EXHIBIT 4.1
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL I INC.,
Depositor,
OCWEN FEDERAL BANK FSB,
Servicer,
NC CAPITAL CORPORATION,
Responsible Party,
and
U.S. BANK NATIONAL ASSOCIATION,
Trustee,
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POOLING AND SERVICING AGREEMENT
Dated as of December 1, 2001
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL I INC. TRUST 2001-NC4
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2001-NC4
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans................................34
Section 2.02 Acceptance by the Trustee of the Mortgage Loans.............36
Section 2.03 Representations, Warranties and Covenants of the
Responsible Party and the Servicer .......................37
Section 2.04 The Depositor and the Mortgage Loans........................40
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitution and Repurchase, Non-Qualified Mortgages......40
Section 2.06 Execution and Delivery of Certificates......................40
Section 2.07 REMIC Matters...............................................41
Section 2.08 Representations and Warranties of the Depositor.............41
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans..........................42
Section 3.02 Subservicing Agreements Between the Servicer and
Subservicers .............................................44
Section 3.03 Successor Subservicers......................................45
Section 3.04 Liability of the Servicer...................................45
Section 3.05 No Contractual Relationship Between Subservicers
and the Trustee...........................................45
Section 3.06 Assumption or Termination of Subservicing Agreements
by Trustee ...............................................46
Section 3.07 Collection of Certain Mortgage Loan Payments;
Establishment of Certain Accounts ........................46
Section 3.08 Subservicing Accounts.......................................49
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts ..........................................49
Section 3.10 Collection Account..........................................50
Section 3.11 Withdrawals from the Collection Account.....................51
Section 3.12 Investment of Funds in the Collection Account...............53
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage ..........................53
Section 3.14 Enforcement of Due-On-Sale Clauses; Assumption Agreements...55
Section 3.15 Realization Upon Defaulted Mortgage Loans...................56
Section 3.16 Release of Mortgage Files...................................57
Section 3.17 Title, Conservation and Disposition of REO Property.........58
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Section 3.18 Notification of Adjustments.................................60
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans .............................60
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to be Held for the Trustee ......................61
Section 3.21 Servicing Compensation......................................61
Section 3.22 Annual Statement as to Compliance...........................62
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements ..........................62
Section 3.24 Trustee to Act as Servicer..................................62
Section 3.25 Compensating Interest.......................................63
Section 3.26 Credit Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act....................63
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances....................................................63
Section 4.02 Priorities of Distribution..................................64
Section 4.03 Monthly Statements to Certificateholders....................68
Section 4.04 Certain Matters Relating to the Determination of LIBOR......71
Section 4.05 Allocation of Applied Realized Loss Amounts.................72
Section 4.06 Policy Matters..............................................72
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates............................................76
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates .................................77
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates...........81
Section 5.04 Persons Deemed Owners.......................................82
Section 5.05 Access to List of Certificateholders' Names and Addresses...82
Section 5.06 Maintenance of Office or Agency.............................82
Section 5.07 Rights of FSA to Exercise Rights of Class A-2
Certificateholders .......................................82
Section 5.08 Class A-2 Certificate Insurer Default.......................83
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the Servicer....83
Section 6.02 Merger or Consolidation of the Depositor or the Servicer....83
Section 6.03 Limitation on Liability of the Depositor, the Servicer
and Others ...............................................84
Section 6.04 Limitation on Resignation of the Servicer...................85
Section 6.05 Additional Indemnification by the Servicer; Third
Party Claims .............................................85
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ARTICLE VII
DEFAULT
Section 7.01 Events of Default...........................................85
Section 7.02 Trustee to Act; Appointment of Successor....................87
Section 7.03 Notification to Certificateholders..........................88
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee.......................................88
Section 8.02 Certain Matters Affecting the Trustee.......................89
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.......90
Section 8.04 Trustee May Own Certificates................................91
Section 8.05 Trustee's Fees and Expenses.................................91
Section 8.06 Eligibility Requirements for the Trustee....................92
Section 8.07 Resignation and Removal of the Trustee......................92
Section 8.08 Successor Trustee...........................................93
Section 8.09 Merger or Consolidation of the Trustee......................93
Section 8.10 Appointment of Co-Trustee or Separate Trustee...............93
Section 8.11 Tax Matters.................................................95
Section 8.12 Periodic Filings............................................97
Section 8.13 Tax Classification of the Excess Reserve Fund Account.......97
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans ...........................................98
Section 9.02 Final Distribution on the Certificates......................98
Section 9.03 Additional Termination Requirements.........................99
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment..................................................100
Section 10.02 Recordation of Agreement; Counterparts.....................102
Section 10.03 Governing Law..............................................102
Section 10.04 Intention of Parties.......................................102
Section 10.05 Notices....................................................103
Section 10.06 Severability of Provisions.................................104
Section 10.07 Assignment; Sales; Advance Facilities......................104
Section 10.08 Limitation on Rights of Certificateholders.................105
Section 10.09 Inspection and Audit Rights................................106
Section 10.10 Certificates Nonassessable and Fully Paid..................106
Section 10.11 The Class A-2 Certificate Insurer Default..................106
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Section 10.12 Third Party Beneficiary....................................106
Section 10.13 Waiver of Jury Trial.......................................107
Section 10.14 Limitation of Damages......................................107
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of the Servicer
Schedule III Representations and Warranties as to the Mortgage Loans
Schedule IV Representations and Warranties as to the Responsible Party
EXHIBITS
Exhibit A Form of Class A, Class M, Class B-1 Certificate
Exhibit B Form of Class P Certificate
Exhibit C Form of Class R Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Trustee
Exhibit F Form of Document Certification and Exception Report of Trustee
Exhibit G Form of Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Form of Contents for each Mortgage File
Exhibit L Form of Certificate Insurance Policy
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EXHIBIT 4.1
THIS POOLING AND SERVICING AGREEMENT, dated as of December 1,
2001, among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL I INC., a Delaware corporation,
as depositor (the "DEPOSITOR"), OCWEN FEDERAL BANK FSB, a federal savings bank,
as servicer (the "SERVICER"), NC CAPITAL CORPORATION, a California corporation,
as responsible party ("RESPONSIBLE PARTY") and U.S. BANK NATIONAL ASSOCIATION, a
national banking association, as trustee (the "TRUSTEE"),
W I T N E S S E T H:
- - - - - - - - - -
In consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that two segregated asset pools within
the Trust Fund be treated for federal income tax purposes as comprising two
REMICs (each a "REMIC" or, in the alternative, the Lower Tier REMIC and the
Upper Tier REMIC, respectively). Each Certificate, other than the Class P and
Class R Certificates, represents ownership of a regular interest in the Upper
Tier REMIC for purposes of the REMIC Provisions. The Class R Certificate
represents ownership of the sole class of residual interest in each of the Lower
Tier REMIC and the Upper Tier REMIC for purposes of the REMIC Provisions. The
Startup Day for each REMIC described herein is the Closing Date. The latest
possible maturity date for each regular interest is the date referenced in this
preliminary statement. The Upper Tier REMIC shall hold as assets the several
classes of uncertificated Lower Tier Regular Interests, set out below. Each such
Lower Tier Regular Interest is hereby designated as a regular interest in the
Lower Tier REMIC. Class LT-A1, Class LT-A2, Class LT-M-1, Class LT-M-2 and Class
LT-B-1 are hereby designated the LT Accretion Directed Classes. The Class P
Certificate represents beneficial ownership of the Prepayment Charges, which
portion of the Trust Fund shall be treated as a grantor trust.
CORRESPONDING LATEST POSSIBLE
CLASS DESIGNATION INTEREST RATE PRINCIPAL AMOUNT REMIC CLASS MATURITY DATE
Class LT-A-1 (1) 1/2 initial Corresponding Upper Tier A-1 January 25, 2032
REMIC initial principal balance
Class LT-A-2 (1) 1/2 initial Corresponding Upper Tier A-2 July 25, 2030
REMIC initial principal balance
Class LT-M-1 (1) 1/2 initial Corresponding Upper Tier M-1 January 25, 2032
REMIC initial principal balance
Class LT-M-2 (1) 1/2 initial Corresponding Upper Tier M-2 January 25, 2032
REMIC initial principal balance
Class LT-B-1 (1) 1/2 initial Corresponding Upper Tier B-1 January 25, 2032
REMIC initial principal balance
Class LT-Accrual (1) 1/2 Pool Balance plus 1/2
Subordinated Amount
Class LT-R (2) (2)
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the WAC Cap.
(2) The Class LT-R Interest is the sole class of residual interest in the
Lower Tier REMIC and it does not have a principal amount or an
interest rate.
The Lower Tier REMIC shall hold as assets all of the assets
included in the Trust Fund other than Prepayment Charges, the Excess Reserve
Fund Account, and the Lower Tier Regular Interests.
On each Distribution Date, 50% of the increase in the
Subordinated Amount will be payable as a reduction of the principal balances of
the LT Accretion Directed Classes (each such Class will be reduced by an amount
equal to 50% of any increase in the Subordinated Amount that is attributable to
a reduction in the principal balance of its Corresponding Class) and will be
accrued and added to the principal balance of the LT Accrual Class. On each
Distribution Date, the increase in the principal balance of the LT Accrual Class
may not exceed interest accruals for such Distribution Date for the LT Accrual
Class. In the event that: (i) 50% of the increase in the Subordinated Amount
exceeds (ii) interest accruals on the LT Accrual Class for such Distribution
Date, the excess for such Distribution Date (accumulated with all such excesses
for all prior Distribution Dates) will be added to any increase in the
Subordinated Amount for purposes of determining the amount of interest accrual
on the LT Accrual Class payable as principal on the LT Accretion Directed
Classes on the next Distribution Date pursuant to the first sentence of this
paragraph. All payments of scheduled principal and prepayments of principal
generated by the Mortgage Loans shall be allocated 50% to the LT Accrual Class,
and 50% to the LT Accretion Directed Classes (principal payments shall be
allocated among such LT Accretion Directed Classes in an amount equal to 50% of
the principal amounts allocated to their respective Corresponding Classes),
until paid in full. Notwithstanding the above, principal payments allocated to
the Class X Certificates that result in the reduction in the Subordinated Amount
shall be allocated to the LT Accrual Class (until paid in full). Realized losses
shall be applied so that after all distributions have been made on each
Distribution Date (i) the principal balances of each of the LT Accretion
Directed Class is equal to 50% of the principal balance of their Corresponding
Class, and (ii) the LT Accrual Class is equal to 50% of the aggregate principal
balance of the Mortgage Pool plus 50% of the Subordinated Amount.
The Upper Tier REMIC shall issue the following classes of
interests and each Upper Tier Interest, other than the Class UT-R Interest, is
hereby designated as a regular interest in the Upper Tier REMIC.
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UPPER TIER UPPER TIER INITIAL UPPER TIER CORRESPONDING LATEST POSSIBLE
CLASS DESIGNATION INTEREST RATE PRINCIPAL AMOUNT CERTIFICATE MATURITY DATE
Class A-1 (1) $325,915,000 Class A-1(6) January 25,
2032
Class A-2 (2) $194,085,000 Class A-2(6) July 25,
2030
Class M-1 (3) $ 42,250,000 Class M-1(6) January 25,
2032
Class M-2 (3) $ 39,000,000 Class M-2(6) January 25,
2032
Class B-1 (3) $ 35,750,000 Class B-1(6) January 25,
2032
Class X (4) (4) Class X(4) January 25,
2032
Class UT-R (5) Class R January 25,
2032
(1) The Class A-1 Interests will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.310%, (ii) 16%, (iii)
the Loan Group I Cap and (iv) the WAC Cap or (b) after the Optional
Termination Date, the least of (i) LIBOR plus 0.620%, (ii) 16%, (iii)
the Loan Group I Cap and (iv) the WAC Cap.
(2) The Class A-2 Interests will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, (X) the least of (i) LIBOR plus 0.370%, (ii) 16%,
(iii) the Loan Group II Cap and (iv) the WAC Cap minus (Y) 0.06% per
annum or (b) after the Optional Termination Date, (X) the least of (i)
LIBOR plus 0.740%, (ii) 16%, (iii) the Loan Group II Cap and (iv) the
WAC Cap minus (Y) 0.06% per annum.
(3) The Class M-1, Class M-2 and Class B-1 Interests will bear interest
during each Interest Accrual Period at a per annum rate equal to (a) on
or prior to the Optional Termination Date, the least of (i) LIBOR plus
1.000%, 1.650% and 2.500%, respectively, (ii) 16%, and (iii) the WAC
Cap or (b) after the Optional Termination Date, the least of (i) LIBOR
plus 1.500%, 2.475% and 3.750%, respectively, (ii) 16%, and (iii) the
WAC Cap.
(4) The Class X Interest has an initial principal balance of $13,305,549,
but it will not accrue interest on such balance but will accrue
interest on a notional principal balance. As of any Distribution Date,
the Class X Interest shall have a notional principal balance equal to
the aggregate of the principal balances of the Lower Tier Regular
Interests as of the first day of the related Interest Accrual Period.
With respect to any Interest Accrual Period, the Class X Interest shall
bear interest at a rate equal to the excess, if any, of the WAC Cap
over the product of (i) 2 and (ii) the weighted average Pass-Through
Rate of the Lower Tier REMIC Interests, where the LT Accrual Class is
subject to a cap equal to zero and each LT Accretion Directed Class is
subject to a cap equal to the Pass-Through Rate on its Corresponding
Class. With respect to any Distribution Date, interest that so accrues
on the notional principal balance of the Class X Interest shall be
deferred in an amount equal to any increase in the Subordinated Amount
on such Distribution Date. Such deferred interest shall not itself bear
interest.
(5) The Class UT-R Interest is the sole class of residual interest in the
Upper Tier REMIC. The Class UT-R Interest does not have an interest
rate.
(6) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper Tier Regular Interest but also the right
to receive payments from the Excess Reserve Fund Account in respect of
any Basis Risk CarryForward Amounts. For federal income tax purposes,
the Trustee will treat a Certificateholder's right to receive payments
from the Excess Reserve Fund Account as payments made pursuant to an
interest rate cap contract written by the Class X Certificateholder.
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The minimum denomination for each Class of Certificates, other
than the Class P, Class R and the Class X Certificates, will be $25,000. The
Class P, Class R and the Class X Certificates will each represent a 100%
Percentage Interest in such class.
Set forth below are designations of Classes of Certificates to
the categories used herein:
Book-Entry Certificates................... All Classes of Certificates other than the Physical Certificates.
Class A Certificates...................... Class A-1 and Class A-2 Certificates.
Subordinated Certificates................. Class M-1, Class M-2 and Class B Certificates.
Delay Certificates........................ None.
ERISA-Restricted Certificates............. Class R Certificates, Class P Certificate and Class X Certificate;
any certificate with a rating below the lowest applicable permitted
rating under the Underwriters' Exemption.
Floating Rate Certificates................ Class A and Subordinated Certificates.
LIBOR Certificates........................ Class A and Subordinated Certificates.
Non-Delay Certificates.................... Class A, Class X and Subordinated Certificates.
Offered Certificates...................... All Classes of Certificates other than the Private Certificates.
Physical Certificates..................... Class P, Class X and Class R Certificates.
Private Certificates...................... Class A-1, Class P, Class X and Class R Certificates.
Rating Agencies........................... ▇▇▇▇▇'▇, Fitch and Standard & Poor's.
Regular Certificates...................... All Classes of Certificates other than the Class P and Class R
Certificates.
Residual Certificates..................... Class R Certificates.
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ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
60+ DAY DELINQUENT LOAN: Each Mortgage Loan with respect to which
any portion of a Scheduled Payment is, as of the last day of the prior Due
Period, two months or more past due (without giving effect to any grace period),
each Mortgage Loan in foreclosure, all REO Property and each Mortgage Loan for
which the Mortgagor has filed for bankruptcy.
ACCEPTED SERVICING PRACTICES: With respect to any Mortgage Loan,
those mortgage servicing practices set forth in Section 3.01 of this Agreement.
ACCRUED CERTIFICATE INTEREST DISTRIBUTION AMOUNT: With respect to
any Distribution Date for each Class of Certificates (other than the Class X
Certificate), the amount of interest accrued during the related Interest Accrual
Period at the applicable Pass-Through Rate on the related Class Certificate
Balance immediately prior to such Distribution Date, as reduced by such Class's
share of Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls
for the related Due Period allocated to such Class pursuant to Section 4.02.
ADJUSTABLE RATE MORTGAGE LOAN: A Mortgage Loan bearing interest at
an adjustable rate.
ADJUSTED MORTGAGE RATE: As to each Mortgage Loan and at any time,
the per annum rate equal to the Mortgage Rate less the Servicing Fee Rate.
ADJUSTED NET MORTGAGE RATE: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the Expense Fee Rate.
ADJUSTMENT DATE: As to any Mortgage Loan, the first Due Date on
which the related Mortgage Rate adjusts as set forth in the related Mortgage
Note and each Due Date thereafter on which the Mortgage Rate adjusts as set
forth in the related Mortgage Note.
ADVANCE FACILITY: A financing or other facility as described in
Section 10.07.
ADVANCING PERSON: The Person to whom the Servicer's rights under
this Agreement to be reimbursed for any Monthly Advances or Servicing Advances
have been assigned pursuant to Section 10.07.
AFFILIATE: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" 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.
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AGREEMENT: This Pooling and Servicing Agreement and all amendments
or supplements hereto.
AMOUNT HELD FOR FUTURE DISTRIBUTION: As to the Certificates on any
Distribution Date, the aggregate amount held in the Collection Account at the
close of business on the related Determination Date on account of (i) Principal
Prepayments and Liquidation Proceeds on the Mortgage Loans received after the
end of the related Prepayment Period and (ii) all Scheduled Payments on the
Mortgage Loans due after the end of the related Due Period.
APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
Regular Certificates after distributions of principal on such Distribution Date
exceeds the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the immediately preceding Due Period.
APPRAISED VALUE: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
ASSIGNMENT OF MORTGAGE: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, (other than the assignee's
name and recording information not yet returned from the recording office),
reflecting the sale of the Mortgage to the Trustee.
BALLOON LOAN: Any Mortgage Loan that provided on the date of
origination for an amortization schedule extending beyond its stated maturity
date.
BASIC PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Subordinated Amount, if any, for such
Distribution Date.
BASIS RISK CARRYFORWARD AMOUNT: With respect to each Class of
Regular Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of Regular Certificates is
based upon a Loan Group Cap or the WAC Cap, the excess of (i) the amount of
interest such Class of Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of LIBOR and the
applicable Pass-Through Margin on such Class of Certificates for such
Distribution Date, up to 16% (or, in the case of the Class A-2 Certificates, the
Loan Group II Cap or the WAC Cap minus the Class A-2 Insurance Rate, up to 16%
minus the Class A-2 Insurance Rate) over (ii) the amount of interest payable on
such Class of Certificates at, with respect to the Class A-1 Certificates, the
lesser of (x) the Loan Group I Cap or (z) the WAC Cap, with respect to the Class
A-2 Certificates, the lesser of (x) the Loan Group II Cap or (z) the WAC Cap,
and with respect to each other Class of Regular Certificates, the WAC Cap, as
applicable, for such Distribution Date and (B) the Basis Risk CarryForward
Amount for such Class of Certificates for all previous Distribution Dates not
previously paid, together with interest thereon at a rate equal to the sum of
LIBOR and the applicable Pass-Through Margin for such Class of Certificates for
such Distribution Date, up to 16% (or, in the case of the Class A-2
Certificates, 16 % minus the Class A-2 Insurance Rate).
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BASIS RISK PAYMENT: For any Distribution Date, an amount equal to
any Basis Risk CarryForward Amount; PROVIDED, HOWEVER, that with respect to any
Distribution Date, the payment cannot exceed the sum of the amounts otherwise
distributable on the Class X Certificates.
BEST'S: Best's Key Rating Guide, as the same shall be amended from
time to time.
BOOK-ENTRY CERTIFICATES: As specified in the Preliminary Statement.
BUSINESS DAY: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the State of New
York, New Jersey, Minnesota and Florida, (b) the state in which the Servicer's
servicing operations are located, or (c) the State in which the Trustee's
operations are located, are authorized or obligated by law or executive order to
be closed.
CERTIFICATE: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
CERTIFICATE BALANCE: With respect to any Class of Certificates,
other than the Class P or Class R Certificates, at any date, the maximum dollar
amount of principal to which the Holder thereof is then entitled hereunder, such
amount being equal to the Denomination thereof minus all distributions of
principal previously made with respect thereto and in the case of any
Subordinated Certificates, reduced by any Applied Realized Loss Amounts
applicable to such Class of Subordinated Certificates. Exclusively for the
purpose of determining any subrogation rights of FSA arising under Section 4.06
hereof, the "Certificate Balance" of the Class A-2 Certificate shall not be
reduced by the amount of any payments made by FSA in respect of principal on
such Certificates under the Certificate Insurance Policy, except to the extent
such payment shall have been reimbursed to FSA pursuant to the provisions of
this Agreement. The Class P and Class R Certificates have no Certificate
Balance.
CERTIFICATE INSURANCE POLICY: The irrevocable Certificate Guaranty
Insurance Policy, No. 51221-N, including any endorsements thereto, issued by FSA
with respect to the Class A-2 Certificates, in the form attached hereto as
Exhibit L.
CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
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, and, with respect to the Class A-2
Certificates, FSA to the extent of any amount paid under the Certificate
Insurance Policy, except that, solely for the purpose of giving any consent
pursuant to this Agreement, any Certificate registered in the name of the
Depositor or any affiliate of the Depositor shall be deemed not to be
Outstanding and the Percentage Interest evidenced thereby shall not be taken
into account in determining whether the requisite amount of Percentage Interests
necessary to effect such consent has been obtained; PROVIDED, HOWEVER, that if
any such Person (including the Depositor) owns 100% of the Percentage Interests
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evidenced by a Class of Certificates, such Certificates shall be deemed to be
Outstanding for purposes of any provision hereof that requires the consent of
the Holders of Certificates of a particular Class as a condition to the taking
of any action hereunder. The Trustee is entitled to rely conclusively on a
certification of the Depositor or any affiliate of the Depositor in determining
which Certificates are registered in the name of an affiliate of the Depositor.
CLASS: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
CLASS A CERTIFICATES: The Class A-1 and Class A-2 Certificates.
CLASS A PRINCIPAL ALLOCATION PERCENTAGE: For any Distribution Date
is the percentage equivalent of a fraction, determined as follows: (A) with
respect to the Class A-1 Certificates, the numerator of which is (x) the portion
of the Principal Remittance Amount for that Distribution Date that is
attributable to the principal received or advanced on the Group I Mortgage Loans
and the denominator of which is (y) the Principal Remittance Amount for that
Distribution Date; and (B) with respect to the Class A-2 Certificates, the
numerator of which is (x) the portion of the Principal Remittance Amount for
that Distribution Date that is attributable to the principal received or
advanced on the Group II Mortgage Loans and the denominator of which is (y) the
Principal Remittance Amount for that Distribution Date.
CLASS A PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balances of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) 60.0%, of the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period and (B) the Stated
Principal Balances of the Mortgage Loans as of the last day of the related Due
Period minus $3,251,528.
CLASS A-1 CERTIFICATES: All Certificates bearing the class
designation of "Class A-1 Certificates".
CLASS A-2 CERTIFICATES: All Certificates bearing the class
designation of "Class A-2 Certificates".
