that withholding the notice is in the
interests of Noteholders.
Section
6.06. Reports
by Indenture Trustee to Holders and Tax Administration.
The
Indenture Trustee shall deliver to each Noteholder such information as may
be
required to enable such holder to prepare its federal and state income tax
returns. The Indenture Trustee shall prepare and file (or cause to be prepared
and filed), on behalf of the Owner Trustee or the Issuer, all tax returns (if
any) and information reports, tax elections and such annual or other reports
of
the Issuer as are necessary for preparation of tax returns and information
reports as provided in Section 5.03 of the Trust Agreement, including without
limitation Form 1099. All tax returns and information reports shall be signed
by
the Owner Trustee as provided in Section 5.03 of the Trust
Agreement.
Section
6.07. Compensation
and Indemnity. The
Indenture Trustee shall withdraw from the Payment Account on each Payment Date
and pay to itself the Indenture Trustee Fee. The Indenture Trustee’s
compensation shall not be limited by any law on compensation of a trustee of
an
express trust. In addition, the Indenture Trustee shall withdraw from the
Payment Account on each Payment Date and pay to the Owner Trustee the Owner
Trustee Fee and its Expenses.
The
Issuer shall reimburse the Indenture Trustee and the Owner Trustee for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to compensation for its services. Such expenses shall
include reasonable compensation and expenses, disbursements and advances of
the
Indenture Trustee’s or the Owner Trustee’s agents, counsel, accountants and
experts. The Issuer shall indemnify the Indenture Trustee and hold it harmless
against any and all claim, tax, penalty, loss, liability or expense (including
attorneys’ fees and expenses) of any kind whatsoever incurred by it in
connection with the administration of this Trust and the performance of its
duties under any of the Basic Documents. The Indenture Trustee shall notify
the
Issuer promptly of any claim for which it may seek indemnity. Failure by the
Indenture Trustee to so notify the Issuer shall not relieve the Issuer of its
obligations hereunder. The Issuer shall defend any such claim, and the Indenture
Trustee may have separate counsel and the Issuer shall pay the fees and expenses
of such counsel. The Issuer is not obligated to reimburse any expense or
indemnify against any loss, liability or expense incurred by the Indenture
Trustee through the Indenture Trustee’s own willful misconduct, negligence or
bad faith.
The
Issuer’s payment obligations to the Indenture Trustee and the Owner Trustee
pursuant to this Section 6.07 shall survive the discharge of this Indenture
and
the termination or resignation of the Indenture Trustee. When the Indenture
Trustee or the Owner Trustee incurs expenses after the occurrence of an Event
of
Default with respect to the Issuer, the expenses are intended to constitute
expenses of administration under Title 11 of the United States Code or any
other
applicable federal or state bankruptcy, insolvency or similar law.
Section
6.08. Replacement
of Indenture Trustee.
No
resignation or removal of the Indenture Trustee and no appointment of a
successor Indenture Trustee shall become effective until the acceptance of
appointment by the successor Indenture Trustee pursuant to this Section 6.08.
The Indenture Trustee may resign at any time by so notifying the Issuer. Holders
of a majority of Note Balances of the Notes may remove the Indenture Trustee
by
so notifying the Indenture Trustee and may appoint a successor Indenture
Trustee. The Issuer shall, remove the Indenture Trustee if:
(i) the
Indenture Trustee fails to comply with Section 6.11 hereof;
(ii) the
Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a
receiver or other public officer takes charge of the Indenture Trustee or its
property; or
(iv) the
Indenture Trustee otherwise becomes incapable of acting.
If
the
Indenture Trustee resigns or is removed or if a vacancy exists in the office
of
the Indenture Trustee for any reason (the Indenture Trustee in such event being
referred to herein as the retiring Indenture Trustee), the Issuer shall,
promptly appoint a successor Indenture Trustee.
A
successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon,
the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Noteholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee
to
the successor Indenture Trustee.
If
a
successor Indenture Trustee does not take office within 30 days after the
retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Holders of a majority of Note Balances of the Notes
may petition any court of competent jurisdiction for the appointment of a
successor Indenture Trustee.
Notwithstanding
the replacement of the Indenture Trustee pursuant to this Section, the Issuer’s
obligations under Section 6.07 shall continue for the benefit of the
retiring Indenture Trustee.
Section
6.09. Successor
Indenture Trustee by Xxxxxx.
If the
Indenture Trustee consolidates with, merges or converts into, or transfers
all
or substantially all of its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation, without any further act, shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11 hereof. The Indenture Trustee shall
provide the Rating Agencies with prior written notice of any such
transaction.
If
at the
time such successor or successors by merger, conversion or consolidation to
the
Indenture Trustee shall succeed to the trusts created by this Indenture and
any
of the Notes shall have been authenticated but not delivered, any such successor
to the Indenture Trustee may adopt the certificate of authentication of any
predecessor trustee and deliver such Notes so authenticated; and if at that
time
any of the Notes shall not have been authenticated, any successor to the
Indenture Trustee may authenticate such Notes either in the name of any
predecessor hereunder or in the name of the successor to the Indenture Trustee;
and in all such cases such certificates shall have the full force which it
is in
the Notes or in this Indenture provided that the certificate of the Indenture
Trustee shall have.
Section
6.10. Appointment
of Co-Indenture Trustee or Separate Indenture Trustee.
(a) Notwithstanding
any other provisions of this Indenture, at any time, for the purpose of meeting
any legal requirement of any jurisdiction in which any part of the Trust Estate
may at the time be located, the Indenture Trustee shall have the power and
may
execute and deliver all instruments to appoint one or more Persons to act as
a
co-trustee or co-trustees, or separate trustee or separate trustees, of all
or
any part of the Trust Estate, and to vest in such Person or Persons, in such
capacity and for the benefit of the Noteholders, such title to the Trust Estate,
or any part hereof, and, subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the Indenture Trustee may
consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 6.11 hereof.
(b) Every
separate trustee and co-trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and
conditions:
(i) all
rights, powers, duties and obligations conferred or imposed upon the Indenture
Trustee shall be conferred or imposed upon and exercised or performed by the
Indenture Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Indenture Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Estate
or
any portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction
of
the Indenture Trustee;
(ii) no
trustee hereunder shall be personally liable by reason of any act or omission of
any other trustee hereunder; and
(iii) the
Indenture Trustee may at any time accept the resignation of or remove any
separate trustee or co-trustee.
(c) Any
notice, request or other writing given to the Indenture Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Indenture and the conditions
of this Article VI. Each separate trustee and co-trustee, upon its acceptance
of
the trusts conferred, shall be vested with the estates or property specified
in
its instrument of appointment, either jointly with the Indenture Trustee or
separately, as may be provided therein, subject to all the provisions of this
Indenture, specifically including every provision of this Indenture relating
to
the conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.
(d) Any
separate trustee or co-trustee may at any time constitute the Indenture Trustee,
its agent or attorney-in-fact with full power and authority, to the extent
not
prohibited by law, to do any lawful act under or in respect of this Indenture
on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Indenture Trustee, to the extent permitted by law, without the appointment
of a
new or successor trustee.
Section
6.11. Eligibility;
Disqualification. The
Indenture Trustee shall at all times satisfy the requirements of TIA § 310(a).
The Indenture Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of condition
and it or its parent shall have a long-term debt rating of “Baa3” or better by
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 Issuer 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 Issuer.
The
Indenture Trustee shall comply with TIA § 311(a), excluding any creditor
relationship listed in TIA § 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA § 311(a) to the extent
indicated.
Section
6.13. Representations
and Warranties. The
Indenture Trustee hereby represents that:
(i) It
is a
national banking association duly organized, validly existing and in good
standing under the laws of the United States.
(ii) The
execution and delivery of this Indenture by it, and the performance and
compliance with the terms of this Indenture by it, will not violate its charter
or bylaws.
(iii) It
has
the full power and authority to enter into and consummate all transactions
contemplated by this Indenture has duly authorized the execution, delivery
and
performance of this Indenture, and has duly executed and delivered this
Indenture.
(iv) This
Indenture, assuming due authorization, execution and delivery by the Issuer,
constitutes a valid, legal and binding obligation of it, enforceable against
it
in accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, receivership, reorganization, moratorium and other laws affecting
the enforcement of creditors’ rights generally, and (B) general principles of
equity, regardless of whether such enforcement is considered in a proceeding
in
equity or at law.
(v) The
Indenture Trustee is a “securities intermediary,” as such term is defined in
Section 8-102(a)(14)(B) of the New York UCC, that in the ordinary course of
its
business maintains “securities accounts” for others, as such term is used in
Section 8-501 of the New York UCC.
(vi) The
“securities intermediary’s jurisdiction” as defined in the New York UCC shall be
the State of New York.
(vii) The
Indenture Trustee is not a “clearing corporation”, as such term is defined in
Section 8-102(a)(5) of the New York UCC.
Section
6.14. Directions
to Indenture Trustee.
The Indenture Trustee is hereby directed:
(i) to
accept
the pledge of the Mortgage Loans and hold the assets of the Trust Estate in
trust for the Noteholders;
(ii) to
authenticate and deliver the Notes substantially in the form prescribed by
Exhibits A-1 through A-14 to this Indenture in accordance with the terms of
this
Indenture; and
(iii) to
take
all other actions as shall be required to be taken by the terms of this
Indenture.
Section
6.15. The
Agents. The
provisions of this Indenture relating to the limitations of the Indenture
Trustee’s liability and to its indemnity, rights and protections shall inure
also to the Paying Agent and Note Registrar.
ARTICLE VII
NOTEHOLDERS’
LISTS AND REPORTS
Section
7.01. Issuer
To Furnish Indenture Trustee Names and Addresses of Noteholders.
The
Issuer will furnish or cause to be furnished to the Indenture Trustee (a) not
more than five days after each Record Date, a list, in such form as the
Indenture Trustee may reasonably require, of the names and addresses of the
Holders of Notes as of such Record Date, (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date
not
more than 10 days prior to the time such list is furnished; provided,
however,
that so
long as the Indenture Trustee is the Note Registrar, no such list shall be
required to be furnished to the Indenture Trustee.
Section
7.02. Preservation
of Information; Communications to Noteholders.
(a) The
Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Indenture Trustee as provided in Section
7.01
hereof and the names and addresses of Holders of Notes received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy
any
list furnished to it as provided in such Section 7.01 upon receipt of a new
list
so furnished.
(b) Noteholders
or Note Owners may communicate pursuant to TIA § 312(b) with other Noteholders
or Note Owners with respect to their rights under this Indenture or under the
Notes.
(c) The
Issuer, the Indenture Trustee and the Note Registrar shall have the protection
of TIA § 312(c).
Section
7.03. Reports
of Issuer.
(a) Subject
to Section 4.02 of the Servicing Agreement,
(i) The
Indenture Trustee shall file with the Commission on behalf of the Issuer, with
a
copy to the Issuer within 15 days before the Issuer is required to file the
same
with the Commission, the annual reports and the information, documents and
other
reports (or such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) that the Issuer may be required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act;
(ii) The
Indenture Trustee shall file with the Commission, on behalf of the Issuer,
in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect
to
compliance by the Issuer with the conditions and covenants of this Indenture
as
may be required from time to time by such rules and regulations;
and
(iii) The
Indenture Trustee shall supply (and the Indenture Trustee shall transmit by
mail
to all Noteholders described in TIA § 313(c)) such summaries of any information,
documents and reports required to be filed by the Issuer pursuant to clauses
(i)
and (ii) of this Section 7.03(a) and by rules and regulations prescribed from
time to time by the Commission.
(b) Unless
the Issuer otherwise determines, the fiscal year of the Issuer shall end on
December 31st
of each
year.
Section
7.04. Reports
by Indenture Trustee.
If
required by TIA § 313(a), within 60 days after each January 30th
beginning with March 31, 2007, the Indenture Trustee shall mail to each
Noteholder as required by TIA § 313(c) a brief report dated as of such date that
complies with TIA § 313(a). The Indenture Trustee also shall comply with TIA §
313(b).
A
copy of
each report at the time of its mailing to Noteholders shall be filed by the
Indenture Trustee with the Commission via XXXXX and each stock exchange, if
any,
on which the Notes are listed. The Issuer shall notify the Indenture Trustee
if
and when the Notes are listed on any stock exchange.
Section
7.05. Statements
to Noteholders.
(a) With
respect to each Payment Date, the Indenture Trustee shall make available via
the
Indenture Trustee’s website xxxxx://xxx.xxx.xx.xxx/xxxx or deliver at the
recipient’s option to each Noteholder and each Certificateholder, the Depositor,
the Owner Trustee, the Certificate Paying Agent and each Rating Agency, a
statement setting forth the following information as to the Notes, to the extent
applicable:
(i) the
amount of the payment made on such Payment Date to the Holders of the Notes
of
each Class allocable to principal;
(ii) the
amount of the payment made on such Payment Date to the Holders of the Notes
of
each Class allocable to interest;
(iii) the
fees
and expenses of the Trust accrued and paid on such Payment Date and to whom
such
fees and expenses were paid;
(iv) the
aggregate amount of P&I Advances for such Payment Date (including the
general purpose of such P&I Advances);
(v) the
aggregate Stated Principal Balance of the Mortgage Loans and any REO Properties
as of the close of business on such Payment Date;
(vi) the
number, aggregate principal balance, weighted average remaining term to maturity
and weighted average Mortgage Rate of the Mortgage Loans as of the related
Due
Date;
(vii) the
number and aggregate unpaid principal balance of Mortgage Loans (a) delinquent
30 to 59 days, (b) delinquent 60 to 89 days, (c) delinquent 90 or more days,
in
each case, as of the last day of the preceding calendar month, (d) as to which
foreclosure proceedings have been commenced and (e) with respect to which the
related Mortgagor has filed for protection under applicable bankruptcy laws,
with respect to whom bankruptcy proceedings are pending or with respect to
whom
bankruptcy protection is in force;
(viii) with
respect to any Mortgage Loan that became an REO Property during the preceding
calendar month, the loan number of such Mortgage Loan and the Stated Principal
Balance of such Mortgage Loan as of the date it became an REO
Property;
(ix) the
aggregate amount of Principal Prepayments made during the related Prepayment
Period;
(x) the
aggregate amount of Realized Losses incurred during the related Prepayment
Period and the aggregate amount of Realized Losses incurred since the Closing
Date and the aggregate amount of Subsequent Recoveries received during the
Prepayment Period and the cumulative amount of Subsequent Recoveries received
since the Closing Date;
(xi) the
aggregate Note Balance of each Class of Notes, before and after giving effect
to
the payments, and allocations of Realized Losses, made on such Payment
Date;
(xii) the
Interest Payment Amount in respect of the Class A Notes and the Mezzanine Notes
for such Payment Date and the Interest Carry Forward Amount, if any, with
respect to the Class A Notes and the Mezzanine Notes on such Payment
Date;
(xiii) the
aggregate amount of any Prepayment Interest Shortfall for such Payment Date,
to
the extent not covered by payments by the Servicer pursuant to Section 3.24
of
the Servicing Agreement;
(xiv) the
aggregate amount of Relief Act Interest Shortfalls for such Payment
Date;
(xv) the
Net
Monthly Excess Cashflow, the Overcollateralized Amount, the
Overcollateralization Reduction Amount, Overcollateralization Increase Amount,
the Overcollateralization Target Amount, the Credit Enhancement Percentage
for
such Payment Date;
(xvi) the
respective Note Rates applicable to the Class A Notes and the Mezzanine Notes
for such Payment Date and the Note Rate applicable to the Class A Notes and
the
Mezzanine Notes for the immediately succeeding Payment Date;
(xvii) the
Basis
Risk Shortfall for the Class A Notes and the Mezzanine Notes, if any, for such
Payment Date and the amount remaining unpaid after reimbursements therefor
on
such Payment Date;
(xviii) whether
the Stepdown Date or a Trigger Event is in effect on such Payment Date;
(xix) the
Delinquency Percentage and Realized Loss Percentage for such Payment
Date;
(xx) the
amount of Prepayment Charges collected or paid by the Servicer for such Payment
Date;
(xxi) the
total
cashflows received and the general sources thereof; and
(xxii) the
applicable Record Dates, Interest Accrual Periods and Interest Determination
Dates for calculating payments for such Payment Date.
Items
(i)
and (ii) above shall be presented on the basis of a Note having a $1,000
denomination. In addition, by January 31st
of each
calendar year following any year during which the Notes are outstanding, the
Indenture Trustee shall furnish a report to each Noteholder of record if so
requested in writing at any time during each calendar year as to the aggregate
of amounts reported pursuant to (i) and (ii) with respect to the Notes for
such
calendar year.
(b) The
Indenture Trustee may conclusively rely upon the Remittance Report provided
by
the Servicer pursuant to Section 4.01 of the Servicing Agreement in its
preparation of its Statement to Noteholders.
ARTICLE VIII
ACCOUNTS,
DISBURSEMENTS AND RELEASES
Section
8.01. Collection
of Money.
Except
as otherwise expressly provided herein, the Indenture Trustee may demand payment
or delivery of, and shall receive and collect, directly and without intervention
or assistance of any fiscal agent or other intermediary, all money and other
property payable to or receivable by the Indenture Trustee pursuant to this
Indenture. The Indenture Trustee shall apply all such money received by it
as
provided in this Indenture. Except as otherwise expressly provided in this
Indenture, if any default occurs in the making of any payment or performance
under any agreement or instrument that is part of the Trust Estate, the
Indenture Trustee may take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim
a
Default or Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.
Section
8.02. Trust
Accounts.
(a) On
or
prior to the Closing Date, the Issuer shall cause the Indenture Trustee to
establish and maintain, in the name of the Indenture Trustee, for the benefit
of
the Noteholders, the Payment Account as provided in Section 3.01
hereof.
(b) On
each
Payment Date, the Indenture Trustee shall pay itself the Indenture Trustee
Fee
and any expenses owing to it for such Payment Date and shall pay the Owner
Trustee the Owner Trustee Fee and its Expenses, and then the Indenture Trustee
shall pay all remaining amounts on deposit in the Payment Account to the
Noteholders in respect of the Notes and to such other persons in the order
of
priority set forth in Section 3.05 hereof (except as otherwise provided in
Section 5.04(b) hereof).
(c) Pursuant
to Section 3.12 of the Servicing Agreement, funds in the Payment Account shall
remain uninvested unless the Indenture Trustee is otherwise directed by the
Servicer in Section 3.10(d) of the Servicing Agreement.
Section
8.03. Officer’s
Certificate.
The
Indenture Trustee shall receive at least seven Business Days’ notice when
requested by the Issuer to take any action pursuant to Section 8.05(a) hereof,
accompanied by copies of any instruments to be executed, and the Indenture
Trustee shall also require, as a condition to such action, an Officer’s
Certificate, in form and substance satisfactory to the Indenture Trustee,
stating the legal effect of any such action, outlining the steps required to
complete the same, and concluding that all conditions precedent to the taking
of
such action have been complied with.
Section
8.04. Termination
Upon Distribution to Noteholders.
This
Indenture and the respective obligations and responsibilities of the Issuer
and
the Indenture Trustee created hereby shall terminate upon the payment to
Noteholders, the Certificate Paying Agent on behalf of the Owner Trustee, the
Certificateholders and the Indenture Trustee of all amounts required to be
paid
pursuant to Article III; provided,
however,
that in
no event shall the trust created hereby continue beyond the expiration of 21
years from the death of the survivor of the descendants of Xxxxxx X. Xxxxxxx,
the late ambassador of the United States to the Court of St. Xxxxx, living
on
the date hereof.
Section
8.05. Release
of Trust Estate.
(a) Subject
to the payment of its fees and expenses, the Indenture Trustee may, and when
required by the provisions of this Indenture shall, execute instruments to
release property from the lien of this Indenture, or convey the Indenture
Trustee’s interest in the same, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture, including for the purposes
of any repurchase by the Servicer of a Mortgage Loan pursuant to Section 3.16
of
the Servicing Agreement. No party relying upon an instrument executed by the
Indenture Trustee as provided in Article VIII hereunder shall be bound to
ascertain the Indenture Trustee’s authority, inquire into the satisfaction of
any conditions precedent, or see to the application of any monies.
(b) The
Indenture Trustee shall, at such time as (i) there are no Notes Outstanding
and
(ii) all sums due to the Indenture Trustee pursuant to this Indenture have
been
paid, release any remaining portion of the Trust Estate that secured the Notes
from the lien of this Indenture.
(c) The
Indenture Trustee shall release property from the lien of this Indenture
pursuant to this Section 8.05 only upon receipt of a request from the Issuer
accompanied by an Officers’ Certificate and an Opinion of Counsel stating that
all applicable requirements have been satisfied.
Section
8.06. Surrender
of Notes Upon Final Payment.
