Exhibit 99.1
EXECUTION COPY
ACE SECURITIES CORP.
Depositor
Ameriquest Mortgage Company
Original Seller and Servicer
U.S. BANK NATIONAL ASSOCIATION
Trustee
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
Trust Administrator
-----------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of April 1, 2001
-----------------------------------------
ACE Securities Corp. Home Equity Loan Trust, Series 2001-AQ1
Asset Backed Pass-Through Certificates
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS..................................................................................4
SECTION 1.01. Defined Terms.....................................................................4
Accepted Servicing Practices......................................................................4
Accrual Rate......................................................................................4
Accrued Certificate Interest......................................................................4
Adjustment Date...................................................................................5
Administration Fee................................................................................5
Administration Fee Rate...........................................................................5
Affiliate.........................................................................................5
Aggregate Loss Severity Percentage................................................................5
Agreement.........................................................................................5
Allocated Realized Loss Amount....................................................................6
Ameriquest........................................................................................6
Assignment........................................................................................6
Available Distribution Amount.....................................................................6
Bankruptcy Code...................................................................................7
Bankruptcy Loss...................................................................................7
Basic Principal Distribution Amount...............................................................7
Basis Risk Shortfall..............................................................................7
Book-Entry Certificate............................................................................7
Book-Entry Custodian..............................................................................7
Business Day......................................................................................7
Cap Contract......................................................................................7
Cap Premium.......................................................................................7
Cash-Out Refinancing..............................................................................7
Certificate.......................................................................................8
Certificate Factor................................................................................8
Certificate Notional Amount.......................................................................8
Certificate Owner.................................................................................8
Certificate Principal Balance.....................................................................8
Certificate Register..............................................................................8
Certificateholder" or "Holder.....................................................................8
Class.............................................................................................9
Class A Certificate...............................................................................9
Class A-1 Certificate.............................................................................9
Class A-IO Certificate............................................................................9
Class A Principal Distribution Amount.............................................................9
Class CP Interest.................................................................................9
Class M-1 Certificate.............................................................................9
Class M-1 Principal Distribution Amount..........................................................10
Class M-2 Certificate............................................................................10
Class M-2 Principal Distribution Amount..........................................................10
Class R Certificates.............................................................................10
Class R-I Interest...............................................................................10
Class R-II Interest..............................................................................10
Class X/N Certificates...........................................................................10
Closing Date.....................................................................................10
Code.............................................................................................11
Collection Account...............................................................................11
Commission.......................................................................................11
Corporate Trust Office...........................................................................11
Corresponding Certificate........................................................................11
Counterparty.....................................................................................11
Credit Enhancement Percentage....................................................................11
Cumulative Loss Percentage.......................................................................11
Cut-off Date.....................................................................................11
Debt Service Reduction...........................................................................12
Deficient Valuation..............................................................................12
Definitive Certificates..........................................................................12
Deleted Mortgage Loan............................................................................12
Delinquency Percentage...........................................................................12
Depositor........................................................................................12
Depository.......................................................................................12
Depository Institution...........................................................................12
Depository Participant...........................................................................13
Determination Date...............................................................................13
Directly Operate.................................................................................13
Disqualified Organization........................................................................13
Distribution Account.............................................................................13
Distribution Date................................................................................14
Due Date.........................................................................................14
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
Xxxxxx Xxx.......................................................................................15
FDIC.............................................................................................15
Final Recovery Determination.....................................................................15
Flood Zone Service Contract......................................................................15
Xxxxxxx Mac......................................................................................15
Gross Margin.....................................................................................15
Holder...........................................................................................15
Independent......................................................................................15
Independent Contractor...........................................................................15
Index............................................................................................16
Insurance Proceeds...............................................................................16
Interest Accrual Period..........................................................................16
Interest Carry Forward Amount....................................................................16
Interest Determination Date......................................................................17
Interest Distribution Amount.....................................................................17
Interest Remittance Amount.......................................................................17
Late Collections.................................................................................17
LIBOR Business Day...............................................................................17
Liquidation Event................................................................................17
Liquidation Proceeds.............................................................................17
Loan-to-Value Ratio..............................................................................18
Loss Severity Percentage.........................................................................18
Marker Rate......................................................................................18
Master Mortgage Loan Pooling Agreement...........................................................18
Maximum Mortgage Rate............................................................................18
Maximum Pass-Through Rate........................................................................18
MERS.............................................................................................18
Mezzanine Certificate............................................................................18
Minimum Mortgage Rate............................................................................18
Xxxxx'x..........................................................................................18
Monthly Payment..................................................................................18
Mortgage.........................................................................................19
Mortgage File....................................................................................19
Mortgage Loan....................................................................................19
Mortgage Loan Purchase Agreement.................................................................19
Mortgage Loan Schedule...........................................................................19
Mortgage Note....................................................................................21
Mortgage Pool....................................................................................21
Mortgage Rate....................................................................................21
Mortgaged Property...............................................................................21
Mortgagor........................................................................................21
Net Monthly Excess Cashflow......................................................................21
Net Monthly Excess Spread........................................................................22
Net Mortgage Rate................................................................................22
Net WAC Pass-Through Rate........................................................................22
New Lease........................................................................................22
Nonrecoverable P&I Advance.......................................................................22
Nonrecoverable Servicing Advance.................................................................22
Non-United States Person.........................................................................22
Notional Amount..................................................................................22
Officers' Certificate............................................................................23
One-Month LIBOR..................................................................................23
One-Month LIBOR Pass-Through Rate................................................................23
Opinion of Counsel...............................................................................24
Original Seller..................................................................................24
Overcollateralized Amount........................................................................24
Overcollateralization Deficiency Amount..........................................................24
Overcollateralization Increase Amount............................................................24
Overcollateralization Reduction Amount...........................................................24
Ownership Interest...............................................................................24
Pass-Through Rate................................................................................25
Percentage Interest..............................................................................25
Periodic Rate Cap................................................................................25
Permitted Investments............................................................................26
Permitted Transferee.............................................................................26
Person...........................................................................................27
P&I Advance......................................................................................27
Plan.............................................................................................27
PMI Insured Mortgage Loan........................................................................27
PMI Policy.......................................................................................27
PMI Policy Premium...............................................................................27
Prepayment Assumption............................................................................27
Prepayment Charge................................................................................27
Prepayment Interest Shortfall....................................................................28
Prepayment Period................................................................................28
Principal Distribution Amount....................................................................28
Principal Prepayment.............................................................................28
Principal Remittance Amount......................................................................28
Purchase Price...................................................................................28
Rate/Term Refinancing............................................................................29
Rating Agency" or "Rating Agencies...............................................................29
Realized Loss....................................................................................29
Record Date......................................................................................30
Reference Banks..................................................................................30
Refinanced Mortgage Loan.........................................................................31
Regular Certificate..............................................................................31
Regular Interest.................................................................................31
Relief Act.......................................................................................31
Relief Act Interest Shortfall....................................................................31
REMIC............................................................................................31
REMIC I..........................................................................................31
REMIC I Remittance Rate..........................................................................31
REMIC I Required Overcollateralization Amount....................................................32
REMIC II.........................................................................................32
REMIC II Regular Interests.......................................................................32
REMIC II Remittance Rate.........................................................................32
REMIC III........................................................................................32
REMIC Provisions.................................................................................32
Remittance Report................................................................................32
Rents from Real Property.........................................................................33
REO Disposition..................................................................................33
REO Imputed Interest.............................................................................33
REO Principal Amortization.......................................................................33
REO Property.....................................................................................33
Request for Release..............................................................................33
Required Overcollateralized Amount...............................................................33
Required Reserve Fund Balance....................................................................33
Required Reserve Fund Deposit....................................................................33
Reserve Fund.....................................................................................34
Reserve Interest Rate............................................................................34