CLASS A-2 CERTIFICATE INSURER DEFAULT: The existence and continuance
of any of the following:
(a) FSA shall have failed to make a required payment when due
under the Class A-2 Insurance Policy;
(b) FSA shall have (i) filed a petition or commenced any case or
proceeding under any provision or chapter of the United States Bankruptcy
Code, the New York State Insurance Law or any other similar federal or
state law relating to insolvency, bankruptcy, rehabilitation, liquidation,
or reorganization, (ii) made a general assignment for the benefit of its
creditors or (iii) had an order for relief entered against it under the
United States Bankruptcy Code, the New York State Insurance
8
Law or any other similar federal or state law relating to insolvency,
bankruptcy, rehabilitation, liquidation, or reorganization that is final
and nonappealable; or
(c) a court of competent jurisdiction, the New York Department of
Insurance or any other competent regulatory authority shall have entered a
final and nonappealable order, judgment or decree (i) appointing a
custodian, trustee, agent, or receiver for FSA or for all or any material
portion of its property or (ii) authorizing the taking of possession by a
custodian, trustee, agent, or receiver of FSA or of all or any material
portion of its property.
CLASS A-2 DEFICIENCY: With respect to any Distribution Date and the Class
A-2 Certificates, an amount equal to the excess of the sum of:
(i) the excess of (x) the Accrued Certificate Interest
Distribution Amount for the Class A-2 Certificates on such Distribution
Date, over (y) the Interest Remittance Amount allowable to the Group II
Mortgage Loans, less the Class A-2 Insurance Premium Payment Amount and
the Trustee Fee, in each case for such Distribution date; plus
(ii) the Class A-2 Principal Parity Amount, if any, for such
Distribution Date; plus
(iii) on the Final Scheduled Distribution Date for the Class A-2
Certificates, the outstanding Class Certificate Balance thereof, after
taking into account the distribution of the Principal Distribution Amount
on such Distribution Date..
CLASS A-2 INSURANCE ACCRUAL PERIOD: With respect to FSA and any
Distribution Date, the period commencing on the 25th day of the month preceding
the month in which such Distribution Date occurs and ending on the 24th day of
the month in which such Distribution Date occurs (or in the case of the first
Distribution Date, the period from and including the Closing Date to but
excluding such first Distribution Date). For purposes of computing interest
accruals with respect to the Class A-2 Insurance Accrual Period, each Class A-2
Insurance Accrual Period has the actual number of days in such month and each
year is assumed to have 360 days.
CLASS A-2 INSURANCE PREMIUM PAYMENT AMOUNT: With respect to any
Distribution Date for FSA, the amount of Class A-2 Insurance Payment Amount
accrued during the Class A-2 Insurance Accrual Period at the applicable Class
A-2 Insurance Rate on the Class Certificate Balance of the Class A-2
Certificates immediately prior to such Distribution Date, as reduced by FSA's
share of Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls
for the related Due Period allocated to FSA pursuant to Section 4.02.
CLASS A-2 INSURANCE RATE: 0.060% per annum.
CLASS A-2 PRINCIPAL PARITY AMOUNT: With respect to any Distribution
Date on which the Class Certificate Balance of the Class M-1, Class M-2 and
Class B-1 Certificates is
9
zero, the excess, if any, of (i) the aggregate Class Certificate Balance for the
Class A-2 Certificates on that Distribution Date, after taking into account any
reduction therein on such Distribution date from sources other than the Class
A-2 Insurance Policy over (ii) the Pool Stated Principal Balance of the Group II
Mortgage Loans as of the last day of the related Due Period.
CLASS B CERTIFICATES: All Certificates bearing the class designation
of "Class B Certificates".
CLASS B-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account distribution of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class Certificate Balance of the Class M-2
Certificates (after taking into account distribution of the Class M-2 Principal
Distribution Amount for such Distribution Date), and (D) the Class Certificate
Balance of the Class B-1 Certificates immediately prior to such Distribution
Date over (ii) the lesser of (A) 96.0% of the aggregate Stated Principal Balance
of the Mortgage Loans as of the last day of the related Due Period and (B) the
Stated Principal Balances of the Mortgage Loans as of the last day of the
related Due Period MINUS $3,251,528; PROVIDED, HOWEVER, that with respect to any
Distribution Date on which the Class Certificate Balances of the Class A, Class
M-1 and Class M-2 Certificates have been reduced to zero, the Class B-1
Principal Distribution Amount is the lesser of (x) the Class Certificate Balance
of the Class B-1 Certificates and (y) the Principal Distribution Amount.
CLASS CERTIFICATE BALANCE: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
CLASS M-1 CERTIFICATES: All Certificates bearing the class
designation of "Class M-1 Certificates".
CLASS M-2 CERTIFICATES: All Certificates bearing the class
designation of "Class M-2 Certificates".
CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 73.0% of
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period and (B) the Stated Principal Balances of the Mortgage
Loans as of the last day of the related Due Period MINUS $3,251,528.
CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after
10
taking into account distribution of the Class A Principal Distribution Amount on
such Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account distribution of the Class M-1 Principal
Distribution Amount on such Distribution Date) and (C) the Class Certificate
Balance of the Class M-2 Certificates immediately prior to such Distribution
Date over (ii) the lesser of (A) 85.0% of the aggregate Stated Principal Balance
of the Mortgage Loans as of the last day of the related Due Period and (B) the
Stated Principal Balances of the Mortgage Loans as of the last day of the
related Due Period MINUS $3,251,528.
CLASS P CERTIFICATES: All Certificates bearing the class designation
of "Class P Certificates".
CLASS R CERTIFICATES: All Certificates bearing the class designation
of "Class R Certificates".
CLASS X CERTIFICATES: All Certificates bearing the designation of
"Class X Certificates".
CLASS X DISTRIBUTABLE AMOUNT: On any Distribution Date, the sum of
(i) the amount of interest that has accrued on the Class X Regular Interest and
not applied as an Extra Principal Distribution Amount on such Distribution Date,
plus any such accrued interest remaining undistributed from prior Distribution
Dates, and (ii) any portion of the principal balance of the Class X Regular
Interest which is distributable as a Subordination Reduction Amount, less any
amounts paid as a Basis Risk Payment.
CLOSING DATE: December 27, 2001.
CODE: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
COLLECTION ACCOUNT: As defined in Section 3.10(a).
COMPENSATING INTEREST: For any Distribution Date, the lesser of (a)
the Prepayment Interest Shortfall, if any, for the Distribution Date, and (b)
the amount of the Servicing Fee payable to the Servicer for such Distribution
Date.
CONDEMNATION PROCEEDS: All awards of settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
CORPORATE TRUST OFFICE: The designated office of the Trustee in the
State of California at which at any particular time its corporate trust business
with respect to this Agreement is administered, which office at the date of the
execution of this Agreement is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Structured Finance/MSDW 2001-NC4, facsimile no. (651)
244-1797 and which is the address to which notices to and correspondence with
the Trustee should be directed.
CORRESPONDING CLASS: The class of interests in any REMIC created
under this Agreement that correspond to the Class of interests in another such
REMIC or to a Class of Certificates in the manner set out below:
11
LOWER TIER UPPER TIER CORRESPONDING
CLASS DESIGNATION INTEREST CERTIFICATE
--------------------- -------------- -----------------
Class LT-A-1 Class A-1 Class A-1
Class LT-A-2 Class A-2 Class A-2
Class LT-M-1 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-M-3 Class B-1 Class B-1
CUMULATIVE LOSS PERCENTAGE: With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Applied Realized Loss Amounts incurred from the Cut-off Date to the
last day of the preceding calendar month and the denominator of which is the
Scheduled Principal Balance of the Mortgage Loans as of the Cut-off Date.
CUSTODIAL FILE: With respect to each Mortgage Loan, the file
retained by the Trustee consisting of items (a) - (h) as listed on Exhibit K
hereto.
CUT-OFF DATE: December 1, 2001.
CUT-OFF DATE POOL PRINCIPAL BALANCE: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date.
CUT-OFF DATE PRINCIPAL BALANCE: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
DATA TAPE INFORMATION: The information provided by the Responsible
Party as of December 1, 2001 to the Depositor setting forth the following
information with respect to each Mortgage Loan: (1) the Mortgagor's name; (2) as
to each Mortgage Loan, the Scheduled Principal Balance as of the Cut-Off Date;
(3) the Mortgage Rate Cap; (4) the Index; (5) a code indicating whether the
Mortgaged Property is owner-occupied; (6) the type of Mortgaged Property; (7)
the first date on which the Monthly Payment was due on the Mortgage Loan and, if
such date is not consistent with the Due Date currently in effect, such Due
Date; (8) the "paid through date" based on payments received from the related
Mortgagor; (9) the original principal amount of the Mortgage Loan; (10) with
respect to Adjustable Rate Mortgage Loans, the Maximum Mortgage Rate; (11) the
type of Mortgage Loan (I.E., fixed or adjustable); (12) a code indicating the
purpose of the loan (I.E., purchase, rate and term refinance, equity take-out
refinance); (13) a code indicating the documentation style (I.E., full, asset
verification, income verification and no documentation); (14) the credit risk
score (FICO score); (15) the loan credit grade classification (as described in
the Underwriting Guidelines); (16) with respect to each Adjustable Rate Mortgage
Loan, the Minimum Mortgage Rate; (17) the Mortgage Rate at origination; (18)
with respect to each Adjustable Rate Mortgage Loan, the first Adjustment Date
immediately following the Cut-off Date; (19) the Value of the Mortgaged
Property; (20) a code indicating the type of Prepayment Charges applicable to
such Mortgage Loan, if any; and (21) with respect to each Adjustable Rate
Mortgage Loan, the Periodic Mortgage Rate Cap. With respect to the Mortgage
Loans in the aggregate, the Data Tape Information shall set forth the following
information, as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the
current
12
aggregate outstanding 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.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any reduction that results in a permanent forgiveness of principal.
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: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
DELAY CERTIFICATES: As specified in the Preliminary Statement.
DELETED MORTGAGE LOAN: As defined in Section 2.03.
DELINQUENT: A mortgage loan is "Delinquent" if any monthly payment
due on a due date is not made by the close of business on the next scheduled due
date for that mortgage loan. A mortgage loan is "30 days Delinquent" if the
monthly payment has not been received by the close of business on the
corresponding day of the month immediately succeeding the month in which that
monthly payment was due or, if there was no corresponding date (E.G., as when a
30-day month follows a 31-day month in which the payment was due on the 31st day
of that month), then on the last day of that immediately preceding month; and
similarly for "60 days Delinquent" and "90 days Delinquent," etc.
DENOMINATION: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the Percentage Interest appearing on the face thereof.
DEPOSITOR: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. a Delaware
corporation, or its successor in interest.
DEPOSITORY: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
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.
13
DETERMINATION DATE: With respect to each Remittance Date, the
Business Day immediately preceding such Remittance Date.
DISTRIBUTION ACCOUNT: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(d) in the name of the Trustee
for the benefit of the Certificateholders and designated "U.S. Bank National
Association in trust for registered holders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Capital I Inc. Mortgage Pass-Through Certificates, Series 2001-NC4". Funds in
the Distribution Account shall be held in trust for the Certificateholders for
the uses and purposes set forth in this Agreement.
DISTRIBUTION ACCOUNT DEPOSIT DATE: As to any Distribution Date,
12:30 p.m. Central time on the Business Day immediately preceding such
Distribution Date.
DISTRIBUTION DATE: The 25th day of each calendar month after the
initial issuance of the Certificates, or if such day is not a Business Day, the
next succeeding Business Day, commencing in January 2002.
DOCUMENT CERTIFICATION AND EXCEPTION REPORT: The report attached to
Exhibit F hereto.
DUE DATE: The day of the month on which the Scheduled Payment is due
on a Mortgage Loan, exclusive of any days of grace.
DUE PERIOD: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month of the Remittance
Date and ending on the first day of the month of the Remittance Date.
ELIGIBLE ACCOUNT: Either (i) a demand account maintained with an
Eligible Institution or (ii) a trust account or accounts maintained with a
federal or state chartered depository institution or trust company acting in its
fiduciary capacity or (iii) any other account acceptable to each Rating Agency.
Eligible Accounts may bear interest, and may include, if otherwise qualified
under this definition, accounts maintained with the Trustee.
ELIGIBLE INSTITUTION: A federal or state chartered depository
institution or trust company, which (x) with respect to any Eligible Account,
the amounts on deposit in which will be held for 30 days or less, the commercial
paper, short term debt obligations, or other short-term deposits of which are
rated at least "A-1+" by Standard & Poor's and "P-1" by Moody's (or a comparable
rating if another Rating Agency is specified by the Depositor by written notice
to the Servicer and the Trustee) or (y) with respect to any Eligible Account,
the amounts on deposit in which will be held for more than 30 days, the
long-term unsecured debt obligations of which are rated at least "AA-" by
Standard & Poor's and Aa3 by Moody's (or a comparable rating if another Rating
Agency is specified by the Depositor by written notice to the Servicer and the
Trustee).
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-QUALIFYING UNDERWRITING: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction
14
Exemption ("PTE") 97-34, 62 Fed. Reg. 39021 (1997), as amended by PTE 2000-58,
65 Fed. Reg. 67,765 (2000) (or any successor thereto), or any substantially
similar administrative exemption granted by the U.S. Department of Labor.
ERISA-RESTRICTED CERTIFICATE: As specified in the Preliminary
Statement.
ESCROW ACCOUNT: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).
ESCROW PAYMENTS: As defined in Section 3.09(b) of this Agreement.
EVENT OF DEFAULT: As defined in Section 7.01.
EXCESS RESERVE FUND ACCOUNT: The separate Eligible Account created
and maintained by the Trustee pursuant to Sections 3.07(b) and 3.07(c) in the
name of the Trustee for the benefit of the Regular Certificateholders and
designated "U.S. Bank National Association in trust for registered holders of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. Trust 2001-NC4, Mortgage Pass-Through
Certificates, Series 2001-NC4". Funds in the Excess Reserve Fund Account shall
be held in trust for the Regular Certificateholders for the uses and purposes
set forth in this Agreement.
EXCESS SUBORDINATED AMOUNT: With respect to any Distribution Date,
the excess, if any, of (a) the Subordinated Amount on such Distribution Date
over (b) the Specified Subordinated Amount for such Distribution Date.
EXPENSE FEES: As to each Mortgage Loan, the sum of the Servicing Fee
and Trustee Fee.
EXPENSE FEE RATE: As to each Mortgage Loan, the sum of the Servicing
Fee Rate and Trustee Fee Rate.
EXTRA PRINCIPAL DISTRIBUTION AMOUNT: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for such Distribution
Date and (y) the Subordination Deficiency for such Distribution Date.
▇▇▇▇▇▇ MAE: The Federal National Mortgage Association, or any
successor thereto.
▇▇▇▇▇▇ ▇▇▇ GUIDES: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ ▇▇▇
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
15
FINAL CERTIFICATION: A certification submitted by the Trustee in
substantially the form of Exhibit F hereto.
FINAL RECOVERY DETERMINATION: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Responsible Party as contemplated by this Agreement), 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.
FINAL SCHEDULED DISTRIBUTION DATE: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date in each of the
following months:
FINAL SCHEDULED
DISTRIBUTION DATE
-----------------
Class A-1 Certificates................................ January 25, 2032
Class A-2 Certificates................................ July 25, 2030
Class M-1 Certificates................................ January 25, 2032
Class M-2 Certificates................................ January 25, 2032
Class B-1 Certificates................................ January 25, 2032
Class X Certificates.................................. January 25, 2032
Class P Certificates.................................. January 25, 2032
Class R Certificates.................................. January 25, 2032
FISCAL AGENT: As defined in the Certificate Insurance Policy.
FITCH: Fitch, Inc., or any successor thereto. If Fitch is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section
10.05(b) the address for notices to Fitch shall be Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: MBS Monitoring - ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ Capital I Inc. 2001-NC4, or such other address as Fitch may hereafter
furnish to the Depositor and the Servicer.
FIXED RATE MORTGAGE LOAN: A fixed rate Mortgage Loan purchased
pursuant to the Purchase Agreement.
FSA: Financial Security Assurance Inc., a New York stock insurance
company, or any successor thereto.
FSA CONTACT PERSONS: Collectively, the officers designated by each
Servicer to provide information to FSA pursuant to Section 4.06(l).
FSA DEFAULT: As defined in Section 4.06(o).
16
GROSS MARGIN: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note to be added
to the applicable Index to determine the Mortgage Rate.
GROUP I MORTGAGE LOANS: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group I Mortgage Loans.
GROUP II MORTGAGE LOANS: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.
GUARANTEED DISTRIBUTIONS: As defined in the Certificate Insurance
Policy.
INDEX: As to each Adjustable Rate Mortgage Loan, the index from time
to time in effect for the adjustment of the Mortgage Rate set forth as such on
the related Mortgage Note.
INSURANCE POLICY: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
INSURANCE PROCEEDS: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
INSURED PAYMENT: As defined in the Certificate Insurance Policy.
INTEREST ACCRUAL PERIOD: With respect to each Class of Non-Delay
Certificates and the Corresponding Class of Lower Tier Regular Interests and any
Distribution Date, the period commencing on the 25th day of the month preceding
the month in which such Distribution Date occurs and ending on the 24th day of
the month in which such Distribution Date occurs (or in the case of the first
Distribution Date, the period from and including the Closing Date to but
excluding such first Distribution Date). For purposes of computing interest
accruals on each Class of Non-Delay Certificates, each Interest Accrual Period
has the actual number of days in such month and each year is assumed to have 360
days.
INTEREST RATE ADJUSTMENT DATE: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Rate is adjusted.
INTEREST REMITTANCE AMOUNT: With respect to any Remittance Date, the
sum, without duplication, of:
(i) all scheduled installments of interest due (or advanced by the
Servicer) on the Mortgage Loans during the related Due Period;
(ii) Compensating Interest paid by the Servicer on such Remittance
Date;
(iii) the interest component of all related Substitution Adjustment
Amounts and Repurchase Prices; and
17
(iv) the interest component of all Condemnation Proceeds, Insurance
Proceeds and Liquidation Proceeds received by the Servicer during the
related Prepayment Period (in each case, net (but not to be reduced below
zero) of unreimbursed expenses incurred in connection with a liquidation
or foreclosure and unreimbursed Advances, if any); and
(v) the interest component of the proceeds of any termination of
the Trust Fund,
REDUCED by the Servicing Fee for the related Due Period, together with amounts
in reimbursement for Advances previously made with respect to the Mortgage Loans
and other amounts as to which the Servicer is entitled to be reimbursed pursuant
to the Agreement.
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: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Trustee on the related LIBOR
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 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 rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Servicer, at
approximately 11:00 a.m. (New York City time) on such date for one-month U.S.
dollar loan to leading European banks.
LIBOR CERTIFICATES: As specified in the Preliminary Statement.
LIBOR DETERMINATION DATE: With respect to any Interest Accrual
Period (other than the initial Interest Accrual Period) for the LIBOR
Certificates, the second London Business Day preceding the commencement of such
Interest Accrual Period.
LIQUIDATED MORTGAGE LOAN: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
Servicer has certified (in accordance with this Agreement) that it has received
all amounts it expects to receive in connection with the liquidation of such
Mortgage Loan including the final disposition of an REO Property.
18
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 coverage under this Agreement by reason of its being purchased,
sold or replaced pursuant to or as contemplated by this Agreement. 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 coverage under this Agreement by reason of its being purchased
pursuant to this Agreement.
LIQUIDATION PROCEEDS: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through trustee's sale,
foreclosure sale or otherwise.
LOAN-TO-VALUE RATIO or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the original outstanding principal amount
of the Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to the
lesser of (a) the Appraised Value of the Mortgaged Property at origination, and
(b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
LONDON BUSINESS DAY: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
LOAN GROUP CAP: The Loan Group I Cap or the Loan Group II Cap, as
applicable.
LOAN GROUP I CAP: With respect to the Group I Mortgage Loans as of
any Distribution Date, the product of (i) the weighted average of the Adjusted
Net Mortgage Rates then in effect on the beginning of the related Due Period on
the Group I Mortgage Loans and (ii) a fraction, the numerator of which is 30 and
the denominator of which is the actual number of days in the Interest Accrual
Period related to such Distribution Date.
LOAN GROUP II CAP: With respect to the Group II Mortgage Loans as of
any Distribution Date, the product of (i) the weighted average of the Adjusted
Net Mortgage Rates then in effect on the beginning of the related Due Period on
the Group II Mortgage Loans and (ii) a fraction, the numerator of which is 30
and the denominator of which is the actual number of days in the Interest
Accrual Period related to such Distribution Date.
LOWER TIER REGULAR INTEREST: Each of the Class LT-A-1, Class LT-A-2,
Class LT-M-1, Class LT-M-2, Class LT-B-1 and Class LT-Accrual Interests as
described in the Preliminary Statement.
LOWER TIER REMIC: As described in the Preliminary Statement
MAXIMUM MORTGAGE RATE: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the maximum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be increased during the
lifetime of such Mortgage Loan.
MINIMUM MORTGAGE RATE: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii)
19
is the minimum interest rate to which the Mortgage Rate on such Adjustable Rate
Mortgage Loan may be decreased during the lifetime of such Mortgage Loan.
MONTHLY STATEMENT: The statement delivered to the Certificateholders
pursuant to Section 4.03.
MOODY'S: ▇▇▇▇▇'▇ Investors Service, Inc. If ▇▇▇▇▇'▇ is designated as
a Rating Agency in the Preliminary Statement, for purposes of Section 10.05(b)
the address for notices to Moody's shall be ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage
Pass-Through Group, or such other address as Moody's may hereafter furnish to
the Depositor and the Servicer.
MORTGAGE: The mortgage, deed of trust or other instrument identified
on the Mortgage Loan Schedule as securing a Mortgage Note.
MORTGAGE FILE: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
MORTGAGE LOANS: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes,
without limitation, the Mortgage File, the Scheduled Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan, excluding
replaced or repurchased Mortgage Loans.
MORTGAGE LOAN SCHEDULE: A schedule of Mortgage Loans annexed hereto
as Schedule I, such schedule setting forth the following information with
respect to each Mortgage Loan: (1) the Seller's Mortgage Loan number; (2) the
city, state and zip code of the Mortgaged Property; (3) a code indicating
whether the Mortgaged Property is a single family residence, two-family
residence, three-family residence, four-family residence, PUD or condominium;
(4) the current Mortgage Interest Rate; (5) the current net Mortgage Interest
Rate; (6) the current Monthly Payment; (7) the Gross Margin; (8) the original
term to maturity; (9) the scheduled maturity date; (10) the principal balance of
the Mortgage Loan as of the Cut-off Date after deduction of payments of
principal due on or before the Cut-off Date whether or not collected; (11) the
Loan-to-Value Ratio; (12) the next Interest Rate Adjustment Date; (13) the
lifetime Mortgage Interest Rate Cap; (14) whether the Mortgage Loan is
convertible or not; (15) a code indicating the mortgage guaranty insurance
company; (16) the Servicing Fee and (17) if such Mortgage Loan is a Group I
Mortgage Loan or a Group II Mortgage Loan.
MORTGAGE NOTE: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
MORTGAGE RATE: The annual rate of interest borne on a Mortgage Note,
which shall be adjusted from time to time with respect to Adjustable Rate
Mortgage Loans.
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MORTGAGE RATE CAPS: With respect to an Adjustable Rate Mortgage
Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate, and the Minimum
Mortgage Rate for such Mortgage Loan.