By
acceptance of any Note, the Holder thereof agrees to surrender such Note to
the
Indenture Trustee promptly, prior to such Noteholder’s receipt of the final
payment thereon.
Section
8.07. Optional
Redemption of the Notes.
(a) The
Holder of the Owner Trust Certificates (in such capacity, the “Terminator”)
shall have the option to purchase the Mortgage Loans and any REO Properties
on
any Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date. The aggregate purchase price will be equal
to
the greater of (i) the Stated Principal Balance of the Mortgage Loans and the
appraised value of any REO Properties, such appraisal to be conducted by an
Independent appraiser mutually agreed upon by the Terminator and the Indenture
Trustee in their reasonable discretion and (ii) the fair market value of the
Mortgage Loans and the REO Properties (as determined by the Terminator and,
to
the extent that a Class of Class A Notes or a Class of Mezzanine Notes will
not
receive all amounts owed to it as a result of the purchase, the Indenture
Trustee (it being understood and agreed that any determination by the Indenture
Trustee shall be made solely in reliance on an appraisal by an Independent
appraiser as provided above)), in each case plus accrued and unpaid interest
thereon at the weighted average of the Mortgage Rates through the end of the
Due
Period preceding the final Payment Date plus unreimbursed Servicing Advances,
P&I Advances, any unpaid Servicing Fees allocable to such Mortgage Loans and
REO Properties and any accrued and unpaid Basis Risk Shortfalls then remaining
unpaid or which is due to the exercise of such option (the “Redemption Price”);
provided, however, that the Terminator will not be permitted to purchase the
Mortgage Loans unless the Redemption Price is sufficient to retire the Note
Balance of the remaining Notes to zero. If the determination of the fair market
value of the Mortgage Loans and REO Properties shall be required to be made
by
the Terminator and an Independent appraiser as provided above, (A) such
appraisal shall be obtained at no expense to the Indenture Trustee and (B)
the
Indenture Trustee may conclusively rely on, and shall be protected in relying
on, such appraisal.
(b) In
order
to exercise the foregoing option, the Terminator shall provide written notice
of
its exercise of such option to the Indenture Trustee and the Owner Trustee
at
least 15 days prior to its exercise. Following receipt of the notice, the
Indenture Trustee shall provide notice to the Noteholders of the final payment
on the Notes. In addition, the Terminator shall, not less than one Business
Day
prior to the proposed Payment Date on which such redemption is to be made,
deposit the aggregate redemption price specified in (a) above with the Indenture
Trustee, who shall deposit the aggregate redemption price into the Payment
Account and shall, on the Payment Date after receipt of the funds, apply such
funds to make final payments of principal and interest on the Notes in
accordance with Section 3.05(b) and (c) hereof and payment in full to the
Indenture Trustee, and this Indenture shall be discharged subject to the
provisions of Section 4.10 hereof. If for any reason the amount deposited by
the
Terminator is not sufficient to make such redemption or such redemption cannot
be completed for any reason, the amount so deposited by the Terminator with
the
Indenture Trustee shall be immediately returned to the Terminator in full and
shall not be used for any other purpose or be deemed to be part of the Trust
Estate.
ARTICLE IX
SUPPLEMENTAL
INDENTURES
Section
9.01. Supplemental
Indentures Without Consent of Noteholders.
(a) Without
the consent of the Holders of any Notes but with prior notice to the Rating
Agencies, the Issuer and the Indenture Trustee, when authorized by an Issuer
Request, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
TIA
as in force at the date of the execution thereof), in form satisfactory to
the
Indenture Trustee, for any of the following purposes:
(i) to
correct or amplify the description of any property at any time subject to the
lien of this Indenture, or better to assure, convey and confirm unto the
Indenture Trustee any property subject or required to be subjected to the lien
of this Indenture, or to subject to the lien of this Indenture additional
property;
(ii) to
evidence the succession, in compliance with the applicable provisions hereof,
of
another person to the Issuer, and the assumption by any such successor of the
covenants of the Issuer herein and in the Notes contained;
(iii) to
add to
the covenants of the Issuer, for the benefit of the Holders of the Notes, or
to
surrender any right or power herein conferred upon the Issuer;
(iv) to
convey, transfer, assign, mortgage or pledge any property to or with the
Indenture Trustee;
(v) to
cure
any ambiguity, to correct or supplement any provision herein or in any
supplemental indenture that may be inconsistent with any other provision herein
or in any supplemental indenture;
(vi) to
make
any other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; provided, that such action (as
evidenced by either (i) an Opinion of Counsel delivered to the Servicer and
the
Indenture Trustee or (ii) confirmation from the Rating Agencies that such
amendment will not result in the reduction or withdrawal of the rating of any
Class of Notes) shall not materially and adversely affect the interests of
the
Holders of the Notes;
(vii) to
evidence and provide for the acceptance of the appointment hereunder by a
successor trustee with respect to the Notes and to add to or change any of
the
provisions of this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one trustee, pursuant to
the
requirements of Article VI hereof; or
(viii) to
modify, eliminate or add to the provisions of this Indenture to such extent
as
shall be necessary to effect the qualification of this Indenture under the
TIA
or under any similar federal statute hereafter enacted and to add to this
Indenture such other provisions as may be expressly required by the
TIA;
provided,
however,
that no
such indenture supplements shall be entered into unless the Indenture Trustee
shall have received an Opinion of Counsel as to the enforceability of any such
indenture supplement and to the effect that (i) such indenture supplement is
permitted hereunder and (ii) entering into such indenture supplement will not
result in a “substantial modification” of the Notes under Treasury Regulation
Section 1.1001-3 or adversely affect the status of the Notes as indebtedness
for
federal income tax purposes.
The
Indenture Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, may,
also without the consent of any of the Holders of the Notes and prior notice
to
the Rating Agencies, enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; provided,
however,
that
such action as evidenced by an Opinion of Counsel, (i) is permitted by this
Indenture, and shall not (ii) adversely affect in any material respect the
interests of any Noteholder (which may be evidenced by confirmation from the
Rating Agencies that such amendment will not result in the reduction or
withdrawal of the rating of any Class of Notes) or (iii) if 100% of the
Certificates are not owned by the Seller, cause the Issuer to be subject to
an
entity level tax for federal income tax purposes.
Section
9.02. Supplemental
Indentures With Consent of Noteholders.
The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, also
may, with prior notice to the Rating Agencies and, with the consent of the
Holders of not less than a majority of the Note Balance of each Class of Notes
affected thereby, by Act (as defined in Section 10.03 hereof) of such Holders
delivered to the Issuer and the Indenture Trustee, enter into an indenture
or
indentures supplemental hereto for the purpose of adding any provisions to,
or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Notes under
this
Indenture; provided,
however,
that no
such supplemental indenture shall, without the consent of the Holder of each
Note affected thereby:
(i) change
the date of payment of any installment of principal of or interest on any Note,
or reduce the principal amount thereof or the interest rate thereon, change
the
provisions of this Indenture relating to the application of collections on,
or
the proceeds of the sale of, the Trust Estate to payment of principal of or
interest on the Notes, or change any place of payment where, or the coin or
currency in which, any Note or the interest thereon is payable, or impair the
right to institute suit for the enforcement of the provisions of this Indenture
requiring the application of funds available therefor, as provided in Article
V,
to the payment of any such amount due on the Notes on or after the respective
due dates thereof;
(ii) reduce
the percentage of the Note Balances of the Notes, the consent of the Holders
of
which is required for any such supplemental indenture, or the consent of the
Holders of which is required for any waiver of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences provided for in this Indenture;
(iii) modify
or
alter the provisions of the proviso to the definition of the term “Outstanding”
or modify or alter the exception in the definition of the term
“Holder”;
(iv) reduce
the percentage of the Note Balances of the Notes required to direct the
Indenture Trustee to direct the Issuer to sell or liquidate the Trust Estate
pursuant to Section 5.04 hereof;
(v) modify
any provision of this Section 9.02 except to increase any percentage specified
herein or to provide that certain additional provisions of this Indenture or
the
Basic Documents cannot be modified or waived without the consent of the Holder
of each Note affected thereby;
(vi) modify
any of the provisions of this Indenture in such manner as to affect the
calculation of the amount of any payment of interest or principal due on any
Note on any Payment Date (including the calculation of any of the individual
components of such calculation); or
(vii) permit
the creation of any lien ranking prior to or on a parity with the lien of this
Indenture with respect to any part of the Trust Estate or, except as otherwise
permitted or contemplated herein, terminate the lien of this Indenture on any
property at any time subject hereto or deprive the Holder of any Note of the
security provided by the lien of this Indenture;
and
provided,
further,
that
such action shall not, as evidenced by an Opinion of Counsel, cause the Issuer
(if 100% of the Certificates are not owned by the Seller) to be subject to
an
entity level tax.
Any
such
action shall not (as evidenced by either (i) an Opinion of Counsel delivered
to
the Servicer and the Indenture Trustee or (ii) confirmation from the Rating
Agencies that such amendment will not result in the reduction or withdrawal
of
the rating of any Class of Notes) adversely affect in any material respect
the
interest of any Holder (other than a Holder who shall consent to such
supplemental indenture).
It
shall
not be necessary for any Act of Noteholders under this Section 9.02 to approve
the particular form of any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance thereof.
Promptly
after the execution by the Issuer and the Indenture Trustee of any supplemental
indenture pursuant to this Section 9.02, the Indenture Trustee shall mail to
the
Holders of the Notes to which such amendment or supplemental indenture relates
a
notice setting forth in general terms the substance of such supplemental
indenture. Any failure of the Indenture Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity
of
any such supplemental indenture.
Section
9.03. Execution
of Supplemental Indentures.
In
executing, or permitting the additional trusts created by, any supplemental
indenture permitted by this Article IX or the modification thereby of the trusts
created by this Indenture, the Indenture Trustee shall be entitled to receive,
and subject to Sections 6.01 and 6.02 hereof, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee’s own rights, duties,
liabilities or immunities under this Indenture or otherwise.
Section
9.04. Effect
of Supplemental Indenture.
Upon
the execution of any supplemental indenture pursuant to the provisions hereof,
this Indenture shall be and shall be deemed to be modified and amended in
accordance therewith with respect to the Notes affected thereby, and the
respective rights, limitations of rights, obligations, duties, liabilities
and
immunities under this Indenture of the Indenture Trustee, the Issuer and the
Holders of the Notes shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and
all
the terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and
all
purposes.
Section
9.05. Conformity
with Trust Indenture Act.
Every
amendment of this Indenture and every supplemental indenture executed pursuant
to this Article IX shall conform to the requirements of the Trust Indenture
Act
as then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
Section
9.06. Reference
in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture
may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
ARTICLE
X
MISCELLANEOUS
Section
10.01. Compliance
Certificates and Opinions, etc.
(a) Upon
any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officer’s Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and (ii) an Opinion of Counsel stating that in the opinion of
such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture,
no additional certificate or opinion need be furnished.
Every
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(i) a
statement that each signatory of such certificate or opinion has read or has
caused to be read such covenant or condition and the definitions herein relating
thereto;
(ii) a
brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based;
(iii) a
statement that, in the opinion of each such signatory, such signatory has made
such examination or investigation as is necessary to enable such signatory
to
express an informed opinion as to whether or not such covenant or condition
has
been complied with;
(iv) a
statement as to whether, in the opinion of each such signatory, such condition
or covenant has been complied with; and
(v) if
the
signatory of such certificate or opinion is required to be Independent, the
statement required by the definition of the term “Independent
Certificate.”
(b) (i)
Prior
to the deposit of any Collateral or other property or securities with the
Indenture Trustee that is to be made the basis for the release of any property
or securities subject to the lien of this Indenture, the Issuer shall, in
addition to any obligation imposed in Section 10.01(a) or elsewhere in this
Indenture, furnish to the Indenture Trustee an Officer’s Certificate certifying
or stating the opinion of each person signing such certificate as to the fair
value (within 90 days prior to such deposit) to the Issuer of the Collateral
or
other property or securities to be so deposited and a report from a nationally
recognized accounting firm verifying such value.
(ii) Whenever
the Issuer is required to furnish to the Indenture Trustee an Officer’s
Certificate certifying or stating the opinion of any signer thereof as to the
matters described in clause (i) above, the Issuer shall also deliver to the
Indenture Trustee an Independent Certificate from a nationally recognized
accounting firm as to the same matters, if the fair value of the securities
to
be so deposited and of all other such securities made the basis of any such
withdrawal or release since the commencement of the then current fiscal year
of
the Issuer, as set forth in the certificates delivered pursuant to clause (i)
above and this clause (ii), is 10% or more of the Note Balances of the Notes,
but such a certificate need not be furnished with respect to any securities
so
deposited, if the fair value thereof as set forth in the related Officer’s
Certificate is less than $25,000 or less than one percent of the Note Balances
of the Notes.
(iii) Whenever
any property or securities are to be released from the lien of this Indenture,
the Issuer shall also furnish to the Indenture Trustee an Officer’s Certificate
certifying or stating the opinion of each person signing such certificate as
to
the fair value (within 90 days prior to such release) of the property or
securities proposed to be released and stating that in the opinion of such
person the proposed release will not impair the security under this Indenture
in
contravention of the provisions hereof.
(iv) Whenever
the Issuer is required to furnish to the Indenture Trustee an Officer’s
Certificate certifying or stating the opinion of any signer thereof as to the
matters described in clause (iii) above, the Issuer shall also furnish to the
Indenture Trustee an Independent Certificate as to the same matters if the
fair
value of the property or securities and of all other property or securities
released from the lien of this Indenture since the commencement of the
then-current calendar year, as set forth in the certificates required by clause
(iii) above and this clause (iv), equals 10% or more of the Note Principal
Balances of the Notes, but such certificate need not be furnished in the case
of
any release of property or securities if the fair value thereof as set forth
in
the related Officer’s Certificate is less than $25,000 or less than one percent
of the then Note Principal Balances of the Notes.
Section
10.02. Form
of Documents Delivered to Indenture Trustee.
In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters
be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any
certificate or opinion of an Authorized Officer of the Issuer may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise
of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based
are
erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate
or
opinion of, or representations by, an officer or officers of the Seller or
the
Issuer, stating that the information with respect to such factual matters is
in
the possession of the Seller or the Issuer, unless such counsel knows, or in
the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where
any
Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this
Indenture, they may, but need not, be consolidated and form one
instrument.
Whenever
in this Indenture, in connection with any application or certificate or report
to the Indenture Trustee, it is provided that the Issuer shall deliver any
document as a condition of the granting of such application, or as evidence
of
the Issuer’s compliance with any term hereof, it is intended that the truth and
accuracy, at the time of the granting of such application or at the effective
date of such certificate or report (as the case may be), of the facts and
opinions stated in such document shall in such case be conditions precedent
to
the right of the Issuer to have such application granted or to the sufficiency
of such certificate or report. The foregoing shall not, however, be construed
to
affect the Indenture Trustee’s right to rely upon the truth and accuracy of any
statement or opinion contained in any such document as provided in Article
VI.
Section
10.03. Acts
of Noteholders.
(a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Noteholders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Noteholders in person or by agents duly appointed in
writing; and except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Indenture Trustee, and, where it is hereby expressly required, to the Issuer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the “Act” of the Noteholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for
any
purpose of this Indenture and (subject to Section 6.01 hereof) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided
in
this Section 10.03 hereof.
(b) The
fact
and date of the execution by any person of any such instrument or writing may
be
proved in any manner that the Indenture Trustee deems sufficient.
(c) The
ownership of Notes shall be proved by the Note Registrar.
(d) Any
request, demand, authorization, direction, notice, consent, waiver or other
action by the Holder of any Notes shall bind the Holder of every Note issued
upon the registration thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
Section
10.04. Notices
etc., to Indenture Trustee Issuer and Rating Agencies.
Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Noteholders or other documents provided or permitted by this Indenture shall
be
in writing and if such request, demand, authorization, direction, notice,
consent, waiver or act of Noteholders is to be made upon, given or furnished
to
or filed with:
(i) the
Indenture Trustee by any Noteholder or by the Issuer shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or
with
the Indenture Trustee at the Corporate Trust Office. The Indenture Trustee
shall
promptly transmit any notice received by it from the Noteholders to the Issuer;
or
(ii) the
Issuer by the Indenture Trustee or by any Noteholder shall be sufficient for
every purpose hereunder if in writing and mailed first-class, postage prepaid
to
the Issuer addressed to: New Century Alternative Mortgage Loan Trust 2006-ALT1,
in care of Wilmington Trust Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, Attention: Corporate Trust
Administration, or at any other address previously furnished in writing to
the
Indenture Trustee by the Issuer. The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Indenture Trustee.
Notices
required to be given to the Rating Agencies by the Issuer, the Indenture Trustee
or the Owner Trustee shall be in writing, mailed first-class postage pre-paid,
to (i) in the case of Moody’s, at the following address: Xxxxx’x Investors
Service, Inc., Residential Mortgage Monitoring Department, 00 Xxxxxx Xxxxxx,
Xxx
Xxxx, Xxx Xxxx 00000, (ii) in the case of S&P, at the following address:
Standard & Poor’s, 00 Xxxxx Xxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention of Asset Backed Surveillance Department
and
(iii) in the case of Fitch Ratings, at the following address: Fitch Ratings,
Xxx
Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; or as to each of the foregoing,
at
such other address as shall be designated by written notice to the other
parties.
Section
10.05. Notices
to Noteholders; Waiver.
Where
this Indenture provides for notice to Noteholders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if
in
writing and mailed, first-class, postage prepaid to each Noteholder affected
by
such event, at such Person’s address as it appears on the Note Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Noteholders is given
by mail, neither the failure to mail such notice nor any defect in any notice
so
mailed to any particular Noteholder shall affect the sufficiency of such notice
with respect to other Noteholders, and any notice that is mailed in the manner
herein provided shall conclusively be presumed to have been duly given
regardless of whether such notice is in fact actually received.
Where
this Indenture provides for notice in any manner, such notice may be waived
in
writing by any Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers
of
notice by Noteholders shall be filed with the Indenture Trustee but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such a waiver.
In
case,
by reason of the suspension of regular mail service as a result of a strike,
work stoppage or similar activity, it shall be impractical to mail notice of
any
event to Noteholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall
be
satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving
of such notice.
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 Issuer shall
bind its successors and assigns, whether so expressed or not. All agreements
of
the Indenture Trustee in this Indenture shall bind its successors, co-trustees
and agents.
Section
10.09. Separability.
In case
any provision in this Indenture or in the Notes shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section
10.10. [Reserved.]
Section
10.11. Legal
Holidays.
In any
case where the date on which any payment is due shall not be a Business Day,
then (notwithstanding any other provision of the Notes or this Indenture)
payment need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the date on which
nominally due, and no interest shall accrue for the period from and after any
such nominal date.
Section
10.12. GOVERNING
LAW. THIS
INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
Section
10.13. Counterparts.
This
Indenture may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
Section
10.14. Recording
of Indenture.
If this
Indenture is subject to recording in any appropriate public recording offices,
such recording is to be effected by the Issuer and at its expense accompanied
by
an Opinion of Counsel at its expense (which may be counsel to the Indenture
Trustee or any other counsel reasonably acceptable to the Indenture Trustee)
to
the effect that such recording is necessary either for the protection of the
Noteholders or any other Person secured hereunder or for the enforcement of
any
right or remedy granted to the Indenture Trustee under this
Indenture.
Section
10.15. Issuer
Obligation. No
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
this Indenture or any certificate or other writing delivered in connection
herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee
in
its individual capacity, (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner, beneficiary, agent, officer, director, employee
or
agent of the Indenture Trustee or the Owner Trustee in its individual capacity,
any holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or
the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the Owner
Trustee have no such obligations in their individual capacity) and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity. For all purposes of this Indenture, in the performance of any duties
or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to,
and
entitled to the benefits of, the terms and provisions of Article VI, VII and
VIII of the Trust Agreement.
Section
10.16. No
Petition. The
Indenture Trustee, by entering into this Indenture, and each Noteholder, by
accepting a Note, hereby covenant and agree that they will not at any time
prior
to one year from the date of termination hereof, institute against the Depositor
or the Issuer, or join in any institution against the Depositor or the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, this Indenture or any of the Basic Documents, except for filing proofs
of
claim.
Section
10.17. Inspection.
The
Issuer agrees that, at its expense, on reasonable prior notice, it shall permit
any representative of the Indenture Trustee, during the Issuer’s normal business
hours, to examine all the books of account, records, reports and other papers
of
the Issuer, to make copies and extracts therefrom, to cause such books to be
audited by Independent certified public accountants, and to discuss the Issuer’s
affairs, finances and accounts with the Issuer’s officers, employees, and
Independent certified public accountants, all at such reasonable times and
as
often as may be reasonably requested. The Indenture Trustee shall cause its
representatives to hold in confidence all such information except to the extent
disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.
