Exhibit 4.1
ACE SECURITIES CORP.
Depositor
LITTON LOAN SERVICING LP
Servicer
U.S. BANK NATIONAL ASSOCIATION
Trustee
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
Trust Administrator
-----------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2001
-----------------------------------------
ACE Securities Corp. Home Equity Loan Trust, Series 2001-NC1
Asset Backed Pass-Through Certificates
TABLE OF CONTENTS
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SECTION PAGE
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ARTICLE I
DEFINITIONS
1.01. Defined Terms.................................................................................-4-
Accepted Servicing Practices..................................................................-4-
Accrual Rate..................................................................................-4-
Accrued Certificate Interest..................................................................-4-
Adjustment Date...............................................................................-4-
Administration Fee............................................................................-5-
Administration Fee Rate.......................................................................-5-
Affiliate.....................................................................................-5-
Aggregate Loss Severity Percentage............................................................-5-
Agreement.....................................................................................-5-
Allocated Realized Loss Amount................................................................-5-
Assignment....................................................................................-5-
Available Distribution Amount.................................................................-6-
Bankruptcy Code...............................................................................-6-
Bankruptcy Loss...............................................................................-6-
Basis Risk Shortfall..........................................................................-6-
Book-Entry Certificate........................................................................-7-
Book-Entry Custodian..........................................................................-7-
Business Day..................................................................................-7-
Cash-Out Refinancing..........................................................................-7-
Certificate...................................................................................-7-
Certificate Factor............................................................................-7-
Certificateholder or Holder...................................................................-7-
Certificate Owner.............................................................................-8-
Certificate Principal Balance.................................................................-8-
Certificate Register..........................................................................-8-
Class .....................................................................................-8-
Class A Certificate...........................................................................-8-
Class A-1 Certificate.........................................................................-8-
Class A-2 Certificate.........................................................................-8-
Class A Principal Allocation Percentage.......................................................-8-
Class A Principal Distribution Amount.........................................................-9-
Class B Certificate...........................................................................-9-
Class B Principal Distribution Amount.........................................................-9-
Class M-1 Certificate.........................................................................-9-
Class M-1 Principal Distribution Amount.......................................................-9-
Class M-2 Certificate.........................................................................-9-
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SECTION PAGE
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Class M-2 Principal Distribution Amount......................................................-10-
Class N Certificate..........................................................................-10-
Class N Payment Balance......................................................................-10-
Class R Certificates.........................................................................-10-
Class R-III Certificates.....................................................................-10-
Class R-I Interest...........................................................................-10-
Class R-II Interest..........................................................................-10-
Class X Certificate..........................................................................-10-
Class X/N Interest...........................................................................-10-
Closing Date.................................................................................-10-
Code ....................................................................................-10-
Collection Account...........................................................................-11-
Commission...................................................................................-11-
Corporate Trust Office.......................................................................-11-
Corresponding Certificate....................................................................-11-
Credit Enhancement Percentage................................................................-11-
Cumulative Loss Percentage...................................................................-11-
Cut-off Date.................................................................................-11-
Debt Service Reduction.......................................................................-11-
Deficient Valuation..........................................................................-12-
Definitive Certificates......................................................................-12-
Deleted Mortgage Loan........................................................................-12-
Delinquency Percentage.......................................................................-12-
Depositor....................................................................................-12-
Depository...................................................................................-12-
Depository Institution.......................................................................-12-
Depository Participant.......................................................................-12-
Determination Date...........................................................................-12-
Directly Operate.............................................................................-13-
Disqualified Organization....................................................................-13-
Distribution Account.........................................................................-13-
Distribution Date............................................................................-13-
Due Date ....................................................................................-13-
Due Period...................................................................................-14-
Eligible Account.............................................................................-14-
ERISA ....................................................................................-14-
Estate in Real Property......................................................................-14-
Excess Overcollateralized Amount.............................................................-14-
Expense Adjusted Mortgage Rate...............................................................-14-
Expense Adjusted Maximum Mortgage Rate.......................................................-14-
Extra Principal Distribution Amount..........................................................-14-
Fannie Mae...................................................................................-14-
FDIC ....................................................................................-14-
Final Recovery Determination.................................................................-14-
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SECTION PAGE
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First Union..................................................................................-15-
Freddie Mac..................................................................................-15-
Gross Margin.................................................................................-15-
Group I Mortgage Loan........................................................................-15-
Group II Mortgage Loan.......................................................................-15-
Group I Basic Principal Distribution Amount..................................................-15-
Group II Basic Principal Distribution Amount.................................................-15-
Group I Class A Principal Distribution Amount................................................-15-
Group II Class A Principal Distribution Amount...............................................-16-
Independent..................................................................................-16-
Independent Contractor.......................................................................-16-
Index ....................................................................................-16-
Initial Class N Payment Balance.............................................................-16-
Insurance Proceeds...........................................................................-16-
Interest Accrual Period......................................................................-17-
Interest Carry Forward Amount................................................................-17-
Interest Determination Date..................................................................-17-
Interest Distribution Amount.................................................................-17-
Interest Remittance Amount...................................................................-17-
Late Collections.............................................................................-17-
Liquidation Event............................................................................-18-
Liquidation Proceeds.........................................................................-18-
Loan-to-Value Ratio..........................................................................-18-
London Business Day..........................................................................-18-
Loss Severity Percentage.....................................................................-18-
Marker Rate..................................................................................-18-
Maximum I-LT7 Uncertificated Interest Deferral Amount........................................-18-
Maximum Mortgage Rate........................................................................-19-
Maximum Pass-Through Rate....................................................................-19-
Mezzanine Certificate........................................................................-19-
Minimum Mortgage Rate........................................................................-19-
Monthly Payment..............................................................................-19-
Mortgage ....................................................................................-19-
Mortgage File................................................................................-19-
Mortgage Loan................................................................................-19-
Mortgage Loan Purchase Agreement.............................................................-19-
Mortgage Loan Schedule.......................................................................-20-
Mortgage Note................................................................................-22-
Mortgage Pool................................................................................-22-
Mortgage Rate................................................................................-22-
Mortgaged Property...........................................................................-22-
Mortgagor....................................................................................-22-
Net Monthly Excess Cashflow..................................................................-22-
Net Monthly Excess Spread....................................................................-23-
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SECTION PAGE
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Net Mortgage Rate............................................................................-23-
Net WAC Pass-Through Rate....................................................................-23-
New Lease....................................................................................-23-
Nonrecoverable P&I Advance...................................................................-23-
Nonrecoverable Servicing Advance.............................................................-23-
Non-United States Person.....................................................................-23-
Notional Amount..............................................................................-23-
Officers' Certificate........................................................................-23-
One-Month LIBOR..............................................................................-24-
One-Month LIBOR Pass-Through Rate............................................................-24-
Opinion of Counsel...........................................................................-25-
Overcollateralized Amount....................................................................-25-
Overcollateralization Deficiency Amount......................................................-25-
Overcollateralization Increase Amount........................................................-25-
Overcollateralization Reduction Amount.......................................................-25-
Ownership Interest...........................................................................-26-
Pass-Through Rate............................................................................-26-
Percentage Interest..........................................................................-27-
Periodic Rate Cap............................................................................-27-
Permitted Investments........................................................................-27-
Permitted Transferee.........................................................................-28-
Person ....................................................................................-28-
P&I Advance..................................................................................-28-
Plan ....................................................................................-28-
Prepayment Assumption........................................................................-28-
Prepayment Charge............................................................................-29-
Prepayment Interest Shortfall................................................................-29-
Prepayment Period............................................................................-29-
Principal Distribution Amount................................................................-29-
Principal Prepayment.........................................................................-29-
Principal Remittance Amount..................................................................-29-
Purchase Price...............................................................................-29-
Qualified Substitute Mortgage Loan...........................................................-30-
Rate/Term Refinancing........................................................................-31-
Rating Agency or Rating Agencies.............................................................-31-
Realized Loss................................................................................-31-
Record Date..................................................................................-32-
Reference Banks..............................................................................-32-
Refinanced Mortgage Loan.....................................................................-33-
Regular Certificate..........................................................................-33-
Regular Interest.............................................................................-33-
Relief Act...................................................................................-33-
Relief Act Interest Shortfall................................................................-33-
REMIC ....................................................................................-33-
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SECTION PAGE
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REMIC I ....................................................................................-33-
REMIC I Interest Loss Allocation Amount......................................................-33-
REMIC I Overcollateralization Amount.........................................................-34-
REMIC I Principal Loss Allocation Amount.....................................................-34-
REMIC I Regular Interest.....................................................................-34-
REMIC I Remittance Rate......................................................................-35-
REMIC I Required Overcollateralization Amount................................................-35-
REMIC II ....................................................................................-35-
REMIC II Certificate.........................................................................-35-
REMIC III Certificateholder..................................................................-36-
Remittance Report............................................................................-36-
Rents from Real Property.....................................................................-36-
REO Account..................................................................................-36-
REO Disposition..............................................................................-36-
REO Imputed Interest.........................................................................-36-
REO Principal Amortization...................................................................-36-
REO Property.................................................................................-37-
Request for Release..........................................................................-37-
Required Overcollateralized Amount...........................................................-37-
Required Reserve Fund Balance................................................................-37-
Required Reserve Fund Deposit................................................................-37-
Reserve Fund.................................................................................-37-
Reserve Interest Rate........................................................................-37-
Residential Dwelling.........................................................................-37-
Residual Certificate.........................................................................-37-
Residual Interest............................................................................-37-
Responsible Officer..........................................................................-38-
Scheduled Principal Balance..................................................................-38-
Senior Interest Distribution Amount..........................................................-39-
Servicer ....................................................................................-39-
Servicer Event of Default....................................................................-39-
Servicer Remittance Date.....................................................................-39-
Servicer Termination Trigger.................................................................-39-
Servicing Account............................................................................-39-
Servicing Advances...........................................................................-39-
Servicing Fee................................................................................-40-
Servicing Fee Rate...........................................................................-40-
Servicing Officer............................................................................-40-
Single Certificate...........................................................................-40-
Special Servicer Fee.........................................................................-40-
Startup Day..................................................................................-40-
Stated Principal Balance.....................................................................-40-
Stayed Funds.................................................................................-41-
Stepdown Date................................................................................-41-
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SECTION PAGE
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Sub-Servicer.................................................................................-41-
Sub-Servicing Agreement......................................................................-41-
Substitution Shortfall Amount................................................................-41-
Tax Returns..................................................................................-41-
Termination Price............................................................................-42-
Terminator...................................................................................-42-
Transfer ....................................................................................-42-
Transferee...................................................................................-42-
Transferor...................................................................................-42-
Trigger Event................................................................................-42-
Trust ....................................................................................-42-
Trust Administrator..........................................................................-42-
Trust REMIC..................................................................................-42-
Trustee ....................................................................................-42-
Trust Fund...................................................................................-42-
Uncertificated Balance.......................................................................-42-
Uncertificated Interest......................................................................-43-
Uncertificated REMIC Regular Interest........................................................-43-
Uninsured Cause..............................................................................-43-
United States Person.........................................................................-43-
Unpaid Basis Risk Shortfall..................................................................-44-
Value ....................................................................................-44-
Voting Rights................................................................................-44-
1.02. Allocation of Certain Interest Shortfalls....................................................-44-
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
2.01. Conveyance of the Mortgage Loans.............................................................-46-
2.02. Acceptance of REMIC I by Trustee.............................................................-48-
2.03. Repurchase or Substitution of Mortgage Loans by NC Capital...................................-49-
2.04. [Reserved]...................................................................................-52-
2.05. Representations, Warranties and Covenants of the Servicer....................................-52-
2.06. Conveyance of Uncertificated REMIC Regular Interests and Acceptance of
REMIC II and REMIC III by the Trustee; Issuance of Certificates..............................-54-
2.07. Establishment of the Trust...................................................................-55-
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
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SECTION PAGE
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3.01. Servicer to Act as Servicer..................................................................-56-
3.02. Sub-Servicing Agreements Between Servicer and Sub-Servicers..................................-58-
3.03. Successor Sub-Servicers......................................................................-58-
3.04. No Contractual Relationship Between Sub-Servicer, Trust Administrator........................-59-
3.05. Assumption or Termination of Sub-Servicing Agreement by Trust
Administrator................................................................................-59-
3.06. [Reserved]...................................................................................-59-
3.07. Collection of Certain Mortgage Loan Payments.................................................-59-
3.08. [Reserved]...................................................................................-60-
3.09. Collection of Taxes, Assessments and Similar Items; Servicing Accounts.......................-60-
3.10. Collection Account and Distribution Account..................................................-61-
3.11. Withdrawals from the Collection Account and Distribution Account.............................-63-
3.12. Investment of Funds in the Investment Accounts...............................................-64-
3.13. [Reserved]...................................................................................-66-
3.14. Maintenance of Hazard Insurance and Errors and Omissions and Fidelity
Coverage.....................................................................................-66-
3.15. Enforcement of Due-on-Sale Clauses; Assumption Agreements....................................-67-
3.16. Realization Upon Defaulted Mortgage Loans....................................................-68-
3.17. Trustee to Cooperate; Release of Mortgage Files..............................................-70-
3.18. Servicing Compensation.......................................................................-71-
3.19. Reports to the Trust Administrator and the Trustee; Collection Account
Statements...................................................................................-72-
3.20. Statement as to Compliance...................................................................-72-
3.21. Independent Public Accountants' Servicing Report.............................................-72-
3.22. Access to Certain Documentation..............................................................-73-
3.23. Title, Management and Disposition of REO Property............................................-73-
3.24. Obligations of the Servicer in Respect of Prepayment Interest Shortfalls.....................-76-
3.25. [Reserved]...................................................................................-76-
3.26. Obligations of the Servicer in Respect of Mortgage Rates and Monthly
Payments.....................................................................................-76-
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
4.01. Distributions................................................................................-78-
4.02. Statements to Certificateholders.............................................................-88-
4.03. Remittance Reports; P&I Advances.............................................................-91-
4.04. Allocation of Realized Losses................................................................-93-
4.05. Compliance with Withholding Requirements.....................................................-94-
4.06. Exchange Commission; Additional Information..................................................-95-
4.07. Reserve Fund.................................................................................-95-
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SECTION PAGE
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ARTICLE V
THE CERTIFICATES
5.01. The Certificates.............................................................................-96-
5.02. Registration of Transfer and Exchange of Certificates........................................-98-
5.03. Mutilated, Destroyed, Lost or Stolen Certificates...........................................-102-
5.04. Persons Deemed Owners.......................................................................-102-
5.05. Certain Available Information...............................................................-103-
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
6.01. Liability of the Depositor and the Servicer.................................................-104-
6.02. Merger or Consolidation of the Depositor or the Servicer....................................-104-
6.03. Limitation on Liability of the Depositor, the Servicer and Others...........................-104-
6.04. Limitation on Resignation of the Servicer...................................................-105-
6.05. Rights of the Depositor in Respect of the Servicer..........................................-106-
ARTICLE VII
DEFAULT
7.01. Servicer Events of Default..................................................................-107-
7.02. Trust Administrator or Trustee to Act; Appointment of Successor.............................-109-
7.03. Notification to Certificateholders..........................................................-111-
7.04. Waiver of Servicer Events of Default........................................................-111-
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE TRUST ADMINISTRATOR
8.01. Duties of Trustee and the Trust Administrator...............................................-112-
8.02. Certain Matters Affecting the Trustee and the Trust Administrator...........................-113-
8.03. Neither the Trustee nor Trust Administrator Liable for Certificates or
Mortgage Loans..............................................................................-114-
8.04. Trustee and Trust Administrator May Own Certificates........................................-115-
8.05. Trustee's and Trust Administrator's Fees and Expenses.......................................-115-
8.06. Eligibility Requirements for Trustee........................................................-115-
8.07. Resignation and Removal of the Trustee......................................................-116-
8.08. Successor Trustee...........................................................................-117-
8.09. Merger or Consolidation of Trustee..........................................................-118-
8.10. Appointment of Co-Trustee or Separate Trustee...............................................-118-
-ix-
8.11. Appointment of Office or Agency.............................................................-119-
8.12. Representations and Warranties..............................................................-119-
ARTICLE IX
TERMINATION
9.01 Termination Upon Repurchase or Liquidation of All Mortgage Loans............................-121-
9.02 Additional Termination Requirements.........................................................-123-
ARTICLE X
REMIC PROVISIONS
10.01. REMIC Administration........................................................................-125-
10.02. Prohibited Transactions and Activities......................................................-128-
10.03. Servicer, Trustee and Trust Administrator Indemnification...................................-128-
10.04. Treatment of the Reserve Fund and the Class N Certificates..................................-129-
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.01. Amendment...................................................................................-130-
11.02. Recordation of Agreement; Counterparts......................................................-131-
11.03. Limitation on Rights of Certificateholders..................................................-131-
11.04. Governing Law...............................................................................-132-
11.05. Notices.....................................................................................-132-
11.06. Severability of Provisions..................................................................-133-
11.07. Notice to Rating Agencies...................................................................-133-
11.08. Article and Section References..............................................................-134-
11.09. Grant of Security Interest..................................................................-134-
-x-
Exhibits
Exhibit A-1 Form of Class A-1 Certificate
Exhibit A-2 Form of Class A-2 Certificate
Exhibit A-3 [Reserved]
Exhibit A-4 Form of Class M-1 Certificate
Exhibit A-5 Form of Class M-2 Certificate
Exhibit A-6 Form of Class B Certificate
Exhibit A-7 Form of Class N Certificate
Exhibit A-8 Form of Class X Certificate
Exhibit A-9 Form of Class R Certificate
Exhibit A-10 Form of Class R-III Certificate
Exhibit B [Reserved]
Exhibit C-1 Form of Trustee's Initial Certification
Exhibit C-2 Form of Trustee's Final Certification
Exhibit D Form of Mortgage Loan Purchase Agreement
Exhibit E-1 Request for Release
Exhibit E-2 Request for Release Mortgage Loans paid in full
Exhibit F-1 Form of Transferor Representation Letter and Form of Transferee
Representation Letter in Connection with Transfer of the Class X
Certificates, Class N Certificates and Residual Certificates Pursuant to Rule
144A Under the 1933 Act
Exhibit F-2 Form of Transferor Representation Letter and Form
of Transferee Representation Letter in Connection
with Transfer of the Class X Certificates, Class N
Certificates and Residual Certificates Pursuant to
Rule 501(a) Under the 1933 Act
Exhibit F-3 Form of Transfer Affidavit and Agreement and Form of Transferor Affidavit
in Connection with Transfer of Residual Certificates
Exhibit G [Reserved]
Exhibit H Form of Report Pursuant to Section 4.06
Exhibit I Form of Lost Note Affidavit
Exhibit J Officer's Certificate with respect to prepayments
Schedule 1 Mortgage Loan Schedule
Schedule 2 Prepayment Charge Schedule
-xi-
This Pooling and Servicing Agreement, is dated and effective
as of March 1, 2001, among ACE SECURITIES CORP. as Depositor, LITTON LOAN
SERVICING LP as Servicer, U.S.
BANK NATIONAL ASSOCIATION as Trustee and BANKERS TRUST COMPANY OF
CALIFORNIA, N.A. as Trust Administrator.
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates to be
issued hereunder in multiple classes, which in the aggregate will evidence the
entire beneficial ownership interest the Trust Fund created hereunder. The Trust
Fund will consist of a segregated pool of assets comprising of the Mortgage
Loans and certain other related assets subject to this Agreement.
REMIC I
-------
As provided herein, the Trust Administrator will elect to
treat the segregated pool of assets consisting of the Mortgage Loans and certain
other related assets subject to this Agreement as a REMIC for federal income tax
purposes, and such segregated pool of assets will be designated as "REMIC I."
The Class R-I Interest will be the sole class of "residual interests" in REMIC I
for purposes of the REMIC Provisions (as defined herein). The following table
irrevocably sets forth the designation, the REMIC I Remittance Rate, the initial
Uncertificated Balance and, solely for purposes of satisfying Treasury
regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for
each of the REMIC I Regular Interests (as defined herein). None of the REMIC I
Regular Interests will be certificated.
REMIC I Initial Latest Possible
Designation Remittance Rate Uncertificated Balance Maturity Date(1)
----------- --------------- ---------------------- ----------------
I-LT1 Variable(2) $163,261,631.64 January 25, 2031
I-LT2 Variable(2) $1,016,220.00 January 25, 2031
I-LT3 Variable(2) $374,830.00 January 25, 2031
I-LT4 Variable(2) $133,270.00 January 25, 2031
I-LT5 Variable(2) $58,300.00 January 25, 2031
I-LT6 Variable(2) $33,310.00 January 25, 2031
I-LT7 Variable(2) $1,715,940.03 January 25, 2031
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each REMIC I
Regular Interest.
(2) Calculated in accordance with the definition of "REMIC I Remittance
Rate" herein.
-1-
REMIC II
--------
As provided herein, the Trust Administrator will elect to
treat the segregated pool of assets consisting of the REMIC I Regular Interests
as a REMIC for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC II." The Class R-II Interest will evidence the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions.
The following table irrevocably sets forth the designation, the Pass-Through
Rate, the initial aggregate Certificate Principal Balance and, solely for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for the indicated Classes of Certificates.
Initial Aggregate Latest Possible
Designation Pass-Through Rate Certificate Principal Balance Maturity Date(1)
----------- ----------------- ----------------------------- ----------------
Class A-1 Variable(2) $101,622,000.00 January 25, 2031
Class A-2 Variable(2) $ 37,483,000.00 January 25, 2031
Class M-1 Variable(2) $ 13,327,000.00 January 25, 2031
Class M-2 Variable(2) $ 5,830,000.00 January 25, 2031
Class B Variable(2) $ 3,331,000.00 January 25, 2031
Class X/N Interest Variable(2) $ 5,000,501.67(3) January 25, 2031
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each Class of
Certificates.
(2) Calculated in accordance with the definition of "Pass-Through Rate"
herein.
(3) The Class X/N Interest will accrue interest at its variable Pass-Through
Rate on the Notional Amount of the Class X/N Interest outstanding from
time to time which shall equal the Uncertificated Balance of the REMIC I
Regular Interests. The Class X/N Interest will not accrue interest on
its Certificate Principal Balance.
-2-
REMIC III
---------
As provided herein, the Trust Administrator will elect to treat
the segregated pool of assets consisting solely of the Class X/N Interest as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC III." The Class R-III Certificates will be the sole
class of "residual interests" in REMIC III for purposes of the REMIC Provisions
(as defined herein). The following table irrevocably sets forth the designation,
the Pass-Through Rate, the initial aggregate Certificate Principal Balance and,
solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for the Class X
Certificates.
Initial Aggregate Latest Possible
Designation Pass-Through Rate Certificate Principal Balance Maturity Date(1)
----------- ----------------- ----------------------------- ----------------
Class X Certificates Variable(2) $5,000,501.67(3) January 25, 2031
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for the Class X
Certificates.
(2) Calculated in accordance with the definition of "Pass-Through Rate"
herein.
(3) The Class X Certificates will accrue interest at their variable
Pass-Through Rate on the Notional Amount of the Class X Certificates
outstanding from time to time which shall equal the Uncertificated
Balance of the REMIC I Regular Interests. The Class X Certificates
will not accrue interest on their Certificate Principal Balance.
In addition to the above Certificates, the Trust Fund shall issue an
additional Class of Certificates, designated as the Class N Certificates. For
federal income tax purposes, in the event that the beneficial ownership of the
Class N Certificates and the Class X Certificates is held by separate persons
for tax purposes, the Trustee and the Trust Administrator shall treat the Class
N Certificates as debt of the Class X Certificateholders for federal income tax
purposes and shall not treat such Class of Certificates as an interest in any
REMIC created hereunder. In the event that the beneficial ownership of the Class
N Certificates and the Class X Certificates is held by the same person, the
Trustee and the Trust Administrator shall treat the Class N Certificates as not
having been issued for federal income tax purposes so that the entire economic
entitlement of the Class N Certificates and Class X Certificates (excluding the
Class X Certificates right to receive amounts from the Reserve Fund) will
represent a "regular interest" in REMIC III. The following table irrevocably
sets forth the designation, the Pass-Through Rate, the Initial Class N Payment
Principal Balance and, solely for purposes of satisfying Treasury regulation
Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for the Class N
Certificates.
Initial Class N Latest Possible
Designation Pass-Through Rate Payment Balance Maturity Date
----------- ----------------- --------------- -------------
Class N Certificates 10.00% $14,000,000.00 January 25, 2031
-3-
As of the Cut-off Date, the Mortgage Loans had an aggregate Scheduled
Principal Balance equal to $166,593,501.67.
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer, the Trustee and the Trust Administrator agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, including, without
limitation, in the Preliminary Statement hereto, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article. Unless otherwise specified, all calculations
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months.
"Accepted Servicing Practices": The servicing standards set
forth in Section 3.01.
"Accrual Rate": With respect to the Class A Certificates and
the Mezzanine Certificates and any Distribution Date, the per annum rate equal
to the lesser of (i) the One-Month LIBOR Pass-Through Rate for the applicable
Interest Accrual Period and (ii) the Maximum Pass- Through Rate for such
Interest Accrual Period.
"Accrued Certificate Interest": With respect to any Class A
Certificate, Mezzanine Certificate, Class X/N Interest, Class N Certificate or
Class X Certificate and each Distribution Date, interest accrued during the
related Interest Accrual Period at the Pass-Through Rate for such Certificate
for such Distribution Date on the Certificate Principal Balance, in the case of
the Class A Certificates and the Mezzanine Certificates, or on the related
Notional Amount in the case of the Class X/N Interest, of such Certificate
immediately prior to such Distribution Date. All distributions of interest on
the Class A Certificates and the Mezzanine Certificates will be calculated on
the basis of a 360-day year and the actual number of days in the applicable
Interest Accrual Period. Accrued Certificate Interest with respect to each
Distribution Date, as to any Class A Certificate, Mezzanine Certificate or Class
X/N Interest shall be reduced by an amount equal to the portion allocable to
such Certificate pursuant to Section 1.02 hereof, if any, of the sum of (a) the
aggregate Prepayment Interest Shortfall, if any, for such Distribution Date to
the extent not covered by payments pursuant to Section 3.24 and (b) the
aggregate amount of any Relief Act Interest Shortfall, if any, for such
Distribution Date. In addition, Accrued Certificate Interest with respect to
each Distribution Date, as to any Class X Certificate, shall be reduced by an
amount equal to the portion allocable to such Class X/N Interest of Realized
Losses, if any, pursuant to Section 1.02 and Section 4.04 hereof.
"Adjustment Date": With respect to each Mortgage Loan, the
first day of the month in which the Mortgage Rate of a Mortgage Loan changes
pursuant to the related Mortgage Note. The first Adjustment Date following the
Cut-off Date as to each Mortgage Loan is set forth in the Mortgage Loan
Schedule.
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"Administration Fee": The amount payable to the Trust
Administrator on each Distribution Date pursuant to Section 8.05 as compensation
for all services rendered by it or the Trustee in the execution of the trust
hereby created and in the exercise and performance of any of the powers and
duties of the Trust Administrator hereunder, which amount shall equal
one-twelfth of the product of (i) the Administration Fee Rate multiplied by (ii)
the aggregate Scheduled Principal Balance of the Mortgage Loans and any REO
Properties as of the second preceding Due Date (or, in the case of the initial
Distribution Date, as of the Cut-off Date), calculated on the basis of a 360-
day year consisting of twelve 30-day months. The fee payable to the Trustee for
all services rendered by it in the exercise and performance of any of the powers
and duties of the Trustee hereunder will be paid by the Trust Administrator out
of the Administration Fee.
"Administration Fee Rate": 0.0125% per annum, of which 0.0080%
per annum shall be payable to the Trust Administrator, 0.002% per annum (but no
less than $1,500 per year) shall be payable to the Trustee in the Trustee's
capacity as fiduciary to the Trust and 0.0025% per annum shall be payable to the
Trustee in the Trustee's capacity as custodian.
"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.
"Aggregate Loss Severity Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is the aggregate amount of Realized Losses incurred on any Mortgage Loans
from the Cut-off Date to the last day of the preceding calendar month and the
denominator of which is the aggregate principal balance of such Mortgage Loans
immediately prior to the liquidation of such Mortgage Loans.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
"Allocated Realized Loss Amount": With respect to any
Distribution Date and any Class of Mezzanine Certificates, the sum of (i) any
Realized Losses allocated to such Class of Certificates on such Distribution
Date and (ii) the amount of any Allocated Realized Loss Amount for such Class of
Certificates remaining unpaid from the previous Distribution Date plus accrued
interest on such amount calculated at the related Pass-Through Rate for the most
recently ended Interest Accrual Period.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect 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.
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"Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (1) the sum of (a) the aggregate of the
amounts on deposit in the Collection Account and Distribution Account as of the
close of business on the related Determination Date, (b) the aggregate of any
amounts received in respect of an REO Property withdrawn from any REO Account
and deposited in the Distribution Account for such Distribution Date pursuant to
Section 3.23, (c) the aggregate of any amounts deposited in the Distribution
Account by the Servicer in respect of Prepayment Interest Shortfalls for such
Distribution Date pursuant to Section 3.24, (d) the aggregate of any P&I
Advances made by the Servicer for such Distribution Date pursuant to Section
4.03 and (e) the aggregate of any advances made by the Trust Administrator, the
Trustee or other successor Servicer, as applicable, for such Distribution Date
pursuant to Section 7.02(b), reduced (to not less than zero) by (2) the sum of
(x) 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
Trustee, NC Capital, the Trust Administrator, the Seller or any Sub- Servicer
pursuant to Section 3.11 or Section 3.12 or otherwise payable in respect of
extraordinary Trust Fund expenses, (v) Stayed Funds, (vi) the Administration Fee
payable from the Distribution Account pursuant to Section 8.05, (vii) amounts
deposited in the Collection Account or the Distribution Account in error and
(viii) the amount of any Prepayment Charges collected by the Servicer in
connection with the Principal Prepayment of any of the Mortgage Loans, and (y)
amounts reimbursable to the Trustee, the Trust Administrator or other successor
Servicer, as applicable, for an advance made pursuant to Section 7.02(b) which
advance the Trustee, the Trust Administrator or other successor Servicer, as
applicable, has determined to be nonrecoverable from the Stayed Funds in respect
of which it was made.
"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.
"Basis Risk Shortfall": With respect to the Class A
Certificates and any Class of the Mezzanine Certificates and any Distribution
Date on which the Pass-Through Rate thereon calculated pursuant to the
definition thereof is limited to the Net WAC Pass-Through Rate, an amount equal
to interest accrued during the related Interest Accrual Period on the aggregate
Certificate Principal Balance of such Class of Certificates immediately prior to
such Distribution Date at a per annum rate equal to the excess of (a) the
Accrual Rate for such Distribution Date over (b) the Net WAC Pass-Through Rate
for such Distribution Date.
"Book-Entry Certificate": The Class A Certificates and the
Mezzanine Certificates for so long as the Certificates of such Class shall be
registered in the name of the Depository or its nominee.
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"Book-Entry Custodian": The custodian appointed pursuant to
Section 5.01.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings and loan institutions in the State of New York
or in the city in which the Corporate Trust Office of the Trust Administrator or
the Corporate Trust Office of the 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": Any one of the Depositor's Asset Backed
Pass-Through Certificates, Series 2001-NC1, Class A-1, Class A-2, Class M-1,
Class M-2, Class B, Class N, Class X, Class R and Class R-III issued under this
Agreement.
"Certificate Factor": With respect to any Class of
Certificates (other than the Residual Certificates) as of any Distribution Date,
a fraction, expressed as a decimal carried to six places, the numerator of which
is the aggregate Certificate Principal Balance (or Notional Amount, in the case
of the Class X Certificates) of such Class of Certificates on such Distribution
Date (after giving effect to any distributions of principal and allocations of
Realized Losses resulting in reduction of the Certificate Principal Balance (or
Notional Amount, in the case of the Class X Certificates) of such Class of
Certificates to be made on such Distribution Date), and the denominator of which
is the initial aggregate Certificate Principal Balance (or Notional Amount, in
the case of the Class X Certificates) of such Class of Certificates as of the
Closing Date.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or a Non-United States Person shall not be a Holder of
a Residual Certificate for any purposes hereof, and solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or the Servicer or any Affiliate thereof shall be deemed
not to be outstanding and the Voting Rights to which it is entitled shall not be
taken into account in determining whether the requisite percentage of Voting
Rights necessary to effect any such consent has been obtained, except as
otherwise provided in Section 11.01. The Trustee and the Trust Administrator may
conclusively rely upon a certificate of the Depositor or the Servicer in
determining whether a Certificate is held by an Affiliate thereof. All
references herein to "Holders" or "Certificateholders" shall reflect the rights
of Certificate Owners as they may indirectly exercise such rights through the
Depository and participating members thereof, except as otherwise specified
herein; provided, however, that the Trustee and the Trust Administrator shall be
required to recognize as a "Holder" or "Certificateholder" only the Person in
whose name a Certificate is registered in the Certificate Register.
"Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate as reflected on the
books of the Depository or on the books of a Depository Participant or on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent.
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"Certificate Principal Balance": With respect to each Class A
Certificate or Mezzanine Certificate as of any date of determination, the
Certificate Principal Balance of such Certificate on the Distribution Date
immediately prior to such date of determination, minus all distributions
allocable to principal made thereon and Realized Losses allocated thereto on
such immediately prior Distribution Date (or, in the case of any date of
determination up to and including the first Distribution Date, the initial
Certificate Principal Balance of such Certificate, as stated on the face
thereof). With respect to each Class X/N Interest and Class X Certificate as of
any date of determination, an amount equal to the Percentage Interest evidenced
by such Certificate times the excess, if any, of (A) the then aggregate
Uncertificated Balances of the REMIC I Regular Interests over (B) the then
aggregate Certificate Principal Balances of the Class A Certificates and the
Mezzanine Certificates then outstanding. The aggregate initial Certificate
Principal Balance of each Class of Regular Certificates is set forth in the
Preliminary Statement hereto.
"Certificate Register": The register maintained pursuant to
Section 5.02.
"Class": Collectively, all of the Certificates bearing the
same class designation.
"Class A Certificate": Any Class A-1 Certificate and the Class
A-2 Certificate.
"Class A-1 Certificate": Any one of the Class A-1 Certificates
executed, authenticated and delivered by the Trustee or the Trust Administrator,
substantially in the form annexed hereto as Exhibit A-1 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class A-2 Certificate": Any one of the Class A-2 Certificates
executed, authenticated and delivered by the Trustee or the Trust Administrator,
substantially in the form annexed hereto as Exhibit A-2 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class A Principal Allocation Percentage": For any
Distribution Date, the percentage equivalent of a fraction, determined as
follows: (i) in the case of the Class A-1 Certificates, the numerator of which
is (x) the portion of the Principal Remittance Amount for such Distribution Date
that is attributable to principal received or advanced on the Group I Mortgage
Loans, and the denominator of which is (y) the Principal Remittance Amount for
such Distribution Date, and (ii) in the case of the Class A-2 Certificates, the
numerator of which is (x) the portion of the Principal Remittance Amount for
such Distribution Date that is attributable to principal received or advanced on
the Group II Mortgage Loans, and the denominator of which is (y) the Principal
Remittance Amount for such Distribution Date.
"Class A Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the Certificate Principal Balance of the Class
A Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) 67.00% and (ii) the aggregate Stated Principal Balance
of the Mortgage Loans as of the last day of the related Due Period and (B) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $832,968.
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"Class B Certificate": Any one of the Class B Certificates
executed, authenticated and delivered by the Trustee or the Trust Administrator,
substantially in the form annexed hereto as Exhibit A-6 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class B Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date) and (iv) the Certificate
Principal Balance of the Class B Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 94.00% 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 $832,968.
"Class M-1 Certificate": Any one of the Class M-1 Certificates
executed, authenticated and delivered by the Trustee or the Trust Administrator,
substantially in the form annexed hereto as Exhibit A-4 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date) and (ii)
the Certificate Principal Balance of the Class M-1 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
83.00% 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
$832,968.
"Class M-2 Certificate": Any one of the Class M-2 Certificates
executed, authenticated and delivered by the Trustee or the Trust Administrator,
substantially in the form annexed hereto as Exhibit A-5 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC Provisions.
"Class M-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date) and (iii) the Certificate Principal Balance of the Class M-2
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 90.00% and (ii) the aggregate Stated Principal Balance of
the Mortgage
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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 $832,968.
"Class N Certificate": Any one of the Class N Certificates
executed, authenticated and delivered by the Trustee or the Trust Administrator,
substantially in the form annexed hereto as Exhibit A-7 representing the right
to distributions as set forth herein and therein. The Class N Certificates shall
not represent an interest in any Trust REMIC.
"Class N Payment Balance": On any Distribution Date, with
respect to the Class N Certificates, an amount equal to the Initial Class N
Payment Balance reduced by the aggregate principal distributions made to the
Class N Certificates.
"Class R Certificates": Any one of the Class R Certificates
executed, authenticated and delivered by the Trustee or the Trust Administrator,
substantially in the form annexed hereto as Exhibit A-9, representing the right
to distributions as set forth herein and therein and evidencing the ownership of
the Class R-I Interest and the Class R-II Interest.
"Class R-III Certificates": Any one of the Class R-III
Certificates executed, authenticated and delivered by the Trustee or the Trust
Administrator, substantially in the form annexed hereto as Exhibit A-10, and
evidencing the Residual Interest in REMIC III for purposes of the REMIC
Provisions.
"Class R-I Interest": The uncertificated Residual Interest in
REMIC I.
"Class R-II Interest": The uncertificated Residual Interest in
REMIC II.
"Class X Certificate": Any one of the Class X Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-8 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions.
"Class X/N Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the holders of the Class X Certificates,
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Closing Date": March 22, 2001.
"Code": The Internal Revenue Code of 1986.
"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), which shall be entitled "Collection Account, Litton Loan
Servicing LP, as Servicer, on behalf of U.S. Bank National Association, as
Trustee, in trust for the registered holders of ACE Securities Corp. Home Equity
Loan Trust, Series 2001-NC1". The Collection Account must be an Eligible
Account.
"Commission": The Securities and Exchange Commission.
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"Corporate Trust Office": The principal corporate trust office
of the Trust Administrator or the Trustee, as the case may be, at which at any
particular time its corporate trust business in connection with this Agreement
shall be administered, which office, with respect to the Trust Administrator, at
the date of the execution of this instrument is located at 1761 East St. Andrew
Place, Santa Ana, California 92705, or at such other address as the Trust
Administrator may designate from time to time by notice to the
Certificateholders, the Depositor, the Servicer and the Trustee and, which
office, with respect to the Trustee, at the date of the execution of this
instrument is located at 180 East Fifth Street, St. Paul, Minnesota 55101,
Attention: Structured Finance, ACE 2001-NC1, or at such other address as the
Trustee may designate from time to time by notice to the Certificateholders, the
Depositor, the Servicer and the Trust Administrator.
"Corresponding Certificate": With respect to REMIC I Regular
Interest I-LT2, REMIC I Regular Interest I-LT3, REMIC I Regular Interest I-LT4,
REMIC II Regular Interest I-LT5 and REMIC I Regular Interest I-LT6, the Class
A-1 Certificates, Class A-2 Certificates, Class M-1 Certificates, Class M-2
Certificates and Class B Certificates, respectively.
"Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the sum of
the aggregate Certificate Principal Balances of the Mezzanine Certificates and
the Class X/N Interest, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans, calculated after taking into account
distributions of principal on the Mortgage Loans and distribution of the
Principal Distribution Amount to the Certificates then entitled to distributions
of principal on such Distribution Date.
"Cumulative Loss Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Realized Losses incurred from the Cut-off Date to the last
day of the preceding calendar month and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.
"Cut-off Date": With respect to each Mortgage Loan, March 1,
2001. With respect to all Qualified Substitute Mortgage Loans, their respective
dates of substitution. References herein to the "Cut-off Date," when used with
respect to more than one Mortgage Loan, shall be to the respective Cut-off Dates
for such Mortgage Loans.
"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 resulting from a Deficient Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.01(b).
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"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.
"Delinquency Percentage": As of the last day of the related
Due Period, the percentage equivalent of a fraction, the numerator of which is
the aggregate Stated Principal Balance of all Mortgage Loans that, as of the
last day of the previous calendar month, are 60 or more days delinquent, are in
foreclosure, have been converted to REO Properties or have been discharged by
reason of bankruptcy, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans and REO Properties as of the last day of
the previous calendar month; provided, however, that any Mortgage Loan purchased
by the Servicer pursuant to Section 3.16(c) shall not be included in either the
numerator or the denominator for purposes of calculating the Delinquency
Percentage.
"Depositor": ACE Securities Corp., a Delaware corporation, or
its successor in interest.
"Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository, for purposes
of registering those Certificates that are to be Book-Entry Certificates, is
CEDE & Co. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934, as amended.
"Depository Institution": Any depository institution or trust
company, including the Trustee and the Trust Administrator, 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 F-1 by Fitch and A-1 by S&P (or comparable ratings
if Fitch and S&P are not the Rating Agencies).
"Depository Participant": A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to each Distribution Date,
the 10th day of the calendar month in which such Distribution Date occurs or, if
such 10th day is not a Business Day, the Business Day immediately preceding such
10th 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 REMIC I other than
through an Independent Contractor; provided, however, that the Trustee (or the
Servicer under this Agreement) shall not be considered to Directly Operate an
REO Property solely because the Trustee
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(or the Servicer under this Agreement) 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.
"Disqualified Organization": Any of the following: (i) the
United States, any State or political subdivision thereof, any possession of the
United States, or any agency or instrumentality of any of the foregoing (other
than an instrumentality which is a corporation if all of its activities are
subject to tax and, except for Freddie Mac, a majority of its board of directors
is not selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on
unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an "electing
large partnership" and (vi) any other Person so designated by the Trust
Administrator based upon an Opinion of Counsel that the holding of an Ownership
Interest in a Residual Certificate by such Person may cause any Trust REMIC or
any Person having an Ownership Interest in any Class of Certificates (other than
such Person) to incur a liability for any federal tax imposed under the Code
that would not otherwise be imposed but for the Transfer of an Ownership
Interest in a Residual Certificate to such Person. The terms "United States,"
"State" and "international organization" shall have the meanings set forth in
Section 7701 of the Code or successor provisions.
"Distribution Account": The trust account or accounts created
and maintained by the Trust Administrator pursuant to Section 3.10(b), which
shall be entitled "Bankers Trust Company of California, N.A., as Trust
Administrator for U.S. Bank National Association, as Trustee, in trust for the
registered holders of ACE Securities Corp. Home Equity Loan Trust, Series
2001-NC1". The Distribution Account must be an Eligible Account.
"Distribution 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 April 2001.
"Due Date": With respect to each Distribution Date, the day of
the month on which the Monthly Payment is due on a Mortgage Loan during the
related Due Period, exclusive of any days of grace.
"Due Period": With respect to any Distribution Date, the
period commencing on the second day of the month immediately preceding the month
in which such Distribution 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 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.
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"Estate in Real Property": A fee simple estate in a parcel of
land.
"Excess Overcollateralized Amount": With respect to the Class
A Certificates and the Mezzanine Certificates and any Distribution Date, the
excess, if any, of (i) the Overcollateralized Amount for such Distribution Date
over (ii) the Required Overcollateralized Amount for such Distribution Date.
"Expense Adjusted Mortgage Rate": With respect to any Mortgage
Loan or REO Property, the then applicable Mortgage Rate thereon minus the sum of
(i) the Administration Fee Rate and (ii) the Servicing Fee Rate.
"Expense Adjusted Maximum Mortgage Rate": With respect to any
Mortgage Loan or REO Property, the Maximum Mortgage Rate thereon minus the sum
of (i) the Administration Fee Rate and (ii) the Servicing Fee Rate.
"Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (i) the Net Monthly Excess Cashflow for such
Distribution Date and (ii) the Overcollateralization Increase Amount for such
Distribution Date.
"Fannie Mae": Fannie Mae, formally known as the Federal
National Mortgage Association, or any successor thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by NC Capital, the Seller, the Depositor or the Servicer pursuant to
or as contemplated by Section 2.03, Section 3.16(c) or Section 9.01), 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.
"First Union": First Union National Bank or any successor
thereto.
"Fitch": Fitch, Inc., or its successor in interest.
"Flood Zone Service Contract": A transferable contract
maintained for the Mortgaged Property with a nationally recognized flood zone
service provider for the purpose of obtaining the current flood zone status
relating to such Mortgaged Property.
"Freddie Mac": Freddie Mac, formally known as the Federal Home
Loan Mortgage Corporation, or any successor thereto.
"Gross Margin": With respect to each Mortgage Loan, the fixed
percentage set forth in the related Mortgage Note that is added to the Index on
each Adjustment Date in accordance with
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the terms of the related Mortgage Note used to determine the Mortgage Rate for
such Mortgage Loan.
"Group I Mortgage Loan": Those Mortgage Loans with original
principal balances (as such principal balances are shown on the Mortgage Loan
Schedule) that conform to Fannie Mae and Freddie Mac limits for mortgage loans
for purchase by Fannie Mae and Freddie Mac.
"Group II Mortgage Loan": Those Mortgage Loans with original
principal balances (as such principal balances are shown on the Mortgage Loan
Schedule) that do not conform to Fannie Mae and Freddie Mac limits for mortgage
loans for purchase by Fannie Mae and Freddie Mac.
"Group I Basic Principal Distribution Amount": With respect to
any Distribution Date, the sum of (i) the Principal Remittance Amount with
respect to the Group I Mortgage Loans minus (ii) the amount of any
Overcollateralization Reduction Amount for the Distribution Date multiplied by a
fraction, the numerator of which is (x) the portion of the Principal Remittance
Amount for such Distribution Date that is attributable to principal received or
advanced on the Group I Mortgage Loans, and the denominator of which is (y) the
Principal Remittance Amount for such Distribution Date.
"Group II Basic Principal Distribution Amount": With respect
to any Distribution Date, the sum of (i) the Principal Remittance Amount with
respect to the Group II Mortgage Loans minus (ii) the amount of any
Overcollateralization Reduction Amount for the Distribution Date multiplied by a
fraction, the numerator of which is (x) the portion of the Principal Remittance
Amount for such Distribution Date that is attributable to principal received or
advanced on the Group I Mortgage Loans, and the denominator of which is (y) the
Principal Remittance Amount for such Distribution Date.
"Group I Class A Principal Distribution Amount": With respect
to any Distribution Date, the Class A Principal Distribution Amount multiplied
by a fraction, the numerator of which is (x) the portion of the Principal
Remittance Amount for such Distribution Date that is attributable to principal
received or advanced on the Group I Mortgage Loans, and the denominator of which
is (y) the Principal Remittance Amount for such Distribution Date.
"Group II Class A Principal Distribution Amount": With respect
to any Distribution Date, the Class A Principal Distribution Amount multiplied
by a fraction, the numerator of which is (x) the portion of the Principal
Remittance Amount for such Distribution Date that is attributable to principal
received or advanced on the Group II Mortgage Loans, and the denominator of
which is (y) the Principal Remittance Amount for such Distribution Date.
"Independent": When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Depositor, the Servicer,
NC Capital and their respective Affiliates, (b) does not have any direct
financial interest in or any material indirect financial interest in the
Depositor, NC Capital, the Servicer or any Affiliate thereof, and (c) is not
connected with the Depositor, NC Capital, the Servicer or any Affiliate thereof
as an officer, employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions; provided, however,
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that a Person shall not fail to be Independent of the Depositor, NC Capital, the
Servicer or any Affiliate thereof merely because such Person is the beneficial
owner of 1% or less of any class of securities issued by the Depositor, NC
Capital, the Servicer or any Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than
the Servicer) that would be an "independent contractor" with respect to REMIC I
within the meaning of Section 856(d)(3) of the Code if REMIC I 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 Certificates), so long as REMIC I does
not receive or derive any income from such Person and provided that the
relationship between such Person and REMIC I 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 Trustee and the Trust Administrator have
received an Opinion of Counsel to the effect that the taking of any action in
respect of any REO Property by such Person, subject to any conditions therein
specified, that is otherwise herein contemplated to be taken by an Independent
Contractor will not cause such REO Property to cease to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code (determined
without regard to the exception applicable for purposes of Section 860D(a) of
the Code), or cause any income realized in respect of such REO Property to fail
to qualify as Rents from Real Property.
"Index": With respect to each Mortgage Loan and each related
Adjustment Date, the average of the interbank offered rates for six-month United
States dollar deposits in the London market as published in THE WALL STREET
JOURNAL and as most recently available either (i) as of the first Business Day
45 days prior to such Adjustment Date or (ii) as of the first Business Day of
the month preceding the month of such Adjustment Date, as specified in the
related Mortgage Note.
"Initial Class N Payment Balance": $14,000,000.
"Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan, to the extent such
proceeds are not to be applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the procedures that the
Servicer would follow in servicing mortgage loans similar to the 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 Distribution
Date and the Class A Certificates, the Mezzanine Certificates, REMIC I Regular
Interest I-LT2, REMIC I Regular Interest I-LT3, REMIC I Regular Interest I-LT4,
REMIC I Regular Interest I-LT5 and REMIC I Regular Interest I-LT6, the period
commencing on the Distribution Date of the month immediately preceding the month
in which such Distribution Date occurs (or, in the case of the first
Distribution Date, commencing on the Closing Date) and ending on the day
preceding such Distribution Date. With respect to any Distribution Date and
REMIC I Regular Interest I-LT1 and REMIC I Regular Interest I-LT7, the one-month
period ending on the last day of the calendar month preceding the month in which
such Distribution Date occurs.
"Interest Carry Forward Amount": With respect to any
Distribution Date and the Class A Certificates, any Class of Mezzanine
Certificates or the Class N Certificates, the sum of (i)
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the amount, if any, by which (a) the Interest Distribution Amount for such Class
of Certificates as of the immediately preceding Distribution Date exceeded (b)
the actual amount distributed on such Class of Certificates in respect of
interest on such immediately preceding Distribution Date and (ii) the amount of
any Interest Carry Forward Amount for such Class of Certificates remaining
unpaid from the previous Distribution Date, plus accrued interest on such sum
calculated at the related Pass- Through Rate for the most recently ended
Interest Accrual Period.
"Interest Determination Date": With respect to the Class A
Certificates, the Mezzanine Certificates, REMIC I Regular Interest I-LT2, REMIC
I Regular Interest I-LT3, REMIC I Regular Interest II-LT4, REMIC I Regular
Interest I-LT5 and REMIC I Regular Interest I-LT6, and any Interest Accrual
Period therefor, the second London Business Day preceding the commencement of
such Interest Accrual Period.
"Interest Distribution Amount": With respect to any
Distribution Date and any Class A Certificates, any Mezzanine Certificates, any
Class N Certificates and any Class X Certificates, the aggregate Accrued
Certificate Interest on the Certificates of such Class for such Distribution
Date.
"Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Available Distribution Amount for such Distribution
Date that represents interest received or advanced on the Mortgage Loans.
"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 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.
"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 REMIC I by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section 3.16(c) or Section 9.01.
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 REMIC I by reason of its being purchased pursuant to Section
9.01.
"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, or (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.03, Section 3.16(c), Section 3.23 or Section
9.01.
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"Loan-to-Value Ratio": As of any date of determination, the
fraction, expressed as a percentage, the numerator of which is the principal
balance of the related Mortgage Loan at such date and the denominator of which
is the Value of the related Mortgaged Property.
"London Business Day": Any day on which banks in the City of
London are open and conducting transactions in United States dollars.
"Loss Severity Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
amount of Realized Losses incurred on a Mortgage Loan and the denominator of
which is the principal balance of such Mortgage Loan immediately prior to the
liquidation of such Mortgage Loan.