MORTGAGED PROPERTY: The real property (or leasehold estate, if
applicable) identified on the Mortgage Loan Schedule as securing repayment of
the debt evidenced by a Mortgage Note.
MORTGAGOR: The obligor(s) on a Mortgage Note.
NET MONTHLY EXCESS CASH FLOW: For any Distribution Date the amount
remaining for distribution pursuant to subsection 4.02(iii) (before giving
effect to distributions pursuant to such subsection).
NCCC PURCHASE AGREEMENTS: The three Mortgage Loan Purchase
Agreements, dated as of November 1, 2001 (November 15 Closing Date), (November
30 Closing Date), and December 1, 2001, each by and between the Responsible
Party and the Purchaser.
NET PREPAYMENT INTEREST SHORTFALL: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls exceeds the sum of
the Compensating Interest payments made on such Distribution Date.
NIMS TRUST: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. NIM Trust
2001-NC4N, a Delaware business trust.
NON-DELAY CERTIFICATES: As specified in the Preliminary Statement.
NONRECOVERABLE ADVANCE: Any Servicing Advances previously made or
proposed to be made in respect of a Mortgage Loan or REO Property, which, 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
Insurance Proceeds, Liquidation Proceeds or otherwise. The determination by the
Servicer that it has made a Nonrecoverable Advance or that any proposed
Servicing Advances, if made, would constitute a Nonrecoverable Advance, shall be
evidenced by an Officers' Certificate delivered to the Trustee.
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.
NOTICE OF FINAL DISTRIBUTION: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
OFFERED CERTIFICATES: As specified in the Preliminary Statement.
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OFFICER'S CERTIFICATE: A certificate signed by an officer of the
Servicer with responsibility for the servicing of the Mortgage Loans and listed
on a list delivered to the Trustee pursuant to this Agreement.
OPINION OF COUNSEL: A written opinion of counsel, who may be
in-house counsel for the Servicer or the Subservicer, reasonably acceptable to
the Trustee, provided that any Opinion of Counsel relating to (a) qualification
of the Mortgage Loans in a REMIC or (b) compliance with the REMIC Provisions,
must be (unless otherwise stated in such Opinion of Counsel) an opinion of
counsel who (i) is in fact independent of the Servicer of the Mortgage Loans,
(ii) does not have any material direct or indirect financial interest in the
Servicer of the Mortgage Loans or in an affiliate of either and (iii) is not
connected with the Servicer of the Mortgage Loans as an officer, employee,
director or person performing similar functions.
OPTIONAL TERMINATION DATE: The Distribution Date on which the assets
of the Trust Fund decline to 10% or less of the Cut-off Date Pool Principal
Balance.
OTS: Office of Thrift Supervision, and any successor thereto.
OUTSTANDING: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered
to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to
this Agreement.
OUTSTANDING MORTGAGE LOAN: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
OWNERSHIP INTEREST: As to any Residual Certificate, any ownership
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.
P&I ADVANCE: As to any Mortgage Loan or REO Property, any advance
made by the Servicer in respect of any Remittance Date representing the
aggregate of all payments of principal and interest, net of the Servicing Fee,
that were due during the related Due Period on the Mortgage Loans and that were
delinquent on the related Determination Date, plus certain amounts representing
assumed payments not covered by any current net income on the Mortgaged
Properties acquired by foreclosure or deed in lieu of foreclosure as determined
pursuant to Section 4.01.
PASS-THROUGH MARGIN: With respect to each Class of Regular
Certificates, the following percentages: Class A-1 Certificates, 0.310%; Class
A-2 Certificates, 0.370%, Class M-1 Certificates, 1.000%; Class M-2
Certificates, 1.650%; and Class B-1 Certificates, 2.500%. On the first
Distribution Date after the Optional Termination Date, the Pass-Through Margins
22
shall increase to: Class A-1 Certificates, 0.620%, Class A-2 Certificates,
0.740%, Class M-1 Certificates, 1.500%, Class M-2 Certificates, 2.475% and Class
B-1 Certificates, 3.750%.
PASS-THROUGH RATE: For each Class of Certificates and each Lower
Tier Regular Interest, the per annum rate set forth or calculated in the manner
described in the Preliminary Statement.
PERCENTAGE INTEREST: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
PERIODIC MORTGAGE RATE CAP: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Interest Rate adjustment as
set forth in the related Mortgage Note.
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 Servicer, the Trustee or any of their respective
Affiliates:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed by
the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances (which shall each have an original maturity of not
more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United States dollars and
issued by, any Eligible Institution and rated F1+ by Fitch;
(iii) repurchase obligations with respect to any security described
in clause (i) above entered into with a Eligible 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, including money market funds
advised by the Depositor or the Trustee or an Affiliate thereof, that have
been rated "Aaa" by
23
Moody's, "AAA" by Standard & Poor's and, if rated by Fitch, at least "AA"
by Fitch; and
(vii) if previously confirmed in writing to the Trustee, any other
demand, money market or time deposit, or any other obligation, security or
investment, as may be acceptable to the Rating Agencies as a permitted
investment of funds backing "Aaa" or "AAA" rated securities;
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 person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in section 1381(a)(2)(C) of the Code, (v) a Person that is not a U.S.
Person, (vi) an "electing large partnership" within the meaning of section 775
of the Code and (vii) any other Person so designated by the Depositor based upon
an Opinion of Counsel that the Transfer of an Ownership Interest in a Residual
Certificate to such Person may cause the REMIC hereunder to fail to qualify as a
REMIC at any time that the Certificates are outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in section 7701 of the Code or successor provisions. A corporation will
not be treated as an instrumentality of the United States or of any State or
political subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
government unit.
PERSON: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
PHYSICAL CERTIFICATES: As specified in the Preliminary Statement.
POLICY PAYMENTS ACCOUNT: As defined in Section 4.06(f).
POOL STATED PRINCIPAL BALANCE: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans on the last day
of the related Due Period which were Outstanding Mortgage Loans on such day.
PREFERENCE AMOUNT: Any amounts distributed in respect of the Class
A-2 Certificates which are recovered from any Holder of a Class A-2 Certificate
as a voidable preference by a trustee in bankruptcy pursuant to the United
States Bankruptcy Code or other
24
similar law in accordance with a final, nonappealable order of a court having
competent jurisdiction and which have not theretofore been repaid to such
Holder.
PREFERENCE CLAIM: As defined in Section 4.06(k) hereof.
PREPAYMENT CHARGE: Any prepayment premium, penalty or charge
collected by the Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any voluntary Principal Prepayment in full pursuant to the terms
of the related Mortgage Note.
PREPAYMENT INTEREST SHORTFALL: With respect to any Remittance Date,
the sum of, for each Mortgage Loan that was during the related Prepayment Period
the subject of a Principal Prepayment 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 the product of
(a) the Mortgage Rate net of the Servicing Fee Rate for such Mortgage Loan, (b)
the amount of the Principal Prepayment for such Mortgage Loan, (c) 1/360 and (d)
the number of days commencing on the date on which such Principal Prepayment was
applied and ending on the last day of the related Prepayment Period.
PREPAYMENT PERIOD: With respect to any Remittance Date, the calendar
month preceding the calendar month in which such Remittance Date occurs.
PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, the sum of
(i) the Basic Principal Distribution Amount for such Distribution Date and (ii)
the Extra Principal Distribution Amount for such Distribution Date.
PRINCIPAL PREPAYMENT: Any full or partial payment or other recovery
of principal on a Mortgage Loan (including upon liquidation of a Mortgage Loan)
which is received in advance of its scheduled Due Date, excluding any prepayment
penalty or premium thereon and which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
PRINCIPAL PREPAYMENT IN FULL: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
PRINCIPAL REMITTANCE AMOUNT: With respect to any Remittance Date,
the sum, without duplication, of:
(i) all scheduled installments of principal due (or advanced by
the Servicer) on the Mortgage Loans during the related Due Period;
(ii) the principal component of all Condemnation Proceeds,
Insurance Proceeds and Liquidation Proceeds during the related Prepayment
Period (in each case, net of remaining (I.E., not deducted from the
Interest Remittance Amount) unreimbursed expenses incurred in connection
with a liquidation or foreclosure and unreimbursed Advances, if any);
(iii) all partial or full prepayments on the Mortgage Loans received
during the related Prepayment Period; and
25
(iv) the principal component of all related Substitution Adjustment
Amounts or Repurchase Prices; and
(v) the principal component of the proceeds of any termination of
the Trust Fund.
reduced by remaining amounts (I.E., not deducted from the Interest Remittance
Amount) in reimbursement for Advances previously made with respect to the
Mortgage Loans and other amounts as to which the Servicer is entitled to be
reimbursed pursuant to this Agreement.
PRIVATE CERTIFICATES: As specified in the Preliminary Statement.
PROSPECTUS SUPPLEMENT: The Prospectus Supplement, dated December 14,
2001, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: Planned Unit Development.
PURCHASER: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Mortgage Capital Inc. as
purchaser of the Mortgage Loans under the NCCC Purchase Agreements.
QUALIFIED INSURER: A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as a
FNMA- or FHLMC-approved mortgage insurer or having a claims paying ability
rating of at least "AA" or equivalent rating by a nationally recognized
statistical rating organization. Any replacement insurer with respect to a
Mortgage Loan must have at least as high a claims paying ability rating as the
insurer it replaces had on the Closing Date.
RATING AGENCY: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee. References
herein to a given rating or rating category of a Rating Agency shall mean such
rating category without giving effect to any modifiers. For purposes of Section
10.05(b), the addresses for notices to each Rating Agency shall be the address
specified therefor in the definition corresponding to the name of such Rating
Agency, or such other address as either such Rating Agency may hereafter furnish
to the Depositor and the Servicer.
RECORD DATE: With respect to any Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date;
PROVIDED, HOWEVER, that for any Certificate issued in Definitive Form, the
Record Date shall be the close of business on the last Business Day of the month
preceding the month in which such applicable Distribution Date occurs.
26
REFERENCE BANK: As defined in Section 4.04.
REGULAR CERTIFICATES: As specified in the Preliminary Statement.
REIMBURSEMENT AMOUNT: As of any Distribution Date, the sum of (a)(i)
all Insured Payments previously received by the Trustee and all Preference
Amounts previously paid by FSA and in each case not previously repaid to FSA
pursuant to Section 4.02 hereof. FSA shall notify the Trustee and the
Responsible Party of the amount of any Reimbursement Amount.
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 Due Period as a result of the
application of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended.
REMIC: A "real estate mortgage investment conduit" within the
meaning of section 860D of the Code.
REMIC PROVISIONS: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REMITTANCE DATE: The Business Day immediately preceding each
Distribution Date.
REO DISPOSITION: The final sale by the Servicer of any REO Property.
REO IMPUTED INTEREST: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by
any income from the REO Property treated as a recovery of principal).
REO PROPERTY: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
REPURCHASE PRICE: With respect to any Mortgage Loan, an amount equal
to the sum of (i) the unpaid principal balance of such Mortgage Loan as of the
date of repurchase, (ii) interest on such unpaid principal balance of such
Mortgage Loan at the Mortgage Rate from the last date through which interest has
been paid and distributed to the Trustee to the date of repurchase, (iii) all
unreimbursed Servicing Advances and (iv) all expenses reasonably incurred by the
Servicer or the Trustee, as the case may be, in respect of a breach or defect,
including, without limitation, expenses arising out of the Servicer's or
Trustee's, as the case may be, enforcement of the Responsible Party's repurchase
obligation, to the extent not included in (iii).
27
REQUEST FOR RELEASE: The Request for Release submitted by the
Servicer to the Trustee, substantially in the form of Exhibit J.
RESIDUAL CERTIFICATES: As specified in the Preliminary Statement.
RESPONSIBLE OFFICER: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, any Assistant Secretary, any Assistant
Treasurer, any Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers who at such time shall be officers to whom, with respect to a
particular matter, such matter is referred because of such officer's knowledge
of and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Agreement.
RESPONSIBLE PARTY: NC Capital Corporation, a California corporation,
and its successors and assigns, in its capacity as responsible party hereunder.
RULE 144A LETTER: As defined in Section 5.01(b).
SCHEDULED PAYMENT: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified herein, shall give effect to any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage Loan.
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 reduction in the
principal balance of such Mortgage Loan incurred with respect thereto as a
result of a Deficient Valuation occurring before such Due Date, but only to the
extent such reduction in principal balance 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.
SECURITIES ACT: The Securities Act of 1933, as amended.
SENIOR ENHANCEMENT PERCENTAGE: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the Subordinated
Amount (in each case after taking into
28
account the distributions of the Principal Distribution Amount for such
Distribution Date) by (y) the aggregate Stated Principal Balance of the Mortgage
Loans as of the last day of the related Due Period.
SERVICER: Ocwen Federal Bank FSB, a federally-chartered savings
bank, and its successors and assigns, in its capacity as servicer hereunder.
SERVICER INVESTMENT ACCOUNT: As defined in section 3.12(a).
SERVICER TERMINATION TEST: With respect to any Distribution Date,
the Servicer Termination Test will be failed with respect to the Servicer if the
Cumulative Loss Percentage exceeds 6.70%.
SERVICING ADVANCES: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the Servicer in the performance of
its servicing obligations in connection with a default, delinquency or other
unanticipated event, 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 and litigation, 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 3.13 and Section 3.15 hereof. The Servicer shall not be required to make
any Nonrecoverable Advances.
SERVICING FEE: With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (or in the event of any
payment of interest which accompanies a Principal Prepayment in full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the Servicing Fee Rate on the same principal amount
on which interest on such Mortgage Loan accrues for such calendar month. Such
fee shall be payable monthly, and shall be pro rated for any portion of a month
during which the Mortgage Loan is serviced by the Servicer under this Agreement.
The Servicing Fee is payable solely from, the interest portion (including
recoveries with respect to interest from Liquidation Proceeds and proceeds
received with respect to REO Properties, to the extent permitted by Section
3.11) of such Monthly Payment collected by the Servicer, or as otherwise
provided under Section 3.11.
SERVICING FEE RATE: With respect to each Mortgage Loan, 0.50% per
annum.
SERVICING FILE: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals or copies of all documents in
the Mortgage File which are not delivered to the Trustee in the Custodial File
and copies of the Mortgage Loan Documents set forth in Exhibit K hereto.
SERVICING OFFICER: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Servicer on the Closing Date pursuant to this Agreement, as
such list may from time to time be amended.
SIMILAR LAW: As defined in Section 5.02(b).
29
SPECIFIED SUBORDINATED AMOUNT: Prior to the Stepdown Date, an amount
equal to 2.00% of the Cut-off Date Pool Principal Balance, and on and after the
Stepdown Date, an amount equal 4.00% of the aggregate Stated Principal Balance
of the Mortgage Loans as of the last day of the related Due Period, subject to a
minimum amount equal to 0.50% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date; PROVIDED, HOWEVER, that if, on any
Distribution Date, a Trigger Event has occurred, the Specified Subordinated
Amount shall not be reduced to the applicable percentage of the then current
aggregate Stated Principal Balance of the Mortgage Loans until the Distribution
Date on which a Trigger Event is no longer occurring.
STANDARD & POOR'S: Standard & Poor's Ratings Services, a division of
the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. If Standard & Poor's is designated as a Rating
Agency in the Preliminary Statement, for purposes of Section 10.05(b) the
address for notices to Standard & Poor's shall be ▇▇▇▇▇▇▇▇ & ▇▇▇▇'▇, ▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage Surveillance Group -
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. 2001-NC4, or such other address as
Standard & Poor's may hereafter furnish to the Depositor and the Servicer.
STARTUP DAY: The Closing Date.
STATED PRINCIPAL BALANCE: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal due on or before such date, to the extent actually
received, minus (ii) all amounts previously distributed to the Trustee with
respect to the related Mortgage Loan representing payments or recoveries of
principal.
STEPDOWN DATE: The later to occur of (i) the earlier to occur of (a)
the Distribution Date in January 2005 and (b) the date on which the aggregate
Class Certificate Balances of the Class A Certificates have been reduced to zero
and (ii) the first Distribution Date on which the Senior Enhancement Percentage
(calculated for this purpose only after taking into account payments of
principal on the Mortgage Loans on the last day of the related Due Period but
prior to any applications of Principal Distribution Amount to the Certificates)
is greater than or equal to 40.0%.
SUBORDINATED AMOUNT: As of any Distribution Date, the excess, if
any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans as of
the end of the related Due Period over (b) the aggregate of the Class
Certificate Balances of the Class A and Subordinated Certificates as of such
Distribution Date (after giving effect to the payment of the Principal
Remittance Amount on such Certificates on such Distribution Date).
SUBORDINATED CERTIFICATES: As specified in the Preliminary
Statement.
SUBORDINATION DEFICIENCY: With respect to any Distribution Date, the
excess, if any, of (a) the Specified Subordinated Amount applicable to such
Distribution Date over (b) the Subordinated Amount applicable to such
Distribution Date.
30
SUBORDINATION REDUCTION AMOUNT: With respect to any Distribution
Date, an amount equal to the lesser of (a) the Excess Subordinated Amount and
(b) the Total Monthly Excess Spread.
SUBSERVICER: As defined in Section 3.02(a).
SUBSERVICING ACCOUNT: As defined in Section 3.08.
SUBSTITUTE MORTGAGE LOAN: A Mortgage Loan substituted by the
Responsible Party for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the form
of Exhibit J, (i) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution, not
in excess of, and not more than 10% less than, the Stated Principal Balance of
the Deleted Mortgage Loan; (ii) be accruing interest at a rate no lower than and
not more than 1% per annum higher than, that of the Deleted Mortgage Loan; (iii)
have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan;
(iv) have a remaining term to maturity no greater than (and not more than one
year less than that of) the Deleted Mortgage Loan; and (v) comply with each
representation and warranty set forth in Section 2.03.
SUBSTITUTION ADJUSTMENT AMOUNT: The meaning ascribed to such term
pursuant to Section 2.03.
TAX SERVICE CONTRACT: As defined in Section 3.09(a).
TELERATE PAGE 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).
TOTAL MONTHLY EXCESS SPREAD: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest collected or advanced on the
Mortgage Loans for Due Dates during the related Remittance Period (net of
Expense Fees) over (ii) the sum of the interest payable to the Classes of
Floating Rate Certificates on such Distribution Date.
TRANSFER: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
TRANSFER AFFIDAVIT: As defined in section 5.02(b).
TRANSFEROR CERTIFICATE: As defined in Section 5.02(b).
TRIGGER EVENT: With respect to the Certificates and as of a
Distribution Date, exists if (i) (x) the Stated Principal Balance of Mortgage
Loans 60 days Delinquent or more, as of the end of the related Due Period
(including Mortgage Loans in bankruptcy, foreclosure or represented by an REO
Property), over (y) the aggregate Stated Principal Balance of the Mortgage Loans
as of the end of the related Due Period exceeds 40% of the prior period's Senior
Enhancement Percentage or (ii) the aggregate amount of Realized Losses incurred
since the Cut-off Date through the last day of the related Due Period divided by
the Cut-off Date Pool
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Principal Balance exceeds the applicable percentages described below with
respect to such Distribution Date:
--------------------------------------------------------------------------------
DISTRIBUTION DATE OCCURRING IN LOSS PERCENTAGE
--------------------------------------------------------------------------------
January 2005 through December 2005 4.00% for the first month, plus an
additional 1/12th of 2.00% for each
month thereafter (E.G., 5.00% in July
2005)
--------------------------------------------------------------------------------
January 2006 through November 2006 6.00% for the first month, plus an
additional 1/12th of 1.00% for each
month thereafter (E.G., 6.50% in July
2006)
--------------------------------------------------------------------------------
January 2007 through November 2007 7.00% for the first month, plus an
additional 1/12th of 0.50% for each
month thereafter (E.G., 7.25% in July
2006)
--------------------------------------------------------------------------------
January 2008 and thereafter 7.50%
--------------------------------------------------------------------------------
TRUST FUND: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal received on or with
respect thereto after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or before the related Cut-off Date; (ii) the
Collection Account, Excess Reserve Fund Account, the Distribution Account, and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing and (v) with
respect to the Class A-2 Certificates only, the rights of the Trustee under the
Certificate Insurance Policy.
TRUSTEE: U.S. Bank National Association and its successors and, if a
successor trustee is appointed hereunder, such successor.
TRUSTEE FEE: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the related Trustee Fee Rate on the
Stated Principal Balance of such Mortgage Loan or, in the event of any payment
of interest which accompanies a Principal Prepayment in Full made by the
Mortgagor, interest at the Trustee Fee Rate on the Stated Principal Balance of
such Mortgage Loan for the period covered by such payment of interest.
TRUSTEE FEE RATE: With respect to each Mortgage Loan, 0.00425% per
annum.
TRUSTEE INVESTMENT ACCOUNT: As defined in section 3.07(e).
UNPAID CLASS A-2 INSURANCE PREMIUM PAYMENT AMOUNTS: For FSA and as
of any Distribution Date, the sum of (a) the excess of (i) the sum of the Class
A-2 Insurance Premium Payment Amount for such Distribution Date and any portion
of such Class A-2 Insurance Payment Amount from prior Distribution Dates
remaining unpaid (from any source) over (ii) the amount in respect of the Class
A-2 Insurance Premium Payment Amount for FSA actually
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distributed on the preceding Distribution Date and (b) 30 days' interest on such
excess at the Class A-2 Insurance Rate (to the extent permitted by applicable
law).
UNPAID INTEREST AMOUNTS: As of any Distribution Date and any Class
of Certificates, the sum of (a) the excess of (i) the sum of the Accrued
Certificate Interest Distribution Amount for such Distribution Date and any
portion of such Accrued Certificate Interest Distribution Amount from prior
Distribution Dates remaining unpaid (from any source excluding, with respect to
the Class A-2 Certificates, the Certificate Insurance Policy) over (ii) the
amount in respect of interest on such Class of Certificates actually distributed
on the preceding Distribution Date and (b) 30 days' interest on such excess at
the applicable Pass-Through Rate (to the extent permitted by applicable law).
UNPAID REALIZED LOSS AMOUNT: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the excess of (i)
Applied Realized Loss Amounts with respect to such Class over (ii) the sum of
all distributions in reduction of such Applied Realized Loss Amounts on all
previous Distribution Dates. Any amounts distributed to a Class of Subordinated
Certificates in respect of any Unpaid Realized Loss Amount will not be applied
to reduce the Class Certificate Balance of such Class.
U.S. PERSON: Shall mean (i) a citizen or resident of the United
States; (ii) a corporation (or entity treated as a corporation for tax purposes)
created or organized in the United States or under the laws of the United States
or of any state thereof, including, for this purpose, the District of Columbia;
(iii) a partnership (or entity treated as a partnership for tax purposes)
organized in the United States or under the laws of the United States or of any
state thereof, including, for this purpose, the District of Columbia (unless
provided otherwise by future Treasury regulations); (iv) an estate whose income
is includible in gross income for United States income tax purposes regardless
of its source; or (v) 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 U.S. Persons have authority to control all substantial decisions of the
trust. Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
UPPER TIER REGULAR INTEREST: As described in the Preliminary
Statement.
UPPER TIER REMIC: As described in the Preliminary Statement.
VOTING RIGHTS: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, and (c) the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
WAC CAP: With respect to the Mortgage Loans as of any Distribution
Date, the product of (i) the weighted average of the Adjusted Net Mortgage Rates
then in effect on the
33
beginning of the related Due Period on the Mortgage Loans and (ii) a fraction,
the numerator of which is 30 and the denominator of which is the actual number
of days in the Interest Accrual Period related to such Distribution Date.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 CONVEYANCE OF MORTGAGE LOANS.