Residential Dwelling.............................................................................34
Residual Certificate.............................................................................34
Residual Interest................................................................................34
Responsible Officer..............................................................................34
S&P..............................................................................................35
Scheduled Principal Balance......................................................................35
Seller...........................................................................................35
Senior Interest Distribution Amount..............................................................35
Servicer.........................................................................................35
Servicer Event of Default........................................................................35
Servicer Remittance Date.........................................................................36
Servicer Termination Trigger.....................................................................36
Servicing Account................................................................................36
Servicing Advances...............................................................................36
Servicing Fee....................................................................................36
Servicing Fee Rate...............................................................................36
Servicing Officer................................................................................36
Single Certificate...............................................................................36
Startup Day......................................................................................37
Stated Principal Balance.........................................................................37
Stayed Funds.....................................................................................37
Stepdown Date....................................................................................37
Sub-Servicer.....................................................................................38
Sub-Servicing Agreement..........................................................................38
Tax Returns......................................................................................38
Telerate Page 3750...............................................................................38
Termination Price................................................................................38
Terminator.......................................................................................38
Transfer.........................................................................................38
Transferee.......................................................................................38
Transferor.......................................................................................38
Trigger Event....................................................................................38
Trust............................................................................................39
Trust Administrator..............................................................................39
Trust REMIC......................................................................................39
Trustee..........................................................................................39
Trust Fund.......................................................................................39
Uncertificated REMIC Regular Interest............................................................39
Uninsured Cause..................................................................................39
United States Person.............................................................................39
Unpaid Basis Risk Shortfall......................................................................39
Value............................................................................................40
Voting Rights....................................................................................40
SECTION 1.02. Allocation of Certain Interest Shortfalls........................................40
ARTICLE II CONVEYANCE ASSETS; ORIGINAL ISSUANCE OF CERTIFICATES.......................................41
SECTION 2.01. Conveyance of Assets.............................................................41
SECTION 2.02. Acceptance of REMIC I by Trustee.................................................43
SECTION 2.03. Repurchase of Mortgage Loans by Ameriquest or the Seller.........................44
SECTION 2.04. [Reserved].......................................................................45
SECTION 2.05. Representations, Warranties and Covenants of the Servicer........................45
[SECTION 2.06. Conveyance of Uncertificated REMIC Regular Interests and Acceptance of
REMIC II by the Trustee; Issuance of Certificates................................47
SECTION 2.07. Establishment of the Trust.......................................................47
ARTICLE III ADMINISTRATION AND SERVICING OF THE TRUST FUND............................................49
SECTION 3.01. Servicer to Act as Servicer......................................................49
SECTION 3.02. Sub-Servicing Agreements Between Servicer and Sub-Servicers......................51
SECTION 3.03. Successor Sub-Servicers..........................................................51
SECTION 3.04. No Contractual Relationship Between Sub-Servicer, Trust Administrator,
Trustee or the Certificateholders................................................52
SECTION 3.05. Assumption or Termination of Sub-Servicing Agreement by Trust
Administrator....................................................................52
SECTION 3.06. [Reserved].......................................................................52
SECTION 3.07. Collection of Certain Mortgage Loan Payments.....................................52
SECTION 3.08. Primary Mortgage Insurance.......................................................53
SECTION 3.09. Collection of Taxes, Assessments and Similar Items; Servicing Accounts...........53
SECTION 3.10. Collection Account and Distribution Account......................................54
SECTION 3.11. Withdrawals from the Collection Account and Distribution Account.................56
SECTION 3.12. Investment of Funds in the Investment Accounts...................................58
SECTION 3.13. [Reserved].......................................................................59
SECTION 3.14. Maintenance of Hazard Insurance and Errors and Omissions and Fidelity
Coverage.........................................................................59
SECTION 3.15. Enforcement of Due-on-Sale Clauses; Assumption Agreements........................60
SECTION 3.16. Realization Upon Defaulted Mortgage Loans........................................61
SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files..................................63
SECTION 3.18. Servicing Compensation...........................................................64
SECTION 3.19. Reports to the Trust Administrator and the Trustee; Collection Account
Statements.......................................................................65
SECTION 3.20. Statement as to Compliance.......................................................65
SECTION 3.21. Independent Public Accountants' Servicing Report.................................65
SECTION 3.22. Access to Certain Documentation..................................................66
SECTION 3.23. Title, Management and Disposition of REO Property................................66
SECTION 3.24. Obligations of the Servicer in Respect of Prepayment Interest Shortfalls.........69
SECTION 3.25. [Reserved].......................................................................69
SECTION 3.26. Obligations of the Servicer in Respect of Mortgage Rates and Monthly
Payments.........................................................................69
SECTION 3.27. Advance Facility.................................................................70
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS.............................................................71
SECTION 4.01. Distributions....................................................................71
SECTION 4.02. Statements to Certificateholders.................................................76
SECTION 4.03. Remittance Reports; P&I Advances.................................................80
SECTION 4.04. Allocation of Realized Losses....................................................81
SECTION 4.05. Compliance with Withholding Requirements ........................................82
SECTION 4.06. Exchange Commission; Additional Information......................................83
SECTION 4.07. Reserve Fund and Cap Contract....................................................83
ARTICLE V THE CERTIFICATES............................................................................85
SECTION 5.01. The Certificates.................................................................85
SECTION 5.02. Registration of Transfer and Exchange of Certificates............................87
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates................................91
SECTION 5.04. Persons Deemed Owners............................................................91
SECTION 5.05. Certain Available Information....................................................91
ARTICLE VI THE DEPOSITOR AND THE SERVICER.............................................................93
SECTION 6.01. Liability of the Depositor and the Servicer......................................93
SECTION 6.02. Merger or Consolidation of the Depositor or the Servicer.........................93
SECTION 6.03. Limitation on Liability of the Depositor, the Servicer and Others................93
SECTION 6.04. Limitation on Resignation of the Servicer........................................94
SECTION 6.05. Rights of the Depositor in Respect of the Servicer...............................95
ARTICLE VII DEFAULT...................................................................................96
SECTION 7.01. Servicer Events of Default.......................................................96
SECTION 7.02. Trust Administrator or Trustee to Act; Appointment of Successor..................98
SECTION 7.03. Notification to Certificateholders...............................................99
SECTION 7.04. Waiver of Servicer Events of Default............................................100
ARTICLE VIII CONCERNING THE TRUSTEE AND THE TRUST ADMINISTRATOR......................................101
SECTION 8.01. Duties of Trustee and the Trust Administrator...................................101
SECTION 8.02. Certain Matters Affecting the Trustee and the Trust Administrator...............102
SECTION 8.03. Neither the Trustee nor Trust Administrator Liable for Certificates or
Mortgage Loans..................................................................103
SECTION 8.04. Trustee and Trust Administrator May Own Certificates............................104
SECTION 8.05. Trustee's and Trust Administrator's Fees and Expenses...........................104
SECTION 8.06. Eligibility Requirements for Trustee and Trust Administrator....................104
SECTION 8.07. Resignation and Removal of the Trustee..........................................105
SECTION 8.08. Successor Trustee or Trust Administrator........................................106
SECTION 8.09. Merger or Consolidation of Trustee or Trust Administrator.......................107
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee...................................107
SECTION 8.11. Appointment of Office or Agency.................................................108
SECTION 8.12. Representations and Warranties..................................................108
ARTICLE IX TERMINATION...............................................................................110
SECTION 9.01. Termination Upon Repurchase or Liquidation of All Mortgage Loans................110
SECTION 9.02. Additional Termination Requirements.............................................112
ARTICLE X REMIC PROVISIONS...........................................................................113
SECTION 10.01. REMIC Administration............................................................113
SECTION 10.02. Prohibited Transactions and Activities..........................................116
SECTION 10.03. Servicer, Trustee and Trust Administrator Indemnification.......................116
SECTION 10.04. Treatment of the Reserve Fund and the Class X/N Certificates....................117
ARTICLE XI MISCELLANEOUS PROVISIONS..................................................................118
SECTION 11.01. Amendment.......................................................................118
SECTION 11.02. Recordation of Agreement; Counterparts..........................................119
SECTION 11.03. Limitation on Rights of Certificateholders......................................119
SECTION 11.04. Governing Law...................................................................120
SECTION 11.05. Notices.........................................................................120
SECTION 11.06. Severability of Provisions......................................................121
SECTION 11.07. Notice to Rating Agencies.......................................................121
SECTION 11.08. Article and Section References..................................................122
SECTION 11.09. Grant of Security Interest......................................................122
SECTION 11.10. Commitment Letter for PMI Policy................................................123
SECTION 11.11. Third Party Beneficiary.........................................................123
Exhibits
Exhibit A-1 Form of Class A-1 Certificate
Exhibit A-2 Form of Class A-IO 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 X/N Certificate
Exhibit A-7 Form of Class R Certificate
Exhibit B Sections 3.01 and 3.02 and Exhibit C of Master Mortgage
Loan Pooling Agreement
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
ClassX/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/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 Form of Cap Contract
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
This Pooling and Servicing Agreement, is dated and effective as of April
1, 2001, among ACE SECURITIES CORP., as Depositor, AMERIQUEST MORTGAGE
COMPANY, as Original Seller and 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-1 Variable(2) $235,438,000 March 25, 2031
I-CP Variable(2) $ [100,000] March 25, 2031
I-AIO1 Variable(2) $ 45,000,000 March 25, 2031
I-AIO2 Variable(2) $ 45,000,000 March 25, 2031
I-AIO3 Variable(2) $ 35,000,000 March 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.
On each Distribution Date: (i) through the Distribution Date in December,
2001, all scheduled payments of principal, curtailments, prepayments of
principal and Realized Losses will be allocated to the Class I-1 Interest
until the Pool Balance following for such Distribution Date is equal to the
sum of $125,100,000 plus the aggregate principal balance of all Mortgage Loans
having a Net Mortgage Rate that is less than 6.75%; (ii) beginning with the
Distribution Date in January, 2002 through the Distribution Date in December,
2002, all scheduled payments of principal, curtailments, prepayments of
principal and Realized Losses will be allocated to the Class I-1 Interest
until the Pool Balance following for such Distribution Date is equal to the
sum of $80,100,000 plus the aggregate principal balance of all Mortgage Loans
having a Net Mortgage Rate that is less than 6.75%; and (iii) from and
including the Distribution Date in January, 2003, all scheduled payments of
principal, curtailments, prepayments of principal and Realized Losses will be
allocated to the Class I-1 Interest until the Pool Balance following for such
Distribution Date is equal to the sum of $35,100,000 plus the aggregate
principal balance of all Mortgage Loans having a Net Mortgage Rate that is
less than 6.75%. In each case, all additional scheduled payments of principal,
curtailments, prepayments of principal and Realized Losses will be allocated
first to the Class I-AIO1 Interest until paid in full, second to the Class
I-AIO2 Interest until paid in full, third to Class I-AIO1 Interest until paid
in full, and fourth to the Class I-CP Interest until paid in full.
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
Remittance Rate, the initial Uncertificated Balance, solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest
possible maturity date and corresponding Classes of REMIC III Certificates"
for the indicated REMIC II Interests.
Initial Corresponding
REMIC II Uncertificated Latest Possible Class of REMIC
Designation Remittance Rate Balance Maturity Date(1) III Certificates
----------- --------------- ------- ---------------- ----------------
II-1 Variable(2) $445,241,000 March 25, 2031 A-1
II-2 Variable(2) $21,778,000] March 25, 2031 M-1
II-3 Variable(2) $14,519,000] March 25, 2031 M-2
II-4 Variable(2) Initial Over- March 25, 2031 N/A
collateralized Amount
II-AIO 6.75% (3) March 25, 2031 N/A
II-CP 381% (3) March 25, 2031 N/A
(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 II
Regular Interest.
(2) Calculated in accordance with the definition of "REMIC II Remittance
Rate" herein.
(3) The Class II-AIO Interest will have a notional balance equal to: (i) the
sum of the Class I-AIO1, Class I-AIO2, and Class I-AIO3 through the
Distribution Date in December, 2001, (ii) the sum of the Class I-AIO1,
and Class I-AIO2 for each Distribution Date from and including the
Distribution Date in January, 2002 through the Distribution Date in
December, 2002, and (iii) the Class I-AIO3 for each Distribution Date
from and including the Distribution Date in January, 2003. The Class
II-CP Interest will have a notional balance equal to the principal
balance of the Class I-CP Interest.
On each Distribution Date, following the application of scheduled
payments of principal, curtailments, prepayments of principal and Realized
Losses, each of Classes XX-XX0, XX-XX0, and II-LT3 will have a principal
balance equal to that a its Corresponding REMIC III Class.