"Marker Rate": With respect to the Class X/N Interest and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the REMIC I Remittance Rate for each of the REMIC I Regular Interests, with
the rate on each REMIC I Regular Interest (other than REMIC I Regular Interest
I-LT7) subject to a cap equal to the lesser of (i) the related One-Month LIBOR
Pass-Through Rate and (ii) the Net WAC Pass-Through Rate for the purpose of this
calculation for such Distribution Date and with the rate on REMIC I Regular
Interest I-LT7 subject to a cap of zero for the purpose of this calculation.
"Maximum I-LT7 Uncertificated Interest Deferral Amount": With
respect to any Distribution Date, the excess of (i) accrued interest at the
REMIC I Remittance Rate applicable to REMIC I Regular Interest I-LT7 for such
Distribution Date on a balance equal to the Uncertificated Balance of REMIC I
Regular Interest I-LT7 minus the REMIC I Overcollateralization Amount, in each
case for such Distribution Date, over (ii) Uncertificated Interest on REMIC I
Regular Interest I-LT2, REMIC I Regular Interest I-LT3, REMIC I Regular Interest
I-LT4, REMIC I Regular Interest I-LT5 and REMIC I Regular Interest I-LT6 for
such Distribution Date, with the rate on each of REMIC I Regular Interest I-LT2,
REMIC I Regular Interest I-LT3, REMIC I Regular Interest I-LT4, REMIC I Regular
Interest I-LT5 and REMIC I Regular Interest I-LT6 subject to a cap equal to the
lesser of (i) the related One-Month LIBOR Pass-Through Rate and (ii) the Net WAC
Pass-Through Rate for the purpose of this calculation for such Distribution
Date.
"Maximum Mortgage Rate": With respect to each Mortgage Loan,
the percentage set forth in the related Mortgage Note as the maximum Mortgage
Rate thereunder.
"Maximum Pass-Through Rate": With respect to the Class A
Certificates and the Mezzanine Certificates and any Distribution Date, a rate
per annum equal to (i) the weighted average of the Expense Adjusted Maximum
Mortgage Rates on the then outstanding Mortgage Loans, weighted based on their
Scheduled Principal Balances as of the first day of the calendar month preceding
the month in which the Distribution Date occurs multiplied 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.
"Mezzanine Certificate": Any Class M-1 Certificate, Class M-2
Certificate or Class B Certificate.
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"Minimum Mortgage Rate": With respect to each Mortgage Loan,
the percentage set forth in the related Mortgage Note as the minimum Mortgage
Rate thereunder.
"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; and (c) on the assumption that all other
amounts, if any, due under such Mortgage Loan are paid when due.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first lien on, or first priority security interest in, a Mortgaged
Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee and delivered to the Trust Administrator pursuant to Section 2.01
or Section 2.03(d) of this Agreement, as held from time to time as a part of the
Trust Fund, the Mortgage Loans so held being identified in the Mortgage Loan
Schedule.
"Mortgage Loan Purchase Agreement": The agreement among the
Seller, NC Capital and the Depositor, regarding the sale of the Mortgage Loans
by the Seller to the Depositor, substantially in the form of Exhibit D annexed
hereto.
"Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in REMIC I on such date, attached hereto as Schedule 1. The
Mortgage Loan Schedule shall set forth the following information with respect to
each Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) the Mortgagor's name;
(iii) the street address of the Mortgaged Property including the
state and zip code;
(iv) a code indicating whether the Mortgaged Property is
owner-occupied;
(v) the type of Residential Dwelling constituting the
Mortgaged Property;
(vi) the original months to maturity;
(vii) the stated remaining months to maturity from the Cut-off
Date based on the original amortization schedule;
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(viii) the Loan-to-Value Ratio at origination;
(ix) the Mortgage Rate in effect immediately following the
Cut-off Date;
(x) (A) the date on which the first Monthly Payment was due on
the Mortgage Loan and, (B) if such date is not consistent
with the Due Date currently in effect, such Due Date;
(xi) the stated maturity date;
(xii) the amount of the Monthly Payment at origination;
(xiii) the amount of the Monthly Payment due on the first Due
Date after the Cut-off Date;
(xiv) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance;
(xv) the original principal amount of the Mortgage Loan;
(xvi) the Scheduled Principal Balance of the Mortgage Loan as of
the close of business on the Cut-off Date;
(xvii) the Adjustment Dates;
(xviii) the Gross Margin;
(xix) a code indicating the purpose of the Mortgage Loan (I.E.,
purchase financing, Rate/Term Refinancing, Cash-Out
Refinancing);
(xx) the Maximum Mortgage Rate;
(xxi) the Minimum Mortgage Rate;
(xxii) the Mortgage Rate at origination;
(xxiii) the Periodic Rate Cap and the maximum first Adjustment
Date Mortgage Rate adjustment;
(xxiv) a code indicating the documentation program (I.E., Full
Documentation, Limited Documentation, Stated Income
Documentation);
(xxv) [intentionally omitted];
(xxvi) the first Adjustment Date immediately following the
Cut-off Date;
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(xxvii) the risk grade;
(xxviii) [intentionally omitted];
(xxix) [intentionally omitted];
(xxx) [intentionally omitted];
(xxxi) the Value of the Mortgaged Property;
(xxxii) the sale price of the Mortgaged Property, if applicable;
(xxxiii) the actual unpaid principal balance of the Mortgage Loan
as of the Cut-off Date;
(xxxiv) if the related Mortgage Loan has a Prepayment Charge and
if so, the type and term of the related Prepayment Charge;
(xxxv) [intentionally omitted];
(xxxvi) [intentionally omitted];
(xxxvii) the rounding code (I.E., nearest 0.125%, next highest
0.125%);
(xxxviii) [intentionally omitted];
(xxxix) [intentionally omitted]; and
(xl) the program code.
The Mortgage Loan Schedule shall set forth the following
information with respect to the Mortgage Loans in the aggregate as of the
Cut-off Date: (1) the number of Mortgage Loans; (2) the current 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. The
Mortgage Loan Schedule shall be amended from time to time by the Depositor in
accordance with the provisions of this Agreement. 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
Schedule 1 from time to time, 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
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related Mortgage Note, which rate (A) as of any date of determination until the
first Adjustment Date following the Cut-off Date shall be the rate set forth in
the Mortgage Loan Schedule as the Mortgage Rate in effect immediately following
the Cut-off Date and (B) as of any date of determination thereafter shall be the
rate as adjusted on the most recent Adjustment Date equal to the sum, rounded to
the nearest 0.125% as provided in the Mortgage Note, of the Index, as most
recently available as of a date prior to the Adjustment Date as set forth in the
related Mortgage Note, plus the related Gross Margin; provided that the Mortgage
Rate on such Mortgage Loan on any Adjustment Date shall never be more than the
lesser of (i) the sum of the Mortgage Rate in effect immediately prior to the
Adjustment Date plus the related Periodic Rate Cap, if any, and (ii) the related
Maximum Mortgage Rate, and shall never be less than the greater of (i) the
Mortgage Rate in effect immediately prior to the Adjustment Date less the
Periodic Rate Cap, if any, and (ii) the related Minimum Mortgage Rate. With
respect to each Mortgage Loan that becomes an REO Property, as of any date of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.
"Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of an Estate in Real
Property improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"NC Capital": NC Capital Corporation, or its successor in
interest.
"Net Monthly Excess Cashflow": With respect to any
Distribution Date, the sum of (i) any Overcollateralization Reduction Amount for
such Distribution Date and (ii) the excess of (x) the Available Distribution
Amount for such Distribution Date over (y) the sum for such Distribution Date of
(A) the Senior Interest Distribution Amounts payable to the holders of the Class
A Certificates, (B) the Interest Distribution Amounts payable to the holders of
the Mezzanine Certificates, (C) the Group I Basic Principal Distribution Amount
and (D) the Group II Basic Principal Distribution Amount.
"Net Monthly Excess Spread": With respect to any Distribution
Date, the excess of (x) the Available Distribution Amount for such Distribution
Date over (y) the sum for such Distribution Date of (A) the Interest
Distribution Amount payable to the holders of the Class A Certificates 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.
"Net WAC Pass-Through Rate": With respect to any Distribution
Date, a rate per annum equal to the weighted average of the Expense Adjusted
Mortgage Rates on the then outstanding Mortgage Loans, weighted based on their
Scheduled Principal Balances as of the first day of the calendar month preceding
the month in which the Distribution Date occurs multiplied 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.
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"New Lease": Any lease of REO Property entered into on behalf
of REMIC I, including any lease renewed or extended on behalf of REMIC I, if
REMIC I 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
payments, 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 payments, Insurance Proceeds or Liquidation Proceeds on such
Mortgage Loan or REO Property as provided herein.
"Non-United States Person": Any Person other than a United
States Person.
"Notional Amount": With respect to the Class X/N Interest and
the Class X Certificates and any Distribution Date, the Uncertificated Balance
of the REMIC I Regular Interests for such Distribution Date.
"Officers' Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Servicer, NC Capital, the
Seller or the Depositor, as applicable.
"One-Month LIBOR": With respect to the Class A Certificates,
the Mezzanine Certificates, REMIC I Regular Interest I-LT2, REMIC I Regular
Interest I-LT3, REMIC I Regular Interest I-LT4, REMIC I Regular Interest I-LT5
and REMIC I Regular Interest I-LT6 and any Interest Accrual Period therefor, the
rate determined by the Trust Administrator 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 Trust Administrator 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 Trust Administrator shall select an
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alternative comparable index (over which the Trust Administrator has no
control), used for determining one-month Eurodollar lending rates that is
calculated and published (or otherwise made available) by an independent party.
"One-Month LIBOR Pass-Through Rate": With respect to the Class
A-1 Certificates and REMIC I Regular Interest I-LT2, a per annum rate equal to
One-Month LIBOR plus 0.235%, in the case of each Distribution Date through and
including the Distribution Date on which the aggregate Stated Principal Balance
of the Mortgage Loans and REO Properties remaining in the Trust Fund is reduced
to less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date, or One-Month LIBOR plus 0.470%, in the case of any
Distribution Date thereafter.
With respect to the Class A-2 Certificates and REMIC I Regular
Interest I-LT3, a per annum rate equal to One-Month LIBOR plus 0.290%, in the
case of each Distribution Date through and including the Distribution Date on
which the aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties remaining in the Trust Fund is reduced to less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
or One-Month LIBOR plus 0.580%, in the case of any Distribution Date thereafter.
With respect to the Class M-1 Certificates and REMIC I Regular
Interest I-LT4, a per annum rate equal to One-Month LIBOR plus 0.640%, in the
case of each Distribution Date through and including the Distribution Date on
which the aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties remaining in the Trust Fund is reduced to less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
or One-Month LIBOR plus 0.960%, in the case of any Distribution Date thereafter.
With respect to the Class M-2 Certificates and REMIC I Regular
Interest I-LT5, a per annum rate equal to One-Month LIBOR plus 1.200%, in the
case of each Distribution Date through and including the Distribution Date on
which the aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties remaining in the Trust Fund is reduced to less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
or One-Month LIBOR plus 1.800% in the case of any Distribution Date thereafter.
With respect to the Class B Certificates and REMIC I Regular
Interest I-LT6, a per annum rate equal to One-Month LIBOR plus 2.500%, in the
case of each Distribution Date through and including the Distribution Date on
which the aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties remaining in the Trust Fund is reduced to less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
or One-Month LIBOR plus 3.750%, in the case of any Distribution Date thereafter.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be salaried counsel for the Depositor or the Servicer,
acceptable to the Trustee, if such opinion is delivered to the Trustee, or
acceptable to the Trust Administrator, if such opinion is to be delivered to the
Trust Administrator, except that any opinion of counsel relating to (a) the
qualification of any of any REMIC as a REMIC or (b) compliance with the REMIC
Provisions must be an opinion of Independent counsel.
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"Overcollateralized Amount": With respect to any Distribution
Date, the excess, if any, of (a) the aggregate Stated Principal Balances of the
Mortgage Loans and REO Properties immediately following such Distribution Date
over (b) the sum of the aggregate Certificate Principal Balances of the Class A
Certificates and the Mezzanine Certificates as of such Distribution Date (after
taking into account the payment of the Principal Remittance Amount on such
Distribution Date).
"Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the excess, if any, of (a) the Required Overcollateralized
Amount applicable to such Distribution Date over (b) the Overcollateralized
Amount applicable to such Distribution Date prior to taking into account the
payment of any Overcollateralization Increase Amount on such Distribution Date.
"Overcollateralization Increase Amount": With respect to any
Distribution Date, the lesser of (a) the Overcollateralization Deficiency Amount
as of such Distribution Date (after taking into account the payment of the
Principal Distribution Amount on such Distribution Date, exclusive of the
payment of any Overcollateralization Increase Amount) and (b) the amount of
Accrued Certificate Interest payable on the Class X/N Interest on such
Distribution Date as reduced by Realized Losses allocated thereto with respect
to such Distribution Date pursuant to Section 4.04.
"Overcollateralization Reduction Amount": With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the Principal Remittance Amount.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
"Pass-Through Rate": With respect to the Class A Certificates
and the Mezzanine Certificates and any Distribution Date, a rate per annum equal
to the lesser of (i) the related One- Month LIBOR Pass-Through Rate for such
Distribution Date and (ii) the Net WAC Pass-Through Rate for such Distribution
Date.
With respect to the Class X/N Interest and any Distribution
Date, a rate per annum equal to the percentage equivalent of a fraction, the
numerator of which is the sum of the amounts calculated pursuant to clauses (i)
through (vii) below, and the denominator of which is the aggregate
Uncertificated Balances of the REMIC I Regular Interests. For purposes of
calculating the Pass- Through Rate for the Class X Certificates, the numerator
is equal to the sum of the following components:
(i) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LT1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LT1;
(ii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LT2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular
Interest I-LT2;
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(iii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LT3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LT3;
(iv) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LT4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LT4;
(v) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LT5 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LT5;
(vi) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LT6 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LT6; and
(vii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LT7 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LT7.
With respect to the Class N Certificates, 10.00% per annum.
With respect to the Class X Certificates, 100% of the interest payable to the
Class X/N Interest.
"Percentage Interest": With respect to any Class of
Certificates (other than the Residual Certificates), the undivided percentage
ownership in such Class evidenced by such Certificate, expressed as a
percentage, the numerator of which is the initial Certificate Principal Balance
represented by such Certificate and the denominator of which is the aggregate
initial Certificate Principal Balance of all of the Certificates of such Class.
The Class A Certificates, the Mezzanine Certificates, the Class N Certificates
and the Class X Certificates are issuable only in minimum Percentage Interests
corresponding to minimum initial Certificate Principal Balances of $25,000 and
integral multiples of $1,000 in excess thereof; provided, however, that a single
Certificate of each such Class of Certificates may be issued having a Percentage
Interest corresponding to the remainder of the aggregate initial Certificate
Principal Balance of such Class or to an otherwise authorized denomination for
such Class plus such remainder. With respect to any Residual Certificate, the
undivided percentage ownership in such Class evidenced by such Certificate, as
set forth on the face of such Certificate. The Residual Certificates are
issuable in Percentage Interests of 20% and integral multiples of 5% in excess
thereof.
"Periodic Rate Cap": With respect to each Mortgage Loan and
any Adjustment Date therefor, the fixed percentage set forth in the related
Mortgage Note, which is the maximum amount by which the Mortgage Rate for such
Mortgage Loan may increase or decrease (without regard to the Maximum Mortgage
Rate or the Minimum Mortgage Rate) on such Adjustment Date from the Mortgage
Rate in effect immediately prior to such Adjustment Date.
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"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 Trustee, the
Trust Administrator 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
"AAA" by Fitch and "AAA" by S&P; and
(viii) if previously confirmed in writing to the
Trustee and the Trust Administrator, 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 Certificates;
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.
"Permitted Transferee": Any Transferee of a Residual
Certificate other than a Disqualified Organization or Non-United States Person.
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"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 Distribution Date pursuant to
Section 4.03.
"Plan": Any employee benefit plan or certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
Keogh 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 and Section 4975 of the Code.
"Prepayment Assumption": A prepayment rate for the Mortgage
Loans of 28% CPR. The Prepayment Assumption is used solely for determining the
accrual of original issue discount on the Certificates for federal income tax
purposes. A CPR (or Constant Prepayment Rate) represents an annualized constant
assumed rate of prepayment each month of a pool of mortgage loans relative to
its outstanding principal balance for the life of such pool.
"Prepayment Charge": With respect to any Principal Prepayment,
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
Distribution Date, for each Mortgage Loan that was during the related Prepayment
Period the subject of a Principal Prepayment in full that was applied by the
Servicer to reduce the outstanding principal balance of such Mortgage Loan on a
date preceding the Due Date in the succeeding Prepayment Period, an amount equal
to interest at the applicable Net Mortgage Rate on the amount of such Principal
Prepayment for the number of days commencing on the date on which the prepayment
is applied and ending on the last day of the related Prepayment Period. The
obligations of the Servicer in respect of any Prepayment Interest Shortfall are
set forth in Section 3.24.
"Prepayment Period": With respect to any Distribution Date,
the calendar month preceding the calendar month in which such Distribution Date
occurs.
"Principal Distribution Amount": With respect to the Class A-1
Certificates and any Distribution Date, the Group I Basic Principal Distribution
Amount plus the related portion of the Extra Principal Distribution Amount. With
respect to the Class A-2 Certificates and any Distribution Date, the Group II
Basic Principal Distribution Amount plus the related portion of the Extra
Principal Distribution Amount.
"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.
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"Principal Remittance Amount": The sum of (i) the principal
portion of each Monthly Payment on the Mortgage Loans due during the related Due
Period, actually received or advanced on or prior to the related Determination
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
2.03, Section 3.16(c) or Section 9.01 and the amount of any shortfall deposited
in the Collection Account in connection with the substitution of a Deleted
Mortgage Loan pursuant to Section 2.03 during the related Prepayment Period; and
(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 (A) any portion thereof that represents a recovery of principal
for which an advance was made by the Servicer pursuant to Section 4.03 in
respect of a preceding Distribution Date and (B) the amount of any
Nonrecoverable Servicing Advances or Nonrecoverable P&I Advances reimbursable to
the Servicer.
"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.16(c) or Section 9.01, and as confirmed by an Officers' Certificate from the
Servicer to the Trustee and the Trust Administrator, an amount equal to the sum
of (i) 100% of the Stated Principal Balance thereof as of the date of purchase
(or such other price as provided in Section 9.01), (ii) in the case of (x) a
Mortgage Loan, accrued interest on such Stated Principal Balance at the
applicable Net 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
distributed pursuant to Section 4.01, 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 Net 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 distributed as or to cover REO Imputed Interest pursuant to Section
4.01, (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), and (v) in the case of a Mortgage Loan required to be purchased
pursuant to Section 2.03, expenses reasonably incurred or to be incurred by the
Servicer, the Trustee or the Trust Administrator in respect of the breach or
defect giving rise to the purchase obligation.
"Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
which must, on the date of such substitution, (i) have an outstanding principal
balance, after application of all scheduled payments of principal and interest
due during or prior to the month of substitution, not in excess of the Scheduled
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
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in excess of) the Mortgage Rate of the Deleted Mortgage Loan, (iii) have a
Maximum Mortgage Rate not less than the Maximum Mortgage Rate on the Deleted
Mortgage Loan, (iv) have a Minimum Mortgage Rate not less than the Minimum
Mortgage Rate of the Deleted Mortgage Loan, (v) have a Gross Margin equal to the
Gross Margin of the Deleted Mortgage Loan, (vi) have a next Adjustment Date not
more than two months later than the next Adjustment Date on the Deleted Mortgage
Loan, (vii) have a remaining term to maturity not greater than (and not more
than one year less than) that of the Deleted Mortgage Loan, (viii) have the same
Due Date as the Due Date on the Deleted Mortgage Loan, (ix) have a Loan-to-Value
Ratio as of the date of substitution equal to or lower than the Loan-to-Value
Ratio of the Deleted Mortgage Loan as of such date, (x) have a risk grading
determined by New Century Mortgage Corporation at least equal to the risk
grading assigned on the Deleted Mortgage Loan, (xi) is a "qualified mortgage" as
defined in the REMIC Provisions and (xii) conform to each representation and
warranty set forth in Section 6 of the 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
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 (xii) 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": Fitch and S&P or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be such nationally recognized statistical rating
agencies, or other comparable Persons, designated by the Depositor, notice of
which designation shall be given to the Trustee, the Trust Administrator and the
Servicer.
"Re-performance Test": The following criteria one of which
must be met for a Mortgage Loan to qualify as a Re-performing Mortgage Loan: (1)
the Mortgagor has made at least three aggregate Monthly Payments in the three
calendar months preceding the Cut-off Date (regardless of either the timing of
receipt of such payments or the payment history of such Mortgage Loans prior to
December 1, 2000), or (2) the Mortgagor has made at least four aggregate Monthly
Payments in the four calendar months preceding the Cut-off Date (regardless of
either the timing of receipt of such payments or the payment history of such
loans prior to November 1, 2000), or (3) the Mortgagor has made at least five
aggregate Monthly Payments in the five calendar months preceding the Cut-off
Date (regardless of either the timing of receipt of such payments or the payment
history of such loans prior to October 1, 2000).
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"Re-performing Mortgage Loan": A Mortgage Loan which has
defaulted in the past and which is at least 90 days Delinquent with respect to
certain Monthly Payments but which satisfies one of the Re-Performance Test
criteria.
"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 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 Distribution 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), 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).
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 REMIC I, 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 Distribution 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), 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 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 Distribution Account pursuant to Section 3.23.
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
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immediately prior to such Deficient Valuation and the 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 Distribution Date and any
Book-Entry Certificate, the Business Day immediately preceding such Distribution
Date. With respect to each Distribution Date and any other Class of
Certificates, including any Definitive Certificates, the last Business Day of
the month immediately preceding the month in which such Distribution Date
occurs.
"Reference Banks": Bankers Trust Company, Barclay's 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
Trust Administrator which are engaged in transactions in Eurodollar deposits in
the international Eurocurrency market (i) with an established place of business
in London, (ii) not controlling, under the control of or under common control
with the Depositor or any Affiliate thereof and (iii) which have been designated
as such by the Trust Administrator.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of
which were not used to purchase the related Mortgaged Property.
"Regular Certificate": Any Class A Certificate, Mezzanine
Certificate, Class X/N Interest or Class X Certificate.
"Regular Interest": A "regular interest" in a REMIC within the
meaning of Section 860G(a)(1) of the Code.
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
"Relief Act Interest Shortfall": With respect to any
Distribution 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.
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) such
Mortgage Loans and Prepayment Charges as from time to time are subject to this
Agreement, together with the Mortgage Files relating thereto, and together with
all collections thereon and proceeds thereof; (ii) any REO Property, together
with all collections thereon and proceeds thereof; (iii) the Trustee's rights
with respect to the Mortgage Loans under all
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insurance policies required to be maintained pursuant to this Agreement and any
proceeds thereof; (iv) the Depositor's rights under the Mortgage Loan Purchase
Agreement (including any security interest created thereby); (v) the Collection
Account, the Distribution Account and any REO Account, and such assets that are
deposited therein from time to time and any investments thereof, together with
any and all income, proceeds and payments with respect thereto. Notwithstanding
the foregoing, however, REMIC I specifically excludes (i) all payments and other
collections of principal and interest due on the Mortgage Loans on or before the
Cut-off Date and all Prepayment Charges payable in connection with Principal
Prepayments made before the Cut-off Date and (ii) the Reserve Fund and any
amounts on deposit therein from time to time and any proceeds thereof.
"REMIC I Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LT1 minus the Marker Rate, divided by (b) 12.
"REMIC I Overcollateralization Amount": With respect to any
date of determination, (i) 1% of the aggregate Uncertificated Balances of the
REMIC I Regular Interests minus (ii) the aggregate of the Uncertificated
Balances of REMIC I Regular Interest I-LT2, REMIC I Regular Interest I-LT3,
REMIC I Regular Interest I-LT4, REMIC I Regular Interest I-LT5 and REMIC I
Regular Interest I-LT6, in each case as of such date of determination.
"REMIC I Principal Loss Allocation Amount": With respect to
any Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Balances of REMIC I Regular Interest I-LT2,
REMIC I Regular Interest I-LT3, REMIC I Regular Interest I-LT4, REMIC I Regular
Interest I-LT5 and REMIC I Regular Interest I-LT6 and the denominator of which
is the aggregate of the Uncertificated Balances of REMIC I Regular Interest
I-LT2, REMIC I Regular Interest I-LT3, REMIC I Regular Interest I-LT4, REMIC I
Regular Interest I-LT5, REMIC I Regular Interest I-LT6 and REMIC I Regular
Interest I-LT7.
"REMIC I Regular Interest": Any of the seven separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a "regular interest" in REMIC I. Each REMIC I Regular Interest
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto. The
designations for the respective REMIC I Regular Interests are set forth in the
Preliminary Statement hereto.
"REMIC I Regular Interest I-LT1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT1
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
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"REMIC I Regular Interest I-LT2": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT2
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT3": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT3
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT4": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT4
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT5": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT5
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT6": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT6
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT7": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT7
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Remittance Rate": With respect to the REMIC I Regular
Interests, a per annum rate equal to the Net WAC Pass-Through Rate.
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"REMIC I Required Overcollateralization Amount": 1% of the
Required Overcollateralization Amount.
"REMIC II": The segregated pool of assets consisting of all of
the REMIC I Regular Interests conveyed in trust to the Trustee, for the benefit
of the Holders of the Regular Certificates, as holders of the Regular Interests
in REMIC II, and the Class R Certificateholders, as holders of the Class R-II
Interest pursuant to Section 2.09, and all amounts deposited therein, with
respect to which a separate REMIC election is to be made.
"REMIC II Certificate": Any Regular Certificate (other than
the Class X Certificates).
"REMIC III": The segregated pool of assets consisting of the
Class X/N Interest conveyed in trust to the Trustee, for the benefit of the
Class X Certificates, as the Regular Interest in REMIC III and the Class R-III
Certificateholders, and all amounts deposited therein, with respect to which a
separate REMIC election is to be made.
"REMIC III Certificateholder": The Holder of any Class R-III
Certificate.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Section
860A through 860G of the Code, and related provisions, and proposed, temporary
and final regulations and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time to time.
"Remittance Report": A report in form and substance mutually
acceptable to the Trust Administrator and the Servicer and sufficient to enable
the Trust Administrator to provide the statements and reports required by
Section 4.02 on a magnetic disk or tape prepared by the Servicer pursuant to
Section 4.03 with such additions, deletions and modifications as agreed to by
the Trust Administrator 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.
"REO Disposition": The sale or other disposition of an REO
Property on behalf of REMIC I.
"REO Imputed Interest": As to any REO Property, for any
calendar month during which such REO Property was at any time part of REMIC I,
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
Distribution Date in such calendar month.
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"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 Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
9.01 that is allocable to such REO Property) or otherwise, net of any portion of
such amounts (i) payable pursuant to Section 3.23(c) 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) 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 REMIC I through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.23.
"Request for Release": A release signed by a Servicing
Officer, in the form of Exhibit E-1 or Exhibit E-2 attached hereto.
"Required Overcollateralized Amount": With respect to any
Distribution Date (i) prior to the Stepdown Date, $5,000,501.67, (ii) on or
after the Stepdown Date provided a Trigger Event is not in effect, the greater
of (x) 6.00% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period and (y) $832,968, and (iii) on or
after the Stepdown Date and a Trigger Event is in effect, the Required
Overcollateralized Amount for the immediately preceding Distribution Date.
"Required Reserve Fund Balance": $5,000.
"Required Reserve Fund Deposit": With respect to any
Distribution Date on which the balance in the Reserve Fund is less than the
Required Reserve Fund Balance, the amount, if any, by which (i) the Required
Reserve Fund Balance exceeds (ii) the amount on deposit in the Reserve Fund
immediately prior to such date.
"Reserve Fund": A fund created pursuant to Section 4.07 of
this Agreement which shall be an asset of the Trust Fund but which shall not be
an asset of any Trust REMIC.
"Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Trust Administrator 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 Trust Administrator 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 Trust
Administrator can determine no such arithmetic mean, the lowest one-month U.S.
dollar lending rate which New York City banks selected by the Trust
Administrator 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
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dwelling, (iii) a one-family dwelling unit in a Fannie Mae 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, mobile or
manufactured home (as defined in 42 United States Code, Section 5402(6)).
"Residual Certificate": Any one of the Class R Certificates or
the Class R-III Certificates.
"Residual Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee,
the Chairman or Vice Chairman of the Board of Directors or Trustees, the
Chairman or Vice Chairman of the Executive or Standing Committee of the Board of
Directors or Trustees, the President, the Chairman of the Committee on Trust
Matters, any vice president, any assistant vice president, the Secretary, any
assistant secretary, the Treasurer, any assistant treasurer, the Cashier, any
assistant cashier, any trust officer or assistant trust officer, the Controller
and any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and in each case having direct responsibility for the administration of
this Agreement 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. When used with respect to the Trust Administrator, any vice
president, any assistant vice president, any managing director, any director,
any assistant treasurer, any trust officer or assistant trust officer or any
other officer of the Trust Administrator customarily 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.
"S&P": Standard and Poor's, a division of the McGraw-Hill
Companies, Inc.
"Scheduled Principal Balance": With respect to any Mortgage
Loan: (a) as of the Cut-off Date, the outstanding principal balance of such
Mortgage Loan as of such date, net of the principal portion of all unpaid
Monthly Payments, if any, due on or before such date; (b) as of any Due Date
subsequent to the Cut-off Date up to and including the Due Date in the calendar
month in which a Liquidation Event occurs with respect to such Mortgage Loan,
the Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date,
minus the sum of (i) the principal portion of each Monthly Payment due on or
before such Due Date but subsequent to the Cut-off Date, whether or not
received, (ii) all Principal Prepayments received before such Due Date but after
the Cut-off Date, (iii) the principal portion of all Liquidation Proceeds and
Insurance Proceeds received before such Due Date but after the Cut-off Date, net
of any portion thereof that represents principal due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) on a Due
Date occurring on or before the date on which such proceeds were received and
(iv) any Realized Loss incurred with respect thereto as a result of a Deficient
Valuation occurring before such Due Date, but only to the extent such Realized
Loss represents a reduction in the portion of principal of such Mortgage Loan
not yet due (without regard to any acceleration of payments under the related
Mortgage and Mortgage Note) as of the date of such Deficient Valuation; and (c)
as of any Due Date subsequent to the occurrence of a Liquidation Event with
respect to such Mortgage Loan, zero. With
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respect to any REO Property: (a) as of any Due Date subsequent to the date of
its acquisition on behalf of the Trust Fund up to and including the Due Date in
the calendar month in which a Liquidation Event occurs with respect to such REO
Property, an amount (not less than zero) equal to the Scheduled Principal
Balance of the related Mortgage Loan as of the Due Date in the calendar month in
which such REO Property was acquired, minus the aggregate amount of REO
Principal Amortization, if any, in respect of such REO Property for all
previously ended calendar months; and (b) as of any Due Date subsequent to the
occurrence of a Liquidation Event with respect to such REO Property, zero.
"Seller": Deutsche Bank AG New York Branch or its successor in
interest, in its capacity as seller under the Mortgage Loan Purchase Agreement.
"Senior Interest Distribution Amount": With respect to any
Distribution Date, an amount equal to the sum of (i) the Interest Distribution
Amount for such Distribution Date for the Class A Certificates and (ii) the
Interest Carry Forward Amount, if any, for such Distribution Date for the Class
A Certificates.
"Servicer": Litton Loan Servicing LP or any successor Servicer
appointed as herein provided, in its capacity as Servicer hereunder.
"Servicer Event of Default": One or more of the events
described in Section 7.01.
"Servicer Remittance Date": With respect to any Distribution
Date, 5:00 p.m. New York time two Business Days prior to such Distribution Date.
"Servicer Termination Trigger": A Servicer Termination Trigger
has occurred (i) with respect to a Distribution Date occurring between the
Cut-off Date and the fifth anniversary of the Cut-off Date if on such
Distribution Date (X) the sum of (a) the product of (1) the percentage obtained
by dividing the balance of 30 to 59 day delinquent Mortgage Loans by the Stated
Principal Balance of the Mortgage Loans, (2) 25% and (3) 43.00%; plus (b) the
product of (1) the percentage obtained by dividing the balance of 60 to 89 day
delinquent Mortgage Loans by the Stated Principal Balance of the Mortgage Loans,
(2) 50% and (3) 43.00%; plus (c) the product of (1) the percentage obtained by
dividing the balance of 90 day or more delinquent Mortgage Loans by the Stated
Principal Balance of the Mortgage Loans and (2) 43.00%; plus (d) the percentage
obtained by dividing the sum of Realized Losses as of such Distribution Date by
the aggregate initial Stated Principal Balance of the Mortgage Loans on the
Cut-Off Date, in each case as of the last day of the calendar month preceding
such Distribution Date, exceeds (Y) 11.00% and (ii) with respect to a
Distribution Date occurring after the fifth anniversary of the Cut-off Date and
on or before the tenth anniversary of the Cut-off Date if on such Distribution
Date the sum set forth in (X) above, in each case as of the last day of the
calendar month preceding such Distribution Date, exceeds 16.50%.
"Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09.
"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
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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 foreclosures,
in respect of a particular Mortgage Loan, (iii) the management (including
reasonable fees in connection therewith) and liquidation of any REO Property and
(iv) the performance of its obligations under Section 3.01, Section 3.09,
Section 3.14, Section 3.16 and Section 3.23. The Servicer shall not be required
to make any Servicing Advance in respect of a Mortgage Loan or REO Property
that, in the good faith business judgment of the Servicer, would not be
ultimately recoverable from related Insurance Proceeds or Liquidation Proceeds
on such Mortgage Loan or REO Property as provided herein.
"Servicing Fee": With respect to each Mortgage Loan and for
any calendar month, an amount equal to one month's interest (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) at the applicable Servicing Fee
Rate on the same principal amount on which interest on such Mortgage Loan
accrues for such calendar month. A portion of such Servicing Fee may be retained
by any Sub-Servicer as its servicing compensation.
"Servicing Fee Rate": 0.50% per annum.
"Servicing 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 Trust Administrator, the Trustee and the Depositor on the
Closing Date, as such list may from time to time be amended.
"Single Certificate": With respect to any Class of
Certificates (other than the Residual Certificates), a hypothetical Certificate
of such Class evidencing a Percentage Interest for such Class corresponding to
an initial Certificate Principal Balance of $1,000. With respect to the Residual
Certificates, a hypothetical Certificate of such Class evidencing a 100%
Percentage Interest in such Class.
"Special Servicer Fee": With respect to each Mortgage Loan
(except a Re-performing Mortgage Loan) delinquent 90 or more days, $150 per
month, which fee shall be payable until the earlier to occur of (i) 18
consecutive months of such payment, and (ii) the Delinquency status of such
Mortgage Loan has been reduced to less than 90 days.
"Startup Day": With respect to each Trust REMIC, the day
designated as such pursuant to Section 10.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the Scheduled 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 distributed pursuant to Section 4.01 on or
before such date of determination, (ii) all Principal
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Prepayments received after the Cut-off Date, to the extent distributed pursuant
to Section 4.01 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, to the extent
distributed pursuant to Section 4.01 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 Distribution Date coinciding with or preceding such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such Mortgage Loan would be distributed, zero.
With respect to any REO Property: (a) as of any date of determination up to but
not including the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, 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 REMIC I, minus the sum of (i) if such REO Property was acquired before the
Distribution 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 distributed pursuant to Section 4.01 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 distributed pursuant to Section 4.01 on or before such
date of determination; and (b) as of any date of determination coinciding with
or subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.
"Stayed Funds": If the Servicer is the subject of a proceeding
under the federal Bankruptcy Code and the making of a Remittance (as defined in
Section 7.02(b)) is prohibited by Section 362 of the federal Bankruptcy Code,
funds that are in the custody of the Servicer, a trustee in bankruptcy or a
federal bankruptcy court and should have been the subject of such Remittance
absent such prohibition.
"Stepdown Date": The earlier to occur of (i) the later to
occur of (a) the Distribution Date occurring in April 2004 and (b) the first
Distribution Date on which the Credit Enhancement Percentage (calculated for
this purpose only after taking into account distributions of principal on the
Mortgage Loans but prior to any distribution of the Principal Distribution
Amount to the Certificates then entitled to distributions of principal on such
Distribution Date) is equal to or greater than 33.00% and (ii) the first
Distribution Date on which the aggregate Certificate Principal Balance of the
Class A Certificates has been reduced to zero.
"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.
"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.
"Substitution Shortfall Amount": As defined in Section
2.03(d).
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"Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of the Trust REMICs under the REMIC Provisions, together
with any and all other information reports or returns that may be required to be
furnished to the Certificateholders or filed with the Internal Revenue Service
or any other governmental taxing authority under any applicable provisions of
federal, state or local tax laws.
"Telerate Page 3750": The display designated as page "3750" on
the Dow Jones 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).
"Termination Price": As defined in Section 9.01.
"Terminator": As defined in Section 9.01.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.
"Trigger Event": A Trigger Event has occurred with respect to
a Distribution Date if the Delinquency Percentage exceeds the lesser of (i) 40%
of the Credit Enhancement Percentage or (ii) 13.20%.
"Trust": ACE Securities Corp., Home Equity Loan Trust, Series
2001-NC1, the trust created hereunder
"Trust Administrator": Bankers Trust Company of California,
N.A., a national banking association, or its successor in interest, or any
successor trust administrator appointed as herein provided.
"Trust REMIC": REMIC I, REMIC II or REMIC III.
"Trustee": U.S. Bank National Association, a national banking
association, or its successor in interest, or any successor trustee appointed as
herein provided.
"Trust Fund": Collectively, all of the assets of REMIC I,
REMIC II, REMIC III and the Reserve Fund, and any amounts on deposit therein and
any proceeds thereof.
"Uncertificated Balance": The amount of the Uncertificated
REMIC Regular Interests outstanding as of any date of determination. As of the
Closing Date, the Uncertificated Balance of
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each Uncertificated REMIC Regular Interest shall equal the amount set forth in
the Preliminary Statement hereto as its initial uncertificated balance. On each
Distribution Date, the Uncertificated Balance of the Uncertificated REMIC
Regular Interest shall be reduced by all distributions of principal made on such
Uncertificated REMIC Regular Interest on such Distribution Date pursuant to
Section 4.01 and, if and to the extent necessary and appropriate, shall be
further reduced on such Distribution Date by Realized Losses as provided in
Section 4.04 and the Uncertificated Balance of REMIC I Regular Interest I-LT7
shall be increased by interest deferrals as provided in Section
4.01(a)(1)(A)(i). The Uncertificated Balance of each Uncertificated REMIC
Regular Interest shall never be less than zero.
"Uncertificated Interest": With respect to any REMIC I Regular
Interest for any Distribution Date, one month's interest at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for such
Distribution Date, accrued on the Uncertificated Balance thereof immediately
prior to such Distribution Date. Uncertificated Interest in respect of REMIC I
Regular Interest I-LT1 and REMIC I Regular Interest I-LT7 shall accrue on the
basis of a 360-day year consisting of twelve 30-day months; Uncertificated
Interest in respect of REMIC I Regular Interest I-LT2, REMIC I Regular Interest
I-LT3, REMIC I Regular Interest I-LT4, REMIC I Regular Interest I-LT5 and REMIC
I Regular Interest I-LT6, shall accrue on the basis of a 360-day year and the
actual number of days in the applicable Interest Accrual Period. Uncertificated
Interest with respect to each Distribution Date, as to any Uncertificated REMIC
Regular Interest, shall be reduced by an amount equal to the sum of (a) the
aggregate Prepayment Interest Shortfall, if any, for such Distribution Date to
the extent not covered by payments pursuant to Section 3.24 and (b) the
aggregate amount of any Relief Act Interest Shortfall, if any allocated, in each
case, to such REMIC I Regular Interest or REMIC I Regular Interest pursuant to
Section 1.02. In addition, Uncertificated Interest with respect to each
Distribution Date, as to any Uncertificaetd REMIC Regular Interest, shall be
reduced by Realized Losses, if any, allocated to such Uncertificated REMIC
Regular Interest pursuant to Section 1.02 and Section 4.04.
"Uncertificated REMIC Regular Interest": The REMIC I Regular
Interests.
"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.
"United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof
(except, in the case of a partnership, to the extent provided in regulations) or
an estate whose income is subject to United States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have the authority to control all substantial
decisions of the trust. To the extent prescribed in regulations by the Secretary
of the Treasury, which have not yet been issued, a trust which was in existence
on August 20, 1996 (other than a trust treated as owned by the grantor under
subpart E of part I of subchapter J of chapter 1 of the Code), and which was
treated as a United States person on August 20, 1996 may elect to continue to be
treated as a United States person notwithstanding the previous sentence. The
term "United States" shall have the meaning set forth in Section 7701 of the
Code.
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"Unpaid Basis Risk Shortfall": With respect to the Class A
Certificates and the Mezzanine Certificates and any Distribution Date, an amount
equal to (i) the Basis Risk Shortfall for the previous Distribution Date, plus
(ii) the unpaid Basis Risk Shortfall for the previous Distribution Date, to the
extent not paid on the previous Distribution Date, plus (iii) interest accrued
on the unpaid amount for the most recently ended Interest Accrual Period at the
applicable Accrual Rate.
"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 Fannie Mae and Freddie
Mac and (b) the value thereof as determined by a review appraisal conducted by
the originator of the Mortgage Loan in accordance with such 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 the Mortgage Loan of such
Refinanced Mortgage Loan at the time of origination of such Refinanced Mortgage
Loan by an appraiser who met the minimum requirements of Fannie Mae and Freddie
Mac and (2) the value thereof as determined by a review appraisal conducted by
the originator of the Mortgage Loan in accordance with such 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.
"Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any such Certificate. With respect to any
date of determination, 100% of all Voting Rights will be allocated among the
holders of the Class A Certificates, the Mezzanine Certificates and the Class X
Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates. The Voting Rights allocated to each
Class of Certificate shall be allocated among Holders of each such Class in
accordance with their respective Percentage Interests as of the most recent
Record Date.
SECTION 1.02. Allocation of Certain Interest
Shortfalls.
For purposes of calculating the amount of Accrued Certificate
Interest and the amount of the Interest Distribution Amount for the Class A
Certificates, the Mezzanine Certificates, the Class X/N Interest and the Class X
Certificates for any Distribution Date, (1) the aggregate amount of any
Prepayment Interest Shortfalls (to the extent not covered by payments by the
Servicer pursuant to Section 3.24) and any Relief Act Interest Shortfalls
incurred in respect of the Mortgage Loans for any Distribution Date shall be
allocated first, to the Class X/N Interest based on, and to the extent of, one
month's interest at the then applicable respective Pass-Through Rate on the
Notional Amount thereof and, thereafter, among the Class B Certificates, the
Class M-2 Certificates, the Class M-1 Certificates and concurrently, to the
Class A-1 Certificates and the Class A-2 Certificates, in that
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order, in each case on a PRO RATA basis based on, and to the extent of, one
month's interest at the then applicable respective Pass-Through Rate on the
respective Certificate Principal Balance of each such Certificate and (2) the
aggregate amount of any Realized Losses incurred for any Distribution Date shall
be allocated to the Class X/N Interest on a PRO RATA basis based on, and to the
extent of, one month's interest at the then applicable respective Pass-Through
Rate on the respective Notional Amount thereof.
For purposes of calculating the amount of Uncertificated
Interest for the REMIC I Regular Interests for any Distribution Date, the
aggregate amount of any Prepayment Interest Shortfalls (to the extent not
covered by payments by the Servicer pursuant to Section 3.24) and any Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Interest payable
to REMIC I Regular Interest I-LT1 and REMIC I Regular Interest I-LT7 up to an
aggregate amount equal to the REMIC I Interest Loss Allocation Amount, 98% and
2%, respectively, and thereafter among REMIC I Regular Interest I- LT2, REMIC I
Regular Interest I-LT3, REMIC I Regular Interest I-LT4, REMIC I Regular Interest
I-LT5, REMIC I Regular Interest I-LT6 and REMIC I Regular Interest I-LT7, PRO
RATA based on, and to the extent of, one month's interest at the then applicable
respective REMIC I Remittance Rate on the respective Uncertificated Balance of
each such REMIC I Regular Interest.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of the Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, on behalf of the Trust, without recourse, for the benefit of the
Certificateholders, all the right, title and interest of the Depositor,
including any security interest therein for the benefit of the Depositor, in and
to the Mortgage Loans identified on the Mortgage Loan Schedule, the rights of
the Depositor under the Mortgage Loan Purchase Agreement, and all other assets
included or to be included in REMIC I. Such assignment includes all interest and
principal received by the Depositor or the Servicer on or with respect to the
Mortgage Loans (other than payments of principal and interest due on such
Mortgage Loans on or before the Cut-off Date).
In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with, the Trustee, the following documents
or instruments with respect to each Mortgage Loan so transferred and assigned (a
"Mortgage File"):
(i) the original Mortgage Note, endorsed in the following
form: "Pay to the order of U.S. Bank National Association, as
Trustee under the applicable agreement, without recourse,"
with all prior and intervening endorsements showing a complete
chain of endorsement from the originator to the Person so
endorsing to the Trustee;
(ii) the original Mortgage with evidence of recording
thereon, and the original recorded power of attorney, if the
Mortgage was executed pursuant to a power of attorney, with
evidence of recording thereon;
(iii) an original Assignment of the Mortgage executed in
the following form: "U.S. Bank National Association, as
Trustee under the applicable agreement";
(iv) the original recorded Assignment or Assignments of
the Mortgage showing a complete chain of assignment from the
originator to the Person assigning the Mortgage to the Trustee
as contemplated by the immediately preceding clause (iii);
(v) the original or copies of each assumption,
modification, written assurance or substitution agreement, if
any; and
(vi) the original lender's title insurance policy,
together with all endorsements or riders that were issued with
or subsequent to the issuance of such policy, insuring the
priority of the Mortgage as a first lien on the Mortgaged
Property represented therein as a fee interest vested in the
Mortgagor, or in the event such
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original title policy is unavailable, a written commitment or
uniform binder or preliminary report of title issued by the
title insurance or escrow company.
The Depositor shall cause NC Capital to promptly (within sixty
Business Days following the later of the Closing Date and the date of receipt by
the Trustee of the recording information for a Mortgage, but in no event later
than ninety days following the Closing Date) submit or cause to be submitted for
recording, at no expense to the Trust Fund, the Trustee, the Trust
Administrator, the Seller, the Servicer or the Depositor, in the appropriate
public office for real property records, each Assignment referred to in Sections
2.01(iii) and (iv) above. In the event that any such Assignment is lost or
returned unrecorded because of a defect therein, NC Capital shall promptly
prepare or cause to be prepared a substitute Assignment or cure or cause to be
cured such defect, as the case may be, and thereafter cause each such Assignment
to be duly recorded.
With respect to a maximum of approximately 1.0% of the
Mortgage Loans, by outstanding principal balance of the Mortgage Loans as of the
Cut-off Date, if any original Mortgage Note referred to in Section 2.01(i) above
cannot be located, the obligations of the Depositor to deliver such documents
shall be deemed to be satisfied upon delivery to the Trustee of a photocopy of
such Mortgage Note, if available, with a lost note affidavit substantially in
the form of Exhibit I attached hereto. If any of the original Mortgage Notes for
which a lost note affidavit was delivered to the Trustee is subsequently
located, such original Mortgage Note shall be delivered to the Trustee within
three Business Days. If any of the documents referred to in Sections 2.01(ii),
(iii) or (iv) above has as of the Closing Date been submitted for recording but
either (x) has not been returned from the applicable public recording office or
(y) has been lost or such public recording office has retained the original of
such document, the obligations of the Depositor to deliver such documents shall
be deemed to be satisfied upon (1) delivery to the Trustee of a copy of each
such document certified by NC Capital in the case of (x) above or the applicable
public recording office in the case of (y) above to be a true and complete copy
of the original that was submitted for recording and (2) if such copy is
certified by NC Capital, delivery to the Trustee promptly upon receipt thereof
of either the original or a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original. Notice
shall be provided to the Trustee, the Trust Administrator and the Rating
Agencies by NC Capital if delivery pursuant to clause (2) above will be made
more than 180 days after the Closing Date. If the original lender's title
insurance policy was not delivered pursuant to Section 2.01(vi) above, the
Depositor shall deliver or cause to be delivered to the Trustee promptly after
receipt thereof, the original lender's title insurance policy. The Depositor
shall deliver or cause to be delivered to the Trustee promptly upon receipt
thereof any other original documents constituting a part of a Mortgage File
received with respect to any Mortgage Loan, including, but not limited to, any
original documents evidencing an assumption or modification of any Mortgage
Loan.
All original documents relating to the Mortgage Loans that are
not delivered to the Trustee are and shall be held by or on behalf of NC
Capital, the Seller, the Depositor or the Servicer, as the case may be, in trust
for the benefit of the Trustee, on behalf of the Trust and for the benefit of
the Certificateholders. In the event that any such original document is required
pursuant to the terms of this Section to be a part of a Mortgage File, such
document shall be delivered promptly to the Trustee. Any such original document
delivered to or held by the Depositor that is not required
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pursuant to the terms of this Section to be a part of a Mortgage File, shall be
delivered promptly to the Servicer.
The Depositor herewith delivers to the Trustee and the Trust
Administrator an executed copy of the Mortgage Loan Purchase Agreement.
SECTION 2.02. Acceptance of REMIC I by Trustee.
The Trustee acknowledges receipt, subject to the provisions of
Section 2.01 and subject to any exceptions noted on the exception report
described in the next paragraph below, the documents referred to in Section 2.01
(other than such documents described in Section 2.01(v)) above and all other
assets included in the definition of "REMIC I" under clauses (i), (iii), (iv)
and (v) (to the extent of amounts deposited into the Distribution Account) and
declares that it holds and will hold such documents and the other documents
delivered to it constituting a Mortgage File, and that it holds or will hold all
such assets and such other assets included in the definition of "REMIC I" in
trust for the exclusive use and benefit of all present and future
Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders,
to review each Mortgage File on or before the Closing Date and to certify in
substantially the form attached hereto as Exhibit C-1 that, as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan 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 2.01(v)) required to be delivered to it pursuant to this 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, (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) through (iii), (vi),
(x)(A), (xi), (xii), (xv), (xvii), (xviii), (xx) through (xxiii) and (xxv) 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 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 2.01.
Prior to the first anniversary date of this Agreement the
Trustee shall deliver to the Depositor, the Servicer and the Trust Administrator
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
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 Trustee shall so notify the Depositor, the Servicer and the Trust
Administrator. In addition, upon the discovery by the Depositor, the Servicer,
the Trust Administrator or the Trustee of a breach of any of the representations
and warranties made by NC
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Capital or the Seller 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 Certificateholders in such Mortgage Loan, the party
discovering such breach shall give prompt written notice to the other parties.
The Trustee shall, at the written request and expense of any
Certificateholder, provide a written report to such Certificateholder of all
Mortgage Files released to the Servicer for servicing purposes.
SECTION 2.03. Repurchase or Substitution of
Mortgage Loans by NC Capital.