(a) The Depositor, concurrently with the execution and delivery
hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the
Trustee for the benefit of the Certificateholders, without recourse, all the
right, title and interest of the Depositor in and to the Trust Fund. In
addition, on or prior to the Closing Date, the Depositor shall cause FSA to
deliver the Certificate Insurance Policy to the Trustee.
(b) In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered or caused to be delivered to the
Trustee for the benefit of the Certificateholders the following documents or
instruments with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note bearing all intervening
endorsements showing a complete chain of endorsement from the originator
to the last endorsee, endorsed "Pay to the order of _____________, without
recourse" and signed (which may be by facsimile signature) in the name of
the last endorsee by an authorized officer. To the extent that there is no
room on the face of the Mortgage Notes for endorsements, the endorsement
may be contained on an allonge, if state law so allows and the Trustee is
so advised by the Responsible Party that state law so allows;
(ii) the original of any guaranty executed in connection with the
Mortgage Note;
(iii) the original Mortgage with evidence of recording thereon or a
certified true copy of such Mortgage submitted for recording. If in
connection with any Mortgage Loan, the Responsible Party cannot deliver or
cause to be delivered the original Mortgage with evidence of recording
thereon on or prior to the Closing Date because of a delay caused by the
public recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost or because such public
recording office retains the original recorded Mortgage, the Responsible
Party shall deliver or cause to be delivered to the Trustee, a photocopy
of such Mortgage, together with (i) in the case of a delay caused by the
public recording office, an Officer's Certificate of the Responsible Party
or a certificate from an escrow company, a title company or closing
attorney stating that such Mortgage has been dispatched to the appropriate
public recording office for recordation and that the original recorded
Mortgage or a copy of such Mortgage certified by such public recording
office to be a true and complete copy of the original recorded Mortgage
will be promptly delivered to the Trustee upon receipt thereof
34
by the Responsible Party; or (ii) in the case of a Mortgage where a public
recording office retains the original recorded Mortgage or in the case
where a Mortgage is lost after recordation in a public recording office, a
copy of such Mortgage certified by such public recording office to be a
true and complete copy of the original recorded Mortgage;
(iv) the originals of all assumption, modification, consolidation
or extension agreements (if provided), with evidence of recording thereon
or a certified true copy of such agreement submitted for recording;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed in blank,
(vi) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the applicable
originator to the last endorsee with evidence of recording thereon, or if
any such intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office
retains the original recorded assignments of mortgage, the Responsible
Party shall deliver or cause to be delivered to the Trustee, a photocopy
of such intervening assignment, together with (i) in the case of a delay
caused by the public recording office, an Officer's Certificate of the
Responsible Party or a certificate from an escrow company, a title company
or a closing attorney stating that such intervening assignment of mortgage
has been dispatched to the appropriate public recording office for
recordation and that such original recorded intervening assignment of
mortgage or a copy of such intervening assignment of mortgage certified by
the appropriate public recording office to be a true and complete copy of
the original recorded intervening assignment of mortgage will be promptly
delivered to the Trustee upon receipt thereof by the Responsible Party; or
(ii) in the case of an intervening assignment where a public recording
office retains the original recorded intervening assignment or in the case
where an intervening assignment is lost after recordation in a public
recording office, a copy of such intervening assignment certified by such
public recording office to be a true and complete copy of the original
recorded intervening assignment;
(vii) the original mortgagee title insurance policy or attorney's
opinion of title and abstract of title; and
(viii) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage (if
provided).
The Responsible Party shall deliver to the Trustee the applicable
recorded document promptly upon receipt from the respective recording office but
in no event later than 120 days from the Closing Date.
From time to time, the Responsible Party shall forward to the
Trustee additional original documents, additional documents evidencing an
assumption, modification, consolidation or extension of a Mortgage Loan approved
by the Responsible Party, in accordance with the terms of this Agreement. All
such mortgage documents held by the Trustee as to each Mortgage Loan shall
constitute the "CUSTODIAL FILE".
35
On or prior to the Closing Date, the Responsible Party shall deliver
to the Trustee Assignments of Mortgages, in blank, for each Mortgage Loan. No
later than thirty (30) Business Days following the later of the Closing Date and
the date of receipt by the Servicer of the recording information for a Mortgage,
the Servicer shall promptly submit or cause to be submitted for recording, at no
expense to the Trust Fund, the Trustee or the Depositor, in the appropriate
public office for real property records, each Assignment referred to in Section
2.01(b)(v). Notwithstanding the foregoing, however, for administrative
convenience and facilitation of servicing and to reduce closing costs, the
Assignments shall not be required to be completed and submitted for recording
with respect to any Mortgage Loan if the Trustee and each Rating Agency has
received an opinion of counsel, satisfactory in form and substance to the
Trustee and each Rating Agency, to the effect that the recordation of such
Assignments in any specific jurisdiction is not necessary to protect the
Trustee's interest in the related Mortgage Note. If the Assignment of Mortgage
is to be recorded, the Mortgage shall be assigned by the Responsible Party, at
the expense of the Responsible Party, to "U.S. Bank National Association, as
trustee under the Pooling and Servicing Agreement dated as of December 1, 2001,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. Trust 2001-NC4." In the event that any
such assignment is lost or returned unrecorded because of a defect therein, the
Responsible Party shall promptly prepare a substitute assignment to cure such
defect and thereafter cause each such assignment to be duly recorded.
In the event that such original or copy of any document submitted
for recordation to the appropriate public recording office is not so delivered
to the Trustee within 90 days following the Closing Date, and in the event that
the Responsible Party does not cure such failure within 30 days of discovery or
receipt of written notification of such failure from the Depositor, the related
Mortgage Loan shall, upon the request of the Depositor, be repurchased by the
Responsible Party at the price and in the manner specified in Section 2.03. The
foregoing repurchase obligation shall not apply in the event that the
Responsible Party cannot deliver such original or copy of any document submitted
for recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; PROVIDED that the Responsible Party shall instead deliver a
recording receipt of such recording office or, if such recording receipt is not
available, an officer's certificate of a servicing officer of the Responsible
Party, confirming that such document has been accepted for recording.
Notwithstanding anything to the contrary contained in this Section
2.01, in those instances where the public recording office retains or loses the
original Mortgage or assignment after it has been recorded, the obligations of
the Responsible Party shall be deemed to have been satisfied upon delivery by
the Responsible Party to the Trustee prior to the Closing Date of a copy of such
Mortgage or assignment, as the case may be, certified (such certification to be
an original thereof) by the public recording office to be a true and complete
copy of the recorded original thereof.
Section 2.02 ACCEPTANCE BY THE TRUSTEE OF THE MORTGAGE LOANS.
The Trustee acknowledges receipt of the documents identified in the
Initial Certification in the form annexed hereto as Exhibit E, and declares that
it holds and will hold such documents and the other documents delivered to it
pursuant to Section 2.01, and that it
36
holds or will hold such other assets as are included in the Trust Fund, in trust
for the exclusive use and benefit of all present and future Certificateholders.
The Trustee acknowledges that it will maintain possession of the related
Mortgage Notes in the State of Minnesota, unless otherwise permitted by the
Rating Agencies.
Prior to and as a condition to the Closing, the Trustee shall
deliver via facsimile (with original to follow the next Business Day) to the
Depositor and to FSA an Initial Certification prior to the Closing Date, or as
the Depositor agrees to, on the Closing Date, certifying receipt of a Mortgage
Note and Assignment of Mortgage for each Mortgage Loan. The Trustee shall not be
responsible to verify the validity, sufficiency or genuineness of any document
in any Custodial File.
Within 90 days after the Closing Date, the Trustee shall ascertain
that all documents required to be delivered to it are in its possession, and
shall deliver to the Depositor and FSA a Document Certification and Exception
Report to the effect 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 such certification as an exception and not covered by
such certification): (i) all documents required to be delivered to it 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 documents, the information set forth in items (1), (2),
(7), and (9) of the Mortgage Loan Schedule and items (1), (9) and (17) of the
Data Tape Information respecting such Mortgage Loan is correct; and (iv) each
Mortgage Note has been endorsed as provided in Section 2.01 of this Agreement.
The Trustee shall not be responsible to verify the validity, sufficiency or
genuineness of any document in any Custodial File.
The Trustee shall retain possession and custody of each Custodial
File in accordance with and subject to the terms and conditions set forth
herein. The Servicer shall promptly deliver to the Trustee, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Custodial File as come into the possession of the Servicer from
time to time.
Section 2.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
RESPONSIBLE PARTY AND THE SERVICER.
(a) The Servicer hereby makes the representations and warranties
set forth in Schedule II hereto to the Depositor and the Trustee, as of the
Closing Date.
(b) NC Capital Corporation, in its capacity as Responsible Party,
hereby makes the representations and warranties set forth in Schedule III and
Schedule IV hereto, to the Depositor and the Trustee, as of the Closing Date.
(c) It is understood and agreed by the Servicer and the
Responsible Party that the representations and warranties set forth in Section
2.03 shall survive the transfer of the Mortgage Loans by the Depositor to the
Trustee, and shall inure to the benefit of the Depositor and the Trustee
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon
37
discovery by any of the Responsible Party, the Depositor, the Trustee or the
Servicer of a breach of any of the foregoing representations and warranties, the
party discovering such breach shall give prompt written notice to the other.
(d) Within 30 days of the earlier of either discovery by or notice
to the Responsible Party of that any Mortgage Loan does not conform to the
requirements as determined in the Trustee's review of the related Custodial File
or within 90 days of the earlier of either discovery by or notice to the
Responsible Party of any breach of a representation or warranty, set forth in
Section 2.03(b) that materially and adversely affects the value of the Mortgage
Loans or the interest of the Trustee or the Certificateholders therein, the
Responsible Party shall use its best efforts to cause to be remedied a material
defect in a document constituting part of a Mortgage File or promptly to cure
such breach in all material respects and, if such defect or breach cannot be
remedied, the Responsible Party shall, (i) if such 30 or 90 day period, as
applicable, expires prior to the second anniversary of the Closing Date, remove
such Mortgage Loan (a "DELETED MORTGAGE LOAN") from the Trust Fund and
substitute in its place a Substitute Mortgage Loan, in the manner and subject to
the conditions set forth in this Section 2.03; or (ii) at the Depositor's
option, repurchase such Mortgage Loan at the Repurchase Price; PROVIDED,
HOWEVER, that any such substitution pursuant to (i) above shall not be effected
prior to the delivery to the Trustee of the Opinion of Counsel required by
Section 2.05, if any, and a Request for Release substantially in the form of
Exhibit K, and the Mortgage File for any such Substitute Mortgage Loan. In the
event that a breach shall involve any representation or warranty set forth in
Section 2.03(b) and Schedule IV, and such breach cannot be cured within 60 days
of the earlier of either discovery by or notice to the Responsible Party of such
breach, all of the Mortgage Loans shall, at the Depositor's option, be
repurchased by the Responsible Party at the Repurchase Price.
With respect to any Substitute Mortgage Loan or Loans, the
Responsible Party shall deliver to the Trustee for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related assignment of
the Mortgage, and such other documents and agreements as are required by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned as required by
Section 2.01. No substitution is permitted to be made in any calendar month
after the Determination Date for such month. Scheduled Payments due with respect
to Substitute Mortgage Loans in the Due Period of substitution shall not be part
of the Trust Fund and will be retained by the Seller on the next succeeding
Distribution Date. For the Due Period of substitution, distributions to
Certificateholders will include the monthly payment due on any Deleted Mortgage
Loan for such Due Period and thereafter the Seller shall be entitled to retain
all amounts received in respect of such Deleted Mortgage Loan.
The Servicer shall amend the Mortgage Loan Schedule for the benefit
of the Certificateholders to reflect the removal of such Deleted Mortgage Loan
and the substitution of the Substitute Mortgage Loan or Loans and the Servicer
shall deliver the amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, the Substitute Mortgage Loan or Loans shall be subject to the
terms of this Agreement in all respects, and the Responsible Party shall be
deemed to have made with respect to such Substitute Mortgage Loan or Loans, as
of the date of substitution, the representations and warranties made pursuant to
Section 2.03(b) with respect to such Mortgage Loan. Upon any such substitution
and the deposit to the Collection Account of the amount required to be deposited
therein in connection with such substitution as described in
38
the following paragraph, the Trustee shall release the Mortgage File held for
the benefit of the Certificateholders relating to such Deleted Mortgage Loan to
the Responsible Party and shall execute and deliver at the Responsible Party's
direction such instruments of transfer or assignment prepared by the Responsible
Party, in each case without recourse, as shall be necessary to vest title in the
Responsible Party, or its designee, the Trustee's interest in any Deleted
Mortgage Loan substituted for pursuant to this Section 2.03.
For any month in which the Responsible Party substitutes one or more
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer
will determine the amount (if any) by which the aggregate principal balance of
all such Substitute Mortgage Loans as of the date of substitution is less than
the aggregate Stated Principal Balance of all such Deleted Mortgage Loans (after
application of the scheduled principal portion of the monthly payments due in
the Due Period of substitution). The amount of such shortage (the "SUBSTITUTION
ADJUSTMENT AMOUNT") plus, if the Responsible Party is not the Servicer, an
amount equal to the aggregate of any unreimbursed Advances and Servicing
Advances with respect to such Deleted Mortgage Loans shall be deposited into the
Collection Account by the Responsible Party on or before the Distribution
Account Deposit Date for the Distribution Date in the month succeeding the
calendar month during which the related Mortgage Loan became required to be
purchased or replaced hereunder.
In addition to such repurchase obligation, the Responsible Party
shall indemnify the Depositor, any of its Affiliates, and the Trustee and hold
such parties harmless against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and other costs and expenses resulting from any claim, demand, defense or
assertion based on or grounded upon, or resulting from, a breach by the
Responsible Party of any of its representations and warranties contained in the
Purchase Agreement or this Agreement.
The Servicer shall amend the Mortgage Loan Schedule for the benefit
of the Certificateholders to reflect the removal of such Deleted Mortgage Loan
and the Servicer shall deliver the amended Mortgage Loan Schedule to the
Trustee.
In the event that the Responsible Party shall have repurchased a
Mortgage Loan, the Repurchase Price therefor shall be deposited in the
Collection Account pursuant to Section 3.10 on or before the Distribution
Account Deposit Date for the Distribution Date in the month following the month
during which the Responsible Party became obligated hereunder to repurchase or
replace such Mortgage Loan and upon such deposit of the Repurchase Price, the
delivery of the Opinion of Counsel required by Section 2.05 and receipt of a
Request for Release in the form of Exhibit J hereto, the Trustee shall release
the related Custodial File held for the benefit of the Certificateholders to
such Person as directed by the Servicer, and the Trustee shall execute and
deliver at such Person's direction such instruments of transfer or assignment
prepared by such Person, in each case without recourse, as shall be necessary to
transfer title from the Trustee. It is understood and agreed that the obligation
under this Agreement of any Person to cure, repurchase or replace any Mortgage
Loan as to which a breach has occurred and is continuing shall constitute the
sole remedy against such Persons respecting such breach available to
Certificateholders, the Depositor or the Trustee on their behalf.
39
The representations and warranties made pursuant to this Section
2.03 shall survive delivery of the respective Custodial Files to the Trustee for
the benefit of the Certificateholders.
Section 2.04 THE DEPOSITOR AND THE MORTGAGE LOANS.
The Depositor hereby represents and warrants to the Trustee with
respect to each Mortgage Loan as of the date hereof or such other date set forth
herein that as of the Closing Date, and following the transfer of the Mortgage
Loans to it by the Purchaser, the Depositor had good title to the Mortgage Loans
and the Mortgage Notes were subject to no offsets, defenses or counterclaims.
The Depositor hereby assigns, transfers and conveys to the Trustee
all of its rights with respect to the Mortgage Loans.
Section 2.05 DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH
SUBSTITUTION AND REPURCHASE, NON-QUALIFIED MORTGAGES.
(a) Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.03 shall be made more than 30 days after the
Closing Date unless the Responsible Party delivers to the Trustee an Opinion of
Counsel, which Opinion of Counsel shall not be at the expense of either the
Trustee or the Trust Fund, addressed to the Trustee, to the effect that such
substitution will not (i) result in the imposition of the tax on "prohibited
transactions" on the Trust Fund or contributions after the Startup Date, as
defined in Sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii)
cause the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
(b) Upon discovery by the Depositor, the Responsible Party, the
Servicer or the Trustee that any Mortgage Loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the party
discovering such fact shall promptly (and in any event within five (5) Business
Days of discovery) give written notice thereof to the other parties. In
connection therewith, the Trustee shall require the Responsible Party to
repurchase the affected Mortgage Loan within 90 days of such discovery in the
same manner as it would a Mortgage Loan for a breach of representation or
warranty made pursuant to Section 2.03. The Trustee shall reconvey to the
Responsible Party the Mortgage Loan to be released pursuant hereto in the same
manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty contained in Section
2.03.
Section 2.06 EXECUTION AND DELIVERY OF CERTIFICATES.
The Trustee acknowledges the transfer and assignment to it of the
Trust Fund and, concurrently with such transfer and assignment, has executed and
delivered to or upon the order of the Depositor, the Certificates in authorized
denominations evidencing directly or indirectly the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates.
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Section 2.07 REMIC MATTERS.
The Preliminary Statement sets forth the designations for federal
income tax purposes of all interests created hereby. The "STARTUP DAY" for
purposes of the REMIC Provisions shall be the Closing Date.
Section 2.08 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor hereby represents, warrants and covenants to the
Trustee and the that as of the date of this Agreement or as of such date
specifically provided herein:
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(b) The Depositor has the corporate power and authority to convey
the Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite corporate action having been
taken, and, assuming the due authorization, execution and delivery hereof by the
Servicer and the Trustee, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental authority or court
is required for the execution, delivery and performance of or compliance by the
Depositor with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against
or investigations of, the Depositor pending, or to the knowledge of the
Depositor, threatened, before
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any court, administrative agency or other tribunal, and no notice of any such
action, which, in the Depositor's reasonable judgment, might materially and
adversely affect the performance by the Depositor of its obligations under this
Agreement, or the validity or enforceability of this Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee, the Depositor had good title to, and was the sole
owner of each Mortgage Loan, free of any interest of any other Person, and the
Depositor has transferred all right, title and interest in each Mortgage Loan to
the Trustee. The transfer of the Mortgage Note and the Mortgage as and in the
manner contemplated by this Agreement is sufficient either (i) fully to transfer
to the Trustee, for the benefit of the Certificateholders, all right, title, and
interest of the Depositor thereto as note holder and mortgagee or (ii) to grant
to the Trustee, for the benefit of the Certificateholders, the security interest
referred to in Section 10.04 hereof.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.08 shall survive delivery of the
respective Custodial Files to the Trustee or to a custodian, as the case may be,
and shall inure to the benefit of the Trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 SERVICER TO SERVICE MORTGAGE LOANS.
(a) For and on behalf of the Certificateholders, the Servicer
shall service and administer the Mortgage Loans in accordance with the terms of
this Agreement and the respective Mortgage Loans and, to the extent consistent
with such terms, in the same manner in which it services and administers similar
mortgage loans for its own portfolio, giving due consideration to customary and
usual standards of practice of mortgage lenders and loan servicers administering
similar mortgage loans but without regard to:
(i) any relationship that the Servicer, any Subservicer or any
Affiliate of the Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-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 or any Subservicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
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To the extent consistent with the foregoing, the Servicer shall 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, acting alone or through Subservicers as provided
in Section 3.02, 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
or in the name of a Subservicer is hereby authorized and empowered by the
Trustee when the Servicer believes it appropriate in its best judgment in
accordance with the servicing standards set forth above, to execute and deliver
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. 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 3.15, the Trustee shall execute, at the
written request of the Servicer, and furnish to the Servicer and any Subservicer
such documents as are necessary or appropriate to enable the Servicer or any
Subservicer to carry out their servicing and administrative duties hereunder,
and the Trustee hereby grants to the Servicer, and this Agreement shall
constitute, a power of attorney to carry out such duties including a power of
attorney to take title to Mortgaged Properties after foreclosure on behalf of
the Trustee. The Trustee shall execute a separate power of attorney in favor of
the Servicer for the purposes described herein to the extent necessary or
desirable to enable the Servicer to perform its duties hereunder. The Trustee
shall not be liable for the actions of the Servicer or any Subservicers under
such powers of attorney.
(b) Subject to Section 3.09(b) hereof, in accordance with the
standards of the preceding paragraph, the Servicer shall advance or cause to be
advanced funds as necessary for the purpose of effecting the timely payment of
taxes and assessments on the Mortgaged Properties, which advances shall be
Servicing Advances reimbursable in the first instance from related collections
from the Mortgagors pursuant to Section 3.09(b), and further as provided in
Section 3.11. Any cost incurred by the Servicer or by Subservicers in effecting
the timely payment of taxes and assessments on a Mortgaged Property shall not be
added to the unpaid principal balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit.
(c) 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 4.01) and the Servicer shall not (i) 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 or (ii) permit 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 REMIC to
fail to qualify as a REMIC under the
43
Code or the imposition of any tax on "prohibited transactions" or "contributions
after the startup date" under the REMIC Provisions, or (iii) except as provided
in Section 3.07(a), waive any Prepayment Charges.
(d) 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 SUBSERVICING AGREEMENTS BETWEEN THE SERVICER AND
SUBSERVICERS.
(a) The Servicer may enter into Subservicing Agreements with
Subservicers, for the servicing and administration of the Mortgage Loans.
Each Subservicer shall be (i) authorized to transact business in the
state or states in which the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution that has deposit accounts
insured by the FDIC and (iii) a ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae approved mortgage
servicer. Each Subservicing Agreement must impose on the Subservicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Servicer will examine each Subservicing Agreement and will be familiar with
the terms thereof. The terms of any Subservicing Agreement will not be
inconsistent with any of the provisions of this Agreement. The Servicer and the
Subservicers may enter into and make amendments to the Subservicing Agreements
or enter into different forms of Subservicing Agreements; PROVIDED, HOWEVER,
that any such amendments or different forms shall be consistent with and not
violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Trustee, without the consent of
the Trustee. Any variation without the consent of the Trustee from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Subservicing Accounts, or credits and charges to the
Subservicing Accounts or the timing and amount of remittances by the
Subservicers to the Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. The Servicer shall deliver to the
Trustee and the Depositor copies of all Subservicing Agreements, and any
amendments or modifications thereof, promptly upon the Servicer's execution and
delivery of such instruments.
(b) As part of its servicing activities hereunder, the Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement, including, without limitation, any
obligation to make advances in respect of delinquent payments as required by a
Subservicing Agreement. Such enforcement, including, without limitation, the
legal prosecution of claims, termination of Subservicing Agreements, and the
pursuit of other appropriate remedies, shall be in such form and carried out to
such an extent and at such time as the Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Servicer shall pay the costs of such enforcement at its own expense, and shall
be reimbursed therefor only (i) from a general recovery resulting from such
enforcement, to
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the extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loans or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.
Section 3.03 SUCCESSOR SUBSERVICERS.