REMIC III
---------
As provided herein, the Trust Administrator will elect to treat the
segregated pool of assets consisting of the REMIC II Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC III." The Class R-III 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, each of which, except for the Class X/N Certificates,
is hereby treated as a REMIC regular interest for federal income tax purposes.
Initial Aggregate Latest Possible
Designation Pass-Through Rate Certificate Principal Balance Maturity Date(1)
----------- ----------------- ----------------------------- ----------------
Class A-1 Variable(2) $445,241,000 March 25, 2031
Class A-IO 6.75% (3) March 25, 2031
Class M-1 Variable(2) $21,778,000 March 25, 2031
Class M-2 Variable(2) $14,519,000 March 25, 2031
Class X/N Variable(4) Initial Overcollateralized Amount (4) March 25, 2031
Class CP Interest 381% (5) March 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) Interest will accrue on the Notional Amount.
(4) The Class X/N Certificates will accrue interest at its variable
Pass-Through Rate on the Notional Amount of the Class X/N Certificates
outstanding from time to time which shall equal the Uncertificated
Balance of the REMIC I Regular Interests. The Class X/N Certificates will
not accrue interest on its Certificate Principal Balance. Solely for
federal income tax purposes, the Class X/N Certificates will be treated
as comprised of four REMIC II regular interests, three of which have
notional principal balances equal to the principal balances of the Class
II-1, Class II-2 and Class II-3 Interests and bear interest at pass
through rates equal to the excess of the REMIC II Pass Through Rate over
the Pass Through Rates in respect of the Class A-1 Certificates, Class
M-1 Certificates and Class M-2 Certificates, respectively, and the fourth
of which will have a principal balance equal to the principal balance of
the REMIC II-4 Interest and will bear interest at a rate equal to the
REMIC II Pass Through Rate.
(5) The Class A-IO Certificates will be entitled to all distributions of
interest in respect of the Class II-AIO Interest. The Class CP Interest
will be entitled to all distributions of interest in respect of the Class
II-CP Interest.
As of the Cut-off Date, the Mortgage Loans had an aggregate Scheduled
Principal Balance equal to $483,958,213.
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": With respect to any Mortgage Loan, those
customary and reasonable mortgage servicing practices of sub prime mortgage
lending institutions which service mortgage loans of the same or similar type
as such Mortgage Loan in the jurisdiction where the related Mortgaged Property
is located.
"Accrual Rate": With respect to the Class A-1 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 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-1 Certificates and
the Mezzanine Certificates, or on the related Notional Amount in the case of
the Class A-IO Certificates, of such Certificate immediately prior to such
Distribution Date. All distributions of interest on the Class A-1 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.
All distribution of interest on the Class X/N Certificates and the Class A-IO
Certificates will be calculated on the basis of twelve 30-day months and a
360-day year. Accrued Certificate Interest with respect to each Distribution
Date, as to any Class A Certificate, Mezzanine Certificate or Class X/N
Certificates 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/N Certificate, shall be reduced by
an amount equal to the portion allocable thereto 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.
"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": For each Distribution Date, a rate per annum
equal to 0.0075% per annum plus the per annum rate on the aggregate Scheduled
Principal Balance of the Mortgage Loans for such Distribution Date which would
result in $3,000 each month. 0.0045% per annum shall be payable to the Trust
Administrator, $3,000 per year shall be payable to the Trustee in the
Trustee's capacity as fiduciary to the Trust and 0.0030% 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.
"Ameriquest": Ameriquest Mortgage Company or its successor in interest.
"Assignment": An assignment of Mortgage, notice of transfer or equivalent
instrument, in recordable form (excepting therefrom the name of the assignee
and Mortgage recordation information which has not been returned by the
applicable recording office), which is sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering Mortgages secured by Mortgaged Properties located in the same county,
if permitted by law.
"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 the Collection 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, the Trust Administrator, the Seller,
the Counterparty or any Sub-Servicer pursuant to Section 3.11 or Section 3.12
or otherwise payable in respect of extraordinary Trust Fund expenses, and the
Cap Premium, (v) Stayed Funds, (vi) the Administration Fee payable from the
Distribution Account pursuant to Section 8.05 and the PMI Policy Premium,
(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.
"Basic Principal Distribution Amount": With respect to any Distribution
Date, the sum of (i) the Principal Remittance Amount with respect to the
Mortgage Loans minus (ii) the amount of any Overcollateralization Reduction
Amount for the Distribution Date.
"Basis Risk Shortfall": With respect to the Class A-1 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-1 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.
"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, the State
of California, city of London, England 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.
"Cap Contract": The interest rate cap agreement between the Trust Fund
and the Counterparty.
"Cap Premium": $31,750 per month.
"Cash-Out Refinancing": A Refinanced Mortgage Loan the proceeds of which
are more than a nominal amount (as defined by the Original Seller's
underwriting guidelines) in excess of the combined amount of any existing
first mortgage or subordinate mortgage or other lien on or interest in the
related Mortgaged Property and related closing costs.
"Certificate": Any one of the Depositor's Asset Backed Pass-Through
Certificates, Series 2001-AQ1, Class A-1, Class A-IO, Class M-1, Class M-2,
Class X/N, 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/N 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/N 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/N Certificates) of such Class of
Certificates as of the Closing Date.
"Certificate Notional Amount": With respect to any Class A-IO Certificate
the amount set forth on such certificate as the "Certificate Notional Amount."
"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.
"Certificate Principal Balance": With respect to each Class A-1
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 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-1 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.
"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.
"Class": Collectively, all of the Certificates bearing the same class
designation.
"Class A Certificate": Any Class A-1 Certificate and the Class A-IO
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-IO Certificate": Any one of the Class A-IO 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-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 Certificate Principal Balance of the
Class A-1 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 84% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period minus $2,419,791.
"Class CP Interest": As described in the Preliminary Statement.
"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-1 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) 93% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period and (B) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $2,419,791.
"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-1 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) 99% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period minus $2,419,791.
"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-I Interest": The uncertificated Residual Interest in REMIC I.
"Class R-II Interest": The uncertificated Residual Interest in REMIC II.
"Class X/N Certificates": Any one of the Class X/N Certificates executed,
authenticated and delivered by the Trustee or the Trust Administrator,
substantially in the form annexed hereto as Exhibit A-6, evidencing a four
separate Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Closing Date": May 9, 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, Ameriquest Mortgage
Company, 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-AQ1." The Collection Account must be an Eligible Account.
"Commission": The Securities and Exchange Commission.
"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 0000 Xxxx Xx.
Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000 Attention: Trust
Administration-DB01A1, 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 000
Xxxx Xxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000, Attention: Structured Finance,
ACE 2001-AQ1, 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": As set forth in the Preliminary Statement.
"Counterparty": Westdeutsche Landesbank Girozentrale, New York Branch,
and any successor thereto.
"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 Certificates, 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, April 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).
"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 P-1 by Moody's and A-1 by S&P.
"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 (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 Xxxxxxx 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-AQ1." 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 May 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.
"Estate in Real Property": A fee simple estate in a parcel of land.
"Excess Overcollateralized Amount": With respect to the Class A-1
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, (ii) the Servicing Fee Rate and (iii) if a PMI
Insured Mortgage Loan, the PMI Policy Premium.
"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, (ii) the Servicing Fee Rate and (iii) if a PMI
Insured Mortgage Loan, the PMI Policy Premium.
"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.
"Xxxxxx Xxx": Xxxxxx Xxx, 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 Ameriquest, 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.
"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.
"Xxxxxxx Mac": Xxxxxxx 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 the terms of the related Mortgage Note used
to determine the Mortgage Rate for such Mortgage Loan.
"Holder": See Certificateholder.
"Independent": When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Servicer,
Ameriquest and their respective Affiliates, (b) does not have any direct
financial interest in or any material indirect financial interest in the
Depositor, Ameriquest, the Servicer or any Affiliate thereof, and (c) is not
connected with the Depositor, Ameriquest, the Servicer or any Affiliate
thereof as an officer, employee, promoter, underwriter, trustee, partner,
director or Person performing similar functions; provided, however, that a
Person shall not fail to be Independent of the Depositor, Ameriquest, 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,
Ameriquest, 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 as of the first Business Day 45 days prior to
such Adjustment Date, as specified in the related Mortgage Note.
"Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan (including proceeds of the PMI
Policy), 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-1 Certificates, the Mezzanine Certificates and each regular interest
issued by REMIC I or REMIC II, Class II-AI0, and the Class II-CP Interests
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
the Class A-IO Certificates, Class II-AI0, and the Class II-CP, 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) 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-1
Certificates, the Mezzanine Certificates, and any Interest Accrual Period
therefor, the second LIBOR Business Day preceding the commencement of such
Interest Accrual Period.
"Interest Distribution Amount": With respect to any Distribution Date and
any Class A-1 Certificates, any Mezzanine Certificates and any Class X/N
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.
"LIBOR Business Day": Any day on which banks in the City of London and
City of New York are open and conducting transactions in United States
dollars.
"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.
"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.
"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.
"Master Mortgage Loan Pooling Agreement": The agreement among Ameriquest
and Bankers Trust Company of California, N.A., dated as of October 3, 2000,
regarding the conveyance of the Mortgage Loans by Ameriquest.
"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-1 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.
"MERS": Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any
successor thereto.
"Mezzanine Certificate": Any Class M-1 Certificate or Class M-2
Certificate.
"Minimum Mortgage Rate": With respect to each Mortgage Loan, the
percentage set forth in the related Mortgage Note as the minimum Mortgage Rate
thereunder.
"Moody's": Xxxxx'x Investors Service, Inc.