(a) Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
the breach by NC Capital of any representation, warranty or covenant under the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan that materially
adversely affects the value of such Mortgage Loan or the interest therein of the
Certificateholders, the Trustee shall promptly notify NC Capital, the Seller,
the Servicer and the Trust Administrator of such defect, missing document or
breach and request that NC Capital deliver such missing document or cure such
defect or breach within 60 days from the date NC Capital was notified of such
missing document, defect or breach, and if NC Capital does not deliver such
missing document or cure such defect or breach in all material respects during
such period, the Trustee shall notify the Trust Administrator and the Trust
Administrator, pursuant to Section 2.07, shall enforce the obligations of NC
Capital under the Mortgage Loan Purchase Agreement to repurchase such Mortgage
Loan from REMIC I at the Purchase Price within 90 days after the date on which
NC Capital was notified (subject to Section 2.03(e)) of such missing document,
defect or breach, if and to the extent that NC Capital is obligated to do so
under the Mortgage Loan Purchase Agreement. The Purchase Price for the
repurchased Mortgage Loan shall be deposited in the Collection Account and the
Trustee, upon receipt of written certification from the Servicer of such
deposit, shall release to NC Capital the related Mortgage File and the Trustee
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, as NC Capital shall furnish to it and as shall be
necessary to vest in NC Capital any Mortgage Loan released pursuant hereto
neither the Trustee nor the Trust Administrator shall have any further
responsibility with regard to such Mortgage File. In lieu of repurchasing any
such Mortgage Loan as provided above, if so provided in the Mortgage Loan
Purchase Agreement, NC Capital may cause such Mortgage Loan to be removed from
REMIC I (in which case it shall become a Deleted Mortgage Loan) and substitute
one or more Qualified Substitute Mortgage Loans in the manner and subject to the
limitations set forth in Section 2.03(d). It is understood and agreed that the
obligation of NC Capital to cure or to repurchase (or to substitute for) any
Mortgage Loan as to which a document is missing, a material defect in a
constituent document exists or as to which such a breach has occurred and is
continuing and the obligation to provide indemnification as set forth in Section
12 of the Mortgage Loan Purchase Agreement shall constitute the sole remedy
respecting such omission, defect or breach available to the Trustee, the Trust
Administrator and the Certificateholders.
In addition, promptly upon the earlier of discovery by the Servicer or
receipt of notice by the Servicer of the breach of the representation or
covenant of NC Capital set forth in Section
5(b)(xiii)
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of the Mortgage Loan Purchase Agreement which materially and adversely affects
the interests of the Holders of the Class X Certificates in any Prepayment
Charge, the Servicer shall promptly notify NC Capital, the Seller, the Trust
Administrator and the Trustee of such breach. The Trust Administrator shall
enforce the obligations of NC Capital under the Mortgage Loan Purchase Agreement
to remedy such breach to the extent and in the manner set forth in the Mortgage
Loan Purchase Agreement.
(b) Within 90 days of the earlier of discovery by the Servicer
or receipt of notice by the Servicer of the breach of any representation,
warranty or covenant of the Servicer set forth in Section 2.05 which materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan or Prepayment Charge, the Servicer shall cure such breach in all material
respects.
(c) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to Section 2.03(a) must be effected
prior to the date which is two years after the Startup Day for REMIC I.
As to any Deleted Mortgage Loan for which NC Capital
substitutes a Qualified Substitute Mortgage Loan or Loans, such substitution
shall be effected by NC Capital delivering to the Trustee, for such Qualified
Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the
Assignment to the Trustee, and such other documents and agreements, with all
necessary endorsements thereon, as are required by Section 2.01, together with
an Officers' Certificate providing that each such Qualified Substitute Mortgage
Loan satisfies the definition thereof and specifying the Substitution Shortfall
Amount (as described below), if any, in connection with such substitution. The
Trustee shall acknowledge receipt for such Qualified Substitute Mortgage Loan or
Loans and, within ten Business Days thereafter, review such documents as
specified in Section 2.02 and deliver to the Depositor, the Servicer and the
Trust Administrator, with respect to such Qualified Substitute Mortgage Loan or
Loans, a certification substantially in the form attached hereto as Exhibit C-1,
with any applicable exceptions noted thereon. Within one year of the date of
substitution, the Trustee shall deliver to the Depositor, the Servicer and the
Trust Administrator a certification substantially in the form of Exhibit C-2
hereto with respect to such Qualified Substitute Mortgage Loan or Loans, with
any applicable exceptions noted thereon. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution are not part of
REMIC I and will be retained by NC Capital. For the month of substitution,
distributions to Certificateholders will reflect the Monthly Payment due on such
Deleted Mortgage Loan on or before the Due Date in the month of substitution,
and NC Capital shall thereafter be entitled to retain all amounts subsequently
received in respect of such Deleted Mortgage Loan. The Depositor shall give or
cause to be given written notice to the Certificateholders that such
substitution has taken place, shall amend the Mortgage Loan Schedule to reflect
the removal of such Deleted Mortgage Loan from the terms of this Agreement and
the substitution of the Qualified Substitute Mortgage Loan or Loans and shall
deliver a copy of such amended Mortgage Loan Schedule to the Trustee and the
Trust Administrator. Upon such substitution, such Qualified Substitute Mortgage
Loan or Loans shall constitute part of the Mortgage Pool and shall be subject in
all respects to the terms of this Agreement and the Mortgage Loan Purchase
Agreement, including all applicable representations and warranties thereof
included in the Mortgage Loan Purchase Agreement.
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For any month in which NC Capital substitutes one or more
Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Servicer will determine the amount (the "Substitution Shortfall Amount"), if
any, by which the aggregate Purchase Price of all such Deleted Mortgage Loans
exceeds the aggregate of, as to each such Qualified Substitute Mortgage Loan,
the Scheduled Principal Balance thereof as of the date of substitution, together
with one month's interest on such Scheduled Principal Balance at the applicable
Net Mortgage Rate, plus all outstanding P&I Advances and Servicing Advances
(including Nonrecoverable P&I Advances and Nonrecoverable Servicing Advances)
related thereto. On the date of such substitution, NC Capital will deliver or
cause to be delivered to the Servicer for deposit in the Collection Account an
amount equal to the Substitution Shortfall Amount, if any, and the Trustee, upon
receipt of the related Qualified Substitute Mortgage Loan or Loans and
certification by the Servicer of such deposit, shall release to NC Capital the
related Mortgage File or Files and the Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as NC
Capital shall deliver to it and as shall be necessary to vest therein any
Deleted Mortgage Loan released pursuant hereto.
In addition, NC Capital shall obtain at its own expense and
deliver to the Trust Administrator and the Trustee an Opinion of Counsel to the
effect that such substitution will not cause (a) any federal tax to be imposed
on any Trust REMIC, including without limitation, any federal tax imposed on
"prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code, or
(b) any Trust REMIC to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
(e) Upon discovery by the Depositor, NC Capital, the Seller,
the Servicer, the Trustee or the Trust Administrator that any Mortgage Loan does
not constitute a "qualified mortgage" within the meaning of Section 860G(a)(3)
of the Code, the party discovering such fact shall within two Business Days give
written notice thereof to the other parties. In connection therewith, NC Capital
shall repurchase or, subject to the limitations set forth in Section 2.03(d),
substitute one or more Qualified Substitute Mortgage Loans for the affected
Mortgage Loan within 90 days of the earlier of discovery or receipt of such
notice with respect to such affected Mortgage Loan. Such repurchase or
substitution shall be made by (i) NC Capital if the affected Mortgage Loan's
status as a non-qualified mortgage is or results from a breach of any
representation, warranty or covenant made by NC Capital under the Mortgage Loan
Purchase Agreement, or (ii) the Depositor, if the affected Mortgage Loan's
status as a non-qualified mortgage is a breach of no representation or warranty.
Any such repurchase or substitution shall be made in the same manner as set
forth in Section 2.03(a). The Trustee shall reconvey to NC Capital the Mortgage
Loan to be released pursuant hereto in the same manner, and on the same terms
and conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty.
(f) With respect to a breach of the representations made
pursuant to Section 5(a)(viii) and (xiv) of the Mortgage Loan Purchase Agreement
that materially adversely affects the value of such Mortgage Loan or the
interest therein of the Certificateholders, the Seller, and not NC Capital,
shall be required to take the actions set forth in this Section 2.03.
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SECTION 2.04. [Reserved].
SECTION 2.05. Representations, Warranties and
Covenants of the Servicer.
The Servicer hereby represents, warrants and covenants to the
Trust Administrator and the Trustee, for the benefit of each of the Trustee, the
Trust Administrator, the Certificateholders and the Depositor that as of the
Closing Date or as of such date specifically provided herein:
(i) The Servicer is a limited partnership duly formed,
validly existing and in good standing as a limited partnership
under the laws of the State of Delaware and is duly authorized
and qualified to transact any and all business contemplated by
this Agreement to be conducted by the Servicer in any state in
which a Mortgaged Property is located or is otherwise not
required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business
laws of any such State, to the extent necessary to ensure its
ability to enforce each Mortgage Loan and to service the
Mortgage Loans in accordance with the terms of this Agreement;
(ii) The Servicer has the full power and authority to
conduct its business as presently conducted by it and to
execute, deliver and perform, and to enter into and
consummate, all transactions contemplated by this Agreement.
The Servicer has duly authorized the execution, delivery and
performance of this Agreement, has duly executed and delivered
this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the Depositor, the
Trust Administrator and the Trustee, constitutes a legal,
valid and binding obligation of the Servicer, enforceable
against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and by general
principles of equity;
(iii) The execution and delivery of this Agreement by the
Servicer, the servicing of the Mortgage Loans by the Servicer
hereunder, the consummation by the Servicer of any other of
the transactions herein contemplated, and the fulfillment of
or compliance with the terms hereof are in the ordinary course
of business of the Servicer and will not (A) result in a
breach of any term or provision of the limited partnership
agreement of the Servicer or (B) conflict with, result in a
breach, violation or acceleration of, or result in a default
under, the terms of any other material agreement or instrument
to which the Servicer is a party or by which it may be bound,
or any statute, order or regulation applicable to the Servicer
of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Servicer; and
the Servicer is not a party to, bound by, or in breach or
violation of any indenture or other agreement or instrument,
or subject to or in violation of any statute, order or
regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it, which
materially and adversely affects or, to the Servicer's
knowledge, would in the future materially and adversely
affect, (x) the ability of the Servicer to perform its
obligations under this Agreement or (y) the business,
operations, financial condition, properties or assets of the
Servicer taken as a whole;
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(iv) The Servicer is a HUD approved mortgagee pursuant
to Section 203 and Section 211 of the National Housing Act. No
event has occurred, including but not limited to a change in
insurance coverage, that would make the Servicer unable to
comply with HUD eligibility requirements or that would require
notification to HUD;
(v) The Servicer does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and
every covenant made by it and contained in this Agreement;
(vi) With respect to each Mortgage Loan, the Servicer,
or Sub-Servicer, if any, is, or will be within 30 days of the
Closing Date, in possession of a complete Mortgage File,
except for such documents as have been delivered to the
Trustee. To the extent the Servicer is not in possession of a
complete mortgage file within 30 days of the Closing Date, the
Servicer shall so notify the Trustee and the Trust
Administrator;
(vii) No litigation is pending against the Servicer that
would materially and adversely affect the execution, delivery
or enforceability of this Agreement or the ability of the
Servicer to service the Mortgage Loans or to perform any of
its other obligations hereunder in accordance with the terms
hereof;
(viii) There are no actions or proceedings against, or
investigations known to it of, the Servicer before any court,
administrative or other tribunal (A) that might prohibit its
entering into this Agreement, (B) seeking to prevent the
consummation of the transactions contemplated by this
Agreement or (C) that might prohibit or materially and
adversely affect the performance by the Servicer of its
obligations under, or validity or enforceability of, this
Agreement;
(ix) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Servicer of, or
compliance by the Servicer with, this Agreement or the
consummation by it of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations
or orders, if any, that have been obtained prior to the
Closing Date; and
(x) The Servicer does and will continue to accurately
report its borrower credit files for each Mortgage Loan to the
three major credit bureaus in existence as of the Closing Date
in a timely manner.
.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive delivery
of the Mortgage Files to the Trustee and shall inure to the benefit of the Trust
Administrator, the Trustee, the Depositor and the Certificateholders. Upon
discovery by any of the Depositor, the Servicer, the Trust Administrator or the
Trustee of a breach of any of the foregoing representations, warranties and
covenants which materially and adversely affects the value of any Mortgage Loan,
Prepayment Charge or the interests therein of the
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Certificateholders, the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following such discovery)
to the Trust Administrator and the Trustee. Subject to Section 7.01, unless such
breach shall not be susceptible of cure within 90 days, the obligation of the
Servicer set forth in Section 2.03(c) to cure breaches shall constitute the sole
remedy against the Servicer available to the Certificateholders, the Depositor
or the Trust Administrator and the Trustee on behalf of the Certificateholders
respecting a breach of the representations, warranties and covenants contained
in this Section 2.05. The foregoing shall not, however, limit any remedies
available to the Certificateholders, the Depositor, the Trust Administrator or
the Trustee on behalf of the Certificateholders, pursuant to the Mortgage Loan
Purchase Agreement signed by NC Capital, respecting a breach of the
representations, warranties and covenants of NC Capital contained in the
Mortgage Loan Purchase Agreement.
SECTION 2.06. Conveyance of Uncertificated
REMIC Regular Interests and
Acceptance of REMIC II and REMIC III
by the Trustee; Issuance of
Certificates.
(a) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the REMIC I Regular Interests for the benefit of the holders
of the REMIC II Certificates and the Class R-I Interest. The Trustee
acknowledges receipt of the REMIC I Regular Interests (which are uncertificated)
and declares that it holds and will hold the same in trust for the exclusive use
and benefit of the holders of the REMIC I Regular Interests and the Class R-I
Interest. The interests evidenced by the Class R-II Interest, together with the
REMIC II Certificates, constitute the entire beneficial ownership interest in
REMIC II.
(b) In exchange for the REMIC II Certificates and,
concurrently with the assignment to the Trustee thereof, pursuant to the written
request of the Depositor executed by an officer of the Depositor, the Trust
Administrator has executed, authenticated and delivered to or upon the order of
the Depositor, the Regular Certificates in authorized denominations evidencing
(together with the Class R-II Interest) the entire beneficial ownership interest
in REMIC II.
(c) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the Class X/N Interest for the benefit of the holders of the
Class X Certificates, the Class N Certificates, the Class R Certificates and the
Class R-III Certificates. The Trustee acknowledges receipt of the Class X/N
Interest (which is uncertificated) and declares that it holds and will hold the
same in trust for the exclusive use and benefit of the holders of the Class X
Certificates, the Class N Certificates, the Class R Certificates and the Class
R-III Certificates. The interests evidenced by the Class R-III Certificates,
together with the Class X Certificates, constitute the entire beneficial
ownership interest in REMIC III.
(d) Concurrently with (i) the assignment and delivery to the
Trustee of REMIC I (including the Residual Interest therein represented by the
Class R-I Interest) and the acceptance by the Trustee thereof, pursuant to
Section 2.01, Section 2.02 and Section 2.06(a), (ii) the assignment and delivery
to the Trustee of REMIC II (including the Residual Interest therein represented
by the Class R-II Interest) and the acceptance by the Trustee thereof, pursuant
to Section 2.06(b), (iv) the
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assignment and delivery to the Trustee of REMIC III (including the Residual
Interest therein represented by the Class R-III Certificates) and the acceptance
by the Trustee thereof, pursuant to Section 2.06(d) the Trust Administrator,
pursuant to the written request of the Depositor executed by an officer of the
Depositor, has executed, authenticated and delivered to or upon the order of the
Depositor, the Class R Certificates in authorized denominations evidencing the
Class R-I Interest and the Class R-II Interest and the Class R-III Certificates.
SECTION 2.07. Establishment of the Trust.
The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust to be known, for convenience, as "ACE Securities Corp., Home Equity Loan
Trust, Series 2001-NC1" and does hereby appoint U.S.
Bank National Association, as Trustee in accordance with the provisions of this
Agreement and does hereby appoint Bankers Trust Company of California, N.A., as
Trust Administrator to perform certain duties in accordance with the provisions
of this Agreement, in such capacity on behalf of and as custodian or agent for
the Trust. The Trustee does hereby authorize the Trust Administrator to take, on
behalf of the Trust and in the name of the Trustee, all actions required under
Section 2.03 to enforce repurchase obligations.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
SECTION 3.01. Servicer to Act as Servicer.
The Servicer shall service and administer the Mortgage Loans
on behalf of the Trust and in the best interests of and for the benefit of the
Certificateholders (as determined by the Servicer in its reasonable judgment) in
accordance with the terms of this Agreement and the respective Mortgage Loans
and, to the extent consistent with such terms, in the same manner in which it
services and administers similar mortgage loans for its own portfolio, giving
due consideration to customary and usual standards of practice of prudent
mortgage lenders and loan servicers administering similar mortgage loans but
without regard to:
(i) any relationship that the Servicer or any Affiliate of the
Servicer may have with the related Mortgagor;
(ii) the ownership of any Certificate by the Servicer or any
Affiliate of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or
Servicing Advances; or
(iv) the Servicer's right to receive compensation for its
services hereunder or with respect to any particular transaction.
To the extent consistent with the foregoing, the Servicer
shall also seek to maximize the timely and complete recovery of principal and
interest on the Mortgage Notes. Subject only to the above-described servicing
standards and the terms of this Agreement and of the respective Mortgage Loans,
the Servicer shall have full power and authority, to do or cause to be done any
and all things in connection with such servicing and administration which it may
deem necessary or desirable. Without limiting the generality of the foregoing,
the Servicer in its own name is hereby authorized and empowered by the Trustee
when the Servicer believes it appropriate in its best judgment, to execute and
deliver, on behalf of the Trust, the Certificateholders and the Trustee or any
of them, and upon notice to the Trustee and the Trust Administrator, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Mortgage
Loans and the Mortgaged Properties and to institute foreclosure proceedings or
obtain a deed-in-lieu of foreclosure so as to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on behalf
of the Trustee, for the benefit of the Trust and the Certificateholders. The
Servicer shall service and administer the Mortgage Loans in accordance with
applicable state and federal law and shall provide to the Mortgagors any reports
required to be provided to them thereby. The Servicer shall also comply in the
performance of this Agreement with all reasonable rules and requirements of each
insurer under any standard hazard insurance policy. Subject to Section 3.17, the
Trustee shall execute, at the written request of the Servicer, and furnish to
the Servicer any special or limited powers of attorney and other documents
necessary or appropriate to enable the Servicer to carry out its servicing and
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administrative duties hereunder and the Trustee shall not be liable for the
actions of the Servicer under such powers of attorney.
In accordance with the standards of the preceding paragraph,
the Servicer shall make or cause to be made Servicing Advances as necessary for
the purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which Servicing Advances shall be reimbursable in the first instance
from related collections from the Mortgagors pursuant to Section 3.09, and
further as provided in Section 3.11. Any cost incurred by the Servicer in
effecting the payment of taxes and assessments on a Mortgaged Property shall
not, for the purpose of calculating the Stated Principal Balance of a Mortgage
Loan or distributions to Certificateholders, be added to the unpaid principal
balance of the related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so permit.
Notwithstanding anything in this Agreement to the contrary,
the Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.03) and the Servicer shall not permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Rate, reduce or increase the principal balance (except for reductions resulting
from actual payments of principal) or change the final maturity date on such
Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in default
with respect to the Mortgage Loan or such default is, in the judgment of the
Servicer, reasonably foreseeable) or any modification, waiver or amendment of
any term of any Mortgage Loan that would both (A) effect an exchange or
reissuance of such Mortgage Loan under Section 1001 of the Code (or final,
temporary or proposed Treasury regulations promulgated thereunder) and (B) cause
any of the REMICs created hereunder to fail to qualify as a REMIC under the Code
or the imposition of any tax on "prohibited transactions" or "contributions
after the startup date" under the REMIC Provisions.
Notwithstanding anything in this Agreement to the contrary, in
the event of a Principal Prepayment in full of a Mortgage Loan, the Servicer may
not waive any Prepayment Charge or portion thereof required by the terms of the
related Mortgage Note unless (i) the Servicer determines that such waiver would
maximize recovery of Liquidation Proceeds for such Mortgage Loan, taking into
account the value of such Prepayment Charge, or (ii)(A) the enforceability
thereof is limited (1) by bankruptcy, insolvency, moratorium, receivership, or
other similar law relating to creditors' rights generally or (2) due to
acceleration in connection with a foreclosure or other involuntary payment, or
(B) the enforceability is otherwise limited or prohibited by applicable law.
In the event of a Principal Prepayment in full with respect to any Mortgage
Loan, the Servicer shall deliver to the Trust Administrator an Officers'
Certificate substantially in the form of Exhibit J no later than the third
Business Day following the immediately succeeding Determination Date with a copy
to the Class X Certificateholder.
Promptly upon the earlier of discovery by the Servicer or
receipt of notice by the Servicer of the breach of the covenant of the Servicer
set forth above which materially and adversely affects the interests of the
Holders of the Class X Certificates in any Prepayment Charge, the Servicer shall
promptly pay the amount of such waived Prepayment Charge (or such portion
thereof as had been waived), for the benefit of the holders of the Class X
Certificates, by depositing such amount into the Collection Account for
distribution in accordance with the terms of this Agreement. The foregoing shall
not, however, limit any remedies available to the Certificateholders, the
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Depositor or the Trustee on behalf of the Trust and for the benefit of the
Certificateholders, pursuant to the Mortgage Loan Purchase Agreement signed by
NC Capital, respecting a breach of the representations, warranties and covenants
of NC Capital contained in the Mortgage Loan Purchase Agreement.
With respect to each Mortgage Loan which is the subject of a
Principal Prepayment in full, which prepayment is not accompanied by the payment
of a Prepayment Charge, the Trust Administrator shall verify that such Mortgage
Loan was identified on the Mortgage Loan Schedule as not being subject to a
Prepayment Charge.
The Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Servicer
from the responsibilities or liabilities arising under this Agreement.
SECTION 3.02. Sub-Servicing Agreements Between
Servicer and Sub-Servicers.
The Servicer may arrange for the subservicing of any Mortgage
Loan by a Sub- Servicer pursuant to a Sub-Servicing Agreement; provided that
such sub-servicing arrangement and the terms of the related Sub-Servicing
Agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder.
Notwithstanding the provisions of any Sub-Servicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Servicer or a Sub-Servicer or reference to actions taken through a Servicer or
otherwise, the Servicer shall remain obligated and liable to the Depositor, the
Trust, the Trustee, the Trust Administrator and the Certificateholders for the
servicing and administration of the Mortgage Loans in accordance with the
provisions of this Agreement without diminution of such obligation or liability
by virtue of such Sub-Servicing Agreements or arrangements or by virtue of
indemnification from the Sub-Servicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and administering
the Mortgage Loans. Every Sub-Servicing Agreement entered into by the Servicer
shall contain a provision giving the successor Servicer the option to terminate
such agreement in the event a successor Servicer is appointed. All actions of
each Sub-Servicer performed pursuant to the related Sub-Servicing Agreement
shall be performed as an agent of the Servicer with the same force and effect as
if performed directly by the Servicer.
For purposes of this Agreement, the Servicer shall be deemed
to have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a Sub- Servicer regardless of whether such
payments are remitted by the Sub-Servicer to the Servicer.
SECTION 3.03. Successor Sub-Servicers.
The Servicer shall be entitled to terminate any Sub-Servicing
Agreement in accordance with the terms and conditions of such Sub-Servicing
Agreement and to either itself directly service the related Mortgage Loans or
enter into a Sub-Servicing Agreement with a successor Sub-Servicer which
qualifies under Section 3.02.
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Any Sub-Servicing Agreement shall include the provision that
such agreement may be immediately terminated by the Trust Administrator or the
Trustee (if the Trust Administrator or the Trustee is acting as Servicer)
without fee, in accordance with the terms of this Agreement, in the event that
the Servicer (or the Trust Administrator or the Trustee, if it is then acting as
Servicer) shall, for any reason, no longer be the Servicer (including
termination due to a Servicer Event of Default).
SECTION 3.04. No Contractual Relationship Between
Sub-Servicer, Trust Administrator,
Trustee or the Certificateholders.
Any Sub-Servicing Agreement and any other transactions or
services relating to the Mortgage Loans involving a Sub-Servicer shall be deemed
to be between the Sub-Servicer and the Servicer alone and the Trust
Administrator, the Trustee and the Certificateholders shall not be deemed
parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to any Sub-Servicer except as set forth in Section
3.05.
SECTION 3.05. Assumption or Termination of
Sub-Servicing Agreement by Trust
Administrator.
In connection with the assumption of the responsibilities,
duties and liabilities and of the authority, power and rights of the Servicer
hereunder by the Trust Administrator pursuant to Section 7.02 or another
successor Servicer, it is understood and agreed that the Servicer's rights and
obligations under any Sub-Servicing Agreement then in force between the Servicer
and a Sub-Servicer shall be assumed simultaneously by the Trust Administrator or
another successor Servicer without act or deed on the part of the Trust
Administrator; provided, however, that the Trust Administrator or any other
successor Servicer may terminate the Sub-Servicer.
The Servicer shall, upon the reasonable request of the Trust
Administrator, but at the expense of the Servicer, deliver to the assuming party
documents and records relating to each Sub-Servicing Agreement and an accounting
of amounts collected and held by it and otherwise use its best reasonable
efforts to effect the orderly and efficient transfer of the Sub-Servicing
Agreements to the assuming party.
SECTION 3.06. [Reserved].
SECTION 3.07. Collection of Certain Mortgage Loan
Payments.
The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement,
follow such collection procedures as it would follow with respect to mortgage
loans comparable to the Mortgage Loans and held for its own account. Consistent
with the foregoing, the Servicer may in its discretion (i) waive any late
payment charge or, if applicable, penalty interest or (ii) extend the due dates
for the Monthly Payments due on a Mortgage Note for a period of not greater than
180 days; provided that any extension pursuant to this clause shall not affect
the amortization schedule of any Mortgage Loan for purposes of any computation
hereunder. Notwithstanding the foregoing, in the event that any Mortgage Loan is
in default or, in the judgment
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of the Servicer, such default is reasonably foreseeable, the Servicer,
consistent with the standards set forth in Section 3.01 may waive, modify or
vary any term of such Mortgage Loan (including modifications that change the
Mortgage Rate, forgive the payment of principal or interest or extend the final
maturity date of such Mortgage Loan), accept payment from the related Mortgagor
of an amount less than the Stated Principal Balance in final satisfaction of
such Mortgage Loan (such payment, a "Short Pay-off"), or consent to the
postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor if in the Servicer's determination such waiver,
modification, postponement or indulgence is not materially adverse to the
interests of the Certificateholders (taking into account any estimated Realized
Loss that might result absent such action).
SECTION 3.08. [Reserved].
SECTION 3.09. Collection of Taxes, Assessments and
Similar Items; Servicing Accounts.
The Servicer shall establish and maintain one or more accounts
(the "Servicing Accounts"), into which all collections from the Mortgagors (or
related advances from Sub-Servicers) for the payment of taxes, assessments,
fire, flood, and hazard insurance premiums, and comparable items for the account
of the Mortgagors ("Escrow Payments") shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The Servicer shall deposit in the Servicing
Accounts on a daily basis and in no event later than the second Business Day
after receipt, and retain therein, all Escrow Payments collected on account of
the Mortgage Loans, for the purpose of effecting the timely payment of any such
items as required under the terms of this Agreement. Withdrawals of amounts from
a Servicing Account may be made only to (i) effect timely payment of taxes,
assessments, fire, flood, and hazard insurance premiums, and comparable items;
(ii) reimburse the Servicer out of related collections for any advances made
pursuant to Section 3.01 (with respect to taxes and assessments) and Section
3.14 (with respect to fire, flood and hazard insurance); (iii) refund to
Mortgagors any sums as may be determined to be overages; (iv) pay interest, if
required and as described below, to Mortgagors on balances in the Servicing
Account; or (v) clear and terminate the Servicing Account at the termination of
the Servicer's obligations and responsibilities in respect of the Mortgage Loans
under this Agreement in accordance with Article IX. As part of its servicing
duties, the Servicer shall pay to the Mortgagors interest on funds in Servicing
Accounts, to the extent required by law and, to the extent that interest earned
on funds in the Servicing Accounts is insufficient, to pay such interest from
its or their own funds, without any reimbursement therefor. Notwithstanding the
foregoing, the Servicer shall not be obligated to collect Escrow Payments if the
related Mortgage Loan does not require such payments but the Servicer shall
nevertheless be obligated to make Servicing Advances as provided in Section
3.01. In the event the Servicer shall deposit in the Servicing Accounts any
amount not required to be deposited therein, it may at any time withdraw such
amount from the Servicing Accounts, any provision to the contrary
notwithstanding.
SECTION 3.10. Collection Account and Distribution
Account.
(a) On behalf of the Trust Fund, the Servicer shall establish
and maintain one or more accounts (such account or accounts, the "Collection
Account"), held in trust for the benefit of
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the Trustee, the Trust and the Certificateholders. On behalf of the Trust Fund,
the Servicer shall deposit or cause to be deposited in the Collection Account on
a daily basis and in no event later than two Business Days after receipt, as and
when received or as otherwise required hereunder, the following payments and
collections received or made by it on or subsequent to the Cut-off Date:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds (other
than proceeds collected in respect of any particular REO Property and
amounts paid by the Servicer in connection with a purchase of Mortgage
Loans and REO Properties pursuant to Section 9.01);
(iv) any amounts required to be deposited pursuant to Section
3.12 in connection with any losses realized on Permitted Investments
with respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer
pursuant to the second paragraph of Section 3.14(a) in respect of any
blanket policy deductibles;
(vi) any Purchase Price or Substitution Shortfall Amount
delivered to the Servicer and all proceeds (net of amounts payable or
reimbursable to the Servicer) of Mortgage Loans purchased in accordance
with Section 9.01; and
(vii) any Prepayment Charges or amounts required to be
deposited by the Servicer in connection with a breach of its
obligations under Section 3.01 with respect to the waiver of Prepayment
Charges.
The foregoing requirements for deposit in the Collection
Accounts shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges, assumption fees or other similar fees need not be deposited by the
Servicer in the Collection Account. In the event the Servicer shall deposit in
the Collection Account any amount not required to be deposited therein, it may
at any time withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.
(b) On behalf of the Trust, the Trust Administrator, as agent
for the Trustee, shall establish and maintain one or more accounts (such account
or accounts, the "Distribution Account"), held in trust for the benefit of the
Trustee, the Trust and the Certificateholders. On behalf of the Trust, the
Servicer shall deliver to the Trust Administrator in immediately available funds
for deposit in the Distribution Account on or before 5:00 p.m. New York time (i)
on the Servicer Remittance Date, that portion of the Available Distribution
Amount (calculated without regard to the references in clause (2) of the
definition thereof to amounts that may be withdrawn from the Distribution
Account) for the related Distribution Date then on deposit in the Collection
Account and the amount
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of all Prepayment Charges collected by the Servicer in connection with the
Principal Prepayment of any of the Mortgage Loans (including the amount of any
payment by the Servicer in respect of a waived Prepayment Charge, other than as
permitted in Section 3.01) then on deposit in the Collection Account, and (ii)
on each Business Day as of the commencement of which the balance on deposit in
the Collection Account exceeds $75,000 following any withdrawals pursuant to the
next succeeding sentence, the amount of such excess, but only if the Collection
Account constitutes an Eligible Account solely pursuant to clause (ii) of the
definition of "Eligible Account." If the balance on deposit in the Collection
Account exceeds $75,000 as of the commencement of business on any Business Day
and the Collection Account constitutes an Eligible Account solely pursuant to
clause (ii) of the definition of "Eligible Account," the Servicer shall, on or
before 5:00 p.m. New York time on such Business Day, withdraw from the
Collection Account any and all amounts payable or reimbursable to the Depositor,
the Servicer, the Trustee, the Trust Administrator or NC Capital pursuant to
Section 3.11 and shall pay such amounts to the Persons entitled thereto.
(c) Funds in the Collection Account and the Distribution
Account may be invested in Permitted Investments in accordance with the
provisions set forth in Section 3.12. The Servicer shall give notice to the
Trustee and the Trust Administrator of the location of the Collection Account
maintained by it when established and prior to any change thereof. The Trust
Administrator shall give notice to the Servicer, the Trustee and the Depositor
of the location of the Distribution Account when established and prior to any
change thereof.
(d) Funds held in the Collection Account at any time may be
delivered by the Servicer in immediately available funds to the Trust
Administrator for deposit in the Distribution Account. In the event the Servicer
shall deliver to the Trust Administrator for deposit in the Distribution Account
any amount not required to be deposited therein, it may at any time request that
the Trust Administrator withdraw such amount from the Distribution Account and
remit to it any such amount, any provision herein to the contrary
notwithstanding. In no event shall the Trust Administrator incur liability as a
result of withdrawals from the Distribution Account at the direction of the
Servicer in accordance with the immediately preceding sentence. In addition, the
Servicer shall deliver to the Trust Administrator from time to time for deposit
in the Distribution Account the amounts set forth in clauses (i) through (v)
below:
(i) any P&I Advances, as required pursuant to Section 4.03;
(ii) any amounts required to be deposited pursuant to Section
3.23(d) or (f) in connection with any REO Property;
(iii) any amounts to be paid in connection with a purchase of
Mortgage Loans and REO Properties pursuant to Section 9.01;
(iv) any amounts required to be deposited pursuant to Section
3.24 in connection with any Prepayment Interest Shortfalls; and
(v) any Stayed Funds, as soon as permitted by the federal
bankruptcy court having jurisdiction in such matters.
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(e) Promptly upon receipt of any Stayed Funds, whether from
the Servicer, a trustee in bankruptcy, or federal bankruptcy court or other
source, the Trust Administrator shall notify the Servicer of such receipt and
deposit such funds in the Distribution Account, subject to withdrawal thereof as
permitted hereunder. In addition, the Servicer shall deliver to the Trust
Administrator for deposit in the Distribution Account any amounts required to be
deposited pursuant to Section 3.12 in connection with losses realized on
Permitted Investments with respect to funds held in the Collection Account.
SECTION 3.11. Withdrawals from the Collection
Account and Distribution Account.
(a) The Servicer shall, from time to time, make withdrawals
from the Collection Account for any of the following purposes or as described in
Section 4.03:
(i) to remit to the Trust Administrator for deposit in the
Distribution Account the amounts required to be so remitted pursuant to Section
3.10(b) or permitted to be so remitted pursuant to the first sentence of Section
3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Servicer for
P&I Advances, but only to the extent of amounts received which represent Late
Collections (net of the related Servicing Fees) of Monthly Payments on Mortgage
Loans with respect to which such P&I Advances were made in accordance with the
provisions of Section 4.03;
(iii) subject to Section 3.16(d), to pay the Servicer any
unpaid Servicing Fees and reimburse the Servicer any unreimbursed Servicing
Advances with respect to each Mortgage Loan, but only to the extent of any
Liquidation Proceeds and Insurance Proceeds received with respect to such
Mortgage Loan;
(iv) to pay to the Servicer as servicing compensation (in
addition to the Servicing Fee) on the Servicer Remittance Date any interest or
investment income earned on funds deposited in the Collection Account;
(v) to pay to the Servicer, the Depositor or NC Capital, as
the case may be, with respect to each Mortgage Loan that has previously been
purchased or replaced pursuant to Section 2.03 or Section 3.16(c) all amounts
received thereon not included in the Purchase Price or the Substitution
Shortfall Amount;
(vi) to reimburse the Servicer for any P&I Advance or
Servicing Advance previously made which the Servicer has determined to be a
Nonrecoverable P&I Advance or a Nonrecoverable Servicing Advance in accordance
with the provisions of Section 4.03;
(vii) to reimburse the Servicer or the Depositor for expenses
incurred by or reimbursable to the Servicer or the Depositor, as the case may
be, pursuant to Section 6.03;
(viii) to reimburse the Servicer, the Trust Administrator or
the Trustee, as the case may be, for expenses reasonably incurred in respect of
the breach or defect giving rise to the
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purchase obligation under Section 2.03 or Section 2.04 of this Agreement that
were included in the Purchase Price of the Mortgage Loan, including any expenses
arising out of the enforcement of the purchase obligation;
(ix) to pay, or to reimburse the Servicer for advances in
respect of, expenses incurred in connection with any Mortgage Loan pursuant to
Section 3.16(b); and
(x) to clear and terminate the Collection Account pursuant to
Section 9.01.
The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (ii), (iii), (v), (vi), (viii) and (ix) above.
The Servicer shall provide written notification to the Trustee and the Trust
Administrator, on or prior to the next succeeding Servicer Remittance Date, upon
making any withdrawals from the Collection Account pursuant to subclauses (vi)
and (vii) above.
(b) The Trust Administrator shall, from time to time, make
withdrawals from the Distribution Account, for any of the following purposes,
without priority:
(i) to make distributions to Certificateholders in accordance
with Section 4.01;
(ii) to pay to itself and the Trustee amounts to which it is
entitled pursuant to Section 8.05;
(iii) to pay to itself any interest or investment income
earned on funds deposited in the Distribution Account pursuant
to Section 3.12(b);
(iv) to reimburse itself pursuant to Section 7.02;
(v) to pay any amounts in respect of taxes pursuant to Section
10.01(g)(iii); and
(vi) to clear and terminate the Distribution Account pursuant
to Section 9.01.
SECTION 3.12. Investment of Funds in the
Investment Accounts.
(a) The Servicer may direct, by means of written directions
(which may be standing directions), any depository institution maintaining the
Collection Account to invest the funds in the Collection Account and the Trust
Administrator may direct the investment of funds in the Distribution Account
(each, for purposes of this Section 3.12, an "Investment Account") in one or
more Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand, (i) no later than the Business Day immediately
preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if a Person other than the Trust
Administrator is the obligor thereon, and (ii) no later than the date on which
such funds are required to be withdrawn from such account pursuant to this
Agreement, if the Trust Administrator is the obligor thereon. All such Permitted
Investments shall be held to maturity, unless payable on demand. Any investment
of funds shall be made in the name of the Trust Administrator (in its
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capacity as such) or in the name of a nominee of the Trust Administrator. The
Trust Administrator shall be entitled to sole possession over each such
investment (except with respect to investment direction of funds held in the
Collection Account) and, subject to subsection (b) below, the income thereon,
and any certificate or other instrument evidencing any such investment shall be
delivered directly to the Trust Administrator or its agent, together with any
document of transfer necessary to transfer title to such investment to the Trust
Administrator or its nominee. In the event amounts on deposit in the Collection
Account are at any time invested in a Permitted Investment payable on demand,
the Trust Administrator shall at the direction of the Servicer:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the last day such Permitted
Investment may otherwise mature hereunder in an amount equal to the lesser of
(1) all amounts then payable thereunder and (2) the amount required to be
withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Trust Administrator that such
Permitted Investment would not constitute a Permitted Investment in respect of
funds thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account held by or on behalf of the Servicer or the
Trustee, shall be for the benefit of the Servicer and shall be subject to its
withdrawal in accordance with Section 3.11. The Servicer shall deposit in the
Collection Account the amount of any loss incurred in respect of any such
Permitted Investment made with funds in such account immediately upon
realization of such loss. All income and gain realized from the investment of
funds deposited in the Distribution Account shall be for the benefit of the
Trust Administrator. The Trust Administrator shall deposit in the Distribution
Account the amount of any loss incurred in respect of any such Permitted
Investment made with funds in such account immediately upon realization of such
loss.
(c) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trust Administrator may and, subject to Section 8.01
and Section 8.02(v), shall, at the written direction of the Servicer, take such
action as may be appropriate to enforce such payment or performance, including
the institution and prosecution of appropriate proceedings.
(d) In the absence of written direction to the Trust
Administrator from the Servicer, all funds on deposit in the Collection Account
shall remain uninvested.
SECTION 3.13. [Reserved].
SECTION 3.14. Maintenance of Hazard Insurance and
Errors and Omissions and Fidelity
Coverage.
(a) The terms of each Mortgage Note require the related
Mortgagor to maintain the fire, flood and hazard insurance policies. To the
extent such policies are not maintained, the
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Servicer shall cause to be maintained for each Mortgaged Property fire and
hazard insurance with extended coverage as is customary in the area where the
Mortgaged Property is located in an amount which is at least equal to the lesser
of the current principal balance of such Mortgage Loan and the amount necessary
to fully compensate for any damage or loss to the improvements which are a part
of such property on a replacement cost basis, in each case in an amount not less
than such amount as is necessary to avoid the application of any coinsurance
clause contained in the related hazard insurance policy. The Servicer shall also
cause to be maintained fire and hazard insurance on each REO Property with
extended coverage as is customary in the area where the Mortgaged Property is
located in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and (ii)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property. The Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by the Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the Collection
Account, subject to withdrawal pursuant to Section 3.11, if received in respect
of a Mortgage Loan, or in the REO Account, subject to withdrawal pursuant to
Section 3.23, if received in respect of an REO Property.
Any cost incurred by the Servicer in maintaining any such insurance shall not,
for the purpose of calculating distributions to Certificateholders, be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit. It is understood and agreed that no
earthquake or other additional insurance is to be required of any Mortgagor
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. If the Mortgaged
Property or REO Property is at any time in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, the Servicer will cause to be maintained a flood insurance policy in
respect thereof. Such flood insurance shall be in an amount equal to the lesser
of (i) the unpaid principal balance of the related Mortgage Loan and (ii) the
maximum amount of such insurance available for the related Mortgaged Property
under the national flood insurance program (assuming that the area in which such
Mortgaged Property is located is participating in such program).
In the event that the Servicer shall obtain and maintain a
blanket policy with an insurer having a General Policy Rating of A:X or better
in Best's Key Rating Guide insuring against hazard losses on all of the Mortgage
Loans, it shall conclusively be deemed to have satisfied its obligations as set
forth in the first two sentences of this Section 3.14, it being understood and
agreed that such policy may contain a deductible clause, in which case the
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with the first two
sentences of this Section 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection Account
from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Servicer agrees to prepare
and present, on behalf of itself, the Trustee, the Trust and the
Certificateholders, claims under any such blanket policy in a timely fashion in
accordance with the terms of such policy.
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(b) The Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of its respective obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of Fannie Mae or Freddie Mac if it were the purchaser of the
Mortgage Loans, unless the Servicer, has obtained a waiver of such requirements
from Fannie Mae or Freddie Mac. The Servicer shall each also maintain a fidelity
bond in the form and amount that would meet the requirements of Fannie Mae or
Freddie Mac, unless the Servicer, has obtained a waiver of such requirements
from Fannie Mae or Freddie Mac. The Servicer shall be deemed to have complied
with this provision if an Affiliate of the Servicer, has such errors and
omissions and fidelity bond coverage and, by the terms of such insurance policy
or fidelity bond, the coverage afforded thereunder extends to the Servicer. Any
such errors and omissions policy and fidelity bond shall by its terms not be
cancelable without thirty days' prior written notice to the Trustee and the
Trust Administrator.
SECTION 3.15. Enforcement of Due-on-Sale Clauses;
Assumption Agreements.
The Servicer will, to the extent it has knowledge of any
conveyance or prospective conveyance of any Mortgaged Property by any Mortgagor
(whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains or is to remain liable under the Mortgage Note and/or the
Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan
under the "due-on-sale" clause, if any, applicable thereto; provided, however,
that the Servicer shall not exercise any such rights if prohibited by law from
doing so. If the Servicer reasonably believes it is unable under applicable law
to enforce such "due-on-sale" clause, or if any of the other conditions set
forth in the proviso to the preceding sentence apply, the Servicer will enter
into an assumption and modification agreement from or with the person to whom
such property has been conveyed or is proposed to be conveyed, pursuant to which
such person becomes liable under the Mortgage Note and, to the extent permitted
by applicable state law, the Mortgagor remains liable thereon. The Servicer is
also authorized to enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note, provided that no such substitution shall be effective unless such
person satisfies the then current underwriting criteria of the Servicer for
mortgage loans similar to the Mortgage Loans. In connection with any assumption
or substitution, the Servicer shall apply such underwriting standards and follow
such practices and procedures as shall be normal and usual in its general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Servicer shall not take or enter into any assumption and
modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable hazard insurance policy. Any fee collected by
the Servicer in respect of an assumption or substitution of liability agreement
will be retained by the Servicer as additional servicing compensation. In
connection with any such assumption, no material term of the Mortgage Note
(including but not limited to the related Mortgage Rate and the amount of the
Monthly Payment) may be amended or modified, except as otherwise required
pursuant to the terms thereof. The Servicer shall notify the Trustee and the
Trust Administrator that any such substitution or assumption agreement has been
completed by forwarding to the Trust Administrator (with a copy to the Trustee)
the executed original of such substitution or assumption agreement, which
document shall be added to the related
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Mortgage File and shall, for all purposes, be considered a part of such Mortgage
File to the same extent as all other documents and instruments constituting a
part thereof.
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatever. For purposes of this Section 3.15, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
SECTION 3.16. Realization Upon Defaulted Mortgage
Loans.
(a) The Servicer shall use its best efforts, consistent with
Accepted Servicing Practices, to foreclose upon or otherwise comparably convert
the ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 3.07. The Servicer shall
be responsible for all costs and expenses incurred by it in any such
proceedings; provided, however, that such costs and expenses will be recoverable
as Servicing Advances by the Servicer as contemplated in Sections 3.11 and 3.23.
The foregoing is subject to the provision that, in any case in which a Mortgaged
Property shall have suffered damage from an Uninsured Cause, the Servicer shall
not be required to expend its own funds toward the restoration of such property
unless it shall determine in its discretion that such restoration will increase
the proceeds of liquidation of the related Mortgage Loan after reimbursement to
itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section
3.16 or any other provision of this Agreement, with respect to any Mortgage Loan
as to which the Servicer has received actual notice of, or has actual knowledge
of, the presence of any toxic or hazardous substance on the related Mortgaged
Property, the Servicer shall not, on behalf of the Trust, either (i) obtain
title to such Mortgaged Property as a result of or in lieu of foreclosure or
otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property, if, as a result of any such action,
the Trust, the Trustee, the Trust Administrator or the Certificateholders would
be considered to hold title to, to be a "mortgagee-in-possession" of, or to be
an "owner" or "operator" of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless the Servicer has also
previously determined, based on its reasonable judgment and a prudent report
prepared by a Person who regularly conducts environmental audits using customary
industry standards, that:
(1) such Mortgaged Property is in compliance with
applicable environmental laws or, if not, that it would be in the best economic
interest of the Trust Fund to take such actions as are necessary to bring the
Mortgaged Property into compliance therewith; and
(2) there are no circumstances present at such
Mortgaged Property relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes or petroleum-based materials
for which investigation, testing, monitoring, containment,
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clean-up or remediation could be required under any federal, state or local law
or regulation, or that if any such materials are present for which such action
could be required, that it would be in the best economic interest of the Trust
Fund to take such actions with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by
this Section 3.16 shall be advanced by the Servicer, subject to the Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.11(a)(ix), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received in
respect of the affected Mortgage Loan or other Mortgage Loans.
If the Servicer determines, as described above, that it is in
the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Servicer shall take such action as it deems to be in the best economic
interest of the Trust Fund. The cost of any such compliance, containment,
cleanup or remediation shall be advanced by the Servicer, subject to the
Servicer's right to be reimbursed therefor from the Collection Account as
provided in Sections 3.11(a)(iii) or 3.11(a)(ix), such right of reimbursement
being prior to the rights of Certificateholders to receive any amount in the
Collection Account received in respect of the affected Mortgage Loan or other
Mortgage Loans.
(c) The Servicer shall have the right to purchase from REMIC I
any defaulted Mortgage Loan that is 90 days or more delinquent, which the
Servicer determines in good faith will otherwise become subject to foreclosure
proceedings (evidence of such determination to be delivered in writing to the
Trust Administrator and the Trustee, in form and substance satisfactory to the
Servicer, the Trust Administrator and the Trustee prior to purchase), at a price
equal to the Purchase Price. The Purchase Price for any Mortgage Loan purchased
hereunder shall be deposited in the Collection Account, and the Trust
Administrator, upon receipt of written certification from the Servicer of such
deposit, shall release or cause to be released to the Servicer the related
Mortgage File and the Trustee shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as the Servicer shall
furnish and as shall be necessary to vest in the Servicer title to any Mortgage
Loan released pursuant hereto.
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
Servicer for any related unreimbursed Servicing Advances and P&I Advances,
pursuant to Section 3.11(a)(ii) or (a)(iii); second, to accrued and unpaid
interest on the Mortgage Loan, to the date of the Final Recovery Determination,
or to the Due Date prior to the Distribution Date on which such amounts are to
be distributed if not in connection with a Final Recovery Determination; and
third, as a recovery of principal of the Mortgage Loan. If the amount of the
recovery so allocated to interest is less than the full amount of accrued and
unpaid interest due on such Mortgage Loan, the amount of such recovery will be
allocated by the Servicer as follows: first, concurrently and on a pro rata
basis to unpaid Servicing Fees; and second, to the balance of the
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interest then due and owing. The portion of the recovery so allocated to unpaid
Servicing Fees shall be reimbursed to the Servicer pursuant to Section
3.11(a)(iii). The portion of the recovery allocated to interest (net of unpaid
Servicing Fees) and the portion of the recovery allocated to principal of the
Mortgage Loan shall be applied as follows: first, to reimburse the Servicer for
any related unreimbursed P&I Advances in accordance with Section 3.11(a)(ii) and
any other amounts reimbursable to the Servicer pursuant to Section 3.11, and
second, as part of the amounts to be transferred to the Distribution Account in
accordance with Section 3.10(b).
SECTION 3.17. Trustee to Cooperate; Release of
Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt
by the Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Servicer will notify the Trust
Administrator and the Trustee by a certification in the form of Exhibit E-2
(which certification shall include a statement to the effect that all amounts
received or to be received in connection with such payment which are required to
be deposited in the Collection Account pursuant to Section 3.10 have been or
will be so deposited) of a Servicing Officer and shall request delivery to it of
the Mortgage File. Upon receipt of such certification and request, the Trustee
shall promptly release the related Mortgage File to the Servicer. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account or the Distribution
Account.
From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee shall, upon
request of the Servicer and delivery to the Trustee of a Request for Release in
the form of Exhibit E-l, release the related Mortgage File to the Servicer, and
the Trustee or the Servicer as attorney-in-fact of the Trustee shall, at the
direction of the Servicer, execute such documents as shall be necessary to the
prosecution of any such proceedings. Such Request for Release shall obligate the
Servicer to return each and every document previously requested from the
Mortgage File to the Trustee when the need therefor by the Servicer no longer
exists, unless the Mortgage Loan has been liquidated and the Liquidation
Proceeds relating to the Mortgage Loan have been deposited in the Collection
Account or the Mortgage File or such document has been delivered to an attorney,
or to a public trustee or other public official as required by law, for purposes
of initiating or pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property either judicially or non-judicially, and the Servicer
has delivered to the Trustee a certificate of a Servicing Officer of the
Servicer certifying as to the name and address of the Person to which such
Mortgage File or such document was delivered and the purpose or purposes of such
delivery. Upon receipt of a certificate of a Servicing Officer of the Servicer
stating that such Mortgage Loan was liquidated and that all amounts received or
to be received in connection with such liquidation that are required to be
deposited into the Collection Account have been so deposited, or that such
Mortgage Loan has become an REO Property, a copy of the Request for Release
shall be released by the Trustee to the Servicer.
Upon written certification of a Servicing Officer of the
Servicer, the Trustee shall execute and deliver to the Servicer, any court
pleadings, requests for trustee's sale or other documents necessary to the
foreclosure or trustee's sale in respect of a Mortgaged Property or to any legal
action brought to obtain judgment against any Mortgagor on the Mortgage Note or
Mortgage
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or to obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity. Each such certification shall include a request that such pleadings or
documents be executed by the Trustee and a statement as to the reason such
documents or pleadings are required and that the execution and delivery thereof
by the Trustee will not invalidate or otherwise affect the lien of the Mortgage,
except for the termination of such a lien upon completion of the foreclosure or
trustee's sale. So long as no Servicing Termination Event shall have occurred
and be continuing, the Servicer shall have the right to execute any and all such
court pleadings, requests and other documents as attorney-in-fact for, and on
behalf of the Trustee.
SECTION 3.18. Servicing Compensation.
As compensation for the activities of the Servicer, hereunder,
the Servicer shall be entitled to the Servicing Fee with respect to each
Mortgage Loan payable solely from payments of interest in respect of such
Mortgage Loan, subject to Section 3.24. In addition, the Servicer shall be
entitled to recover unpaid Servicing Fees out of Insurance Proceeds or
Liquidation Proceeds to the extent permitted by Section 3.11(a)(iii) and out of
amounts derived from the operation and sale of an REO Property to the extent
permitted by Section 3.23. Except as set forth in Section 6.04 hereof, the right
to receive the Servicing Fee may not be transferred in whole or in part except
in connection with the transfer of all of the Servicer's responsibilities and
obligations under this Agreement to the extent permitted herein. In addition,
the Servicer shall be entitled to the Special Servicer Fee pursuant to Section
4.01(a)(4)(xiv), if applicable.