The Servicer shall be entitled to terminate any Subservicing
Agreement and the rights and obligations of any Subservicer pursuant to any
Subservicing Agreement in accordance with the terms and conditions of such
Subservicing Agreement. In the event of termination of any Subservicer, all
servicing obligations of such Subservicer shall be assumed simultaneously by the
Servicer without any act or deed on the part of such Subservicer or the
Servicer, and the Servicer either shall service directly the related Mortgage
Loans or shall enter into a Subservicing Agreement with a successor Subservicer
which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Servicer shall, for any reason, no longer be the Servicer (including termination
due to an Event of Default).
Section 3.04 LIABILITY OF THE SERVICER.
Notwithstanding any Subservicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Servicer and a
Subservicer or reference to actions taken through a Subservicer or otherwise,
the Servicer shall remain obligated and primarily liable to the Trustee for the
servicing and administering of the Mortgage Loans in accordance with the
provisions of Section 3.01 without diminution of such obligation or liability by
virtue of such Subservicing Agreements or arrangements or by virtue of
indemnification from the Subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and administering
the Mortgage Loans. The Servicer shall be entitled to enter into any agreement
with a Subservicer for indemnification of the Servicer by such Subservicer and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
Section 3.05 NO CONTRACTUAL RELATIONSHIP BETWEEN SUBSERVICERS AND
THE TRUSTEE.
Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
Servicer alone, and the Trustee (or any successor Servicer) shall not be deemed
a party thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Subservicer except as set forth in Section 3.06.
The Servicer shall be solely liable for all fees owed by it to any Subservicer,
irrespective of whether the Servicer's compensation pursuant to this Agreement
is sufficient to pay such fees.
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Section 3.06 ASSUMPTION OR TERMINATION OF SUBSERVICING AGREEMENTS BY
TRUSTEE.
In the event the Servicer at any time shall for any reason no longer
be the Servicer (including by reason of the occurrence of a Event of Default),
the Trustee or its designee shall thereupon assume all of the rights and
obligations of the Servicer under each Subservicing Agreement that the Servicer
may have entered into, with copies thereof provided to the Trustee prior to the
Trustee assuming such rights and obligations, unless the Trustee elects to
terminate any Subservicing Agreement in accordance with its terms as provided in
Section 3.03.
Upon such assumption, the Trustee, its designee or the successor
servicer shall be deemed, subject to Section 3.03, to have assumed all of the
Servicer's interest therein and to have replaced the Servicer as a party to each
Subservicing Agreement to the same extent as if each Subservicing Agreement had
been assigned to the assuming party, except that (i) the Servicer shall not
thereby be relieved of any liability or obligations under any Subservicing
Agreement that arose before it ceased to be the Servicer and (ii) none of the
Depositor, the Trustee, their designees or any successor Servicer shall be
deemed to have assumed any liability or obligation of the Servicer that arose
before it ceased to be the Servicer.
The Servicer at its expense shall, upon request of the Trustee,
deliver to the assuming party all documents and records relating to each
Subservicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the
Subservicing Agreements to the assuming party.
Section 3.07 COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS;
ESTABLISHMENT OF CERTAIN ACCOUNTS.
(a) 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 and
the terms and provisions of any applicable insurance policies, 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 (i) waive any late payment charge or, if
applicable, any penalty interest, or (ii) extend the due dates for the Scheduled
Payments due on a Mortgage Note for a period of not greater than 180 days;
PROVIDED that any extension pursuant to clause (ii) above shall not affect the
amortization schedule of any Mortgage Loan for purposes of any computation
hereunder, except as provided below. In the event of any such arrangement
pursuant to clause (ii) above, the Servicer shall make timely advances on such
Mortgage Loan during such extension pursuant to Section 4.01 and in accordance
with the amortization schedule of such Mortgage Loan without modification
thereof by reason of such arrangements, subject to Section 4.01(d) pursuant to
which the Servicer shall not be required to make any such advances that are
Nonrecoverable P&I Advances. Notwithstanding the foregoing, the Servicer may
waive, in whole or in part, a Prepayment Charge only under the following
circumstances: (i) such waiver relates to a default or a reasonably foreseeable
default and would, in the reasonable judgment of the Servicer, maximize recovery
of total proceeds taking into account the value of such Prepayment Charge and
the related Mortgage Loan or (ii) such Prepayment Charge is not
46
permitted to be collected by applicable law. If a Prepayment Charge is waived
other than as permitted by the prior sentence, then the Servicer is required to
pay the amount of such waived Prepayment Charge, for the benefit of the Holders
of the Class P Certificates, by depositing such amount into the Collection
Account together with and at the time that the amount prepaid on the related
Mortgage Loan is required to be deposited into the Collection Account.
(b) (i) The Trustee shall establish and maintain the Excess
Reserve Fund Account, on behalf of the Class X Certificateholders, to
secure their limited recourse obligation to pay to the Floating Rate
Certificateholders Basis Risk CarryForward Amounts.
(ii) On each Distribution Date, the Trustee shall deposit the
amount of any Basis Risk Payment for such date into the Excess Reserve
Fund Account.
(c) (i) On each Distribution Date on which there exists a Basis
Risk CarryForward Amount on any Class of Certificates, the Trustee shall
(1) withdraw from the Distribution Account and deposit in the Excess
Reserve Fund Account, as set forth in Section 4.02(a)(iii)(g), the lesser
of the Class X Distributable Amount (without regard to the reduction in
the definition thereof with respect to the Basis Risk CarryForward Amount)
(to the extent remaining after the distributions specified in Sections
4.02(a)(iii)(a)-(f)) and the Basis Risk CarryForward Amount and (2)
withdraw from the Excess Reserve Fund Account amounts necessary to pay to
such Class or Classes of Certificates the Basis Risk CarryForward Amount.
Such payments shall be allocated to those Classes on a pro rata basis
based upon the amount of Basis Risk CarryForward Amount owed to each such
Class and shall be paid in the priority set forth in Section
4.02(a)(iii)(h) hereof.
(ii) The Trustee shall account for the Excess Reserve Fund Account
as an outside reserve fund within the meaning of Treasury regulation
1.860G-2(h) and not an asset of any REMIC created pursuant to this
Agreement. The beneficial owner of the Excess Reserve Fund Account is the
Class X Certificateholder. For all federal tax purposes, amounts
transferred by the Upper Tier REMIC to the Excess Reserve Fund Account
shall be treated as distributions by the Trustee to the Class X
Certificateholder.
(iii) Any Basis Risk CarryForward Amounts paid by the Trustee to the
Floating Rate Certificateholders shall be accounted for by the Trustee as
amounts paid first to the Holders of the Class X Certificate and then to
the respective Class or Classes of Floating Rate Certificates. In
addition, the Trustee shall account for the Floating Rate
Certificateholders' rights to receive payments of Basis Risk CarryForward
Amounts as rights in a limited recourse interest rate cap contract written
by the Class X Certificateholders in favor of the Floating Rate
Certificateholders.
(iv) Notwithstanding any provision contained in this Agreement, the
Trustee shall not be required to make any payments from the Excess Reserve
Fund Account except as expressly set forth in this Section 3.07(c).
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(d) The Trustee shall establish and maintain the Distribution
Account on behalf of the Certificateholders. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Servicer to the Trustee
pursuant to 3.11;
(ii) any amount deposited by the Servicer pursuant to Section 3.10
in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not required
to be remitted, it may at any time direct the Trustee in writing to withdraw
such amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering notice to the
Trustee which describes the amounts deposited in error in the Distribution
Account. All funds deposited in the Distribution Account shall be held by the
Trustee in trust for the Certificateholders until disbursed in accordance with
this Agreement or withdrawn in accordance with Section 4.02. In no event shall
the Trustee incur liability for withdrawals from the Distribution Account at the
direction of the Servicer.
(e) The Trustee may invest the funds in the Distribution Account
(for purposes of this Section 3.07 a "TRUSTEE INVESTMENT ACCOUNT"), in one or
more Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand no later than the date on which such funds are required
to be withdrawn from such account pursuant to this Agreement. All such Permitted
Investments shall be held to maturity, unless payable on demand. Any investment
of funds in a Trustee Investment Account shall be made in the name of the
Trustee. The Trustee shall be entitled to sole possession over each such
investment, and any certificate or other instrument evidencing any such
investment shall be delivered directly to the Trustee or its agent, together
with any document of transfer necessary to transfer title to such investment to
the Trustee. In the event amounts on deposit in a Trustee Investment Account are
at any time invested in a Permitted Investment payable on demand, the Trustee
may:
(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 that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the
Trustee Investment Account.
(i) All income and gain realized from the investment of funds
deposited in the Distribution Account held by or on behalf of the Trustee,
shall be for the benefit of the Trustee and shall be subject to its
withdrawal. In regard to the Distribution Account, the Trustee shall
deposit in the Distribution Account the amount of any loss of principal
48
incurred in respect of any such Permitted Investment made with funds in
such account immediately upon realization of such loss.
(ii) 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 Trustee shall take such action as may be
appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings. The Trustee shall
not be liable for the amount of any loss incurred in respect of any
investment or lack of investment of funds held in the Distribution Account
if made in accordance with this Section 3.07.
(f) The Servicer shall give notice to the Trustee, each Rating
Agency and the Depositor of any proposed change of the location of the
Collection Account not later than 30 days and not more than 45 days prior to any
change thereof.
Section 3.08 SUBSERVICING ACCOUNTS.
In those cases where a Subservicer is servicing a Mortgage Loan
pursuant to a Subservicing Agreement, the Subservicer will be required to
establish and maintain one or more accounts (collectively, the "SUBSERVICING
ACCOUNT"). The Subservicing Account shall be an Eligible Account and shall
otherwise be acceptable to the Servicer. The Subservicer shall deposit in the
clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Subservicer's receipt thereof, all proceeds
of Mortgage Loans received by the Subservicer less its servicing compensation to
the extent permitted by the Subservicing Agreement, and shall thereafter deposit
such amounts in the Subservicing Account, in no event more than two Business
Days after the deposit of such funds into the clearing account. The Subservicer
shall thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Servicer for deposit in the Collection Account not later than
two Business Days after the deposit of such amounts in the Subservicing Account.
For purposes of this Agreement, the Servicer shall be deemed to have received
payments on the Mortgage Loans when the Subservicer receives such payments.
Section 3.09 COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS;
ESCROW ACCOUNTS.
(a) The Servicer shall ensure that each of the Mortgage Loans
shall be covered by a paid-in-full, life-of-the-loan tax service contract with a
provider mutually acceptable to the Depositor and Servicer (each, a "TAX SERVICE
CONTRACT"). Each Tax Service Contract shall be assigned to the Trustee, or its
designee, at the Servicer's expense in the event that the Servicer is terminated
as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph
(b) are not otherwise provided pursuant to the Tax Service Contracts described
in paragraph (a) hereof, the Servicer undertakes to perform such functions. The
Servicer shall establish and maintain, or
49
cause to be established and maintained, one or more accounts (the "ESCROW
ACCOUNTS"), which shall be Eligible Accounts. The Servicer shall deposit in the
clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Servicer's receipt thereof, all collections
from the Mortgagors (or related advances from Subservicers) for the payment of
taxes, assessments, hazard insurance premiums and comparable items for the
account of the Mortgagors ("ESCROW PAYMENTS") collected on account of the
Mortgage Loans and shall thereafter deposit such Escrow Payments in the Escrow
Accounts, in no event more than two Business Days after the deposit of such
funds in the clearing account, for the purpose of effecting the payment of any
such items as required under the terms of this Agreement. Withdrawals of amounts
from an Escrow Account may be made only to (i) effect payment of taxes,
assessments, hazard insurance premiums, and comparable items; (ii) reimburse the
Servicer (or a Subservicer to the extent provided in the related Subservicing
Agreement) out of related collections for any advances made pursuant to Section
3.01 (with respect to taxes and assessments) and Section 3.13 (with respect to
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 Escrow Account; (v) clear and terminate the Escrow
Account at the termination of the Servicer's obligations and responsibilities in
respect of the Mortgage Loans under this Agreement or (vi) recover amounts
deposited in error. As part of its servicing duties, the Servicer or
Subservicers shall pay to the Mortgagors interest on funds in Escrow Accounts,
to the extent required by law and, to the extent that interest earned on funds
in the Escrow Accounts is insufficient, to pay such interest from its or their
own funds, without any reimbursement therefor. To the extent that a Mortgage
does not provide for Escrow Payments, the Servicer shall determine whether any
such payments are made by the Mortgagor in a manner and at a time that avoids
the loss of the Mortgaged Property due to a tax sale or the foreclosure of a tax
lien. The Servicer assumes full responsibility for the payment of all such bills
within such time and shall effect payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make advances from its own funds to effect such
payments; PROVIDED, HOWEVER, that such advances are deemed to be Servicing
Advances.
Section 3.10 COLLECTION ACCOUNT.
(a) On behalf of the Trustee, the Servicer shall establish and
maintain, or cause to be established and maintained, one or more Eligible
Accounts (such account or accounts, the "COLLECTION ACCOUNT"), held in trust for
the benefit of the Trustee. On behalf of the Trustee, the Servicer shall deposit
or cause to be deposited in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Servicer's
receipt thereof, and shall thereafter deposit in the Collection Account, in no
event more than two Business Days after the deposit of such funds into the
clearing account, as and when received or as otherwise required hereunder, the
following payments and collections received or made by it subsequent to the
Cut-off Date (other than in respect of principal or interest on the related
Mortgage Loans due on or before the Cut-off Date), or payments (other than
Principal Prepayments) received by it on or prior to the Cut-off Date but
allocable to a Due Period subsequent thereto:
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(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 to the extent such Insurance Proceeds
are not to be applied to the restoration of the related Mortgaged Property
or released to the related Mortgagor in accordance with the express
requirements of law or in accordance with prudent and customary servicing
practices and Liquidation Proceeds;
(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 3.13(a) in respect of any blanket
policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with this Agreement; and
(vii) all Prepayment Charges collected by the Servicer.
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, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by the Servicer in the Collection Account and shall, upon
collection, belong to the Servicer as additional compensation for its servicing
activities. 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) Funds in the Collection 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 Depositor of the location of
the Collection Account maintained by it when established and prior to any change
thereof.
Section 3.11 WITHDRAWALS FROM THE COLLECTION 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 4.01:
(i) On or prior to the Remittance Date, to remit to the Trustee
(i) the Trustee Fee with respect to such Distribution Date and (ii) the
Interest Remittance Amount and the Principal Remittance Amount in respect
of the related Distribution Date together with all amounts representing
Prepayment Charges from the Mortgage Loans received during the related
Prepayment Period;
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(ii) 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 4.01;
(iii) to pay the Servicer or any Subservicer (a) any unpaid
Servicing Fees or (b) any unreimbursed Servicing Advances with respect to
each Mortgage Loan, but only to the extent of any Late Collections,
Liquidation Proceeds, Insurance Proceeds or other amounts as may be
collected by the Servicer from a Mortgagor, or otherwise received with
respect to such Mortgage Loan (or the related REO Property);
(iv) to pay to the Servicer as servicing compensation (in addition
to the Servicing Fee) on the Remittance Date any interest or investment
income earned on funds deposited in the Collection Account;
(v) to pay to the Responsible Party, with respect to each Mortgage
Loan that has previously been purchased or replaced pursuant to this
Agreement all amounts received thereon subsequent to the date of purchase
or substitution, as the case may be;
(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 Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01;
(vii) to pay, or to reimburse the Servicer for advances in respect
of, expenses incurred in connection with any Mortgage Loan pursuant to
Section 3.15;
(viii) 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;
(ix) to reimburse the Servicer 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 of this Agreement that
were included in the Repurchase Price of the Mortgage Loan, including any
expenses arising out of the enforcement of the purchase obligation;
(x) to withdraw any amounts deposited in the Collection Account in
error; and
(xi) to clear and terminate the Collection Account upon termination
of this Agreement.
(b) 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 (a)(ii), (iii), (v), (vi), (vii), (viii) and (ix)
above. The Servicer shall provide written notification to the Depositor, on or
prior to the next succeeding Remittance Date, upon making any withdrawals from
the Collection Account pursuant to subclause (a)(vii) above.
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Section 3.12 INVESTMENT OF FUNDS IN THE COLLECTION ACCOUNT.
(a) The Servicer may invest the funds in the Collection Account
(for purposes of this Section 3.12, a "SERVICER INVESTMENT ACCOUNT"), in one or
more Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand 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. All such Permitted Investments shall be held to
maturity, unless payable on demand. Any investment of funds in a Servicer
Investment Account shall be made in the name of the Servicer. The Servicer shall
be entitled to sole possession (except with respect to investment direction of
funds held in the Collection Account and any income and gain realized thereon)
over each such investment, and any certificate or other instrument evidencing
any such investment shall be delivered directly to the Servicer or its agent,
together with any document of transfer necessary to transfer title to such
investment to the Servicer. In the event amounts on deposit in a Servicer
Investment Account are at any time invested in a Permitted Investment payable on
demand, the Servicer may:
(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 that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the
Servicer 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, shall
be for the benefit of the Servicer and shall be subject to its withdrawal in the
manner set forth in Section 3.11. In regard to the Collection Account, the
Servicer shall deposit in the Collection Account the amount of any loss of
principal incurred in respect of any such Permitted Investment made with funds
in such accounts 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 Servicer shall take such action as may be appropriate
to enforce such payment or performance, including the institution and
prosecution of appropriate proceedings. The Servicer shall not be liable for the
amount of any loss incurred in respect of any investment or lack of investment
of funds held in the Collection Account if made in accordance with this Section
3.12.
Section 3.13 MAINTENANCE OF HAZARD INSURANCE AND ERRORS AND
OMISSIONS AND FIDELITY COVERAGE.
(a) The Servicer shall cause to be maintained for each Mortgage
Loan fire insurance with extended coverage on the related Mortgaged Property in
an amount which is at least equal to the least of (i) the current principal
balance of such Mortgage Loan, (ii) the amount
53
necessary to fully compensate for any damage or loss to the improvements that
are a part of such property on a replacement cost basis and (iii) the maximum
insurable value of the improvements which are a part of such Mortgaged Property,
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 insurance with
extended coverage on each REO Property in an amount which is at least equal to
the lesser of (i) the maximum insurable value of the improvements which are a
part of such property and (ii) the outstanding principal balance of the related
Mortgage Loan at the time it became an REO Property, plus accrued interest at
the Mortgage Rate and related Servicing Advances. The Servicer will comply in
the performance of this Agreement with all reasonable rules and requirements of
each insurer under any such hazard policies. Any amounts to be collected by the
Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with the procedures that the
Servicer would follow in servicing loans held for its own account, subject to
the terms and conditions of the related Mortgage and Mortgage Note) shall be
deposited in the Collection Account, subject to withdrawal pursuant to Section
3.11. Any cost incurred by the Servicer in maintaining any such insurance shall
not, for the purpose of calculating distributions to the Trustee, 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 flood insurance has been made available, the Servicer will cause to
be maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the unpaid principal balance of
the related Mortgage Loan and (ii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood insurance
program (assuming that the area in which such Mortgaged Property is located is
participating in such program).
In the event that the Servicer shall obtain and maintain a blanket
policy with an insurer having a General Policy Rating of A:X or better in Best's
(or such other rating that is comparable to such rating) 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 3.13, 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 3.13, and there
shall have been one or more losses which would have been covered by such policy,
deposit to the Collection Account from its own funds the amount not otherwise
payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Servicer agrees to prepare and present, on behalf of itself, the
Trustee 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 the Servicer's obligations under this Agreement,
which policy or policies shall be in such form
54
and amount that would meet the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac if it
were the purchaser of the Mortgage Loans, unless the Servicer has obtained a
waiver of such requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Servicer shall
also maintain a fidelity bond in the form and amount that would meet the
requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, unless the Servicer has obtained a
waiver of such requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Servicer shall
provide the Trustee with copies of any such insurance policies and fidelity
bond. 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. The Servicer shall also cause
each Subservicer to maintain a policy of insurance covering errors and omissions
and a fidelity bond which would meet such requirements.
Section 3.14 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 be required to take such action if, in its sole business
judgment, the Servicer believes it is not in the best interests of the Trust
Fund and 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 underwriting criteria of the Servicer, has a credit risk rating at
least equal to that of the original Mortgagor. In connection with any
assumption, modification 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, or a new policy meeting the requirements of this Section is obtained.
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 Scheduled Payment) may be amended or modified, except as otherwise
required pursuant to the terms thereof. The Servicer shall notify the Trustee
that any such substitution, modification or assumption agreement has been
completed by forwarding to the
55
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 3.14, 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 3.15 REALIZATION UPON DEFAULTED MORTGAGE LOANS.
The Servicer shall use its best efforts, consistent with customary
servicing practices as described in Section 3.01, to foreclose upon or otherwise
comparably convert (which may include an acquisition of REO Property) 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, and which are not
released from this Agreement pursuant to any other provision hereof. The
Servicer shall use reasonable efforts to realize upon such defaulted Mortgage
Loans in such manner as will maximize the receipt of principal and interest by
the Trustee, taking into account, among other things, the timing of foreclosure
proceedings. The foregoing is subject to the provisions that, in any case in
which 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 sole discretion (i) that such
restoration will increase the net proceeds of liquidation of the related
Mortgage Loan to the Trustee, after reimbursement to itself for such expenses,
and (ii) that such expenses will be recoverable by the Servicer through
Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property,
as contemplated in Section 3.11. The Servicer shall be responsible for all other
costs and expenses incurred by it in any such proceedings; PROVIDED, HOWEVER,
that it shall be entitled to reimbursement thereof from the related property, as
contemplated in Section 3.11.
The proceeds of any liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds or
Liquidation Proceeds or any income from an REO Property, will be applied in the
following order of priority: first, to reimburse the Servicer or any Subservicer
for any related unreimbursed Servicing Advances, pursuant to Section 3.11 or
3.17; second, to accrued and unpaid interest on the Mortgage Loan or REO Imputed
Interest, at the Mortgage Rate, to the date of the liquidation or REO
Disposition, or to the Due Date prior to the Remittance Date on which such
amounts are to be distributed if not in connection with a liquidation or REO
Disposition; third, to reimburse the Servicer for any related ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇
Advances, pursuant to Section 3.11; and fourth, as a recovery of principal of
the Mortgage Loan. If the amount of the recovery so allocated to interest is
less than a full recovery thereof, that amount will be allocated as follows:
first, to unpaid Servicing Fees; and second, as interest at the Mortgage Rate
(net of the Servicing Fee Rate). The portion of the recovery so allocated to
unpaid Servicing Fees shall be reimbursed to the Servicer or any
56
Subservicer pursuant to Section 3.11 or 3.17. The portions of the recovery so
allocated to interest at the Mortgage Rate (net of the Servicing Fee Rate) and
to principal of the Mortgage Loan shall be applied as follows: first, to
reimburse the Servicer or any Subservicer for any related unreimbursed Servicing
Advances in accordance with Section 3.11 or 3.17, and second, to the Trustee in
accordance with the provisions of Section 4.02, subject to the last paragraph of
Section 3.17 with respect to certain excess recoveries from an REO Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee otherwise requests, the Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a qualified inspector. Upon completion of the inspection, the
Servicer shall promptly provide the Trustee with a written report of the
environmental inspection.