Section
10.18. No
Recourse to Owner Trustee.
It is
expressly understood and agreed by the parties hereto that (a) this Indenture
is
executed and delivered by Wilmington Trust Company, not individually or
personally, but solely as Owner Trustee of New Century Alternative Mortgage
Loan
Trust 2006-ALT1, in the exercise of the powers and authority conferred and
vested in it, (b) each of the representations, undertakings and agreements
herein made on the part of the Issuer is made and intended not as personal
representations, undertakings and agreements by Wilmington Trust Company but
is
made and intended for the purpose for binding only the Issuer, (c) nothing
herein contained shall be construed as creating any liability of Wilmington
Trust Company, individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties hereto and by any Person claiming by, through
or
under the parties hereto and (d) under no circumstances shall Wilmington Trust
Company be personally liable for the payment of any indebtedness or expenses
of
the Issuer or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Issuer under
this
Indenture or any other related documents.
Section
10.19. Proofs
of Claim.
The
Indenture Trustee is authorized to file such proofs of claim and other papers
or
documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel) and the Noteholders allowed in any judicial proceedings relative to
the
Issuer (or any other obligor upon the Notes), its creditors or its property
and
shall be entitled and empowered to collect, receive and distribute any money
or
other property payable or deliverable on any such claims and any custodian
in
any such judicial proceeding is hereby authorized by each Noteholder to make
such payments to the Indenture Trustee, as administrative expenses associated
with any such proceeding, and, in the event that the Indenture Trustee shall
consent to the making of such payments directly to the Noteholder to pay to
the
Indenture Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel, and any other amounts due to the Indenture Trustee under Section 6.07
hereof. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Indenture Trustee, its agents and counsel,
and
any other amounts due the Indenture Trustee under Section 6.07 hereof out of
the
estate in any such proceeding, shall be denied for any reason, payment of the
same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Noteholders may be entitled to receive in such proceeding whether in liquidation
or under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Indenture Trustee to authorize or
consent to or accept or adopt on behalf of any Noteholder any plan of
reorganization, arrangement, adjustment or composition affecting the Noteholder
of the rights of any Noteholder thereof, or to authorize the Indenture Trustee
to vote in respect of the claim of any Noteholder in any such
proceeding.
IN
WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused their names
to
be signed hereto by their respective officers thereunto duly authorized, all
as
of the day and year first above written.
|
By:
Wilmington Trust Company, not in its individual capacity but solely
as
Owner Trustee
|
||||||
|
By:
|
/s/
Xxxxxxx X. Xxxxx
|
|||||
|
Name:
|
Xxxxxxx
X. Xxxxx
|
|||||
|
Title:
|
Financial
Services Officer
|
|||||
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, as Indenture Trustee
|
||||||
|
By:
|
/s/
Xxxx Xxxxxxx
|
|||||
|
Name:
|
Xxxx
Xxxxxxx
|
|||||
|
Title:
|
Associate
|
|||||
|
By:
|
/s/
Xxxxxxx Xxxxx
|
|
Name:
|
Xxxxxxx
Xxxxx
|
|
Title:
|
Vice
President
|
|
STATE
OF CALIFORNIA
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF ORANGE
|
)
|
On
this
___ day of June, 2006, 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 DELAWARE
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF NEW CASTLE
|
)
|
On
this
___ day of June, 2006, before me personally appeared _______________ to me
known, who being by me duly sworn, did depose and say, that (s)he is a Financial
Services Officer of the Owner Trustee, one of the 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 AV-1 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
ASSET-BACKED
NOTES, SERIES 2006-ALT1
CLASS
AV-1
|
AGGREGATE
NOTE BALANCE:
$176,827,000.00
|
NOTE
RATE: Variable
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $176,827,000.00
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Alternative Mortgage Loan Trust 2006-ALT1 (the “Issuer”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($176,827,000.00) 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 June 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
2006-ALT1 (the “Notes”), issued under an Indenture dated as of June 22, 2006
(the “Indenture”), between the Issuer and Deutsche Bank National Trust Company,
as indenture trustee (the “Indenture Trustee”, which term includes any successor
Indenture Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights thereunder of the Issuer, the Indenture Trustee, and the Holders of
the
Notes and the terms upon which the Notes are to be authenticated and delivered.
All terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be equal to this
Note’s pro
rata
share of
the aggregate payments on all Class AV-1 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Terminator on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuer shall not be liable upon the indebtedness evidenced by the Notes except
to the extent of amounts available from the Trust Estate which constitutes
security for the payment of the Notes. The assets included in the Trust Estate
will be the sole source of payments on the Class AV-1 Notes, and each Holder
hereof, by its acceptance of this Note, agrees that (i) such Note will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Servicer or any of their respective affiliates, or to the assets of any of
the
foregoing entities, except the assets of the Issuer pledged to secure the Class
AV-1 Notes pursuant to the Indenture and the rights conveyed to the Issuer
under
the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuer maintained by it
for
such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Servicer or any successor servicer which opines that the acquisition, holding
and transfer of this Note or interest herein is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
NC Capital, the Depositor, any Underwriter, the Owner Trustee, the Indenture
Trustee, the Servicer or any successor servicer to any obligation in addition
to
those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuer.
Upon surrender for registration of transfer of, or presentation of a written
instrument of transfer for, this Note at the office or agency designated by
the
Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Notes
of any authorized denominations and of a like aggregate initial Note Balance,
will be issued to the designated transferee or transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuer,
the
Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
treat
the Person in whose name this Note is registered as the owner of such Note
(i)
on the applicable Record Date for the purpose of making payments and interest
of
such Note and (ii) on any other date for all other purposes whatsoever, as
the
owner hereof, whether or not this Note be overdue, and neither the Issuer,
the
Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
shall be affected by notice to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and
the
rights of the Holders of the Notes under the Indenture at any time by the Issuer
and the Holders of a majority of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the aggregate Note Balance of the Notes on behalf
of
the Holders of all the Notes, to waive any past Default under the Indenture
and
its consequences. Any such waiver by the Holder, at the time of the giving
thereof, of this Note (or any one or more predecessor Notes) shall bind the
Holder of every Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth
in
the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
by
Wilmington Trust Company, not in its individual capacity but solely as Owner
Trustee.
Dated:
June ____, 2006
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above LIST.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
NUMBER
OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-2
FORM
OF
CLASS AF-2 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
ASSET-BACKED
NOTES, SERIES 2006-ALT1
CLASS
AF-2
|
AGGREGATE
NOTE BALANCE:
$49,143,000.00
|
NOTE
RATE: [__]% per annum
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $49,143,000.00
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Alternative Mortgage Loan Trust 2006-ALT1 (the “Issuer”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($49,143,000.00) 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 June 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
2006-ALT1 (the “Notes”), issued under an Indenture dated as of June 22, 2006
(the “Indenture”), between the Issuer and Deutsche Bank National Trust Company,
as indenture trustee (the “Indenture Trustee”, which term includes any successor
Indenture Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights thereunder of the Issuer, the Indenture Trustee, and the Holders of
the
Notes and the terms upon which the Notes are to be authenticated and delivered.
All terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be equal to this
Note’s pro
rata
share of
the aggregate payments on all Class AF-2 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Terminator on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuer shall not be liable upon the indebtedness evidenced by the Notes except
to the extent of amounts available from the Trust Estate which constitutes
security for the payment of the Notes. The assets included in the Trust Estate
will be the sole source of payments on the Class AF-2 Notes, and each Holder
hereof, by its acceptance of this Note, agrees that (i) such Note will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Servicer or any of their respective affiliates, or to the assets of any of
the
foregoing entities, except the assets of the Issuer pledged to secure the Class
AF-2 Notes pursuant to the Indenture and the rights conveyed to the Issuer
under
the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuer maintained by it
for
such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Servicer or any successor servicer which opines that the acquisition, holding
and transfer of this Note or interest herein is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
NC Capital, the Depositor, any Underwriter, the Owner Trustee, the Indenture
Trustee, the Servicer or any successor servicer to any obligation in addition
to
those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuer.
Upon surrender for registration of transfer of, or presentation of a written
instrument of transfer for, this Note at the office or agency designated by
the
Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Notes
of any authorized denominations and of a like aggregate initial Note Balance,
will be issued to the designated transferee or transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuer,
the
Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
treat
the Person in whose name this Note is registered as the owner of such Note
(i)
on the applicable Record Date for the purpose of making payments and interest
of
such Note and (ii) on any other date for all other purposes whatsoever, as
the
owner hereof, whether or not this Note be overdue, and neither the Issuer,
the
Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
shall be affected by notice to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and
the
rights of the Holders of the Notes under the Indenture at any time by the Issuer
and the Holders of a majority of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the aggregate Note Balance of the Notes on behalf
of
the Holders of all the Notes, to waive any past Default under the Indenture
and
its consequences. Any such waiver by the Holder, at the time of the giving
thereof, of this Note (or any one or more predecessor Notes) shall bind the
Holder of every Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth
in
the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
by
Wilmington Trust Company, not in its individual capacity but solely as Owner
Trustee.
Dated:
June ____, 2006
|
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above LIST.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
NUMBER
OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-3
FORM
OF
CLASS AF-3 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
ASSET-BACKED
NOTES, SERIES 2006-ALT1
CLASS
AF-3
|
AGGREGATE
NOTE BALANCE:
$74,436,000.00
|
NOTE
RATE: [__]% per annum
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $74,436,000.00
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Alternative Mortgage Loan Trust 2006-ALT1 (the “Issuer”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($74,436,000.00) 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 June 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
2006-ALT1 (the “Notes”), issued under an Indenture dated as of June 22, 2006
(the “Indenture”), between the Issuer and Deutsche Bank National Trust Company,
as indenture trustee (the “Indenture Trustee”, which term includes any successor
Indenture Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights thereunder of the Issuer, the Indenture Trustee, and the Holders of
the
Notes and the terms upon which the Notes are to be authenticated and delivered.
All terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be equal to this
Note’s pro
rata
share of
the aggregate payments on all Class AF-3 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Terminator on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuer shall not be liable upon the indebtedness evidenced by the Notes except
to the extent of amounts available from the Trust Estate which constitutes
security for the payment of the Notes. The assets included in the Trust Estate
will be the sole source of payments on the Class AF-3 Notes, and each Holder
hereof, by its acceptance of this Note, agrees that (i) such Note will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Servicer or any of their respective affiliates, or to the assets of any of
the
foregoing entities, except the assets of the Issuer pledged to secure the Class
AF-3 Notes pursuant to the Indenture and the rights conveyed to the Issuer
under
the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuer maintained by it
for
such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Servicer or any successor servicer which opines that the acquisition, holding
and transfer of this Note or interest herein is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
NC Capital, the Depositor, any Underwriter, the Owner Trustee, the Indenture
Trustee, the Servicer or any successor servicer to any obligation in addition
to
those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuer.
Upon surrender for registration of transfer of, or presentation of a written
instrument of transfer for, this Note at the office or agency designated by
the
Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Notes
of any authorized denominations and of a like aggregate initial Note Balance,
will be issued to the designated transferee or transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuer,
the
Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
treat
the Person in whose name this Note is registered as the owner of such Note
(i)
on the applicable Record Date for the purpose of making payments and interest
of
such Note and (ii) on any other date for all other purposes whatsoever, as
the
owner hereof, whether or not this Note be overdue, and neither the Issuer,
the
Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
shall be affected by notice to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and
the
rights of the Holders of the Notes under the Indenture at any time by the Issuer
and the Holders of a majority of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the aggregate Note Balance of the Notes on behalf
of
the Holders of all the Notes, to waive any past Default under the Indenture
and
its consequences. Any such waiver by the Holder, at the time of the giving
thereof, of this Note (or any one or more predecessor Notes) shall bind the
Holder of every Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth
in
the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
by
Wilmington Trust Company, not in its individual capacity but solely as Owner
Trustee.
Dated:
June ____, 2006
|
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above LIST.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
NUMBER
OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-4
FORM
OF
CLASS AF-4 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
ASSET-BACKED
NOTES, SERIES 2006-ALT1
CLASS
AF-4
|
AGGREGATE
NOTE BALANCE:
$77,025,000.00
|
NOTE
RATE: [__]% per annum
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $77,025,000.00
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Alternative Mortgage Loan Trust 2006-ALT1 (the “Issuer”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($77,025,000.00) 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 June 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
2006-ALT1 (the “Notes”), issued under an Indenture dated as of June 22, 2006
(the “Indenture”), between the Issuer and Deutsche Bank National Trust Company,
as indenture trustee (the “Indenture Trustee”, which term includes any successor
Indenture Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights thereunder of the Issuer, the Indenture Trustee, and the Holders of
the
Notes and the terms upon which the Notes are to be authenticated and delivered.
All terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be equal to this
Note’s pro
rata
share of
the aggregate payments on all Class AF-4 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Terminator on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuer shall not be liable upon the indebtedness evidenced by the Notes except
to the extent of amounts available from the Trust Estate which constitutes
security for the payment of the Notes. The assets included in the Trust Estate
will be the sole source of payments on the Class AF-4 Notes, and each Holder
hereof, by its acceptance of this Note, agrees that (i) such Note will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Servicer or any of their respective affiliates, or to the assets of any of
the
foregoing entities, except the assets of the Issuer pledged to secure the Class
AF-4 Notes pursuant to the Indenture and the rights conveyed to the Issuer
under
the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuer maintained by it
for
such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Servicer or any successor servicer which opines that the acquisition, holding
and transfer of this Note or interest herein is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
NC Capital, the Depositor, any Underwriter, the Owner Trustee, the Indenture
Trustee, the Servicer or any successor servicer to any obligation in addition
to
those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuer.
Upon surrender for registration of transfer of, or presentation of a written
instrument of transfer for, this Note at the office or agency designated by
the
Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Notes
of any authorized denominations and of a like aggregate initial Note Balance,
will be issued to the designated transferee or transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuer,
the
Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
treat
the Person in whose name this Note is registered as the owner of such Note
(i)
on the applicable Record Date for the purpose of making payments and interest
of
such Note and (ii) on any other date for all other purposes whatsoever, as
the
owner hereof, whether or not this Note be overdue, and neither the Issuer,
the
Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
shall be affected by notice to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and
the
rights of the Holders of the Notes under the Indenture at any time by the Issuer
and the Holders of a majority of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the aggregate Note Balance of the Notes on behalf
of
the Holders of all the Notes, to waive any past Default under the Indenture
and
its consequences. Any such waiver by the Holder, at the time of the giving
thereof, of this Note (or any one or more predecessor Notes) shall bind the
Holder of every Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth
in
the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
by
Wilmington Trust Company, not in its individual capacity but solely as Owner
Trustee.
Dated:
June ____, 2006
|
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above LIST.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
NUMBER
OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-5
FORM
OF
CLASS AF-5 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
ASSET-BACKED
NOTES, SERIES 2006-ALT1
CLASS
AF-5
|
AGGREGATE
NOTE BALANCE:
$64,489,000.00
|
NOTE
RATE: [__]% per annum
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $64,489,000.00
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Alternative Mortgage Loan Trust 2006-ALT1 (the “Issuer”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($64,489,000.00) 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 June 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
2006-ALT1 (the “Notes”), issued under an Indenture dated as of June 22, 2006
(the “Indenture”), between the Issuer and Deutsche Bank National Trust Company,
as indenture trustee (the “Indenture Trustee”, which term includes any successor
Indenture Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights thereunder of the Issuer, the Indenture Trustee, and the Holders of
the
Notes and the terms upon which the Notes are to be authenticated and delivered.
All terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be equal to this
Note’s pro
rata
share of
the aggregate payments on all Class AF-5 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Terminator on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuer shall not be liable upon the indebtedness evidenced by the Notes except
to the extent of amounts available from the Trust Estate which constitutes
security for the payment of the Notes. The assets included in the Trust Estate
will be the sole source of payments on the Class AF-5 Notes, and each Holder
hereof, by its acceptance of this Note, agrees that (i) such Note will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Servicer or any of their respective affiliates, or to the assets of any of
the
foregoing entities, except the assets of the Issuer pledged to secure the Class
AF-5 Notes pursuant to the Indenture and the rights conveyed to the Issuer
under
the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuer maintained by it
for
such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Servicer or any successor servicer which opines that the acquisition, holding
and transfer of this Note or interest herein is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
NC Capital, the Depositor, any Underwriter, the Owner Trustee, the Indenture
Trustee, the Servicer or any successor servicer to any obligation in addition
to
those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuer.
Upon surrender for registration of transfer of, or presentation of a written
instrument of transfer for, this Note at the office or agency designated by
the
Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Notes
of any authorized denominations and of a like aggregate initial Note Balance,
will be issued to the designated transferee or transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuer,
the
Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
treat
the Person in whose name this Note is registered as the owner of such Note
(i)
on the applicable Record Date for the purpose of making payments and interest
of
such Note and (ii) on any other date for all other purposes whatsoever, as
the
owner hereof, whether or not this Note be overdue, and neither the Issuer,
the
Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
shall be affected by notice to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and
the
rights of the Holders of the Notes under the Indenture at any time by the Issuer
and the Holders of a majority of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the aggregate Note Balance of the Notes on behalf
of
the Holders of all the Notes, to waive any past Default under the Indenture
and
its consequences. Any such waiver by the Holder, at the time of the giving
thereof, of this Note (or any one or more predecessor Notes) shall bind the
Holder of every Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth
in
the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
by
Wilmington Trust Company, not in its individual capacity but solely as Owner
Trustee.
Dated:
June ____, 2006
|
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above LIST.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
NUMBER
OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-6
FORM
OF
CLASS AF-6 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
ASSET-BACKED
NOTES, SERIES 2006-ALT1
CLASS
AF-6
|
AGGREGATE
NOTE BALANCE:
$49,102,000.00
|
NOTE
RATE: [__]% per annum
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $49,102,000.00
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [
]
|
New
Century Alternative Mortgage Loan Trust 2006-ALT1 (the “Issuer”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($49,102,000.00) 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 June 2006 and ending on or before the Payment Date occurring
on
the Final Stated Maturity Date and to pay interest on the Note Balance of this
Note (this “Note”) outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
2006-ALT1 (the “Notes”), issued under an Indenture dated as of June 22, 2006
(the “Indenture”), between the Issuer and Deutsche Bank National Trust Company,
as indenture trustee (the “Indenture Trustee”, which term includes any successor
Indenture Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights thereunder of the Issuer, the Indenture Trustee, and the Holders of
the
Notes and the terms upon which the Notes are to be authenticated and delivered.
All terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be equal to this
Note’s pro
rata
share of
the aggregate payments on all Class AF-6 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Terminator on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuer shall not be liable upon the indebtedness evidenced by the Notes except
to the extent of amounts available from the Trust Estate which constitutes
security for the payment of the Notes. The assets included in the Trust Estate
will be the sole source of payments on the Class AF-6 Notes, and each Holder
hereof, by its acceptance of this Note, agrees that (i) such Note will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Servicer or any of their respective affiliates, or to the assets of any of
the
foregoing entities, except the assets of the Issuer pledged to secure the Class
AF-6 Notes pursuant to the Indenture and the rights conveyed to the Issuer
under
the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuer maintained by it
for
such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Servicer or any successor servicer which opines that the acquisition, holding
and transfer of this Note or interest herein is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
NC Capital, the Depositor, any Underwriter, the Owner Trustee, the Indenture
Trustee, the Servicer or any successor servicer to any obligation in addition
to
those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuer.
Upon surrender for registration of transfer of, or presentation of a written
instrument of transfer for, this Note at the office or agency designated by
the
Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Notes
of any authorized denominations and of a like aggregate initial Note Balance,
will be issued to the designated transferee or transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuer,
the
Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
treat
the Person in whose name this Note is registered as the owner of such Note
(i)
on the applicable Record Date for the purpose of making payments and interest
of
such Note and (ii) on any other date for all other purposes whatsoever, as
the
owner hereof, whether or not this Note be overdue, and neither the Issuer,
the
Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
shall be affected by notice to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and
the
rights of the Holders of the Notes under the Indenture at any time by the Issuer
and the Holders of a majority of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the aggregate Note Balance of the Notes on behalf
of
the Holders of all the Notes, to waive any past Default under the Indenture
and
its consequences. Any such waiver by the Holder, at the time of the giving
thereof, of this Note (or any one or more predecessor Notes) shall bind the
Holder of every Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth
in
the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
by
Wilmington Trust Company, not in its individual capacity but solely as Owner
Trustee.
Dated:
June ____, 2006
|
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above LIST.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
NUMBER
OF
ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-7
FORM
OF
CLASS M-1 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THIS
NOTE
IS SUBORDINATE TO THE CLASS A NOTES TO THE EXTENT DESCRIBED IN THE INDENTURE
REFERRED TO HEREIN.