Additional servicing compensation in the form of assumption
fees, late payment charges and other miscellaneous fees (other than Prepayment
Charges) shall be retained by the Servicer only to the extent such fees or
charges are received by the Servicer. The Servicer shall also be entitled
pursuant to Section 3.11(a)(iv) to withdraw from the Collection Account and
pursuant to Section 3.23(b) to withdraw from any REO Account, as additional
servicing compensation, interest or other income earned on deposits therein,
subject to Section 3.12. The Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder (including
premiums for the insurance required by Section 3.14, to the extent such premiums
are not paid by the related Mortgagors) and shall not be entitled to
reimbursement therefor except as specifically provided herein.
SECTION 3.19. Reports to the Trust Administrator
and the Trustee; Collection Account
Statements.
Not later than fifteen days after each Distribution Date, the
Servicer shall forward to the Trust Administrator, the Trustee and the Depositor
a statement prepared by the institution at which the Collection Account is
maintained setting forth the status of the Collection Account as of the close of
business on such Distribution Date and showing, for the period covered by such
statement, the aggregate amount of deposits into and withdrawals from the
Collection Account of each category of deposit specified in Section 3.10(a) and
each category of withdrawal specified in Section 3.11. Copies of such statement
shall be provided by the Trust Administrator to any Certificateholder and to any
Person identified to the Trust Administrator as a prospective transferee
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of a Certificate, upon request at the expense of the requesting party, provided
such statement is delivered by the Servicer to the Trust Administrator.
SECTION 3.20. Statement as to Compliance.
The Servicer will deliver to, the Trust Administrator, the
Trustee and the Depositor not later than 120 days following the end of the
fiscal year of the Servicer, which as of the Closing Date ends on the last day
in December, an Officers' Certificate stating, as to each signatory thereof,
that (i) a review of the activities of the Servicer during the preceding year
and of performance under this Agreement has been made under such officers'
supervision and (ii) to the best of such officer's knowledge, based on such
review, the Servicer has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. Copies of any such statement shall be provided by the
Trust Administrator to any Certificateholder and to any Person identified to the
Trust Administrator as a prospective transferee of a Certificate, upon request
at the expense of the requesting party, provided such statement is delivered by
the Servicer to the Trust Administrator.
SECTION 3.21. Independent Public Accountants'
Servicing Report.
Not later than 120 days following the end of each fiscal year
of the Servicer (which, as of the Closing Date, ends on the last day of
December), the Servicer, at its expense, shall cause a nationally recognized
firm of independent certified public accountants to furnish to the Servicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Servicer which includes an assertion
that the Servicer has complied with certain minimum residential mortgage loan
servicing standards, identified in the Uniform Single Attestation Program for
Mortgage Bankers established by the Mortgage Bankers Association of America,
with respect to the servicing of residential mortgage loans during the most
recently completed fiscal year and (ii) on the basis of an examination conducted
by such firm in accordance with standards established by the American Institute
of Certified Public Accountants, such representation is fairly stated in all
material respects, subject to such exceptions and other qualifications that may
be appropriate. Immediately upon receipt of such report, the Servicer shall
furnish a copy of such report to the Trust Administrator, the Trustee and each
Rating Agency. Copies of such statement shall be provided by the Trust
Administrator to any Certificateholder upon request at the Servicer's expense,
provided that such statement is delivered by the Servicer to the Trust
Administrator.
SECTION 3.22. Access to Certain Documentation.
The Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder,
access to the documentation regarding the Mortgage Loans required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and during normal business hours at the offices of the
Servicer designated by it. In addition, access to the documentation regarding
the Mortgage Loans will be provided to any Certificateholder, the Trustee, the
Trust Administrator and to any Person identified to the Servicer,
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as a prospective transferee of a Certificate, upon reasonable request during
normal business hours at the offices of the Servicer designated by it at the
expense of the Person requesting such access.
SECTION 3.23. Title, Management and Disposition of
REO Property.
(a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, on behalf of the Trust and
for the benefit of the Certificateholders. The Servicer, on behalf of REMIC I,
shall either sell any REO Property by the close of the third calendar year
following the calendar year in which REMIC I acquires ownership of such REO
Property for purposes of Section 860(a)(8) of the Code or request from the
Internal Revenue Service, no later than 60 days before the day on which the
three-year grace period would otherwise expire an extension of the three-year
grace period, unless the Servicer had delivered to the Trust Administrator and
the Trustee an Opinion of Counsel, addressed to the Trust Administrator, the
Trustee and the Depositor, to the effect that the holding by REMIC I of such REO
Property subsequent to three years after its acquisition will not result in the
imposition on any Trust REMIC created hereunder of taxes on "prohibited
transactions" thereof, as defined in Section 860F of the Code, or cause any
Trust REMIC hereunder to fail to qualify as a REMIC under Federal law at any
time that any Certificates are outstanding. The Servicer shall manage, conserve,
protect and operate each REO Property for the Certificateholders solely for the
purpose of its prompt disposition and sale in a manner which does not cause such
REO Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by any Trust REMIC
created hereunder of any "income from non-permitted assets" within the meaning
of Section 860F(a)(2)(B) of the Code, or any "net income from foreclosure
property" which is subject to taxation under the REMIC Provisions.
(b) The Servicer shall segregate and hold all funds collected
and received in connection with the operation of any REO Property separate and
apart from its own funds and general assets and shall establish and maintain
with respect to REO Properties an account held in trust for the Trustee, on
behalf of the Trust and for the benefit of the Certificateholders (the "REO
Account"), which shall be an Eligible Account. The Servicer shall be permitted
to allow the Collection Account to serve as the REO Account, subject to separate
ledgers for each REO Property. The Servicer shall be entitled to retain or
withdraw any interest income paid on funds deposited in the REO Account.
(c) The Servicer shall have full power and authority, subject
only to the specific requirements and prohibitions of this Agreement, to do any
and all things in connection with any REO Property as are consistent with the
manner in which the Servicer manages and operates similar property owned by the
Servicer or any of its Affiliates, all on such terms and for such period as the
Servicer deems to be in the best interests of Certificateholders. In connection
therewith, the Servicer shall deposit, or cause to be deposited, on a daily
basis in the REO Account all revenues received by it with respect to an REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of such REO Property including, without limitation:
(i) all insurance premiums due and payable in respect of such
REO Property;
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(ii) all real estate taxes and assessments in respect of such
REO Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the Servicer shall advance from
its own funds such amount as is necessary for such purposes if, but only if, the
Servicer would make such advances if the Servicer owned the REO Property and if
in the Servicer's judgment, the payment of such amounts will be recoverable from
the rental or sale of the REO Property.
Subject to compliance with applicable laws and regulations as
shall at any time be in force, and notwithstanding the foregoing, the Servicer
shall not:
(i) permit the Trust Fund to enter into, renew or extend any
New Lease with respect to any REO Property, if the New Lease by its terms will
give rise to any income that does not constitute Rents from Real Property;
(ii) permit any amount to be received or accrued under any New
Lease other than amounts that will constitute Rents from Real Property;
(iii) authorize or permit any construction on any REO
Property, other than the completion of a building or other improvement thereon,
and then only if more than ten percent of the construction of such building or
other improvement was completed before default on the related Mortgage Loan
became imminent, all within the meaning of Section 856(e)(4)(B) of the Code; or
(iv) allow any Person to Directly Operate any REO Property on
any date more than 90 days after its date of acquisition by the Trust Fund;
unless, in any such case, the Servicer has obtained an Opinion of Counsel,
provided to the Servicer, the Trust Administrator and the Trustee, to the effect
that such action will not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code at
any time that it is held by REMIC I, in which case the Servicer may take such
actions as are specified in such Opinion of Counsel.
The Servicer may contract with any Independent Contractor for
the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered
to require, that the Independent Contractor pay all costs and expenses incurred
in connection with the operation and management of such REO Property, including
those listed above and remit all related revenues (net
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of such costs and expenses) to the Servicer as soon as practicable, but in no
event later than thirty days following the receipt thereof by such Independent
Contractor;
(iii) none of the provisions of this Section 3.23(c) relating
to any such contract or to actions taken through any such Independent Contractor
shall be deemed to relieve the Servicer of any of its duties and obligations to
the Trustee on behalf of the Trust and for the benefit of the Certificateholders
with respect to the operation and management of any such REO Property; and
(iv) the Servicer shall be obligated with respect thereto to
the same extent as if it alone were performing all duties and obligations in
connection with the operation and management of such REO Property.
The Servicer shall be entitled to enter into any agreement with any Independent
Contractor performing services for it related to its duties and obligations
hereunder for indemnification of the Servicer by such Independent Contractor,
and nothing in this Agreement shall be deemed to limit or modify such
indemnification. The Servicer shall be solely liable for all fees owed by it to
any such Independent Contractor, irrespective of whether the Servicer's
compensation pursuant to Section 3.18 is sufficient to pay such fees.
(d) In addition to the withdrawals permitted under Section
3.23(c), the Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself unpaid Servicing Fees in respect
of the related Mortgage Loan; and (ii) to reimburse itself or any Sub-Servicer
for unreimbursed Servicing Advances and P&I Advances made in respect of such REO
Property or the related Mortgage Loan. On the Servicer Remittance Date, the
Servicer shall withdraw from each REO Account maintained by it and deposit into
the Distribution Account in accordance with Section 3.10(d)(ii), for
distribution on the related Distribution Date in accordance with Section 4.01,
the income from the related REO Property received during the prior calendar
month, net of any withdrawals made pursuant to Section 3.23(c) or this Section
3.23(d).
(e) Subject to the time constraints set forth in Section
3.23(a), each REO Disposition shall be carried out by the Servicer at such price
and upon such terms and conditions as the Servicer shall deem necessary or
advisable, as shall be normal and usual in its Accepted Servicing Practices.
(f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Servicer as provided above, shall
be deposited in the Distribution Account in accordance with Section 3.10(d)(ii)
on the Servicer Remittance Date in the month following the receipt thereof for
distribution on the related Distribution Date in accordance with Section 4.01.
Any REO Disposition shall be for cash only (unless changes in the REMIC
Provisions made subsequent to the Startup Day allow a sale for other
consideration).
(g) The Servicer shall file information returns with respect
to the receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of any Mortgaged Property and cancellation of
indebtedness income with respect to any Mortgaged Property as required by
Sections 6050H, 6050J and 6050P of the Code, respectively. Such reports shall be
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in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 6050J and 6050P of the Code.
SECTION 3.24. Obligations of the Servicer in
Respect of Prepayment Interest
Shortfalls.
The Servicer shall deliver to the Trust Administrator for
deposit into the Distribution Account on or before 5:00 p.m. New York time on
the Servicer Remittance Date from its own funds an amount equal to the lesser of
(i) the aggregate of the Prepayment Interest Shortfalls attributable to
prepayments in full for the related Distribution Date resulting solely from
Principal Prepayments received by the Servicer during the related Collection
Period and (ii) 50% of its aggregate Servicing Fee for the most recently ended
Prepayment Period. The Servicer shall not have the right to reimbursement for
any amounts remitted to the Trust Administrator in respect of this Section 3.24.
The Servicer shall not be obligated to pay the amounts set forth in this Section
3.24 with respect to Relief Act Interest Shortfalls.
SECTION 3.25. [Reserved].
SECTION 3.26. Obligations of the Servicer in
Respect of Mortgage Rates and
Monthly Payments.
In the event that a shortfall in any collection on or
liability with respect to any Mortgage Loan results from or is attributable to
adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances
that were made by the Servicer in a manner not consistent with the terms of the
related Mortgage Note and this Agreement, the Servicer, upon discovery or
receipt of notice thereof, immediately shall deliver to the Trust Administrator
for deposit in the Distribution Account from its own funds the amount of any
such shortfall and shall indemnify and hold harmless the Trust Fund, the Trust
Administrator, the Trustee, the Depositor and any successor Servicer in respect
of any such liability. Such indemnities shall survive the termination or
discharge of this Agreement.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions.
(a)(1) On each Distribution Date, the following amounts, in
the following order of priority, shall be distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests and distributed to the holders of the
Class R-II Interest, as the case may be:
(i) to the Holders of REMIC I Regular Interest I-LT1,
REMIC I Regular Interest I-LT2, REMIC I Regular Interest
I-LT3, REMIC I Regular Interest I-LT4, REMIC I Regular
Interest I-LT5, REMIC I Regular Interest I-LT6 and REMIC I
Regular Interest I-LT7, PRO RATA, in an amount equal to (A)
the Uncertificated Interest for such Distribution Date, plus
(B) any amounts in respect thereof remaining unpaid from
previous Distribution Dates. Amounts payable as Uncertificated
Accrued Interest in respect of REMIC I Regular Interest I-LT7
shall be reduced when the REMIC I Overcollateralization Amount
is less than the REMIC I Required Overcollateralization
Amount, by the lesser of (x) the amount of such difference and
(y) the REMIC I Regular Interest I-LT7 Maximum Interest
Deferral Amount , and such amount will be payable to the
Holders of REMIC I Regular Interest I-LT2, REMIC I Regular
Interest I-LT3, REMIC I Regular Interest I-LT4, REMIC I
Regular Interest I-LT5 and REMIC I Regular Interest I-LT6 in
the same proportion as the Overcollateralization Increase
Amount is allocated to the Class A-1 Certificates, Class A-2
Certificates, Class M-1 Certificates, Class M-2 Certificates
and Class B Certificates, respectively; and
(ii) on each Distribution Date, to the Holders of REMIC
I Regular Interests, in an amount equal to the remainder of
the proceeds relating to the REMIC I Regular Interests after
the distributions made pursuant to clause (i) above, allocated
as follows (except as provided below):
(i) to the Holders of the REMIC I Regular
Interest I-LT1, 98.00% of such remainder
until the Uncertificated Balance of such
REMIC I Regular Interest is reduced to zero;
(ii) to the Holders of the REMIC I Regular
Interests I-LT2, I-LT3, I-LT4, I-LT5 and
I-LT6, 1.00% of such remainder, in the same
proportion as principal payments are
allocated to the Class A-1, Class A-2, Class
M-1, Class M-2 and Class B Certificates,
respectively;
(iii) to the Holders of the REMIC I Regular
Interest I-LT7, 1.00% of such remainder; and
(iv) any remaining amounts to the Holders of
the Class R-II Interest;
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provided, however, that 98.00% and 2.00% of any principal payments that are
attributable to an Overcollateralization Reduction Amount shall be allocated to
Holders of the REMIC I Regular Interest I-LT1 and REMIC I Regular Interest
I-LT7, respectively.
Notwithstanding the distributions on the REMIC I Regular
Interests described in this Section 4.01(a)(1), distribution of funds from the
Certificate Account shall be made only in accordance with the remaining sections
of Section 4.01.
(2) On each Distribution Date, the Trust Administrator shall
withdraw from the Distribution Account an amount equal to the Interest
Remittance Amount and make the following disbursements and transfers in the
order of priority described below, in each case to the extent of the Interest
Remittance Amount (or, in the case of clause (i) and clause (ii), to the extent
of the applicable specified portion of the Interest Remittance Amount) remaining
for such Distribution Date:
(i) the portion of the Interest Remittance Amount attributable
to the Group I Mortgage Loans will be distributed:
FIRST, to pay the Class A-1 Certificates the Senior
Interest Distribution Amount for the Class A-1
Certificates; and
SECOND, to pay the Class A-2 Certificates the Senior
Interest Distribution Amount for the Class A-2
Certificates, in each case to the extent not paid
pursuant to clause (ii) below;
(ii) the portion of the Interest Remittance Amount
attributable to the Group II Mortgage Loans will be distributed:
FIRST, to pay the Class A-2 Certificates the Senior
Interest Distribution Amount for the Class A-2
Certificates; and
SECOND, to pay the Class A-1 Certificates the Senior
Interest Distribution Amount for the Class A-1
Certificates, in each case to the extent not paid
pursuant to clause (i) above; and
(iii) the portion of the Interest Remittance Amount remaining
undistributed following the distributions pursuant to clauses (i) and
(ii) above will be distributed:
FIRST, to the Holders of the Class M-1 Certificates,
the related Interest Distribution Amount for such
Class for such Distribution Date;
SECOND, to the Holders of the Class M-2 Certificates,
the related Interest Distribution Amount for such
Class for such Distribution Date; and
THIRD, to the Holders of the Class B Certificates,
the related Interest Distribution Amount for such
Class for such Distribution Date.
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(3) On each Distribution Date, the Trust Administrator shall
withdraw from the Distribution Account an amount equal to the Group I Basic
Principal Distribution Amount and the Group II Basic Principal Distribution
Amount and distribute to the Certificateholders the following amounts, in the
following order of priority:
(i) On each Distribution Date (a) prior to the Stepdown
Date or (b) on which a Trigger Event is in effect, the Group I
Basic Principal Distribution Amount shall be distributed in
the following order of priority;
FIRST, to the Holders of the Class A-1 Certificates,
until the Certificate Principal Balance of such Class
has been reduced to zero; and
SECOND, to the Holders of the Class A-2 Certificates,
until the Certificate Principal Balance of such Class
has been reduced to zero (after taking into account
distributions of the Group II Basic Principal
Distribution Amount set forth in (ii) below).
(ii) On each Distribution Date (a) prior to the Stepdown
Date or (b) on which a Trigger Event is in effect, the Group
II Basic Principal Distribution Amount shall be distributed in
the following order of priority;
FIRST, to the Holders of the Class A-2 Certificates,
until the Certificate Principal Balance of such Class
has been reduced to zero; and
SECOND, to the Holders of the Class A-1 Certificates,
until the Certificate Principal Balance of such Class
has been reduced to zero (after taking into account
distributions of the Group I Basic Principal
Distribution Amount set forth in (i) above).
(iii) On each Distribution Date (a) prior to the Stepdown
Date or (b) on which a Trigger Event is in effect, any
remaining Group I Basic Principal Distribution Amount and
Group II Basic Principal Distribution Amount shall be
distributed in the following order of priority;
FIRST, to the Holders of the Class M-1 Certificates,
until the Certificate Principal Balance of such Class
has been reduced to zero;
SECOND, to the Holders of the Class M-2 Certificates,
until the Certificate Principal Balance of such Class
has been reduced to zero; and
THIRD, to the Holders of the Class B Certificates,
until the Certificate Principal Balance of such Class
has been reduced to zero.
(iv) On each Distribution Date (a) on or after the
Stepdown Date and (b) on which a Trigger Event is not in
effect, the Group I Basic Principal Distribution Amount shall
be distributed in the following order of priority;
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FIRST, to the Class A-1 Certificates, the lesser of
(x) the Group I Basic Principal Distribution Amount
and (y) the Group I Class A Principal Distribution
Amount, until the Certificate Principal Balance of
the Class A-1 Certificates has been reduced to zero;
and
SECOND, to the Class A-2 Certificates, the lesser of
(x) the Group II Basic Principal Distribution Amount
and (y) the Group II Class A Principal Distribution
Amount, until the Certificate Principal Balance of
the Class A-2 Certificates has been reduced to zero
(after taking into account distributions of the Group
II Basic Principal Distribution Amount set forth in
(v) below).
(v) On each Distribution Date (a) on or after the
Stepdown Date and (b) on which a Trigger Event is not in
effect, the Group II Basic Principal Distribution Amount shall
be distributed in the following order of priority;
FIRST, to the Class A-2 Certificates, the lesser of
(x) the Group II Basic Principal Distribution Amount
and (y) the Group II Class A Principal Distribution
Amount, until the Certificate Principal Balance of
the Class A-2 Certificates has been reduced to zero;
and
SECOND, to the Class A-1 Certificates, the lesser of
(x) the Group I Basic Principal Distribution Amount
and (y) the Group I Class A Principal Distribution
Amount, until the Certificate Principal Balance of
the Class A-1 Certificates has been reduced to zero
(after taking into account distributions of the Group
I Basic Principal Distribution Amount set forth in
(iv) above).
(vi) On each Distribution Date (a) on or after the
Stepdown Date and (b) on which a Trigger Event is not in
effect, any remaining Group I Basic Principal Distribution
Amount and Group II Basic Principal Distribution Amount shall
be distributed in the following order of priority;
FIRST, the lesser of (x) the excess of (i) the
Principal Distribution Amount over (ii) the amount
distributed to the Holders of the Class A
Certificates pursuant to clause first above and (y)
the Class M-1 Principal Distribution Amount shall be
distributed to the Holders of the Class M-1
Certificates, until the Certificate Principal Balance
of such Class has been reduced to zero;
SECOND, the lesser of (x) the excess of (i) the
Principal Distribution Amount over (ii) the sum of
the amounts distributed to the Holders of the Class A
Certificates pursuant to clause first above and to
the Holders of the Class
M-1
Certificates pursuant to clause second above and (y)
the Class M-2 Principal Distribution Amount shall be
distributed to the Holders of the Class M-2
Certificates, until the Certificate Principal Balance
of such Class has been reduced to zero; and
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THIRD, the lesser of (x) the excess of (i) the
Principal Distribution Amount over (ii) the sum of
the amounts distributed to the Holders of the Class A
Certificates pursuant to clause first above, to the
Holders of the Class M-1 Certificates pursuant to
clause second above and to the Holders of the Class
M-2 Certificates pursuant to clause third above and
(y) the Class B Principal Distribution Amount shall
be distributed to the Holders of the Class B
Certificates, until the Certificate Principal Balance
of such Class has been reduced to zero.
(4) On each Distribution Date, the Net Monthly Excess Cashflow
(or, in the case of clause (i) below, the Net Monthly Excess Cashflow exclusive
of any Overcollateralization Reduction Amount) shall be distributed as follows:
(i) to the Holders of the Class or Classes of
Certificates then entitled to receive distributions
in respect of principal, in an amount equal to any
Extra Principal Distribution Amount, payable to such
Holders in accordance with the priorities set forth
in (b) below;
(ii) to the Holders of the Class or Classes of
Certificates then entitled to receive distributions
in respect of principal, in an amount equal to the
Overcollateralization Increase Amount, applied to
reduce the Certificate Principal Balance of such
Certificates until the aggregate Certificate
Principal Balance of such Certificates is reduced to
zero;
(iii) to the Holders of the Class M-1 Certificates,
in an amount equal to the Interest Carry Forward
Amount allocable to such Class of Certificates;
(iv) to the Holders of the Class M-1 Certificates, in
an amount equal to the Allocated Realized Loss Amount
allocable to such Class of Certificates;
(v) to the Holders of the Class M-2 Certificates, in
an amount equal to the Interest Carry Forward Amount
allocable to such Class of Certificates;
(vi) to the Holders of the Class M-2 Certificates, in
an amount equal to the Allocated Realized Loss Amount
allocable to such Class of Certificates;
(vii) to the Holders of the Class B Certificates, in
an amount equal to the Interest Carry Forward Amount
allocable to such Class of Certificates;
(viii) to the Holders of the Class B Certificates, in
an amount equal to the Allocated Realized Loss Amount
allocable to such Class of Certificates;
(ix) to the Holders of the Class A Certificates, in
an amount equal to the aggregate of any Prepayment
Interest Shortfalls (to the extent not covered by
payments pursuant to Section 3.24) and any Relief Act
Interest Shortfall, in each case that were allocated
to such Class for such Distribution Date and for
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any prior Distribution Date, to the extent not
previously reimbursed pursuant to Section 1.02;
(x) to the Holders of the Class M-1 Certificates, in
an amount equal to the aggregate of any Prepayment
Interest Shortfalls (to the extent not covered by
payments pursuant to Section 3.24) and any Relief Act
Interest Shortfall, in each case that were allocated
to such Class for such Distribution Date and for any
prior Distribution Date, to the extent not previously
reimbursed, pursuant to Section 1.02;
(xi) to the Holders of the Class M-2 Certificates, in
an amount equal to the aggregate of any Prepayment
Interest Shortfalls (to the extent not covered by
payments pursuant to Section 3.24) and any Relief Act
Interest Shortfall, in each case that were allocated
to such Class for such Distribution Date and for any
prior Distribution Date, to the extent not previously
reimbursed pursuant to Section 1.02;
(xii) to the Holders of the Class B Certificates, in
an amount equal to the aggregate of any Prepayment
Interest Shortfalls (to the extent not covered by
payments pursuant to Section 3.24) and any Relief Act
Interest Shortfall, in each case that were allocated
to such Class for such Distribution Date and for any
prior Distribution Date, to the extent not previously
reimbursed pursuant to Section 1.02;
(xiii) to the Reserve Fund from amounts otherwise
payable to the Class X Certificates, and then from
the Reserve Fund to the Class A, Class M-1, Class M-2
and Class B Certificates, in that order, in an amount
equal to the unpaid amount of any Basis Risk
Shortfall for each such Class for such Distribution
Date and any Unpaid Basis Risk Shortfall for each
such Class for such Distribution Date;
(xiv) to pay to the Servicer the Special Servicing
Fee and any Special Servicing Fee remaining unpaid
from any previous Distribution Date;
(xv) to the Reserve Fund, an amount equal to the
Required Reserve Fund Deposit;
(xvi) to the Class N Certificates, together with any
Prepayment Charges received during the related
Prepayment Period, an amount equal to (A) one month's
interest at the Pass-Through Rate for such Class on
the Class N Payment Balance and (B) any interest
unpaid from previous Distribution Dates;
(xvii) [Reserved]
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(xviii) to the Class N Certificates, any remaining
amounts to reduce the Class N Payment Balance, until
the Class N Payment Balance has been reduced to zero;
(xix) to the Holders of the Class X Certificates, (A)
any amounts received by REMIC III in respect of the
Class X/N Interest and any Prepayment Charges
received during the related Prepayment Period (net of
amounts deposited into the Reserve Fund pursuant to
(xiii) and (xv) above and net of amounts paid to the
Class N Certificates pursuant to (xvi) and (xviii)
above) the Interest Distribution Amount and any
Overcollateralization Reduction Amount for such
Distribution Date and (B) any amounts payable from
the Reserve Fund pursuant to Sections 4.07(c) and
(d); and
(xx) to the Holders of the Class R Certificates, any
remaining amounts].
In the case of the distributions described in clauses (xiii)
and (xv) above, the Trust Administrator shall account for such distributions as
having been made first to the Class X/N Interest and then to the Class X
Certificates and then paid by the Class X Certificateholders to the Reserve
Fund. In the case of the distributions described in clauses (xvi) and (xviii)
above, the Trust Administrator shall account for such distributions as having
been made first to the Class X/N Interest and then to the Class X Certificates
and then paid by the Class X Certificateholders to the Class N Certificates.
(b)(i) On each Distribution Date (a) prior to the Stepdown
Date or (b) on which a Trigger Event is in effect, the Extra
Principal Distribution Amount shall be distributed in the
following order of priority;
FIRST, to the Holders of the Class A Certificates,
allocated between the Classes of Class A Certificates
as set forth below, until the Certificate Principal
Balance of such Class has been reduced to zero;
SECOND, to the Holders of the Class M-1 Certificates,
until the Certificate Principal Balance of such Class
has been reduced to zero;
THIRD, to the Holders of the Class M-2 Certificates,
until the Certificate Principal Balance of such Class
has been reduced to zero; and
FOURTH, to the Holders of the Class B Certificates,
until the Certificate Principal Balance of such Class
has been reduced to zero.
(ii) On each Distribution Date (a) on or after the
Stepdown Date and (b) on which a Trigger Event is not in
effect, the Extra Principal Distribution Amount shall be
distributed in the following order of priority;
FIRST, the lesser of (x) the Principal Distribution
Amount and (y) the Class A Principal Distribution
Amount shall be distributed to the Holders of the
Class
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A Certificates, allocated between the Classes of
Class A Certificates as set forth below, until the
Certificate Principal Balance of such Class has been
reduced to zero;
SECOND, the lesser of (x) the excess of (i) the
Principal Distribution Amount over (ii) the amount
distributed to the Holders of the Class A
Certificates pursuant to clause first above and (y)
the Class M-1 Principal Distribution Amount shall be
distributed to the Holders of the Class M-1
Certificates, until the Certificate Principal Balance
of such Class has been reduced to zero;
THIRD, the lesser of (x) the excess of (i) the
Principal Distribution Amount over (ii) the sum of
the amounts distributed to the Holders of the Class A
Certificates pursuant to clause first above and to
the Holders of the Class M-1 Certificates pursuant to
clause second above and (y) the Class M-2 Principal
Distribution Amount shall be distributed to the
Holders of the Class M-2 Certificates, until the
Certificate Principal Balance of such Class has been
reduced to zero; and
FOURTH, the lesser of (x) the excess of (i) the
Principal Distribution Amount over (ii) the sum of
the amounts distributed to the Holders of the Class A
Certificates pursuant to clause first above, to the
Holders of the Class M-1 Certificates pursuant to
clause second above and to the Holders of the Class
M-2 Certificates pursuant to clause third above and
(y) the Class B Principal Distribution Amount shall
be distributed to the Holders of the Class B
Certificates, until the Certificate Principal Balance
of such Class has been reduced to zero.
The Extra Principal Distribution Amount payable to the Holders
of the Class A Certificates on any Distribution Date will be allocated between
the Class A-1 Certificates and the Class A-2 Certificates on a PRO RATA basis
based on the Class A Principal Allocation Percentage for each such Class for
such Distribution Date; provided, however, that if the Certificate Principal
Balance of either Class of Class A Certificates is reduced to zero, then the
remaining amount of Extra Principal Distribution Amount distributable to the
Holders of the Class A Certificates on such Distribution Date, and the amount of
Extra principal Distribution Amount distributable to the Holders of the Class A
Certificates on all subsequent Distribution Dates, will be distributed to the
holders of the Class of Class A Certificates remaining outstanding, until the
Certificate Principal Balance of such Class of Class A Certificates remaining
outstanding has been reduced to zero.
(c) On each Distribution Date, the Trust Administrator shall
withdraw any amounts then on deposit in the Distribution Account that represent
Prepayment Charges collected by the Servicer in connection with the Principal
Prepayment of any of the Mortgage Loans (or any amount in respect of a
Prepayment Charge paid by the Servicer due to a breach by the Servicer of its
obligations not to waive Prepayment Charges except in accordance with the
standards set forth in Section 3.01 hereof) and shall distribute such amounts to
the as described above.
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(d) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date will be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 4.01(e) or
Section 9.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Trust Administrator in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Certificates having an
initial aggregate Certificate Principal Balance that is in excess of the lesser
of (i) $5,000,000 or (ii) two-thirds of the initial Certificate Principal
Balance of such Class of Certificates, or otherwise by check mailed by first
class mail to the address of such Holder appearing in the Certificate Register.
The final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the Corporate Trust Office
of the Trust Administrator or such other location specified in the notice to
Certificateholders of such final distribution.
Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate 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 Certificate Owners that it represents. None of the Trust Administrator,
the Trustee, the Depositor or the Servicer shall have any responsibility
therefor except as otherwise provided by this Agreement or applicable law.
(e) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. None of the Holders of any Class of Certificates, the Trust
Administrator, the Trustee or the Servicer shall in any way be responsible or
liable to the Holders of any other Class of Certificates in respect of amounts
properly previously distributed on the Certificates.
(f) Except as otherwise provided in Section 9.01, whenever the
Trust Administrator expects that the final distribution with respect to any
Class of Certificates will be made on the next Distribution Date, the Trust
Administrator shall, no later than three (3) days before the related
Distribution Date, mail to each Holder on such date of such Class of
Certificates a notice to the effect that:
(i) the Trust Administrator expects that the final distribution
with respect to such Class of Certificates will be made on such
Distribution Date but only upon presentation and surrender of such
Certificates at the office of the Trust Administrator therein
specified, and
(ii) no interest shall accrue on such Certificates from and after
the end of the related Interest Accrual Period.
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Any funds not distributed to any Holder or Holders of Certificates of
such Class on such Distribution Date because of the failure of such Holder or
Holders to tender their Certificates shall, on such date, be set aside and held
in trust by the Trust Administrator and credited to the account of the
appropriate non-tendering Holder or Holders. If any Certificates as to which
notice has been given pursuant to this Section 4.01(e) shall not have been
surrendered for cancellation within six months after the time specified in such
notice, the Trust Administrator shall mail a second notice to the remaining
non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto. If
within one year after the second notice all such Certificates shall not have
been surrendered for cancellation, the Trust Administrator shall, directly or
through an agent, mail a final notice to the remaining non-tendering
Certificateholders concerning surrender of their Certificates but shall continue
to hold any remaining funds for the benefit of non-tendering Certificateholders.
The costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in such trust fund.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, the Trust Administrator shall pay to the
Depositor all such amounts, and all rights of non-tendering Certificateholders
in or to such amounts shall thereupon cease. No interest shall accrue or be
payable to any Certificateholder on any amount held in trust by the Trust
Administrator as a result of such Certificateholder's failure to surrender its
Certificate(s) for final payment thereof in accordance with this Section
4.01(e). Any such amounts held in trust by the Trust Administrator shall be held
in an Eligible Account and the Trust Administrator may direct any depository
institution maintaining such account to invest the funds in one or more
Permitted Investments. All income and gain realized from the investment of funds
deposited in such accounts held in trust by the Trust Administrator shall be for
the benefit of the Trust Administrator; provided, however, that the Trust
Administrator shall deposit in such account the amount of any loss of principal
incurred in respect of any such Permitted Investment made with funds in such
accounts immediately upon the realization of such loss.
(g) Notwithstanding anything to the contrary herein, in no
event shall the Certificate Principal Balance of a Class A Certificate or a
Mezzanine Certificate be reduced more than once in respect of any particular
amount both (a) allocated to such Certificate in respect of Realized Losses
pursuant to Section 4.04 and (b) distributed to the Holder of such Certificate
in reduction of the Certificate Principal Balance thereof pursuant to this
Section 4.01 from Net Monthly Excess Cashflow and (ii) in no event shall the
Uncertificated Balance of a REMIC Regular Interest be reduced more than once in
respect of any particular amount both (a) allocated to such REMIC Regular
Interest in respect of Realized Losses pursuant to Section 4.04 and (b)
distributed on such REMIC Regular Interest in reduction of the Uncertificated
Balance thereof pursuant to this Section 4.01.
SECTION 4.02. Statements to Certificateholders.
On each Distribution Date, the Trust Administrator shall provide or
make available to each Holder of the Regular Certificates (based on information
from the Servicer), a statement as to the distributions made on such
Distribution Date setting forth:
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(i) the amount of the distribution made on such
Distribution Date to the Holders of the Certificates of each
Class allocable to principal, and the amount of the
distribution made on such Distribution Date to the Holders of
the Class X Certificates allocable to Prepayment Charges;
(ii) the amount of the distribution made on such
Distribution Date to the Holders of the Certificates of each
Class allocable to interest;
(iii) the aggregate Servicing Fee received by the
Servicer during the related Due Period and such other
customary information as the Trust Administrator deems
necessary or desirable, or which a Certificateholder
reasonably requests, to enable Certificateholders to prepare
their tax returns;
(iv) the aggregate amount of P&I Advances for such
Distribution Date;
(v) the aggregate Stated Principal Balance of the
Mortgage Loans and any REO Properties as of the close of
business on such Distribution 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, the unpaid principal balance and
the Stated Principal Balance of such Mortgage Loan as of the
date it became an REO Property;
(ix) the book value of any REO Property as of the close
of business on the last Business Day of the calendar month
preceding the Distribution Date;
(x) the aggregate amount of Principal Prepayments made
during the related Prepayment Period and the aggregate amount
of any Prepayment Charges (or payments by the Servicer in
respect of any waived Prepayment Charges) received in respect
thereof;
(xi) the aggregate amount of Realized Losses incurred
during the related Prepayment Period (or, in the case of
Bankruptcy Losses allocable to interest, during the related
Due Period), separately identifying whether such Realized
Losses
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constituted Bankruptcy Losses and the aggregate amount of
Realized Losses incurred since the Closing Date;
(xii) the aggregate amount of extraordinary Trust Fund
expenses withdrawn from the Collection Account or the
Distribution Account for such Distribution Date;
(xiii) the aggregate Certificate Principal Balance of
each Class of Certificates, after giving effect to the
distributions, and allocations of Realized Losses, made on
such Distribution Date, separately identifying any reduction
thereof due to allocations of Realized Losses;
(xiv) the Certificate Factor for each such Class of
Certificates applicable to such Distribution Date;
(xv) the Interest Distribution Amount in respect of the
Class A Certificates, the Mezzanine Certificates, the Class X
Certificates and the Class N Certificates for such
Distribution Date and the Interest Carry Forward Amount, if
any, with respect to the Class A Certificates and the
Mezzanine Certificates on such Distribution Date, and in the
case of the Class A Certificates and the Mezzanine
Certificates, separately identifying any reduction thereof due
to allocations of Realized Losses, Prepayment Interest
Shortfalls, Relief Act Interest Shortfalls and Basis Risk
Shortfalls;
(xvi) the aggregate amount of any Prepayment Interest
Shortfall for such Distribution Date, to the extent not
covered by payments by the Servicer pursuant to Section 3.24;
(xvii) the Allocated Realized Loss Amount with respect
to each Class of Mezzanine Certificates for such Distribution
Date and the aggregate unpaid Allocated Realized Loss Amount
with respect to each Class of Mezzanine Certificates for all
prior Distribution Dates;
(xviii) the aggregate amount of Relief Act Interest
Shortfalls for such Distribution Date;
(xix) the Required Overcollateralized Amount and the
Credit Enhancement Percentage for such Distribution Date;
(xx) the Overcollateralization Increase Amount, if any,
for such Distribution Date;
(xxi) the Overcollateralization Reduction Amount, if
any, for such Distribution Date;
(xxii) the Basis Risk Shortfall, if any, for such
Distribution Date;
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(xxiii) the Unpaid Basis Risk Shortfalls, if any,
outstanding after reimbursements therefor on such Distribution
Date;
(xxiv) the respective Pass-Through Rates applicable to
the Class A Certificates, the Mezzanine Certificates, the
Class X Certificates and the Class N Certificates for such
Distribution Date and the Pass-Through Rate applicable to the
Class A Certificates and the Mezzanine Certificates for the
immediately succeeding Distribution Date;
(xxv) the balance of the Reserve Fund prior to the
deposit or withdrawal of any amounts on such Distribution
Date;
(xxvi) the amount of any withdrawal from the Reserve
Fund pursuant to Section 4.01(a)(4)(xiii);
(xxvii) the balance of the Reserve Fund after all
deposits and withdrawals on such Distribution Date;
(xxviii) the Loss Severity Percentage with respect to
each Mortgage Loan; and
(xxix) the Aggregate Loss Severity Percentage.
The Trust Administrator will make such statement (and, at its
option, any additional files containing the same information in an alternative
format) available each month to Certificateholders, the Servicer, the Trustee
and the Rating Agencies via the Trust Administrator's internet website. The
Trust Administrator's internet website shall initially be located at http:\\www-
apps.gis.deutsche-bank.com/invr and assistance in using the website can be
obtained by calling the Trust Administrator's customer service desk at
1-800-735-7777. Parties that are unable to use the above distribution options
are entitled to have a paper copy mailed to them via first class mail by calling
the customer service desk and indicating such. The Trust Administrator shall
have the right to change the way such statements are distributed in order to
make such distribution more convenient and/or more accessible to the above
parties and the Trust Administrator shall provide timely and adequate
notification to all above parties regarding any such changes.
In the case of information furnished pursuant to subclauses
(i) through (iii) above, the amounts shall be expressed as a dollar amount per
Single Certificate of the relevant Class.
Within a reasonable period of time after the end of each
calendar year, the Trust Administrator shall furnish to each Person who at any
time during the calendar year was a Holder of a Regular Certificate a statement
containing the information set forth in subclauses (i) through (iii) above,
aggregated for such calendar year or applicable portion thereof during which
such person was a Certificateholder. Such obligation of the Trust Administrator
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trust Administrator pursuant to
any requirements of the Code as from time to time are in force.
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On each Distribution Date, the Trust Administrator shall make
available to the Depositor, the Trustee, to each Holder of a Residual
Certificate and to the Servicer, via its internet website, a copy of the reports
made available to the Regular Certificateholders on such Distribution Date and a
statement setting forth the amounts, if any, actually distributed with respect
to the Residual Certificates, respectively, on such Distribution Date.
Within a reasonable period of time after the end of each
calendar year, the Trust Administrator shall furnish to each Person who at any
time during the calendar year was a Holder of a Residual Certificate a statement
setting forth the amount, if any, actually distributed with respect to the
Residual Certificates, as appropriate, aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder.
The Trust Administrator shall, upon request, furnish to each
Certificateholder, during the term of this Agreement, such periodic, special, or
other reports or information, whether or not provided for herein, as shall be
reasonable with respect to the Certificateholder, or otherwise with respect to
the purposes of this Agreement, all such reports or information to be provided
at the expense of the Certificateholder in accordance with such reasonable and
explicit instructions and directions as the Certificateholder may provide. For
purposes of this Section 4.02, the Trust Administrator's duties are limited to
the extent that the Trust Administrator receives timely reports as required from
the Servicer.
On each Distribution Date the Trust Administrator shall
provide Bloomberg Financial Markets, L.P. ("Bloomberg") CUSIP level factors for
each class of Certificates as of such Distribution Date, using a format and
media mutually acceptable to the Trust Administrator and Bloomberg.
SECTION 4.03. Remittance Reports; P&I Advances.
(a) On the Business Day following each Determination Date, the
Servicer shall deliver to the Trust Administrator by telecopy (or by such other
means as the Servicer, the Trust Administrator and the Trustee may agree from
time to time) a Remittance Report with respect to the related Distribution Date.
On the same date, the Servicer shall forward to the Trust Administrator by
overnight mail a computer readable magnetic tape containing the information set
forth in such Remittance Report with respect to the related Distribution Date.
Such Remittance Report will include (i) the amount of P&I Advances to be made by
the Servicer in respect of the related Distribution Date, the aggregate amount
of P&I Advances outstanding after giving effect to such P&I Advances, and the
aggregate amount of Nonrecoverable P&I Advances in respect of such Distribution
Date and (ii) such other information with respect to the Mortgage Loans as the
Trust Administrator may reasonably require to perform the calculations necessary
to make the distributions contemplated by Section 4.01 and to prepare the
statements to Certificateholders contemplated by Section 4.02. The Trust
Administrator shall not be responsible (except with regard to any information
regarding the Prepayment Charges to the extent set forth below) to recompute,
recalculate or verify any information provided to it by the Servicer.
Notwithstanding the foregoing, in connection with any Principal Prepayment in
full on any Mortgage Loan listed on Schedule 1 hereto, the Trust Administrator
shall verify that the related Prepayment Charge was delivered to the
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Trust Administrator for deposit in the Distribution Account in the amount set
forth on such Schedule 1 or that such Prepayment Charge was waived in accordance
with the terms hereof.
(b) The amount of P&I Advances to be made by the Servicer for
any Distribution Date shall equal, subject to Section 4.03(d), the sum of (i)
the aggregate amount of Monthly Payments (with each interest portion thereof net
of the related Servicing Fee), due on the related Due Date in respect of the
Mortgage Loans, which Monthly Payments were delinquent as of the close of
business on the related Servicer Remittance Date and (ii) with respect to each
REO Property, which REO Property was acquired during or prior to the related
Prepayment Period and as to which REO Property an REO Disposition did not occur
during the related Prepayment Period, an amount equal to the excess, if any, of
the REO Imputed Interest on such REO Property for the most recently ended
calendar month, over the net income from such REO Property transferred to the
Distribution Account pursuant to Section 3.23 for distribution on such
Distribution Date.
On or before 3:00 p.m. New York time on the Servicer
Remittance Date, the Servicer shall remit in immediately available funds to the
Trust Administrator for deposit in the Distribution Account an amount equal to
the aggregate amount of P&I Advances, if any, to be made in respect of the
Mortgage Loans and REO Properties for the related Distribution Date either (i)
from its own funds or (ii) from the Collection Account, to the extent of funds
held therein for future distribution (in which case it will cause to be made an
appropriate entry in the records of the Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.03, used by the
Servicer in discharge of any such P&I Advance) or (iii) in the form of any
combination of clauses (i) and (ii) above aggregating the total amount of P&I
Advances to be made by the Servicer with respect to the Mortgage Loans and REO
Properties. Any amounts held for future distribution and so used shall be
appropriately reflected in the Servicer's records and replaced by the Servicer
by deposit in the Collection Account on or before any future Servicer Remittance
Date to the extent that the Available Distribution Amount for the related
Distribution Date (determined without regard to P&I Advances to be made on the
Servicer Remittance Date) shall be less than the total amount that would be
distributed to the Classes of Certificateholders pursuant to Section 4.01 on
such Distribution Date if such amounts held for future distributions had not
been so used to make P&I Advances. The Trust Administrator will provide notice
to the Servicer by telecopy by the close of business on the third Business Day
prior to the Distribution Date in the event that the amount remitted by the
Servicer to the Trust Administrator on such date is less than the P&I Advances
required to be made by the Servicer for the related Distribution Date.
(c) The obligation of the Servicer to make such P&I Advances
is mandatory, notwithstanding any other provision of this Agreement but subject
to (d) below, and, with respect to any Mortgage Loan or REO Property, shall
continue until a Final Recovery Determination in connection therewith or the
removal thereof from the Trust Fund pursuant to any applicable provision of this
Agreement, except as otherwise provided in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I
Advance or Servicing Advance shall be required to be made hereunder by the
Servicer if such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance, respectively.
The determination by the Servicer that it has made a Nonrecoverable P&I Advance
or a Nonrecoverable Servicing Advance or that any proposed P&I Advance or
Servicing
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Advance, if made, would constitute a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officers' Certificate of the Servicer delivered to the Depositor, the Trust
Administrator and the Trustee.
SECTION 4.04. Allocation of Realized Losses.
(a) Prior to each Determination Date, the Servicer shall
determine as to each Mortgage Loan and REO Property: (i) the total amount of
Realized Losses, if any, incurred in connection with any Final Recovery
Determinations made during the related Prepayment Period; (ii) whether and the
extent to which such Realized Losses constituted Bankruptcy Losses; and (iii)
the respective portions of such Realized Losses allocable to interest and
allocable to principal. Prior to each Determination Date, the Servicer shall
also determine as to each Mortgage Loan: (i) the total amount of Realized
Losses, if any, incurred in connection with any Deficient Valuations made during
the related Prepayment Period; and (ii) the total amount of Realized Losses, if
any, incurred in connection with Debt Service Reductions in respect of Monthly
Payments due during the related Due Period. The information described in the two
preceding sentences that is to be supplied by the Servicer shall be evidenced by
an Officers' Certificate delivered to the Trust Administrator by the Servicer
prior to the Determination Date immediately following the end of (i) in the case
of Bankruptcy Losses allocable to interest, the Due Period during which any such
Realized Loss was incurred, and (ii) in the case of all other Realized Losses,
the Prepayment Period during which any such Realized Loss was incurred.
(b) All Realized Losses on the Mortgage Loans allocated to any
REMIC I Regular Interest pursuant to Section 4.04(c) on the Mortgage Loans shall
be allocated by the Trust Administrator on each Distribution Date as follows:
first, to Net Monthly Excess Cashflow; second, to the Class X/N Interest, until
the Certificate Principal Balance thereof has been reduced to zero, third, to
the Class B Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; fourth, to the Class M-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and fifth, to
the Class M-1 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero. All Realized Losses to be allocated to the Certificate
Principal Balances of all Classes on any Distribution Date shall be so allocated
after the actual distributions to be made on such date as provided above. All
references above to the Certificate Principal Balance of any Class of
Certificates shall be to the Certificate Principal Balance of such Class
immediately prior to the relevant Distribution Date, before reduction thereof by
any Realized Losses, in each case to be allocated to such Class of Certificates,
on such Distribution Date.
Any allocation of Realized Losses to a Mezzanine Certificate
on any Distribution Date shall be made by reducing the Certificate Principal
Balance thereof by the amount so allocated; any allocation of Realized Losses to
a Class X/N Interest shall be made by reducing the amount otherwise payable in
respect thereof pursuant to Section 4.01(a)(4)(xvi). No allocations of any
Realized Losses shall be made to the Certificate Principal Balances of the Class
A Certificates.
As used herein, an allocation of a Realized Loss on a "PRO
RATA basis" among two or more specified Classes of Certificates means an
allocation on a PRO RATA basis, among the various Classes so specified, to each
such Class of Certificates on the basis of their then outstanding Certificate
Principal Balances prior to giving effect to distributions to be made on such
Distribution
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Date. All Realized Losses and all other losses allocated to a Class of
Certificates hereunder will be allocated among the Certificates of such Class in
proportion to the Percentage Interests evidenced thereby.
(c) All Realized Losses on REMIC I Regular Interest I-LT1 and
REMIC I Regular Interest I-LT2 shall be deemed to have been allocated in the
specified percentages, as follows: first, to Uncertificated Interest payable to
the REMIC I Regular Interest I-LT1 and REMIC I Regular Interest I-LT7 up to an
aggregate amount equal to the REMIC I Interest Loss Allocation Amount, 98% and
2%, respectively; second, to the Uncertificated Balances of the REMIC I Regular
Interest I-LT1 and REMIC I Regular Interest I-LT7 up to an aggregate amount
equal to the REMIC I Principal Loss Allocation Amount, 98% and 2%, respectively;
third, to the Uncertificated Balances of REMIC I Regular Interest I-LT1, REMIC I
Regular Interest I-LT6 and REMIC I Regular Interest I-LT7, 98%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest I-LT6
has been reduced to zero; fourth to the Uncertificated Balances of REMIC I
Regular Interest I-LT1, REMIC I Regular Interest I-LT5 and REMIC I Regular
Interest I-LT7, 98%, 1% and 1%, respectively, until the Uncertificated Balance
of REMIC I Regular Interest I-LT5 has been reduced to zero; fifth to the
Uncertificated Balances of REMIC I Regular Interest I-LT1, REMIC I Regular
Interest I-LT4 and REMIC I Regular Interest I-LT7, 98%, 1% and 1%, respectively,
until the Uncertificated Balance of REMIC I Regular Interest I-LT4 has been
reduced to zero.
As used herein, an allocation of a Realized Loss on a "PRO
RATA basis" among the REMIC I Regular Interests means an allocation on a PRO
RATA basis among the REMIC I Regular Interests on the basis of their then
outstanding Uncertificated Balances, in each case prior to giving effect to
distributions to be made on such Distribution Date.
SECTION 4.05. Compliance with Withholding
Requirements.
Notwithstanding any other provision of this Agreement, the
Trust Administrator shall comply with all federal withholding requirements
respecting payments to Certificateholders of interest or original issue discount
that the Trust Administrator reasonably believes are applicable under the Code.
The consent of Certificateholders shall not be required for such withholding. In
the event the Trust Administrator does withhold any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trust Administrator shall
indicate the amount withheld to such Certificateholders.
SECTION 4.06. Exchange Commission; Additional
Information.
Within 15 days after each Distribution Date, the Trust
Administrator shall file with the Commission via the Electronic Data Gathering
and Retrieval System, a Form 8-K with a copy of the statement to
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
January 30, 2002, the Trust Administrator shall file a Form 15 Suspension
Notification with respect to the Trust Fund, if applicable. Prior to March 30,
2002, the Trust Administrator shall file a Form 10-K, substantially in the form
attached hereto as Exhibit H, with respect to the Trust Fund. The Depositor
hereby grants to the Trust Administrator a limited power of attorney to execute
and file each such document on behalf of the Depositor. Such power of attorney
shall continue until the earlier of (i) receipt by the Trust Administrator from
the Depositor of written termination of such
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power of attorney and (ii) the termination of the Trust Fund. Upon request, the
Trust Administrator shall deliver to the Depositor a copy of any Form 8-K or
Form 10-K filed pursuant to this Section 4.06.