"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 between the Seller 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;
(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 original principal amount of the Mortgage Loan;
(xv) the Scheduled Principal Balance of the Mortgage Loan as of the
close of business on the Cut-off Date;
(xvi) the initial and periodic Periodic Rate Cap;
(xvii) the Gross Margin;
(xviii) the Index;
(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 Mortgage Rate at origination;
(xxii) a code indicating the documentation program (i.e., Full
Documentation, Fast Trac Documentation, Stated Income Documentation);
(xxiii) whether the Mortgage Loan is covered by the PMI Policy;
(xxiv) the first Adjustment Date immediately following the Cut-off
Date;
(xxv) the risk grade (i.e., AAA, AA, A, B, C or D);
(xxvi) the Value of the Mortgaged Property;
(xxvii) the purchase price of the Mortgaged Property, if applicable;
(xxviii) the actual unpaid principal balance of the Mortgage Loan as
of the Cut-off Date; and
(xxix) if the related Mortgage Loan has a Prepayment Charge and if
so, the type and term of the related Prepayment Charge.
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.
"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 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 of the Index, as most recently available as
of a date prior to the Adjustment Date determined 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 excluding any portion of improvements thereupon not
part of the Value.
"Mortgagor": The obligor on a Mortgage Note.
"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 and (C) the Principal Remittance 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-1 Certificates and (B) the sum of
the amounts described in clauses (b)(i) through (iii) of the definition of
Principal Distribution 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": The weighted average of the Expense Adjusted
Mortgage Rates.
"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 A-IO Certificates and any
Distribution Date the lesser of (i) the aggregate Scheduled Principal Balance
of the Mortgage Loans with an Expense Adjusted Mortgage Rate equal to greater
than 6.75% per annum for such Distribution Date and (ii)(a) through the
Distribution Date in December 2001, $125,000,000, (b) from but excluding the
Distribution Date in December 2001 to and including the Distribution Date in
December 2002, $80,000,000, (c) from but excluding the Distribution Date in
December 2002 to and including the Distribution Date in April 2004,
$35,000,000, and (d) after the Distribution Date in April 2004, $0. With
respect to the Class X/N 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, Ameriquest, the
Seller or the Depositor, as applicable.
"One-Month LIBOR": With respect to the Class A-1 Certificates, the
Mezzanine Certificates, 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 0.0625%). 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.
"One-Month LIBOR Pass-Through Rate": With respect to the Class A-1
Certificates and, a per annum rate equal to One-Month LIBOR plus 0.260%, 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 0.520%, in the case of any Distribution Date
thereafter.
With respect to the Class M-1 Certificates, a per annum rate equal to
One-Month LIBOR plus 0.670%, 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 1.005%, in the
case of any Distribution Date thereafter.
With respect to the Class M-2 Certificates and, a per annum rate equal to
One-Month LIBOR plus 1.150%, 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 1.725% 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.
"Original Seller": Ameriquest Mortgage Company or its successor in
interest, in its capacity as original seller of the Mortgage Loans.
"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-1
Certificates and the Mezzanine Certificates as of such Distribution Date
(after taking into account the payment of the Basic Principal Distribution
Amount for 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 Net Monthly Excess Cashflow
net of any payments payable to the Counterparty pursuant to Section 4.07.
"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-1 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 A-IO Certificate on and prior to the
Distribution Date in April 2004, 6.750% per annum, for each Distribution Date
thereafter 0%.
(i) With respect to the Class X/N Certificates and any
Distribution Date, a rate per annum equal to the excess of the REMIC
II Remittance Rate over the weighted average of the Pass Through
Rates of the Class A1 Certificates, Mezzanine Certificates and the
Overcollateralized Amount which, solely for purposes of calculating
the X/N Certificate Pass Through Rate, will be treated as having a
pass through rate equal to zero and as principal balance equal the
Overcollateralized Amount
Solely for federal income tax purposes, the Class X/N Certificates will
be treated as comprised of four REMIC II regular interests, three of which
have notional principal balances equal to the principal balances of the Class
II-1, Class II-2 and Class II-3 Interests and bear interest at pass through
rates equal to the excess of the REMIC II Pass Through Rate over the Pass
Through Rates in respect of the Class A-1 Certificates, Class M-1 Certificates
and Class M-2 Certificates, respectively, and the fourth of which will have a
principal balance equal to the principal balance of the REMIC II-4 Interest
and will bear interest at a rate equal to the REMIC II Pass Through Rate.
"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 or Certificate Notional
Amount represented by such Certificate and the denominator of which is the
aggregate initial Certificate Principal Balance or initial Notional Amount, as
applicable, of all of the Certificates of such Class. The Class A
Certificates, the Mezzanine Certificates and the Class X/N Certificates are
issuable only in minimum Percentage Interests corresponding to minimum initial
Certificate Principal Balances or Certificate Notional Amount, in the case of
the Class A-IO Certificates, of $50,000 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 or
Certificate Notional Amount, in the case of the Class A-IO Certificates, 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.
"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
Xxxxx'x and "AAA" by S & P; and
(vii) 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.
"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, Xxxxx
plans and bank collective investment funds and insurance company general or
separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA and Section 4975 of the Code.
"PMI Insured Mortgage Loan": Any Mortgage Loan covered by the PMI Policy
as indicated on the Mortgage Loan Schedule.
"PMI Policy": The primary mortgage insurance policy issued by Mortgage
Guaranty Insurance Corporation with respect to some of the Mortgage Loans.
"PMI Policy Premium ": With respect to each PMI Insured Mortgage Loan,
the related annual premium as specified in the PMI Policy, expressed as a
percentage of the related Scheduled Principal Balance in effect from time to
time.
"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": The fee, if any, provided for in the related
Mortgage Note, to be paid by the Mortgagor for the privilege to prepay the
principal obligation of the related Mortgage Loan prior to the Mortgage Loan's
maturity date; which when required by the terms of the Mortgage Note shall be
collected by the Servicer upon the Mortgagor's full and voluntary principal
prepayment except to the extent that: (1) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to debtors' and creditors' rights generally; (2) the
collectability thereof may be limited due to acceleration in connection with a
foreclosure or other involuntary prepayment; (3) subsequent changes in state
or federal law (including decisional authority) limit prohibit enforceability
of the applicable penalty; or (4) a Servicer has, in response to a default as
provided for under the terms of this Agreement waived, altered, limited or
forgiven the Prepayment Charge provided in the related 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 Expense Adjusted 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 any Distribution Date,
the sum of the Basic Principal Distribution Amount and 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.
"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 (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.
"Rate/Term Refinancing": A Refinanced Mortgage Loan, the proceeds of
which are not more than a nominal amount (as defined by Original Seller's
underwriting guidelines) in excess of the combined amount of any existing
first mortgage loan or subordinate mortgage loan or other lien on or interest
in the related Mortgaged Property and related closing costs.
"Rating Agency" or "Rating Agencies": Xxxxx'x and S&P or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be such nationally recognized statistical rating
agencies, or other comparable Persons, designated by the Depositor, notice of
which designation shall be given to the Trustee, the Trust Administrator and
the Servicer.
"Realized Loss": With respect to each Mortgage Loan as to which a Final
Recovery Determination has been made, an amount (not less than zero) equal to
(i) the unpaid 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 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, Xxxxxxx'x Bank PLC, The Tokyo
Mitsubishi Bank and National Westminster Bank PLC and their successors in
interest; provided, however, that if any of the foregoing banks are not
suitable to serve as a Reference Bank, then any leading banks selected by the
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-1 Certificate, Class A-IO Certificate,
Mezzanine Certificate or Class X/N 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 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); and (v) the Collection Account and the
Distribution 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 Remittance Rate": With respect to the REMIC I Regular Interests,
a per annum rate equal to the Net WAC Pass-Through Rate.
"REMIC I Required Overcollateralization Amount": 0.50% 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 Regular Interests": As designated in the Preliminary Statement.
"REMIC II Remittance Rate": With respect to any Distribution Date, a rate
per annum equal to the Net WAC Pass Through Rate, minus (ii) the product of (a)
the Interest Distribution Amount for the Class A-IO Certificates for such
Distribution Date multiplied by a fraction, the numerator of which is 12 and
the denominator of which is the Stated Principal Balance of the Mortgage Loans
as of the first day of the month preceding the month of such Distribution Date
and (b) 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
minus, (iii) the product of (a) the Cap Premium for such Distribution Date
multiplied by a fraction, the numerator of which is 12 and the denominator of
which is the Stated Principal Balance of the Mortgage Loans as of the first
day of the month preceding the month of such Distribution Date and (b) 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.
"REMIC III": The segregated pool of assets consisting of the REMIC II
Regular Interests conveyed in trust to the Trustee, for the benefit of the
Regular Interest in REMIC III and the Class R Certificateholders, as holders
of the Class R-III Interest pursuant to Section 2.09, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"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 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 Expense Adjusted 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.
"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, $2,419,791.
"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 0.0625%) 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) a single parcel of
real property with a one-to-four family residence erected thereon, (ii) a
townhouse or an individual condominium unit in a condominium project, (iii) an
individual unit in a planned unit development, or (iv) a mobile home or
manufactured dwelling which is permanently affixed to a foundation and treated
as "real estate" under applicable law.
"Residual Certificate": Any one of the Class R 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 & Poor's, a division of The XxXxxx-Xxxx 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 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": Ameriquest Mortgage Company 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, one
Business Day prior to such Distribution Date.
"Servicer Termination Trigger" : A Servicer Termination Trigger has
occurred with respect to any Distribution Date if as of the last day of the
related Due Period (i) the percentage obtained by dividing (a) the aggregate
amount of Realized Losses since the Cut-Off Date by (b) Stated Principal
Balance of the Mortgage Loans as of the Cut-Off Date, exceeds (ii) 4%.
"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 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.
"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 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 May 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 16% 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.
"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
Xxxxx Telerate Capital Markets Report (or such other page as may replace page
3750 on that report for the purpose of displaying London interbank offered
rates of major banks).
"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)
40.00% of the Credit Enhancement Percentage and (ii) 6.40%.
"Trust": ACE Securities Corp., Home Equity Loan Trust, Series 2001-AQ1,
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 REMIC Regular Interest": The REMIC I Regular Interests
and REMIC II 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.
"Unpaid Basis Risk Shortfall": With respect to the Class A-1 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 the Uniform Standards
of Professional Appraisal Practice 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 the Uniform Standards of Professional Appraisal
Practice 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, 1% of all Voting Rights will be allocated among the
Holders of the Class A-IO Certificates until the Notional Amount thereof is
equal to $0 and thereafter the Holders of the Class A-IO Certificates will
have no Voting Rights. 100% of all Voting Rights not allocated to the Class
A-IO will be allocated among the holders of the Class A-1 Certificates, the
Mezzanine Certificates and the Class X/N 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 and the Class X/N Certificates 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 the
Class X/N Certificates 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 M-2 Certificates, the Class M-1
Certificates and concurrently, to the Class A-1 Certificates and the Class
A-IO Certificates, in that 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.