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
ASSET-BACKED
NOTES, SERIES 2006-ALT1
CLASS
M-1
|
AGGREGATE
NOTE BALANCE:
$7,301,000.00
|
NOTE
RATE: [__]% per annum
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $7,301,000.00
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Alternative Mortgage Loan Trust 2006-ALT1 (the “Issuer”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($7,301,000.00) 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 June 2006
and ending on or before the Payment Date occurring on the Final Stated Maturity
Date and to pay interest on the Note Balance of this Note (this “Note”)
outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
2006-ALT1 (the “Notes”), issued under an Indenture dated as of June 22, 2006
(the “Indenture”), between the Issuer and Deutsche Bank National Trust Company,
as indenture trustee (the “Indenture Trustee”, which term includes any successor
Indenture Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights thereunder of the Issuer, the Indenture Trustee, and the Holders of
the
Notes and the terms upon which the Notes are to be authenticated and delivered.
All terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be equal to this
Note’s pro
rata
share of
the aggregate payments on all Class M-1 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Terminator on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuer shall not be liable upon the indebtedness evidenced by the Notes except
to the extent of amounts available from the Trust Estate which constitutes
security for the payment of the Notes. The assets included in the Trust Estate
will be the sole source of payments on the Class M-1 Notes, and each Holder
hereof, by its acceptance of this Note, agrees that (i) such Note will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Servicer or any of their respective affiliates, or to the assets of any of
the
foregoing entities, except the assets of the Issuer pledged to secure the Class
M-1 Notes pursuant to the Indenture and the rights conveyed to the Issuer under
the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuer maintained by it
for
such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Servicer or any successor servicer which opines that the acquisition, holding
and transfer of this Note or interest herein is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
NC Capital, the Depositor, any Underwriter, the Owner Trustee, the Indenture
Trustee, the Servicer or any successor servicer to any obligation in addition
to
those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuer.
Upon surrender for registration of transfer of, or presentation of a written
instrument of transfer for, this Note at the office or agency designated by
the
Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Notes
of any authorized denominations and of a like aggregate initial Note Balance,
will be issued to the designated transferee or transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuer,
the
Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
treat
the Person in whose name this Note is registered as the owner of such Note
(i)
on the applicable Record Date for the purpose of making payments and interest
of
such Note and (ii) on any other date for all other purposes whatsoever, as
the
owner hereof, whether or not this Note be overdue, and neither the Issuer,
the
Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
shall be affected by notice to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and
the
rights of the Holders of the Notes under the Indenture at any time by the Issuer
and the Holders of a majority of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the aggregate Note Balance of the Notes on behalf
of
the Holders of all the Notes, to waive any past Default under the Indenture
and
its consequences. Any such waiver by the Holder, at the time of the giving
thereof, of this Note (or any one or more predecessor Notes) shall bind the
Holder of every Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth
in
the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
by
Wilmington Trust Company, not in its individual capacity but solely as Owner
Trustee.
Dated:
June ____, 2006
|
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-8
FORM
OF
CLASS M-2 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THIS
NOTE
IS SUBORDINATE TO THE CLASS A NOTES AND THE CLASS M-1 NOTES TO THE EXTENT
DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
ASSET-BACKED
NOTES, SERIES 2006-ALT1
CLASS
M-2
|
AGGREGATE
NOTE BALANCE:
$2,610,000.00
|
NOTE
RATE: [__]% per annum
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $2,610,000.00
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Alternative Mortgage Loan Trust 2006-ALT1 (the “Issuer”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($2,610,000.00) 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 June 2006
and ending on or before the Payment Date occurring on the Final Stated Maturity
Date and to pay interest on the Note Balance of this Note (this “Note”)
outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
2006-ALT1 (the “Notes”), issued under an Indenture dated as of June 22, 2006
(the “Indenture”), between the Issuer and Deutsche Bank National Trust Company,
as indenture trustee (the “Indenture Trustee”, which term includes any successor
Indenture Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights thereunder of the Issuer, the Indenture Trustee, and the Holders of
the
Notes and the terms upon which the Notes are to be authenticated and delivered.
All terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be equal to this
Note’s pro
rata
share of
the aggregate payments on all Class M-2 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Terminator on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuer shall not be liable upon the indebtedness evidenced by the Notes except
to the extent of amounts available from the Trust Estate which constitutes
security for the payment of the Notes. The assets included in the Trust Estate
will be the sole source of payments on the Class M-2 Notes, and each Holder
hereof, by its acceptance of this Note, agrees that (i) such Note will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Servicer or any of their respective affiliates, or to the assets of any of
the
foregoing entities, except the assets of the Issuer pledged to secure the Class
M-2 Notes pursuant to the Indenture and the rights conveyed to the Issuer under
the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuer maintained by it
for
such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Servicer or any successor servicer which opines that the acquisition, holding
and transfer of this Note or interest herein is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
NC Capital, the Depositor, any Underwriter, the Owner Trustee, the Indenture
Trustee, the Servicer or any successor servicer to any obligation in addition
to
those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuer.
Upon surrender for registration of transfer of, or presentation of a written
instrument of transfer for, this Note at the office or agency designated by
the
Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Notes
of any authorized denominations and of a like aggregate initial Note Balance,
will be issued to the designated transferee or transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuer,
the
Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
treat
the Person in whose name this Note is registered as the owner of such Note
(i)
on the applicable Record Date for the purpose of making payments and interest
of
such Note and (ii) on any other date for all other purposes whatsoever, as
the
owner hereof, whether or not this Note be overdue, and neither the Issuer,
the
Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
shall be affected by notice to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and
the
rights of the Holders of the Notes under the Indenture at any time by the Issuer
and the Holders of a majority of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the aggregate Note Balance of the Notes on behalf
of
the Holders of all the Notes, to waive any past Default under the Indenture
and
its consequences. Any such waiver by the Holder, at the time of the giving
thereof, of this Note (or any one or more predecessor Notes) shall bind the
Holder of every Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth
in
the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
by
Wilmington Trust Company, not in its individual capacity but solely as Owner
Trustee.
Dated:
June ____, 2006
|
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-9
FORM
OF
CLASS M-3 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THIS
NOTE
IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES AND THE CLASS M-2
NOTES
TO THE EXTENT DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
ASSET-BACKED
NOTES, SERIES 2006-ALT1
CLASS
M-3
|
AGGREGATE
NOTE BALANCE:
$2,610,000.00
|
NOTE
RATE: [__]% per annum
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $2,610,000.00
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Alternative Mortgage Loan Trust 2006-ALT1 (the “Issuer”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($2,610,000.00) 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 June 2006
and ending on or before the Payment Date occurring on the Final Stated Maturity
Date and to pay interest on the Note Balance of this Note (this “Note”)
outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
2006-ALT1 (the “Notes”), issued under an Indenture dated as of June 22, 2006
(the “Indenture”), between the Issuer and Deutsche Bank National Trust Company,
as indenture trustee (the “Indenture Trustee”, which term includes any successor
Indenture Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights thereunder of the Issuer, the Indenture Trustee, and the Holders of
the
Notes and the terms upon which the Notes are to be authenticated and delivered.
All terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be equal to this
Note’s pro
rata
share of
the aggregate payments on all Class M-3 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Terminator on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuer shall not be liable upon the indebtedness evidenced by the Notes except
to the extent of amounts available from the Trust Estate which constitutes
security for the payment of the Notes. The assets included in the Trust Estate
will be the sole source of payments on the Class M-3 Notes, and each Holder
hereof, by its acceptance of this Note, agrees that (i) such Note will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Servicer or any of their respective affiliates, or to the assets of any of
the
foregoing entities, except the assets of the Issuer pledged to secure the Class
M-3 Notes pursuant to the Indenture and the rights conveyed to the Issuer under
the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuer maintained by it
for
such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Servicer or any successor servicer which opines that the acquisition, holding
and transfer of this Note or interest herein is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
NC Capital, the Depositor, any Underwriter, the Owner Trustee, the Indenture
Trustee, the Servicer or any successor servicer to any obligation in addition
to
those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuer.
Upon surrender for registration of transfer of, or presentation of a written
instrument of transfer for, this Note at the office or agency designated by
the
Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Notes
of any authorized denominations and of a like aggregate initial Note Balance,
will be issued to the designated transferee or transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuer,
the
Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
treat
the Person in whose name this Note is registered as the owner of such Note
(i)
on the applicable Record Date for the purpose of making payments and interest
of
such Note and (ii) on any other date for all other purposes whatsoever, as
the
owner hereof, whether or not this Note be overdue, and neither the Issuer,
the
Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
shall be affected by notice to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and
the
rights of the Holders of the Notes under the Indenture at any time by the Issuer
and the Holders of a majority of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the aggregate Note Balance of the Notes on behalf
of
the Holders of all the Notes, to waive any past Default under the Indenture
and
its consequences. Any such waiver by the Holder, at the time of the giving
thereof, of this Note (or any one or more predecessor Notes) shall bind the
Holder of every Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth
in
the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
by
Wilmington Trust Company, not in its individual capacity but solely as Owner
Trustee.
Dated:
June ____, 2006
|
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-10
FORM
OF
CLASS M-4 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THIS
NOTE
IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES, THE CLASS M-2 NOTES
AND THE CLASS M-3 NOTES TO THE EXTENT DESCRIBED IN THE INDENTURE REFERRED TO
HEREIN.
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
ASSET-BACKED
NOTES, SERIES 2006-ALT1
CLASS
M-4
|
AGGREGATE
NOTE BALANCE:
$2,610,000.00
|
NOTE
RATE: [__]% per annum
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $2,610,000.00
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Alternative Mortgage Loan Trust 2006-ALT1 (the “Issuer”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($2,610,000.00) 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 June 2006
and ending on or before the Payment Date occurring on the Final Stated Maturity
Date and to pay interest on the Note Balance of this Note (this “Note”)
outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
2006-ALT1 (the “Notes”), issued under an Indenture dated as of June 22, 2006
(the “Indenture”), between the Issuer and Deutsche Bank National Trust Company,
as indenture trustee (the “Indenture Trustee”, which term includes any successor
Indenture Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights thereunder of the Issuer, the Indenture Trustee, and the Holders of
the
Notes and the terms upon which the Notes are to be authenticated and delivered.
All terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be equal to this
Note’s pro
rata
share of
the aggregate payments on all Class M-4 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Terminator on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuer shall not be liable upon the indebtedness evidenced by the Notes except
to the extent of amounts available from the Trust Estate which constitutes
security for the payment of the Notes. The assets included in the Trust Estate
will be the sole source of payments on the Class M-4 Notes, and each Holder
hereof, by its acceptance of this Note, agrees that (i) such Note will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Servicer or any of their respective affiliates, or to the assets of any of
the
foregoing entities, except the assets of the Issuer pledged to secure the Class
M-4 Notes pursuant to the Indenture and the rights conveyed to the Issuer under
the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuer maintained by it
for
such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Servicer or any successor servicer which opines that the acquisition, holding
and transfer of this Note or interest herein is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
NC Capital, the Depositor, any Underwriter, the Owner Trustee, the Indenture
Trustee, the Servicer or any successor servicer to any obligation in addition
to
those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuer.
Upon surrender for registration of transfer of, or presentation of a written
instrument of transfer for, this Note at the office or agency designated by
the
Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Notes
of any authorized denominations and of a like aggregate initial Note Balance,
will be issued to the designated transferee or transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuer,
the
Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
treat
the Person in whose name this Note is registered as the owner of such Note
(i)
on the applicable Record Date for the purpose of making payments and interest
of
such Note and (ii) on any other date for all other purposes whatsoever, as
the
owner hereof, whether or not this Note be overdue, and neither the Issuer,
the
Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
shall be affected by notice to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and
the
rights of the Holders of the Notes under the Indenture at any time by the Issuer
and the Holders of a majority of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the aggregate Note Balance of the Notes on behalf
of
the Holders of all the Notes, to waive any past Default under the Indenture
and
its consequences. Any such waiver by the Holder, at the time of the giving
thereof, of this Note (or any one or more predecessor Notes) shall bind the
Holder of every Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth
in
the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
by
Wilmington Trust Company, not in its individual capacity but solely as Owner
Trustee.
Dated:
June ____, 2006
|
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-11
FORM
OF
CLASS M-5 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THIS
NOTE
IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES, THE CLASS M-2 NOTES,
THE CLASS M-3 NOTES AND THE CLASS M-4 NOTES TO THE EXTENT DESCRIBED IN THE
INDENTURE REFERRED TO HEREIN.
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
ASSET-BACKED
NOTES, SERIES 2006-ALT1
CLASS
M-5
|
AGGREGATE
NOTE BALANCE:
$2,610,000.00
|
NOTE
RATE: [__]% per annum
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $2,610,000.00
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [
]
|
New
Century Alternative Mortgage Loan Trust 2006-ALT1 (the “Issuer”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($2,610,000.00) 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 June 2006
and ending on or before the Payment Date occurring on the Final Stated Maturity
Date and to pay interest on the Note Balance of this Note (this “Note”)
outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
2006-ALT1 (the “Notes”), issued under an Indenture dated as of June 22, 2006
(the “Indenture”), between the Issuer and Deutsche Bank National Trust Company,
as indenture trustee (the “Indenture Trustee”, which term includes any successor
Indenture Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights thereunder of the Issuer, the Indenture Trustee, and the Holders of
the
Notes and the terms upon which the Notes are to be authenticated and delivered.
All terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be equal to this
Note’s pro
rata
share of
the aggregate payments on all Class M-5 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Terminator on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuer shall not be liable upon the indebtedness evidenced by the Notes except
to the extent of amounts available from the Trust Estate which constitutes
security for the payment of the Notes. The assets included in the Trust Estate
will be the sole source of payments on the Class M-5 Notes, and each Holder
hereof, by its acceptance of this Note, agrees that (i) such Note will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Servicer or any of their respective affiliates, or to the assets of any of
the
foregoing entities, except the assets of the Issuer pledged to secure the Class
M-5 Notes pursuant to the Indenture and the rights conveyed to the Issuer under
the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuer maintained by it
for
such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Servicer or any successor servicer which opines that the acquisition, holding
and transfer of this Note or interest herein is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
NC Capital, the Depositor, any Underwriter, the Owner Trustee, the Indenture
Trustee, the Servicer or any successor servicer to any obligation in addition
to
those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuer.
Upon surrender for registration of transfer of, or presentation of a written
instrument of transfer for, this Note at the office or agency designated by
the
Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Notes
of any authorized denominations and of a like aggregate initial Note Balance,
will be issued to the designated transferee or transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuer,
the
Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
treat
the Person in whose name this Note is registered as the owner of such Note
(i)
on the applicable Record Date for the purpose of making payments and interest
of
such Note and (ii) on any other date for all other purposes whatsoever, as
the
owner hereof, whether or not this Note be overdue, and neither the Issuer,
the
Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
shall be affected by notice to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and
the
rights of the Holders of the Notes under the Indenture at any time by the Issuer
and the Holders of a majority of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the aggregate Note Balance of the Notes on behalf
of
the Holders of all the Notes, to waive any past Default under the Indenture
and
its consequences. Any such waiver by the Holder, at the time of the giving
thereof, of this Note (or any one or more predecessor Notes) shall bind the
Holder of every Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth
in
the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
by
Wilmington Trust Company, not in its individual capacity but solely as Owner
Trustee.
Dated:
June ____, 2006
|
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-12
FORM
OF
CLASS M-6 NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
INDENTURE.
THIS
NOTE
IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT
TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO
BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS
NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THIS
NOTE
IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES, THE CLASS M-2 NOTES,
THE CLASS M-3 NOTES, THE CLASS M-4 NOTES AND THE CLASS M-5 NOTES TO THE EXTENT
DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
ASSET-BACKED
NOTES, SERIES 2006-ALT1
CLASS
M-6
|
AGGREGATE
NOTE BALANCE:
$2,610,000.00
|
NOTE
RATE: [__]% per annum
|
|
INITIAL
NOTE BALANCE OF THIS BOND: $2,610,000.00
|
BOND
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO. [ ]
|
New
Century Alternative Mortgage Loan Trust 2006-ALT1 (the “Issuer”), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($2,610,000.00) 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 June 2006
and ending on or before the Payment Date occurring on the Final Stated Maturity
Date and to pay interest on the Note Balance of this Note (this “Note”)
outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
2006-ALT1 (the “Notes”), issued under an Indenture dated as of June 22, 2006
(the “Indenture”), between the Issuer and Deutsche Bank National Trust Company,
as indenture trustee (the “Indenture Trustee”, which term includes any successor
Indenture Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights thereunder of the Issuer, the Indenture Trustee, and the Holders of
the
Notes and the terms upon which the Notes are to be authenticated and delivered.
All terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Balance” of a Note
as of any date of determination is equal to the initial Note Balance thereof,
reduced by the aggregate of all amounts previously paid with respect to such
Note on account of principal and the aggregate amount of cumulative Realized
Losses allocated to such Note on all prior Payment Dates.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be equal to this
Note’s pro
rata
share of
the aggregate payments on all Class M-6 Notes as described above, and shall
be
applied as between interest and principal as provided in the
Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Stated Maturity Date.
The
Notes
are subject to redemption in whole, but not in part, by the Terminator on any
Payment Date on or after the Payment Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the prior Due Period
is
less than or equal to 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date.
The
Issuer shall not be liable upon the indebtedness evidenced by the Notes except
to the extent of amounts available from the Trust Estate which constitutes
security for the payment of the Notes. The assets included in the Trust Estate
will be the sole source of payments on the Class M-6 Notes, and each Holder
hereof, by its acceptance of this Note, agrees that (i) such Note will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, NC Capital, the
Servicer or any of their respective affiliates, or to the assets of any of
the
foregoing entities, except the assets of the Issuer pledged to secure the Class
M-6 Notes pursuant to the Indenture and the rights conveyed to the Issuer under
the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Indenture Trustee
at
least five Business Days prior to the Record Date, any payment of principal
or
interest, other than the final installment of principal or interest, shall
be
made by wire transfer to an account in the United States designated by such
Holder. All scheduled reductions in the Note Balance of a Note (or one or more
predecessor Notes) effected by payments of principal made on any Payment Date
shall be binding upon all Holders of this Note and of any note issued upon
the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final payment of this
Note shall be payable upon presentation and surrender thereof on or after the
Payment Date thereof at the office or agency of the Issuer maintained by it
for
such purpose pursuant to Section 3.02 of the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Balance of
the
Notes, the amount payable to the Holder of this Note will be equal to the sum
of
the unpaid Note Balance of the Notes, together with accrued and unpaid interest
thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared
due
and payable.
The
failure to pay any Interest Carryforward Amount at any time when funds are
not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring this Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of this Note will not give rise to
a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) this Note is rated investment grade or better and such person
believes that this Note is properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
this
Note. Alternatively, regardless of the rating of this Note, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
NC Capital, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Servicer or any successor servicer which opines that the acquisition, holding
and transfer of this Note or interest herein is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
NC Capital, the Depositor, any Underwriter, the Owner Trustee, the Indenture
Trustee, the Servicer or any successor servicer to any obligation in addition
to
those undertaken in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuer.
Upon surrender for registration of transfer of, or presentation of a written
instrument of transfer for, this Note at the office or agency designated by
the
Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Notes
of any authorized denominations and of a like aggregate initial Note Balance,
will be issued to the designated transferee or transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuer,
the
Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
treat
the Person in whose name this Note is registered as the owner of such Note
(i)
on the applicable Record Date for the purpose of making payments and interest
of
such Note and (ii) on any other date for all other purposes whatsoever, as
the
owner hereof, whether or not this Note be overdue, and neither the Issuer,
the
Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
shall be affected by notice to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and
the
rights of the Holders of the Notes under the Indenture at any time by the Issuer
and the Holders of a majority of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the aggregate Note Balance of the Notes on behalf
of
the Holders of all the Notes, to waive any past Default under the Indenture
and
its consequences. Any such waiver by the Holder, at the time of the giving
thereof, of this Note (or any one or more predecessor Notes) shall bind the
Holder of every Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent
or
waiver is made upon such Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth
in
the Indenture without the consent of the Holders of the Notes issued
thereunder.
Initially,
this Note will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for this Note. This Note will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. This Note is exchangeable
for a like aggregate initial Note Balance of Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Indenture
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
by
Wilmington Trust Company, not in its individual capacity but solely as Owner
Trustee.
Dated:
June ____, 2006
|
NEW
CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT1
|
||||||||||||
|
BY:
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
in its
capacity as Owner Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes referred to in the within-mentioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
as
Indenture Trustee
|
||||||
|
By:
|
||||||
|
Authorized
Signatory
|
||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
|
UNIF
GIFT MIN ACT
|
--
|
__________
Custodian
|
|
|
(Cust)
|
(Minor)
|
||
|
under
Uniform Gifts to Minor Act
|
|||
|
(State)
|
|||
Additional
abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:
(Please
print or typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints _________________________________ attorney to transfer said Note on
the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:
________________________________ ________________________________
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
B
MORTGAGE
LOAN SCHEDULE
EXHIBIT
C-1
FORM
OF
INITIAL CERTIFICATION
June
22,
2006
|
New
Century Alternative Mortgage Loan Trust 2006-ALT1
c/o
Wilmington Trust Company
Xxxxxx
Square North
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000-0000
Attention:
Corporate Trust Administration
|
Xxxxx
Fargo Bank, N.A.