SECTION 4.07. Reserve Fund.
(a) On the Closing Date, the Trust Administrator shall
establish and maintain in its name, as agent for the Trustee, in trust for the
benefit of the holders of the Class A, Class M-1, Class M-2 and Class B
Certificates, the Reserve Fund. The Reserve Fund shall be an Eligible Account,
and funds on deposit therein shall be held separate and apart from, and shall
not be commingled with, any other moneys, including, without limitation, other
moneys of the Trustee or the Trust Administrator held pursuant to this
Agreement.
(b) On each Distribution Date, the Trust Administrator shall
transfer the Required Reserve Fund Deposit from the Distribution Account to the
Reserve Fund pursuant to Section 4.01(a)(4)(xv). The Trust Administrator shall
make withdrawals from the Reserve Fund to make distributions pursuant to
Sections 4.01(a)(4)(xiii).
(c) Funds in the Reserve Fund may be invested in Permitted
Investments. Any earnings on such amounts shall be distributed to the Class X
Certificate pursuant to Section 4.01(a)(4)(xix). The Class X Certificate shall
evidence ownership of the Reserve Fund for federal income tax purposes and the
Holder thereof shall direct the Trust Administrator, in writing, as to
investment of amounts on deposit therein. In the absence of written direction to
the Trust Administrator from the Holder of the Class X Certificate, all funds in
the Reserve Fund shall remain uninvested. The Reserve Fund shall not be an asset
of any Trust REMIC.
(d) Upon termination of the Trust Fund, any amounts remaining
in the Reserve Fund shall be distributed to the Class X Certificateholder
pursuant to Section 4.01(a)(4)(xix).
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
(a) The Certificates in the aggregate will represent the
entire beneficial ownership interest in the Mortgage Loans and all other assets
included in REMIC I.
The Certificates will be substantially in the forms annexed
hereto as Exhibits A-1 through A-9. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.
Upon original issue, the Certificates shall be executed by the
Trust Administrator on behalf or the Trustee, and authenticated and delivered by
the Trust Administrator to and upon the order of the Depositor. The Certificates
shall be executed by manual or facsimile signature on behalf of the Trust
Administrator by an authorized signatory. Certificates bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Trust Administrator shall bind the Trust Administrator, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
herein executed by the Trust Administrator by manual signature, and such
certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
(b) The Class A Certificates and the Mezzanine Certificates
shall initially be issued as one or more Certificates held by the Book-Entry
Custodian or, if appointed to hold such Certificates as provided below, the
Depository and registered in the name of the Depository or its nominee and,
except as provided below, registration of such Certificates may not be
transferred by the Trust Administrator except to another Depository that agrees
to hold such Certificates for the respective Certificate Owners with Ownership
Interests therein. The Certificate Owners shall hold their respective Ownership
Interests in and to such Certificates through the book-entry facilities of the
Depository and, except as provided below, shall not be entitled to definitive,
fully registered Certificates ("Definitive Certificates") in respect of such
Ownership Interests. All transfers by Certificate Owners of their respective
Ownership Interests in the Book-Entry Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owner. Each Depository Participant shall only
transfer the Ownership Interests in the Book-Entry Certificates of Certificate
Owners it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The Trust Administrator is
hereby initially appointed as the Book-Entry Custodian and hereby agrees to act
as such in accordance herewith and in accordance with the agreement that it has
with the Depository authorizing it to act as such. The Book-Entry Custodian may,
and, if it is no longer qualified to act as such, the Book-Entry Custodian
shall, appoint, by a written instrument delivered to the Depositor,
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the Servicer, the Trustee, and, if the Trust Administrator is not the Book-Entry
Custodian, the Trust Administrator, any other transfer agent (including the
Depository or any successor Depository) to act as Book-Entry Custodian under
such conditions as the predecessor Book-Entry Custodian and the Depository or
any successor Depository may prescribe, provided that the predecessor Book-Entry
Custodian shall not be relieved of any of its duties or responsibilities by
reason of any such appointment of other than the Depository. If the Trust
Administrator resigns or is removed in accordance with the terms hereof, the
Trustee, the successor trust administrator or, if it so elects, the Depository
shall immediately succeed to its predecessor's duties as Book-Entry Custodian.
The Depositor shall have the right to inspect, and to obtain copies of, any
Certificates held as Book-Entry Certificates by the Book-Entry Custodian.
The Trust Administrator, the Trustee, the Servicer and the
Depositor may for all purposes (including the making of payments due on the
Book-Entry Certificates) deal with the Depository as the authorized
representative of the Certificate Owners with respect to the Book-Entry
Certificates for the purposes of exercising the rights of Certificateholders
hereunder. The rights of Certificate Owners with respect to the Book-Entry
Certificates shall be limited to those established by law and agreements between
such Certificate Owners and the Depository Participants and brokerage firms
representing such Certificate Owners. Multiple requests and directions from, and
votes of, the Depository as Holder of the Book-Entry Certificates with respect
to any particular matter shall not be deemed inconsistent if they are made with
respect to different Certificate Owners. The Trust Administrator may establish a
reasonable record date in connection with solicitations of consents from or
voting by Certificateholders and shall give notice to the Depository of such
record date.
If (i)(A) the Depositor advises the Trust Administrator in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (B) the Depositor is unable to locate a
qualified successor, (ii) the Depositor at its option advises the Trust
Administrator in writing that it elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of a Servicer Event of
Default, Certificate Owners representing in the aggregate not less than 51% of
the Ownership Interests of the Book-Entry Certificates advise the Trust
Administrator through the Depository, in writing, that the continuation of a
book-entry system through the Depository is no longer in the best interests of
the Certificate Owners, the Trust Administrator shall notify all Certificate
Owners, through the Depository, of the occurrence of any such event and of the
availability of Definitive Certificates to Certificate Owners requesting the
same. Upon surrender to the Trust Administrator of the Book-Entry Certificates
by the Book-Entry Custodian or the Depository, as applicable, accompanied by
registration instructions from the Depository for registration of transfer, the
Trust Administrator shall cause the Definitive Certificates to be issued. Such
Definitive Certificates will be issued in minimum denominations of $10,000
except that any beneficial ownership that was represented by a Book-Entry
Certificate in an amount less than $10,000 immediately prior to the issuance of
a Definitive Certificate shall be issued in a minimum denomination equal to the
amount represented by such Book-Entry Certificate. None of the Depositor, the
Servicer, the Trust Administrator or the Trustee shall be liable for any delay
in the delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Trust Administrator, to the extent applicable with respect to such
Definitive
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Certificates, and the Trust Administrator shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder.
SECTION 5.02. Registration of Transfer and
Exchange of Certificates.
(a) The Trust Administrator shall cause to be kept at one of
the offices or agencies to be appointed by the Trust Administrator in accordance
with the provisions of Section 8.11, a Certificate Register for the Certificates
in which, subject to such reasonable regulations as it may prescribe, the Trust
Administrator shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided.
(b) No transfer of any Class X Certificate, Class N
Certificate or Residual Certificate shall be made unless that transfer is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and effective registration or qualification
under applicable state securities laws, or is made in a transaction that does
not require such registration or qualification. In the event that such a
transfer of a Class X Certificate, Class N Certificate or Residual Certificate
is to be made without registration or qualification (other than in connection
with the initial transfer of any such Certificate by the Depositor), the Trust
Administrator shall require receipt of: (i) if such transfer is purportedly
being made in reliance upon Rule 144A under the 1933 Act, written certifications
from the Certificateholder desiring to effect the transfer and from such
Certificateholder's prospective transferee, substantially in the form attached
hereto as Exhibit F-1; (ii) if such transfer is purportedly being made in
reliance upon Rule 501(a) under the 1933 Act, written certifications from the
Certificateholder desiring to effect the transfer and from such
Certificateholder's prospective transferee, substantially in the form attached
hereto as Exhibit F-2 and (iii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trust Administrator, the Trustee, the Servicer in
its capacity as such or any Sub-Servicer), together with copies of the written
certification(s) of the Certificateholder desiring to effect the transfer and/or
such Certificateholder's prospective transferee upon which such Opinion of
Counsel is based, if any. None of the Depositor, the Trust Administrator or the
Trustee is obligated to register or qualify any such Certificates under the 1933
Act or any other securities laws or to take any action not otherwise required
under this Agreement to permit the transfer of such Certificates without
registration or qualification. Any Certificateholder desiring to effect the
transfer of any such Certificate shall, and does hereby agree to, indemnify the
Trust Administrator, the Trustee, the Depositor and the Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
(c) No transfer of a Class X Certificate, Class N Certificate
or a Residual Certificate or any interest therein shall be made to any Plan
subject to ERISA or Section 4975 of the Code, any Person acting, directly or
indirectly, on behalf of any such Plan or any Person acquiring such Certificates
with "Plan Assets" of a Plan within the meaning of the Department of Labor
regulation promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets") unless the
Depositor, the Trust Administrator, the Trustee and the Servicer are provided
with an Opinion of Counsel which establishes to the satisfaction of the
Depositor, the Trust Administrator, the Trustee and the Servicer that the
purchase of such Certificates is permissible under applicable law, will not
constitute or result in any prohibited transaction under ERISA or Section 4975
of the Code and will not subject the
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Depositor, the Servicer, the Trust Administrator, the Trustee or the Trust Fund
to any obligation or liability (including obligations or liabilities under ERISA
or Section 4975 of the Code) in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Depositor, the Servicer,
the Trust Administrator, the Trustee or the Trust Fund. An Opinion of Counsel
will not be required in connection with the initial transfer of any such
Certificate by the Depositor to an affiliate of the Depositor (in which case,
the Depositor or any affiliate thereof shall have deemed to have represented
that such affiliate is not a Plan or a Person investing Plan Assets) and the
Trust Administrator shall be entitled to conclusively rely upon a representation
(which, upon the request of the Trust Administrator, shall be a written
representation) from the Depositor of the status of such transferee as an
affiliate of the Depositor.
(d) (i) Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions and to have irrevocably authorized the Trust Administrator
or its designee under clause (iii)(A) below to deliver payments to a Person
other than such Person and to negotiate the terms of any mandatory sale under
clause (iii)(B) below and to execute all instruments of Transfer and to do all
other things necessary in connection with any such sale. The rights of each
Person acquiring any Ownership Interest in a Residual Certificate are expressly
subject to the following provisions:
(A) Each Person holding or acquiring any
Ownership Interest in a Residual Certificate shall be
a Permitted Transferee and shall promptly notify the
Trust Administrator of any change or impending change
in its status as a Permitted Transferee.
(B) In connection with any proposed Transfer
of any Ownership Interest in a Residual Certificate,
the Trust Administrator shall require delivery to it,
and shall not register the Transfer of any Residual
Certificate until its receipt of, an affidavit and
agreement (a "Transfer Affidavit and Agreement," in
the form attached hereto as Exhibit F-3) from the
proposed Transferee, in form and substance
satisfactory to the Trust Administrator, representing
and warranting, among other things, that such
Transferee is a Permitted Transferee, that it is not
acquiring its Ownership Interest in the Residual
Certificate that is the subject of the proposed
Transfer as a nominee, trustee or agent for any
Person that is not a Permitted Transferee, that for
so long as it retains its Ownership Interest in a
Residual Certificate, it will endeavor to remain a
Permitted Transferee, and that it has reviewed the
provisions of this Section 5.02(d) and agrees to be
bound by them.
(C) Notwithstanding the delivery of a
Transfer Affidavit and Agreement by a proposed
Transferee under clause (B) above, if a Responsible
Officer of the Trust Administrator who is assigned to
this transaction has actual knowledge that the
proposed Transferee is not a Permitted Transferee, no
Transfer of an Ownership Interest in a Residual
Certificate to such proposed Transferee shall be
effected.
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(D) Each Person holding or acquiring any
Ownership Interest in a Residual Certificate shall
agree (x) to require a Transfer Affidavit and
Agreement from any other Person to whom such Person
attempts to transfer its Ownership Interest in a
Residual Certificate and (y) not to transfer its
Ownership Interest unless it provides a Transferor
Affidavit (in the form attached hereto as Exhibit
F-2) to the Trust Administrator stating that, among
other things, it has no actual knowledge that such
other Person is not a Permitted Transferee.
(E) Each Person holding or acquiring an
Ownership Interest in a Residual Certificate, by
purchasing an Ownership Interest in such Certificate,
agrees to give the Trust Administrator written notice
that it is a "pass-through interest holder" within
the meaning of temporary Treasury regulation Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring an
Ownership Interest in a Residual Certificate, if it
is, or is holding an Ownership Interest in a Residual
Certificate on behalf of, a "pass-through interest
holder."
(ii) The Trust Administrator will register the Transfer
of any Residual Certificate only if it shall have received the
Transfer Affidavit and Agreement and all of such other
documents as shall have been reasonably required by the Trust
Administrator as a condition to such registration. In
addition, no Transfer of a Residual Certificate shall be made
unless the Trust Administrator shall have received a
representation letter from the Transferee of such Certificate
to the effect that such Transferee is a Permitted Transferee.
(iii) (A) If any purported Transferee shall become a
Holder of a Residual Certificate in violation of the
provisions of this Section 5.02(d), then the last preceding
Permitted Transferee shall be restored, to the extent
permitted by law, to all rights as holder thereof retroactive
to the date of registration of such Transfer of such Residual
Certificate. The Trust Administrator shall be under no
liability to any Person for any registration of Transfer of a
Residual Certificate that is in fact not permitted by this
Section 5.02(d) or for making any payments due on such
Certificate to the holder thereof or for taking any other
action with respect to such holder under the provisions of
this Agreement.
(B) If any purported Transferee shall become
a holder of a Residual Certificate in violation of the
restrictions in this Section 5.02(d) and to the extent that
the retroactive restoration of the rights of the holder of
such Residual Certificate as described in clause (iii)(A)
above shall be invalid, illegal or unenforceable, then the
Trust Administrator shall have the right, without notice to
the holder or any prior holder of such Residual Certificate,
to sell such Residual Certificate to a purchaser selected by
the Trust Administrator on such terms as the Trust
Administrator may choose. Such purported Trust Administrator
shall promptly endorse and deliver each Residual Certificate
in accordance with the instructions of the Trust
Administrator. Such purchaser may be the Trust Administrator
itself or any Affiliate of the Trust Administrator. The
proceeds of such sale, net of the
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commissions (which may include commissions payable to the
Trust Administrator or its Affiliates), expenses and taxes
due, if any, will be remitted by the Trust Administrator to
such purported Transferee. The terms and conditions of any
sale under this clause (iii)(B) shall be determined in the
sole discretion of the Trust Administrator, and the Trust
Administrator shall not be liable to any Person having an
Ownership Interest in a Residual Certificate as a result of
its exercise of such discretion.
(iv) The Trust Administrator shall make available to the
Internal Revenue Service and those Persons specified by the
REMIC Provisions all information necessary to compute any tax
imposed (A) as a result of the Transfer of an Ownership
Interest in a Residual Certificate to any Person who is a
Disqualified Organization, including the information described
in Treasury regulations sections 1.860D-1(b)(5) and
1.860E-2(a)(5) with respect to the "excess inclusions" of such
Residual Certificate and (B) as a result of any regulated
investment company, real estate investment trust, common trust
fund, partnership, trust, estate or organization described in
Section 1381 of the Code that holds an Ownership Interest in a
Residual Certificate having as among its record holders at any
time any Person which is a Disqualified Organization.
Reasonable compensation for providing such information may be
accepted by the Trust Administrator.
(v) The provisions of this Section 5.02(d) set forth
prior to this subsection (v) may be modified, added to or
eliminated, provided that there shall have been delivered to
the Trust Administrator at the expense of the party seeking to
modify, add to or eliminate any such provision the following:
(A) written notification from each Rating
Agency to the effect that the modification, addition
to or elimination of such provisions will not cause
such Rating Agency to downgrade its then-current
ratings of any Class of Certificates; and
(B) an Opinion of Counsel, in form and
substance satisfactory to the Trust Administrator, to
the effect that such modification of, addition to or
elimination of such provisions will not cause any
Trust REMIC to cease to qualify as a REMIC and will
not cause any Trust REMIC, as the case may be, to be
subject to an entity-level tax caused by the Transfer
of any Residual Certificate to a Person that is not a
Permitted Transferee or a Person other than the
prospective transferee to be subject to a REMIC-tax
caused by the Transfer of a Residual Certificate to a
Person that is not a Permitted Transferee.
(e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the Trust
Administrator maintained for such purpose pursuant to Section 8.11, the Trustee,
or the Trust Administrator on behalf of the Trustee, shall execute, and the
Trustee or the Trust Administrator shall authenticate and deliver, in the name
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of the designated Transferee or Transferees, one or more new Certificates of the
same Class of a like aggregate Percentage Interest.
(f) At the option of the Holder thereof, any Certificate may
be exchanged for other Certificates of the same Class with authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any office or agency of the Trust Administrator
maintained for such purpose pursuant to Section 8.11. Whenever any Certificates
are so surrendered for exchange, the Trustee, or the Trust Administrator on
behalf of the Trustee, shall execute, and the Trustee or the Trust Administrator
shall authenticate and deliver, the Certificates which the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for transfer or exchange shall (if so required by the Trust
Administrator) be duly endorsed by, or be accompanied by a written instrument of
transfer in the form satisfactory to the Trust Administrator duly executed by,
the Holder thereof or his attorney duly authorized in writing.
(g) No service charge to the Certificateholders shall be made
for any transfer or exchange of Certificates, but the Trust Administrator may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
(h) All Certificates surrendered for transfer and exchange
shall be canceled and destroyed by the Trust Administrator in accordance with
its customary procedures.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the Trust
Administrator, or the Trust Administrator receives evidence to its satisfaction
of the destruction, loss or theft of any Certificate, and (ii) there is
delivered to each of the Trust Administrator and the Trustee such security or
indemnity as may be required by it to save it harmless, then, in the absence of
actual knowledge by the Trust Administrator or the Trustee that such Certificate
has been acquired by a bona fide purchaser, the Trust Administrator on behalf of
the Trustee, shall execute, authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of the same Class and of like denomination and Percentage Interest. Upon the
issuance of any new Certificate under this Section, the Trust Administrator may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee and the Trust Administrator) connected
therewith. Any replacement Certificate issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership in the applicable
REMIC created hereunder, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time.
SECTION 5.04. Persons Deemed Owners.
The Depositor, the Servicer, the Trust Administrator, the
Trustee and any agent of any of them may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 4.01 and for all other purposes
whatsoever, and none of the Depositor, the Servicer, the Trust Administrator,
the Trustee or any agent of any of them shall be affected by notice to the
contrary.
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SECTION 5.05. Certain Available Information.
On or prior to the date of the first sale of any Class X
Certificate, Class N Certificate or Residual Certificate to an Independent third
party, the Depositor shall provide to the Trust Administrator ten copies of any
private placement memorandum or other disclosure document used by the Depositor
in connection with the offer and sale of such Certificate. In addition, if any
such private placement memorandum or disclosure document is revised, amended or
supplemented at any time following the delivery thereof to the Trust
Administrator, the Depositor promptly shall inform the Trust Administrator of
such event and shall deliver to the Trust Administrator ten copies of the
private placement memorandum or disclosure document, as revised, amended or
supplemented. The Trust Administrator shall maintain at its Corporate Trust
Office and shall make available free of charge during normal business hours for
review by any Holder of a Certificate or any Person identified to the Trust
Administrator as a prospective transferee of a Certificate, originals or copies
of the following items: (i) in the case of a Holder or prospective transferee of
a Class X Certificate, Class N Certificate or Residual Certificate, the related
private placement memorandum or other disclosure document relating to such Class
of Certificates, in the form most recently provided to the Trust Administrator;
and (ii) in all cases, (A) this Agreement and any amendments hereof entered into
pursuant to Section 11.01, (B) all monthly statements required to be delivered
to Certificateholders of the relevant Class pursuant to Section 4.02 since the
Closing Date, and all other notices, reports, statements and written
communications delivered to the Certificateholders of the relevant Class
pursuant to this Agreement since the Closing Date, (C) all certifications
delivered by a Responsible Officer of the Trust Administrator since the Closing
Date pursuant to Section 10.01(h), (D) any and all Officers' Certificates
delivered to the Trust Administrator by the Servicer since the Closing Date to
evidence the Servicer's determination that any P&I Advance or Servicing Advance
was, or if made, would be a Nonrecoverable P&I Advance or Nonrecoverable
Servicing Advance, respectively, and (E) any and all Officers' Certificates
delivered to the Trust Administrator by the Servicer since the Closing Date
pursuant to Section 4.04(a). Copies and mailing of any and all of the foregoing
items will be available from the Trust Administrator upon request at the expense
of the Person requesting the same.
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ARTICLE VI
THE DEPOSITOR AND THE SERVICER
SECTION 6.01. Liability of the Depositor and the
Servicer.
The Depositor and the Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement upon them in their respective capacities as Depositor and
Servicer and undertaken hereunder by the Depositor and the Servicer herein.
SECTION 6.02. Merger or Consolidation of the
Depositor or the Servicer.
Subject to the following paragraph, the Depositor will keep in
full effect its existence, rights and franchises as a corporation under the laws
of the jurisdiction of its incorporation. Subject to the following paragraph,
the Servicer will keep in full effect its existence, rights and franchises as a
limited partnership under the laws of the jurisdiction of its formation. The
Depositor and the Servicer each will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
The Depositor or the Servicer may be merged or consolidated
with or into any Person, or transfer all or substantially all of its assets to
any Person, in which case any Person resulting from any merger or consolidation
to which the Depositor or the Servicer shall be a party, or any Person
succeeding to the business of the Depositor or the Servicer, shall be the
successor of the Depositor or the Servicer, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or surviving Person to the Servicer shall
be qualified to service mortgage loans on behalf of Fannie Mae or Freddie Mac;
and provided further that the Rating Agencies' ratings of the Class A
Certificates and the Mezzanine Certificates in effect immediately prior to such
merger or consolidation will not be qualified, reduced or withdrawn as a result
thereof (as evidenced by a letter to such effect from the Rating Agencies).
SECTION 6.03. Limitation on Liability of the
Depositor, the Servicer and Others.
None of the Depositor, the Servicer or any of the directors,
officers, employees or agents of the Depositor or the Servicer shall be under
any liability to the Trust Fund or the Certificateholders for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Servicer or any such person against any
breach of warranties, representations or covenants made herein, or against any
specific liability imposed on the Servicer pursuant hereto, or against any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Depositor, the Servicer and
any director, officer,
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employee or agent of the Depositor or the Servicer may rely in good faith on any
document of any kind which, PRIMA FACIE, is properly executed and submitted by
any Person respecting any matters arising hereunder. The Depositor, the Servicer
and any director, officer, employee or agent of the Depositor or the Servicer
shall be indemnified and held harmless by the Trust Fund against any loss,
liability or expense incurred in connection with any legal action relating to
this Agreement or the Certificates, other than any loss, liability or expense
relating to any specific Mortgage Loan or Mortgage Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) or any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. Neither the Depositor nor the Servicer shall be under any obligation
to appear in, prosecute or defend any legal action unless such action is related
to its respective duties under this Agreement and, in its opinion, does not
involve it in any expense or liability; provided, however, that each of the
Depositor and the Servicer may in its discretion undertake any such action which
it may deem necessary or desirable with respect to this Agreement and the rights
and duties of the parties hereto and the interests of the Certificateholders
hereunder. In such event, unless the Depositor or the Servicer acts without the
consent of Holders of Certificates entitled to at least 51% of the Voting
Rights, the legal expenses and costs of such action and any liability resulting
therefrom (except any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder) shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor and the Servicer shall be entitled to be reimbursed therefor from the
Collection Account as and to the extent provided in Section 3.11, any such right
of reimbursement being prior to the rights of the Certificateholders to receive
any amount in the Collection Account.
SECTION 6.04. Limitation on Resignation of the
Servicer.
The Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination pursuant to the
preceding sentence permitting the resignation of the Servicer shall be evidenced
by an Opinion of Counsel to such effect obtained at the expense of the Servicer
and delivered to the Trust Administrator. No resignation of the Servicer shall
become effective until the Trustee, the Trust Administrator or a successor
Servicer shall have assumed the Servicer's responsibilities, duties, liabilities
(other than those liabilities arising prior to the appointment of such
successor) and obligations under this Agreement.
Except as expressly provided herein, the Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract with, or authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by the Servicer hereunder. The foregoing prohibition on assignment
shall not prohibit the Servicer from designating a Subservicer as payee of any
indemnification amount payable to the Servicer hereunder; provided, however,
that as provided in Section 3.06 hereof, no Subservicer shall be a third-party
beneficiary hereunder and the parties hereto shall not be required to recognize
any Subservicer as an indemnitee under this Agreement. The Trust Administrator,
the Trustee and the Depositor hereby specifically (i) consent to the pledge and
assignment by the Servicer of all of the Servicer's right, title and interest
in, to and under this Agreement to First Union, for the benefit of
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certain lenders and (ii) provided that no Servicer Event of Default (other than
as set forth under Section 7.01(a)(viii)) exists, agree that upon delivery to
the Trust Administrator by First Union of a letter signed by the Servicer
whereunder the Servicer shall resign as Servicer under this Agreement, the Trust
Administrator shall appoint First Union or its designee as successor Servicer,
provided that at the time of such appointment, First Union or such designee
meets the requirements of a successor Servicer pursuant to Section 7.02(a)
hereof and agrees to be subject to the terms of this Agreement.
If, pursuant to any provision hereof, the duties of the Servicer are transferred
to a successor Servicer, the entire amount of the Servicing Fee and other
compensation payable to the Servicer pursuant hereto shall thereafter be payable
to such successor Servicer.
SECTION 6.05. Rights of the Depositor in Respect
of the Servicer.
The Servicer shall afford (and any Sub-Servicing Agreement
shall provide that each Sub-Servicer shall afford) the Depositor, the Trust
Administrator and the Trustee, upon reasonable notice, during normal business
hours, access to all records maintained by the Servicer (and any such
Sub-Servicer) in respect of the Servicer's rights and obligations hereunder and
access to officers of the Servicer (and those of any such Sub-Servicer)
responsible for such obligations. Upon request, the Servicer shall furnish to
the Depositor, the Trust Administrator and the Trustee its (and any such
Sub-Servicer's) most recent financial statements and such other information
relating to the Servicer's capacity to perform its obligations under this
Agreement as it possesses (and that any such Sub- Servicer possesses). To the
extent such information is not otherwise available to the public, the Depositor,
the Trust Administrator and the Trustee shall not disseminate any information
obtained pursuant to the preceding two sentences without the Servicer's written
consent, except as required pursuant to this Agreement or to the extent that it
is appropriate to do so (i) in working with legal counsel, auditors, taxing
authorities or other governmental agencies or (ii) pursuant to any law, rule,
regulation, order, judgment, writ, injunction or decree of any court or
governmental authority having jurisdiction over the Depositor, the Trust
Administrator, the Trustee or the Trust Fund, and in any case, the Depositor,
the Trust Administrator or the Trustee, as the case may be, shall use its best
efforts to assure the confidentiality of any such disseminated non-public
information. The Depositor may, but is not obligated to, enforce the obligations
of the Servicer under this Agreement and may, but is not obligated to, perform,
or cause a designee to perform, any defaulted obligation of the Servicer under
this Agreement or exercise the rights of the Servicer under this Agreement;
provided that the Servicer shall not be relieved of any of its obligations under
this Agreement by virtue of such performance by the Depositor or its designee.
The Depositor shall not have any responsibility or liability for any action or
failure to act by the Servicer and is not obligated to supervise the performance
of the Servicer under this Agreement or otherwise.
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ARTICLE VII
DEFAULT
SECTION 7.01. Servicer Events of Default.
(a) "Servicer Event of Default," wherever used herein, means
any one of the following events:
(i) any failure by the Servicer to remit to the Trust
Administrator for distribution to the Certificateholders any
payment (other than a P&I Advance required to be made from its
own funds on any Servicer Remittance Date pursuant to Section
4.03) required to be made under the terms of the Certificates
and this Agreement which continues unremedied for a period of
one Business Day after the date upon which written notice of
such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Depositor, the Trustee or
the Trust Administrator (in which case notice shall be
provided by telecopy), or to the Servicer, the Depositor, the
Trustee, the Trust Administrator and by the Holders of
Certificates entitled to at least 25% of the Voting Rights; or
(ii) any failure on the part of the Servicer duly to
observe or perform in any material respect any other of the
covenants or agreements on the part of the Servicer contained
in this Agreement, or the breach by the Servicer of any
representation and warranty contained in Section 2.05, which
continues unremedied for a period of 30 days after the earlier
of (i) the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to
the Servicer by the Depositor, the Trustee, the Trust
Administrator or to the Servicer, the Depositor, the Trustee
and the Trust Administrator by the Holders of Certificates
entitled to at least 25% of the Voting Rights and (ii) actual
knowledge of such failure by a Servicing Officer of the
Servicer; or
(iii) a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises in
an involuntary case under any present or future federal or
state bankruptcy, insolvency or similar law or the appointment
of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or
similar proceeding, or for the winding-up or liquidation of
its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged
or unstayed for a period of 90 days; or
(iv) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to it or of or relating to
all or substantially all of its property; or
(v) the Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition
to take advantage of any applicable
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insolvency or reorganization statute, make an assignment for
the benefit of its creditors, or voluntarily suspend payment
of its obligations; or
(vi) any failure by the Servicer of the Servicer
Termination Trigger; or
(vii) any failure of the Servicer to make any P&I Advance
on any Servicer Remittance Date required to be made from its
own funds pursuant to Section 4.03 which continues unremedied
until 3:00 p.m. New York time on the second Business Day
immediately following the Servicer Remittance Date; or
(viii) receipt by the Trust Administrator of a letter of
resignation signed by the Servicer and First Union, pursuant
to that certain credit agreement among the Servicer and
certain Affiliates of the Servicer as borrowers, First Union
and certain other financial institutions as lenders and First
Union as administrative agent (as amended, modified, restated,
renewed, replaced or extended from time to time).
If a Servicer Event of Default described in clauses (i) through (vi) of this
Section shall occur, then, and in each and every such case, so long as such
Servicer Event of Default shall not have been remedied, the Depositor or the
Trustee may, and at the written direction of the Holders of Certificates
entitled to at least 51% of Voting Rights, the Trustee shall, by notice in
writing to the Servicer (and to the Depositor and the Trust Administrator if
given by the Trustee or to the Trustee and the Trust Administrator if given by
the Depositor), terminate all of the rights and obligations of the Servicer in
its capacity as Servicer under this Agreement, to the extent permitted by law,
and in and to the Mortgage Loans and the proceeds thereof. If a Servicer Event
of Default described in clause (vii) hereof shall occur, the Trustee shall, by
notice in writing to the Servicer, the Trust Administrator and the Depositor,
terminate all of the rights and obligations of the Servicer in its capacity as
Servicer under this Agreement and in and to the Mortgage Loans and the proceeds
thereof. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer under this Agreement, whether with respect
to the Certificates (other than as a Holder of any Certificate) or the Mortgage
Loans or otherwise, shall pass to and be vested in the Trust Administrator
pursuant to and under this Section, and, without limitation, the Trust
Administrator is hereby authorized and empowered, as attorney-in-fact or
otherwise, to execute and deliver, on behalf of and at the expense of the
Servicer, any and all documents and other instruments and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise. The
Servicer agrees promptly (and in any event no later than ten Business Days
subsequent to such notice) to provide the Trust Administrator with all documents
and records requested by it to enable it to assume the Servicer's functions
under this Agreement, and to cooperate with the Trust Administrator and the
Trustee in effecting the termination of the Servicer's responsibilities and
rights under this Agreement, including, without limitation, the transfer within
one Business Day to the Trust Administrator for administration by it of all cash
amounts which at the time shall be or should have been credited by the Servicer
to the Collection Account held by or on behalf of the Servicer, the Distribution
Account or any REO Account or Servicing Account held by or on behalf of the
Servicer or thereafter be received with respect to the Mortgage Loans or any REO
Property serviced by the Servicer (provided, however, that the Servicer shall
continue to be entitled to receive all amounts accrued or owing to it under this
Agreement on or prior to the date
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of such termination, whether in respect of P&I Advances or otherwise, and shall
continue to be entitled to the benefits of Section 6.03, notwithstanding any
such termination, with respect to events occurring prior to such termination).
For purposes of this Section 7.01, each of the Trust Administrator and the
Trustee shall not be deemed to have knowledge of a Servicer Event of Default
unless a Responsible Officer of the Trust Administrator or the Trustee, as
applicable, assigned to and working in the Trust Administrator's or the
Trustee's, as the case may be, Corporate Trust Office has actual knowledge
thereof or unless written notice of any event which is in fact such a Servicer
Event of Default is received by the Trust Administrator or the Trustee, as
applicable, and such notice references the Certificates, the Trust Fund or this
Agreement.
SECTION 7.02. Trust Administrator or Trustee to
Act; Appointment of Successor.
(a) (1) On and after the time the Servicer receives a notice
of termination, the Trust Administrator (and in the event the Trust
Administrator fails in its obligation, the Trustee) shall be the successor in
all respects to the Servicer in its capacity as Servicer under this Agreement
and the transactions set forth or provided for herein, and all the
responsibilities, duties and liabilities relating thereto and arising thereafter
shall be assumed by the Trust Administrator or the Trustee, as applicable
(except for any representations or warranties of the Servicer under this
Agreement, the responsibilities, duties and liabilities contained in Section
2.03(c) and the obligation to deposit amounts in respect of losses pursuant to
Section 3.12) by the terms and provisions hereof including, without limitation,
the Servicer's obligations to make P&I Advances pursuant to Section 4.03;
provided, however, that if the Trust Administrator or the Trustee, as
applicable, is prohibited by law or regulation from obligating itself to make
advances regarding delinquent mortgage loans, then the Trust Administrator or
the Trustee, as applicable, shall not be obligated to make P&I Advances pursuant
to Section 4.03; and provided further, that any failure to perform such duties
or responsibilities caused by the Servicer's failure to provide information
required by Section 7.01 shall not be considered a default by the Trust
Administrator or the Trustee, as applicable, as successor to the Servicer
hereunder. As compensation therefor, the Trust Administrator or the Trustee, as
applicable, shall be entitled to the Servicing Fee and all funds relating to the
Mortgage Loans to which the Servicer would have been entitled if it had
continued to act hereunder. Notwithstanding the above and subject to Section
7.02(a)(2) below, the Trust Administrator or the Trustee, as applicable, may, if
it shall be unwilling to so act, or shall, if it is unable to so act or if it is
prohibited by law from making advances regarding delinquent mortgage loans or if
the Holders of Certificates entitled to at least 51% of the Voting Rights so
request in writing to the Trust Administrator or the Trustee, as applicable,
promptly appoint or petition a court of competent jurisdiction to appoint, an
established mortgage loan servicing institution acceptable to each Rating Agency
and having a net worth of not less than $15,000,000, as the successor to the
Servicer under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer under this Agreement.
(2) No appointment of a successor to the Servicer
under this Agreement shall be effective until the assumption by the successor of
all of the Servicer's responsibilities, duties and liabilities hereunder. In
connection with such appointment and assumption described herein, the Trust
Administrator or the Trustee, as applicable, may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall
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agree; provided, however, that no such compensation shall be in excess of that
permitted the Servicer as such hereunder. The Depositor, the Trust
Administrator, the Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
Pending appointment of a successor to the Servicer under this Agreement, the
Trust Administrator or the Trustee, as applicable, shall act in such capacity as
hereinabove provided.
(b) If the Servicer fails to remit to the Trust Administrator
for distribution to the Certificateholders any payment required to be made under
the terms of this Agreement (for purposes of this Section 7.02(b), a
"Remittance") because the Servicer is the subject of a proceeding under the
federal Bankruptcy Code and the making of such Remittance is prohibited by
Section 362 of the federal Bankruptcy Code, the Trust Administrator (and in the
event the Trust Administrator fails in its obligation, the Trustee) shall, upon
notice of such prohibition, immediately become the successor Servicer,
regardless of whether a notice of termination under Section 7.01 has been given,
and advance the amount of such Remittance by depositing such amount in the
Distribution Account on the related Distribution Date. The Trust Administrator
or the Trustee, as applicable, shall be obligated to make such advance only if
(i) such advance, in the good faith judgment of the Trust Administrator or the
Trustee, as applicable, can reasonably be expected to be ultimately recoverable
from Stayed Funds and (ii) the Trust Administrator or the Trustee, as
applicable, is not prohibited by law from making such advance or obligating
itself to do so. Upon remittance of the Stayed Funds to the Trust Administrator
or the deposit thereof in the Distribution Account by the Servicer, a trustee in
bankruptcy or a federal bankruptcy court, the Trust Administrator or the
Trustee, as the case may be, may recover the amount so advanced, without
interest, by withdrawing such amount from the Distribution Account; however,
nothing in this Agreement shall be deemed to affect the Trust Administrator's or
the Trustee's, as applicable, rights to recover from the Servicer's own funds
interest on the amount of any such advance. If the Trust Administrator or the
Trustee, as the case may be, at any time makes an advance under this Subsection
which it later determines in its good faith judgment will not be ultimately
recoverable from the Stayed Funds with respect to which such advance was made,
the Trust Administrator or the Trustee, as applicable, shall be entitled to
reimburse itself for such advance, without interest, by withdrawing from the
Distribution Account, out of amounts on deposit therein, an amount equal to the
portion of such advance attributable to the Stayed Funds. During such time as
the Trust Administrator or the Trustee, as applicable, acts as the successor
Servicer, it shall be entitled to the Servicing Fee and all funds relating to
the Mortgage Loans to which the Servicer would have been entitled as set forth
in Section 7.02(a).
(c) In the event of a Servicer Event of Default (other than as
set forth in Section 7.01(a)(viii) hereof, notwithstanding anything to the
contrary above, the Trust Administrator, the Trustee and the Depositor hereby
agree that upon delivery to the Trust Administrator by First Union of a letter
signed by the Servicer within ten Business Days of when notification of such
event shall have been provided to the Trust Administrator, whereunder the
Servicer shall resign as Servicer under this Agreement, the Trust Administrator
shall appoint First Union or its designee as successor Servicer, provided that
at the time of such appointment, First Union or such designee meets the
requirements of a successor Servicer set forth above and First Union or such
designee agrees to be subject to the terms of this Agreement.
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SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination of the Servicer pursuant to Section
7.01 above or any appointment of a successor to the Servicer pursuant to Section
7.02 above, the Trust Administrator shall give prompt written notice thereof to
Certificateholders at their respective addresses appearing in the Certificate
Register.
(b) Not later than the later of 60 days after the occurrence
of any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Servicer Event of Default or five days after a Responsible
Officer of the Trustee or the Trust Administrator becomes aware of the
occurrence of such an event, the Trustee or the Trust Administrator shall
transmit (or in the case of the Trustee, the Trustee shall cause the Trust
Administrator to transmit) by mail to all Holders of Certificates notice of each
such occurrence, unless such default or Servicer Event of Default shall have
been cured or waived.
SECTION 7.04. Waiver of Servicer Events of
Default.
The Holders representing at least 66% of the Voting Rights
evidenced by all Classes of Certificates affected by any default or Servicer
Event of Default hereunder may waive such default or Servicer Event of Default;
provided, however, that a default or Servicer Event of Default under clause (i)
or (vii) of Section 7.01 may be waived only by all of the Holders of the Regular
Certificates. Upon any such waiver of a default or Servicer Event of Default,
such default or Servicer Event of Default shall cease to exist and shall be
deemed to have been remedied for every purpose hereunder. No such waiver shall
extend to any subsequent or other default or Servicer Event of Default or impair
any right consequent thereon except to the extent expressly so waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE AND THE TRUST ADMINISTRATOR
SECTION 8.01. Duties of Trustee and the Trust
Administrator.
Each of the Trustee and the Trust Administrator, prior to the
occurrence of a Servicer Event of Default and after the curing of all Servicer
Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement.
During a Servicer Event of Default, each of the Trustee and the Trust
Administrator shall exercise such of the rights and powers vested in it by this
Agreement, 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. Any permissive right of the Trustee or the Trust
Administrator enumerated in this Agreement shall not be construed as a duty.
Each of the Trustee and the Trust Administrator, upon receipt
of all resolutions, certificates, statements, opinions, reports, documents,
orders or other instruments furnished to it, which are specifically required to
be furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform to the requirements of this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, it shall take such action as it deems appropriate to have the
instrument corrected, and if the instrument is not corrected to its
satisfaction, it will provide notice thereof to the Certificateholders.
No provision of this Agreement shall be construed to relieve
the Trustee or the Trust Administrator from liability for its own negligent
action, its own negligent failure to act or its own misconduct; provided,
however, that:
(i) Prior to the occurrence of a Servicer Event of
Default, and after the curing of all such Servicer Events of
Default which may have occurred, the duties and obligations of
each of the Trustee and the Trust Administrator shall be
determined solely by the express provisions of this Agreement,
neither the Trustee nor the Trust Administrator shall be
liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement,
no implied covenants or obligations shall be read into this
Agreement against the Trustee or the Trust Administrator and,
in the absence of bad faith on the part of the Trustee or the
Trust Administrator, as applicable, the Trustee or the Trust
Administrator, as the case may be, may conclusively rely, as
to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Trustee or the Trust Administrator, as the
case may be, that conform to the requirements of this
Agreement;
(ii) Neither the Trustee nor the Trust Administrator
shall be personally liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of
it unless it shall be proved that it was negligent in
ascertaining the pertinent facts; and
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(iii) Neither the Trustee nor the Trust Administrator
shall be personally liable with respect to any action taken,
suffered or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Certificates
entitled to at least 25% of the Voting Rights relating to the
time, method and place of conducting any proceeding for any
remedy available to it or exercising any trust or power
conferred upon it under this Agreement.
SECTION 8.02. Certain Matters Affecting the
Trustee and the Trust Administrator.
(a) Except as otherwise provided in Section 8.01:
(i) Each of the Trustee and the Trust Administrator may
request and rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officers'
Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document
reasonably believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(ii) Each of the Trustee and the Trust Administrator may
consult with counsel and any Opinion of Counsel shall be full
and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good
faith and in accordance with such Opinion of Counsel;
(iii) Each of the Trustee and the Trust Administrator
shall not be under any obligation to exercise any of the
trusts or powers vested in it by this Agreement or to
institute, conduct or defend any litigation hereunder or in
relation hereto at the request, order or direction of any of
the Certificateholders, pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered
to the Trustee or the Trust Administrator, as applicable,
reasonable security or indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby;
nothing contained herein shall, however, relieve the Trustee
or the Trust Administrator of the obligation, upon the
occurrence of a Servicer Event of Default (which has not been
cured or waived), to exercise such of the rights and powers
vested in it by this Agreement, and to 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;
(iv) Neither the Trustee nor the Trust Administrator
shall be personally liable for any action taken, suffered or
omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(v) Prior to the occurrence of a Servicer Event of
Default hereunder and after the curing of all Servicer Events
of Default which may have occurred, neither the Trustee nor
the Trust Administrator shall be bound to make any
investigation into
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the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document,
unless requested in writing to do so by the Holders of
Certificates entitled to at least 25% of the Voting Rights;
provided, however, that if the payment within a reasonable
time to the Trustee or the Trust Administrator of the costs,
expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee
or the Trust Administrator, as applicable, not reasonably
assured to the Trustee or the Trust Administrator, as
applicable, by such Certificateholders, the Trustee or the
Trust Administrator, as applicable, may require reasonable
indemnity against such expense, or liability from such
Certificateholders as a condition to taking any such action;
(vi) Each of the Trustee and the Trust Administrator may
execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or
attorneys; and
(vii) Neither the Trustee nor the Trust Administrator
shall be personally liable for any loss resulting from the
investment of funds held in the Collection Account at the
direction of the Servicer pursuant to Section 3.12, for any
loss resulting from the investment of funds held in the
Reserve Fund at the direction of the Holder of the Class X
Certificate or for any loss resulting from the redemption or
sale of any such investment as therein authorized.
(b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee or the Trust Administrator, may be
enforced by it without the possession of any of the Certificates, or the
production thereof at the trial or other proceeding relating thereto, and any
such suit, action or proceeding instituted by the Trustee or the Trust
Administrator shall be brought in its name for the benefit of all the Holders of
such Certificates, subject to the provisions of this Agreement.
SECTION 8.03. Neither the Trustee nor Trust
Administrator Liable for
Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other
than the signature of the Trustee or the Trust Administrator, on behalf of the
Trustee, the authentication of the Trustee or the Trust Administrator on the
Certificates, the acknowledgments of the Trustee and the Trust Administrator
contained in Article II and the representations and warranties of the Trustee
and the Trust Administrator in Section 8.12) shall be taken as the statements of
the Depositor and neither the Trustee nor the Trust Administrator assumes any
responsibility for their correctness. Neither the Trustee nor the Trust
Administrator makes any representations or warranties as to the validity or
sufficiency of this Agreement (other than as specifically set forth in Section
8.12) or of the Certificates (other than the signature of the Trustee, or the
Trust Administrator on behalf of the Trustee, and authentication of the Trustee,
or the Trust Administrator on behalf of the Trustee, on the Certificates) or of
any Mortgage Loan or related document. Neither the Trustee nor the Trust
Administrator shall be accountable for the use or application by the Depositor
of any of the Certificates or of the proceeds of such Certificates, or for the
use or application of any funds paid
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to the Depositor or the Servicer in respect of the Mortgage Loans or deposited
in or withdrawn from the Collection Account by the Servicer, other than any
funds held by or on behalf of the Trustee or the Trust Administrator in
accordance with Section 3.10.
SECTION 8.04. Trustee and Trust Administrator May
Own Certificates.
Each of the Trustee and the Trust Administrator in its
individual capacity or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not Trustee or Trust
Administrator, as applicable.
SECTION 8.05. Trustee's and Trust Administrator's
Fees and Expenses.
The Trust Administrator shall withdraw from the Distribution
Account on each Distribution Date and pay to itself the related portion of the
Administration Fee and pay to the Trustee the related portion of the
Administration Fee and, to the extent that the funds therein are at anytime
insufficient for such purpose, the Servicer shall pay such fees. Each of the
Trustee and the Trust Administrator and any director, officer, employee or agent
of the Trustee or the Trust Administrator, as applicable, shall be indemnified
by the Trust Fund and held harmless against any loss, liability or expense (not
including expenses, disbursements and advances incurred or made by the Trustee
or the Trust Administrator, as applicable, including the compensation and the
expenses and disbursements of its agents and counsel, in the ordinary course of
the Trustee's or the Trust Administrator's, as the case may be, performance in
accordance with the provisions of this Agreement) incurred by the Trustee or the
Trust Administrator, as applicable, in connection with any claim or legal action
or any pending or threatened claim or legal action arising out of or in
connection with the acceptance or administration of its obligations and duties
under this Agreement, other than any loss, liability or expense (i) for which
the Trust Administrator or the Trustee, as applicable, is indemnified by the
Servicer, (ii) that constitutes a specific liability of the Trustee or the Trust
Administrator, as applicable, pursuant to Section 10.01(g) or (iii) any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties hereunder by reason of reckless
disregard of obligations and duties hereunder or in the case of the Trust
Administrator, as a result of breach of the Trust Administrator's obligations
under Article X hereof. The Servicer agrees to indemnify the Trustee and the
Trust Administrator, from, and hold the Trustee harmless against, any loss,
liability or expense arising in respect of any breach by the Servicer of its
obligations in connection with this Agreement. Such indemnity shall survive the
termination or discharge of this Agreement and the resignation or removal of the
Trustee or the Trust Administrator, as the case may be. Any payment hereunder
made by the Servicer to the Trustee or the Trust Administrator shall be from the
Servicer's own funds, without reimbursement from REMIC I therefor.
SECTION 8.06. Eligibility Requirements for Trustee
and Trust Administrator.
Each of the Trustee and the Trust Administrator hereunder
shall at all times be a corporation or an association (other than the Depositor,
NC Capital, the Seller, the Servicer or, in the case of the Trustee, any
Affiliate of the foregoing) organized and doing business under the laws of any
state or the United States of America, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 (or a member of a bank
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holding company whose capital and surplus is at least $50,000,000) and subject
to supervision or examination by federal or state authority. If such corporation
or association publishes reports of conditions at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of conditions so published. In
case at any time the Trustee or the Trust Administrator shall cease to be
eligible in accordance with the provisions of this Section, the Trustee or the
Trust Administrator, as the case may be, shall resign immediately in the manner
and with the effect specified in Section 8.07.
SECTION 8.07. Resignation and Removal of the
Trustee.
Either of the Trustee or the Trust Administrator may at any
time resign and be discharged from the trust hereby created by giving written
notice thereof to the Depositor, to the Servicer, to the Certificateholders and,
if the Trustee is resigning, to the Trust Administrator, or, if the Trust
Administrator is resigning, to the Trustee.. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor trustee or trust
administrator (which may be the same Person in the event both the Trustee and
the Trust Administrator resign or are removed) by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee or Trust
Administrator and to the successor trustee or trust administrator, as
applicable. A copy of such instrument shall be delivered to the
Certificateholders, the Trustee or the Trust Administrator, as applicable, and
the Servicer by the Depositor. If no successor trustee or trust administrator
shall have been so appointed and have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Trustee or Trust
Administrator, as applicable, may petition any court of competent jurisdiction
for the appointment of a successor trustee or trust administrator, as
applicable.
If at any time the Trustee or the Trust Administrator shall
cease to be eligible in accordance with the provisions of Section 8.06 and shall
fail to resign after written request therefor by the Depositor (or in the case
of the Trust Administrator, the Trustee), or if at any time the Trustee or the
Trust Administrator shall become incapable of acting, or shall be adjudged
bankrupt or insolvent, or a receiver of the Trustee or the Trust Administrator
or of its property shall be appointed, or any public officer shall take charge
or control of the Trustee or the Trust Administrator or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor (or in the case of the Trust Administrator, the Trustee) may remove
the Trustee or the Trust Administrator, as applicable, and appoint a successor
trustee or trust administrator (which may be the same Person in the event both
the Trustee and the Trust Administrator resign or are removed) by written
instrument, in duplicate, which instrument shall be delivered to the Trustee or
the Trust Administrator, as the case may be, so removed and to the successor
trustee or trust administrator. A copy of such instrument shall be delivered to
the Certificateholders, the Trustee or the Trust Administrator, as applicable,
and the Servicer by the Depositor.
The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee or the Trust Administrator and
appoint a successor trustee or trust administrator by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to the
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Depositor, one complete set to the Trustee or the Trust Administrator, as the
case may be, so removed and one complete set to the successor so appointed. A
copy of such instrument shall be delivered to the Certificateholders and the
Servicer by the Depositor. In addition, if the Trustee has knowledge that the
Trust Administrator has breached any of its duties under this Agreement, the
Trustee may remove the Trust Administrator in the same manner as provided in the
prior sentence.
For purposes of this Section, the Trustee shall not be deemed to have knowledge
of a breach by the Trust Administrator of any of its duties hereunder, unless a
Responsible Officer of the Trustee, assigned to and working in the Trustee's
Corporate Trust Office has actual knowledge thereof or unless written notice of
any event which is in fact such a breach is received by the Trustee, and such
notice references the Certificates, the Trust Fund or this Agreement.
Any resignation or removal of the Trustee or the Trust
Administrator and appointment of a successor trustee or the trust administrator,
as the case may be, pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee or
trust administrator as provided in Section 8.08. Notwithstanding the foregoing,
in the event the Trust Administrator advises the Trustee that it is unable to
continue to perform its obligations pursuant to the terms of this Agreement
prior to the appointment of a successor, the Trustee shall be obligated to
perform such obligations until a new trust administrator is appointed. Such
performance shall be without prejudice to any claim by a party hereto or
beneficiary hereof resulting from the Trust Administrator's breach of its
obligations hereunder.