ARTICLE II
CONVEYANCE ASSETS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Assets.
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 the Master
Mortgage Loan Pooling Agreement, the rights of the Depositor in the Class CP
Interest 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 bearing all intervening endorsements
and including any riders to the Mortgage Note endorsed "Pay to the order
of ____________________________________," without recourse;
(ii) the original Mortgage with evidence of recording thereon or
copies certified by the related recording office or, if the original
Mortgage has not yet been returned from the recording office, a copy
certified by Ameriquest indicating that such Mortgage has been delivered
for recording, and the original power of attorney, if the Mortgage was
executed pursuant to a power of attorney;
(iii) an original Assignment of the Mortgage executed in blank, in
recordable form, excepting therefrom the name of the assignee and
mortgage recordation information which has not been returned by the
applicable recorder's office, for each Mortgage Loan unless issued with a
MERS identification number;
(iv) The originals of any intervening recorded Assignments of
Mortgage, showing a complete chain of assignment from origination to
Ameriquest, including warehousing assignments, with evidence of recording
thereon (or, if an original intervening Assignment of Mortgage has not
been returned from the recording office, a copy thereof certified by
Ameriquest indicating that such intervening Assignment of Mortgage has
been delivered for recording, the original of which shall be delivered to
the Trustee forthwith after return from such recording office);
(v) [RESERVED];
(vi) the original mortgage title insurance policy, duplicate title
insurance policy, the related binder or a commitment to insure or a
preliminary title report;
(vii) the originals of all assumption, modification, consolidation,
or extension agreements, (or, if an original of any of these documents
has not been returned from the recording office, a certified copy
thereof, the original to be delivered to Ameriquest forthwith after
return from such recording office) with evidence of recording thereon;
(viii) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage Loan, if
applicable; and
(ix) the original of any guarantee executed in connection with the
Mortgage Note, if applicable.
The Depositor shall within sixty Business Days following the later of the
Closing Date and the date of receipt by the Depositor of the recording
information for a Mortgage submit for recording in the appropriate public
office for real property records, each Assignment referred to in Sections
2.01(iii) above. In the event that any such Assignment is lost or returned
unrecorded because of a defect therein, Ameriquest shall promptly prepare a
substitute Assignment or cure such defect and thereafter the Depositor shall
cause each such Assignment to be duly recorded.
In the event that the original Mortgage was not delivered pursuant to
subsection (ii) above, the original title insurance policy was not delivered
pursuant to subsection (vi) above, or the original recorded Assignment or
Assignments of Mortgage, if any, showing a complete chain of assignment from
the origination to Ameriquest was not delivered pursuant to subsection (iv)
above, the Depositor shall: (1) in the instance of subsections (ii), (iii), or
(vii) above provide a copy certified by Ameriquest to be a true and correct
copy of the original sent to the applicable recorder's office for recording;
(2) in the instance of subsection (vi) above provide a copy of the preliminary
title report or similar commitment to insure if such is not already in the
possession of the Trustee; and (3) as to all undelivered original Mortgage
Loan Documents use its best and reasonable efforts to promptly secure the
delivery of such originals and cause such originals to be delivered to the
Trustee promptly upon receipt thereof and in no event later than 365 days
following the Closing Date. Notwithstanding the foregoing, the Depositor shall
not be deemed to be in breach of the delivery requirements set forth in this
paragraph if the Depositor fails to deliver any of the documents described
herein and provides evidence to the Trustee that such failure is due solely to
any of (i) the failure of the applicable recorder's office to return a
document that was properly submitted for recordation, or (ii) the failure of
the title insurer to issue and deliver the original mortgagee's policy of
title issuance (unless the title insurer is claiming that it is under no
obligation to issue such policy or (iii) the failure of Ameriquest to perform
its obligations under the Master Mortgage Loan Pooling Agreement. 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 the Servicer
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.
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, a file for each Mortgage Loan 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 within 90 days of 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), (xiv), (xvi), (xvii),
(xviii) and (xx) 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.
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 Ameriquest in the Master Mortgage Loan
Pooling Agreement 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 of Mortgage Loans by Ameriquest or the Seller.
(a) Upon actual knowledge or receipt of notice that Ameriquest has
not complied with the delivery requirements set forth in Exhibit C of the
Master Mortgage Loan Pooling Agreement, or of the breach by Ameriquest of any
representation or warranty under Section 3.01 or 3.03 of, the Master Mortgage
Loan Pooling Agreement (attached hereto as Exhibit B) in respect of any
Mortgage Loan that materially adversely affects the value of such Mortgage
Loan or the interest therein of any of the Certificateholders, the Trustee and
the Trust Administrator, as applicable, shall promptly notify Ameriquest, the
Seller, the Depositor, the Servicer and the Trust Administrator of such
non-compliance or breach and request that Ameriquest comply with such delivery
requirements or cure such breach within 120 days from the date Ameriquest was
notified of such non-compliance breach, and if Ameriquest does not deliver
such missing document or cure such non-compliance or breach in all material
respects during such period, the Trustee shall notify the Trust Administrator
and the Trust Administrator shall enforce the obligations of Ameriquest under
the Master Mortgage Loan Pooling Agreement to repurchase such Mortgage Loan
from REMIC I at the Purchase Price within 120 days after the date on which
Ameriquest discovered or was notified of such missing document, non-compliance
or breach, if and to the extent that Ameriquest is obligated to do so under
the Master Mortgage Loan Pooling 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 Ameriquest the related Mortgage File and the Trustee
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, as Ameriquest shall furnish to it and as shall be
necessary to vest in Ameriquest any Mortgage Loan released pursuant hereto and
upon doing so neither the Trustee nor the Trust Administrator shall have any
further responsibility with regard to such Mortgage File. It is understood and
agreed that the obligation of Ameriquest to cure or to repurchase any Mortgage
Loan as to which Ameriquest has not complied with its delivery requirements
under Exhibit C of the Master Mortgage Loan Pooling Agreement or as to which
such a breach of a representation warranty under Section 3.01 or 3.02 of the
Master Mortgage Loan Pooling Agreement has occurred and is continuing shall
constitute the sole remedy respecting such omission, defect or breach
available to the Trustee, the Trust Administrator and the Certificateholders.
Ameriquest hereby agrees and covenants for the benefit of the Depositor,
the Seller, the Trustee, the Trust Administrator and the Certificateholders to
comply with the document delivery requirements of Exhibit C of the Master
Mortgage Loan Pooling Agreement, and to cure any breach of a representation or
warranty or repurchase any Mortgage Loan required to be repurchased pursuant
to Section 3.01 or 3.03 of the Master Mortgage Loan Pooling Agreement.
(b) Upon actual knowledge or receipt of notice of the breach by the
Seller 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 any of the
Certificateholders, the Trustee and the Trust Administratior, as applicable,
shall promptly notify the Seller, the Depositor, the Servicer and the Trust
Administrator of such breach and request that the Seller cure such breach
within 120 days from the date the Seller was notified of such breach and if
the Seller does not cure such breach in all material respects during such
period, the Trustee shall notify the Trust Administrator and the Trust
Administrator shall enforce the obligations of the Seller under the Mortgage
Loan Purchase Agreement to repurchase such Mortgage Loan from REMIC I at the
Purchase Price within 120 days after the date on which the Seller discovered
or was notified of such breach, if and to the extent that the Seller is
obligated to do so under the Mortgage Loan Purchase Agreement; provided,
however, that notwithstanding anything set forth in this Section 2.03(b), the
Seller will have no obligation to cure any breach or repurchase any Mortgage
Loan after a breach of a representation as described in this Section 2.03(b)
if such breach also constitutes a breach described in Section 2.03(a).
(c) 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.
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:
(a) Due Organization and Authority. The Servicer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all licenses necessary to carry on its business as
now being conducted and is licensed, qualified and in good standing in each
state where a Mortgaged Property is located if the laws of such state require
licensing or qualification in order to conduct business of the type conducted
by the Servicer, and in any event the Servicer is in compliance with the laws
of any such state to the extent necessary to ensure the enforceability of the
related Mortgage Loan in accordance with the terms of this Agreement; the
Servicer has the full corporate power and authority to execute and deliver
this Agreement and to perform in accordance herewith; the execution, delivery
and performance of this Agreement by the Servicer and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action; this Agreement evidences the valid, binding and
enforceable obligation of the Servicer; and all requisite corporate action has
been taken by the Servicer to make this Agreement valid and binding upon the
Servicer in accordance with its terms.
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Servicer.
(c) No Conflicts. Neither the execution and delivery of this
Agreement or the transactions contemplated hereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, will conflict with
or result in a breach of any of the terms, conditions or provisions of the
Servicer's charter or by-laws or any legal restriction or any material
agreement or instrument to which the Servicer is now a party or by which it is
bound, or constitute a default or result in an acceleration under any of the
foregoing, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Servicer or its property is subject.
(d) Ability to Service. The Servicer is an approved seller/servicer
of residential mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac and no event has
occurred, including but not limited to a change in insurance coverage, which
would make the Servicer unable to comply with Xxxxxx Mae or Xxxxxxx Mac
eligibility requirements or which would require notification to either Xxxxxx
Mae or Xxxxxxx Mac.
(e) Reasonable Servicing Fee. The Servicer acknowledges and agrees
that the Servicing Fee, as calculated at the Servicing Fee Rate, represents
reasonable compensation for performing such services and that the entire
Servicing Fee shall be treated by the Servicer, for accounting and tax
purposes, as compensation for the servicing and administration of the Mortgage
Loans pursuant to this Agreement.
(f) Ability to Perform. The Servicer 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.