0000
Xxx Xxxxxxxxx Xxxx
Xxxxxxxx,
Xxxxxxxx 00000
|
|
Re:
|
Indenture
dated as of June 22, 2006, between New Century Alternative Mortgage
Loan
Trust 2006-ALT1 and Deutsche Bank National Trust
Company
|
Ladies
and Gentlemen:
In
accordance with Section 2.03(a) of the above-captioned Indenture and Section
2.1(b)(i)-(v) of the Mortgage Loan Purchase Agreement, dated as of June 22,
2006
(the “MLPA”; and together with the Indenture, the “Agreements”), among New
Century Credit Corporation, NC Capital Corporation and New Century Mortgage
Securities LLC., the undersigned, as Indenture Trustee, hereby certifies that
as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in
the
exception report annexed thereto as not being covered by such certification)
(i)
all documents constituting part of such Mortgage File (other than such documents
described in Section 2.1(v) of the MLPA) required to be delivered to it pursuant
to the Agreement are in its possession, (ii) such documents have been reviewed
by it and appear regular on their face and relate to such Mortgage Loan and
(iii) based on its examination and only as to the foregoing, the information
set
forth in the Mortgage Loan Schedule that corresponds to items (i), (ii), (x),
(xi) and (xiv) of the definition of “Mortgage Loan Schedule” accurately reflects
information set forth in the Mortgage File.
The
Indenture Trustee makes no representations as to: (i) the validity, legality,
sufficiency, enforceability or genuineness of any of the documents contained
in
the Mortgage File of any of the Mortgage Loans identified on the Mortgage Loan
Schedule, (ii) the collectability, insurability, effectiveness or suitability
of
any such Mortgage Loan, or (iii) whether any Mortgage File included any of
the
documents specified in clause (v) of Section 2.1 of the MLPA.
Capitalized
words and phrases used herein shall have the respective meanings assigned to
them in the above-captioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, as Indenture Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Name:
|
||||||||||||
|
Title:
|
||||||||||||
EXHIBIT
C-2
FORM
OF
FINAL CERTIFICATION
,
200__
|
New
Century Alternative Mortgage Loan Trust 2006-ALT1
c/o
Wilmington Trust Company
Xxxxxx
Square North
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000-0000
Attention:
Corporate Trust Administration
|
Xxxxx
Fargo Bank, N.A.
0000
Xxx Xxxxxxxxx Xxxx
Xxxxxxxx,
Xxxxxxxx 00000
|
|
Re:
|
Indenture
dated as of June 22, 2006, between New Century Alternative Mortgage
Loan
Trust 2006-ALT1 and Deutsche Bank National Trust
Company
|
Ladies
and Gentlemen:
In
accordance with Section 2.03(b) of the above-captioned Indenture, and Section
2.1(b) of the Mortgage Loan Purchase Agreement, dated as of June 7, 2006, (the
“MLPA”; and together with the Indenture, the “Agreements”), among New Century
Credit Corporation, NC Capital Corporation and New Century Mortgage Securities
LLC, the undersigned, as Indenture Trustee, hereby certifies that as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan
paid in full or listed on the exception report attached hereto) it has received
the documents set forth in Section 2.1(b) of the MLPA.
The
Indenture Trustee has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the Agreements.
The Indenture Trustee makes no representation that any documents specified
in
clause (v) of Section 2.1(b) should be included in any Mortgage
File.
The
Indenture Trustee makes no representations as to and shall not be responsible
to
verify: (i) the validity, legality, sufficiency, enforceability, due
authorization, recordability or genuineness of any of the documents contained
in
each Mortgage File of any of the Mortgage Loans identified on the Mortgage
Loan
Schedule, (ii) the collectability, insurability, effectiveness or suitability
of
any such Mortgage Loan or (iii) the existence of any assumption, modification,
written assurance or substitution agreement with respect to any Mortgage File
if
no such documents appear in the Mortgage File delivered to the Indenture
Trustee.
Capitalized
words and phrases used herein shall have the respective meanings assigned to
them in the above-captioned Indenture.
|
DEUTSCHE
BANK NATIONAL TRUST COMPANY, as Indenture Trustee
|
||||||||||||
|
By:
|
||||||||||||
|
Name:
|
||||||||||||
|
Title:
|
||||||||||||
EXHIBIT
D
[RESERVED]
APPENDIX
A
DEFINITIONS
“Accepted
Servicing Practices”: The servicing standards set forth in Section 3.01 of the
Servicing Agreement.
“Accrued
Note Interest”: With respect to any Class A Note or Mezzanine Note and each
Payment Date, interest accrued during the related Interest Accrual Period
at the
Note Rate for such Note for such Payment Date on the Note Balance immediately
prior to such Payment Date. All payments of interest on the Floating Rate
Notes
will be calculated on the basis of a 360-day year and the actual number of
days
in the applicable Interest Accrual Period. All payments of interest on the
Fixed
Rate Notes will be the calendar month preceding the month in which such Payment
Date occurs calculated on the basis of a 360-day year and twelve 30-day months.
“Additional
Form 10-D Disclosure”: As defined in Section 4.02(b)(i) of the Servicing
Agreement.
“Additional
Form 10-K Disclosure”: As defined in Section 4.02(b)(iii) of the Servicing
Agreement.
“Advancing
Person”: As defined in Section 3.26(a) of the Servicing Agreement.
“Administrator”:
NC Capital Corporation in the performance of its duties pursuant to Article
VIII
under the Mortgage Loan Purchase Agreement.
“Affiliate”:
With respect to any specified Person, any other Person controlling or controlled
by or under common control with such specified Person. For the purposes of
this
definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or
otherwise, and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.
“Allocated
Realized Loss Amount”: With respect to any Payment Date and any Class of
Mezzanine Notes, the sum of (i) any Realized Losses allocated to such Class
of
Notes on such Payment Date and previous Payment Dates minus the amount of
Subsequent Recoveries allocated to such Class on such Payment Date and previous
Payment Dates as provided in Section 3.05 hereof minus the amount of Net
Monthly
Excess Cashflow applied to such Class for such Payment Date and previous
Payment
Dates pursuant to Section 3.05(d)(iv).
“Assignment”:
An assignment of Mortgage, notice of transfer or equivalent instrument, in
recordable form (excepting therefrom, if applicable, the mortgage recordation
information which has not been required pursuant to Section 2.1 of the Mortgage
Loan Purchase Agreement or returned by the applicable recorder’s office), which
is sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect of record the sale of the Mortgage, which
assignment, notice of transfer or equivalent instrument may be in the form
of
one or more blanket assignments covering Mortgages secured by Mortgaged
Properties located in the same county, if permitted by law.
“Authorized
Newspaper”: A newspaper of general circulation in the Borough of Manhattan, The
City of New York, printed in the English language and customarily published
on
each Business Day, whether or not published on Saturdays, Sundays or
holidays.
“Authorized
Officer”: With respect to the Issuer, any officer of the Owner Trustee who is
authorized to act for the Owner Trustee in matters relating to the Issuer
and
who is identified on the list of Authorized Officers delivered by the Owner
Trustee to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter) and any authorized
officer of the Servicer in its capacity as administrator of the Issuer pursuant
to Article VIII of the Servicing Agreement.
“Available
Funds Rate”: For any Payment Date and the Class A Notes and Mezzanine Notes, a
per annum rate equal to the weighted average of the Expense Adjusted Mortgage
Rates of the then outstanding Mortgage Loans multiplied by a fraction the
numerator of which is the aggregate Stated Principal Balance of the Mortgage
Loans as of the last day of the prior Due Period and the denominator of which
is
the aggregate Note Balance of the Class A Notes and the Mezzanine Notes
immediately prior to such Payment Date multiplied (in the case of the Floating
Rate Notes) by a fraction, the numerator of which is 30 and the denominator
of
which is the actual number of days elapsed in the related Interest Accrual
Period.
“Available
Payment Amount”: With respect to any Payment Date, an amount equal to (1) the
sum of (a) the aggregate of the amounts on deposit in the Collection Account
as
of the close of business on the related Determination Date, including any
Subsequent Recoveries, (b) the aggregate of any amounts received in respect
of
an REO Property withdrawn from the Collection Account and deposited in the
Payment Account for such Payment Date pursuant to Section 3.23 of the Servicing
Agreement, (c) the aggregate of any amounts deposited in the Payment Account
by
the Servicer in respect of Prepayment Interest Shortfalls for such Payment
Date
pursuant to Section 3.24 of the Servicing Agreement, (d) the aggregate of
any
P&I Advances made by the Servicer for such Payment Date pursuant to Section
4.01 of the Servicing Agreement, (e) the aggregate of any advances made by
the
Indenture Trustee as successor Servicer or any other successor Servicer for
such
Payment Date pursuant to Section 6.02 of the Servicing Agreement, and (f)
the
amount of any Prepayment Charges collected by the Servicer in connection
with
the Principal Prepayment of any of the Mortgage Loans, by (2) the portion
of the
amount described in clause (1)(a) above that represents (i) Monthly Payments
on
the Mortgage Loans received from a Mortgagor on or prior to the Determination
Date but due during any Due Period subsequent to the related Due Period,
(ii)
Principal Prepayments on the Mortgage Loans received after the related
Prepayment Period (together with any interest payments received with such
Principal Prepayments to the extent they represent the payment of interest
accrued on the Mortgage Loans during a period subsequent to the related
Prepayment Period), (iii) Liquidation Proceeds and Insurance Proceeds received
in respect of the Mortgage Loans after the related Prepayment Period, (iv)
amounts reimbursable or payable to the Depositor, the Servicer, the Indenture
Trustee, the Owner Trustee, the Seller or any Sub- Servicer pursuant to Section
3.11 or Section 3.12 of the Servicing Agreement, (v) the Indenture Trustee
Fee,
the Owner Trustee Fee (beginning on the 13th
Payment
Date) and other amounts payable from the Payment Account pursuant to Section
6.07 hereof and (vi) amounts deposited in the Collection Account or the Payment
Account in error.
“Bankruptcy
Code”: The Bankruptcy Reform Act of 1978 (Title 11 of the United States Code),
as amended.
“Bankruptcy
Loss”: With respect to any Mortgage Loan, a Realized Loss resulting from a
Deficient Valuation or Debt Service Reduction.
“Basic
Documents”: The Trust Agreement, the Certificate of Trust, the Indenture, the
Servicing Agreement, the Mortgage Loan Purchase Agreement and the other
documents and certificates delivered in connection with any of the
above.
“Basis
Risk Shortfall”: With respect to any Class of Notes and any Payment Date, the
sum of (i) the excess, if any, of (x) the aggregate Accrued Note Interest
thereon for such Payment Date (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 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 hereof.
“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 Iowa, or in the city in
which
the Corporate Trust Office of the Indenture Trustee is located are authorized
or
obligated by law or executive order to be closed.
“Cash-Out
Refinancing”: A Refinanced Mortgage Loan the proceeds of which are more than a
nominal amount in excess of the principal balance of any existing first mortgage
or subordinate mortgage on the related Mortgaged Property and related closing
costs.
“Certificate
Distribution Account”: The account or accounts created and maintained pursuant
to Section 3.10(c) of the Trust Agreement. The Certificate Distribution Account
shall be an Eligible Account.
“Certificate
Paying Agent”: The meaning specified in Section 3.10 of the Trust
Agreement.
“Certificate
Percentage Interest”: With respect to each Certificate, the Certificate
Percentage Interest stated on the face thereof.
“Certificate
Register”: The register maintained by the Certificate Registrar in which the
Certificate Registrar shall provide for the registration of Certificates
and of
transfers and exchanges of Certificates.
“Certificate
Registrar”: Initially, the Indenture Trustee, in its capacity as Certificate
Registrar, or any successor to the Indenture Trustee in such
capacity.
“Certificate
of Trust”: The Certificate of Trust filed for the Trust pursuant to Section
3810(a) of the Statutory Trust Statute.
“Certificates”
or “Trust Certificates”: The New Century Alternative Mortgage Loan Trust
2006-ALT1 Trust Certificates, evidencing the beneficial ownership interest
in
the Issuer and executed by the Owner Trustee in substantially the form set
forth
in Exhibit A to the Trust Agreement.
“Certificateholder”
or “Holder”: The Person in whose name a Certificate is registered in the
Certificate Register. Owners of Certificates that have been pledged in good
faith may be regarded as Holders if the pledgee establishes to the satisfaction
of the Indenture Trustee or the Owner Trustee, as the case may be, the pledgee’s
right so to act with respect to such Certificates and that the pledgee is
not
the Issuer, any other obligor upon the Certificates or any Affiliate of any
of
the foregoing Persons.
“Certification”:
As defined in Section 4.02(b)(iii) of the Servicing Agreement.
“Class”:
Collectively, all of the Notes bearing the same class designation.
“Class
A
Notes”: Any of the Class AV-1 Notes, Class AF-2 Notes, Class AF-3 Notes, Class
AF-4 Notes, Class AF-5 Notes or the Class AF-6 Notes.
“Class
AV-1 Notes”: Any one of the Class AV-1 Notes executed, authenticated and
delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit
A-1 to the Indenture.
“Class
AF-2 Notes”: Any one of the Class AF-2 Notes executed, authenticated and
delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit
A-2 to the Indenture.
“Class
AF-3 Notes”: Any one of the Class AF-3 Notes executed, authenticated and
delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit
A-3 to the Indenture.
“Class
AF-4 Notes”: Any one of the Class AF-4 Notes executed, authenticated and
delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit
A-4 to the Indenture.
“Class
AF-5 Notes”: Any one of the Class AF-5 Notes executed, authenticated and
delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit
A-5 to the Indenture.
“Class
AF-6 Notes”: Any one of the Class AF-6 Notes executed, authenticated and
delivered by the Indenture Trustee, substantially in the form annexed as
Exhibit
A-6 to the Indenture.
“Class
M-1 Note”: Any one of the Class M-1 Notes executed, authenticated and delivered
by the Indenture Trustee, substantially in the form annexed as Exhibit A-7
to
the Indenture.
“Class
M-1 Principal Payment Amount”: With respect to any Payment Date, the excess of
(x) the sum of (i) the aggregate Note Balance of the Class A Notes (after
taking
into account the payment of the Senior Principal Payment Amount on such Payment
Date) and (ii) the Note Balance of the Class M-1 Notes immediately prior
to such
Payment Date over (y) the lesser of (A) the product of (i) 91.00% and (ii)
the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of
the related Due Period and (B) the aggregate Stated Principal Balance of
the
Mortgage Loans as of the last day of the related Due Period minus
$2,609,047.87.
“Class
M-2 Note”: Any one of the Class M-2 Notes executed, authenticated and delivered
by the Indenture Trustee, substantially in the form annexed as Exhibit A-8
to
the Indenture.
“Class
M-2 Principal Payment Amount”: With respect to any Payment Date, the excess of
(x) the sum of (i) the aggregate Note Balance of the Class A Notes (after
taking
into account the payment of the Senior Principal Payment Amount on such Payment
Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
the payment of the Class M-1 Principal Payment Amount on such Payment Date)
and
(iii) the Note Balance of the Class M-2 Notes immediately prior to such Payment
Date over (y) the lesser of (A) the product of (i) 92.00% and (ii) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the
related
Due Period and (B) the aggregate Stated Principal Balance of the Mortgage
Loans
as of the last day of the related Due Period minus $2,609,047.87.
“Class
M-3 Note”: Any one of the Class M-3 Notes executed, authenticated and delivered
by the Indenture Trustee, substantially in the form annexed as Exhibit A-9
to
the Indenture.
“Class
M-3 Principal Payment Amount”: With respect to any Payment Date, the excess of
(x) the sum of (i) the aggregate Note Balance of the Class A Notes (after
taking
into account the payment of the Senior Principal Payment Amount on such Payment
Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
the payment of the Class M-1 Principal Payment Amount on such Payment Date),
(iii) the Note Balance of the Class M-2 Notes (after taking into account
the
payment of the Class M-2 Principal Payment Amount on such Payment Date) and
(iv)
the Note Balance of the Class M-3 Notes immediately prior to such Payment
Date
over (y) the lesser of (A) the product of (i) 93.00% and (ii) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the
related
Due Period and (B) the aggregate Stated Principal Balance of the Mortgage
Loans
as of the last day of the related Due Period minus $2,609,047.87.
“Class
M-4 Note”: Any one of the Class M-4 Notes executed, authenticated and delivered
by the Indenture Trustee, substantially in the form annexed as Exhibit A-10
to
the Indenture.
“Class
M-4 Principal Payment Amount”: With respect to any Payment Date, the excess of
(x) the sum of (i) the aggregate Note Balance of the Class A Notes (after
taking
into account the payment of the Senior Principal Payment Amount on such Payment
Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
the payment of the Class M-1 Principal Payment Amount on such Payment Date),
(iii) the Note Balance of the Class M-2 Notes (after taking into account
the
payment of the Class M-2 Principal Payment Amount on such Payment Date),
(iv)
the Note Balance of the Class M-3 Notes (after taking into account the payment
of the Class M-3 Principal Payment Amount on such Payment Date) and (v) the
Note
Balance of the Class M-4 Notes immediately prior to such Payment Date over
(y)
the lesser of (A) the product of (i) 94.00% (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
and
(B) the aggregate Stated Principal Balance of the Mortgage Loans as of the
last
day of the related Due Period minus $2,609,047.87.
“Class
M-5 Note”: Any one of the Class M-5 Notes executed, authenticated and delivered
by the Indenture Trustee, substantially in the form annexed as Exhibit A-11
of
the Indenture.
“Class
M-5 Principal Payment Amount”: With respect to any Payment Date, the excess of
(x) the sum of (i) the aggregate Note Balance of the Class A Notes (after
taking
into account the payment of the Senior Principal Payment Amount on such Payment
Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
the payment of the Class M-1 Principal Payment Amount on such Payment Date),
(iii) the Note Balance of the Class M-2 Notes (after taking into account
the
payment of the Class M-2 Principal Payment Amount on such Payment Date),
(iv)
the Note Balance of the Class M-3 Notes (after taking into account the payment
of the Class M-3 Principal Payment Amount on such Payment Date), (v) the
Note
Balance of the Class M-4 Notes (after taking into account the payment of
the
Class M-4 Principal Payment Amount on such Payment Date) and (vi) the Note
Balance of the Class M-5 Notes immediately prior to such Payment Date over
(y)
the lesser of (A) the product of (i) 95.00% (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
and
(B) the aggregate Stated Principal Balance of the Mortgage Loans as of the
last
day of the related Due Period minus $2,609,047.87.
“Class
M-6 Note”: Any one of the Class M-6 Notes executed, authenticated and delivered
by the Indenture Trustee, substantially in the form annexed as Exhibit A-12
of
the Indenture.
“Class
M-6 Principal Payment Amount”: With respect to any Payment Date, the excess of
(x) the sum of (i) the aggregate Note Balance of the Class A Notes (after
taking
into account the payment of the Senior Principal Payment Amount on such Payment
Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
the payment of the Class M-1 Principal Payment Amount on such Payment Date),
(iii) the Note Balance of the Class M-2 Notes (after taking into account
the
payment of the Class M-2 Principal Payment Amount on such Payment Date),
(iv)
the Note Balance of the Class M-3 Notes (after taking into account the payment
of the Class M-3 Principal Payment Amount on such Payment Date), (v) the
Note
Balance of the Class M-4 Notes (after taking into account the payment of
the
Class M-4 Principal Payment Amount on such Payment Date), (vi) the Note Balance
of the Class M-5 Notes (after taking into account the payment of the Class
M-5
Principal Payment Amount on such Payment Date) and (vii) the Note Balance
of the
Class M-6 Notes immediately prior to such Payment Date over (y) the lesser
of
(A) the product of (i) 96.00% (ii) the aggregate Stated Principal Balance
of the
Mortgage Loans as of the last day of the related Due Period and (B) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of
the related Due Period minus $2,609,047.87.
“Closing
Date”: June 22, 2006.
“Code”:
The Internal Revenue Code of 1986.
“Collateral”:
The meaning specified in the Granting Clause of the Indenture.
“Collection
Account”: The account or accounts created and maintained, or caused to be
created and maintained, by the Servicer pursuant to Section 3.10(a) of the
Servicing Agreement, which shall be entitled “Xxxxx Fargo Bank, N.A., as
Servicer for Deutsche Bank National Trust Company, as Indenture Trustee,
in
trust for the registered holders of New Century Alternative Mortgage Loan
Trust
2006-ALT1, Asset Backed Notes, Series 2006-ALT1.” The Collection Account must be
an Eligible Account.