SECTION 8.08. Successor Trustee or Trust
Administrator.
Any successor trustee or trust administrator appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the
Depositor, the Trustee or the Trust Administrator, as applicable, and its
predecessor trustee or trust administrator an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee or trust administrator shall become effective and such
successor trustee or trust administrator, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee or trust administrator herein. The predecessor trustee or trust
administrator shall deliver to the successor trustee or trust administrator all
Mortgage Files and related documents and statements to the extent held by it
hereunder, as well as all moneys, held by it hereunder, and the Depositor and
the predecessor trustee or trust administrator shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor trustee or trust
administrator all such rights, powers, duties and obligations.
No successor trustee or trust administrator shall accept
appointment as provided in this Section unless at the time of such acceptance
such successor trustee or trust administrator shall be eligible under the
provisions of Section 8.06 and the appointment of such successor trustee or
trust administrator shall not result in a downgrading of any Class of
Certificates by either Rating Agency, as evidenced by a letter from each Rating
Agency.
Upon acceptance of appointment by a successor trustee or trust
administrator as provided in this Section, the Depositor shall mail notice of
the succession of such trustee or trust administrator hereunder to all Holders
of Certificates at their addresses as shown in the Certificate
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Register. If the Depositor fails to mail such notice within 10 days after
acceptance of appointment by the successor trustee or trust administrator, the
successor trustee shall cause such notice to be mailed at the expense of the
Depositor.
SECTION 8.09. Merger or Consolidation of Trustee
or Trust Administrator.
Any corporation or association into which either the Trustee
or the Trust Administrator may be merged or converted or with which it may be
consolidated or any corporation or association resulting from any merger,
conversion or consolidation to which the Trustee or the Trust Administrator, as
the case may be, shall be a party, or any corporation or association succeeding
to the business of the Trustee or the Trust Administrator, as applicable, shall
be the successor of the Trustee or the Trust Administrator, as the case may be,
hereunder, provided such corporation or association shall be eligible under the
provisions of Section 8.06, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or
Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the REMIC I or property securing the same may at the time be located,
the Trustee shall have the power and shall execute and deliver all instruments
to appoint one or more Persons approved by the Trustee to act as co-trustee or
co- trustees, jointly with the Trustee, or separate trustee or separate
trustees, of all or any part of REMIC I, and to vest in such Person or Persons,
in such capacity, such title to REMIC I, or any part thereof, and, subject to
the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the 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 8.06 hereunder and no notice to
Holders of Certificates of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 8.08 hereof.
In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to a defaulting Servicer hereunder), the
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 REMIC I or any portion thereof in any such jurisdiction) shall be
exercised and performed by such separate trustee or co-trustee at the direction
of the Trustee.
Any notice, request or other writing given to the 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 Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trust conferred, shall be vested with the estates or
property specified in its instrument of appointment,
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either jointly with the Trustee, or separately, as may be provided therein,
subject to all the provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting the liability
of, or affording protection to, the Trustee. Every such instrument shall be
filed with the Trustee.
Any separate trustee or co-trustee may, at any time,
constitute the 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 Agreement 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 Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee or co-trustee.
SECTION 8.11. Appointment of Office or Agency.
The Trust Administrator will appoint an office or agency in
the City of New York, New York, where the Certificates may be surrendered for
registration of transfer or exchange, and presented for final distribution,
which as of the Closing Date, shall be its offices located at 123 Washington
Street, New York, New York 10006. All other notices and demands to or upon the
Trust Administrator in respect of the Certificates and this Agreement may be
served at its address set forth in Section 11.05.
SECTION 8.12. Representations and Warranties.
Each of the Trustee and the Trust Administrator hereby
represents and warrants to the Servicer, the Depositor and the Trustee or the
Trust Administrator, as applicable, as of the Closing Date, that:
(i) it is a national banking association duly organized,
validly existing and in good standing under the laws of the United
States of America.
(ii) The execution and delivery of this Agreement by it, and
the performance and compliance with the terms of this Agreement by it,
will not violate its articles of association or bylaws or constitute a
default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which
is applicable to it or any of its assets.
(iii) It has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement,
and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the other parties hereto, 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.
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(v) It is not in violation of, and its execution and delivery
of this Agreement and its performance and compliance with the terms of
this Agreement will not constitute a violation of, any law, any order
or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority,
which violation, in its good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of it to perform
its obligations under this Agreement or its financial condition.
(vi) No litigation is pending or, to the best of its
knowledge, threatened against it, which would prohibit it from entering
into this Agreement or, in its good faith reasonable judgment, is
likely to materially and adversely affect either the ability of it to
perform its obligations under this Agreement or its financial
condition.
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ARTICLE IX
TERMINATION
SECTION 9.01 Termination Upon Repurchase or
Liquidation of All Mortgage Loans.
(a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Servicer, the
Trustee and the Trust Administrator (other than the obligations of the Servicer
to the Trustee and the Trust Administrator pursuant to Section 8.05 and of the
Servicer to provide for and the Trust Administrator to make payments in respect
of the REMIC I Regular Interests or the Classes of Certificates as hereinafter
set forth) shall terminate upon payment to the Certificateholders and the
deposit of all amounts held by or on behalf of the Trustee and required
hereunder to be so paid or deposited on the Distribution Date coinciding with or
following the earlier to occur of (i) the purchase by the Terminator (as defined
below) of all Mortgage Loans and each REO Property remaining in REMIC I and (ii)
the final payment or other liquidation (or any advance with respect thereto) of
the last Mortgage Loan or REO Property remaining in REMIC I; provided, however,
that in no event shall the trust created hereby continue beyond the expiration
of 21 years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the Court of St. James,
living on the date hereof. Subject to Section 3.11 hereof, the purchase by the
Terminator of all Mortgage Loans and each REO Property remaining in REMIC I
shall be at a price (the "Termination Price") equal to the greater of (A) the
aggregate Purchase Price of all the Mortgage Loans included in REMIC I, plus the
appraised value of each REO Property, if any, included in REMIC I, such
appraisal to be conducted by an appraiser mutually agreed upon by the Terminator
and the Trust Administrator in their reasonable discretion and (B) the aggregate
fair market value of all of the assets of REMIC I (as determined by the
Terminator and the Trust Administrator, as of the close of business on the third
Business Day next preceding the date upon which notice of any such termination
is furnished to Certificateholders pursuant to the third paragraph of this
Section 9.01).
(b) The Servicer shall have the right (the party exercising
such right, the "Terminator"), to purchase all of the Mortgage Loans and each
REO Property remaining in REMIC I pursuant to clause (i) of the preceding
paragraph no later than the Determination Date in the month immediately
preceding the Distribution Date on which the Certificates will be retired;
provided, however, that the Terminator may elect to purchase all of the Mortgage
Loans and each REO Property remaining in REMIC I pursuant to clause (i) above
only if the aggregate Stated Principal Balance of the Mortgage Loans and each
REO Property remaining in the Trust Fund at the time of such election is reduced
to less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date. By acceptance of the Residual Certificates, the Holder
of the Residual Certificates agrees, in connection with any termination
hereunder, to assign and transfer any amounts in excess of par, and to the
extent received in respect of such termination, to pay any such amounts to the
Holders of the Class X Certificates.
(c) Notice of the liquidation of the REMIC I Regular Interests
shall be given promptly by the Trust Administrator by letter to
Certificateholders mailed (a) in the event such notice is given in connection
with the purchase of the Mortgage Loans and each REO Property by the
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Terminator, not earlier than the 15th day and not later than the 25th day of the
month next preceding the month of the final distribution on the Certificates or
(b) otherwise during the month of such final distribution on or before the
Determination Date in such month, in each case specifying (i) the Distribution
Date upon which the Trust Fund will terminate and the final payment in respect
of the REMIC I Regular Interests or the Certificates will be made upon
presentation and surrender of the related Certificates at the office of the
Trust Administrator therein designated, (ii) the amount of any such final
payment, (iii) that no interest shall accrue in respect of the Certificates from
and after the Interest Accrual Period relating to the final Distribution Date
therefor and (iv) that the Record Date otherwise applicable to such Distribution
Date is not applicable, payments being made only upon presentation and surrender
of the Certificates at the office of the Trust Administrator. In the event such
notice is given in connection with the purchase of all of the Mortgage Loans and
each REO Property remaining in REMIC I by the Terminator, the Terminator shall
deliver to the Trust Administrator for deposit in the Distribution Account not
later than the last Business Day of the month next preceding the month of the
final distribution on the Certificates an amount in immediately available funds
equal to the above-described purchase price. The Trust Administrator shall remit
to the Servicer from such funds deposited in the Distribution Account (i) any
amounts which the Servicer would be permitted to withdraw and retain from the
Collection Account pursuant to Section 3.11 and (ii) any other amounts otherwise
payable by the Trust Administrator to the Servicer from amounts on deposit in
the Distribution Account pursuant to the terms of this Agreement, in each case
prior to making any final distributions pursuant to Section 10.01(d) below.
Upon certification to the Trust Administrator by a Servicing Officer of the
making of such final deposit, the Trust Administrator shall promptly release to
the Terminator the Mortgage Files for the remaining Mortgage Loans, and the
Trustee shall execute all assignments, endorsements and other instruments
necessary to effectuate such transfer.
(d) Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the Trust Administrator shall
distribute to each Certificateholder so presenting and surrendering its
Certificates the amount otherwise distributable on such Distribution Date in
accordance with Section 4.01 in respect of the Certificates so presented and
surrendered. Any funds not distributed to any Holder or Holders of Certificates
being retired on such Distribution Date because of the failure of such Holder or
Holders to tender their Certificates shall, on such date, be set aside and held
in trust and credited to the account of the appropriate non-tendering Holder or
Holders. If any Certificates as to which notice has been given pursuant to this
Section 9.01 shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Trust Administrator shall mail a
second notice to the remaining non-tendering Certificateholders to surrender
their Certificates for cancellation in order to receive the final distribution
with respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trust
Administrator shall, directly or through an agent, mail a final notice to the
remaining non-tendering Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining the funds in trust and of
contacting such Certificateholders shall be paid out of the assets remaining in
the trust funds. If within one year after the final notice any such Certificates
shall not have been surrendered for cancellation, the Trust Administrator shall
pay to the Depositor all such amounts, and all rights of non-tendering
Certificateholders in or to such amounts shall thereupon cease. No interest
shall accrue or be payable to any Certificateholder on any amount held in trust
by the Trust Administrator as a result of such Certificateholder's failure to
surrender its Certificate(s) for final payment thereof in accordance with this
Section 9.01. Any such
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amounts held in trust by the Trust Administrator shall be held in an Eligible
Account and the Trust Administrator may direct any depository institution
maintaining such account to invest the funds in one or more Permitted
Investments. All income and gain realized from the investment of funds deposited
in such accounts held in trust by the Trust Administrator shall be for the
benefit of the Trust Administrator; provided, however, that the Trust
Administrator shall deposit in such account the amount of any loss of principal
incurred in respect of any such Permitted Investment made with funds in such
accounts immediately upon the realization of such loss.
Immediately following the deposit of funds in trust hereunder
in respect of the Certificates, the Trust Fund shall terminate.
SECTION 9.02 Additional Termination Requirements.
(a) In the event that the Terminator purchases all the
Mortgage Loans and each REO Property or the final payment on or other
liquidation of the last Mortgage Loan or REO Property remaining in REMIC I
pursuant to Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements:
(i) The Trust Administrator shall specify the first day
in the 90-day liquidation period in a statement attached to
each Trust REMIC's final Tax Return pursuant to Treasury
regulation Section 1.860F-1 and shall satisfy all requirements
of a qualified liquidation under Section 860F of the Code and
any regulations thereunder, as evidenced by an Opinion of
Counsel obtained at the expense of the Terminator;
(ii) During such 90-day liquidation period and, at or
prior to the time of making of the final payment on the
Certificates, the Trustee, upon request by the Trust
Administrator, shall sell all of the assets of REMIC I to the
Terminator for cash; and
(iii) At the time of the making of the final payment on
the Certificates, the Trust Administrator shall distribute or
credit, or cause to be distributed or credited, to the Holders
of the Residual Certificates all cash on hand in the Trust
Fund (other than cash retained to meet claims), and the Trust
Fund shall terminate at that time.
(b) At the expense of the requesting Terminator (or, if the
Trust Fund is being terminated as a result of the occurrence of the event
described in clause (ii) of the first paragraph of Section 9.01, at the expense
of the Trust Administrator without the right of reimbursement from the Trust
Fund), the Trust Administrator shall prepare or cause to be prepared the
documentation required in connection with the adoption of a plan of liquidation
of each Trust REMIC pursuant to this Section 9.02.
(c) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trust Administrator to specify the 90-day
liquidation period for each Trust REMIC, which authorization shall be binding
upon all successor Certificateholders.
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ARTICLE X
REMIC PROVISIONS
SECTION 10.01. REMIC Administration.
(a) The Trustee and the Trust Administrator shall elect to
treat each Trust REMIC under the Code and, if necessary, under applicable state
law. Each such election will be made by the Trust Administrator on Form 1066 or
other appropriate federal tax or information return or any appropriate state
return for the taxable year ending on the last day of the calendar year in which
the Certificates are issued. For the purposes of the REMIC election in respect
of REMIC I, the REMIC I Regular Interests shall be designated as the Regular
Interests in REMIC I and the Class R-I Interest shall be designated as the
Residual Interests in REMIC I. The Class A Certificates, the Mezzanine
Certificates and the Class X/N Interest shall be designated as the Regular
Interests in REMIC II and the Class R-II Interest shall be designated as the
Residual Interests in REMIC II. The Class X Certificates shall be designated as
the Regular Interests in REMIC III and the Class R-III Certificates shall be
designated as the Residual Interests in REMIC III. Neither the Trustee nor the
Trust Administrator shall permit the creation of any "interests" in each Trust
REMIC (within the meaning of Section 860G of the Code) other than the REMIC I
Regular Interests and the interests represented by the Certificates.
(b) The Closing Date is hereby designated as the "Startup Day"
of each Trust REMIC within the meaning of Section 860G(a)(9) of the Code.
(c) The Trust Administrator shall be reimbursed for any and
all expenses relating to any tax audit of the Trust Fund (including, but not
limited to, any professional fees or any administrative or judicial proceedings
with respect to each Trust REMIC that involve the Internal Revenue Service or
state tax authorities), including the expense of obtaining any tax related
Opinion of Counsel except as specified herein. The Trust Administrator, as agent
for each Trust REMIC's tax matters person shall (i) act on behalf of the Trust
Fund in relation to any tax matter or controversy involving any Trust REMIC and
(ii) represent the Trust Fund in any administrative or judicial proceeding
relating to an examination or audit by any governmental taxing authority with
respect thereto. The holder of the largest Percentage Interest of each class of
Residual Certificates shall be designated, in the manner provided under Treasury
regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1, as the tax matters person of the related REMIC created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint the
Trust Administrator or an Affiliate as its agent to perform all of the duties of
the tax matters person for the Trust Fund.
(d) The Trust Administrator shall prepare, the Trustee shall
sign and the Trust Administrator shall file all of the Tax Returns in respect of
each REMIC created hereunder. The expenses of preparing and filing such returns
shall be borne by the Trust Administrator without any right of reimbursement
therefor. The Servicer shall provide on a timely basis to the Trust
Administrator or its designee such information with respect to the assets of
each REMIC created hereunder as is in its possession and reasonably required by
the Trust Administrator to enable it to perform its obligations under this
Article.
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(e) The Trust Administrator shall perform on behalf of each
Trust REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, as required by the Code, the REMIC
Provisions or other such compliance guidance, the Trust Administrator shall
provide (i) to any Transferor of a Residual Certificate such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Person who is not a Permitted Transferee, (ii) to the
Certificateholders such information or reports as are required by the Code or
the REMIC Provisions including reports relating to interest, original issue
discount and market discount or premium (using the Prepayment Assumption as
required) and (iii) to the Internal Revenue Service the name, title, address and
telephone number of the person who will serve as the representative of each
Trust REMIC. The Depositor shall provide or cause to be provided to the Trust
Administrator, within ten (10) days after the Closing Date, all information or
data that the Trust Administrator reasonably determines to be relevant for tax
purposes as to the valuations and issue prices of the Certificates, including,
without limitation, the price, yield, prepayment assumption and projected cash
flow of the Certificates.
(f) The Trustee and the Trust Administrator shall take such
action and shall cause each REMIC created hereunder to take such action as shall
be necessary to create or maintain the status thereof as a REMIC under the REMIC
Provisions. Neither the Trustee nor the Trust Administrator shall take any
action, cause the Trust Fund to take any action or fail to take (or fail to
cause to be taken) any action that, under the REMIC Provisions, if taken or not
taken, as the case may be, could (i) endanger the status of each Trust REMIC as
a REMIC or (ii) result in the imposition of a tax upon the Trust Fund (including
but not limited to the tax on prohibited transactions as defined in Section
860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in
Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless such action or inaction is permitted under this Agreement or the Trustee
and the Trust Administrator have received an Opinion of Counsel, addressed to
the Trustee and the Trust Administrator (at the expense of the party seeking to
take such action but in no event at the expense of the Trustee or the Trust
Administrator) to the effect that the contemplated action will not, with respect
to any Trust REMIC, endanger such status or result in the imposition of such a
tax, nor shall the Servicer take or fail to take any action (whether or not
authorized hereunder) as to which the Trustee or the Trust Administrator has
advised it in writing that it has received an Opinion of Counsel to the effect
that an Adverse REMIC Event could occur with respect to such action; provided
that the Servicer may conclusively rely on such Opinion of Counsel and shall
incur no liability for its action or failure to act in accordance with such
Opinion of Counsel. In addition, prior to taking any action with respect to any
Trust REMIC or the respective assets of each, or causing any Trust REMIC to take
any action, which is not contemplated under the terms of this Agreement, the
Servicer will consult with the Trustee and the Trust Administrator or its
designee, in writing, with respect to whether such action could cause an Adverse
REMIC Event to occur with respect to any Trust REMIC, and the Servicer shall not
take any such action or cause any Trust REMIC to take any such action as to
which the Trustee or the Trust Administrator has advised it in writing that an
Adverse REMIC Event could occur. The Trustee and the Trust Administrator may
consult with counsel to make such written advice, and the cost of same shall be
borne by the party seeking to take the action not permitted by this Agreement,
but in no event shall such cost be an expense of the Trustee or the Trust
Administrator, as applicable. At all times as may be required by the Code, the
Trustee and the Trust
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Administrator will ensure that substantially all of the assets of REMIC I will
consist of "qualified mortgages" as defined in Section 860G(a)(3) of the Code
and "permitted investments" as defined in Section 860G(a)(5) of the Code, to the
extent such obligations are within such party's control and not otherwise
inconsistent with the terms of this Agreement.
(g) In the event that any tax is imposed on "prohibited
transactions" of any REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on the "net income from foreclosure property" of such REMIC as defined
in Section 860G(c) of the Code, on any contributions to any such REMIC after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trust Administrator pursuant to Section
10.03 hereof, if such tax arises out of or results from a breach by the Trust
Administrator of any of its obligations under this Article X, (ii) to the
Trustee pursuant to Section 10.03 hereof, if such tax arises out of or results
from a breach by the Trustee of any of its obligations under this Article X,
(iii) to the Servicer pursuant to Section 10.03 hereof, if such tax arises out
of or results from a breach by the Servicer of any of its obligations under
Article III or this Article X, or (iv) against amounts on deposit in the
Distribution Account and shall be paid by withdrawal therefrom.
(h) On or before April 15th of each calendar year, commencing
April 15, 2002, the Trust Administrator shall deliver to each Rating Agency an
Officers' Certificate of the Trust Administrator stating the Trust
Administrator's compliance with this Article X.
(i) The Trust Administrator and the Servicer shall, for
federal income tax purposes, maintain books and records with respect to each
Trust REMIC on a calendar year and on an accrual basis.
(j) Following the Startup Day, neither the Trustee nor the
Trust Administrator shall accept any contributions of assets to any Trust REMIC
other than in connection with any Qualified Substitute Mortgage Loan delivered
in accordance with Section 2.03 unless it shall have received an Opinion of
Counsel to the effect that the inclusion of such assets in the Trust Fund will
not cause the related REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject such REMIC to any tax under the REMIC
Provisions or other applicable provisions of federal, state and local law or
ordinances.
(k) None of the Trustee, the Trust Administrator, or the
Servicer shall enter into any arrangement by which any Trust REMIC will receive
a fee or other compensation for services nor permit either REMIC to receive any
income from assets other than "qualified mortgages" as defined in Section
860G(a)(3) of the Code or "permitted investments" as defined in Section
860G(a)(5) of the Code.
(l) The Trust Administrator shall treat the Reserve Fund as an
outside reserve fund within the meaning of Treasury Regulation Section
1.860G-2(h) that is owned by the Class X Certificateholder and that is not an
asset of any Trust REMIC created hereunder. The Trust Administrator shall treat
the rights of the Class A-1, Class A-2, Class M-1, Class M-2, and Class B
Certificateholders to receive payments from the Reserve Fund in the event of a
Basis Risk Shortfall as rights in an interest rate cap contract written by the
Class X Certificateholder in favor of the Class
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A-1, Class A-2, Class M-1, Class M-2, and Class B Certificateholders. Thus, each
Class A-1, Class A-2, Class M-1, Class M-2, and Class B Certificate shall be
treated as representing not only ownership of regular interests in REMIC II, but
also ownership of an interest in an interest rate cap contract. For purposes of
determining the issue prices of the REMIC II Certificates, the Trust
Administrator shall assume that the interest rate cap contract has a value of
$5,000.
SECTION 10.02. Prohibited Transactions and
Activities.
None of the Depositor, the Servicer, the Trust Administrator
or the Trustee shall sell, dispose of or substitute for any of the Mortgage
Loans (except in connection with (i) the foreclosure of a Mortgage Loan,
including but not limited to, the acquisition or sale of a Mortgaged Property
acquired by deed in lieu of foreclosure, (ii) the bankruptcy of REMIC I, (iii)
the termination of REMIC I pursuant to Article IX of this Agreement, (iv) a
substitution pursuant to Article II of this Agreement or (v) a purchase of
Mortgage Loans pursuant to Article II or III of this Agreement), nor acquire any
assets for any Trust REMIC (other than REO Property acquired in respect of a
defaulted Mortgage Loan), nor sell or dispose of any investments in the
Collection Account or the Distribution Account for gain, nor accept any
contributions to any Trust REMIC after the Closing Date (other than a Qualified
Substitute Mortgage Loan delivered in accordance with Section 2.03), unless it
has received an Opinion of Counsel, addressed to the Trustee and the Trust
Administrator (at the expense of the party seeking to cause such sale,
disposition, substitution, acquisition or contribution but in no event at the
expense of the Trustee or the Trust Administrator) that such sale, disposition,
substitution, acquisition or contribution will not (a) affect adversely the
status of any Trust REMIC as a REMIC or (b) cause any Trust REMIC to be subject
to a tax on "prohibited transactions" or "contributions" pursuant to the REMIC
Provisions.
SECTION 10.03. Servicer, Trustee and Trust
Administrator Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the
Depositor, the Servicer and the Trust Administrator for any taxes and costs
including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Trust Fund, the Depositor, the Servicer or the Trust
Administrator as a result of a breach of the Trustee's covenants set forth in
this Article X.
(b) The Trust Administrator agrees to indemnify the Trust
Fund, the Depositor, the Servicer and the Trustee for any taxes and costs
including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Trust Fund, the Depositor, the Servicer or the Trustee as a
result of a breach of the Trust Administrator's covenants set forth in this
Article X.
(c) The Servicer agrees to indemnify the Trust Fund, the
Depositor, Trust Administrator and the Trustee for any taxes and costs
including, without limitation, any reasonable attorneys' fees imposed on or
incurred by the Trust Fund, the Depositor, Trust Administrator or the Trustee,
as a result of a breach of the Servicer's covenants set forth in Article III or
this Article X.
SECTION 10.04. Treatment of the Reserve Fund and
the Class N Certificates.
(a) The Trustee and the Trust Administrator shall treat the
Reserve Fund as an outside reserve fund within the meaning of Treasury
Regulation Section 1.860G-2(h) that is owned
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by the Class X Certificateholders and that is not an asset of any Trust REMIC.
The Trustee and the Trust Administrator shall treat the rights of the Holders of
the Class A Certificates and Mezzanine Certificates to receive payments from the
Reserve Fund as a right in an interest rate cap contract written by the Class X
Certificateholders in favor of the Holders of the Class A Certificates and
Mezzanine Certificates that it shall account for such as property held separate
and apart from the Regular Interests it holds in the Trust REMICs. This
provision is intended to satisfy the requirements of Treasury regulation Section
1.860G-2(i) for the treatment of property rights coupled with regular interests
to be separately respected and shall be interpreted consistent with such
regulation. Thus, each Class A Certificate and Mezzanine Certificate shall be
treated as representing not only ownership of regular interests in REMIC II, but
also ownership of an interest in an interest rate cap contract. On each
Distribution Date, to the extent the Class A Certificates and Mezzanine
Certificates receive interest in excess of the Net WAC Pass-Through Rate, such
interest will be treated as paid to the Class X/N Interest, then paid to the
Class X Certificates, then deposited in the Reserve Fund, and then paid from the
Reserve Fund to the Class A Certificates and Mezzanine Certificates pursuant to
an interest rate cap agreement.
(b) In the event that the beneficial ownership of the Class N
Certificates and the Class X Certificates is held by separate entities for tax
purposes, the Trustee and the Trust Administrator shall treat the Class N
Certificates as debt of the Class X Certificateholders for federal income tax
purposes and shall not treat such Class of Certificates as an interest in any
Trust REMIC created hereunder. In the event that the beneficial ownership of the
Class N Certificates and the Class X Certificates is held by the same person,
the Trustee and the Trust Administrator shall treat the Class N Certificates as
not having been issued for federal income tax purposes so that the entire
economic entitlement of the Class N Certificates and Class X Certificates will
represent a "regular interest" in REMIC III. By acquiring the Class N
Certificates and the Class X Certificates, the respective Holders will agree to
treat the Class N Certificates in accordance with the above treatments.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
This Agreement may be amended from time to time by the
Depositor, the Servicer, the Trust Administrator and the Trustee without the
consent of any of the Certificateholders, (i) to cure any ambiguity or defect,
(ii) to correct, modify or supplement any provisions herein (including to give
effect to the expectations of Certificateholders), or (iii) to make any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with the provisions of this Agreement, provided
that such action shall not, as evidenced by an Opinion of Counsel delivered to
the Trustee and the Trust Administrator, adversely affect in any material
respect the interests of any Certificateholder. No amendment shall be deemed to
adversely affect in any material respect the interests of any Certificateholder
who shall have consented thereto, and no Opinion of Counsel shall be required to
address the effect of any such amendment on any such consenting
Certificateholder.
This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Trust Administrator and the Trustee with the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments received on Mortgage Loans which are required to be distributed on
any Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates in a manner, other than as described in (i), without the
consent of the Holders of Certificates of such Class evidencing at least 66% of
the Voting Rights allocated to such Class, or (iii) modify the consents required
by the immediately preceding clauses (i) and (ii) without the consent of the
Holders of all Certificates then outstanding. Notwithstanding any other
provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 11.01, Certificates registered in the name of
the Depositor or the Servicer or any Affiliate thereof shall be entitled to
Voting Rights with respect to matters affecting such Certificates.
Notwithstanding any contrary provision of this Agreement,
neither the Trustee nor the Trust Administrator shall consent to any amendment
to this Agreement unless it shall have first received an Opinion of Counsel to
the effect that such amendment will not result in the imposition of any tax on
any Trust REMIC pursuant to the REMIC Provisions or cause any Trust REMIC to
fail to qualify as a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any such amendment the Trust
Administrator shall furnish a copy of such amendment to each Certificateholder.
It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the
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authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee or the Trust Administrator may
prescribe.
The cost of any Opinion of Counsel to be delivered pursuant to
this Section 11.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee or
Trust Administrator.
The Trustee and the Trust Administrator may, but shall not be
obligated to enter into any amendment pursuant to this Section that affects its
rights, duties and immunities under this Agreement or otherwise.
SECTION 11.02. Recordation of Agreement;
Counterparts.
To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer at the expense of the Certificateholders, but only upon
direction of the Trustee or the Trust Administrator accompanied by an Opinion of
Counsel to the effect that such recordation materially and beneficially affects
the interests of the Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
SECTION 11.03. Limitation on Rights of
Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates
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entitled to at least 25% of the Voting Rights shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 15 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding. It is understood and intended,
and expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatsoever by virtue of any provision of this
Agreement to affect, disturb or prejudice the rights of the Holders of any other
of such Certificates, or to obtain or seek to obtain priority over or preference
to any other such Holder, or to enforce any right under this Agreement, except
in the manner herein provided and for the equal, ratable and common benefit of
all Certificateholders. For the protection and enforcement of the provisions of
this Section, each and every Certificateholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
SECTION 11.04. Governing Law.
This Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
SECTION 11.05. Notices.
All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when received if personally
delivered at or mailed by first class mail, postage prepaid, or by express
delivery service or delivered in any other manner specified herein, to (a) in
the case of the Depositor, 18400 Von Karman, Suite 1000, Irvine, California
92612 (telecopy number: (949) 225-7878), or such other address or telecopy
number as may hereafter be furnished to the Servicer, the Trust Administrator
and the Trustee in writing by the Depositor, (b) in the case of the Servicer,
5373 West Alabama, Suite 600, Houston, Texas 77056, Attention: Janice McClure
(telecopy number: (713) 960-0539), or such other address or telecopy number as
may hereafter be furnished to the Trustee, the Trust Administrator and the
Depositor in writing by the Servicer, (c) in the case of the Trust
Administrator, 1761 East St. Andrew Place, Santa Ana, California, 92705,
Attention: Trust Administration DB0101 (telecopy number (714) 247-6478), or such
other address or telecopy number as may hereafter be furnished to the Servicer,
the Trustee and the Depositor in writing by the Trust Administrator and (d) in
the case of the Trustee, 180 East Fifth Street, St. Paul, Minnesota, 55101,
Attention: Structured Finance/ACE 2001-NC1 (telecopy number (612) 244- 0089), or
such other address or telecopy number as may hereafter be furnished to the
Servicer, the Trust Administrator and the Depositor in writing by the Trustee.
Any notice required or permitted to be given to a Certificateholder shall be
given by first class mail, postage prepaid, at the address of such Holder as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given when mailed, whether or not the Certificateholder receives such notice. A
copy of any notice required to be telecopied hereunder also shall be mailed to
the appropriate party in the manner set forth above.
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SECTION 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 11.07. Notice to Rating Agencies.
The Trust Administrator shall use its best efforts promptly to
provide notice to the Rating Agencies with respect to each of the following of
which it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Servicer Event of Default that
has not been cured or waived;
3. The resignation or termination of the Servicer, the
Trustee or the Trust Administrator;
4. The repurchase or substitution of Mortgage Loans
pursuant to or as contemplated by Section 2.03;
5. The final payment to the Holders of any Class of
Certificates;
6. Any change in the location of the Collection Account
or the Distribution Account;
7. Any event that would result in the inability of the
Trustee or the Trust Administrator, as applicable, to
make advances regarding delinquent Mortgage Loans;
and
8. The filing of any claim under any Servicer's blanket
bond and errors and omissions insurance policy
required by Section 3.14 or the cancellation or
material modification of coverage under any such
instrument.
In addition, the Trust Administrator shall promptly furnish to
each Rating Agency copies of each report to Certificateholders described in
Section 4.02 and the Servicer shall promptly furnish to each Rating Agency
copies of the following:
1. Each annual statement as to compliance described in
Section 3.20; and
2. Each annual independent public accountants' servicing
report described in Section 3.21.
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Any such notice pursuant to this Section 11.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
Fitch IBCA, One State Street Plaze, New York, New York 10004 and to Standard &
Poor's, a division of the McGraw-Hill Companies, Inc., 55 Water Street, New
York, New York 10041 or such other addresses as the Rating Agencies may
designate in writing to the parties hereto.
SECTION 11.08. Article and Section References.
All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.
SECTION 11.09. Grant of Security Interest.
It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Depositor to the Trustee, on behalf of
the Trust and for the benefit of the Certificateholders, be, and be construed
as, a sale of the Mortgage Loans by the Depositor and not a pledge of the
Mortgage Loans to secure a debt or other obligation of the Depositor. However,
in the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Depositor, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Depositor to the Trustee, on behalf of the Trust and for
the benefit of the Certificateholders, to secure a debt or other obligation of
the Depositor and (b)(1) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the Uniform Commercial Code
as in effect from time to time in the State of New York; (2) the conveyance
provided for in Section 2.01 hereof shall be deemed to be a grant by the
Depositor to the Trustee, on behalf of the Trust and for the benefit of the
Certificateholders, of a security interest in all of the Depositor's right,
title and interest in and to the Mortgage Loans and all amounts payable to the
holders of the Mortgage Loans in accordance with the terms thereof and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the Collection Account and the Distribution Account, whether in the form of
cash, instruments, securities or other property; (3) the obligations secured by
such security agreement shall be deemed to be all of the Depositor's obligations
under this Agreement, including the obligation to provide to the
Certificateholders the benefits of this Agreement relating to the Mortgage Loans
and the Trust Fund; and (4) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law.
Accordingly, the Depositor hereby grants to the Trustee, on behalf of the Trust
and for the benefit of the Certificateholders, a security interest in the
Mortgage Loans and all other property described in clause (2) of the preceding
sentence, for the purpose of securing to the Trustee the performance by the
Depositor of the obligations described in clause (3) of the preceding sentence.
Notwithstanding the foregoing, the parties hereto intend the conveyance pursuant
to Section 2.01 to be a true, absolute and unconditional sale of the Mortgage
Loans and assets constituting the Trust Fund by the Depositor to the Trustee, on
behalf of the Trust and for the benefit of the Certificateholders.
-131-
IN WITNESS WHEREOF, the Depositor, the Servicer, the Trustee
and the Trust Administrator have caused their names to be signed hereto by their
respective officers thereunto duly authorized, in each case as of the day and
year first above written.
ACE SECURITIES CORP.,
as Depositor
By: /s/ Douglas K. Johnson
---------------------------
Name: Douglas K. Johnson
Title: President
By: /s/ Evelyn Echevarria
---------------------------
Name: Evelyn Echevarria
Title: Vice President
LITTON LOAN SERVICING LP,
as Servicer
By: /s/ Janice McClure
---------------------------
Name: Janice McClure
Title: Senior Vice President
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Trustee
By: /s/ Sherri Christopherson
---------------------------
Name: Sherri Christopherson
Title: Vice President
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., solely as
Trust Administrator and not in
its individual capacity
By: /s/ Ronaldo Reyes
---------------------------
Name: Ronaldo Reyes
Title: Associate
STATE OF ___________ )
) ss.:
COUNTY OF _________ )
On the __th day of March, 2001, before me, a notary public in
and for said State, personally appeared Douglas K. Johnson, known to me to be a
President of ACE Securities Corp., one of the corporations that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
------------------------------
Notary Public
[Notarial Seal]
STATE OF ____________ )
) ss.:
COUNTY OF __________ )
On the __th day of March, 2001, before me, a notary public in
and for said State, personally appeared Evelyn Echevarria, known to me to be a
Vice President of ACE Securities Corp., one of the corporations that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
------------------------------
Notary Public
[Notarial Seal]
STATE OF ____________ )
) ss.:
COUNTY OF __________ )
On the __th day of March, 2001, before me, a notary public in
and for said State, personally appeared Janice McClure, known to me to be a
Senior Vice President of Litton Loan Servicing LP, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
------------------------------
Notary Public
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF RAMSEY )
On the __th day of March 2001, before me, a notary public in
and for said State, personally appeared Sherri Christopherson, known to me to be
a Vice President of U.S. Bank National Association, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
--------------------------------
Notary Public
[Notarial Seal]
STATE OF ____________ )
) ss.:
COUNTY OF __________ )
On the __th day of March, 2001, before me, a notary public in
and for said State, personally appeared Ronaldo Reyes, known to me to be a
Associate of Bankers Trust Company of California, N.A., one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
--------------------------------
Notary Public
[Notarial Seal]
EXHIBIT A-1
-----------
FORM OF CLASS A-1 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
Series 2001-NC1, Class A-1
Pass-Through Rate: Variable
Date of Pooling and Servicing Agreement and Cut-off Date: March 1, 2001
First Distribution Date:
April 25, 2001
No. ___
Aggregate Certificate Principal Balance of the Class A-1 Certificates as of the
Issue Date: $_____________
Denomination: $_____________
Servicer: Litton Loan Servicing LP
Trustee: U.S. Bank National Association
Trust Administrator: Bankers Trust Company of California, N.A.
Issue Date: March 22, 2001
CUSIP: 004421 AJ 2
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
CERTIFICATE.
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2001-NC1
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE SERVICER, THE TRUSTEE, THE TRUST ADMINISTRATOR OR
ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ______________ is the registered owner of
a Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-1 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among ACE
Securities Corp. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Servicer, the Trustee and the Trust
Administrator, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-1 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trust Administrator by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Trust Administrator in writing
at least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-1 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A-1 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trust Administrator of the pendency of such
-3-
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trust Administrator for that purpose as
provided in the Agreement.
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One-Month LIBOR plus ____%, in
the case of each Distribution Date through and including the Distribution Date
on which the aggregate principal balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, or One-Month LIBOR plus ____% per annum, in the case of any Distribution
Date thereafter and (ii) the Net WAC Pass-Through Rate for such Distribution
Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee, the Trust Administrator
and the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Trustee and the Trust Administrator with the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trust Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Trust Administrator duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
-4-
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trust Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Trust
Administrator and any agent of the Depositor, the Servicer, the Trustee or the
Trust Administrator may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Trust Administrator nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trust Administrator on behalf of the Trustee and required to
be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in REMIC I and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from REMIC I
of all the Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trust Administrator nor the Trustee assumes
responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trust Administrator, by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trust Administrator has caused this
Certificate to be duly executed.
Dated: March __, 2001
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:
------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A-1 Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:
------------------------
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on
the face of this instrument, 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 if survivorship and not as
tenants in common
UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
_________________
(State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee or the Trust Administrator
to issue a new Certificate of a like Percentage Interest and Class to the above
named assignee and deliver such Certificate to the following address:
Dated:
_________________________________________
Signature by or on behalf of assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or _______________________________, as its agent.
EXHIBIT A-2
-----------
FORM OF CLASS A-2 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
Series 2001-NC1, Class A-2
Pass-Through Rate: Variable
Date of Pooling and Servicing Agreement and Cut-off Date: March 1, 2001
First Distribution Date:
April 25, 2001
No. ___
Aggregate Certificate Principal Balance of the Class A-2 Certificates as of the
Issue Date: $_____________
Denomination: $_____________
Servicer: Litton Loan Servicing LP
Trustee: U.S. Bank National Association
Trust Administrator: Bankers Trust Company of California, N.A.
Issue Date: March 22, 2001
CUSIP: 004421 AK 9
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
CERTIFICATE.
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2001-NC1
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE SERVICER, THE TRUSTEE, THE TRUST ADMINISTRATOR OR
ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ______________ is the registered owner of
a Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-2 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among ACE
Securities Corp. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Servicer, the Trustee and the Trust
Administrator, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-2 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trust Administrator by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Trust Administrator in writing
at least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-2 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A-2 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final
-3-
distribution on this Certificate will be made after due notice by the
Trust Administrator of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trust Administrator for that purpose as provided in the Agreement.
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One-Month LIBOR plus ____%, in
the case of each Distribution Date through and including the Distribution Date
on which the aggregate principal balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, or One-Month LIBOR plus ____% per annum, in the case of any Distribution
Date thereafter and (ii) the Net WAC Pass-Through Rate for such Distribution
Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee, the Trust Administrator
and the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Trustee and the Trust Administrator with the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trust Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Trust Administrator duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized
-4-
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trust Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Trust
Administrator and any agent of the Depositor, the Servicer, the Trustee or the
Trust Administrator may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Trust Administrator nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trust Administrator on behalf of the Trustee and required to
be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in REMIC I and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from REMIC I
of all the Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trust Administrator nor the Trustee assumes
responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trust Administrator, by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trust Administrator has caused this
Certificate to be duly executed.
Dated: March __, 2001
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:
------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A-2 Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:
------------------------
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on
the face of this instrument, 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 if survivorship and not as
tenants in common
UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
_________________
(State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee or the Trust Administrator
to issue a new Certificate of a like Percentage Interest and Class to the above
named assignee and deliver such Certificate to the following address:
Dated:
_________________________________________
Signature by or on behalf of assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or _______________________________, as its agent.
EXHIBIT A-3
[Reserved]
EXHIBIT A-4
FORM OF CLASS M-1 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 AND THE CLASS A-2
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
Series 2001-NC1, Class M-1
Pass-Through Rate: Variable
Date of Pooling and Servicing Agreement and Cut-off Date: March 1, 2001
First Distribution Date:
April 25, 2001
No. ___
Aggregate Certificate Principal Balance of the Class M-1 Certificates as of the
Issue Date: $_____________
Denomination: $_____________
Servicer: Litton Loan Servicing LP
Trustee: U.S. Bank National Association
Trust Administrator: Bankers Trust Company of California, N.A.
Issue Date: March 22, 2001
CUSIP: 004421 AM 5
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
CERTIFICATE.
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2001-NC1
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE SERVICER, THE TRUSTEE, THE TRUST ADMINISTRATOR OR
ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class M-1
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class M-1 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Servicer, the Trustee
and the Trust Administrator, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-1 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trust Administrator by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Trust Administrator in writing
at least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M-1 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class M-1 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final
-3-
distribution on this Certificate will be made after due notice by the
Trust Administrator of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trust Administrator for that purpose as provided in the Agreement.
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One-Month LIBOR plus ____%, in
the case of each Distribution Date through and including the Distribution Date
on which the aggregate principal balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, or One-Month LIBOR plus ____% per annum, in the case of any Distribution
Date thereafter and (ii) the Net WAC Pass-Through Rate for such Distribution
Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee, the Trust Administrator
and the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Trustee and the Trust Administrator with the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trust Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Trust Administrator duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized
-4-
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trust Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Trust
Administrator and any agent of the Depositor, the Servicer, the Trustee or the
Trust Administrator may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Trust Administrator nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trust Administrator on behalf of the Trustee and required to
be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in REMIC I and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from REMIC I
of all the Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trust Administrator nor the Trustee assumes
responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trust Administrator or the Trustee by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
IN WITNESS WHEREOF, the Trust Administrator has caused this
Certificate to be duly executed.
Dated: March __, 2001
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:
------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class M-1 Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:
------------------------
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on
the face of this instrument, 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 if survivorship and not as
tenants in common
UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
_________________
(State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee or the Trust Administrator
to issue a new Certificate of a like Percentage Interest and Class to the above
named assignee and deliver such Certificate to the following address:
Dated:
_________________________________________
Signature by or on behalf of assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or _______________________________, as its agent.
EXHIBIT A-5
-----------
FORM OF CLASS M-2 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE
CLASS A-2 CERTIFICATES AND THE CLASS M-1 CERTIFICATES TO THE EXTENT
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
Series 2001-NC1, Class M-2
Pass-Through Rate: Variable
Date of Pooling and Servicing Agreement and Cut-off Date: March 1, 2001
First Distribution Date:
April 25, 2001
No. ___
Aggregate Certificate Principal Balance of the Class M-2 Certificates as of the
Issue Date: $_____________
Denomination: $_____________
Servicer: Litton Loan Servicing LP
Trustee: U.S. Bank National Association
Trust Administrator: Bankers Trust Company of California, N.A.
Issue Date: March 22, 2001
CUSIP: 004421 AN 3
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
CERTIFICATE.
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST 2001-NC1
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE SERVICER, THE TRUSTEE, THE TRUST ADMINISTRATOR OR
ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that __________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class M-2
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class M-2 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Servicer, the Trustee
and the Trust Administrator, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-2 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trust Administrator by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Trust Administrator in writing
at least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M-2 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class M-2 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final
-3-
distribution on this Certificate will be made after due notice by the Trust
Administrator of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the office or agency appointed by the Trust
Administrator for that purpose as provided in the Agreement.
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One-Month LIBOR plus ____%, in
the case of each Distribution Date through and including the Distribution Date
on which the aggregate principal balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, or One-Month LIBOR plus _____% per annum, in the case of any Distribution
Date thereafter and (ii) the Net WAC Pass-Through Rate for such Distribution
Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee and the Trust
Administrator and the rights of the Certificateholders under the Agreement at
any time by the Depositor, the Servicer, the Trustee and the Trust Administrator
with the consent of the Holders of Certificates entitled to at least 66% of the
Voting Rights. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trust Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Trust Administrator duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trust Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Trust
Administrator and any agent of the Depositor, the Servicer, the Trustee or the
Trust Administrator may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Trust Administrator nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trust Administrator on behalf of the Trustee and required to
be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in REMIC I and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from REMIC I
of all the Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Trust Administrator assumes
responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trust Administrator, by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trust Administrator has caused this
Certificate to be duly executed.
Dated: March __, 2001
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:
------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class M-2 Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:
------------------------
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on
the face of this instrument, 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 if survivorship and not as
tenants in common
UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
_________________
(State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee or the Trust Administrator
to issue a new Certificate of a like Percentage Interest and Class to the above
named assignee and deliver such Certificate to the following address:
Dated:
_________________________________________
Signature by or on behalf of assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or _______________________________, as its agent.
EXHIBIT A-6
-----------
FORM OF CLASS B CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE
CLASS A-2 CERTIFICATES, THE CLASS M-1 CERTIFICATES AND THE CLASS M-2
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
Series 2001-NC1, Class B
Pass-Through Rate: Variable
Date of Pooling and Servicing Agreement and Cut-off Date: March 1, 2001
First Distribution Date:
April 25, 2001
No. ___
Aggregate Certificate Principal Balance of the Class B Certificates as of the
Issue Date: $____________
Denomination: $_____________
Servicer: Litton Loan Servicing LP
Trustee: U.S. Bank National Association
Trust Administrator: Bankers Trust Company of California, N.A.
Issue Date: March 22, 2001
CUSIP: 004421 AP 8
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
CERTIFICATE.
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2001-NC1
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE SERVICER, THE TRUSTEE, THE TRUST ADMINISTRATOR OR
ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class B
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class B Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Servicer, the Trustee
and the Trust Administrator, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trust Administrator by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Trust Administrator in writing
at least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class B Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class B Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final
-2-
distribution on this Certificate will be made after due notice by the Trust
Administrator of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the office or agency appointed by the Trust
Administrator that purpose as provided in the Agreement.
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One-Month LIBOR plus ____%, in
the case of each Distribution Date through and including the Distribution Date
on which the aggregate principal balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, or One-Month LIBOR plus _____% per annum, in the case of any Distribution
Date thereafter and (ii) the Net WAC Pass-Through Rate for such Distribution
Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee, the Trust Administrator
and the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Trustee and the Trust Administrator with the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trust Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Trust Administrator duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized
-3-
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trust Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Trust
Administrator and any agent of the Depositor, the Servicer, the Trustee or the
Trust Administrator may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Trust Administrator nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trust Administrator on behalf of the Trustee and required to
be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in REMIC I and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from REMIC I
of all the Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Trust Administrator assumes
responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trust Administrator, by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trust Administrator has caused this
Certificate to be duly executed.
Dated: March __, 2001
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:
------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:
------------------------
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on
the face of this instrument, 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 if survivorship and not as
tenants in common
UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
_________________
(State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee or the Trust Administrator
to issue a new Certificate of a like Percentage Interest and Class to the above
named assignee and deliver such Certificate to the following address:
Dated:
_________________________________________
Signature by or on behalf of assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or _______________________________, as its agent.
EXHIBIT A-7
-----------
FORM OF CLASS N CERTIFICATE
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, CLASS
A-2 CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2
CERTIFICATES AND THE CLASS B CERTIFICATES TO THE EXTENT DESCRIBED IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
Series 2001-NC1, Class N
Pass-Through Rate: Variable
Date of Pooling and Servicing Agreement and Cut-off Date: March 1, 2001
First Distribution Date:
April 25, 2001
No. ___
Class N Payment Balance: $_____________
Class N Payment Balance of this Certificate: $_____________
Servicer: Litton Loan Servicing LP
Trustee: U.S. Bank National Association
Trust Administrator: Bankers Trust Company of California, N.A.
Issue Date: March 22, 2001
-4-
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2001-NC1
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE SERVICER, THE TRUSTEE, THE TRUST ADMINISTRATOR OR
ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner
of a Percentage Interest (obtained by dividing the Class N Payment Balance of
this Certificate by the aggregate Class N Payment Balance of the Class N
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class N Certificates in REMIC III created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Servicer, the Trustee
and the Trust Administrator, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class N Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trust Administrator by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Trust Administrator in writing
at least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class N Certificates the
aggregate initial Class N Payment Balance of which is in excess of the lesser of
(i) $5,000,000 or (ii) two-thirds of the aggregate initial Class N Payment
Balance of the Class N Certificates, or otherwise by check mailed by first class
mail to the address of the Person entitled thereto, as such name and address
-5-
shall appear on the Certificate Register. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trust
Administrator of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the office or agency appointed by the Trust
Administrator for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the Class N Payment Balance specified on the face hereof divided by the
aggregate Class N Payment Balance of the Class of Certificates specified on the
face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee, the Trust Administrator
and the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Trustee and the Trust Administrator with the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trust Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Trust Administrator duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
-6-
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trust Administrator shall require receipt of
(i) if such transfer is purportedly being made in reliance upon Rule 144A under
the 1933 Act, written certifications from the Holder of the Certificate desiring
to effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, (ii) if
such transfer is purportedly being made in reliance upon Rule 501(a) under the
1933 Act, written certifications from the Certificateholder desiring to effect
the transfer and from such Certificateholder's prospective transferee,
substantially in the form attached hereto as Exhibit F-2, and (iii) in all other
cases, an Opinion of Counsel satisfactory to it that such transfer may be made
without such registration or qualification (which Opinion of Counsel shall not
be an expense of the Trust Fund or of the Depositor, the Trustee, the Trust
Administrator or the Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. Neither the Depositor, the Trustee nor
the Trust Administrator is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Trust Administrator, the
Depositor and the Servicer against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trust Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee or the Trust
Administrator and any agent of the Depositor, the Servicer, the Trustee or the
Trust Administrator may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Trust Administrator nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trust Administrator on behalf of the Trustee and required to
be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect
-7-
thereto) of the last Mortgage Loan remaining in REMIC I and (ii) the purchase by
the party designated in the Agreement at a price determined as provided in the
Agreement from REMIC I of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans. The Agreement permits, but does not require, the
party designated in the Agreement to purchase from REMIC I all the Mortgage
Loans and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being less than 10% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Trust Administrator assumes
responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trust Administrator, by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trust Administrator has caused this
Certificate to be duly executed.
Dated: March __, 2001
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:
------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class N Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:
------------------------
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on
the face of this instrument, 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 if survivorship and not as
tenants in common
UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
_________________
(State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee or the Trust Administrator
to issue a new Certificate of a like Percentage Interest and Class to the above
named assignee and deliver such Certificate to the following address:
Dated:
_________________________________________
Signature by or on behalf of assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or _______________________________, as its agent.
EXHIBIT A-8
-----------
FORM OF CLASS X CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE
CLASS A-2 CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2
CERTIFICATES, THE CLASS B CERTIFICATES AND THE CLASS N CERTIFICATES TO
THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
Series 2001-NC1, Class X
Pass-Through Rate: Variable
Date of Pooling and Servicing Agreement and Cut-off Date: March 1, 2001
First Distribution Date:
April 25, 2001
No. ___
Aggregate Notional Amount of the Class X Certificates as of the Issue Date:
$______________
Notional Amount: $_____________
Aggregate Certificate Principal Balance of the Class X Certificates as of the
Issue Date: $_____________
Denomination: $_____________
Servicer: Litton Loan Servicing LP
Trustee: U.S. Bank National Association
Trust Administrator: Bankers Trust Company of California, N.A.