After reviewing the environmental inspection report, the Depositor
shall determine how the Servicer shall proceed with respect to the Mortgaged
Property. In the event (a) the environmental inspection report indicates that
the Mortgaged Property is contaminated by hazardous or toxic substances or
wastes and (b) the Depositor directs the Servicer to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed
for all reasonable costs associated with such foreclosure or acceptance of a
deed in lieu of foreclosure and any related environmental clean-up costs, as
applicable, from the related Liquidation Proceeds, or if the Liquidation
Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be
entitled to be reimbursed from amounts in the Collection Account pursuant to
Section 3.11 hereof. In the event the Depositor directs the Servicer not to
proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the
Servicer shall be reimbursed from general collections for all Servicing Advances
made with respect to the related Mortgaged Property from the Collection Account
pursuant to Section 3.11 hereof.
Section 3.16 RELEASE OF MORTGAGE FILES.
(a) 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, within five (5) Business
Days of the payment in full, notify the Trustee by a certification (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
Custodial File. Upon receipt of such certification and request, the Trustee
shall promptly release the related Custodial File to the Servicer within two (2)
Business Days. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Collection
Account.
(b) 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,
release the related Custodial File to the Servicer, and the Trustee shall, at
the direction of the Servicer, execute such documents as shall be necessary to
the prosecution
57
of any such proceedings and the Servicer shall retain the Mortgage File in trust
for the benefit of the Trustee. Such Request for Release shall obligate the
Servicer to return each and every document previously requested from the
Custodial 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 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 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 of Documents shall be released by
the Trustee to the Servicer or its designee.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Servicer any court pleadings, requests for trustee's
sale or other documents reasonably 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, or shall
exercise and deliver to the Servicer a power of attorney sufficient to authorize
the Servicer to execute such documents on its behalf. 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.
Section 3.17 TITLE, CONSERVATION AND DISPOSITION OF REO PROPERTY.
(a) This Section shall apply only to REO Properties acquired for
the account of the Trustee and shall not apply to any REO Property relating to a
Mortgage Loan which was purchased or repurchased from the Trustee pursuant to
any provision hereof. In the event that title to any such REO Property is
acquired, the deed or certificate of sale shall be issued to the Servicer, or to
its nominee, on behalf of the Trustee.
(b) The Servicer shall manage, conserve, protect and operate each
REO Property for the Trustee solely for the purpose of its prompt disposition
and sale. The Servicer, either itself or through an agent selected by the
Servicer, shall manage, conserve, protect and operate the REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. The Servicer shall attempt to
sell the same (and may temporarily rent the same for a period not greater than
one year, except as otherwise provided below) on such terms and conditions as
the Servicer deems to be in the best interest of
58
the Trustee. The Servicer shall notify the Trustee from time to time as to the
status of each REO Property.
(c) The Servicer shall use its best efforts to dispose of the REO
Property as soon as possible (subject to the Trustee's right to veto any
proposed sale of REO Property) and shall sell such REO Property in any event
within one year after title has been taken to such REO Property, unless the
Servicer determines, and gives an appropriate notice to the Trustee to such
effect, that a longer period is necessary for the orderly liquidation of such
REO Property. If a period longer than one year is permitted under the foregoing
sentence and is necessary to sell any REO Property, the Servicer shall report
monthly to the Trustee as to the progress being made in selling such REO
Property. Notwithstanding its veto rights, the Trustee has no obligation with
respect to REO dispositions.
(d) [Reserved].
(e) The Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall deposit such funds in the
Collection Account.
(f) The Servicer shall deposit net of reimbursement to the
Servicer for any related outstanding Servicing Advances and unpaid Servicing
Fees provided in Section 3.11 hereof, or cause to be deposited, on a daily basis
in the Collection Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property.
(g) The Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances as well as any
unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.11.
(h) Any net proceeds which are in excess of the applicable Stated
Principal Balance plus all unpaid REO Imputed Interest thereon through the date
of the REO Disposition shall be retained by the Servicer as additional servicing
compensation.
(i) The Servicer shall use its reasonable best efforts to sell, or
cause the Subservicer to sell, any REO Property as soon as possible, but in no
event later than the conclusion of the third calendar year beginning after the
year of its acquisition by the REMIC unless (i) the Servicer applies for an
extension of such period from the Internal Revenue Service pursuant to the REMIC
Provisions and Code Section 856(e)(3), in which event such REO Property shall be
sold within the applicable extension period, or (ii) the Servicer obtains for
the Trustee an Opinion of Counsel, addressed to the Depositor, the Trustee and
the Servicer, to the effect that the holding by the REMIC of such REO Property
subsequent to such period will not result in the imposition of taxes on
"prohibited transactions" as defined in Section 860F of the Code or cause the
REMIC to fail to qualify as a REMIC under the REMIC Provisions or comparable
provisions of relevant state laws at any time. The Servicer shall manage,
conserve, protect and operate each REO Property for the Trustee 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
59
"foreclosure property" within the meaning of Section 860G(a)(8) or result in the
receipt by the REMIC 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 Section 860G(a)(1) of the Code.
Pursuant to its efforts to sell such REO Property, the Servicer shall either
itself or through an agent selected by the Servicer protect and conserve such
REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Trustee on behalf of the
Certificateholders, rent the same, or any part thereof, as the Servicer deems to
be in the best interest of the Trustee on behalf of the Certificateholders for
the period prior to the sale of such REO Property; PROVIDED, HOWEVER, that any
rent received or accrued with respect to such REO Property qualifies as "rents
from real property" as defined in Section 856(d) of the Code.
Section 3.18 NOTIFICATION OF ADJUSTMENTS.
With respect to each Adjustable Rate Mortgage Loan, the Servicer
shall adjust the Mortgage Rate on the related interest rate adjustment date and
shall adjust the Scheduled Payment on the related mortgage payment adjustment
date, if applicable, in compliance with the requirements of applicable law and
the related Mortgage and Mortgage Note. The Servicer shall execute and deliver
any and all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Rate and Scheduled
Payment adjustments. The Servicer shall promptly, upon written request therefor,
deliver to the Trustee such notifications and any additional applicable data
regarding such adjustments and the methods used to calculate and implement such
adjustments. Upon the discovery by the Servicer that the Servicer has failed to
adjust a Mortgage Rate or Scheduled Payment in accordance with the terms of the
related Mortgage Note, the Servicer shall deposit in the Collection Account from
its own funds the amount of any interest loss caused as such interest loss
occurs.
Section 3.19 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE MORTGAGE LOANS.
In the event the Servicer reasonably believes that compliance with
this Section will make the Mortgage Loans legal for investment by federally
insured savings and loan associations, the Servicer shall provide, or cause the
Subservicer to provide, to the Depositor, the Trustee, the OTS or the FDIC and
the examiners and supervisory agents thereof access to the documentation
regarding the Mortgage Loans in its possession required by applicable
regulations of the OTS. Such access shall be afforded without charge, but only
upon reasonable and prior written request and during normal business hours at
the offices of the Servicer, the Depositor, the Trustee or any Subservicer.
Nothing in this Section shall derogate from the obligation of the Servicer, the
Depositor, the Trustee or any Subservicer to observe any applicable law
prohibiting disclosure of information regarding the Mortgagors and the failure
of the Servicer, the Depositor, the Trustee or any Subservicer to provide access
as provided in this Section as a result of such obligation shall not constitute
a breach of this Section.
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Section 3.20 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF THE
SERVICER TO BE HELD FOR THE TRUSTEE.
Not later than fifteen days after each Distribution Date, the
Servicer shall forward to the Trustee a statement prepared by the Servicer
setting forth the status of the Collection Account as of the close of business
on the last day of the calendar month relating to 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. Such statement may be in the form of the then current ▇▇▇▇▇▇
Mae Monthly Accounting Report for its Guaranteed Mortgage Pass-Through Program
with appropriate additions and changes, and shall also include information as to
the aggregate of the outstanding principal balances of all of the Mortgage Loans
as of the last day of the calendar month immediately preceding such Distribution
Date. Copies of such statement shall be provided by the Trustee to any
Certificateholder and to any Person identified to the Trustee as a prospective
transferee of a Certificate, upon the request and at the expense of the
requesting party, provided such statement is delivered by the Servicer to the
Trustee.
Section 3.21 SERVICING COMPENSATION.
(a) As compensation for its activities hereunder, the Servicer
shall, with respect to each Mortgage Loan, be entitled to retain from deposits
to the Collection Account and from Liquidation Proceeds, Insurance Proceeds and
REO Proceeds related to such Mortgage Loan, the Servicing Fee with respect to
each Mortgage Loan (less any portion of such amounts retained by any
Subservicer). In addition, the Servicer shall be entitled to recover unpaid
Servicing Fees out of related late collections to the extent permitted in
Section 3.11. 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; PROVIDED, HOWEVER, that
the Servicer may pay from the Servicing Fee any amounts due to a Subservicer
pursuant to a Subservicing Agreement entered into under Section 3.02.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by
the Servicer only to the extent such fees or charges are received by the
Servicer. The Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to
withdraw from the Collection Account, as additional servicing compensation,
interest or other income earned on deposits therein.
(c) The Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by the Servicer), and shall not be entitled to reimbursement
therefor except as specifically provided in Section 3.11.
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Section 3.22 ANNUAL STATEMENT AS TO COMPLIANCE.
The Servicer will deliver or cause to be delivered to the Depositor,
the Rating Agencies and the Trustee on or before August 15th of each calendar
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 calendar year and of performance under this Agreement or a similar
agreement has been made under such officers' supervision, and (ii) to the best
of such officers' 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 officers and the nature and status thereof.
Section 3.23 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING
STATEMENT; FINANCIAL STATEMENTS.
Not later than August 15th of each calendar year commencing in 2002,
the Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Depositor, the
Servicer, the Rating Agencies and the Trustee 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. In rendering its report such firm may rely, as to matters relating
to the direct servicing of residential mortgage loans by Subservicers, upon
comparable reports of firms of independent certified public accountants rendered
on the basis of examinations conducted in accordance with the same standards
(rendered within one year of such report) with respect to those Subservicers.
Section 3.24 TRUSTEE TO ACT AS SERVICER.
In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of an Event of Default), the Trustee or
its successor shall thereupon assume all of the rights and obligations of the
Servicer hereunder arising thereafter (except that the Trustee shall not be (i)
liable for losses of the Servicer pursuant to Section 3.10 or any acts or
omissions of the predecessor Servicer hereunder), (ii) obligated to make
Advances if it is prohibited from doing so by applicable law, (iii) obligated to
effectuate repurchases or substitutions of Mortgage Loans hereunder, including,
but not limited to, repurchases or substitutions pursuant to Section 2.03, (iv)
responsible for expenses of the Servicer pursuant to Section 2.03 or (v) deemed
to have made any representations and warranties of the Servicer hereunder. Any
such assumption shall be subject to Section 7.02.
Every subservicing 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.
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If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any subservicing agreement in accordance with the terms
thereof; PROVIDED that the Trustee (or any other successor Servicer) shall not
incur any liability or have any obligations in its capacity as successor
Servicer under a subservicing agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of the Servicer thereunder; and the Servicer shall not thereby be relieved of
any liability or obligations under the subservicing agreement arising prior to
the date of such succession.
The Servicer shall, upon request of the Trustee, but at the expense
of the Servicer, deliver to the assuming party all documents and records
relating to each subservicing agreement (if any) and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.
Section 3.25 COMPENSATING INTEREST.
The Servicer shall remit to the Trustee on each Remittance Date an
amount from its own funds equal to the lesser of (a) the Prepayment Interest
Shortfall, if any, for such Remittance Date, and (b) the amount of the Servicing
Fee payable to the Servicer for such Remittance Date.
Section 3.26 CREDIT REPORTING; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ACT.
(a) With respect to each Group I Mortgage Loan, the Servicer
agrees to accurately and fully report its borrower credit files to all three
credit repositories in a timely manner.
(b) The Servicer shall comply with Title V of the
▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999 and all applicable regulations promulgated
thereunder, relating to the Mortgage Loans and the related borrowers and shall
provide all required notices thereunder prior to the July 1, 2001 effective date
and annually thereafter.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 ADVANCES.
(a) The amount of P&I Advances to be made by the Servicer for any
Remittance Date shall equal, subject to Section 4.01(c), the sum of (i) the
aggregate amount of Scheduled Payments (with each interest portion thereof net
of the related Servicing Fee), due on the Due Date immediately preceding such
Remittance Date in respect of the Mortgage Loans, which Scheduled Payments were
not received as of the close of business on the last Business Day of the
immediately preceding calendar month, plus (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Prepayment Period and as to
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which such REO Property an REO Disposition did not occur during the related
Prepayment Period, an amount equal to the excess, if any, of the Scheduled
Payments (with each interest portion thereof net of the related Servicing Fee)
that would have been due on the related Due Date in respect of the related
Mortgage Loans, over the net income from such REO Property transferred to the
Collection Account for distribution on such Remittance Date.
(b) On the Remittance Date, the Servicer shall remit in
immediately available funds to the Trustee 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 Remittance 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 Collection Account that Amounts Held For Future Distribution have
been, as permitted by this Section 4.01, used by the Servicer in discharge of
any such P&I Advance) or (iii) in the form of any combination of (i) and (ii)
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 Remittance Date to the extent required.
(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 coverage under 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 Advance. The determination by the
Servicer that it has made a Nonrecoverable P&I Advance or a Nonrecoverable
Advance or that any proposed P&I Advance or Servicing Advance, if made, would
constitute a Nonrecoverable P&I Advance or a Nonrecoverable Advance,
respectively, shall be evidenced by an Officers' Certificate of the Servicer
delivered to the Trustee.
(e) Except as otherwise provided herein, the Servicer shall be
entitled to reimbursement pursuant to Section 3.11 hereof for Servicing Advances
from recoveries from the related Mortgagor or from all Liquidation Proceeds and
other payments or recoveries (including Insurance Proceeds and Condemnation
Proceeds) with respect to the related Mortgage Loan.
Section 4.02 PRIORITIES OF DISTRIBUTION.
(a) On each Distribution Date, the Trustee will make the
disbursements and transfers from amounts then on deposit in the Distribution
Account in the following order of priority:
(i) (x) from the Interest Remittance Amount, to the Trustee the
Trustee Fee for such Distribution Date;
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(y) from the remaining Interest Remittance Amount, plus in the
case of clause (a) below, the related interest portion of any Guaranteed
Distribution,
to the holders of each Class of Certificates and FSA in the following order of
priority:
(a) to the Class A Certificates, the related Accrued Certificate
Interest Distribution Amount and any Unpaid Interest Amounts for such
Distribution Date and to FSA the Class A-2 Insurance Payment Amount and
any Unpaid Class A-2 Insurance Premium Payment Amounts for such
Distribution Date, as described in Section 4.02(a), pro rata (based on the
accrued and unpaid interest or Class A-2 Insurance Payment Amounts
distributable under this clause 4.02(a)(i)(y)(a) to such Classes of
Certificates or FSA);
(b) to the Class M-1 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution Date;
(c) to the Class M-2 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution Date;
(d) to the Class B-1 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution Date;
(ii) (A) on each Distribution Date (a) before the related Stepdown Date
or (b) with respect to which a Trigger Event is in effect, to the holders of the
related Class or Classes of LIBOR Certificates then entitled to distributions of
principal as set forth below, from the Principal Remittance Amount, plus in the
case of clause (a) below, the related principal portion of any Guaranteed
Distribution, an amount equal to the Principal Distribution Amount in the
following order of priority:
(a) to the Class A-1 and Class A-2 Certificates, allocated as
described in Section 4.02(c), until the respective Class Certificate
Balances thereof are reduced to zero; and
(b) sequentially to the Class M-1, Class M-2 and Class B-1
Certificates, in that order, until the respective Class Certificate
Balances are reduced to zero;
(B) on each Distribution Date (a) on and after the related
Stepdown Date and (b) as long as a Trigger Event is not in effect, to the
holders of the related Class or Classes of LIBOR Certificates then entitled to
distribution of principal an amount equal to, in the aggregate, the Principal
Distribution Amount in the following amounts and order of priority:
(a) the lesser of (x) the Principal Distribution Amount and (y) A
Principal Distribution Amount to the Class A Certificates, allocated as
described in Section 4.02(c), until the respective Class Certificate
Balances thereof are reduced to zero;
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(b) the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the amount distributed to the Class A Certificateholders
in clause (ii)(B)(a) above and (y) the Class M 1 Principal Distribution
Amount to the Class M 1 Certificateholders, until the Class Certificate
Balance thereof has been reduced to zero
(c) the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the amount distributed to the Class A Certificateholders
in clause (ii)(B)(a) above and to the Class M1 Certificates in clause
(ii)(B)(b) above and (y) the Class M-2 Principal Distribution Amount to
the Class M-2 Certificateholders, until the Class Certificate Balance
thereof has been reduced to zero;
(d) the lesser of (x) the excess of (i) the Principal Distribution
Amount over (ii) the amount distributed to the Class A Certificateholders
in clause (ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above and to the Class M-2 Certificates in clause (ii)(B)(c)
above and (y) the Class B-1 Principal Distribution Amount to the Class B-1
Certificateholders, until the Class Certificate Balance thereof has been
reduced to zero;
(iii) any amount remaining after the distributions in clauses (i) and (ii)
above shall be distributed in the following order of priority:
(a) to the holders of the Class M-1 Certificates, any Unpaid
Interest Amounts for such Class;
(b) to the holders of the Class M-1 Certificates, any Unpaid
Realized Loss Amount for such Class;
(c) to the holders of the Class M-2 Certificates, any Unpaid
Interest Amounts for such Class;
(d) to the holders of the Class M-2 Certificates, any Unpaid
Realized Loss Amount for such Class;
(e) to the holders of the Class B-1 Certificates, any Unpaid
Interest Amounts for such Class;
(f) to the holders of the Class B-1 Certificates, any Unpaid
Realized Loss Amount for such Class;
(g) to the Excess Reserve Fund Account, the amount of any Basis
Risk Payment for such Distribution Date;
(h) from funds on deposit in the Excess Reserve Fund Account, an
amount equal to any Basis Risk CarryForward Amount with respect to any
Floating Rate Certificate for such Distribution Date to the Floating Rate
Certificates in the same order and priority in which Accrued Certificate
Interest is allocated among those Classes of Certificates;
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(i) to the holders of the Class X Certificates, the remainder of
the Class X Distributable Amount not distributed pursuant to Sections
4.02(a)(iii)(a)-(h); and
(iv) to the holders of the Class R Certificates, any remaining
amount.
(b) On each Distribution Date, all amounts representing Prepayment
Charges from the Mortgage Loans received during the related Prepayment Period
will be distributed to the holders of the Class P Certificates.
Solely for purposes of this interest allocation calculation, the
portion of the Interest Remittance Amount attributable to Group I Mortgage Loans
will be allocated:
1. FIRST, to the Class A-1 Certificates, the Accrued Certificate
Interest Distribution Amount and any Unpaid Interest Amounts for the Class A-1
Certificates;
2. SECOND, (a) to the Class A-2 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest Amounts for the
Class A-2 and (b) to FSA, the Class A-2 Certificate Insurance Premium Payment
Amount and any Unpaid Class A-2 Insurance Premium Payment Amounts, pro rata
according to the Accrued Certificate Interest Distribution Amount and any Unpaid
Interest Amounts or the Class A-2 Certificate Insurance Premium Payment Amount
and any Unpaid Class A-2 Insurance Premium Payment Amounts, as applicable, to
the extent not otherwise previously paid from the interest component of Interest
Remittance Amount attributable to Group II Mortgage Loans.
Solely for purposes of this interest allocation calculation, the
portion of the Interest Remittance Amount attributable to Group II Mortgage
Loans will be allocated:
1. FIRST, (a) to the Class A-2 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest Amounts for the
Class A-2 Certificates and (b) to FSA, the Class A-2 Certificate Insurance
Premium Payment Amount and any Unpaid Class A-2 Insurance Premium Payment
Amounts, pro rata according to the Accrued Certificate Interest Distribution
Amount and any Unpaid Interest Amounts or the Class A-2 Certificate Insurance
Premium Payment Amount and any Unpaid Class A-2 Insurance Premium Payment
Amounts, as applicable;
2. SECOND, to the Class A-1 Certificates, the Accrued Certificate
Interest Distribution Amount and any Unpaid Interest Amounts for the Class A-1
Certificates to the extent not otherwise previously paid from the interest
component of Interest Remittance Amount attributable to Group I Mortgage Loans.
If on any Distribution Date, as a result of the foregoing allocation
rules, either class of Class A Certificates does not receive the related Accrued
Certificate Interest Distribution Amount or the related Unpaid Interest Amounts,
if any, then that unpaid amount will be recoverable by the holders of that
class, with interest thereon, on future distribution dates, as Unpaid Interest
Amounts, subject to the priorities described above.
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(c) All principal distributions to the holders of the Class A
Certificates on any distribution date will be allocated between the Class A-1
Certificates and the Class A-2 Certificates on a pro rata basis based on the
Class A Principal Allocation Percentage for each of those Classes for that
Distribution Date; provided, however, that (i) if the Class Certificate Balance
of the Class A-1 Certificates is reduced to zero, then the remaining amount of
principal distributions distributable to the Class A-1 Certificates on that
Distribution Date, and the amount of principal distributions distributable on
all subsequent Distribution Dates will be distributed to the holders of the
Class A-2 Certificates remaining outstanding until the Class Certificate Balance
thereof has been reduced to zero and (ii) if the Class Certificate Balance of
the Class A-2 Certificates are reduced to zero, then the remaining amount of
principal distributions distributable to the Class A-2 Certificates on that
Distribution Date, and the amount of principal distributions distributable on
all subsequent Distribution Dates will be distributed to the holders of the
Classes of Class A-1 Certificates remaining outstanding until the Class
Certificate Balance thereof has been reduced to zero. Any payments of principal
to the Class A-1 Certificates shall be made first from the Principal Remittance
Amount and the Interest Remittance Amount relating to the Group I Mortgage
Loans. Any payments of principal to the Class A-2 Certificates shall be made
first from the Principal Remittance Amount and the Interest Remittance Amount
relating to the Group II Mortgage Loans.
(d) On any Distribution Date, any Relief Act Shortfalls and Net
Prepayment Interest Shortfalls for such Distribution Date will be allocated as a
reduction in the following order:
(1) FIRST, to the amount of interest payable to the Class X
Certificates; and
(2) SECOND, pro rata, as a reduction of the Accrued Certificate
Interest for the Class A, Class M and Class B-1 Certificates,
based on the amount of interest to which such classes would
otherwise be entitled.
Section 4.03 MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.