“Commission”:
The Securities and Exchange Commission.
“Corporate
Trust Office”: With respect to the Indenture Trustee, Certificate Registrar,
Certificate Paying Agent and Paying Agent, the principal corporate trust
office
of the Indenture Trustee and Note Registrar at which at any particular time
its
corporate trust business shall be administered, which office at the date
of the
execution of this instrument is located at 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx
Xxx, Xxxxxxxxxx 00000, Attention: Trust Administration, NC06A1. 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 at the date of the execution of this Trust Agreement is located
at
Wilmington Trust Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, Attention: New Century Alternative Mortgage Loan
Trust 2006-ALT1 (NC06A1).
“Credit
Enhancement Percentage”: For any Payment Date, the percentage equivalent of a
fraction, the numerator of which is the sum of the aggregate Note Balance
of the
Mezzanine Notes and the Overcollateralization Amount calculated after taking
into account payments of principal on the Mortgage Loans and payment of the
Principal Payment Amount to the Notes then entitled to payments of principal
on
such Payment Date, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related
Due
Period.
“Cut-off
Date”: The close of business on May 1, 2006.
“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.
“Deferred
Interest”: With respect to the Mezzanine Notes and any Payment Date, an amount
equal to the sum of (a) the aggregate amount of interest accrued at the
applicable Note Rate during the related Interest Accrual Period on any Allocated
Realized Loss Amount for such Class, (b) any amounts described in clause
(a) for
such Class for prior Payment Dates that remain unpaid, and (c) interest accrued
for the Interest Accrual Period related to such Payment Date on the amount
in
clause (b) at the Note Rate applicable to such Class
“Deficient
Valuation”: With respect to any Mortgage Loan, a valuation by a court of
competent jurisdiction of the Mortgaged Property in an amount less than the
then
outstanding indebtedness under the Mortgage Loan, or any reduction in the
amount
of principal to be paid in connection with any scheduled Monthly Payment
that
constitutes a permanent forgiveness of principal, which valuation or reduction
results from a proceeding under the Bankruptcy Code.
“Definitive
Notes”: The meaning specified in Section 4.06 hereof.
“Deleted
Mortgage Loan”: A Mortgage Loan replaced or to be replaced with an Qualified
Substitute Mortgage Loan.
“Delinquency
Rate”: With respect to any calendar month, the percentage obtained by dividing
(a) the sum of the aggregate Stated Principal Balance of (i) Mortgage Loans
delinquent 60 days or more, (ii) Mortgage Loans in foreclosure, (iii) REO
Properties and (iv) Mortgage Loans in bankruptcy and delinquent 60 days or
more
by (b) the aggregate Stated Principal Balance of the Mortgage Loans as of
the
last day of such calendar month; provided, however, that any Mortgage Loan
purchased by the Servicer pursuant to Section 3.16(c) of the Servicing Agreement
shall not be included in either the numerator or the denominator for purposes
of
calculating the Delinquency Percentage.
“Depositor”:
New Century Mortgage Securities 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 Indenture Trustee. Any successor to the Depository shall be an organization
registered as a “clearing agency” pursuant to Section 17A of the Exchange Act
and the regulations of the Securities and Exchange Commission
thereunder.
“Depository
Institution”: Any depository institution or trust company, including the
Indenture Trustee that (a) is incorporated under the laws of the United States
of America or any State thereof, (b) is subject to supervision and examination
by federal or state banking authorities and (c) has outstanding unsecured
commercial paper or other short-term unsecured debt obligations (or, in the
case
of a depository institution that is the principal subsidiary of a holding
company, such holding company has unsecured commercial paper or other short-term
unsecured debt obligations) that are rated at least P-1 by Xxxxx’x, A-1 by Fitch
(if rated by Fitch), A-1+ by S&P and R-1.
“Depository
Participant”: A Person for whom, from time to time, the Depository effects
book-entry transfers and pledges of securities deposited with the
Depository.
“Determination
Date”: With respect to any Payment Date, the 15th
day of
the calendar month in which such Payment Date occurs, or if such 15th
day is
not a Business Day, the Business Day immediately preceding such 15th
day.
“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 Issuer 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, the day of the month on which each
scheduled Monthly Payment is due.
“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 related Due Date.
“Eligible
Account”: Any of (i) an account or accounts maintained with a Depository
Institution, (ii) an account or accounts the deposits in which are fully
insured
by the FDIC or (iii) a segregated, non-interest bearing trust account or
accounts maintained with the corporate trust department of a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity. Eligible Accounts may bear interest.
“ERISA”:
The Employee Retirement Income Security Act of 1974, as amended.
“Escrow
Payment”: As defined in Section 3.09 of the Servicing Agreement.
“Estate
in Real Property”: A fee simple estate in a parcel of land.
“Event
of
Default”: With respect to the Indenture, any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) a
failure
by the Issuer to pay Accrued Note Interest on any of the Notes or the Principal
Payment Amount on any Payment Date; or
(ii) the
failure by the Issuer 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 Issuer made in the Indenture, or any representation or warranty of
the
Issuer made in the Indenture or in any certificate or other writing delivered
pursuant hereto or in connection herewith proving to have been incorrect
in any
material respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or condition
in
respect of which such representation or warranty was incorrect shall not
have
been eliminated or otherwise cured, for a period of 30 days after there shall
have been given, by registered or certified mail, to the Issuer by the Indenture
Trustee or to the Issuer and the Indenture Trustee by the Holders of at least
25% of the aggregate Note Balance of the Outstanding Notes, a written notice
specifying such default or incorrect representation or warranty and requiring
it
to be remedied and stating that such notice is a notice of default hereunder;
or
(iv) there
occurs the filing of a decree or order for relief by a court having jurisdiction
in the premises in respect of the Issuer or any substantial part of the Trust
Estate in an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing
a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the Trust Estate, or
ordering the winding-up or liquidation of the Issuer’s affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or
(v) there
occurs the commencement by the Issuer of a voluntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or hereafter
in
effect, or the consent by the Issuer to the entry of an order for relief
in an
involuntary case under any such law, or the consent by the Issuer to the
appointment or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Issuer or for any substantial
part of the assets of the Trust Estate, or the making by the Issuer of any
general assignment for the benefit of creditors, or the failure by the Issuer
generally to pay its debts as such debts become due, or the taking of any
action
by the Issuer in furtherance of any of the foregoing; or
(vi) the
Issuer becomes subject to federal income tax.
“Excess
Overcollateralized Amount”: With respect to the Class A Notes and the Mezzanine
Notes and any Payment Date, the excess, if any, of (i) the Overcollateralized
Amount for such Payment Date (calculated for this purpose only after assuming
that 100% of the Principal Remittance Amount on such Payment Date has been
paid)
over (ii) the Overcollateralization Target Amount for such Payment
Date.
“Exchange
Act”: The Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“Expense
Adjusted Mortgage Rate”: With respect to any Mortgage Loan (or the related REO
Property), as of any date of determination, a per annum rate of interest
equal
to the applicable Mortgage Rate thereon as of the close of business on the
first
day of the calendar month preceding the month in which the Payment Date occurs
minus the sum of (i) the Indenture Trustee Fee Rate, (ii) the Servicing Fee
Rate
and (iii) a rate per annum equal to the product of (a) a fraction, the numerator
of which is the Owner Trustee Fee for the related Payment Date and the
denominator of which is aggregate Stated Principal Balance of the Mortgage
Loans
as of the last day of the related Due Period and (b) 12.
“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
July 2036.
“Final
Recovery Determination”: With respect to any defaulted Mortgage Loan or any REO
Property (other than a Mortgage Loan or REO Property (i) purchased by NC
Capital, the Depositor or the Servicer pursuant to or as contemplated by
Section
2.04 hereof, Section 3.16(c) of the Servicing Agreement or (ii) removed from
the
Trust pursuant to Section 8.07 hereof), a determination made by the Servicer
that all Insurance Proceeds, Liquidation Proceeds and other payments or
recoveries which the Servicer, in its reasonable good faith judgment, expects
to
be finally recoverable in respect thereof have been so recovered. The Servicer
shall maintain records, prepared by a Servicing Officer, of each Final Recovery
Determination made thereby.
“Fitch”:
Fitch Ratings or its successor in interest.
“Fixed
Rate Notes”: Any Class A Notes (other than the Class AV-1 Notes) or Mezzanine
Notes.
“Floating
Rate Notes”: The Class AV-1 Notes.
“Form
8-K
Disclosure Information”: As defined in Section 4.02(b)(ii) of the 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, create, and xxxxx x xxxx upon and a security interest in and right
of
set-off against, deposit, set over and confirm pursuant to the Indenture.
A
Grant of the Collateral or of any other agreement or instrument shall include
all rights, powers and options (but none of the obligations) of the granting
party thereunder, including the immediate and continuing right to claim for,
collect, receive and give receipt for principal and interest payments in
respect
of such collateral or other agreement or instrument and all other moneys
payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
proceedings in the name of the granting party or otherwise, and generally
to do
and receive anything that the granting party is or may be entitled to do
or
receive thereunder or with respect thereto.
“Highest
Priority”: As of any date of determination, the Class of Mezzanine Notes then
outstanding with a Note Balance greater than zero, with the highest priority
for
payments pursuant to Section 3.05 hereof, in the following order: Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6 Notes.
“Indemnified
Party”: The meaning specified in Section 7.02 of the Trust
Agreement.
“Indenture”:
The indenture dated as of June 22, 2006, between the Issuer and the Indenture
Trustee, relating to the New Century Alternative Mortgage Loan Trust 2006-ALT1,
Asset-Backed Notes, Series 2006-ALT1.
“Indenture
Trustee”: Deutsche Bank National Trust Company, and its successors and assigns
or any successor indenture trustee appointed pursuant to the terms of the
Indenture.
“Indenture
Trustee Fee”: With respect to any Payment Date, one month’s interest accrued at
the Indenture Trustee Fee Rate on the Stated Principal Balance of each Mortgage
Loan as of the first day of the related Due Period.
“Indenture
Trustee Fee Rate”: 0.0053% per annum
“Independent”:
When used with respect to any specified Person, the Person (i) is in fact
independent of the Issuer, any other obligor on the Notes, the Seller, the
Servicer, the Depositor and any Affiliate of any of the foregoing Persons,
(ii)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller, the Servicer,
the
Depositor or any Affiliate of any of the foregoing Persons and (iii) is not
connected with the Issuer, any such other obligor, the Seller, the 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 hereof, made by an independent
appraiser or other expert appointed by an Issuer Request, and such opinion
or
certificate shall state that the signer has read the definition of “Independent”
in this Indenture and that the signer is Independent within the meaning
thereof.
“Independent
Contractor”: Either (i) any Person (other than the Servicer) that would be an
“independent contractor” with respect to the Issuer within the meaning of
Section 856(d)(3) of the Code if the Issuer 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 Issuer does not receive or derive any income
from such Person and provided that the relationship between such Person and
the
Issuer 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.
“Initial
Deposit”: With respect to the Mortgage Loans with a first Monthly Payment due on
July 1, 2006, an amount equal to $219,600.36.
“Initial
Note Balance”: As set forth in Section 2.02 hereof.
“Insurance
Proceeds”: Proceeds of any title policy, hazard policy or other insurance policy
covering a Mortgage Loan to the extent such proceeds are not to be applied
to
the restoration of the related Mortgaged Property or released to the Mortgagor
in accordance with the procedures that the Servicer would follow in servicing
mortgage loans held for its own account, subject to the terms and conditions
of
the related Mortgage Note and Mortgage.
“Interest
Accrual Period”: With
respect to any Payment Date and the Floating Rate Notes, the period
commencing on the Payment Date of the month immediately preceding the month
in
which such Payment Date occurs (or, in the case of the first Payment Date,
commencing on the Closing Date) and ending on the day preceding such Payment
Date. With respect to any Payment Date and the Fixed Rate Notes, the calendar
month preceding the month in which such Payment Date occurs.
“Interest
Carry Forward Amount”: With respect to any Payment Date and any Class of Class A
Notes or Mezzanine Notes, the sum of (i) the amount, if any, by which (a)
the
Interest Payment Amount for such Class of Notes as of the immediately preceding
Payment Date exceeded (b) the actual amount paid on such Class of Notes in
respect of interest on such immediately preceding Payment Date, (ii) the
amount
of any Interest Carry Forward Amount for such Class of Notes remaining unpaid
from the previous Payment Date and (iii) accrued interest on the sum of (i)
and
(ii) above calculated at the related Note Rate for the most recently ended
Interest Accrual Period.
“Interest
Determination Date”: With respect to the Floating Rate Notes and any Interest
Accrual Period therefor, the second London Business Day preceding the
commencement of such Interest Accrual Period.
“Interest
Payment Amount”: With respect to any Payment Date and any Class of Class A Notes
and Mezzanine Notes, the aggregate Accrued Note Interest on the Notes of
such
Class for such Payment Date.
“Interest
Remittance Amount”: With respect to any Payment Date, that portion of the
Available Payment Amount for such Payment Date allocable to interest received
or
advanced on the Mortgage Loans and any Subsequent Recoveries. In addition,
the
Interest Remittance Amount for the first Payment Date will be increased by
the
Initial Deposit.
“Investment
Company Act”: The Investment Company Act of 1940, as amended, and any amendments
thereto.
“IRS”:
The Internal Revenue Service.
“Issuer”:
New Century Alternative Mortgage Loan Trust 2006-ALT1, a Delaware statutory
trust, or its successor in interest.
“Issuer
Request”: A written order or request signed in the name of the Issuer by any one
of its Authorized Officers and delivered to the Indenture Trustee.
“Late
Collections”: With respect to any Mortgage Loan and any Due Period, all amounts
received subsequent to the Determination Date immediately following such Due
Period, whether as late payments of Monthly Payments or as Insurance Proceeds,
Liquidation Proceeds, Subsequent Recoveries or otherwise, which represent
late
payments or collections of principal and/or interest due (without regard
to any
acceleration of payments under the related Mortgage and Mortgage Note) but
delinquent for such Due Period and not previously recovered.
“Lien”:
Any mortgage, deed of trust, pledge, conveyance, hypothecation, assignment,
participation, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority right or interest or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other
than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; provided,
however, that any assignment pursuant to Section 6.02 of the Servicing Agreement
shall not be deemed to constitute a Lien.
“Liquidation
Event”: With respect to any Mortgage Loan, any of the following events: (i) such
Mortgage Loan is paid in full; (ii) a Final Recovery Determination is made
as to
such Mortgage Loan; or (iii) such Mortgage Loan is removed from the Trust
by
reason of (A) its being purchased, sold or replaced pursuant to or as
contemplated by Section 2.03 hereof or Section 3.16(c) of the Servicing
Agreement or (B) the Servicer redeeming the Notes pursuant to Section 8.07
hereof. With respect to any REO Property, either of the following events:
(i) a
Final Recovery Determination is made as to such REO Property; or (ii) such
REO
Property is removed from the Trust by reason of the Servicer redeeming the
Notes
pursuant to Section 8.07 hereof.
“Liquidation
Proceeds”: The amount (other than Insurance Proceeds or amounts received in
respect of the rental of any REO Property prior to REO Disposition) received
by
the Servicer in connection with (i) the taking of all or a part of a Mortgaged
Property by exercise of the power of eminent domain or condemnation, (ii)
the
liquidation of a defaulted Mortgage Loan through a trustee’s sale, foreclosure
sale or otherwise, (iii) the repurchase, substitution or sale of a Mortgage
Loan
or an REO Property pursuant to or as contemplated by Section 2.03 hereof
or
Section 3.16(c) of the Servicing Agreement, or (iv) the removal from the
Trust
of a Mortgage Loan or an REO Property pursuant to Section 8.07
hereof.
“Loan-to-Value
Ratio”: As of any date of determination, the fraction, expressed as a
percentage, the numerator of which is the principal balance of the related
Mortgage Loan at such date (and, with respect to any second lien Mortgage
Loan,
the principal balance of the related first lien Mortgage Loan plus the principal
balance of such second lien Mortgage Loan) and the denominator of which is
the
Value of the related Mortgaged Property.
“Lockout
Note Percentage”: The Lockout Note Percentage for the Class AF-6 Notes will be
calculated for each Payment Date to be the percentage equal to the Note Balance
of the Class AF-6 Notes immediately prior to such Payment Date divided by
the
aggregate Note Balance of the Class A Notes immediately prior to such Payment
Date.
“Lockout
Payment Percentage”: The Lockout Payment Percentage for the Class AF-6 Notes and
any Payment Date means the indicated percentage of the Lockout Note Percentage
for such Payment Date:
|
Distribution
Date Occurring In
|
Percentage
|
|
|
June
2006 through May 2009
|
0%
|
|
|
June
2009 through May 2011
|
45%
|
|
|
June
2011 through May 2012
|
80%
|
|
|
June
2012 through May 2013
|
100%
|
|
|
June
2013 and thereafter
|
300%
|
“London
Business Day”: Any day on which banks in the City of London and New York are
open and conducting transactions in United States dollars.
“Majority
Certificateholder”: A Holder of a 50.01% or greater Certificate Percentage
Interest of the Certificates.
“Mezzanine
Note”: Any Class M-1 Note, Class M-2 Note, Class M-3 Note, Class M-4 Note, Class
M-5 Note or Class M-6 Note.
“Monthly
Payment”: With respect to any Mortgage Loan, the scheduled monthly payment of
principal and interest on such Mortgage Loan which is payable by the related
Mortgagor from time to time under the related Mortgage Note, determined:
(a)
after giving effect to (i) any Deficient Valuation and/or Debt Service Reduction
with respect to such Mortgage Loan and (ii) any reduction in the amount of
interest collectible from the related Mortgagor pursuant to the Relief Act;
(b)
without giving effect to any extension granted or agreed to by the Servicer
pursuant to Section 3.07 of the Servicing Agreement and (c) on the assumption
that all other amounts, if any, due under such Mortgage Loan are paid when
due.
“Moody’s”:
Xxxxx’x Investors Service, Inc. or its successor in interest.
“Mortgage”:
The mortgage, deed of trust or other instrument creating a first or second
lien
on, or first or second priority security interest in, a Mortgaged Property
securing a Mortgage Note.
“Mortgage
File”: The mortgage documents listed in Section 2.1 of the Mortgage Loan
Purchase Agreement pertaining to a particular Mortgage Loan and any additional
documents required to be added to the Mortgage File pursuant to the Mortgage
Loan Purchase Agreement.
“Mortgage
Loan”: Each mortgage loan transferred and assigned to the Trust and delivered
to
the Trust pursuant to Section 2.1 of the Mortgage Loan Purchase Agreement
or
Section 2.04(b) of the Servicing Agreement, as held from time to time as
a part
of the Trust, the Mortgage Loans so held being identified in the Mortgage
Loan
Schedule.
“Mortgage
Loan Schedule”: With respect to any date, the schedule of Mortgage Loans held by
the Issuer on such date. The schedule of Mortgage Loans as of the Cut-off
Date
is the schedule set forth in Exhibit B of the Indenture, which schedule sets
forth as to each Mortgage Loan:
|
(i)
|
the
Mortgage Loan identifying number;
|
|
|
(ii)
|
the
state and zip code of the Mortgaged Property;
|
|
|
(iii)
|
a
code indicating whether the Mortgaged Property is
owner-occupied;
|
|
|
(iv)
|
the
type of Residential Dwelling constituting the Mortgaged
Property;
|
|
|
(v)
|
the
original months to maturity;
|
|
|
(vi)
|
the
stated remaining months to maturity from the Cut-off Date based
on the
original amortization schedule;
|
|
|
(vii)
|
the
Loan-to-Value Ratio at origination;
|
|
|
(viii)
|
the
Mortgage Rate in effect immediately following the Cut-off
Date;
|
|
|
(ix)
|
(A)
the date on which the first Monthly Payment was due on the Mortgage
Loan
and (B) if such date is not consistent with the Due Date currently
in
effect, such Due Date;
|
|
|
(x)
|
the
stated maturity date;
|
|
|
(xi)
|
the
amount of the Monthly Payment at origination;
|
|
|
(xii)
|
the
amount of the Monthly Payment due on the first Due Date after the
Cut-off
Date;
|
|
|
(xiii)
|
the
last Due Date on which a Monthly Payment was actually applied to
the
unpaid Stated Principal Balance;
|
|
|
(xiv)
|
the
original principal amount of the Mortgage Loan;
|
|
|
(xv)
|
the
Stated Principal Balance of the Mortgage Loan as of the close of
business
on the Cut-off Date;
|
|
|
(xvi)
|
[reserved];
|
|
|
(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 Documentation, Stated Income Documentation);
|
|
|
(xx)
|
the
risk grade;
|
|
|
(xxi)
|
the
Value of the Mortgaged Property;
|
|
|
(xxii)
|
the
sale price of the Mortgaged Property, if applicable;
|
|
|
(xxiii)
|
the
actual unpaid Stated Principal Balance of the Mortgage Loan as
of the
Cut-off Date;
|
|
|
(xxiv)
|
the
type and term of the related Prepayment Charge;
|
|
|
(xxv)
|
the
rounding code (i.e., nearest 0.125%, next highest
0.125%);
|
|
|
(xxvi)
|
the
program code; and
|
|
|
(xxvii)
|
the
total amount of points and fees charged such Mortgage
Loan.
|
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;
(2)
the current Stated Principal Balance of the Mortgage Loans; (3) the weighted
average Mortgage Rate of the Mortgage Loans and (4) the weighted average
maturity of the Mortgage Loans. With respect to any Qualified Substitute
Mortgage Loan, the Cut-off Date shall refer to the related Cut-off Date for
such
Mortgage Loan, determined in accordance with the definition of Cut-off Date
herein.