(g) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or to the best of the Servicer's knowledge threatened
against the Servicer which, either in any one instance or in the aggregate,
may result in any material adverse change in the business, operations,
financial condition, properties or assets of the Servicer, or in any material
impairment of the right or ability of the Servicer to carry on its business
substantially as now conducted, or in any material liability on the part of
the Servicer, or which would draw into question the validity of this Agreement
or of any action taken or to be taken in connection with the obligations of
the Servicer contemplated herein, or which would be likely to impair
materially the ability of the Servicer to perform under the terms of this
Agreement.
(h) No Consent Required. 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 Mortgage Loans or the consummation of the
transactions contemplated by this Agreement.
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 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. Upon discovery by or notice to the Servicer of
any breach of a representation or warranty, the Servicer shall use its best
efforts to cure such breach in all material respects and, if such breach
cannot be cured within 120 days of discovery by or notice to the Servicer, the
Servicer shall repurchase such Mortgage Loan at the Purchase Price pursuant to
Section 2.03(a). Subject to Section 7.01, 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.
[SECTION 2.06. Conveyance of Uncertificated REMIC Regular Interests and
Acceptance of REMIC II 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 Regular Certificates and the Class R-II 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 Regular Interests and the
Class R-II Interest. The interests evidenced by the Class R-II Interest,
together with the Regular Certificates, constitute the entire beneficial
ownership interest in REMIC II.
(b) 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) and (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), 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.]
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-AQ1 and does hereby appoint U.S. Bank National Association, as
Trustee in accordance with the provisions of this Agreement and as custodian
or agent for the Trust 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 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. The Trust shall
not be merged with or into any other Person provided that the Trust Fund may
be liquidated or sold pursuant to the terms of this Agreement.
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, Accepted Servicing
Practices 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 reasonable 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
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 Accepted Servicing Practices, 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 voluntary 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 and Accepted Servicing
Practices, 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.
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
in the preceding paragraph which materially and adversely affects the
interests of the Holders of the Class X/N Certificates in any Prepayment
Charge, the Servicer shall promptly pay the amount of the Prepayment Charge
waived in breach of the covenant of the Servicer set forth in the preceding
paragraph (or such portion thereof as had been waived in breach of such
covenant), for the benefit of the holders of the Class X/N Certificates, by
depositing such amount into the Collection Account for distribution in
accordance with the terms of this Agreement.
With respect to each Mortgage Loan which is the subject of a voluntary
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 or was otherwise waived by the Servicer in
accordance with this Section 3.01.
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.
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 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). The
Servicer may only waive a Prepayment Charge pursuant to Section 3.01.
SECTION 3.08. Primary Mortgage Insurance.
For all PMI Insured Mortgage Loans:
(a) The Servicer agrees to prepare and present all claims under the PMI
Policy in a timely fashion in accordance with the terms thereof and to take
such reasonable action as shall be necessary to permit recovery under the PMI
Policy respecting a defaulted PMI Insured Mortgage Loan.
(b) In connection with any assumption or substitution agreement entered
into or to be entered into pursuant to Section 3.15, the Servicer shall
promptly notify the PMI Insurer under the PMI Policy of such assumption or
substitution of liability in accordance with the terms of the PMI Policy and
shall take all actions which may be required by the PMI Insurer as a condition
to the continuation of coverage under the PMI Policy.
(c) Any amounts collected by the Servicer under the PMI Policy claim
shall be deposited in the Custodial Account pursuant to Section 3.10(a)(iii)
and subject to withdrawal pursuant to Section 3.11. On each Servicer
Remittance Date, the Servicer shall withdraw from the Collection Account, the
amount of the PMI Policy Premiums payable in respect of all PMI Insured
Mortgage Loans and shall remit such premiums to the PMI Insurer when and as
the same shall be due and payable. The Servicer shall not be obligated to
advance from its own funds as a Servicing Advance any PMI Policy Premium for
any defaulted PMI Insured Mortgage Loans.
(d) In the event of a default by the PMI Insurer under the PMI Policy (a
"Replacement Event"), the Servicer shall use commercially reasonable efforts
to obtain a substitute PMI Policy on the following terms and conditions: (i)
the Certificates shall be rated no lower than the rating assigned by each
Rating Agency to the Certificates immediately prior to such Replacement Event,
as evidenced by a letter from each Rating Agency addressed to the Servicer,
the Trustee and the Trust Administrator, (ii) the timing and mechanism for
drawing on such new substitute PMI Policy shall be reasonably acceptable to
the Servicer, the Trustee and the Trust Administrator and (iii) the premiums
under the proposed substitute PMI Policy shall not exceed such premiums under
the existing PMI Policy. Any cost incurred to obtain a substitute PMI Policy
shall be immediately reimbursable from the Collection Account.
(e) On or before June 15, 2001, the Servicer will confirm with the PMI
Insurer that each of the PMI Insured Mortgage Loans identified on the Mortgage
Loan Schedule is covered under the PMI Policy and shall provide written
notification to the Trustee and the Trust Aministrator of confirmation.
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 subject
to a voluntary escrow agreement for the payment of taxes, and fire, flood, and
hazard insurance premiums on behalf 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 three calendar days 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 the related escrow agreement. Withdrawals of
amounts from a Servicing Account may be made only to (i) effect timely payment
of Escrow Payments; (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; (v) pay the Servicer any net interest or
investment income earned on funds on deposit in the Servicing Account or (vi)
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 the Trustee, the Trust and the
Certificateholders. The Collection Account shall be an Eligible Account. 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 three
calendar 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 on the Servicer Remittance Date, (a) from amounts on deposit in the
Collection Account, an amount up to the Cap Premium, (b) 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 (c) the amount 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.
(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.
(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 with respect to
unreimbursed Servicing Advances 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 Ameriquest, 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;
(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 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);
(x) to pay the PMI Insurer the PMI Policy Premium under the PMI
Policy; and
(xi) 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 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 (where applicable) and hazard insurance policies. To
the extent such policies are not maintained, the 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 Mortgaged
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 Mortgaged
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 Mortgaged Property or amounts to be released to
the Mortgagor in accordance with Accepted Servicing Practices and 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. 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 and the Mortgagor fails to maintain flood insurance, 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 least of (i)
the unpaid principal balance of the related Mortgage Loan, (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) and (iii) the
replacement value of the Mortgaged Property.
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
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.
(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 Xxxxxx Xxx or Xxxxxxx Mac if it were the purchaser of the
Mortgage Loans, unless the Servicer, has obtained a waiver of such
requirements from Xxxxxx Mae or Xxxxxxx Mac. The Servicer shall each also
maintain a fidelity bond in the form and amount that would meet the
requirements of Xxxxxx Mae or Xxxxxxx Mac, unless the Servicer, has obtained a
waiver of such requirements from Xxxxxx Mae or Xxxxxxx 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 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 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 written
report prepared by a Person who regularly conducts environmental audits using
customary industry standards, that:
(A) 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
(B) 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, 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, to all
unpaid Servicing Fees; and second, to the balance of the 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
xxxxxxxxxxxx X&X 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 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 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 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.
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 3.09(v) to withdraw from the Servicing Account and Section 3.11(a)(iv)
to withdraw from the Collection 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 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 thirty 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 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 April 30th of each year commencing in 2002, 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 April 30th of each year commencing in 2002, 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. No later than April 30th of each year,
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
Certificateholder'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, 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. In each case access to documentation may be
conditioned upon the requesting party's acknowledgment in writing of a
confidentiality agreement regarding any information that is required to remain
confidential under the Xxxxx-Xxxxx -Xxxxxx Act of 1999.
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 in the Collection 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 and in no event later than three calendar days after receipt in
the Collection 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;
(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 Collection 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 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 Collection
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 Collection 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 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) 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 (unless
such amounts were remitted in error). 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.
SECTION 3.27. Advance Facility.
(a) The Servicer is hereby authorized to enter into a facility with
any Person which provides that such Person (an "Advancing Person") may fund
P&I Advances and/or Servicing Advances under this Agreement, although no such
facility shall reduce or otherwise affect the Servicer's obligation to fund
such P&I Advances and/or Servicing Advances. To the extent that an Advancing
Person funds any P&I Advance or any Servicing Advance and provides the Trustee
and Trust Administrator with notice acknowledged by the Servicer that such
Advancing Person is entitled to reimbursement directly from the Trust Fund
pursuant to the terms of the Advance Facility, such Advancing Person shall be
entitled to receive reimbursement pursuant to this Agreement for such amount
to the extent provided in Section 3.27(b). Such notice from the Advancing
Person must specify the amount of the reimbursement, the Section of this
Agreement that permits the applicable P&I Advance or Servicing Advance to be
reimbursed and the section(s) of the Advance Facility that entitle the
Advancing Person to request reimbursement from the Trust Fund, rather than the
Servicer. The Trust Fund shall have no duty or liability with respect to any
calculation of any reimbursement to be paid to an Advancing Person and shall
be entitled to rely without independent investigation on the Advancing
Person's notice provided pursuant to this Section 3.27. An Advancing Person
whose obligations hereunder are limited to the funding of P&I Advances and/or
Servicing Advances shall not be required to meet the qualifications of a
Sub-Servicer pursuant to Section 3.02 hereof.
(b) If an Advancing Person is entitled to reimbursement for any
particular P&I Advance or Servicing Advance as set forth in Section 3.27(a),
then the Servicer shall not be permitted to reimburse itself therefor under
Section 3.11, but instead the Servicer shall include such amounts in the
applicable remittance to the Trust Administrator made pursuant to Section 3.10
to the extent of amounts on deposit in the Collection Account on the related
Servicer Remittance Date. The Trust Administrator is hereby authorized to pay
to an Advancing Person reimbursements for P&I Advances and Servicing Advances
from the Distribution Account to the same extent the Servicer would have been
permitted to reimburse itself for such P&I Advances and/or Servicing Advances
in accordance with Section 3.11, as the case may be, had the Servicer made
such P&I Advance or Servicing Advance from its own funds.
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions.