(a) Not later than each Distribution Date, the Trustee shall make
available to each Certificateholder, the Servicer, the Depositor, each Rating
Agency and FSA a statement setting forth with respect to the related
distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments and
Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Unpaid Interest
Amounts included in such distribution and any remaining Unpaid Interest
Amounts after giving effect to such distribution, any Basis Risk
CarryForward Amount for such Distribution Date and the amount of all Basis
Risk CarryForward Amount covered by withdrawals from the Excess Reserve
Fund Account on such Distribution Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the amount
of the shortfall and the allocation thereof as between
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principal and interest, including any Basis Risk CarryForward Amount not
covered by amounts in the Excess Reserve Fund Account;
(iv) the Class Certificate Balance of each Class of Certificates
after giving effect to the distribution of principal on such Distribution
Date;
(v) the Pool Stated Principal Balance for the following
Distribution Date;
(vi) the amount of the Servicing Fees paid to or retained by the
Servicer or Subservicer (with respect to the Subservicers, in the
aggregate) with respect to such Distribution Date;
(vii) the Pass-Through Rate for each such Class of Certificates
with respect to such Distribution Date;
(viii) the amount of Advances included in the distribution on such
Distribution Date and the aggregate amount of Advances reported by the
servicer as outstanding as of the close of business on such Distribution
Date;
(ix) the number and aggregate Scheduled Principal Balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 1 to
30 days, 31 to 59 days, 60 to 89 days and 90 or more days, (2) as to
which the Scheduled Payment is delinquent 31 to 60 days, 61 to 90 days
and 91 or more days, (3) that have become REO Property, (4) that are in
foreclosure and (5) that are in bankruptcy, in each case as of the close
of business on the last Business Day of the immediately preceding month;
(x) For each of the preceding 12 calendar months, or all
calendar months since the related Cut-off Date, whichever is less, the
aggregate dollar amount of the Scheduled Payments (A) due on all
Outstanding Mortgage Loans on each of the Due Dates in each such month
and (B) delinquent 60 days or more on each of the Due Dates in each such
month;
(xi) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number and Stated
Principal Balance of such Mortgage Loan as of the close of business on
the Determination Date preceding such Distribution Date and the date of
acquisition thereof;
(xii) the total number and principal balance of any REO
Properties (and market value, if available) as of the close of business
on the Determination Date preceding such Distribution Date;
(xiii) whether a Trigger Event has occurred and is continuing
(including the calculation of thereof and the aggregate outstanding
balance of all 60+ Delinquent Loans)
(xiv) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
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(xv) the aggregate amount of Applied Realized Loss Amounts
incurred during the preceding calendar month and aggregate Applied
Realized Loss Amounts through such Distribution Date;
(xvi) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders
with respect to Applied Realized Losses and Unpaid Interest Amounts; and
(xvii) the Subordinated Amount and Required Subordinated Amount.
(xviii) the Interest Remittance Amount, the Principal Remittance
Amount and the Prepayment Charges remitted by Servicer with respect to
that Distribution Date; and
(xix) the Class A-2 Deficiency Amount and the Insured Payment for
such Distribution Date.
(b) The Trustee's responsibility for providing the above
statement to the Certificateholders, each Rating Agency, the Servicer, the
Depositor and FSA is limited to the availability, timeliness and accuracy of the
information derived from the Servicer. The Trustee will provide the above
statement via the Trustee's internet website and, with respect to FSA, via mail.
The Trustee's website will initially be located at ▇▇▇▇://▇▇▇.▇▇▇▇▇▇.▇▇▇/▇▇▇ and
assistance in using the website can be obtained by calling the Trustee's
Bondholder Communications desk at 1-800-934-6802. A paper copy of the statement
will also be made available upon request.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i), (a)(ii) and (a)(vii) of this
Section 4.03 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.
(d) Not later than the fifth Business Day following the end of
each month, the Servicer shall furnish to the Trustee a monthly remittance
advice statement containing such information as shall be reasonably requested by
the Trustee to provide the reports required by Section 4.03(a) as to the
accompanying remittance and the period ending on the close of business on the
last Business Day of the immediately preceding month.
The Servicer shall furnish to the Trustee an individual loan
accounting report, as of the last Business Day of each month, to document
Mortgage Loan payment activity on an individual Mortgage Loan basis. With
respect to each month, the corresponding individual loan accounting report (in
electronic format) shall be received by the Trustee no later than the related
Determination Date, which report shall contain the following:
(i) with respect to each Scheduled Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any
prepayment penalties or premiums, along
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with a detailed report of interest on principal prepayment amounts
remitted in accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the amount of such
remittance allocable to interest and assumption fees;
(iii) the amount of servicing compensation received by the
Servicer during the prior distribution period;
(iv) the individual and aggregate Stated Principal Balance of
the Mortgage Loans;
(v) the individual and aggregate Scheduled Principal Balances
of the Mortgage Loans;
(vi) the aggregate of any expenses reimbursed to the Servicer
during the prior distribution period pursuant to Section 3.05; and
(vii) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89 days, (3)
90 days or more; (b) as to which foreclosure has commenced; and (c) as to
which REO Property has been acquired.
Section 4.04 CERTAIN MATTERS RELATING TO THE DETERMINATION OF
LIBOR.
Until all of the LIBOR Certificates are paid in full, the Trustee
will at all times retain at least four Reference Banks for the purpose of
determining LIBOR with respect to each Interest Determination Date. The Servicer
initially shall designate the Reference Banks. Each "REFERENCE BANK" shall be a
leading bank engaged in transactions in Eurodollar deposits in the international
Eurocurrency market, shall not control, be controlled by, or be under common
control with, the Trustee and shall have an established place of business in
London. If any such Reference Bank should be unwilling or unable to act as such
or if the Servicer should terminate its appointment as Reference Bank, the
Servicer shall promptly appoint or cause to be appointed another Reference Bank.
The Trustee shall have no liability or responsibility to any Person for (i) the
selection of any Reference Bank for purposes of determining LIBOR or (ii) any
inability to retain at least four Reference Banks which is caused by
circumstances beyond its reasonable control.
(i) The Pass-Through Rate for each Class of LIBOR Certificates
for each Interest Accrual Period shall be determined by the Trustee on
each LIBOR Determination Date so long as the LIBOR Certificates are
outstanding on the basis of LIBOR and the respective formulae appearing
in footnotes corresponding to the LIBOR Certificates in the table
relating to the Certificates in the Preliminary Statement. The Trustee
shall not have any liability or responsibility to any Person for its
inability, following a good-faith reasonable effort, to obtain quotations
from the Reference Banks or to determine the arithmetic mean referred to
in the definition of LIBOR, all as provided for in this Section 4.04 and
the definition of LIBOR. The establishment of LIBOR and each Pass-Through
Rate for the LIBOR Certificates by the Trustee shall (in the absence of
manifest error) be final, conclusive and binding upon each Holder of a
Certificate and the Trustee.
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Section 4.05 ALLOCATION OF APPLIED REALIZED LOSS AMOUNTS.
Any Applied Realized Loss Amounts will be allocated to the most
junior Class of Subordinate Certificates then outstanding in reduction of the
Class Certificate Balance thereof.
Section 4.06 POLICY MATTERS.
(a) As soon as possible, and in no event later than 11:00 a.m.,
New York time, on the second Business Day immediately preceding each
Distribution Date, the Trustee shall determine the amount of funds available for
such Distribution Date.
(b) If for any Distribution Date, the Trustee determines that
the funds that will be available for such Distribution Date distributable to the
Holders of the Class A-2 Certificates pursuant to Section 4.02 will be
insufficient to pay the related Guaranteed Distributions on such Distribution
Date, the Trustee shall determine the amount of any such deficiency and shall
give notice to FSA and the Fiscal Agent (as defined in the Certificate Insurance
Policy), if any, by telephone or telecopy of the amount of such deficiency,
confirmed in writing by notice substantially in the form of Exhibit A to the
Certificate Insurance Policy by 12:00 noon, New York City time, on such second
Business Day. The Trustee's responsibility for delivering the notice to FSA, as
provided in the preceding sentence is limited to the availability, timeliness
and accuracy of the information provided by the Servicer. The notice shall
constitute a claim for payment pursuant to the Certificate Insurance Policy.
Upon receipt of the Guaranteed Distribution, at or prior to the latest time
payments of the Guaranteed Distributions are to be made by FSA pursuant to the
Certificate Insurance Policy, on behalf of the Holders of the Class A-2
Certificates, the Trustee shall deposit such Guaranteed Distributions in the
Distribution Account and shall distribute such Guaranteed Distributions only in
accordance with Section 4.02, if applicable.
(c) The Trustee shall receive as attorney-in-fact of each
Holder of a Class A-2 Certificate, any Guaranteed Distributions from FSA and
disburse the same to each Holder of a Class A-2 Certificate in accordance with
the provisions of Article IV. Guaranteed Distributions disbursed by the Trustee
from proceeds of the Certificate Insurance Policy shall not be considered
payment by the Trust nor shall such payments discharge the obligation of the
Trust with respect to such Class A-2 Certificate, and FSA shall become the owner
of such unpaid amounts due from the Trust in respect of such Guaranteed
Distributions as the deemed assignee of such Holder and shall be entitled to
receive the Reimbursement Amount pursuant to Section 4.02, as subrogee of the
Class A-2 Certificateholders in accordance with paragraph (i) below. The Trustee
hereby agrees on behalf of each Holder of a Class A-2 Certificate for the
benefit of FSA that it and they recognize that to the extent that FSA makes
Guaranteed Distributions, either directly or indirectly (as by paying through
the Trustee), to the Class A-2 Certificateholders, FSA will be entitled to
receive the Reimbursement Amount pursuant to Section 4.02, as subrogee of the
Class A-2 Certificateholders in accordance with paragraph (i) below.
(d) It is understood and agreed that the intention of the
parties is that FSA shall not be entitled to reimbursement on any Distribution
Date for amounts previously paid by it unless on such Distribution Date the
Holders of the Class A-2 Certificates shall also have received the full amount
of the Guaranteed Distributions for such Distribution Date.
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(e) In the event the Trustee receives a certified copy of an
order of the appropriate court that any payment of principal or interest on a
Class A-2 Certificate has been voided in whole or in part as a preference
payment under applicable bankruptcy law, the Trustee shall (i) promptly notify
FSA and the Fiscal Agent, if any, and (ii) comply with the provisions of the
Certificate Insurance Policy to obtain payment by FSA of such voided payment. In
addition, the Trustee shall mail notice to all Holders of the Class A-2
Certificates so affected that, in the event that any such Holder's scheduled
payment is so recovered, such Holder will be entitled to payment pursuant to the
terms of the Certificate Insurance Policy a copy of which shall be made
available to such Holders by the Trustee. The Trustee shall furnish to FSA and
the Fiscal Agent, if any, its records listing the payments on the affected Class
A-2 Certificates, if any, that have been made by the Trustee and subsequently
recovered from the affected Holders, and the dates on which such payments were
made by the Trustee.
(f) At the time of the execution hereof, and for the purposes
hereof, the Trustee shall establish a separate special purpose trust account in
the name of the Trustee for the benefit of Holders of the Class A-2 Certificates
(the "POLICY PAYMENTS ACCOUNT") over which the Trustee shall have exclusive
control and sole right of withdrawal. The Policy Payments Account shall be an
Eligible Account. The Trustee shall deposit any amount paid under the
Certificate Insurance Policy into the Policy Payments Account and distribute
such amount only for the purposes of making the payments to Holders of the Class
A-2 Certificates in respect of the Insured Payment for which the related claim
was made under the Certificate Insurance Policy. Such amounts shall be allocated
by the Trustee to Holders of Class A-2 Certificates affected by such shortfalls
in the same manner as principal and interest payments are to be allocated with
respect to such Certificates pursuant to Section 4.02. It shall not be necessary
for such payments to be made by checks or wire transfers separated from the
checks or wire transfers used to make regular payments hereunder with funds
withdrawn from the Distribution Account. However, any payments made on the Class
A-2 Certificates from funds in the Policy Payments Account shall be noted as
provided in subsection (h) below. Funds held in the Policy Payments Account
shall not be invested by the Trustee or the .
(g) Any funds received from FSA for deposit into the Policy
Payments Account pursuant to the Certificate Insurance Policy in respect of a
Distribution Date or otherwise as a result of any claim under the Certificate
Insurance Policy shall be applied by the Trustee directly to the payment in full
(i) of the Insured Payment due on such Distribution Date on the Class A-2
Certificates, or (ii) of other amounts payable under the Certificate Insurance
Policy. Funds received by the Trustee as a result of any claim under the
Certificate Insurance Policy shall be used solely for payment to the Holders of
the Class A-2 Certificates and may not be applied for any other purpose,
including, without limitation, satisfaction of any costs, expenses or
liabilities of the Depositor, the Trustee, the Servicer or the Trust Fund. Any
funds (other than funds deposited therein in respect of the amount of any
distribution of principal or interest to any Class A-2 Certificateholder which
distribution subsequently is avoided in whole or in part as a preference amount
under applicable law payable under the Certificate Insurance Policy) remaining
in the Policy Payments Account on the first Business Day after each Distribution
Date shall be remitted promptly to FSA pursuant to the written instruction of
FSA.
(h) The Trustee shall keep complete and accurate records in
respect of (i) all funds remitted to it by FSA and deposited into the Policy
Payments Account and (ii) the
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allocation of such funds to payments of interest on and principal in respect of
any Class A-2 Certificates. FSA shall have the right to inspect such records at
reasonable times during normal business hours upon three Business Days' prior
notice to the Trustee.
(i) The Trustee acknowledges, and each Holder of a Class A-2
Certificate by its acceptance of the Class A-2 Certificate agrees, that, without
the need for any further action on the part of FSA or the Trustee, to the extent
FSA makes payments, directly or indirectly, on account of principal of or
interest on any Class A-2 Certificates, FSA will be fully subrogated to the
rights of the Holders of such Class A-2 Certificates to receive such principal
and interest from the Trust Fund. The Holders of the Class A-2 Certificates, by
acceptance of the Class A-2 Certificates, assign their rights as Holders of the
Class A-2 Certificates to the extent of FSA's interest with respect to amounts
paid under the Certificate Insurance Policy. Anything herein to the contrary
notwithstanding, solely for purposes of determining FSA's rights, as applicable,
as subrogee for payments distributable pursuant to Section 4.02, any payment
with respect to distributions to the Class A-2 Certificates which is made with
funds received pursuant to the terms of the Certificate Insurance Policy, shall
not be considered payment of the Class A-2 Certificates from the Trust Fund and
shall not result in the distribution or the provision for the distribution in
reduction of the Class Certificate Balance of the Class A-2 Certificates except
to the extent such payment has been reimbursed to FSA pursuant to the terms
hereof.
(j) Upon a Responsible Officer of the Trustee becoming aware of
the occurrence of an Event of Default, the Trustee shall promptly notify FSA of
such Event of Default.
(k) The Trustee shall promptly notify FSA of either of the
following as to which a Responsible Officer of the Trustee has actual knowledge:
(A) the commencement of any proceeding by or against the Depositor commenced
under the United States bankruptcy code or any other applicable bankruptcy,
insolvency, receivership, rehabilitation or similar law (an "INSOLVENCY
PROCEEDING") and (B) the making of any claim in connection with any Insolvency
Proceeding seeking the avoidance as a preferential transfer (a "PREFERENCE
CLAIM") of any distribution made with respect to the Class A-2 Certificates as
to which it has actual knowledge. Each Holder of a Class A-2 Certificate, by its
purchase of Class A-2 Certificates, and the Trustee hereby agrees that FSA (so
long as no FSA Default exists) may at any time during the continuation of any
proceeding relating to a Preference Claim direct all matters relating to such
Preference Claim, including, without limitation, (i) the direction of any appeal
of any order relating to any Preference Claim and (ii) the posting of any
surety, supersedeas or performance bond pending any such appeal. In addition and
without limitation of the foregoing, FSA shall be subrogated to the rights of
the Trustee and each Holder of a Class A-2 Certificate in the conduct of any
Preference Claim, including, without limitation, all rights of any party to an
adversary proceeding action with respect to any court order issued in connection
with any such Preference Claim.
(l) The Servicer shall designate at least one FSA Contact
Person who shall be available to FSA to provide reasonable access to information
regarding the Mortgage Loans. The initial FSA Contact Persons are the Servicing
Officers.
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(m) The Trustee shall surrender the Certificate Insurance
Policy to FSA for cancellation upon the reduction of the Class Certificate
Balance of the Class A-2 Certificates to zero.
(n) The Trustee shall send to FSA the reports prepared pursuant
to Sections 3.22 and 3.23 and the statements prepared pursuant to Section 4.03,
as well as any other statements or communications sent to Holders of the Class A
Certificates, in each case at the same time such reports, statements and
communications are otherwise sent.
(o) For so long as there is no continuing default by FSA under
its obligations under the Certificate Insurance Policy (an "FSA DEFAULT"), each
Holder of a Class A-2 Certificate agrees that FSA shall be treated by the
Depositor, the Servicer and the Trustee as if FSA were the Holder of all of the
Class A-2 Certificates for the purpose (and solely for the purpose) of the
giving of any consent, the making of any direction or the exercise of any voting
or other control rights otherwise given to the Holders of the Class A-2
Certificates hereunder and the Holders of the Class A-2 Certificates shall only
exercise such rights with the prior written consent of FSA.
(p) With respect to this Section 4.06, (i) the terms "Receipt"
and "Received" shall mean actual delivery to FSA and its Fiscal Agent, if any,
prior to 12:00 noon, New York City time, on a Business Day; delivery either on a
day that is not a Business Day or after 12:00 noon, New York City time, shall be
deemed to be Receipt on the next succeeding Business Day and (ii) "Business Day"
means any day other than (A) a Saturday, Sunday or legal holiday or (B) a day on
which banking institutions in New York City, Florida, New Jersey or Minnesota,
are authorized or obligated by law or executive order to be closed. If any
notice or certificate given under the Certificate Insurance Policy by the
Trustee is not in proper form or is not properly completed, executed or
delivered, it shall be deemed not to have been Received. FSA or its Fiscal
Agent, if any, shall promptly so advise the Trustee and the Trustee may submit
an amended notice.
(q) All notices, statements, reports, certificates or opinions
required by this Agreement to be sent to the Rating Agencies or the Class A-2
Certificateholders shall also be sent at such time to FSA at FSA Security
Assurance Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
(r) FSA shall be an express third party beneficiary of this
Agreement for the purpose of enforcing the provisions hereof to the extent of
FSA's rights explicitly specified herein as if a party hereto.
(s) All references herein to the ratings assigned to the
Certificates and to the interests of any Certificateholders shall be without
regard to the Certificate Insurance Policy.
(t) The Depositor, Trustee and the Servicer shall cooperate
with any reasonable request by FSA to preserve or enforce the rights granted to
FSA hereunder.
(u) Any amendment to this Agreement shall require the prior
written consent of FSA if such amendment adversely affects in any respect the
rights or interests of FSA or of the Class A-2 Certificateholders (without
regard to the Certificate Insurance Policy).
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ARTICLE V
THE CERTIFICATES
Section 5.01 THE CERTIFICATES.
The Certificates shall be substantially in the forms attached
hereto as exhibits. The Certificates shall be issuable in registered form, in
the minimum denominations, integral multiples in excess thereof (except that one
Certificate in each Class may be issued in a different amount which must be in
excess of the applicable minimum denomination) and aggregate denominations per
Class set forth in the Preliminary Statement.
The Depositor hereby directs the Trustee to register the Class X
and the Class P Certificates as follows: "U.S. Bank National Association, as
Indenture Trustee on behalf of the Noteholders of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Capital I Inc. NIM Trust 2001-NC4N", and to deliver such Class X and Class P
Certificates to U.S. Bank National Association, as trustee of the NIMs Trust.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if (i) such Holder has
so notified the Trustee at least five Business Days prior to the related Record
Date and (ii) such Holder shall hold (A) 100% of the Class Certificate Balance
of any Class of Certificates or (B) Certificates of any Class with aggregate
principal Denominations of not less than $1,000,000 or (y) by check mailed by
first class mail to such Certificateholder at the address of such holder
appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
such signatures were affixed, authorized to sign on behalf of the Trustee shall
bind the Trustee, notwithstanding that such individuals or any of them have
ceased to be so authorized prior to the countersignature and delivery of any
such Certificates or did not hold such offices at the date of such Certificate.
No Certificate shall be entitled to any benefit under this Agreement, or be
valid for any purpose, unless countersigned by the Trustee by manual signature,
and such countersignature upon any Certificate shall be conclusive evidence, and
the only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their countersignature.
On the Closing Date, the Trustee shall countersign the Certificates to be issued
at the direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the
Trustee on a continuous basis, an adequate inventory of Certificates to
facilitate transfers.
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Section 5.02 CERTIFICATE REGISTER; REGISTRATION OF TRANSFER AND
EXCHANGE OF CERTIFICATES.
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.06, a Certificate Register for the
Trust Fund in which, subject to the provisions of subsections (b) and (c) below
and to such reasonable regulations as it may prescribe, the Trustee shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. Upon surrender for registration of transfer of
any Certificate, the Trustee shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but 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 may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless
such transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. Except
with respect to the transfer of the Class X and Class P Certificates to the NIMs
Trust on the Closing Date, in the event that a transfer of a Private Certificate
which is a Physical Certificate is to be made in reliance upon an exemption from
the Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
transfer shall certify to the Trustee in writing the facts surrounding the
transfer in substantially the form set forth in Exhibit H (the "TRANSFEROR
CERTIFICATE") and either (i) there shall be delivered to the Trustee a letter in
substantially the form of Exhibit I (the "RULE 144A LETTER") or (ii) there shall
be delivered to the Trustee at the expense of the transferor an Opinion of
Counsel that such transfer may be made without registration under the Securities
Act. In the event that a transfer of a Private Certificate which is a Book-Entry
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer will be deemed to
have made as of the transfer date each of the certifications set forth in the
Transferor Certificate in respect of such Certificate and the
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transferee will be deemed to have made as of the transfer date each of the
certifications set forth in the Rule 144A Letter in respect of such Certificate,
in each case as if such Certificate were evidenced by a Physical Certificate.
The Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee and the Servicer shall cooperate with the Depositor in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee and 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.
Except with respect to the transfer of the Class X and Class P
Certificates to the NIMs Trust on the Closing Date, no transfer of an
ERISA-Restricted Certificate shall be made unless the Trustee shall have
received either (i) a representation letter from the transferee of such
Certificate acceptable to and in form and substance satisfactory to the Trustee
(in the event such Certificate is a Private Certificate, such requirement is
satisfied only by the Trustee's receipt of a representation letter from the
transferee substantially in the form of Exhibit I), to the effect that such
transferee is neither an employee benefit plan subject to Title I of ERISA, a
plan subject to Section 4975 of the Code or a plan subject to any Federal, state
or local law materially similar to the foregoing provisions of ERISA or the Code
("SIMILAR LAW"), nor a person acting on behalf of any such plan or using the
assets of any such plan to effect such transfer, or (ii) if the ERISA-Restricted
Certificate is a Class X Certificate that has been the subject of an
ERISA-Qualifying Underwriting, a representation letter from the transferee of
such Certificate acceptable to and in form and substance satisfactory to the
Trustee to the effect that such transferee is an insurance company that is
purchasing such Certificate with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60") and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE 95-60
or (iii) in the case of any ERISA-Restricted Certificate (other than a Class R
Certificate) presented for registration in the name of an employee benefit plan
subject to Title I of ERISA, a plan subject to Section 4975 of the Code, or a
plan subject to Similar Law, or a trustee of any such plan or any other person
acting on behalf of or using the assets of any such plan, an Opinion of Counsel
satisfactory to the Trustee and the Servicer, which Opinion of Counsel shall not
be an expense of the Trustee, the Servicer or the Trust Fund, addressed to the
Trustee, to the effect that the purchase or holding of such ERISA-Restricted
Certificate will not result in the assets of the Trust Fund being deemed to be
"plan assets" and subject to the prohibited transaction provisions of ERISA and
the Code or similar provisions of Similar Law and will not subject the Trustee
or the Servicer to any obligation in addition to those expressly undertaken in
this Agreement or to any liability. For purposes of the preceding sentence, with
respect to an ERISA-Restricted Certificate that is not a Private Certificate, in
the event the representation letter referred to in clause (i) of the preceding
sentence is not furnished, such representation shall be deemed to have been made
to the Trustee by the transferee's (including an initial acquiror's) acceptance
of the ERISA-Restricted Certificates. In
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the event that such representation is violated, or any attempt to transfer to a
plan or arrangement subject to Section 406 of ERISA, a plan subject to Section
4975 of the Code or a plan subject to Similar Law, or a person acting on behalf
of any such plan or arrangement or using the assets of any such plan or
arrangement, without such Opinion of Counsel, such attempted transfer or
acquisition shall be void and of no effect.