“Mortgage
Note”: The original executed note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
“Mortgage
Pool”: The pool of Mortgage Loans, identified on Exhibit B to the Indenture and
existing from time to time thereafter, and any REO Properties acquired in
respect thereof.
“Mortgage
Rate”: With respect to each Mortgage Loan, the annual rate at which interest
accrues on such Mortgage Loan from time to time in accordance with the
provisions of the related Mortgage Note, which rate with respect to each
Mortgage Loan shall remain constant at the rate set forth in the Mortgage
Loan
Schedule as the Mortgage Rate in effect immediately following the Cut-off
Date.
“Mortgaged
Property”: The underlying property securing a Mortgage Loan, including any REO
Property, consisting of an Estate in Real Property improved by a Residential
Dwelling.
“Mortgagor”:
The obligor on a Mortgage Note.
“NC
Capital” or “Responsible Party”: NC Capital Corporation, or its successor in
interest.
“Net
Monthly Excess Cashflow”: With respect to any Payment Date, the sum of (i) any
Overcollateralization Reduction Amount for such Payment Date and (ii) the
excess
of (x) the Available Payment Amount for such Payment Date over (y) the sum
for
such Payment Date of (A) the Senior Interest Payment Amount paid to the Holders
of the Class A Notes and the Interest Payment Amount paid to the Holders
of the
Mezzanine Notes and (B) the Principal Remittance Amount.
“Net
Mortgage Rate”: With respect to any Mortgage Loan (or the related REO Property)
as of any date of determination, a per annum rate of interest equal to the
then
applicable Mortgage Rate for such Mortgage Loan minus the Servicing Fee
Rate.
“New
Lease”: Any lease of REO Property entered into on behalf of the Trust, including
any lease renewed or extended on behalf of the Trust if the Trust has the
right
to renegotiate the terms of such lease.
“Nonrecoverable
P&I Advance”: Any P&I Advance previously made or proposed to be made in
respect of a Mortgage Loan or REO Property that, in the good faith business
judgment of the Servicer, will not or, in the case of a proposed P&I
Advance, would not be ultimately recoverable from related Late Collections,
Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property
as provided herein.
“Nonrecoverable
Servicing Advance”: Any Servicing Advance previously made or proposed to be made
in respect of a Mortgage Loan or REO Property that, in the good faith business
judgment of the Servicer, will not or, in the case of a proposed Servicing
Advance, would not be ultimately recoverable from related Late Collections,
Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property
as provided herein.
“Note”:
Any one of the Asset Backed Notes, Series 2006-ALT1, Class AV-1, Class AF-2,
Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class M-1, Class M-2, Class
M-3,
Class M-4, Class M-5 and Class M-6 issued under the Indenture.
“Note
Balance”: With respect to each Class A Note or Mezzanine Note as of any date of
determination, the Note Balance of such Note on the Payment Date immediately
prior to such date of determination plus, with respect to each Class of
Mezzanine Notes, any increase in the Note Balance of such Note pursuant to
Section 3.05 hereof due to the receipt of Subsequent Recoveries, minus all
payments of principal made thereon and in the case of each Class of Mezzanine
Notes, Realized Losses allocated thereto on such immediately prior Payment
Date
(or, in the case of any date of determination up to and including the first
Payment Date, the initial Note Balance of such Note, as stated on the face
thereof).
“Note
Margin”: With respect to the Class AV-1 Notes, the margin set forth
below:
|
Note
Margin
|
||||
|
Class
|
(1)
(%)
|
(2)
(%)
|
||
|
AV-1
|
0.06000
|
0.06000
|
||
|
_______________
|
|||||
|
(1)
|
For
the Interest Accrual Period for each Payment Date through and including
the first Payment Date on which the aggregate Stated Principal
Balance of
the Mortgage Loans remaining in the Mortgage Pool is reduced to
less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of
the Cut-off 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 the Floating Rate Notes and any Payment Date, a rate per
annum equal to the lesser of (i) One-Month LIBOR plus the related Note Margin
for such Payment Date and (ii) the Available Funds Rate for such Payment
Date.
With
respect to any Class of Fixed Rate Notes and any Payment Date, the lesser
of (i)
the applicable fixed rate per annum set forth below and (ii) the Available
Funds
Rate for such Payment Date.
|
Rate
|
||
|
Class
|
(1)
|
(2)
|
|
AF-2
|
5.90936%
per annum
|
5.90936%
per annum
|
|
AF-3
|
6.17307%
per annum
|
6.17307%
per annum
|
|
AF-4
|
6.31000%
per annum
|
6.81000%
per annum
|
|
AF-5
|
6.31000%
per annum
|
6.81000%
per annum
|
|
AF-6
|
6.16696%
per annum
|
6.66696%
per annum
|
|
M-1
|
6.31000%
per annum
|
6.81000%
per annum
|
|
M-2
|
6.31000%
per annum
|
6.81000%
per annum
|
|
M-3
|
6.31000%
per annum
|
6.81000%
per annum
|
|
M-4
|
6.31000%
per annum
|
6.81000%
per annum
|
|
M-5
|
6.31000%
per annum
|
6.81000%
per annum
|
|
M-6
|
6.31000%
per annum
|
6.81000%
per annum
|
_________
|
(1)
|
For
the Interest Accrual Period for each Payment Date through and including
the first Payment Date on which the aggregate Stated Principal
Balance of
the Mortgage Loans remaining in the Trust is reduced to less than
10% of
the aggregate Stated Principal Balance of the Mortgage Loans as
of the
Cut-off Date.
|
|
(2)
|
For each Interest Accrual Period thereafter. |
“Note
Register”: The register maintained by the Note Registrar in which the Note
Registrar shall provide for the registration of Notes and of transfers and
exchanges of Notes.
“Note
Registrar”: The Indenture Trustee, in its capacity as Note Registrar, or any
successor to the Indenture Trustee in such capacity.
“Noteholder”
or “Holder”: The Person in whose name a Note is registered in the Note Register,
except that, any Note registered in the name of the Depositor, the Issuer,
the
Indenture Trustee, the Seller or the Servicer or any Affiliate of any of
them
shall be deemed not to be a holder or holders, nor shall any so owned be
considered outstanding, for purposes of giving any request, demand,
authorization, direction, notice, consent or waiver under the Indenture or
the
Trust Agreement; provided that, in determining whether the Indenture Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that a Responsible Officer
of
the Indenture Trustee or the Owner Trustee actually knows to be so owned
shall
be so disregarded. Owners of Notes that have been pledged in good faith may
be
regarded as Holders if the pledgee establishes to the satisfaction of the
Indenture Trustee or the Owner Trustee the pledgee’s right so to act with
respect to such Notes and that the pledgee is not the Issuer, any other obligor
upon the Notes or any Affiliate of any of the foregoing Persons.
“Officer’s
Certificate”: With respect to the Servicer, a certificate signed by the
President, Managing Director, a Director, a Vice President or an Assistant
Vice
President, of the Servicer and delivered to the Indenture Trustee. With respect
to the Issuer, a certificate signed by any Authorized Officer of the Issuer,
under the circumstances described in, and otherwise complying with, the
applicable requirements of Section 10.01 hereof, and delivered to the Indenture
Trustee. Unless otherwise specified, any reference in the Indenture to an
Officer’s Certificate shall be to an Officer’s Certificate of any Authorized
Officer of the Issuer.
“One-Month
LIBOR”: With respect to the Floating Rate Notes and any Interest Accrual Period
therefor, the rate determined by the Indenture Trustee on the related Interest
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits, as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such Interest Determination Date; provided that if such rate does
not
appear on Telerate Page 3750, the rate for such date will be determined on
the
basis of the offered rates of the Reference Banks for one-month U.S. dollar
deposits, as of 11:00 a.m. (London time) on such Interest Determination Date.
In
such event, the Indenture Trustee will request the principal London office
of
each of the Reference Banks to provide a quotation of its rate. If on such
Interest Determination Date, two or more Reference Banks provide such offered
quotations, One-Month LIBOR for the related Interest Accrual Period shall
be the
arithmetic mean of such offered quotations (rounded upwards if necessary
to the
nearest whole multiple of 1/16%). If on such Interest Determination Date,
fewer
than two Reference Banks provide such offered quotations, One-Month LIBOR
for
the related Interest Accrual Period shall be the higher of (i) LIBOR as
determined on the previous Interest Determination Date and (ii) the Reserve
Interest Rate. Notwithstanding the foregoing, if, under the priorities described
above, LIBOR for an Interest Determination Date would be based on LIBOR for
the
previous Interest Determination Date for the third consecutive Interest
Determination Date, the Indenture Trustee, after consultation with the Servicer,
shall select an alternative comparable index (over which the Indenture Trustee
has no control), used for determining one-month Eurodollar lending rates
that is
calculated and published (or otherwise made available) by an independent
party.
“Opinion
of Counsel”: A written opinion of counsel acceptable to the Indenture Trustee,
in its reasonable discretion which counsel may be in-house counsel for the
Servicer if acceptable to the Indenture Trustee and the Rating Agencies or
counsel for the Depositor, as the case may be.
“Originators”:
New Century Mortgage Corporation and Home123 Corporation, or their successors
in
interest, in their capacity as originators of the Mortgage Loans.
“Outstanding”:
With respect to the Notes, as of the date of determination, all Notes
theretofore executed, authenticated and delivered under this Indenture
except:
(i) Notes
theretofore canceled by the Note Registrar or delivered to the Indenture
Trustee
for cancellation; and
(ii) Notes
in
exchange for or in lieu of which other Notes have been executed, authenticated
and delivered pursuant to the Indenture unless proof satisfactory to the
Indenture Trustee is presented that any such Notes are held by a holder in
due
course;
“Overcollateralization
Deficiency Amount”: With respect to any Payment Date, the excess, if any, of (a)
the Overcollateralization Target Amount applicable to such Payment Date over
(b)
the Overcollateralized Amount applicable to such Payment Date (calculated
for
this purpose only, after assuming that 100% of the Principal Remittance Amount
on such Payment Date has been paid).
“Overcollateralization
Increase Amount”: With respect to any Payment Date, the lesser of (a) the
Overcollateralization Deficiency Amount as of such Payment Date and (b) the
Net
Monthly Excess Cashflow Amount with respect to such Payment Date and any
Prepayment Charges collected during the related Prepayment Period.
“Overcollateralization
Reduction Amount”: With respect to any Payment Date, an amount equal to the
lesser of (a) the Excess Overcollateralized Amount and (b) the Principal
Remittance Amount.
“Overcollateralization
Target Amount”: With respect to any Payment Date (a) prior to the Stepdown Date,
an amount equal to 2.00% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date; (b) on or after the Stepdown Date
provided a Trigger Event is not in effect, the greater of (i) 4.00% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of
the related Due Period and (ii) $2,609,047.87; and (c) on or after the Stepdown
Date and if a Trigger Event is in effect, the Overcollateralization Target
Amount for the immediately preceding Payment Date. Notwithstanding the
foregoing, on and after any Payment Date following the reduction of the
aggregate Note Balance of the Notes to zero, the Overcollateralization Target
Amount will be zero.
“Overcollateralized
Amount”: With respect to any Payment Date, the excess, if any, of (a) the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties
as
of the last day of the related Due Period over (b) the aggregate Note Balance
of
the Class A Notes and the Mezzanine Notes (after giving effect to payments
to be
made on such Payment Date).
“Owner
Trust Estate”: The corpus of the Issuer created by the Trust Agreement which
consists of items referred to in Section 3.01 of the Trust
Agreement.
“Owner
Trustee”: Wilmington Trust Company, acting not in its individual capacity but
solely as Owner Trustee, and its successors and assigns or any successor
owner
trustee appointed pursuant to the terms of the Trust Agreement.
“Owner
Trustee Fee”: The initial fee and the first year annual administration fee
payable to the Owner Trustee on the Closing Date and with respect to each
Payment Date beginning on the 13th
Payment
Date, one twelfth (1/12) of the Owner Trustee’s annual administration fee, which
the Owner Trustee shall provide to the Servicer and the Indenture
Trustee.
“Paying
Agent”: Any paying agent or co-paying agent appointed pursuant to Section 3.03
hereof, which initially shall be the Indenture Trustee.
“Payment
Account”: The trust account or accounts created and maintained by the Indenture
Trustee pursuant to Section 3.01 hereof, which shall be entitled “Deutsche Bank
National Trust Company, as Indenture Trustee, in trust for the registered
holders of New Century Alternative Mortgage Loan Trust 2006-ALT1, Asset Backed
Notes.” The Payment Account must be an Eligible Account.
“Payment
Date”: The 25th
day of
any month, or if such 25th
day is
not a Business Day, the Business Day immediately following such 25th
day,
commencing in June 2006.
“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.
“Permitted
Investments”: Any one or more of the following obligations or securities
acquired at a purchase price of not greater than par, regardless of whether
issued by the Depositor, the Servicer, the Indenture Trustee or any of their
respective Affiliates:
(i) direct
obligations of, or obligations fully guaranteed as to timely payment of
principal and interest by, the United States or any agency or instrumentality
thereof, provided such obligations are backed by the full faith and credit
of
the United States;
(ii) demand
and time deposits in, certificates of deposit of, or bankers’ acceptances issued
by, any Depository Institution;
(iii) repurchase
obligations with respect to any security described in clause (i) above entered
into with a Depository Institution (acting as principal);
(iv) securities
bearing interest or sold at a discount that are issued by any corporation
incorporated under the laws of the United States of America or any state
thereof
and that are rated by each Rating Agency that rates such securities in its
highest long-term unsecured rating categories at the time of such investment
or
contractual commitment providing for such investment;
(v) commercial
paper (including both non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a specified date not
more
than 30 days after the date of acquisition thereof) that is rated by each
Rating
Agency that rates such securities in its highest short-term unsecured debt
rating available at the time of such investment;
(vi) units
of
money market funds that have been rated “AAAm” or “AAAm-G” by S&P;
and
(viii) if
previously confirmed in writing to the Indenture Trustee, any other demand,
money market or time deposit, or any other obligation, security or investment,
as may be acceptable to the Rating Agencies as a permitted investment of
funds
backing securities having ratings equivalent to its highest initial rating
of
the Class A Notes;
provided,
however, that no instrument described hereunder shall evidence either the
right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of
the
yield to maturity at par of the underlying obligations.
“Person”:
Any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or government or
any
agency or political subdivision thereof.
“P&I
Advance”: As to any Mortgage Loan or REO Property, any advance made by the
Servicer in respect of any Payment Date pursuant to Section 4.01 of the
Servicing Agreement.
“Plan”:
Any employee benefit plan or certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Xxxxx plans and bank
collective investment funds and insurance company general or separate accounts
in which such plans, accounts or arrangements are invested, that are subject
to
ERISA or Section 4975 of the Code.
“Plan
Assets”: Assets of a Plan within the meaning of Department of Labor regulation
29 C.F.R. § 2510.3-101.
“Prepayment
Assumption”: As set forth in the Prospectus Supplement.
“Prepayment
Charge”: With respect to any Prepayment Period, any prepayment premium, penalty
or charge payable by a Mortgagor in connection with any Principal Prepayment
on
a Mortgage Loan pursuant to the terms of the related Mortgage Note.
“Prepayment
Interest Shortfall”: With respect to any Payment Date, for each Mortgage Loan
that was during the related Prepayment Period the subject of a Principal
Prepayment in full or in part that was applied by the Servicer to reduce
the
outstanding Stated Principal Balance of such loan on a date preceding the
Due
Date in the succeeding Prepayment Period, an amount equal to one month’s
interest at the applicable Net Mortgage Rate less any payments of interest
made
by the Mortgagor. The obligations of the Servicer in respect of any Prepayment
Interest Shortfall are set forth in Section 3.24 of the Servicing
Agreement.
“Prepayment
Period”: With respect to any Payment Date, the calendar month preceding the
calendar month in which such Payment Date occurs.
“Principal
Payment Amount”: With respect to any Payment Date, the sum of (i) the principal
portion of each Monthly Payment on the Mortgage Loans due during the related
Due
Period, actually received on or prior to the related Determination Date or
advanced on or before the related Servicer Remittance Date; (ii) the Stated
Principal Balance of any Mortgage Loan that was purchased during the related
Prepayment Period pursuant to or as contemplated by Section 2.04 or Section
3.16(c) of the Servicing Agreement and the amount of any shortfall deposited
in
the Collection Account in connection with the substitution of a Deleted Mortgage
Loan pursuant to Section 2.04 of the Servicing Agreement during the related
Prepayment Period; (iii) the principal portion of all other unscheduled
collections (including, without limitation, Principal Prepayments, Insurance
Proceeds, Liquidation Proceeds and REO Principal Amortization) received during
the related Prepayment Period, net of any portion thereof that represents
a
recovery of principal for which an advance was made by the Servicer pursuant
to
Section 4.01 of the Servicing Agreement in respect of a preceding Payment
Date;
(iv) on the Payment Date on which the Notes are to be redeemed pursuant to
Section 8.07 hereof, that portion of the Redemption Price, in respect of
principal on the Mortgage Loans and (v) the Overcollateralization Increase
Amount for such Payment Date minus
(vi) the
Overcollateralization Reduction Amount 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 amounts set
forth in clauses (i) through (iii) of the definition of Principal Payment
Amount.
“Proceeding”:
Any suit in equity, action at law or other judicial or administrative
proceeding.
“Prospectus
Supplement”: That certain Prospectus Supplement dated June 7, 2006, relating to
the public offering of the Class A Notes and the Mezzanine Notes.
“Purchase
Price”: With respect to any Mortgage Loan or REO Property to be purchased
pursuant to or as contemplated by Section 2.03 hereof or Section 3.16(c)
of the
Servicing Agreement, and as confirmed by an Officer’s Certificate from the
Servicer to the Indenture Trustee, an amount equal to the sum of (i) 100%
of the
Stated Principal Balance thereof as of the date of purchase, (ii) in the
case of
(x) a Mortgage Loan, accrued interest on such Stated Principal Balance at
the
applicable Mortgage Rate in effect from time to time from the Due Date as
to
which interest was last covered by a payment by the Mortgagor or an advance
by
the Servicer, which payment or advance had as of the date of purchase been
paid
pursuant to Section 3.05 hereof, 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, Liquidation Proceeds and P&I Advances that as of the date of
purchase had been paid as or to cover REO Imputed Interest pursuant to Section
3.05 hereof, (iii) any unreimbursed Servicing Advances and P&I Advances
(including Nonrecoverable P&I Advances and Nonrecoverable Servicing
Advances) and any unpaid Servicing Fees allocable to such Mortgage Loan or
REO
Property, (iv) any amounts previously withdrawn from the Collection Account
in
respect of such Mortgage Loan or REO Property pursuant to Section 3.11(a)(ix)
and Section 3.16(b) of the Servicing Agreement, and (v) in the case of a
Mortgage Loan required to be purchased pursuant to Section 2.03 hereof or
purchased by the Servicer pursuant to Section 3.16(c) of the 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.
“Qualified
Substitute Mortgage Loan”: A mortgage loan substituted for a Deleted Mortgage
Loan which must, on the date of such substitution, (i) have an outstanding
Stated Principal Balance, after application of all scheduled payments of
principal and interest due during or prior to the month of substitution,
not in
excess of the Stated Principal Balance of the Deleted Mortgage Loan as of
the
Due Date in the calendar month during which the substitution occurs, (ii)
have a
Mortgage Rate not less than (and not more than one percentage point in excess
of) the Mortgage Rate of the Deleted Mortgage Loan, (iii) have a remaining
term
to maturity not greater than (and not more than one year less than) that
of the
Deleted Mortgage Loan, (viii) have the same Due Date as the Due Date on the
Deleted Mortgage Loan, (ix) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (x) have a risk grading determined by the
Originator at least equal to the risk grading assigned on the Deleted Mortgage
Loan and (xi) conform to each representation and warranty set forth in Mortgage
Loan Purchase Agreement applicable to the Deleted Mortgage Loan. In the event
that one or more mortgage loans are substituted for one or more Deleted Mortgage
Loans, the amounts described in clause (i) hereof shall be determined on
the
basis of aggregate Stated Principal Balances, the Mortgage Rates described
in
clause (ii) hereof shall be determined on the basis of weighted average Mortgage
Rates, the terms described in clause (vii) hereof shall be determined on
the
basis of weighted average remaining term to maturity, the Loan-to-Value Ratios
described in clause (ix) hereof shall be satisfied as to each such mortgage
loan, the risk gradings described in clause (x) hereof shall be satisfied
as to
each such mortgage loan and, except to the extent otherwise provided in this
sentence, the representations and warranties described in clause (xi) hereof
must be satisfied as to each Qualified Substitute Mortgage Loan or in the
aggregate, as the case may be.