(a) (A) On each Distribution Date, the Trust Administrator shall (a)
first, withdraw from the Distribution Account an amount up to the Cap Premium
for payment to the Counterparty pursuant to the Cap Contract and pay such
amount to the Counterparty, (b) second, from amounts remaining on deposit in
the Distribution Account, the Trust Administrator shall withdraw any amount
payable to an Advancing Person pursuant to Section 3.27, and (c) third, from
amounts remaining on deposit in the Distribution Account, an amount equal to
the Available Distribution Amount on such Distribution Date consisting of 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 remaining for such Distribution Date:
first, to pay concurrently to the Class A-1 Certificates and the
Class A-IO Certificates, the Senior Interest Distribution Amount for
such Distribution Date, pro rata, based on their respective Accrued
Certificate Interest for such Distribution Date;
second, to the Holders of the Class M-1 Certificates, the related
Interest Distribution Amount for such Class for such Distribution
Date; and
third, to the Holders of the Class M-2 Certificates, the related
Interest Distribution Amount for such Class for such Distribution
Date.
(B) On each Distribution Date, the Trust Administrator shall
withdraw from the Distribution Account an amount equal to the 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 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;
second, to the Holders of the Class M-1 Certificates, until the
Certificate Principal Balance of such Class has been reduced to
zero; and
third, to the Holders of the Class M-2 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 Basic Principal
Distribution Amount shall be distributed in the following order of
priority;
first, to the Class A-1 Certificates, the lesser of (x) the Basic
Principal Distribution Amount and (y) the Class A-1 Principal
Distribution Amount, until the Certificate Principal Balance of the
Class A-1 Certificates 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-1 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; and
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-1 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.
(C) On each Distribution Date, the Net Monthly Excess Cashflow (or,
in the case of clause (ii) below, the Net Monthly Excess Cashflow exclusive of
any Overcollateralization Reduction Amount) shall be distributed as follows:
(i) to the Holders of the Class X/N Certificates up to any
amounts due to the Counterparty under the Cap Contract and not
paid pursuant to Section 4.01(a)(A); provided that such amount
will be deposited into the Reserve Fund and distributed
pursuant to Section 4.07;
(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 any Extra Principal Distribution Amount,
payable to such Holders in accordance with the priorities set
forth in (b) below;
(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 A-1 Certificates and Class
A-IO Certificates, in an amount equal to, and in proportion 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;
(viii) 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;
(ix) 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;
(x) to the Reserve Fund, an amount equal to the Required
Reserve Fund Deposit;
(xi) to the Class X/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 Certificate Principal
Balance thereof and (B) any interest unpaid from previous
Distribution Dates;
(xii) to the Class X/N Certificates, any remaining amounts to
reduce its Certificate Principal Balance, until its Certificate
Principal Balance has been reduced to zero;
(xiii) to the Holders of the Class R Certificates, any
remaining amounts;
provided, that any distributions made pursuant to clauses (i),
(x), (xi), (xii) and (xiii) above, shall be deposited into the
Reserve Fund.
In the case of the distributions described in clauses (i),
(xi), (xii) and (xiii) above, the Trust Administrator shall
account for such distributions as having been made first to the
Class X/N Certificates and then paid by the Class X/N
Certificateholders to the Reserve Fund.
(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-1 Certificates, 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; and
third, to the Holders of the Class M-2 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-1 Principal Distribution Amount shall be distributed to
the Holders of the Class A-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 amount distributed to the Holders
of the Class A-1 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; and
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-1 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.
(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
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.
(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.
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-1 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:
(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/N 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 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-1
Certificates, the Class A-IO Certificates, Mezzanine Certificates and the
Class X/N Certificates for such Distribution Date and the Interest Carry
Forward Amount, if any, with respect to the Class A-1 Certificates and
the Mezzanine Certificates on such Distribution Date, and in the case of
the Class A-1 Certificates, Class A-IO 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;
(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-1
Certificates, Class A-IO Certificates, the Mezzanine Certificates and the
Class X/N Certificates for such Distribution Date and the Pass-Through
Rate applicable to the Class A-1 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 aggregate payment to the Counterparty related to such
Distribution Date;
(xxix) the Loss Severity Percentage with respect to each Mortgage
Loan; and
(xxx) 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:\\xxx-xxxx.xxx.xxxxxxxx-xxxx.xxx/xxxx and assistance in using the website
can be obtained by calling the Trust Administrator's customer service desk at
0-000-000-0000. Parties that are unable to use the above distribution options
are entitled to have a paper copy mailed to them via first class mail by
calling the customer service desk and indicating such. The 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.
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 eighteenth calendar day of each month, the Servicer shall
deliver to the Trust Administrator by electronic mail (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.
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 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 5:00 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 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 Trust Administrator.
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 eighteenth calendar day of each
month 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 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero,
third, to the Class M-2 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; and fourth, 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 Certificates shall be made by reducing the amount otherwise payable
in respect thereof pursuant to Section 4.01(a)(D)(xii).] No allocations of any
Realized Losses shall be made to the Certificate Principal Balances of the
Class A-1 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 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.
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 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 and Cap Contract.
(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-1, Class M-1 and Class M-2 Certificates and the
Counterparty, 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.
On the Closing Date, the Trustee shall execute on behalf of the Trust,
and the Trust Administrator shall acknowledge, the Cap Contract in the form
attached as Exhibit G hereto. The Trust Administrator shall enforce the rights
of the Trust Fund and cause the Trust Fund to comply with its obligations
under the Cap Contract.
(b) On each Distribution Date, the Trust Administrator shall
transfer to the Reserve Fund any amounts distributable to the Holders of the
Class X/N Certificates pursuant to Sections 4.01(a)(D)(i), (xi), (xii) and
(xiii) and any amounts required to be deposited therein pursuant to Section
4.01(a)(D)(x).
(c) All amounts received with respect to the Cap Contract shall be
deposited into the Reserve Fund.
(d) The Trust Administrator shall make withdrawals from the Reserve
Fund to make the following payments:
first, to pay any amounts due to the Counterparty pursuant to the
Cap Contract and not paid pursuant to Section 4.01(a)(A), including
any termination payment required thereunder as directed by the
Counterparty; and
second, to make distributions in an amount equal to the unpaid
amount of any Basis Risk Shortfall and any Unpaid Basis Risk
Shortfall for the Class A-1, Class M-1 and Class M-2 Certificates,
in that order, for such Distribution Date for each such Class for
such Distribution Date;
Such withdrawals shall be deemed to be made first from amounts received under
the Cap Contract and second from amounts otherwise distributable to the
Holders of the Class X/N Certificates.
(e) Funds in the Reserve Fund may be invested in Permitted
Investments. Any earnings on such amounts shall be distributed to the Class
X/N Certificate pursuant to Section 4.01(a)(D). The Class X/N 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/N Certificate, all
funds in the Reserve Fund shall remain uninvested. The Reserve Fund shall not
be an asset of any Trust REMIC.
(f) Any amounts remaining on deposit in the Reserve Fund in excess
of the Reserve Fund Balance after payment of any Basis Risk Shortfall or
Unpaid Basis Risk Shortfall and otherwise distributable to the Class X/N
Certificates on any Distribution Date or upon termination of the Trust Fund,
shall be distributed to the Class X/N Certificates or such Distribution Date
or upon such termination, as applicable. [Any other amounts remaining on
deposit in the Reserve Fund in excess of the Reserve Fund Balance, shall be
paid to [the Depositor].]
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-1 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, 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
$50,000. 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 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/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/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 to an "accredited
investor" as defined in 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/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 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.
(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 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 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.
SECTION 5.05. Certain Available Information.
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: (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.
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 Xxxxxx Xxx or Xxxxxxx Mac;
and provided further that the Rating Agencies' ratings of the Class A-1
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, 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. 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. In each case access to documentation may be conditioned upon the
requesting party's acknowledgment in writing of a confidentiality agreement
regarding any information that is required to remain confidential under the
Xxxxx-Xxxxx-Xxxxxx Act of 1999. 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.
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 insolvency or reorganization statute, make an assignment
for the benefit of its creditors, or voluntarily suspend payment of its
obligations; or
(vi) the occurrence of a 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.
If a Servicer Event of Default described in clauses (i) through (vii) 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 (vi) 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 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 upon termination all amounts accrued or owing to the Servicer
under this Agreement on or prior to the date of such termination shall be
immediately due and payable from funds held in the Collection Account, whether
in respect of P&I Advances or otherwise and without consideration of the
requirement that the advances be collected from the Mortgage Loan collections,
and the Servicer 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 become the successor in all
respects to the Servicer in its capacity as Servicer under this Agreement,
without further action by any Person, 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), the obligation to cure breaches
of representations or warranties or repurchase Mortgage Loans under Section
2.05 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) Except with respect to the succession by the Trust
Administrator to the Servicer pursuant to subsection (1) above, which shall
require no further action by any party, 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 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).
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 Servicer Event of Default
hereunder may waive such Servicer Event of Default; provided, however, that a
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 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 Servicer Event of Default or impair any right consequent thereon except
to the extent expressly so waived.
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
(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 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/N
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 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 and
the Cap Contract) 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 or the Cap Contract, 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 agrees to hold
the Trustee and the Trust Administrator harmless against, any loss, liability
or expense arising from any third party claim 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,
Ameriquest, 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 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
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 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, 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 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000. 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.
(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.
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 Xxxxxx X. Xxxxxxx, the late ambassador
of the United States to the Court of St. Xxxxx, 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/N 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 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 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.
ARTICLE X
REMIC PROVISIONS
SECTION 10.01. REMIC Administration.
(a) The Trustee and the Trust Administrator shall elect to treat the
Trust as three separate REMICs 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 REMIC II Regular Interests shall be designated the Regular Interests in
REMIC II and the Class R-II Interest shall be designated as the Residual
Interest in REMIC II, and the Class A Certificates, the Mezzanine Certificates
and the Class X/N Certificates and the Class CP Interest shall be designated
as the Regular Interests in REMIC III and the Class R-III Interest 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 REMIC
(within the meaning of Section 860G of the Code) other than the REMIC I
Regular Interests, REMIC II 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.
(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 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/N 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 M-1 and Class M-2 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 Depositor
in favor of the Class A-1, Class M-1 and Class M-2 Certificateholders. Thus,
each Class A-1, Class M-1 and Class M-2 Certificate shall be treated as
representing not only ownership of regular interests in REMIC III, but also
ownership of an interest in an interest rate cap contract. For purposes of
determining the issue prices of the REMIC III 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 X/N
Certificates.