Issue Date: March 22, 2001
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
CERTIFICATE.
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2001-NC1
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE SERVICER, THE TRUSTEE, THE TRUST ADMINISTRATOR OR
ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class X
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class X Certificates in REMIC III created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Servicer, the Trustee
and the Trust Administrator, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class X Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trust Administrator by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Trust Administrator in writing
at least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class X Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class X Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trust Administrator of the
-4-
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Trust Administrator for
that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee, the Trust Administrator
and the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Trustee and the Trust Administrator with the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trust Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Trust Administrator duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
-5-
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trust Administrator shall require receipt of
(i) if such transfer is purportedly being made in reliance upon Rule 144A under
the 1933 Act, written certifications from the Holder of the Certificate desiring
to effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, (ii) if
such transfer is purportedly being made in reliance upon Rule 501(a) under the
1933 Act, written certifications from the Certificateholder desiring to effect
the transfer and from such Certificateholder's prospective transferee,
substantially in the form attached hereto as Exhibit F-2, and (iii) in all other
cases, an Opinion of Counsel satisfactory to it that such transfer may be made
without such registration or qualification (which Opinion of Counsel shall not
be an expense of the Trust Fund or of the Depositor, the Trustee, the Trust
Administrator or the Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. Neither the Depositor, the Trustee nor
the Trust Administrator is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Trust Administrator, the
Depositor and the Servicer against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trust Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee or the Trust
Administrator and any agent of the Depositor, the Servicer, the Trustee or the
Trust Administrator may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Trust Administrator nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trust Administrator on behalf of the Trustee and required to
be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect
-6-
thereto) of the last Mortgage Loan remaining in REMIC I and (ii) the purchase by
the party designated in the Agreement at a price determined as provided in the
Agreement from REMIC I of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans. The Agreement permits, but does not require, the
party designated in the Agreement to purchase from REMIC I all the Mortgage
Loans and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being less than 10% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Trust Administrator assumes
responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trust Administrator, by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trust Administrator has caused this
Certificate to be duly executed.
Dated: March __, 2001
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:
------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class X Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:
------------------------
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on
the face of this instrument, 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 if survivorship and not as
tenants in common
UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
_________________
(State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee or the Trust Administrator
to issue a new Certificate of a like Percentage Interest and Class to the above
named assignee and deliver such Certificate to the following address:
Dated:
_________________________________________
Signature by or on behalf of assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or _______________________________, as its agent.
EXHIBIT A-9
-----------
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS THE "RESIDUAL INTEREST" IN TWO "REAL ESTATE MORTGAGE
INVESTMENT CONDUITS" ("REMIC"), AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986 (THE "CODE").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
TRUST ADMINISTRATOR THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED
STATES OR ANY POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION
THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION
(OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE,
(3) ANY ORGANIZATION DESCRIBED IN
SECTION 1381(A)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE
FOREGOING CLAUSES (1), (2) OR (3) SHALL HEREINAFTER BE REFERRED TO AS A
"DISQUALIFIED ORGANIZATION") OR (4) AN AGENT OF A DISQUALIFIED
ORGANIZATION AND (B) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE
ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF
THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF
NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED
TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT
LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH
HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO HAVE
CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF
SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED
FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.
Series 2001-NC1, Class R
Date of Pooling and Servicing Agreement and Cut-off Date: March 1, 2001
First Distribution Date:
April 25, 2001
No. ___
Aggregate Percentage Interest of the Class R Certificates as of the Issue Date:
100.00%
Servicer: Litton Loan Servicing LP
Trustee: U.S. Bank National Association
Trust Administrator: Bankers Trust Company of California, N.A.
Issue Date: March 22, 2001
-4-
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2001-NC1
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE SERVICER, THE TRUSTEE, THE TRUST ADMINISTRATOR OR
ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class R Certificates in REMIC I and REMIC II created pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among ACE
Securities Corp. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Servicer, the Trustee and the Trust
Administrator, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trust Administrator by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Trust Administrator in writing
at least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class R Certificates, or
-5-
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trust Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trust Administrator for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee, the Trust Administrator
and the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Trustee and the Trust Administrator with the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trust Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Trust Administrator duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are
-6-
exchangeable for new Certificates of the same Class in authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trust Administrator shall require receipt of
(i) if such transfer is purportedly being made in reliance upon Rule 144A under
the 1933 Act, written certifications from the Holder of the Certificate desiring
to effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, (ii) if
such transfer is purportedly being made in reliance upon Rule 501(a) under the
1933 Act, written certifications from the Certificateholder desiring to effect
the transfer and from such Certificateholder's prospective transferee,
substantially in the form attached hereto as Exhibit F-2, and (iii) in all other
cases, an Opinion of Counsel satisfactory to it that such transfer may be made
without such registration or qualification (which Opinion of Counsel shall not
be an expense of the Trust Fund or of the Depositor, the Trustee, the Trust
Administrator or the Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. Neither the Depositor, the Trustee nor
the Trust Administrator is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Trust Administrator, the
Depositor and the Servicer against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.
Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trust Administrator (i) an affidavit to the effect that such transferee is any
Person other than a Disqualified Organization or the agent (including a broker,
nominee or middleman) of a Disqualified Organization, and (ii) a certificate
that acknowledges that (A) the Class R Certificates have been designated as a
residual interest in REMIC I and REMIC II, (B) it will include in its income a
PRO RATA share of the net income of the Trust Fund and that such income may be
an "excess inclusion," as defined in the Code, that, with certain exceptions,
cannot be offset by other losses or benefits from any tax exemption, and (C) it
expects to have the financial means to satisfy all of its tax obligations
including those relating to holding the Class R Certificates. Notwithstanding
the registration in the Certificate Register of any transfer, sale or other
disposition of this Certificate to a Disqualified Organization or an agent
(including a broker, nominee or middleman) of a Disqualified Organization, such
-7-
registration shall be deemed to be of no legal force or effect whatsoever and
such Person shall not be deemed to be a Certificateholder for any purpose,
including, but not limited to, the receipt of distributions in respect of this
Certificate.
The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause any portion
of the Trust Fund to cease to qualify as a REMIC or cause the imposition of a
tax upon any REMIC.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trust Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Trust
Administrator and any agent of the Depositor, the Servicer, the Trustee or the
Trust Administrator may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Trust Administrator nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trust Administrator on behalf of the Trustee and required to
be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in REMIC I and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from REMIC I
of all the Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Trust Administrator assumes
responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trust Administrator, by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trust Administrator has caused this
Certificate to be duly executed.
Dated: March __, 2001
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:
------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class R Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:
------------------------
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on
the face of this instrument, 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 if survivorship and not as
tenants in common
UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
_________________
(State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee or the Trust Administrator
to issue a new Certificate of a like Percentage Interest and Class to the above
named assignee and deliver such Certificate to the following address:
Dated:
_________________________________________
Signature by or on behalf of assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or _______________________________, as its agent.
EXHIBIT A-10
------------
FORM OF CLASS R-III CERTIFICATE
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
TRUST ADMINISTRATOR THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED
STATES OR ANY POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION
THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION
(OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE,
(3) ANY ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE
(ANY SUCH PERSON
DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL HEREINAFTER BE
REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (4) AN AGENT OF A
DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH TRANSFER IS TO
IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH TRANSFEREE
SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL
CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION
IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION
OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF
NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED
TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT
LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH
HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO HAVE
CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF
SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED
FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.
Series 2001-NC1, Class R-III
Date of Pooling and Servicing Agreement and Cut-off Date: March 1, 2001
First Distribution Date:
April 25, 2001
No. ___
Aggregate Percentage Interest of the Class R-III Certificates as of the Issue
Date: 100.00%
Servicer: Litton Loan Servicing LP
Trustee: U.S. Bank National Association
Trust Administrator: Bankers Trust Company of California, N.A.
Issue Date: March 22, 2001
-4-
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2001-NC1
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by
ACE SECURITIES CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
SECURITIES CORP., THE SERVICER, THE TRUSTEE, THE TRUST ADMINISTRATOR OR
ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R-III Certificates
as of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class R-III Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among ACE
Securities Corp. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Servicer, the Trustee and the Trust
Administrator, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R-III Certificates on such
Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trust Administrator by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Trust Administrator in writing
at least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R-III Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class R-III Certificates, or otherwise by check mailed
by first class mail to the address of the Person entitled thereto, as such
-5-
name and address shall appear on the Certificate Register. Notwithstanding the
above, the final distribution on this Certificate will be made after due notice
by the Trust Administrator of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trust Administrator for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee, the Trust Administrator
and the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Trustee and the Trust Administrator with the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trust Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Trust Administrator duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
-6-
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trust Administrator shall require receipt of
(i) if such transfer is purportedly being made in reliance upon Rule 144A under
the 1933 Act, written certifications from the Holder of the Certificate desiring
to effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, (ii) if
such transfer is purportedly being made in reliance upon Rule 501(a) under the
1933 Act, written certifications from the Certificateholder desiring to effect
the transfer and from such Certificateholder's prospective transferee,
substantially in the form attached hereto as Exhibit F-2, and (iii) in all other
cases, an Opinion of Counsel satisfactory to it that such transfer may be made
without such registration or qualification (which Opinion of Counsel shall not
be an expense of the Trust Fund or of the Depositor, the Trustee, the Trust
Administrator or the Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. Neither the Depositor, the Trustee nor
the Trust Administrator is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Trust Administrator, the
Depositor and the Servicer against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.
Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trust Administrator (i) an affidavit to the effect that such transferee is any
Person other than a Disqualified Organization or the agent (including a broker,
nominee or middleman) of a Disqualified Organization, and (ii) a certificate
that acknowledges that (A) the Class R-III Certificates have been designated as
a residual interest in a REMIC, (B) it will include in its income a PRO RATA
share of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R-III Certificates. Notwithstanding the
registration in the Certificate Register of any transfer, sale or other
disposition of this Certificate to a Disqualified Organization or an agent
(including a broker, nominee or middleman) of a Disqualified Organization, such
registration shall be deemed to be of no legal force or effect whatsoever and
such Person shall not be deemed to be a Certificateholder for any purpose,
including, but not limited to, the receipt of distributions in respect of this
Certificate.
-7-
The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause any portion
of the Trust Fund to cease to qualify as a REMIC or cause the imposition of a
tax upon any REMIC.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trust Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Trust
Administrator and any agent of the Depositor, the Servicer, the Trustee or the
Trust Administrator may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Trust Administrator nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trust Administrator on behalf of the Trustee and required to
be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in REMIC I and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from REMIC I
of all the Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Trust Administrator assumes
responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trust Administrator, by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trust Administrator has caused this
Certificate to be duly executed.
Dated: March __, 2001
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:
------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class R-III Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:
------------------------
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on
the face of this instrument, 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 if survivorship and not as
tenants in common
UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
under Uniform Gifts
to Minors Act
_________________
(State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee or the Trust Administrator
to issue a new Certificate of a like Percentage Interest and Class to the above
named assignee and deliver such Certificate to the following address:
Dated:
_________________________________________
Signature by or on behalf of assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or _______________________________, as its agent.
EXHIBIT B
---------
[Reserved]
EXHIBIT C-1
-----------
FORM OF TRUSTEE'S INITIAL CERTIFICATION
[Date]
ACE Securities Corp.
6525 Morrison Boulevard, Suite 318
Charlotte, North Carolina 28211
Litton Loan Servicing LP
5373 West Alabama
Suite 600
Houston, Texas 77056
Re: Pooling and Servicing Agreement, dated as of March 1, 2001,
among ACE Securities Corp., Litton Loan Servicing LP,
U.S. Bank National Association and Bankers Trust
Company of California, N.A., Asset Backed
Pass-Through Certificates, Series 2001-NC1
-----------------------------------------------------------
Ladies and Gentlemen:
Attached is the Trustee's preliminary exceptions in accordance with
Section 2.02 of the referenced Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"). Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to them in the Pooling and Servicing Agreement.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The 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
2.01 of the Pooling and Servicing Agreement.
U.S. BANK NATIONAL ASSOCIATION
By:
---------------------------
Name:
Title:
EXHIBIT C-2
-----------
FORM OF TRUSTEE'S FINAL CERTIFICATION
[Date]
ACE Securities Corp.
6525 Morrison Boulevard, Suite 318
Charlotte, North Carolina 28211
Litton Loan Servicing LP
5373 West Alabama
Suite 600
Houston, Texas 77056
Re: Pooling and Servicing Agreement, dated as of March 1, 2001,
among ACE Securities Corp., Litton Loan Servicing LP,
U.S. Bank National Association and Bankers Trust
Company of California, N.A., Asset Backed
Pass-Through Certificates, Series 2001-NC1
-----------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as 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 attachment hereto), it or a Custodian on its
behalf has received:
(i) the original recorded Mortgage, and the original recorded
power of attorney, if the Mortgage was executed pursuant to a power of
attorney, or a certified copy thereof in those instances where the
public recording office retains the original or where the original has
been lost; and
(ii) an original recorded Assignment of the Mortgage to the
Trustee together with the original recorded Assignment or Assignments
of the Mortgage showing a complete chain of assignment from the
originator, or a certified copy of such Assignments in those instances
where the public recording retains the original or where original has
been lost; and
(iii) the original lender's title insurance policy.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The 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, or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
U.S. BANK NATIONAL ASSOCIATION
By:
---------------------------
Name:
Title:
EXHIBIT D
---------
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT
This is a Mortgage Loan Purchase Agreement (this "Agreement"),
dated March 19, 2001, among Deutsche Bank AG New York Branch (the "Seller"), NC
Capital Corporation, a California corporation ( "NC Capital") and ACE Securities
Corp., a Delaware corporation (the "Purchaser").
PRELIMINARY STATEMENT
---------------------
The Seller intends to sell the Mortgage Loans (as hereinafter
identified) to the Purchaser on the terms and subject to the conditions set
forth in this Agreement. The Purchaser intends to deposit the Mortgage Loans
into a mortgage pool comprising the Trust Fund. The Trust Fund will be evidenced
by a single series of mortgage pass-through certificates designated as ACE
Securities Corp. Home Equity Loan Trust, Series 2001-NC1, Asset Backed
Pass-Through Certificates (the "Certificates"). The Certificates will consist of
ten classes of certificates. The Certificates will be issued pursuant to a
Pooling and Servicing Agreement for Series 2001-NC1, dated as of March 1, 2001
(the "Pooling and Servicing Agreement"), among the Purchaser as depositor,
Litton Loan Servicing LP as servicer (the "Servicer"), U.S. Bank National
Association as trustee (the "Trustee") and Bankers Trust Company of California,
N.A. as trust administrator (the "Trust Administrator"). The Purchaser will sell
the Class A-1, Class A-2, Class M-1, Class M-2 and Class B Certificates to
Deutsche Banc Alex. Brown Inc. (the "Underwriter"), pursuant to the Underwriting
Agreement, dated March 19, 2001 (the "Underwriting Agreement"), between the
Purchaser and the Underwriter. The Purchaser will sell the Class N, the Class X,
the Class R Certificates and the Class R-IV Certificates to Credit-Based Asset
Servicing and Securitization LLC ("C-BASS"), pursuant to the Purchase Agreement,
dated March 19, 2001 (the "Purchase Agreement"), between the Purchaser and
C-BASS. Capitalized terms used but not defined herein shall have the meanings
set forth in the Pooling and Servicing Agreement.
The parties hereto agree as follows:
SECTION 1. AGREEMENT TO PURCHASE. The Seller agrees to sell,
and the Purchaser agrees to purchase, on or before March 22, 2001 (the "Closing
Date"), certain conventional, one- to four-family, adjustable-rate residential
mortgage loans (the "Mortgage Loans"), having an aggregate principal balance as
of the close of business on March 1, 2001, (the "Cut-off Date") of approximately
$166,593,501.67 (the "Closing Balance"), after giving effect to all payments due
on the Mortgage Loans on or before the Cut-off Date, whether or not received,
including the right to any Prepayment Charges payable by the related Mortgagors
in connection with any Principal Prepayments on the Mortgage Loans.
SECTION 2. MORTGAGE LOAN SCHEDULE. The Purchaser and the
Seller have agreed upon which of the mortgage loans owned by the Seller are to
be purchased by the Purchaser pursuant to this Agreement and the Seller will
prepare or cause to be prepared on or prior to the Closing Date a final schedule
(the "Closing Schedule") that shall describe such Mortgage Loans and set forth
all
-2-
of the Mortgage Loans to be purchased under this Agreement, including the
Prepayment Charges. The Closing Schedule will conform to the requirements set
forth in this Agreement and to the definition of "Mortgage Loan Schedule" under
the Pooling and Servicing Agreement. The Closing Schedule shall be used as the
Mortgage Loan Schedule under the Pooling and Servicing Agreement.
SECTION 3. CONSIDERATION.
(a) In consideration for the Mortgage Loans to be purchased
hereunder, the Purchaser shall, as described in Section 8, (i) pay to or upon
the order of the Seller in immediately available funds an amount (the "Purchase
Price") equal to (i) the net sale proceeds of the Class A-1 Certificates, the
Class A-2 Certificates, the Class M-1 Certificates, the Class M-2 Certificates
and the Class B Certificates pursuant to the Underwriting Agreement and (ii) the
net sale proceeds of the Class N Certificates, the Class X Certificates, the
Class R Certificates and the Class R-IV Certificates pursuant to the Purchase
Agreement.
(b) The Purchaser or any assignee, transferee or designee of
the Purchaser shall be entitled to all scheduled payments of principal due after
the Cut-off Date, all other payments of principal due and collected after the
Cut-off Date, and all payments of interest on the Mortgage Loans allocable to
the period after the Cut-off Date. All scheduled payments of principal and
interest due on or before the Cut-off Date and collected after the Cut-off Date
shall belong to the Seller.
(c) Pursuant to the Pooling and Servicing Agreement, the
Purchaser will assign all of its right, title and interest in and to the
Mortgage Loans, together with its rights under this Agreement, to the Trustee
for the benefit of the Certificateholders.
SECTION 4. TRANSFER OF THE MORTGAGE LOANS.
(a) POSSESSION OF MORTGAGE FILES. The Seller does hereby sell,
transfer, assign, set over and convey to the Purchaser, without recourse but
subject to the terms of this Agreement, all of its right, title and interest in,
to and under the Mortgage Loans, including the related Prepayment Charges. The
contents of each Mortgage File not delivered to the Purchaser or to any
assignee, transferee or designee of the Purchaser on or prior to the Closing
Date are and shall be held in trust by the Seller for the benefit of the
Purchaser or any assignee, transferee or designee of the Purchaser. Upon the
sale of the Mortgage Loans, the ownership of each Mortgage Note, the related
Mortgage and the other contents of the related Mortgage File is vested in the
Purchaser and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or that come into the possession of the Seller
on or after the Closing Date shall immediately vest in the Purchaser and shall
be delivered immediately to the Purchaser or as otherwise directed by the
Purchaser.
(b) DELIVERY OF MORTGAGE LOAN DOCUMENTS. The Seller will, on
or prior to the Closing Date, deliver or cause to be delivered to the Purchaser
or any assignee, transferee or designee
-3-
of the Purchaser each of the following documents for each Mortgage Loan (and, to
the extent that NC Capital is in possession of any such documents, NC Capital
shall deliver such documents to the Purchaser on behalf of the Seller):
(i) the original Mortgage Note, endorsed in the
following form: "Pay to the order of U.S. Bank National Association, as
Trustee under the applicable agreement, without recourse," with all
prior and intervening endorsements showing a complete chain of
endorsement from the originator to the Person so endorsing to the
Trustee;
(ii) the original Mortgage with evidence of recording
thereon, and the original recorded power of attorney, if the Mortgage
was executed pursuant to a power of attorney, with evidence of
recording thereon;
(iii) an original Assignment of Mortgage executed in
the following form: "U.S. Bank National Association as Trustee under
the applicable agreement";
(iv) the original recorded Assignment or Assignments
of the Mortgage showing a complete chain of assignment from the
originator to the Person assigning the Mortgage to the Trustee as
contemplated by the immediately preceding clause (iii);
(v) the original or copies of each assumption,
modification, written assurance or substitution agreement, if any; and
(vi) the original lender's title insurance policy,
together with all endorsements or riders that were issued with or
subsequent to the issuance of such policy, insuring the priority of the
Mortgage as a first lien on the Mortgaged Property represented therein
as a fee interest vested in the Mortgagor.
The Seller promptly shall (within sixty Business Days
following the later of the Closing Date and the date of the receipt by the
Seller of the recording information for a Mortgage but in no event later than
ninety days following the Closing Date) submit or cause to be submitted for
recording, at no expense to the Purchaser (or the Trust Fund or the Trustee or
the Trust Administrator under the Pooling and Servicing Agreement), in the
appropriate public office for real property records, each Assignment referred to
in clauses (b)(iii) and (b)(iv) of this Section 4. In the event that any such
Assignment is lost or returned unrecorded because of a defect therein, NC
Capital promptly shall prepare a substitute Assignment or cure such defect, as
the case may be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding anything to the contrary contained in this
Section 4, with respect to a maximum of approximately 1.0% of the Mortgage
Loans, by aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, if any original Mortgage Note referred to in Section 4(b)(i) above cannot
be located, the obligations of the Seller to deliver such documents shall be
deemed to
-4-
be satisfied upon delivery to the Purchaser or any assignee, transferee or
designee of the Purchaser of a photocopy of such Mortgage Note, if available,
with a lost note affidavit substantially in the form of Exhibit 4 attached
hereto. If any of the original Mortgage Notes for which a lost note affidavit
was delivered to the Purchaser or any assignee, transferee or designee of the
Purchaser is subsequently located, such original Mortgage Note shall be
delivered to the Purchaser or any assignee, transferee or designee of the
Purchaser within three Business Days; and if any document referred to in Section
4(b)(ii) or 4(b)(iv) above has been submitted for recording but either (x) has
not been returned from the applicable public recording office or (y) has been
lost or such public recording office has retained the original of such document,
the obligations of the Seller hereunder shall be deemed to have been satisfied
upon delivery to the Purchaser or any assignee, transferee or designee of the
Purchaser promptly upon receipt thereof by or on behalf of the Seller of either
the original or a copy of such document certified by the applicable public
recording office to be a true and complete copy of the original.
In the event that the original lender's title insurance policy
has not yet been issued, the Seller shall deliver to the Purchaser or any
assignee, transferee or designee of the Purchaser a written commitment or
interim binder or preliminary report of title issued by the title insurance or
escrow company. The Seller shall deliver such original title insurance policy to
the Purchaser or any assignee, transferee or designee of the Purchaser promptly
upon receipt by the Seller, if any.
Each original document relating to a Mortgage Loan which is
not delivered to the Purchaser or its assignee, transferee or designee, if held
by the Seller, shall be so held for the benefit of the Purchaser, its assignee,
transferee or designee.
(c) ACCEPTANCE OF MORTGAGE LOANS. The documents delivered
pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or any
assignee, transferee or designee of the Purchaser at any time before or after
the Closing Date (and with respect to each document permitted to be delivered
after the Closing Date, within seven days of its delivery) to ascertain that all
required documents have been executed and received and that such documents
relate to the Mortgage Loans identified on the Mortgage Loan Schedule.
(d) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser has the
right to assign its interest under this Agreement, in whole or in part, to the
Trustee, as may be required to effect the purposes of the Pooling and Servicing
Agreement, without the consent of the Seller or NC Capital, and the assignee
shall succeed to the rights and obligations hereunder of the Purchaser. Any
expense reasonably incurred by or on behalf of the Purchaser or the Trustee in
connection with enforcing any obligations of the Seller or NC Capital under this
Agreement will be promptly reimbursed by the Seller or NC Capital, as
applicable.
(e) EXAMINATION OF MORTGAGE FILES. Prior to the Closing Date,
the Seller shall either (i) deliver in escrow to the Purchaser or to any
assignee, transferee or designee of the Purchaser for examination the Mortgage
File pertaining to each Mortgage Loan, or (ii) make such
-5-
Mortgage Files available to the Purchaser or to any assignee, transferee or
designee of the Purchaser for examination. Such examination may be made by the
Purchaser, the Trustee or the Trust Administrator, and their respective
designees, upon reasonable notice to the Seller during normal business hours
before the Closing Date and within 60 days after the Closing Date. If any such
person makes such examination prior to the Closing Date and identifies any
Mortgage Loans that do not conform to the requirements of the Purchaser as
described in this Agreement, such Mortgage Loans shall be deleted from the
Closing Schedule. The Purchaser may, at its option and without notice to the
Seller, purchase all or part of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or any person has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files shall not affect the rights of the Purchaser or any assignee,
transferee or designee of the Purchaser to demand repurchase or other relief as
provided herein or under the Pooling and Servicing Agreement.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE SELLER.
(a) The Seller hereby represents and warrants to NC Capital
and the Purchaser, as of the date hereof and as of the Closing Date, and
covenants, that:
(i) The Seller is the New York branch of a German
bank with full corporate power and authority to conduct its business as
presently conducted by it to the extent material to the consummation of the
transactions contemplated herein. The Agreement has been duly authorized,
executed and delivered by the Seller acting through the New York branch. The
Seller had the full corporate power and authority to own the Mortgage Loans and
to transfer and convey the Mortgage Loans to the Purchaser and has the full
corporate power and authority to execute and deliver, engage in the transactions
contemplated by, and perform and observe the terms and conditions of this
Agreement.
(ii) The Seller has duly authorized the execution,
delivery and performance of this Agreement, has duly executed and delivered this
Agreement, and this Agreement, assuming due authorization, execution and
delivery by NC Capital and the Purchaser, constitutes a legal, valid and binding
obligation of the Seller, enforceable against it in accordance with its terms
except as the enforceability thereof may be limited by bankruptcy, insolvency or
reorganization or by general principles of equity.
(iii) The execution, delivery and performance of this
Agreement by the Seller (x) does not conflict and will not conflict with, does
not breach and will not result in a breach of and does not constitute and will
not constitute a default (or an event, which with notice or lapse of time or
both, would constitute a default) under (A) any terms or provisions of the
organizational documents of the Seller, (B) any term or provision of any
material agreement, contract, instrument or indenture, to which the Seller is a
party or by which the Seller or any of its property is bound, or (C) any law,
rule, regulation, order, judgment, writ, injunction or decree of any court or
governmental authority having jurisdiction over the Seller or any of its
property and (y) does not
-6-
create or impose and will not result in the creation or imposition of any lien,
charge or encumbrance which would have a material adverse effect upon the
Mortgage Loans or any documents or instruments evidencing or securing the
Mortgage Loans.
(iv) No consent, approval, authorization or order of,
registration or filing with, or notice on behalf of the Seller to any
governmental authority or court is required, under federal laws or the laws of
the State of New York, for the execution, delivery and performance by the Seller
of, or compliance by the Seller with, this Agreement or the consummation by the
Seller of any other transaction contemplated hereby and by the Pooling and
Servicing Agreement; provided, however, that the Seller makes no representation
or warranty regarding federal or state securities laws in connection with the
sale or distribution of the Certificates.
(v) This Agreement does not contain any untrue
statement of material fact or omit to state a material fact necessary to make
the statements contained herein not misleading. The written statements, reports
and other documents prepared and furnished or to be prepared and furnished by
the Seller pursuant to this Agreement or in connection with the transactions
contemplated hereby taken in the aggregate do not contain any untrue statement
of material fact or omit to state a material fact necessary to make the
statements contained therein not misleading.
(vi) The Seller is not in violation of, and the
execution and delivery of this Agreement by the Seller and its performance and
compliance with the terms of this Agreement will not constitute a violation with
respect to, any order or decree of any court or any order or regulation of any
federal, state, municipal or governmental agency having jurisdiction over the
Seller or its assets, which violation might have consequences that would
materially and adversely affect the condition (financial or otherwise) or the
operation of the Seller or its assets or might have consequences that would
materially and adversely affect the performance of its obligations and duties
hereunder.
(vii) The Seller does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement.
(viii) Immediately prior to the sale of the Mortgage
Loans to the Purchaser as herein contemplated, the Seller was the owner of the
related Mortgage and the indebtedness evidenced by the related Mortgage Note,
and, upon the payment to the Seller of the Purchase Price, in the event that the
Seller retains or has retained record title, the Seller shall retain such record
title to each Mortgage, each related Mortgage Note and the related Mortgage
Files with respect thereto in trust for the Purchaser as the owner thereof from
and after the date hereof.
(ix) There are no actions or proceedings against, or
investigations known to it of, the Seller before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans by the Seller or the
consummation of the transactions contemplated by this Agreement or (C) that
might prohibit or
-7-
materially and adversely affect the performance by the Seller of its obligations
under, or validity or enforceability of, this Agreement.
(x) The consummation of the transactions contemplated
by this Agreement are in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Seller pursuant to this Agreement are not subject to the bulk transfer or
any similar statutory provisions in effect in any relevant jurisdiction, except
any as may have been complied with.
(xi) [intentionally omitted]
(xii) The Seller has not dealt with any broker,
investment banker, agent or other person, except for the Purchaser or any of its
affiliates, that may be entitled to any commission or compensation in connection
with the sale of the Mortgage Loans (except that an entity that previously
financed the Seller's ownership of the Mortgage Loans may be entitled to a fee
to release its security interest in the Mortgage Loans, which fee shall have
been paid and which security interest shall have been released on or prior to
the Closing Date).
(xiii) There is no litigation currently pending or,
to the best of the Seller's knowledge without independent investigation,
threatened against the Seller that would reasonably be expected to adversely
affect the transfer of the Mortgage Loans, the issuance of the Certificates or
the execution, delivery, performance or enforceability of this Agreement, or
that would result in a material adverse change in the financial condition of the
Seller.
(xiv) With respect to each Mortgage Loan, the related
borrower shall make its first scheduled Monthly Payment (i) by the first day of
the month following the date such Mortgage Loan is due in the case of those
Mortgage Loans with a first scheduled Monthly Payment due in January 2001 or
prior or (ii) within forty-five days from the day such Monthly Payment was due
with respect to each Mortgage Loan with a first scheduled Monthly Payment due in
February 2001 or later.
(b) NC Capital hereby represents and warrants to the Seller
and the Purchaser, as of the date hereof and as of the Closing Date, and
covenants, that:
(i) NC Capital is duly organized, validly existing
and in good standing as a corporation under the laws of the State of California
with full corporate power and authority to conduct its business as presently
conducted by it to the extent material to the consummation of the transactions
contemplated herein. NC Capital had the full corporate power and authority to
own the Mortgage Loans and to transfer and convey the Mortgage Loans to the
Seller and has the full corporate power and authority to execute and deliver,
engage in the transactions contemplated by, and perform and observe the terms
and conditions of this Agreement.
-8-
(ii) NC Capital has duly authorized the execution,
delivery and performance of this Agreement, has duly executed and delivered this
Agreement, and this Agreement, assuming due authorization, execution and
delivery by the Seller and the Purchaser, constitutes a legal, valid and binding
obligation of NC Capital, enforceable against it in accordance with its terms
except as the enforceability thereof may be limited by bankruptcy, insolvency or
reorganization or by general principles of equity.
(iii) The execution, delivery and performance of this
Agreement by NC Capital (x) does not conflict and will not conflict with, does
not breach and will not result in a breach of and does not constitute and will
not constitute a default (or an event, which with notice or lapse of time or
both, would constitute a default) under (A) any terms or provisions of the
articles of incorporation or by-laws of NC Capital, (B) any term or provision of
any material agreement, contract, instrument or indenture, to which NC Capital
is a party or by which NC Capital or any of its property is bound, or (C) any
law, rule, regulation, order, judgment, writ, injunction or decree of any court
or governmental authority having jurisdiction over NC Capital or any of its
property and (y) does not create or impose and will not result in the creation
or imposition of any lien, charge or encumbrance which would have a material
adverse effect upon the Mortgage Loans or any documents or instruments
evidencing or securing the Mortgage Loans.
(iv) No consent, approval, authorization or order of,
registration or filing with, or notice on behalf of NC Capital to any
governmental authority or court is required, under federal laws or the laws of
the State of California, for the execution, delivery and performance by NC
Capital of, or compliance by NC Capital with, this Agreement or the consummation
by NC Capital of any other transaction contemplated hereby and by the Pooling
and Servicing Agreement; provided, however, that NC Capital makes no
representation or warranty regarding federal or state securities laws in
connection with the sale or distribution of the Certificates.
(v) In this Agreement NC Capital has not made any
untrue statement of material fact or omit to state a material fact necessary to
make the statements contained herein not misleading. The written statements,
reports and other documents prepared and furnished or to be prepared and
furnished by NC Capital pursuant to this Agreement or in connection with the
transactions contemplated hereby taken in the aggregate do not contain any
untrue statement of material fact or omit to state a material fact necessary to
make the statements contained therein not misleading.
(vi) NC Capital is not in violation of, and the
execution and delivery of this Agreement by NC Capital and its performance and
compliance with the terms of this Agreement will not constitute a violation with
respect to, any order or decree of any court or any order or regulation of any
federal, state, municipal or governmental agency having jurisdiction over NC
Capital or its assets, which violation might have consequences that would
materially and adversely affect the condition (financial or otherwise) or the
operation of NC Capital or its assets or might have
-9-
consequences that would materially and adversely affect the performance of its
obligations and duties hereunder.
(vii) NC Capital does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement.
(viii) Immediately prior to the sale of the Mortgage
Loans to the Seller, NC Capital was the owner of the related Mortgage and the
indebtedness evidenced by the related Mortgage Note, and, upon the payment to NC
Capital of the Purchase Price, in the event that NC Capital retains or has
retained record title, NC Capital shall retain such record title to each
Mortgage, each related Mortgage Note and the related Mortgage Files with respect
thereto in trust for the Seller as the owner thereof from and after the date
hereof.
(ix) There are no actions or proceedings against, or
investigations known to it of, NC Capital before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans by NC Capital or the
consummation of the transactions contemplated by this Agreement or (C) that
might prohibit or materially and adversely affect the performance by NC Capital
of its obligations under, or validity or enforceability of, this Agreement.
(x) The consummation of the transactions contemplated
by this Agreement are in the ordinary course of business of NC Capital, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
NC Capital are not subject to the bulk transfer or any similar statutory
provisions.
(xi) NC Capital has not dealt with any broker,
investment banker, agent or other person, except for the Seller or any of its
affiliates, that may be entitled to any commission or compensation in connection
with the sale of the Mortgage Loans (except that an entity that previously
financed NC Capital's ownership of the Mortgage Loans may be entitled to a fee
to release its security interest in the Mortgage Loans, which fee shall have
been paid and which security interest shall have been released on or prior to
the Closing Date).
(xii) There is no litigation currently pending or, to
the best of NC Capital's knowledge without independent investigation, threatened
against NC Capital that would reasonably be expected to adversely affect the
transfer of the Mortgage Loans, the issuance of the Certificates or the
execution, delivery, performance or enforceability of this Agreement, or that
would result in a material adverse change in the financial condition of NC
Capital.
(xiii) The information set forth in the applicable
part of the Mortgage Loan Schedule relating to the existence of a Prepayment
Charge is complete, true and correct in all material respects at the date or
dates respecting which such information is furnished and each Prepayment Charge
is permissible and enforceable in accordance with its terms (except to the
extent
-10-
that the enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors' rights
generally or the collectability thereof may be limited due to acceleration in
connection with a foreclosure) under the applicable state law.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF NC CAPITAL
RELATING TO THE MORTGAGE LOANS.
REPRESENTATIONS AND WARRANTIES AS TO INDIVIDUAL MORTGAGE
LOANS. NC Capital hereby represents and warrants to the Purchaser that as to
each Mortgage Loan as of the Closing Date:
(i) The information set forth in the Mortgage Loan Schedule
with respect to such Mortgage Loan is complete, true and correct;
(ii) [reserved];
(iii) All payments required to be made up to the close of
business on the Closing Date for such Mortgage Loan under the terms of the
Mortgage Note have been made; neither NC Capital nor New Century Mortgage
Corporation (the "Interim Servicer") has advanced funds, or induced, solicited
or knowingly received any advance of funds from a party other than the owner of
the related Mortgaged Property, directly or indirectly, for the payment of any
amount required by the Mortgage Note or Mortgage; and there has been no
delinquency, exclusive of any period of grace, in any payment, by the Mortgagor
thereunder during the last twelve months;
(iv) There are no delinquent taxes, ground rents, water
charges, sewer rents, assessments, insurance premiums, leasehold payments,
including assessments payable in future installments or other outstanding
charges affecting the related Mortgaged Property;
(v) The terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by written
instruments, recorded in the applicable public recording office if necessary to
maintain the lien priority of the Mortgage, and which have been delivered to the
Trustee; the substance of any such waiver, alteration or modification has been
approved by the title insurer, to the extent required by the related policy, and
is reflected on the related Mortgage Loan Schedule. No instrument of waiver,
alteration or modification has been executed, and no Mortgagor has been
released, in whole or in part, except in connection with an assumption agreement
approved by the title insurer, to the extent required by the policy, and which
assumption agreement has been delivered to the Trustee and the terms of which
are reflected in the related Mortgage Loan Schedule;
(vi) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off,
-11-
counterclaim or defense, including the defense of usury and no such right of
rescission, set-off, counterclaim or defense has been asserted with respect
thereto;
(vii) All buildings upon the Mortgaged Property are insured by
an insurer acceptable to Fannie Mae and Freddie Mac against loss by fire,
hazards of extended coverage and such other hazards as are customary in the area
where the Mortgaged Property is located, pursuant to insurance policies
conforming to the requirements of the Pooling and Servicing Agreement. All such
insurance policies contain a standard mortgagee clause naming the Interim
Servicer, its successors and assigns as mortgagee and all premiums thereon have
been paid. If the Mortgaged Property is in an area identified on a flood hazard
map or flood insurance rate map issued by the Federal Emergency Management
Agency as having special flood hazards (and such flood insurance has been made
available) a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in effect which policy
conforms to the requirements of Fannie Mae and Freddie Mac. The Mortgage
obligates the Mortgagor thereunder to maintain all such insurance at the
Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to maintain such insurance at Mortgagor's
cost and expense and to seek reimbursement therefor from the Mortgagor;
(viii) Any and all requirements of any federal, state or local
law including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity,
fair housing or disclosure laws applicable to the origination and servicing of
mortgage loans of a type similar to the Mortgage Loans have been complied with;
(ix) The Mortgage has not been satisfied, cancelled,
subordinated or rescinded, in whole or in part, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in part, nor has
any instrument been executed that would effect any such satisfaction,
cancellation, subordination, rescission or release;
(x) The Mortgage is a valid, existing and enforceable first
lien on the Mortgaged Property, including all improvements on the Mortgaged
Property subject only to (a) the lien of current real property taxes and
assessments not yet due and payable, (b) covenants, conditions and restrictions,
rights of way, easements and other matters of the public record as of the date
of recording being acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and which do not adversely affect the Appraised
Value of the Mortgaged Property, and (c) other matters to which like properties
are commonly subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property. Any security agreement, chattel
mortgage or equivalent document related to and delivered in connection with the
Mortgage Loan establishes and creates a valid, existing and enforceable first
lien and first priority security interest on the property described therein and
NC Capital has full right to sell and assign the same to the Seller. The
Mortgaged Property was not, as
-12-
of the date of origination of the Mortgage Loan, subject to a mortgage, deed of
trust, deed to secure debt or other security instrument creating a lien
subordinate to the lien of the Mortgage;
(xi) The Mortgage Note and the related Mortgage are genuine
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms;
(xii) All parties to the Mortgage Note and the Mortgage had
legal capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have been
duly and properly executed by such parties. The Mortgagor is a natural person;
(xiii) The proceeds of the Mortgage Loan have been fully
disbursed to or for the account of the Mortgagor and there is no obligation for
the mortgagee to advance additional funds thereunder and any and all
requirements as to completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage have been paid, and the Mortgagor is not entitled to
any refund of any amounts paid or due to the mortgagee pursuant to the Mortgage
Note or Mortgage;
(xiv) At the time of the sale of the Mortgage Loans by NC
Capital, NC Capital was the sole legal, beneficial and equitable owner of the
Mortgage Note and the Mortgage and had full right to transfer and sell the
Mortgage Loan to the Seller free and clear of any encumbrance, equity, lien,
pledge, charge, claim or security interest;
(xv) All parties which have had any interest in the Mortgage
Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were) in compliance
with any and all applicable "doing business" and licensing requirements of the
laws of the state wherein the Mortgaged Property is located;
(xvi) The Mortgage Loan is covered by an American Land Title
Association ("ALTA") lender's title insurance policy (which has an adjustable
rate mortgage endorsement in the form of ALTA 6.0 or 6.1) acceptable to Fannie
Mae and Freddie Mac, issued by a title insurer acceptable to Fannie Mae and
Freddie Mac and qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring (subject to the exceptions contained in (x)(a) and
(b) above) the Interim Servicer, its successors and assigns as to the first
priority lien of the Mortgage in the original principal amount of the Mortgage
Loan and against any loss by reason of the invalidity or unenforceability of the
lien resulting from the provisions of the Mortgage providing for adjustment in
the Mortgage Rate and Monthly Payment. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress to and from the
Mortgaged Property, and against encroachments by or upon the Mortgaged Property
or any interest therein. The Interim Servicer is the sole insured of such
lender's title insurance policy, and such lender's title insurance policy is in
full force and effect and will be in full force and effect upon the consummation
of the transactions
-13-
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
NC Capital, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy;
(xvii) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and, to NC
Capital's knowledge, no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default, breach,
violation or event of acceleration, and neither NC Capital nor the Interim
Servicer has waived any default, breach, violation or event of acceleration;
(xviii) There are no mechanics' or similar liens or claims
which have been filed for work, labor or material (and no rights are outstanding
that under law could give rise to such lien) affecting the related Mortgaged
Property which are or may be liens prior to, or equal or coordinate with, the
lien of the related Mortgage;
(xix) All improvements which were considered in determining
the Appraised Value of the related Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property, and no
improvements on adjoining properties encroach upon the Mortgaged Property;
(xx) The Mortgage Loan was originated by the Interim Servicer
or by a savings and loan association, a savings bank, a commercial bank or
similar banking institution which is supervised and examined by a federal or
state authority, or by a mortgagee approved as such by the Secretary of HUD;
(xxi) Principal payments on the Mortgage Loan commenced no
more than sixty days after the proceeds of the Mortgage Loan were disbursed. The
Mortgage Loan bears interest at the Mortgage Rate. With respect to each Mortgage
Loan, the Mortgage Note is payable on the first day of each month in Monthly
Payments, which are changed on each Adjustment Date, and in any case, are
sufficient to fully amortize the original principal balance over the original
term thereof and to pay interest at the related Mortgage Rate. The Index for
each Mortgage Loan is as defined in the Pooling and Servicing Agreement. The
Mortgage Note does not permit negative amortization. No Mortgage Loan allows for
the conversion of the adjustable Mortgage Rate thereon to a fixed Mortgage Rate;
(xxii) The origination and collection practices used by the
Interim Servicer with respect to each Mortgage Note and Mortgage have been in
all respects legal, proper, prudent and customary in the mortgage origination
and servicing industry. The Mortgage Loan has been serviced by the Interim
Servicer and any predecessor servicer in accordance with the terms of the
Mortgage Note. With respect to escrow deposits and escrow payments, if any, all
such payments are in the possession of, or under the control of, the Interim
Servicer and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made.
-14-
No escrow deposits or escrow payments or other charges or payments due the
Interim Servicer have been capitalized under any Mortgage or the related
Mortgage Note and no such escrow deposits or escrow payments are being held by
the Interim Servicer for any work on a Mortgaged Property which has not been
completed;
(xxiii) The Mortgaged Property is free of material damage and
waste and there is no proceeding pending for the total or partial condemnation
thereof;
(xxiv) The Mortgage and related Mortgage Note contain
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including, (a) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and (b)
otherwise by judicial foreclosure. The Mortgaged Property has not been subject
to any bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not
filed for protection under applicable bankruptcy laws. There is no homestead or
other exemption available to the Mortgagor which would interfere with the right
to sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage. The Mortgagor has not notified NC Capital or the Interim Servicer and
NC Capital and the Interim Servicer have no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers and Sailors Civil Relief Act of
1940;
(xxv) The Mortgage Loan was underwritten in accordance with
the underwriting standards of NC Capital in effect at the time the Mortgage Loan
was originated; and the Mortgage Note and Mortgage are on forms acceptable to
prudent mortgage lending institutions in the secondary market;
(xxvi) The Mortgage Note is not and has not been secured by
any collateral except the lien of the corresponding Mortgage on the Mortgaged
Property;
(xxvii) The Mortgage File contains an appraisal of the related
Mortgaged Property which satisfied the standards of Fannie Mae and Freddie Mac
and was made and signed, prior to the approval of the Mortgage Loan application,
by a qualified appraiser, duly appointed by NC Capital or the Interim Servicer,
who had no interest, direct or indirect in the Mortgaged Property or in any loan
made on the security thereof, whose compensation is not affected by the approval
or disapproval of the Mortgage Loan and who met the minimum qualifications of
Fannie Mae and Freddie Mac. Each appraisal of the Mortgage Loan was made in
accordance with the relevant provisions of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989;
(xxviii) In the event the Mortgage constitutes a deed of
trust, a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage, and no
fees or expenses are or will become payable by the Seller to the trustee under
the deed of trust, except in connection with a trustee's sale after default by
the Mortgagor;
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(xxix) No Mortgage Loan contains provisions pursuant to which
Monthly Payments are (a) paid or partially paid with funds deposited in any
separate account established by NC Capital, the Interim Servicer, the Mortgagor,
or anyone on behalf of the Mortgagor, (b) paid by any source other than the
Mortgagor or (c) contains any other similar provisions which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;
(xxx) The Mortgagor has executed a statement to the effect
that the Mortgagor has received all disclosure materials required by applicable
law with respect to the making of adjustable rate mortgage loans and rescission
materials with respect to Refinanced Mortgage Loans, and such statement is and
will remain in the Mortgage File;
(xxxi) No Mortgage Loan was made in connection with (a) the
construction or rehabilitation of a Mortgaged Property or (b) facilitating the
trade-in or exchange of a Mortgaged Property;
(xxxii) The Mortgaged Property is lawfully occupied under
applicable law; all inspections, licenses and certificates required to be made
or issued with respect to all occupied portions of the Mortgaged Property and,
with respect to the use and occupancy of the same, including but not limited to
certificates of occupancy, have been made or obtained from the appropriate
authorities;
(xxxiii) No error, omission, misrepresentation, negligence,
fraud or similar occurrence with respect to a Mortgage Loan has taken place on
the part of any person, including without limitation the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan;
(xxxiv) The Assignment of Mortgage is in recordable form and
is acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;
(xxxv) Any principal advances made to the Mortgagor prior to
the Cut-off Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term. The lien of the Mortgage
securing the consolidated principal amount is expressly insured as having first
lien priority by a title insurance policy, an endorsement to the policy insuring
the mortgagee's consolidated interest or by other title evidence acceptable to
Fannie Mae and Freddie Mac. The consolidated principal amount does not exceed
the original principal amount of the Mortgage Loan;
(xxxvi) No Mortgage Loan has a balloon payment feature;;
-16-
(xxxvii) If the residential dwelling on the Mortgaged Property
is a condominium unit or a unit in a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project meets the eligibility requirements of Fannie Mae and Freddie Mac;
(xxxviii) Each Mortgage Loan which is a Cash-out Refinancing
that was originated in the State of Texas was originated in accordance with
laws, rules and regulations of the State of Texas, including Section 50(a)(6) of
the Texas Constitution;
(xxxix) Interest on each Mortgage Loan is calculated on the
basis of a 360-day year consisting of twelve 30-day months;
(xl) The Mortgaged Property is in material compliance with all
applicable environmental laws pertaining to environmental hazards including,
without limitation, asbestos, and neither NC Capital, the Interim Servicer nor,
to NC Capital's or the Interim Servicer's knowledge, the related Mortgagor, has
received any notice of any violation or potential violation of such law;
(xli) NC Capital has, at its own expense, caused each Mortgage
Loan to be covered by a Tax Service Contract which is assignable to the Seller
or its designee; provided however, that if NC Capital has failed to purchase
such Tax Service Contract, NC Capital shall reimburse the Seller for all costs
and expenses incurred by the Seller in connection with the purchase of any such
Tax Service Contract;
(xlii) Each Mortgage Loan is covered by a Flood Zone Service
Contract which is assignable to the Seller or its designee or, for each Mortgage
Loan not covered by such Flood Zone Service Contract, NC Capital agrees to
purchase such Flood Zone Service Contract;
(xliii) No selection procedures were used by NC Capital that
identified the Mortgage Loans as being less desirable or valuable than other
comparable mortgage loans in NC Capital's portfolio; and;
(xliv) No Mortgage Loan is subject to the provisions of the
Home Ownership and Equity Protection Act of 1994.
(xlv) Each Mortgage Loan constitutes a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code.
(xlvi) No Mortgage Loan was subject to the Home Ownership and
Equity Protection Act of 1994 or any comparable state law.
(xlvii) No proceeds from any Mortgage Loan were used to
finance single-premium credit insurance policies.
-17-
(xlviii) No Mortgage Loan will impose a Prepayment Charge for
a term in excess of five years.
SECTION 7. REPURCHASE OBLIGATION FOR DEFECTIVE
DOCUMENTATION AND FOR BREACH OF
REPRESENTATION AND WARRANTY.
(a) The representations and warranties contained in Section 6
shall not be impaired by any review and examination of loan files or other
documents evidencing or relating to the Mortgage Loans or any failure on the
part of the Seller or the Purchaser to review or examine such documents and
shall inure to the benefit of any assignee, transferee or designee of the
Purchaser, including the Trust Administrator on behalf of the Trustee for the
benefit of the Certificateholders. With respect to the representations and
warranties contained herein as to which NC Capital has no knowledge, if it is
discovered that the substance of any such representation and warranty was
inaccurate as of the date such representation and warranty was made or deemed to
be made, and such inaccuracy materially and adversely affects the value of the
related Mortgage Loan or the interest therein of the Purchaser or the
Purchaser's assignee, transferee or designee, then notwithstanding the lack of
knowledge by NC Capital with respect to the substance of such representation and
warranty being inaccurate at the time the representation and warranty was made,
NC Capital shall take such action described in the following paragraph in
respect of such Mortgage Loan.
Upon discovery by the Seller, the Purchaser or any assignee,
transferee or designee of the Purchaser of any materially defective document in,
or that any material document was not transferred by the Seller (as listed on
the Trustee's Preliminary Exception Report) as part of any Mortgage File, or of
a breach of any of the representations and warranties contained in Section 6
that materially and adversely affects the value of any Mortgage Loan or the
interest therein of the Purchaser or the Purchaser's assignee, transferee or
designee, the party discovering such breach shall give prompt written notice to
NC Capital. Within sixty (60) days of its discovery or its receipt of notice of
any such missing documentation that was not transferred by the Seller as
described above, or of materially defective documentation, or of any such breach
of a representation and warranty, NC Capital promptly shall deliver such missing
document or cure such defect or breach in all material respects or, in the event
NC Capital cannot deliver such missing document or cannot cure such defect or
breach, NC Capital shall, within ninety (90) days of its discovery or receipt of
notice, either (i) repurchase the affected Mortgage Loan at the Purchase Price
(as such term is defined in the Pooling and Servicing Agreement) or (ii)
pursuant to the provisions of the Pooling and Servicing Agreement, cause the
removal of such Mortgage Loan from the Trust Fund and substitute one or more
Qualified Substitute Mortgage Loans. NC Capital shall amend the Closing Schedule
to reflect the withdrawal of such Mortgage Loan from the terms of this Agreement
and the Pooling and Servicing Agreement. NC Capital shall deliver to the
Purchaser such amended Closing Schedule and shall deliver such other documents
as are required by this Agreement or the Pooling and Servicing Agreement within
five (5) days of any such amendment. Any repurchase pursuant to this Section
7(a) shall be accomplished by transfer to an account designated by the Purchaser
of the amount of the Purchase
-18-
Price in accordance with Section 2.03 of the Pooling and Servicing Agreement.