“Rate/Term
Refinancing”: A Refinanced Mortgage Loan, the proceeds of which are not more
than a nominal amount in excess of the existing first mortgage loan and any
subordinate mortgage loan on the related Mortgaged Property and related closing
costs, and were used exclusively (except for such nominal amount) to satisfy
the
then existing first mortgage loan and any subordinate mortgage loan of the
Mortgagor on the related Mortgaged Property and to pay related closing
costs.
“Rating
Agency” or “Rating Agencies”: Moody’s, Fitch, S&P or their successors. If
such agencies or their successors are no longer in existence, “Rating Agencies”
shall be such nationally recognized statistical rating agencies, or other
comparable Persons, designated by the Depositor, notice of which designation
shall be given to the Indenture Trustee and the Servicer.
“Realized
Loss”: With respect to each Mortgage Loan as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i)
the
unpaid Stated Principal Balance of such Mortgage Loan as of the commencement
of
the calendar month in which the Final Recovery Determination was made, plus
(ii)
accrued interest from the Due Date as to which interest was last paid by
the
Mortgagor through the end of the calendar month in which such Final Recovery
Determination was made, calculated in the case of each calendar month during
such period (A) at an annual rate equal to the annual rate at which interest
was
then accruing on such Mortgage Loan and (B) on a principal amount equal to
the
Stated Principal Balance of such Mortgage Loan as of the close of business
on
the Payment Date during such calendar month, plus (iii) any amounts previously
withdrawn from the Collection Account in respect of such Mortgage Loan pursuant
to Section 3.11(a)(ix) and Section 3.16(b) of the Servicing Agreement, minus
(iv) the proceeds, if any, received in respect of such Mortgage Loan during
the
calendar month in which such Final Recovery Determination was made, net of
amounts that are payable therefrom to the Servicer with respect to such Mortgage
Loan pursuant to Section 3.11(a)(iii) of the Servicing Agreement.
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 as principal payments on any
Payment Date.
With
respect to any REO Property as to which a Final Recovery Determination has
been
made, an amount (not less than zero) equal to (i) the unpaid principal balance
of the related Mortgage Loan as of the date of acquisition of such REO Property
on behalf of the Trust, plus (ii) accrued interest from the Due Date as to
which
interest was last paid by the Mortgagor in respect of the related Mortgage
Loan
through the end of the calendar month immediately preceding the calendar
month
in which such REO Property was acquired, calculated in the case of each calendar
month during such period (A) at an annual rate equal to the annual rate at
which
interest was then accruing on the related Mortgage Loan and (B) on a principal
amount equal to the Stated Principal Balance of the related Mortgage Loan
as of
the close of business on the Payment Date during such calendar month, plus
(iii)
REO Imputed Interest for such REO Property for each calendar month commencing
with the calendar month in which such REO Property was acquired and ending
with
the calendar month in which such Final Recovery Determination was made, plus
(iv) any amounts previously withdrawn from the Collection Account in respect
of
the related Mortgage Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b)
of
the Servicing Agreement, minus (v) the aggregate of all P&I Advances and
Servicing Advances (in the case of Servicing Advances, without duplication
of
amounts netted out of the rental income, Insurance Proceeds and Liquidation
Proceeds described in clause (vi) below) made by the Servicer in respect
of such
REO Property or the related Mortgage Loan for which the Servicer has been
or, in
connection with such Final Recovery Determination, will be reimbursed pursuant
to Section 3.23 of the Servicing Agreement out of rental income, Insurance
Proceeds and Liquidation Proceeds received in respect of such REO Property,
minus (vi) the total of all net rental income, Insurance Proceeds and
Liquidation Proceeds received in respect of such REO Property that has been,
or
in connection with such Final Recovery Determination, will be transferred
to the
Payment Account pursuant to Section 3.23 of the Servicing
Agreement.
With
respect to each Mortgage Loan which has become the subject of a Deficient
Valuation, the difference between the principal balance of the Mortgage Loan
outstanding immediately prior to such Deficient Valuation and the Stated
Principal Balance of the Mortgage Loan as reduced by the Deficient
Valuation.
With
respect to each Mortgage Loan which has become the subject of a Debt Service
Reduction, the portion, if any, of the reduction in each affected Monthly
Payment attributable to a reduction in the Mortgage Rate imposed by a court
of
competent jurisdiction. Each such Realized Loss shall be deemed to have been
incurred on the Due Date for each affected Monthly Payment.
“Record
Date”: With respect to each Payment Date and any Floating Rate Notes that are
Book-Entry Notes, the Business Day immediately preceding such Payment Date.
With
respect to each Payment Date and any Fixed Rate Notes, or any Definitive
Notes,
the last Business Day of the month immediately preceding the month in which
such
Payment Date occurs, except in the case of the first Payment Date, in which
case
the Record Date will be the Closing Date.
“Redemption
Price”: As defined in Section 8.07 hereof.
“Reference
Banks”: Deutsche Bank AG, Xxxxxxx’x Bank PLC, The Tokyo Mitsubishi Bank and
National Westminster Bank PLC and their successors in interest; provided,
however, that if any of the foregoing banks are not suitable to serve as
a
Reference Bank, then any leading banks selected by the Indenture Trustee,
after
consultation with the Depositor, which are engaged in transactions in Eurodollar
deposits in the international Eurocurrency market (i) with an established
place
of business in London and (ii) not controlling, under the control of or under
common control with the Depositor or any Affiliate thereof.
“Refinanced
Mortgage Loan”: A Mortgage Loan the proceeds of which were not used to purchase
the related Mortgaged Property.
“Registered
Holder”: The Person in whose name a Note is registered in the Note Register on
the applicable Record Date.
“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.
“Related
Documents”: With respect to each Mortgage Loan, the documents specified in
Section 2.1(b) of the Mortgage Loan Purchase Agreement and any documents
required to be added to such documents pursuant to the Mortgage Loan Purchase
Agreement, the Trust Agreement, Indenture or the Servicing
Agreement.
“Relief
Act”: The Servicemembers Civil Relief Act or similar state law.
“Relief
Act Interest Shortfall”: With respect to any Payment Date and any Mortgage Loan,
any reduction in the amount of interest collectible on such Mortgage Loan
for
the most recently ended calendar month as a result of the application of
the
Relief Act.
“Remittance
Report”: A report in form and substance mutually acceptable to the Indenture
Trustee and the Servicer in an electronic format prepared by the Servicer
pursuant to Section 4.01 of the Servicing Agreement with such additions,
deletions and modifications as mutually agreed to by the Indenture Trustee
and
the Servicer.
“Rents
from Real Property”: With respect to any REO Property, gross income of the
character described in Section 856(d) of the Code as being included in the
term
“rents from real property.”
“REO
Account”: The account or accounts maintained, or caused to be maintained, by the
Servicer in respect of an REO Property pursuant to Section 3.23 of the Servicing
Agreement.
“REO
Disposition”: The sale or other disposition of an REO Property on behalf of the
Trust.
“REO
Imputed Interest”: As to any REO Property, for any calendar month during which
such REO Property was at any time part of the Trust, one month’s interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of such REO
Property (or, in the case of the first such calendar month, of the related
Mortgage Loan, if appropriate) as of the close of business on the Payment
Date
in such calendar month.
“REO
Principal Amortization”: With respect to any REO Property, for any calendar
month, the excess, if any, of (a) the aggregate of all amounts received in
respect of such REO Property during such calendar month, whether in the form
of
rental income, sale proceeds (including, without limitation, that portion
of the
proceeds paid in connection with a purchase of all of the Notes pursuant
to
Section 8.07 hereof that is allocable to such REO Property) or otherwise,
net of
any portion of such amounts (i) payable pursuant to Section 3.23(c) of the
Servicing Agreement in respect of the proper operation, management and
maintenance of such REO Property or (ii) payable or reimbursable to the Servicer
pursuant to Section 3.23(d) of the Servicing Agreement for unpaid Servicing
Fees
in respect of the related Mortgage Loan and unreimbursed Servicing Advances
and
P&I Advances in respect of such REO Property or the related Mortgage Loan,
over (b) the REO Imputed Interest in respect of such REO Property for such
calendar month.
“REO
Property”: A Mortgaged Property acquired by the Servicer on behalf of the Trust
Fund through foreclosure or deed-in-lieu of foreclosure, as described in
Section
3.23 of the Servicing Agreement.
“Reportable
Event”: As defined in Section 4.02(b)(ii) of the Servicing
Agreement.
“Request
for Release”: A release signed by a Servicing Officer, in the form of Exhibit B
attached to the Servicing Agreement.
“Reserve
Interest Rate”: With respect to any Interest Determination Date, the rate per
annum that the Indenture Trustee determines to be either (i) the arithmetic
mean
(rounded upwards if necessary to the nearest whole multiple of 1/16%) of
the
one-month U.S. dollar lending rates which New York City banks selected by
the
Indenture Trustee, after consultation with the Servicer, are quoting on the
relevant Interest Determination Date to the principal London offices of leading
banks in the London interbank market or (ii) in the event that the Indenture
Trustee can determine no such arithmetic mean, the lowest one-month U.S.
dollar
lending rate which New York City banks selected by the Indenture Trustee,
after
consultation with the Servicer, are quoting on such Interest Determination
Date
to leading European banks.
“Residential
Dwelling”: Any one of the following: (i) an attached, detached or semi-detached
one-family dwelling, (ii) an attached, detached or semi-detached two-to
four-family dwelling, (iii) a one-family dwelling unit in a Xxxxxx Xxx eligible
condominium project, or (iv) an attached, detached or semi-detached one-family
dwelling in a planned unit development, none of which is a co-operative or
mobile home (as defined in 42 United States Code, Section 5402(6)).
“Responsible
Officer”: When used with respect to the Indenture Trustee or the Owner Trustee,
any vice president, managing director, director, any assistant vice president,
the Secretary, any assistant secretary, the Treasurer, any assistant treasurer,
any associate, any trust officer or assistant trust officer or any other
officer
of the Trustee having direct responsibility over this Agreement or otherwise
engaged in performing functions similar to those performed by any of the
above
designated officers and, with respect to a particular matter, to whom such
matter is referred because of such officer’s knowledge of and familiarity with
the particular subject.
“Rolling
Three Month Delinquency Rate”: As of any Payment Date, the sum of the
Delinquency Rates for the previous three calendar months divided by 3 (or
1 or
2, in the case of the first or second Payment Date, respectively).
“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.
“Seller”:
New Century Credit Corporation, and its successors and assigns, in its capacity
as seller under the Mortgage Loan Purchase Agreement.
“Senior
Interest Payment Amount”: With respect to any Payment Date and any Class of
Class A Notes, an amount equal to the sum of (i) the Interest Payment Amount
for
such Payment Date for that Class and (ii) the Interest Carry Forward Amount,
if
any, for such Payment Date for that Class.
“Senior
Principal Payment Amount”: With respect to any Payment Date, the excess of (x)
the aggregate Note Balance of the Class A Notes immediately prior to such
Payment Date over (y) the lesser of (A) the product of (i) 88.20% and (ii)
the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of
the related Due Period and (B) the aggregate Stated Principal Balance of
the
Mortgage Loans as of the last day of the related Due Period minus
$2,609,047.87.
“Servicer”:
From and after the Servicing Transfer Date, Xxxxx Fargo Bank, N.A., and if
a
successor servicer is appointed hereunder, such successor. Prior to the
Servicing Transfer Date, “Servicer” shall mean New Century Mortgage Corporation
with respect to all of the Mortgage Loans.
“Servicer
Event of Default”: One or more of the events described in Section 6.01 of the
Servicing Agreement.
“Servicer
Remittance Date”: With respect to any Payment Date, two Business Days preceding
the related Payment Date.
“Servicing
Account”: The account or accounts created and maintained pursuant to Section
3.09 of the Servicing Agreement.
“Servicing
Advances”: The reasonable “out-of-pocket” costs and expenses incurred by the
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 and bankruptcies, in respect of a particular
Mortgage Loan, (iii) the management (including reasonable fees in connection
therewith) and liquidation of any REO Property and (iv) the performance of
its
obligations under Section 3.01, Section 3.09, Section 3.14, Section 3.16
and
Section 3.23 of the Servicing Agreement. The Servicer shall not be required
to
make any Nonrecoverable Servicing Advances.
“Servicing
Agreement”: The Servicing Agreement dated as of June 22, 2006, among the
Servicer, the Issuer and the Indenture Trustee.
“Servicing
Criteria”: As set forth in Exhibit E of the Servicing Agreement.
“Servicing
Fee”: With respect to each Mortgage Loan and for any calendar month, an amount
equal to the Servicing Fee Rate accrued for one month (or in the event of
any
payment of interest which accompanies a Principal Prepayment in full or in
part
made by the Mortgagor during such calendar month, interest for the number
of
days covered by such payment of interest) on the same principal amount on
which
interest on such Mortgage Loan accrues for such calendar month, calculated
on
the basis of a 360-day year consisting of twelve 30-day months. A portion
of
such Servicing Fee may be retained by any Sub-Servicer as its servicing
compensation.
“Servicing
Fee Rate”: 0.250% per annum.
“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
Transfer Date”:
July 1,
2006.
“S&P”:
Standard & Poor’s, a division of The XxXxxx-Xxxx Companies, Inc., or its
successor in interest.
“Stated
Principal Balance”: With respect to any Mortgage Loan: (a) as of any date of
determination up to but not including the Payment Date on which the proceeds,
if
any, of a Liquidation Event with respect to such Mortgage Loan would be paid,
the principal balance of such Mortgage Loan as of the Cut-off Date, as shown
in
the Mortgage Loan Schedule, minus the sum of (i) the principal portion of
each
Monthly Payment due on a Due Date subsequent to the Cut-off Date, to the
extent
received from the Mortgagor or advanced by the Servicer and paid pursuant
to
Section 3.05 hereof 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 hereof on or before such date of determination, (iii) all
Liquidation Proceeds and Insurance Proceeds applied by the Servicer as
recoveries of principal in accordance with the provisions of Section 3.16
of the
Servicing Agreement, to the extent paid pursuant to Section 3.05 hereof on
or
before such date of determination, and (iv) any Realized Loss incurred with
respect thereto as a result of a Deficient Valuation made during or prior
to the
Prepayment Period for the most recent Payment Date coinciding with or preceding
such date of determination; and (b) as of any date of determination coinciding
with or subsequent to the Payment Date on which the proceeds, if any, of
a
Liquidation Event with respect to such Mortgage Loan would be paid, zero.
With
respect to any REO Property: (a) as of any date of determination up to but
not
including the Payment Date on which the proceeds, if any, of a Liquidation
Event
with respect to such REO Property would be paid, an amount (not less than
zero)
equal to the Stated Principal Balance of the related Mortgage Loan as of
the
date on which such REO Property was acquired on behalf of the Trust, minus
the
sum of (i) if such REO Property was acquired before the Payment Date in any
calendar month, the principal portion of the Monthly Payment due on the Due
Date
in the calendar month of acquisition, to the extent advanced by the Servicer
and
paid pursuant to Section 3.05 hereof on or before such date of determination,
and (ii) the aggregate amount of REO Principal Amortization in respect of
such
REO Property for all previously ended calendar months, to the extent paid
pursuant to Section 3.05 hereof 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 June 2009 and (b) the first Payment
Date on which the Credit Enhancement Percentage (calculated for this purpose
only after taking into account payments of principal on the Mortgage Loans
but
prior to any payment of the Principal Payment Amount on the Notes then entitled
to payments of principal on such Payment Date) is equal to or greater than
11.80%.
“Sub-Contractor”:
Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing of Mortgage Loans but performs one or more discrete functions
identified in Item 1122(d) of Regulation AB with respect to Mortgage Loans
under
the direction or authority of any Servicer (or a Sub-Servicer of any Servicer)
or the Indenture Trustee.
“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 Servicing Agreement.
“Sub-Servicing
Account”: An account established by a Sub-Servicer which meets the requirements
set forth in Section 3.08 of the Servicing Agreement and is otherwise acceptable
to the 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 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 Servicing Agreement) specifically related to a Mortgage
Loan
that was the subject of a liquidation or an REO Disposition prior to the
related
Prepayment Period that resulted in a Realized Loss.
“Substitution
Shortfall Amount”: As defined in Section 2.04(b) of the Servicing
Agreement.
“Telerate
Screen Page 3750”: The display designated as page “3750” on the Dow Xxxxx
Telerate Capital Markets Report (or such other page as may replace page 3750
on
that report for the purpose of displaying London interbank offered rates
of
major banks).
“Trigger
Event”: A Trigger Event is in effect with respect to any Payment Date on or
after the Stepdown Date if:
(a) the
Rolling Three Month Delinquency Rate exceeds 45.00% of the Credit Enhancement
Percentage for the prior Payment Date; or
(b) the
aggregate amount of Realized Losses incurred since the Cut-off Date through
the
last day of the related Due Period (reduced by the aggregate amount of
Subsequent Recoveries received from the Cut-off Date through the last day
of the
related Due Period) divided by aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date exceeds the applicable percentages
set
forth below with respect to such Payment Date:
|
Payment
Date Occurring In
|
Percentage
|
|
|
June
2008 through May 2009
|
0.200%
for the first month, plus an additional 1/12th
of
0.250% for each month thereafter
|
|
|
June
2009 through May 2010
|
0.450%
for the first month, plus an additional 1/12th
of
0.300% for each month thereafter
|
|
|
June
2010 through May 2011
|
0.750%
for the first month, plus an additional 1/12th
of
0.200% for each month thereafter
|
|
|
June
2011 through May 2012
|
0.950%
for the first month, plus an additional 1/12th
of
0.250% for each month thereafter
|
|
|
June
2012 and thereafter
|
1.200%
|
“Trust”:
The New Century Alternative Mortgage Loan Trust 2006-ALT1 to be created pursuant
to the Trust Agreement.
“Trust
Agreement”: The Trust Agreement, dated June 19, 2006, between the Owner Trustee
and the Depositor together with the Amended and Restated Trust Agreement
dated
as of June 22, 2006, among the Owner Trustee, the Depositor and Deutsche
Bank
National Trust Company, as Certificate Registrar and Certificate Paying Agent,
relating to the Trust.
“Trust
Estate”: The meaning specified in the Granting Clause of the
Indenture.
“Trust
Indenture Act” or “TIA”: The Trust Indenture Act of 1939, as amended from time
to time, as in effect on any relevant date.
“UCC”:
The Uniform Commercial Code, as amended from time to time, as in effect in
any
specified jurisdiction.
“Underwriter”:
Xxxxxxx, Xxxxx & Co., 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 Servicing
Agreement.
“Value”:
With respect to any Mortgaged Property, the lesser of (i) the lesser of (a)
the
value thereof as determined by an appraisal made for the Originator of the
Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser
who met the minimum requirements of Xxxxxx Xxx and Freddie Mac and (b) the
value
thereof as determined by a review appraisal conducted by the Originator in
accordance with the Originator’s underwriting guidelines, and (ii) the purchase
price paid for the related Mortgaged Property by the Mortgagor with the proceeds
of the Mortgage Loan; provided, however, (A) in the case of a Refinanced
Mortgage Loan, such value of the Mortgaged Property is based solely upon
the
lesser of (1) the value determined by an appraisal made for the Originator
of
such Refinanced Mortgage Loan at the time of origination of such Refinanced
Mortgage Loan by an appraiser who met the minimum requirements of Xxxxxx
Xxx and
Freddie Mac and (2) the value thereof as determined by a review appraisal
conducted by the Originator in accordance with the Originator’s underwriting
guidelines, and (B) in the case of a Mortgage Loan originated in connection
with
a “lease-option purchase,” such value of the Mortgaged Property is based on the
lower of the value determined by an appraisal made for the Originator of
such
Mortgage Loan at the time of origination or the sale price of such Mortgaged
Property if the “lease option purchase price” was set less than 12 months prior
to origination, and is based on the value determined by an appraisal made
for
the Originator of such Mortgage Loan at the time of origination if the “lease
option purchase price” was set 12 months or more prior to
origination.