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 by the Class X/N 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-1 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/N Certificateholders in
favor of the Holders of the Class A-1 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-1 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 Certificates, then deposited in the Reserve Fund, and
then paid from the Reserve Fund to the Class A-1 Certificates and Mezzanine
Certificates pursuant to an interest rate cap agreement.
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
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 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, 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxx
Xxxxxxxx, 00000 (telecopy number: (000) 000-0000), 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, 0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000,
Attention: General Counsel (telecopy number: 000-000-0000, with a copy to the
same address, Attention: Director of Capital Markets, 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, 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx,
00000, Attention: Trust Administration-DB01A1 (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, 000 Xxxx Xxxxx Xxxxxx,
Xx. Xxxx, Xxxxxxxxx, 00000, Attention: Structured Finance/ACE 2001-AQ1
(telecopy number (000) 000-0000), 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
Certificate-holder 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.
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 accountant's servicing report described
in Section 3.21.
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 to
Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 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.
SECTION 11.10. Commitment Letter for PMI Policy. The [Servicer, Trustee
and Trust Administrator shall execute the [Describe Commitment Letter required
to be signed for MGIC] on or prior to the Closing Date.
SECTION 11.11. Third Party Beneficiary.
The Counterparty shall be a third party beneficiary of each agreement or
obligation in this Agreement.
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:________________________
Name:
Title:
By:________________________
Name:
Title:
AMERIQUEST MORTGAGE COMPANY,
as Original Seller and Servicer
By:________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee
By:________________________
Name:
Title:
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., solely as
Trust Administrator and not in
its individual capacity
By:________________________
Name:
Title:
STATE OF ____________)
) ss.:
COUNTY OF ___________)
On the __th day of May, 2001, before me, a notary public in and for said
State, personally appeared ______________________, known to me to be a
____________________________ 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 May, 2001, before me, a notary public in and for said
State, personally appeared ____________________, known to me to be a
_____________________________ of Ameriquest Mortgage Company, 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 May, 2001, before me, a notary public in and for said
State, personally appeared _______________________, known to me to be a
____________________________ 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 MINNESOTA )
) ss.:
COUNTY OF XXXXXX )
On the __th day of May, 2001, before me, a notary public in and for said
State, personally appeared ______________________, known to me to be a
_______________________ 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-AQ1, Class A-1 Aggregate Certificate Principal
Balance of the Class A-1
Pass-Through Rate: Variable Certificates as of the Issue Date:
$445,241,000
Date of Pooling and Servicing Agreement
and Cut-off Date: April 1, 2001 Denomination: $_____________
First Distribution Date: Servicer: Ameriquest Mortgage Company
May 25, 2001
No. ___ Trustee: U.S. Bank National
Association
Trust Administrator: Bankers Trust
Company of California, N.A.
Issue Date: May 9, 2001
CUSIP: 004421 AQ 6
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-AQ1
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 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 0.260%, 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 0.520% 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.
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: May __, 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 UNIF GIFT MIN ACT - Custodian
-----------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
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
[Reserved]
EXHIBIT A-3
FORM OF CLASS A-IO 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-AQ1, Class A-IO Aggregate Certificate Notional
Amount of the Class A-IO
Pass-Through Rate: Variable Certificates as of the Issue Date:
$125,000,000
Date of Pooling and Servicing Agreement Denomination: $______________
and Cut-off Date: April 1, 2001
Servicer: Ameriquest Mortgage Company
First Distribution Date:
May 25, 2001 Trustee: U.S. Bank National
Association
No. __
Trust Administrator: Bankers Trust
Company of California, N.A.
Issue Date: May 9, 2001
CUSIP: 004421 AS 2
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE NOTIONAL AMOUNT 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-AQ1
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 Notional Amount of the Class A-IO Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-IO 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-IO 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-IO
Certificates the aggregate initial Certificate Notional Amount of which is in
excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate
initial Certificate Notional Amount of the Class A-IO 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 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 6.750%.
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, 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: May __, 2001
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:_______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-IO 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 UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform
Gifts to
Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
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-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 CERTIFICATES AND THE
CLASS A-IO CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
Series 2001-AQ1, Class M-1 Aggregate Certificate Principal Balance of
the Class M-1 Certificates as of the Issue
Pass-Through Rate: Variable Date: $21,778,000
Date of Pooling and Servicing Denomination: $_____________
Agreement and Cut-off Date:
April 1, 2001
Servicer: Ameriquest Mortgage Company
First Distribution Date:
May 25, 2001 Trustee: U.S. Bank National Association
No. ___ Trust Administrator: Bankers Trust
Company of California, N.A.
Issue Date: May 9, 2001
CUSIP: 004421 AT 0
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-AQ1
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 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 0.670%, 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 1.005% 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.
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: May __, 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 Officer
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 UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform
Gifts to
Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
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 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, CLASS
A-IO CERTIFICATES AND THE CLASS M-1 CERTIFICATES TO THE EXTENT
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
Series 2001-AQ1, Class M-2 Aggregate Certificate Principal Balance
of the Class M-2 Certificates as of the
Pass-Through Rate: Variable Issue Date: $14,519,000
Date of Pooling and Servicing Denomination: $_____________
Agreement and Cut-off Date:
April 1, 2001 Servicer: Ameriquest Mortgage Company
First Distribution Date: Trustee: U.S. Bank National Association
May 25, 2001
Trust Administrator: Bankers Trust
No. ___ Company of California, N.A.
Issue Date: May 9, 2001
CUSIP: 004421 AU 7
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-AQ1
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 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 1.150%, 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 1.725% 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: May__, 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 UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform
Gifts to
Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
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
[Reserved]
EXHIBIT A-7
FORM OF CLASS X/N 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-IO 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.
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-AQ1, Class X/N
Pass-Through Rate: Variable Servicer: Ameriquest Mortgage Company
Date of Pooling and Servicing Trustee: U.S. Bank National Association
Agreement and Cut-off Date:
April 1, 2001 Trust Administrator: Bankers Trust Company
of California, N.A.
First Distribution Date:
May 25, 2001 Issue Date: May 9, 2001
No. 1
Aggregate Certificate Notional
Amount of the Class X/N
Certificates as of the Issue Date:
$____________
Denomination: $_____________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE NOTIONAL AMOUNT 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-AQ1
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 Notional Amount of the Class X/N Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class X/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 X/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 X/N
Certificates the aggregate initial Certificate Notional Amount of which is in
excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate
initial Certificate Notional Amount of the Class X/N 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 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 Notional Amount 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.
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 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: May __, 2001
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.
as Trust Administrator
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class X/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 UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform
Gifts to
Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
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
[Reserved]
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-AQ1, Class R Aggregate Percentage Interest of the
Class R Certificates as of the Issue
Date: 100.00%
Date of Pooling and Servicing
Agreement and Cut-off Date: Servicer: Ameriquest Mortgage Company
April 1, 2001
First Distribution Date: Trustee: U.S. Bank National Association
May 25, 2001
Trust Administrator: Bankers Trust
Company of California, N.A.
No. ___ Issue Date: May 9, 2001
ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2001-AQ1
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 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 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 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: May __, 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 UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform
Gifts to
Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
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.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ameriquest Mortgage Company
0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxx, XX 00000
Re: Pooling and Servicing Agreement, dated as of April 1, 2001,
among ACE Securities Corp., as depositor,
Ameriquest Mortgage Company, as original seller and servicer
U.S. Bank National Association, as trustee, and Bankers Trust
Company of California, N.A., as trust administrator
--------------------------------------------------------------
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.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ameriquest Mortgage Company
0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxx, XX 00000
Re: Pooling and Servicing Agreement, dated as of April 1, 2001,
among ACE Securities Corp., as depositor,
Ameriquest Mortgage Company, as original seller and servicer
U.S. Bank National Association, as trustee, and Bankers Trust
Company of California, N.A., as trust administrator
------------------------------------------------------------------
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
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: 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Certificates: Asset Backed Pass-Through
Certificates, Series 2001-AQ1.
The undersigned Servicer hereby acknowledges that it has received
from _______________________, as Trustee for the Holders of Asset Backed
Pass-Through Certificates, Series 2001-AQ1, 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 April 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.
AMERIQUEST MORTGAGE COMPANY
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-AQ1
____________________________________________________ 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.
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Re: ACE Securities Corp. Home Equity Loan Trust, Series 2001-AQ1
Asset Backed Pass-Through Certificates, Class [X/N and Class R]
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 April 1, 2001, among ACE Securities Corp. as Depositor,
Ameriquest Mortgage Company as Original Seller and 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.
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Re: ACE Securities Corp. Home Equity Loan Trust, Series 2001-AQ1
Asset Backed Pass-Through Certificates, Class [X/N and Class R]
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 April 1, 2001, among ACE Securities Corp. as Depositor, Ameriquest
Mortgage Company as Original Seller and 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
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
---------------
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.
___ 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 Certificates
Yes No 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, 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 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.
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Re: ACE Securities Corp. Home Equity Loan Trust, Series 2001-AQ1
Asset Backed Pass-Through Certificates, Class [X/N and Class R]
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.
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Re: ACE Securities Corp. Home Equity Loan Trust, Series 2001-AQ1
Asset Backed Pass-Through Certificates, Class [X/N and Class R]
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 May __, 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-AQ1, Asset Backed
Pass-Through Certificates, Series 2001-AQ1, Class R (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.
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 (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: 333-45458
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 00-0000000
------------- ---------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation Identification Number)
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
---------------------------------------------
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number: (000) 000-0000
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
1) 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
----------------- --------------------
___________________ _______________________
___________________ _______________________
___________________ _______________________
2) 99.1 Annual Report of Independent Public Accountants' as to
servicing activities
3) Ameriquest Mortgage Company, as servicer
99.2 Annual Statement of Compliance with obligations under the
Pooling and Servicing Agreement or servicing agreement, as
applicable, of:
(a) Ameriquest Mortgage Company, as servicer
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-AQ1, Asset Backed
Pass-Through Certificates,
By: /s/
--------------------------------------------------
Name:
Title:
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 April 1,
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
Schedule 1
MORTGAGE LOAN SCHEDULE
FILED BY PAPER
Schedule 2
SCHEDULE OF PREPAYMENT CHARGES
AVAILABLE UPON REQUEST