Any repurchase required by this Section shall be made in a manner consistent
with Section 2.03 of the Pooling and Servicing Agreement.
(b) If the representation made by NC Capital in Section
5(b)(xiii) is breached, NC Capital shall not have the right or obligation to
cure, substitute or repurchase the affected Mortgage Loan but shall remit to the
Servicer for deposit in the Collection Account, prior to the next succeeding
Servicer Remittance Date, the amount of the Prepayment Charge indicated on the
applicable part of the Mortgage Loan Schedule to be due from the Mortgagor in
the circumstances less any amount collected and remitted to the Servicer for
deposit into the Collection Account.
(c) It is understood and agreed that the obligations of NC
Capital set forth in this Section 7 to cure or repurchase a defective Mortgage
Loan (and to make payments pursuant to Section 7(b)) constitute the sole
remedies of the Purchaser against NC Capital respecting a missing document or a
breach of the representations and warranties contained in Section 6.
(d) With respect to a breach of the representations made
pursuant to Section 5(a)(viii) and (xiv) that materially and adversely affects
the value of any Mortgage Loan or the interest therein of the Purchaser or the
Purchaser's assignee, transferee or designee, the Seller, and not NC Capital,
shall be required to take the actions set forth in this Section 7.
SECTION 8. CLOSING; PAYMENT FOR THE MORTGAGE LOANS. The
closing of the purchase and sale of the Mortgage Loans shall be held at the New
York City office of Thacher Proffitt & Wood at 10:00 a.m. New York City time on
the Closing Date.
The closing shall be subject to each of the following
conditions:
(a) All of the representations and warranties of the
Seller under this Agreement shall be true and correct
in all material respects as of the date as of which
they are made and no event shall have occurred which,
with notice or the passage of time, would constitute
a default under this Agreement;
(b) All of the representations and warranties of NC
Capital under this Agreement shall be true and
correct in all material respects as of the date as of
which they are made and no event shall have occurred
which, with notice or the passage of time, would
constitute a default under this Agreement;
(c) The Purchaser shall have received, or the attorneys
of the Purchaser shall have received in escrow (to be
released from escrow at the time of closing), all
Closing Documents as specified in Section 9 of this
Agreement, in such forms as are agreed upon and
acceptable to the Purchaser, duly executed by
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all signatories other than the Purchaser as required
pursuant to the respective terms thereof;
(d) The Seller shall have delivered or caused to be
delivered and released to the Purchaser or to its
designee, all documents (including without
limitation, the Mortgage Loans) required to be so
delivered by the Purchaser pursuant to Section 2.01
of the Pooling and Servicing Agreement; and
(e) All other terms and conditions of this Agreement and
the Pooling and Servicing Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Seller on the Closing Date, against
delivery and release by the Seller to the Trustee of all documents required
pursuant to the Pooling and Servicing Agreement, the consideration for the
Mortgage Loans as specified in Section 3 of this Agreement.
SECTION 9. CLOSING DOCUMENTS. Without limiting the generality
of Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:
(a) An Officers' Certificate of the Seller, dated the
Closing Date, upon which NC Capital, the Purchaser
and the Underwriter may rely with respect to certain
facts regarding the sale of the Mortgage Loans by the
Seller to the Purchaser;
(b) An Opinion of Counsel of the Seller, dated the
Closing Date and addressed to NC Capital, the
Purchaser and the Underwriter, substantially in the
form attached hereto as Exhibit 1;
(c) An Officers' Certificate of NC Capital, dated the
Closing Date, upon which the Seller, the Purchaser
and the Underwriter may rely, in the form of Exhibit
2 hereto, and attached thereto copies of the
certificate of incorporation, by- laws and
certificate of good standing of NC Capital under the
laws of its state of incorporation;
(d) An opinion of Counsel of NC Capital, dated the
Closing Date and addressed to the Seller, the
Purchaser and the Underwriter substantially in the
form attached hereto as Exhibit 3;
(e) Such opinions of counsel as the Rating Agencies or
the Trustee may request in connection with the sale
of the Mortgage Loans by the Seller to the Purchaser
or the Seller's execution and delivery of, or
performance under, this Agreement;
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(f) A letter from Deloitte & Touche, certified public
accountants, dated the date hereof, to the effect
that they have performed certain specified procedures
as a result of which they determined that certain
information of an accounting, financial or
statistical nature set forth in the Purchaser's
Prospectus Supplement for Series 2001-NC1, dated
March 19, 2001 under the captions "Summary--The
Mortgage Loans," "Risk Factors," "The Mortgage Pool"
(except with respect to the information contained
under the caption "The Mortgage Pool--Underwriting
Standards") agrees with the records of the Seller and
the information contained under the captions "The
Mortgage Pool--Underwriting Standards" and "The
Originator" agrees with the records of NC Capital;
and
(g) Such further information, certificates, opinions and
documents as the Purchaser or the Underwriter may
reasonably request.
SECTION 10. COSTS. The Seller shall pay (or shall reimburse
the Purchaser or any other Person to the extent that the Purchaser or such other
Person shall pay) all costs and expenses incurred in connection with the
transfer and delivery of the Mortgage Loans, including without limitation,
recording fees, fees for title policy endorsements and continuations and the
fees for recording Assignments of Mortgage, the fees and expenses of the
Seller's accountants and attorneys, the costs and expenses incurred in
connection with producing the Servicer's or any Subservicer's loan loss,
foreclosure and delinquency experience, and the costs and expenses incurred in
connection with obtaining the documents referred to in Sections 9(d), 9(e) and
9(g), the costs and expenses of printing (or otherwise reproducing) and
delivering this Agreement, the Pooling and Servicing Agreement, the
Certificates, the prospectus and prospectus supplement, and any private
placement memorandum relating to the Certificates and other related documents,
the initial fees, costs and expenses of the Trustee and the Trust Administrator,
the fees and expenses of the Purchaser's counsel in connection with the
preparation of all documents relating to the securitization of the Mortgage
Loans, the filing fee charged by the Securities and Exchange Commission for
registration of the Certificates and the fees charged by any rating agency to
rate the Certificates. All other costs and expenses in connection with the
transactions contemplated hereunder shall be borne by the party incurring such
expense.
SECTION 11. SERVICING. NC Capital has represented to the
Purchaser that the Mortgage Loans will be serviced by the Servicer under the
Pooling and Servicing Agreement, and that such Mortgage Loans are not subject to
any other servicing agreements with third parties. It is understood and agreed
among NC Capital, the Seller and the Purchaser that the Mortgage Loans are to be
delivered free and clear of any servicing agreements. NC Capital, without
reimbursement from the Purchaser, shall pay any fees or penalties required by
any servicer for releasing the Mortgage Loans from any such servicing agreement
(it being understood that neither the Purchaser nor any affiliate of the
Purchaser is servicing the Mortgage Loans under any such servicing agreement
and, accordingly, that neither the Purchaser nor any affiliate of the Purchaser
is entitled to receive any fee
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for releasing the Mortgage Loans from any such servicing agreement) and shall
arrange for the orderly transfer, as of the Cut-off Date, of such servicing from
any such servicer to the Servicer. The Mortgage Loans shall be serviced by the
Servicer in accordance with the terms of the Pooling and Servicing Agreement.
For so long as the Servicer services the Mortgage Loans, the Servicer shall be
entitled to the Servicing Fee and such other payments as provided for under the
terms of the Pooling and Servicing Agreement.
SECTION 12. INDEMNIFICATION. (a) NC Capital shall indemnify
and hold harmless each of (i) the Purchaser, (ii) the Underwriter, (iii) the
Person, if any, to which the Purchaser assigns its rights in and to a Mortgage
Loan and each of their respective successors and assigns and (iv) each person,
if any, who controls the Purchaser within the meaning of Section 15 of the
Securities Act of 1933, as amended (the "1933 Act") ((i) through (iv)
collectively, the "Indemnified Party") against any and all losses, claims,
expenses, damages or liabilities to which the Indemnified Party may become
subject, under the 1933 Act or otherwise, insofar as such losses, claims,
expenses, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (a) any untrue statement or alleged untrue statement of any
material fact contained in the prospectus supplement (the "Prospectus
Supplement") or any private placement memorandum relating to the offering by the
Purchaser or an affiliate thereof, of the Class N Certificates and/or the Class
X Certificates, or the omission or the alleged omission to state therein the
material fact necessary in order to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with (i) information furnished in writing to the
Purchaser or any of its affiliates by NC Capital or any of its affiliates
specifically for use therein, which shall include, with respect to the
Prospectus Supplement, the information set forth under the captions
"Summary--The Mortgage Loans," "Risk Factors" (but only to the extent of
information concerning the Mortgage Loans contained therein), "The Mortgage
Pool" and "The Originator" agrees with the records of NC Capital or any of its
affiliates and, with respect to any private placement memorandum, any
information of a comparable nature (to the extent such untrue statement or
alleged untrue statement or omission or alleged omission in such sections is the
result of an error in the data file provided to the Purchaser or any of its
affiliates by NC Capital or any of its affiliates which untrue statement or
alleged untrue statement or omission or alleged omission was not superseded or
corrected by the delivery to the Purchaser of corrected written or electronic
information, or for which NC Capital provided written notice of such untrue
statement or alleged untrue statement or omission or alleged omission to the
Purchaser prior to the confirmation of the sale of the Certificates), or (ii)
the data files containing information with respect to the Mortgage Loans as
transmitted by modem to the Purchaser by NC Capital or any of its affiliates (as
such transmitted information may have been amended in writing by NC Capital or
any of its affiliates with the written consent of the Purchaser subsequent to
such transmission), (b) any representation, warranty or covenant made by NC
Capital or any affiliate of NC Capital herein or in the Pooling and Servicing
Agreement, on which the Purchaser has relied, being, or alleged to be, untrue or
incorrect or (c) any updated collateral information provided by the Underwriter
to a purchaser of the Certificates derived from the data contained in clause
(ii) and the Remittance Report or a current collateral tape obtained from NC
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Capital or an affiliate of NC Capital, including the current loan balances of
the Mortgage Loans; provided, however, that to the extent that any such losses,
claims, expenses, damages or liabilities to which the Indemnified Party may
become subject arise out of or are based upon both (1) statements, omissions,
representations, warranties or covenants of NC Capital described in clause (a),
(b) or (c) above and (2) any other factual basis, NC Capital shall indemnify and
hold harmless the Indemnified Party only to the extent that the losses, claims,
expenses, damages, or liabilities of the person or persons asserting the claim
are determined to rise from or be based upon matters set forth in clause (1)
above and do not result from the gross negligence or willful misconduct of such
Indemnified Party. This indemnity shall be in addition to any liability that NC
Capital may otherwise have.
SECTION 13. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.
The sale and delivery on the Closing Date of the Mortgage Loans described on the
Mortgage Loan Schedule in accordance with the terms and conditions of this
Agreement is mandatory. It is specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser in the event of the Seller's failure to
deliver the Mortgage Loans on or before the Closing Date. The Seller hereby
grants to the Purchaser a lien on and a continuing security interest in the
Seller's interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Seller of
its obligation hereunder, and the Seller agrees that it holds such Mortgage
Loans in custody for the Purchaser, subject to the Purchaser's (i) right, prior
to the Closing Date, to reject any Mortgage Loan to the extent permitted by this
Agreement and (ii) obligation to deliver or cause to be delivered the
consideration for the Mortgage Loans pursuant to Section 8 hereof. Any Mortgage
Loans rejected by the Purchaser shall concurrently therewith be released from
the security interest created hereby. All rights and remedies of the Purchaser
under this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.
Notwithstanding the foregoing, if on the Closing Date, each of
the conditions set forth in Section 8 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the Purchase Price, or any
such condition shall not have been waived or satisfied and the Purchaser
determines not to pay or cause to be paid the Purchase Price, the Purchaser
shall immediately effect the redelivery of the Mortgage Loans, if delivery to
the Purchaser has occurred, and the security interest created by this Section 13
shall be deemed to have been released.
SECTION 14. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by fax and, receipt of which is confirmed by telephone, if to the
Purchaser, addressed to the Purchaser at 6707 Fairview Road, Suite D, Charlotte,
North Carolina 28210, or such other address as may hereafter be furnished to the
Seller and NC Capital in writing by the Purchaser; if to the Seller, addressed
to the Seller at 31 West 52nd Street,
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New York, New York 10019, fax 212-469-2740, Attention: Michael Commaroto, or to
such other address as the Seller may designate in writing to the Purchaser and
NC Capital; and if to NC Capital, addressed to NC Capital at 18400 Von Karman,
Suite 1000, Irvine, California 92612, fax (949) 440- 7033, or such other address
as may hereafter be furnished to the Seller and the Purchaser in writing by NC
Capital.
SECTION 15. SEVERABILITY OF PROVISIONS. Any part, provision,
representation or warranty of this Agreement that is prohibited or that is held
to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement that
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.
SECTION 16. AGREEMENT OF PARTIES. NC Capital, the Seller and
the Purchaser each agree to execute and deliver such instruments and take such
actions as either of the others may, from time to time, reasonably request in
order to effectuate the purpose and to carry out the terms of this Agreement and
the Pooling and Servicing Agreement.
SECTION 17. SURVIVAL. (a) The Seller agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Purchaser, notwithstanding any investigation heretofore or
hereafter made by the Purchaser or on its behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such certificate
or other instrument shall survive the delivery of and payment for the Mortgage
Loans and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and notwithstanding
subsequent termination of this Agreement, the Pooling and Servicing Agreement or
the Trust Fund.
(b) NC Capital agrees that the representations, warranties and
agreements made by it herein and in any certificate or other instrument
delivered pursuant hereto shall be deemed to be relied upon by the Seller and
the Purchaser notwithstanding any investigation heretofore or hereafter made by
the Seller or the Purchaser or on the behalf of either of them, and that the
representations, warranties and agreements made by NC Capital herein or in any
such certificate shall continue in full force and effect, notwithstanding
subsequent termination of this Agreement, the Pooling and Servicing Agreement or
the Trust Fund.
SECTION 18. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE
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LAWS (INCLUDING THE CHOICE OF LAW PROVISIONS) AND DECISIONS OF THE STATE OF NEW
YORK. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.
SECTION 19. MISCELLANEOUS. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Seller to the Purchaser as provided in
Section 4 hereof be, and be construed as, a sale of the Mortgage Loans by the
Seller to the Purchaser and not as a pledge of the Mortgage Loans by the Seller
to the Purchaser to secure a debt or other obligation of the Seller. However, in
the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Seller, then (a) it is the express
intent of the parties that such conveyance be deemed a pledge of the Mortgage
Loans by the Seller to the Purchaser to secure a debt or other obligation of the
Seller and (b) (1) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the New York Uniform
Commercial Code; (2) the conveyance provided for in Section 4 hereof shall be
deemed to be a grant by the Seller to the Purchaser of a security interest in
all of the Seller's right, title and interest in and to the Mortgage Loans and
all amounts payable to the holders of the Mortgage Loans in accordance with the
terms thereof and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property, including
without limitation all amounts, other than investment earnings, from time to
time held or invested in the Collection Account whether in the form of cash,
instruments, securities or other property; (3) the possession by the Purchaser
or its agent of Mortgage Notes, the related Mortgages and such other items of
property that constitute instruments, money, negotiable documents or chattel
paper shall be deemed to be "possession by the secured party" for purposes of
perfecting the security interest pursuant to Section 9-305 of the New York
Uniform Commercial Code; and (4) notifications to persons holding such property
and acknowledgments, receipts or confirmations from persons holding such
property shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Purchaser for the purpose of perfecting such security interest under
applicable law. Any assignment of the interest of the Purchaser pursuant to
Section 4(d) hereof shall also be deemed to be an assignment of any security
interest created hereby. The Seller and the Purchaser shall, to the extent
consistent with this Agreement, take such actions as may be necessary to ensure
that, if this Agreement were deemed to create a security interest in the
Mortgage Loans, such security
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interest would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of this
Agreement and the Pooling and Servicing Agreement.
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IN WITNESS WHEREOF, the Purchaser, NC Capital and the Seller
have caused their names to be signed by their respective officers thereunto duly
authorized as of the date first above written.
DEUTSCHE BANK AG NEW YORK BRANCH
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
ACE SECURITIES CORP.
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
NC CAPITAL CORPORATION
By:_____________________________
Name:
Title:
EXHIBIT 1
[FORM OF OPINION OF COUNSEL TO THE SELLER]
Available Upon Request
EXHIBIT 2
[FORM OF OFFICER'S CERTIFICATE OF NC CAPITAL]
I, __________________ hereby certify that I am the duly
appointed __________________ of NC Capital Corporation, a California corporation
(the "Company"), and further certify, on behalf of the Company, as follows:
1. Attached hereto as Attachment I is a true and correct copy
of the Articles of Incorporation and By-laws of the Company as in full
force and effect on the date hereof. Attached hereto as Attachment II
is a certificate of good standing, dated March __, 2001, issued by the
State of California with respect to the Company. No event has occurred
since the date thereof that has affected the good standing of the
Company under the laws of the State of California.
2. There are no actions, suits or proceedings pending or, to
the best of my knowledge, threatened against or affecting the Company
which, if adversely determined, individually or in the aggregate, would
materially and adversely affect the Company's ability to perform its
obligations under the Mortgage Loan Purchase Agreement, dated March __,
2001 (the "Mortgage Loan Purchase Agreement"), among the Company, ACE
Securities Corp. (the "Purchaser") and Deutsche Bank AG New York Branch
(the "Seller"). No proceedings looking toward merger, consolidation or
liquidation, dissolution or bankruptcy of the Company are pending or
contemplated.
3. Each person who, as an officer or representative of the
Company, signed the Mortgage Loan Purchase Agreement and any other
document delivered prior hereto or on the date hereof in connection
with the transactions contemplated by the Mortgage Loan Purchase
Agreement was at the respective times of such signing and delivery, and
is as of the date hereof, duly elected or appointed, qualified and
acting as such officer or representative, and the signatures of such
persons appearing on such documents are their genuine signatures.
4. Each of the Mortgage Loans referred to in the Mortgage Loan
Purchase Agreement was originated in accordance with Section 6(xii) of
the Mortgage Loan Purchase Agreement.
5. Attached hereto as Attachment III is a true and correct
copy of the resolutions duly adopted by the Board of Directors of the
Company on ____________, ____ (the "Resolutions") with respect to the
transactions contemplated by the Mortgage Loan Purchase Agreement; said
Resolutions have not been amended or modified, annulled or revoked and
are in full force and effect on the date hereof.
6. All of the representations and warranties of the Company
contained in the Mortgage Loan Purchase Agreement are true and correct
in all material respects as of the
Closing Date, and no event has occurred which, with notice or the
passage of time or both, would constitute a default under the Mortgage
Loan Purchase Agreement.
7. The information set forth in the Mortgage Loan Schedule is
true and correct in all material respects.
8. The information contained in the Prospectus Supplement,
dated March __, 2001 including, but not limited to, information
contained in the data file, specifically for use in the preparation of
the Prospectus Supplement, relating to the Mortgage Loans, specifically
the information, in the summary under the subheadings "Summary--The
Mortgage Pool," "Risk Factors," "The Mortgage Pool" and "The
Originator" is true and accurate and does not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
9. The Company has performed all of its duties and has
satisfied all of the material conditions on its part to be performed or
satisfied prior to the Closing Date.
10. Capitalized terms used but not defined herein shall have
the meanings assigned in the Mortgage Loan Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed
the seal of the Company.
Dated: March __, 2001
By:________________________
Name:
[Seal] Title:
I, ____________________________, an [Assistant] Secretary of
NC Capital Corporation, hereby certify that __________________ is the duly
appointed, qualified and acting _______________________ of NC Capital
Corporation and that the signature appearing above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: March __, 2001
By:________________________
Name:
Title:
EXHIBIT 3
[FORM OF OPINION OF COUNSEL FOR NC CAPITAL]
Available Upon Request
EXHIBIT 4
Loan #: ____________
Borrower: _____________
LOST NOTE AFFIDAVIT
-------------------
I, as ____________________ of ______________________, a
_______________ corporation am authorized to make this Affidavit on behalf of
_____________________ (the "Seller"). In connection with the administration of
the Mortgage Loans held by _____________________, a ___________ [corporation] as
Seller on behalf of ________________________ (the "Purchaser"),
_____________________ (the "Deponent"), being duly sworn, deposes and says that:
1. The Seller's address is : _____________________
_____________________
_____________________
2. The Seller previously delivered to the Purchaser a
signed Initial Certification with respect to such Mortgage
and/or Assignment of Mortgage;
3. Such Mortgage Note and/or Assignment of Mortgage was
assigned or sold to the Purchaser by ________________________,
a ____________ corporation pursuant to the terms and
provisions of a Mortgage Loan Purchase Agreement dated as of
March __, 2001;
4. Such Mortgage Note and/or Assignment of Mortgage is
not outstanding pursuant to a request for release of
Documents;
5. Aforesaid Mortgage Note and/or Assignment of Mortgage
(the "Original") has been lost;
6. Deponent has made or caused to be made a diligent
search for the Original and has been unable to find or recover
same;
7. The Seller was the Seller of the Original at the time
of the loss; and
8. Deponent agrees that, if said Original should ever
come into Seller's possession, custody or power, Seller will
immediately and without consideration surrender the Original
to the Purchaser.
9. Attached hereto is a true and correct copy of (i) the
Note, endorsed in blank by the Mortgagee and (ii) the Mortgage
or Deed of Trust (strike one) which secures
the Note, which Mortgage or Deed of Trust is recorded in the
county where the property is located.
10. Deponent hereby agrees that the Seller (a) shall
indemnify and hold harmless the Purchaser, its successors and
assigns, against any loss, liability or damage, including
reasonable attorney's fees, resulting from the unavailability
of any Notes, including but not limited to any loss, liability
or damage arising from (i) any false statement contained in
this Affidavit, (ii) any claim of any party that purchased a
mortgage loan evidenced by the Lost Note or any interest in
such mortgage loan, (iii) any claim of any borrower with
respect to the existence of terms of a mortgage loan evidenced
by the Lost Note on the related property to the fact that the
mortgage loan is not evidenced by an original note and (iv)
the issuance of a new instrument in lieu thereof (items (i)
through (iv) above hereinafter referred to as the "Losses")
and (b) if required by any Rating Agency in connection with
placing such Lost Note into a Pass-Through Transfer, shall
obtain a surety from an insurer acceptable to the applicable
Rating Agency to cover any Losses with respect to such Lost
Note.
11. This Affidavit is intended to be relied upon by the
Purchaser, its successors and assigns. [NC Capital
Corporation, a California corporation] represents and warrants
that is has the authority to perform its obligations under
this Affidavit of Lost Note.
Executed this __ day of _____, 200_.
NC CAPITAL CORPORATION
By:______________________
Name:
Title:
On this __ day of _______, 200_, before me appeared
_________________ to me personally known, who being duly sworn did say that he
is the _____________________ of ____________________ a ______________
corporation and that said Affidavit of Lost Note was signed and sealed on behalf
of such corporation and said acknowledged this instrument to be the free act and
deed of said corporation.
Signature:
[Seal]
EXHIBIT E-1
-----------
REQUEST FOR RELEASE
(for Trustee/Custodian)
Loan Information
- ----------------
Name of Mortgagor: ____________________________
Servicer
Loan No.: ____________________________
Trustee/Custodian
- -----------------
Name: ____________________________
Address: ____________________________
____________________________
Trustee/Custodian
Mortgage File No.: ____________________________
Depositor
- ---------
Name: ACE SECURITIES CORP.
Address: 6525 Morrison Boulevard, Suite 318
Charlotte, North Carolina 28211
Certificates: Asset Backed Pass-Through
Certificates, Series 2001-NC1.
The undersigned Servicer hereby acknowledges that it has
received from _______________________, as Trustee for the Holders of Asset
Backed Pass-Through Certificates, Series 2001-NC1, the documents referred to
below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Release shall have the meanings given them in the Pooling and
Servicing Agreement, dated as of March 1, 2001, among the Trustee, the Depositor
and the Servicer (the "Pooling and Servicing Agreement").
( ) Promissory Note dated _______________, ____, in the original principal
sum of $__________, made by _____________________, payable to, or
endorsed to the order of, the Trustee.
( ) Mortgage recorded on _________________________ as instrument no.
____________________ in the County Recorder's Office of the County of
_________________, State of __________________ in book/reel/docket
_________________ of official records at page/image _____________.
( ) Deed of Trust recorded on ___________________ as instrument no.
________________ in the County Recorder's Office of the County of
_________________, State of ____________________ in book/reel/docket
_________________ of official records at page/image ______________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
___________________ as instrument no. _________ in the County
Recorder's Office of the County of _______________, State of
_______________________ in book/reel/docket ____________ of official
records at page/image ____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) ---------------------------------------------
( ) ---------------------------------------------
( ) ---------------------------------------------
( ) ---------------------------------------------
The undersigned Servicer hereby acknowledges and agrees as
follows:
(1) The Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trustee, solely for the
purposes provided in the Agreement.
(2) The Servicer shall not cause or permit the Documents to
become subject to, or encumbered by, any claim, liens, security
interest, charges, writs of attachment or other impositions nor shall
the Servicer assert or seek to assert any claims or rights of setoff to
or against the Documents or any proceeds thereof.
(3) The Servicer shall return each and every Document
previously requested from the Mortgage File to the Trustee when the
need therefor no longer exists, unless the Mortgage Loan relating to
the Documents has been liquidated and the proceeds thereof have been
remitted to the Collection Account and except as expressly provided in
the Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the
Servicer shall at all times be earmarked for the account of the
Trustee, and the Servicer shall keep the Documents and any proceeds
separate and distinct from all other property in the Servicer's
possession, custody or control.
LITTON LOAN SERVICING LP
By:
---------------------
Name:
Title:
EXHIBIT E-2
-----------
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full]
OFFICERS' CERTIFICATE AND TRUST RECEIPT
ASSET BACKED PASS-THROUGH CERTIFICATES
SERIES 2001-NC1
____________________________________________________ HEREBY CERTIFIES THAT
HE/SHE IS AN OFFICER OF THE SERVICER, HOLDING THE OFFICE SET FORTH BENEATH
HIS/HER SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN MADE.
LOAN NUMBER:________________________ BORROWER'S NAME:___________________
COUNTY:_____________________________
WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE COLLECTION ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
____________________________________________ DATED:____________________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
EXHIBIT F-1
-----------
FORM OF TRANSFEROR REPRESENTATION LETTER
[Date]
Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705-4934
Re: ACE Securities Corp. Home Equity Loan Trust, Series 2001-NC1
Asset Backed Pass-Through Certificates, Class N, Class X, Class R
and Class R-III Certificates
-----------------------------------------------------------------
Ladies and Gentlemen:
In connection with the transfer by ________________ (the
"Transferor") to ________________ (the "Transferee") of the captioned mortgage
pass-through certificates (the "Certificates"), the Transferor hereby certifies
as follows:
Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of
March 1, 2001, among ACE Securities Corp. as Depositor, Litton Loan Servicing LP
as Servicer, U.S. Bank National Association as Trustee and Bankers Trust Company
of California, N.A. at trust administrator (the "Pooling and Servicing
Agreement"), pursuant to which Pooling and Servicing Agreement the Certificates
were issued.
Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.
Very truly yours,
[Transferor]
By:
-----------------------
Name:
Title:
FORM OF TRANSFEREE REPRESENTATION LETTER
[Date]
Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705-4934
Re: ACE Securities Corp. Home Equity Loan Trust, Series 2001-NC1
Asset Backed Pass-Through Certificates, Class N, Class X, Class R-I
Class R-II and Class R-III Certificates
-------------------------------------------------------------------
Ladies and Gentlemen:
In connection with the purchase from ______________________
(the "Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:
1. The Transferee is a "qualified institutional buyer" as that
term is defined in Rule 144A ("Rule 144A") under the Securities Act of
1933 (the "1933 Act") and has completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. The
Transferee is aware that the sale to it is being made in reliance on
Rule 144A. The Transferee is acquiring the Certificates for its own
account or for the account of a qualified institutional buyer, and
understands that such Certificate may be resold, pledged or transferred
only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that
the resale, pledge or transfer is being made in reliance on Rule 144A,
or (ii) pursuant to another exemption from registration under the 1933
Act.
2. The Transferee has been furnished with all information
regarding (a) the Certificates and distributions thereon, (b) the
nature, performance and servicing of the Mortgage Loans, (c) the
Pooling and Servicing Agreement referred to below, and (d) any credit
enhancement mechanism associated with the Certificates, that it has
requested.
3. The Transferee: (a) is not an employee benefit or other
plan subject to the prohibited transaction provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA), or Section
4975 of the Internal Revenue Code of 1986, as amended ("Plan"), or any
other person (including an investment manager, a named fiduciary or a
trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan within the
meaning of the Department of Labor ("DOL") regulation at 29 C.F.R.
ss.2510.3-101 or (b) has provided the Trust Administrator, the Trustee,
the Depositor and the Servicer with an opinion of counsel acceptable to
and in form and substance satisfactory to such parties to the effect
that the purchase of Certificates is permissible under applicable law,
will not constitute or result
in any non-exempt prohibited transaction under ERISA or Section 4975 of
the Code and will not subject the Trust Administrator, the Trustee, the
Depositor or the Servicer to any obligation or liability (including
obligations or liabilities under ERISA or Section 4975 of the Code) in
addition to those undertaken in the Pooling and Servicing Agreement.
In addition, the Transferee hereby certifies, represents and warrants
to, and covenants with, the Depositor, the Trust Administrator, the Trustee and
the Servicer that the Transferee will not transfer such Certificates to any Plan
or person unless such Plan or person meets the requirements set forth in either
3(a) or (b) above.
All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of March 1, 2001, among ACE Securities Corp. as Depositor,
Litton Loan Servicing LP as Servicer, U.S. Bank National Association as Trustee
and Bankers Trust Company of California, N.A. as trust administrator, pursuant
to which the Certificates were issued.
[TRANSFEREE]
By:
---------------------------
Name:
Title:
ANNEX 1 TO EXHIBIT F-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Bankers Trust Company of California, N.A., as
Trust Administrator, with respect to the asset backed pass-through certificates
(the "Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").
2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
owned and/or invested on a discretionary basis $______________________1 in
securities (except for the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in the
category marked below.
___ CORPORATION, ETC. The Transferee is a corporation (other than
a bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or any
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986.
___ BANK. The Transferee (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
___ SAVINGS AND LOAN. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least
- ----------------
1 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities.
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of WHICH IS ATTACHED HERETO.
___ BROKER-DEALER. The Transferee is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
___ INSURANCE COMPANY. The Transferee is an insurance company
whose primary and predominant business activity is the writing
of insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by the
insurance commissioner or a similar official or agency of a
State, territory or the District of Columbia.
___ STATE OR LOCAL PLAN. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA Plan. The Transferee is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
___ Investment Advisor. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee and did not
include any of the securities referred to in the preceding paragraph. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934.
5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.
___ ___ Will the Transferee be purchasing the
Yes No Certificates only for the Transferee's own
account?
6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third party (including any separate account)
in reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.
7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.
Dated:
___________________________
Print Name of Transferee
By:
------------------------
Name:
Title:
ANNEX 2 TO EXHIBIT F-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That Are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Bankers Trust Company of California, as Trust
Administrator, with respect to the asset backed pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").
2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.
____ The Transferee owned $___________________ in securities (other
than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
____ The Transferee is part of a Family of Investment Companies
which owned in the aggregate $______________ in securities
(other than the excluded securities referred to below) as of
the end of the Transferee's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.
5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.
6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
Dated:
___________________________________
Print Name of Transferee or Advisor
By:________________________________
Name:
Title:
IF AN ADVISER:
___________________________________
Print Name of Transferee
FORM OF TRANSFEREE REPRESENTATION LETTER
The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:
1. I am an executive officer of the Purchaser.
2. The Purchaser is a "qualified institutional buyer", as
defined in Rule 144A, ("Rule 144A") under the Securities Act of 1933,
as amended.
3. As of the date specified below (which is not earlier than
the last day of the Purchaser's most recent fiscal year), the amount of
"securities", computed for purposes of Rule 144A, owned and invested on
a discretionary basis by the Purchaser was in excess of $100,000,000.
Name of Purchaser_______________________________________________________________
By: (Signature)____________________________________________________________
Name of Signatory_______________________________________________________________
Title___________________________________________________________________________
Date of this certificate________________________________________________________
Date of information provided in paragraph 3_____________________________________
EXHIBIT F-2
-----------
FORM OF TRANSFEROR REPRESENTATION LETTER
_______________, 20__
Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705-4934
Re: ACE Securities Corp. Home Equity Loan Trust, Series 2001-NC1
Asset Backed Pass-Through Certificates, Class N, Class X, Class R
and Class R-III Certificates
-----------------------------------------------------------------
Ladies and Gentlemen:
In connection with the transfer by ________________ (the
"Transferor") to ________________ (the "Transferee") of the captioned mortgage
pass-through certificates (the "Certificates"), the Transferor hereby certifies
as follows:
Neither the Seller nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, or (e) has taken any other action, that (as to any of (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933 (the "Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Act or any state securities law, or
that would require registration or qualification pursuant thereto. The Seller
will not act, in any manner set forth in the foregoing sentence with respect to
any Certificate. The Seller has not and will not sell or otherwise transfer any
of the Certificates, except in compliance with the provisions of the Pooling and
Servicing Agreement.
Very truly yours,
--------------------------------
(Transferor)
By:________________________________
Name:
Title:
FORM OF TRANSFEREE LETTER
__________________, 20__
Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705-4934
Re: ACE Securities Corp. Home Equity Loan Trust, Series 2001-NC1
Asset Backed Pass-Through Certificates, Class N, Class X, Class R
and Class R-III Certificates
-----------------------------------------------------------------
Ladies and Gentlemen:
In connection with the transfer by ________________ (the
"Transferor") to ________________ (the "Transferee") of the captioned mortgage
pass-through certificates (the "Certificates"), the Transferee hereby certifies
as follows:
1. The Transferee understands that (a) the Certificates have
not been and will not be registered or qualified under the Securities
Act of 1933, as amended (the "Act") or any state securities law, (b)
the Depositor is not required to so register or qualify the
Certificates, (c) the Certificates may be resold only if registered and
qualified pursuant to the provisions of the Act or any state securities
law, or if an exemption from such registration and qualification is
available, (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates and (e) the
Certificates will bear a legend to the foregoing effect.
2. The Transferee is acquiring the Certificates for its own
account for investment only and not with a view to or for sale in
connection with any distribution thereof in any manner that would
violate the Act or any applicable state securities laws.
3. The Transferee is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters, and, in particular, in such matters
related to securities similar to the Certificates, such that it is
capable of evaluating the merits and risks of investment in the
Certificates, (b) able to bear the economic risks of such an investment
and (c) an "accredited investor" within the meaning of Rule 501(a)
promulgated pursuant to the Act.
4. The Transferee has been furnished with, and has had an
opportunity to review (a) [a copy of the Private Placement Memorandum,
dated March 22, 2001, relating to the Certificates (b)] a copy of the
Pooling and Servicing Agreement and [b] [c] such other information
concerning the Certificates, the Mortgage Loans and the Depositor as
has been requested by the Transferee from the Depositor or the
Transferor and is relevant to the Transferee's decision to purchase the
Certificates. The Transferee has had any
questions arising from such review answered by the Depositor or the
Transferor to the satisfaction of the Transferee. [If the Transferee
did not purchase the Certificates from the Transferor in connection
with the initial distribution of the Certificates and was provided with
a copy of the Private Placement Memorandum (the "Memorandum") relating
to the original sale (the "Original Sale") of the Certificates by the
Depositor, the Transferee acknowledges that such Memorandum was
provided to it by the Transferor, that the Memorandum was prepared by
the Depositor solely for use in connection with the Original Sale and
the Depositor did not participate in or facilitate in any way the
purchase of the Certificates by the Transferee from the Transferor, and
the Transferee agrees that it will look solely to the Transferor and
not to the Depositor with respect to any damage, liability, claim or
expense arising out of, resulting from or in connection with (a) error
or omission, or alleged error or omission, contained in the Memorandum,
or (b) any information, development or event arising after the date of
the Memorandum.]
5. The Transferee has not and will not nor has it authorized
or will it authorize any person to (a) offer, pledge, sell, dispose of
or otherwise transfer any Certificate, any interest in any Certificate
or any other similar security to any person in any manner, (b) solicit
any offer to buy or to accept a pledge, disposition of other transfer
of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) otherwise approach
or negotiate with respect to any Certificate, any interest in any
Certificate or any other similar security with any person in any
manner, (d) make any general solicitation by means of general
advertising or in any other manner or (e) take any other action, that
(as to any of (a) through (e) above) would constitute a distribution of
any Certificate under the Act, that would render the disposition of any
Certificate a violation of Section 5 of the 1933 Act or any state
securities law, or that would require registration or qualification
pursuant thereto. The Transferee will not sell or otherwise transfer
any of the Certificates, except in compliance with the provisions of
the Pooling and Servicing Agreement.
6. The Transferee: (a) is not an employee benefit or other
plan subject to the prohibited transaction provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA), or Section
4975 of the Internal Revenue Code of 1986, as amended ("Plan"), or any
other person (including an investment manager, a named fiduciary or a
trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan within the
meaning of the Department of Labor ("DOL") regulation at 29 C.F.R.
ss.2510.3-101 or (b) has provided the Trust Administrator, the Trustee,
the Depositor and the Servicer with an opinion of counsel acceptable to
and in form and substance satisfactory to such parties to the effect
that the purchase of Certificates is permissible under applicable law,
will not constitute or result in any non-exempt prohibited transaction
under ERISA or Section 4975 of the Code and will not subject the Trust
Administrator, the Trustee, the Depositor or the Servicer to any
obligation or liability (including obligations or liabilities under
ERISA or Section 4975 of the Code) in addition to those undertaken in
the Pooling and Servicing Agreement.
In addition, the Transferee hereby certifies, represents and warrants
to, and covenants with, the Depositor, the Trust Administrator, the Trustee and
the Servicer that the Transferee will not transfer such Certificates to any Plan
or person unless such Plan or person meets the requirements set forth in either
6(a) or (b) above.
Very truly yours,
By:________________________________
Name:
Title:
EXHIBIT F-3
-----------
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
______________________, being duly sworn, deposes, represents
and warrants as follows:
1. I am a ______________________ of
____________________________ (the "Owner") a corporation duly
organized and existing under the laws of ______________, the
record owner of ACE Securities Corp. Home Equity Loan Trust,
Series 2001-NC1, Asset Backed Pass-Through Certificates,
Series 2001-NC1, [Class R-I][and Class R-III] (the "Class R
Certificates"), on behalf of whom I make this affidavit and
agreement. Capitalized terms used but not defined herein have
the respective meanings assigned thereto in the Pooling and
Servicing Agreement pursuant to which the Class R Certificates
were issued.
2. The Owner (i) is and will be a "Permitted Transferee"
as of ____________________, ____ and (ii) is acquiring the
Class R Certificates for its own account or for the account of
another Owner from which it has received an affidavit in
substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified
organization" or a possession of the United States. For this
purpose, a "disqualified organization" means the United
States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an
instrumentality all of the activities of which are subject to
tax and, except for the Federal Home Loan Mortgage
Corporation, a majority of whose board of directors is not
selected by any such governmental entity) or any foreign
government, international organization or any agency or
instrumentality of such foreign government or organization,
any rural electric or telephone cooperative, or any
organization (other than certain farmers' cooperatives) that
is generally exempt from federal income tax unless such
organization is subject to the tax on unrelated business
taxable income.
3. The Owner is aware (i) of the tax that would be
imposed on transfers of the Class R Certificates to
disqualified organizations under the Internal Revenue Code of
1986 that applies to all transfers of the Class R Certificates
after March 31, 1988; (ii) that such tax would be on the
transferor or, if such transfer is through an agent (which
person includes a broker, nominee or middleman) for a
non-Permitted Transferee, on the agent; (iii) that the person
otherwise liable for the tax shall be relieved of liability
for the tax if the transferee furnishes to such person an
affidavit that the transferee is a Permitted Transferee and,
at the time of transfer, such person does not have actual
knowledge that the affidavit is false; and (iv) that each of
the Class R Certificates may be a "noneconomic residual
interest" within the meaning of proposed Treasury regulations
promulgated under the Code and that the transferor of a
"noneconomic residual
interest" will remain liable for any taxes due with respect to
the income on such residual interest, unless no significant
purpose of the transfer is to impede the assessment or
collection of tax.
4. The Owner is aware of the tax imposed on a
"pass-through entity" holding the Class R Certificates if, at
any time during the taxable year of the pass-through entity, a
non-Permitted Transferee is the record holder of an interest
in such entity. (For this purpose, a "pass-through entity"
includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or
estate, and certain cooperatives.)
5. The Owner is aware that the Trustee will not register
the transfer of any Class R Certificate unless the transferee,
or the transferee's agent, delivers to the Trustee, among
other things, an affidavit in substantially the same form as
this affidavit. The Owner expressly agrees that it will not
consummate any such transfer if it knows or believes that any
of the representations contained in such affidavit and
agreement are false.
6. The Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of
counsel to constitute a reasonable arrangement to ensure that
the Class R Certificates will only be owned, directly or
indirectly, by an Owner that is a Permitted Transferee.
7. The Owner's taxpayer identification number is
___________________.
8. The Owner has reviewed the restrictions set forth on
the face of the Class R Certificates and the provisions of
Section 5.02(d) of the Pooling and Servicing Agreement under
which the Class R Certificates were issued (in particular,
clauses (iii)(A) and (iii)(B) of Section 5.02(d) which
authorize the Trustee to deliver payments to a person other
than the Owner and negotiate a mandatory sale by the Trustee
in the event that the Owner holds such Certificate in
violation of Section 5.02(d)); and that the Owner expressly
agrees to be bound by and to comply with such restrictions and
provisions.
9. The Owner is not acquiring and will not transfer the
Class R Certificates in order to impede the assessment or
collection of any tax.
10. The Owner anticipates that it will, so long as it
holds the Class R Certificates, have sufficient assets to pay
any taxes owed by the holder of such Class R Certificates, and
hereby represents to and for the benefit of the person from
whom it acquired the Class R Certificates that the Owner
intends to pay taxes associated with holding such Class R
Certificates as they become due, fully understanding that it
may incur tax liabilities in excess of any cash flows
generated by the Class R Certificates.
11. The Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as
it holds the Class R Certificates.
12. The Owner has no present knowledge or expectation
that it will be unable to pay any United States taxes owed by
it so long as any of the Certificates remain outstanding.
13. The Owner is not acquiring the Class R Certificates
with the intent to transfer the Class R Certificates to any
person or entity that will not have sufficient assets to pay
any taxes owed by the holder of such Class R Certificates, or
that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class R Certificates remain
outstanding.
14. The Owner will, in connection with any transfer that
it makes of the Class R Certificates, obtain from its
transferee the representations required by Section 5.02(d) of
the Pooling and Servicing Agreement under which the Class R
Certificate were issued and will not consummate any such
transfer if it knows, or knows facts that should lead it to
believe, that any such representations are false.
15. The Owner will, in connection with any transfer that
it makes of the Class R Certificates, deliver to the Trustee
an affidavit, which represents and warrants that it is not
transferring the Class R Certificates to impede the assessment
or collection of any tax and that it has no actual knowledge
that the proposed transferee: (i) has insufficient assets to
pay any taxes owed by such transferee as holder of the Class R
Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Class R Certificates
remains outstanding; and (iii) is not a "Permitted
Transferee".
16. The Owner is a citizen or resident of the United
States, a corporation, partnership or other entity created or
organized in, or under the laws of, the United States or any
political subdivision thereof, or an estate or trust whose
income from sources without the United States may be included
in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or
business within the United States.
17. The Owner of the Class R-III Certificate, hereby
agrees that in the event that the Trust Fund created by the
Pooling and Servicing Agreement is terminated pursuant to
Section 9.01 thereof, the undersigned shall assign and
transfer to the Holders of the Class N and the Class X
Certificates any amounts in excess of par received in
connection with such termination. Accordingly, in the event of
such termination, the Trustee is hereby authorized to withhold
any such amounts in excess of par and to pay such amounts
directly to the Holders of the Class N and the Class X
Certificates. This agreement shall bind and be enforceable
against any successor, transferee or assigned of the
undersigned in the Class R-III Certificate. In connection with
any transfer of the Class R-III Certificate, the Owner shall
obtain an agreement substantially similar to this clause from
any subsequent owner.
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, ____.
[OWNER]
By:_______________________________________
Name:
Title: [Vice] President
ATTEST:
By:_____________________________
Name:
Title: [Assistant] Secretary
Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this ____ day of __________,
_____.
_____________________________________
Notary Public
County of___________________
State of____________________
My Commission expires:
FORM OF TRANSFEROR AFFIDAVIT
STATE OF NEW YORK )
: ss. :
COUNTY OF NEW YORK )
___________________________________, being duly sworn,
deposes, represents and warrants as follows:
1. I am a ____________________ of
_____________________________ (the "Owner"), a corporation duly organized and
existing under the laws of ______________, on behalf of whom I make this
affidavit.
2. The Owner is not transferring the [Class R-I][Class R-III]
(the "Residual Certificates") to impede the assessment or collection of any tax.
3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.
4. The Owner understands that the Purchaser has delivered to
the Trustee or a transfer affidavit and agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit F-2. The Owner does not know or
believe that any representation contained therein is false.
5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.
6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, _____.
[OWNER]
By:__________________________
Name:
Title: [Vice] President
ATTEST:
By:____________________________
Name:
Title: [Assistant] Secretary
Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this ____ day of __________,
____.
__________________________
Notary Public
County of______________
State of_______________
My Commission expires:
EXHIBIT G
---------
[Reserved]
EXHIBIT H
FORM OF REPORT PURSUANT TO SECTION 4.06
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
Form 10-K
Annualreport pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (Fee Required). For
fiscal year ended __________
Commission file number: 333-76805
ACE Securities Corp.
(AS DEPOSITOR UNDER THE POOLING AND SERVICING
AGREEMENT DATED AS OF____________________,
PROVIDING FOR THE ISSUANCE OF ASSET BACKED
PASS-THROUGH CERTIFICATES SERIES _______)
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 33-0852169
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation Identification Number)
18400 Von Karman
Irvine, California 92612
------------------------
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number: (949) 863-7243
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate whether the Registrant: (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
X YES No
--- ---
Item 1. Business:
Not applicable
Item 2. Properties:
Not applicable
Item 3. Legal Proceedings:
None
Item 4. Submission of Matters to a Vote of Security-Holders
None
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
To the best knowledge of the registrant there is no established public
trading market for the certificates.
There are approximately _____ holders of record as of the end of the
reporting year.
Item 6. Selected Financial Data.
Not applicable.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Not applicable
Item 8. Financial Statements and Supplementary Data.
Not applicable.
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
None
Item 10.
Not applicable
Item 11. Executive Compensation
Not applicable
Item 12. Security Ownership of Certain Beneficial Owners and Management
Not applicable
Item 13. Certain Relationships and Related Transactions
Not applicable
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
a) The company filed on Form 8-K, separately for each
distribution date, the distribution of funds related to the
trust for each of the following distribution dates:
Distribution Date Form 8-K Filing Date
----------------- --------------------
_________________ ____________________
_________________ ____________________
_________________ ____________________
b) 99.1 Annual Report of Independent Public Accountants' as
to servicing activities
(a) Litton Loan Servicing LP, as servicer <F1>
99.2 Annual Statement of Compliance with obligations under
the Pooling and Servicing Agreement or servicing
agreement, as applicable, of:
(a) Litton Loan Servicing LP, as servicer <F1>
<F1> Such document (i) is not filed herewith since such document was not
received by the Reporting Person at least three business days prior to
the due date of this report; and (ii) will be included in an amendment
to this report on Form 10-K/A to be filed within 30 days of the
Reporting Person's receipt of such document.
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Date: ___________
ACE Securities Corp. by U.S. Bank National Association, as Trustee for ACE
Securities Corp. Home Equity Loan Trust, Series 2001-NC1, Asset Backed
Pass-Through Certificates,
By: /s/ Eve Kaplan
---------------------------
Name: Eve Kaplan
Title: Vice President
Company: U.S. Bank National Association
EXHIBIT I
FORM OF LOST NOTE AFFIDAVIT
Loan #: ____________
Borrower: _____________
LOST NOTE AFFIDAVIT
I, as ____________________ of ______________________, a
_______________ corporation am authorized to make this Affidavit on behalf of
_____________________ (the "Seller"). In connection with the administration of
the Mortgage Loans held by ________________, a _________ corporation as Seller
on behalf of ACE Securities Corp. (the "Purchaser"), _____________________ (the
"Deponent"), being duly sworn, deposes and says that:
1.The Seller's address is : _____________________
_____________________
_____________________
2. The Seller previously delivered to the Purchaser a signed
Initial Certification with respect to such Mortgage and/or
Assignment of Mortgage;
3. Such Mortgage Note and/or Assignment of Mortgage was assigned
or sold to the Purchaser by ________________________, a
____________ corporation pursuant to the terms and provisions of
a Mortgage Loan Purchase Agreement dated as of March __, 2001;
4. Such Mortgage Note and/or Assignment of Mortgage is not
outstanding pursuant to a request for release of Documents;
5. Aforesaid Mortgage Note and/or Assignment of Mortgage (the
"Original") has been lost;
6. Deponent has made or caused to be made a diligent search for
the Original and has been unable to find or recover same;
7. The Seller was the Seller of the Original at the time of the
loss; and
8. Deponent agrees that, if said Original should ever come into
Seller's possession, custody or power, Seller will immediately
and without consideration surrender the Original to the
Purchaser.
9. Attached hereto is a true and correct copy of (i) the Note,
endorsed in blank by the Mortgagee and (ii) the Mortgage or Deed
of Trust (strike one) which
secures the Note, which Mortgage or Deed of Trust is recorded in
the county where the property is located.
10. Deponent hereby agrees that the Seller (a) shall indemnify
and hold harmless the Purchaser, its successors and assigns,
against any loss, liability or damage, including reasonable
attorney's fees, resulting from the unavailability of any Notes,
including but not limited to any loss, liability or damage
arising from (i) any false statement contained in this
Affidavit, (ii) any claim of any party that purchased a mortgage
loan evidenced by the Lost Note or any interest in such mortgage
loan, (iii) any claim of any borrower with respect to the
existence of terms of a mortgage loan evidenced by the Lost Note
on the related property to the fact that the mortgage loan is
not evidenced by an original note and (iv) the issuance of a new
instrument in lieu thereof (items (i) through (iv) above
hereinafter referred to as the "Losses") and (b) if required by
any Rating Agency in connection with placing such Lost Note into
a Pass-Through Transfer, shall obtain a surety from an insurer
acceptable to the applicable Rating Agency to cover any Losses
with respect to such Lost Note.
11. This Affidavit is intended to be relied upon by the
Purchaser, its successors and assigns. [_______________, a
__________ corporation] represents and warrants that is has the
authority to perform its obligations under this Affidavit of
Lost Note.
Executed this __ day of _____, _____.
_________________________
By:______________________
Name:
Title:
On this __ day of _______, _____, before me appeared
_________________ to me personally known, who being duly sworn did say that he
is the _____________________ of ____________________ a ______________
corporation and that said Affidavit of Lost Note was signed and sealed on behalf
of such corporation and said acknowledged this instrument to be the free act and
deed of said corporation.
Signature:
[Seal]
EXHIBIT J
---------
Officer's Certificate with Respect to Prepayments
AVAILABLE UPON REQUEST
Schedule 1
----------
MORTGAGE LOAN SCHEDULE
FILED BY PAPER
Schedule 2
SCHEDULE OF PREPAYMENT CHARGES
AVAILABLE UPON REQUEST