The Class R Certificate may not be sold to any employee benefit
plan subject to Title I of ERISA, any plan subject to Section 4975 of the Code,
or any plan subject to any Similar Law or any person investing on behalf of or
with plan assets of such plan.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
(c) 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 the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Residual Certificate unless, in
addition to the certificates required to be delivered to the Trustee
under subparagraph (b) above, the Trustee shall have been furnished with
an affidavit (a "TRANSFER AFFIDAVIT") of the initial owner or the
proposed transferee in the form attached hereto as Exhibit G.
(iii) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall agree (A) to obtain a Transfer Affidavit
from any other Person to whom such Person attempts to Transfer its
Ownership Interest in a Residual Certificate, (B) to obtain a Transfer
Affidavit from any Person for whom such Person is acting as nominee,
trustee or agent in connection with any Transfer of a Residual
Certificate and (C) not to Transfer its Ownership Interest in a Residual
Certificate or to cause the Transfer of an Ownership Interest in a
Residual Certificate to any other Person if it has actual knowledge that
such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of this
Section 5.02(c) shall be absolutely null and void and shall vest no
rights in the purported Transferee. If any purported transferee shall
become a Holder of a Residual Certificate in violation of the
79
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof retroactive
to the date of registration of Transfer of such Residual Certificate. The
Trustee shall be under no liability to any Person for any registration of
Transfer of a Residual Certificate that is in fact not permitted by
Section 5.02(b) and this Section 5.02(c) or for making any payments due
on such Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as
the Transfer was registered after receipt of the related Transfer
Affidavit, Transferor Certificate and the Rule 144A Letter. The Trustee
shall be entitled but not obligated to recover from any Holder of a
Residual Certificate that was in fact not a Permitted Transferee at the
time it became a Holder or, at such subsequent time as it became other
than a Permitted Transferee, all payments made on such Residual
Certificate at and after either such time. Any such payments so recovered
by the Trustee shall be paid and delivered by the Trustee to the last
preceding Permitted Transferee of such Certificate.
(v) The Depositor shall use its best efforts to make available,
upon receipt of written request from the Trustee, all information
necessary to compute any tax imposed under Section 860E(e) of the Code as
a result of a Transfer of an Ownership Interest in a Residual Certificate
to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth
in this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee, the
Responsible Party or the Servicer, to the effect that the elimination of such
restrictions will not cause the Trust Fund hereunder to fail to qualify as a
REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Residual
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Residual Certificate which is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and
opinions referred to above in this Section 5.02 in connection with transfer
shall be at the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall
at all times remain registered in the name of the Depository or its nominee and
at all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal
80
with the Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of 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 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.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, (y) the Depositor at its option advises
the Trustee in writing that it elects to terminate the book-entry system through
the Depository or (z) after the occurrence of an Event of Default, Certificate
Owners representing at least 51% of the Certificate Balance of the Book-Entry
Certificates together advise the Trustee and the Depository through the
Depository Participants 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 Trustee shall notify all Certificate Owners, through the Depository,
of the occurrence of any such event and of the availability of definitive,
fully-registered Certificates (the "DEFINITIVE CERTIFICATES") to Certificate
Owners requesting the same. Upon surrender to the Trustee of the related Class
of Certificates by the Depository, accompanied by the instructions from the
Depository for registration, the Trustee shall issue the Definitive
Certificates. Neither the Servicer, the Depositor nor the Trustee shall be
liable for any delay in delivery of such instruction and each may conclusively
rely on, and shall be protected in relying on, such instructions. The Depositor
shall provide the Trustee with an adequate inventory of certificates to
facilitate the issuance and transfer of Definitive Certificates. 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 Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; PROVIDED, that the
Trustee shall not by virtue of its assumption of such obligations become liable
to any party for any act or failure to act of the Depository.
Section 5.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (a) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Depositor, the
Servicer and the Trustee such security or indemnity as may be required by them
to hold each of them harmless, then, in the absence of notice to the Trustee
that such Certificate has been acquired by a bona fide purchaser, the Trustee
shall execute, countersign and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost
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or stolen Certificate, a new Certificate of like Class, tenor and Percentage
Interest. In connection with the issuance of any new Certificate under this
Section 5.03, the Trustee 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) connected
therewith. Any replacement Certificate issued pursuant to this Section 5.03
shall constitute complete and indefeasible evidence of ownership, 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 Servicer, the Trustee, the Depositor and any agent of the
Servicer, the Depositor or the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Servicer, the Trustee, the Depositor nor any agent
of the Servicer, the Depositor or the Trustee shall be affected by any notice to
the contrary.
Section 5.05 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES.
If three or more Certificateholders (a) request such information
in writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 MAINTENANCE OF OFFICE OR AGENCY.
The Trustee will maintain or cause to be maintained at its expense
an office or offices or agency or agencies in New York City where Certificates
may be surrendered for registration of transfer or exchange. The Trustee
initially designates its offices for such purposes located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The Trustee will give prompt written
notice to the Certificateholders of any change in such location of any such
office or agency.
Section 5.07 RIGHTS OF FSA TO EXERCISE RIGHTS OF CLASS A-2
CERTIFICATEHOLDERS.
By accepting its Class A-2 Certificate, each Class A-2
Certificateholder agrees that unless a Class A-2 Certificate Insurer Default
exists, FSA shall be deemed to be the Class A-2 Certificateholders for all
purposes (other than with respect to the receipt of payment on the Class A-2
Certificates) and shall have the right to exercise all rights of the Class A-2
Certificateholders under this Agreement and under the Class A-2 Certificates
without any further consent of the Class A-2 Certificateholders.
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Section 5.08 CLASS A-2 CERTIFICATE INSURER DEFAULT.
Notwithstanding anything elsewhere in this Agreement or in the
Certificates to the contrary, if a Class A-2 Certificate Insurer Default exists,
or if and to the extent the FSA has delivered its written renunciation of all of
its rights under this Agreement, all provisions of this Agreement which (a)
permit FSA to exercise rights of the Class A-2 Certificateholders, (b) restrict
the ability of the Certificateholders, the Servicer or the Trustee to act
without the consent or approval of FSA, (c) provide that a particular act or
thing must be acceptable to FSA, (d) permit FSA to direct (or otherwise to
require) the actions of the Trustee, the Servicer or the Certificateholders, (e)
provide that any action or omission taken with the consent, approval or
authorization of FSA shall be authorized hereunder or shall not subject the
party taking or omitting to take such action to any liability hereunder or (f)
which have a similar effect, shall be of no further force and effect and the
Trustee shall administer the Trust Fund and perform its obligations hereunder
solely for the benefit of the Holders of the Certificates. Nothing in the
foregoing sentence, nor any action taken pursuant thereto or in compliance
therewith, shall be deemed to have released FSA from any obligation or liability
it may have to any party or to the Class A-2 Certificateholders hereunder, under
any other agreement, instrument or document (including, without limitation, the
Certificate Insurance Policy) or under applicable law.
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 RESPECTIVE LIABILITIES OF THE DEPOSITOR AND THE
SERVICER.
The Depositor and the Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by them herein.
Section 6.02 MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE
SERVICER.
The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation or federal savings bank, as
the case may be, under the laws of the United States or under the laws of one of
the states thereof and will each 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, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or the Servicer may be merged
or consolidated, or 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 sell
mortgage loans to, and to service mortgage loans on behalf of, ▇▇▇▇▇▇ ▇▇▇ or
FHLMC.
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Section 6.03 LIMITATION ON LIABILITY OF THE DEPOSITOR, THE
SERVICER AND OTHERS.
Neither the Depositor, the Servicer nor any of their directors,
officers, employees or agents of the Depositor shall be under any liability to
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 representations or warranties
made by it herein or protect the Depositor or any such Person from any liability
which would otherwise be imposed by reasons 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 and any director, officer,
employee or agent of the Depositor may rely in good faith on any document of any
kind PRIMA FACIE properly executed and submitted by any Person respecting any
matters arising hereunder. The Depositor and any director, officer, employee or
agent of the Depositor shall be indemnified by the Trust Fund and held harmless
against any loss, liability or expense incurred in connection with any audit,
controversy or judicial proceeding relating to a governmental taxing authority
or any legal action relating to this Agreement or the Certificates, other than
any loss, liability or expense related to any specific Mortgage Loan or Mortgage
Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) and 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. The Depositor shall not be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective duties hereunder and which in its opinion may
involve it in any expense or liability; PROVIDED, HOWEVER, that the Depositor
may in its discretion undertake any such action that it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the parties
hereto and interests of the Trustee and the Certificateholders hereunder. In
such event, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust Fund,
and the Depositor shall be entitled to be reimbursed therefor out of the
Collection Account.
Neither the Servicer nor any of the officers, employees or agents
of the Servicer shall be under any liability to the Trustee or the Depositor for
any action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement; PROVIDED, HOWEVER, that this provision shall not
protect the Servicer or any such person against any breach of warranties or
representations made herein, or failure to perform its obligations in strict
compliance with the terms of this Agreement, or any liability which would
otherwise be imposed by reason of any breach of the terms and conditions of this
Agreement. The Servicer and any officer, employee or agent of the Servicer may
rely in good faith on any document of any kind PRIMA FACIE properly executed and
submitted by any Person respecting any matters arising hereunder. The Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Mortgage Loans in
accordance with this Agreement and which in its opinion may involve it in any
expenses or liability; PROVIDED, HOWEVER, that the Servicer may undertake any
such action which it may deem necessary or desirable in respect to this
Agreement and the rights and duties of the parties hereto. In such event, the
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities for which the Depositor or the Trustee
will be liable as set forth in this Agreement, and
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the Servicer shall be entitled to be reimbursed therefor from the Depositor or
the Trustee, as applicable, upon written demand.
Section 6.04 LIMITATION ON RESIGNATION OF THE SERVICER.
The Servicer shall not assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Servicer, the Depositor and the Trustee or upon the determination that its
duties hereunder are no longer permissible under applicable law and such
incapacity cannot be cured by the Servicer. Any such determination permitting
the resignation of the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Depositor and the Trustee which Opinion of Counsel
shall be in form and substance acceptable to the Depositor and the Trustee. No
such resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder.
Section 6.05 ADDITIONAL INDEMNIFICATION BY THE SERVICER; THIRD
PARTY CLAIMS.
The Servicer shall indemnify the Responsible Party, the Depositor
and the Trustee and hold them harmless against any and all claims, losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments, and any other costs, fees and expenses that any of
them may sustain in any way related to any breach by the Servicer, of any of its
representations and warranties referred to in Section 2.03(a) or the failure of
the Servicer to perform its duties and service the Mortgage Loans in strict
compliance with the terms of this Agreement. The Servicer immediately shall
notify the Depositor and the Trustee if a claim is made by a third party with
respect to this Agreement or the Mortgage Loans, assume (with the prior written
consent of the Depositor and the Trustee) the defense of any such claim and pay
all expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
the Responsible Party, the Depositor or the Trustee in respect of such claim.
ARTICLE VII
DEFAULT
Section 7.01 EVENTS OF DEFAULT.
"EVENT OF DEFAULT," wherever used herein, means any one of the
following events:
(a) any failure by the Servicer to remit to the Trustee any
payment required to be made under the terms of 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 or the Trustee or to the Servicer, the
Depositor and the Trustee by Certificateholders evidencing percentage interests
of at least 25% in the Certificates; or
(b) 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 set forth in this Agreement which continues unremedied for
a period of forty-five days (except that such
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number of days shall be fifteen in the case of a failure to pay any premium for
any insurance policy required to be maintained under this Agreement) 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 or
the Trustee, or to the Servicer, the Depositor and the Trustee by
Certificateholders of Certificates evidencing percentage interests of at least
25% in the Certificates and (ii) actual knowledge of such failure by a Servicing
Officer of the Servicer; or
(c) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, 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 sixty days; or
(d) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Servicer or of or relating to all or
substantially all of its property; or
(e) 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;
(f) any failure by the Servicer of the Servicer Termination
Test; or
(g) any failure of the Servicer to make any P&I Advance on any
Remittance Date required to be made from its own funds pursuant to Section 4.01
which continues unremedied for one Business Day immediately following the
Remittance Date; or
(h) A breach of any representation and warranty of the Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders and which continues unremedied for a period
of thirty days after the date upon which written notice of such breach is given
to the Servicer by the Trustee or the Depositor, or to the Servicer, the Trustee
and the Depositor by Certificateholders entitled to at least 25% of the Voting
Rights in the Certificates.
If an Event of Default described in clauses (a) through (h) of
this Section 7.01 shall occur, then, and in each and every such case, so long as
such Event of Default shall not have been remedied, the Trustee may, or at the
direction of 51% of the Voting Rights, the Trustee shall, by notice in writing
to the Servicer (with a copy to each Rating Agency), terminate all of the rights
and obligations of the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof, other than its rights as a Certificateholder
hereunder; PROVIDED, HOWEVER, that the Trustee shall not be required to give
written notice to the Servicer of the occurrence of an Event of Default
described in clauses (b) through (h) of this Section 7.01 unless and until a
Responsible Officer of the Trustee has actual knowledge of the occurrence of
such an Event of Default. On and after the receipt by the Servicer of such
written notice, all authority
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and power of the Servicer hereunder, whether with respect to the Mortgage Loans
or otherwise, shall pass to and be vested in the Trustee. The Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, 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. Unless expressly provided in such written notice, no such termination
shall affect any obligation of the Servicer to pay amounts owed pursuant to
Article VIII. The Servicer agrees to cooperate with the Trustee in effecting the
termination of the Servicer's responsibilities and rights hereunder, including,
without limitation, the transfer to the Trustee of all cash amounts which shall
at the time be credited to the Collection Account, or thereafter be received
with respect to the Mortgage Loans.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan which was due prior to the notice
terminating such Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which such Servicer would
have been entitled pursuant to Sections 3.11, and any other amounts payable to
such Servicer hereunder the entitlement to which arose prior to the termination
of its activities hereunder.
Section 7.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Servicer receives a notice of
termination pursuant to Section 3.24 or Section 7.01, the Trustee shall, subject
to and to the extent provided in Section 3.05, be the successor to the Servicer
in its capacity as servicer under this Agreement and the transactions set forth
or provided for herein and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof and applicable law including the obligation to make P&I
Advances or Servicing Advances pursuant to Section 4.01. As compensation
therefor, the Trustee shall be entitled to all funds relating to the Mortgage
Loans that the Servicer would have been entitled to charge to the Collection
Account if the Servicer had continued to act hereunder including, if the
Servicer was receiving the Servicing Fee, the Servicing Fee and the income on
investments or gain related to the Collection Account. Notwithstanding the
foregoing, if the Trustee has become the successor to the Servicer in accordance
with Section 7.01, the Trustee may, if it shall be unwilling to so act, or
shall, if it is prohibited by applicable law from making P&I Advances and
Servicing Advances pursuant to Section 4.01 or if it is otherwise unable to so
act, appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which does
not adversely affect the then current rating of the Certificates by each Rating
Agency, as the successor to the Servicer hereunder in the assumption of all or
any part of the responsibilities, duties or liabilities of the Servicer
hereunder. Any successor to the Servicer shall be an institution which is a
▇▇▇▇▇▇ ▇▇▇ and FHLMC approved seller/servicer in good standing, which has a net
worth of at least $30,000,000, which is willing to service the Mortgage Loans
and which executes and delivers to the Depositor and the Trustee an agreement
accepting such delegation and assignment, containing an assumption by such
Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer (other than liabilities of the Servicer under
Section 6.03 incurred prior to termination of the Servicer under Section 7.01),
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with like effect as if originally named as a party to this Agreement; PROVIDED
that each Rating Agency acknowledges that its rating of the Certificates in
effect immediately prior to such assignment and delegation will not be qualified
or reduced, as a result of such assignment and delegation. Pending appointment
of a successor to the Servicer hereunder, the Trustee, unless the Trustee is
prohibited by law from so acting, shall, subject to Section 3.05, act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the Trustee 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 the
Servicing Fee Rate and amounts paid to the Servicer from investments. The
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Neither the
Trustee nor any other successor servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
caused by the failure of the Servicer to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer, maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 6.05.
Section 7.03 NOTIFICATION TO CERTIFICATEHOLDERS.
(a) Upon any termination of or appointment of a successor to
the Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Certificateholders and each
Rating Agency notice of each such Event of Default hereunder known to the
Trustee, unless such Event of Default shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 DUTIES OF THE TRUSTEE.
The Trustee, before the occurrence of an Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured, the Trustee 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.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to
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determine whether they are in the form required by this Agreement. The Trustee
shall not be responsible for the accuracy or content of any resolution,
certificate, statement, opinion, report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
Unless an Event of Default known to the Trustee has occurred and
is continuing,
(a) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the Trustee shall
not be liable except for the performance of the duties and obligations
specifically set forth in this Agreement, no implied covenants or obligations
shall be read into this Agreement against the Trustee, and the Trustee 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 and conforming to the requirements of this Agreement which it believed
in good faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it is finally proven that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of Holders of Certificates evidencing not less than 25% of the
Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement.
Section 8.02 CERTAIN MATTERS AFFECTING THE TRUSTEE.
Except as otherwise provided in Section 8.01:
(a) the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties and the Trustee shall have no
responsibility to ascertain or confirm the genuineness of any signature of any
such party or parties;
(b) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants 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;
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(c) the Trustee shall not be 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;
(d) the Trustee shall not 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 so to do by Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates;
(e) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, accountants or attorneys and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any
investment of funds pursuant to this Agreement (other than as issuer of the
investment security);
(h) the Trustee shall not be deemed to have knowledge of an
Event of Default until a Responsible Officer of the Trustee shall have received
written notice thereof; and
(i) the Trustee shall be under no obligation to exercise any of
the trusts, rights 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 this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby.
Section 8.03 TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE
LOANS.
The recitals contained herein and in the Certificates shall be
taken as the statements of the Depositor and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement or of the Certificates or of any
Mortgage Loan or related document other than with respect to the Trustee's
execution and countersignature of the Certificates. The Trustee shall not be
accountable for the use or application by the Depositor or the Servicer 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 Depositor or the
Servicer.
The Trustee shall have no responsibility for filing or recording
any financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer).
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The Trustee executes the Certificates not in its individual
capacity but solely as Trustee of the Trust Fund created by this Agreement, in
the exercise of the powers and authority conferred and vested in it by this
Agreement. Each of the undertakings and agreements made on the part of the
Trustee on behalf of the Trust Fund in the Certificates is made and intended not
as a personal undertaking or agreement by the Trustee but is made and intended
for the purpose of binding only the Trust Fund.
Section 8.04 TRUSTEE MAY OWN CERTIFICATES.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
Section 8.05 TRUSTEE'S FEES AND EXPENSES.
As compensation for its activities under this Agreement, the
Trustee may withdraw from the Distribution Account on each Distribution Date the
Trustee Fee for the Distribution Date and any interest or investment income
earned on funds deposited in the Distribution Account. The Trustee and any
director, officer, employee, or agent of the Trustee shall be indemnified by the
Servicer against any loss, liability, or expense (including reasonable
attorney's fees) resulting from any error in any tax or information return
prepared by the Servicer or incurred in connection with any claim or legal
action relating to
(a) this Agreement,
(b) the Certificates, or
(c) the performance of any of the Trustee's duties under this
Agreement,
other than any loss, liability, or expense incurred because of willful
misfeasance, bad faith, or negligence in the performance of any of the Trustee's
duties under this Agreement. This indemnity shall survive the termination of
this Agreement or the resignation or removal of the Trustee under this
Agreement. Without limiting the foregoing, except as otherwise agreed upon in
writing by the Depositor and the Trustee, and except for any expense,
disbursement, or advance arising from the Trustee's negligence, bad faith, or
willful misconduct, the Servicer shall pay or reimburse the Trustee, for all
reasonable expenses, disbursements, and advances incurred or made by the Trustee
in accordance with this Agreement with respect to
(A) the reasonable compensation, expenses, and disbursements
of its counsel not associated with the closing of the issuance of the
Certificates,
(B) the reasonable compensation, expenses, and disbursements of
any accountant, engineer, or appraiser that is not regularly employed by the
Trustee, to the extent that the Trustee must engage them to perform services
under this Agreement, and
(C) printing and engraving expenses in connection with
preparing any Definitive Certificates.
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Except as otherwise provided in this Agreement or a separate
letter agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee, Registrar, or
Paying Agent under this Agreement or for any other expenses.
Section 8.06 ELIGIBILITY REQUIREMENTS FOR THE TRUSTEE.
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a 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, subject
to supervision or examination by federal or state authority and with a credit
rating which would not cause either of the Rating Agencies to reduce their
respective then current ratings of the Certificates (or having provided such
security from time to time as is sufficient to avoid such reduction) as
evidenced in writing by each Rating Agency. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 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 condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with this
Section 8.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.07. The entity serving as Trustee may have normal
banking and trust relationships with the Depositor and its affiliates or the
Servicer and its affiliates; provided, however, that such entity cannot be an
affiliate of the Depositor or the Servicer other than the Trustee in its role as
successor to the Servicer.
Section 8.07 RESIGNATION AND REMOVAL OF THE TRUSTEE.
The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice of resignation to the Depositor,
the Servicer, each Rating Agency not less than 60 days before the date specified
in such notice, when, subject to Section 8.08, such resignation is to take
effect, and acceptance by a successor trustee in accordance with Section 8.08
meeting the qualifications set forth in Section 8.06. If no successor trustee
meeting such qualifications shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice or resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with Section 8.06 and shall fail to resign after written request
thereto by the Depositor, or if at any time the Trustee shall become incapable
of acting, or shall be adjudged as bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, or a tax is imposed with respect
to the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor or the Servicer may remove the Trustee and
appoint a successor trustee by written instrument, in triplicate, one copy of
which shall be delivered to the Trustee, one copy to the Servicer and one copy
to the successor trustee.
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The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to the Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. The
successor trustee shall notify each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 SUCCESSOR TRUSTEE.
Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor and to its predecessor trustee
and the Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, 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 herein. The Depositor, the Servicer and the predecessor trustee
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 all such rights, powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided
in this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 MERGER OR CONSOLIDATION OF THE TRUSTEE.
Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to the business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
eligible under Section 8.06 without the execution or filing of any paper or
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 of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property securing any Mortgage Note may at
the time be located, the Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to
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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 the Trust Fund, and to vest in such Person or Persons, in
such capacity and for the benefit of the Certificateholders, such title to the
Trust Fund or any part thereof, whichever is applicable, and, subject to the
other provisions of this Section 8.10, such powers, duties, obligations, rights
and trusts as the Servicer and the Trustee may consider appropriate. If the
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.06 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this Agreement
to advance funds on behalf of the Servicer, shall be conferred or imposed upon
and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the 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 the applicable Trust
Fund or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(b) No trustee hereunder shall be held personally liable
because of any act or omission of any other trustee hereunder and such
appointment shall not, and shall not be deemed to, constitute any such separate
trustee or co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(d) The Servicer, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and 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 trusts 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
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Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Servicer and the Depositor.
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.
Section 8.11 TAX MATTERS.
It is intended that the assets with respect to which any REMIC
election pertaining to the Trust Fund is to be made, as set forth in the
Preliminary Statement, shall constitute, and that the conduct of matters
relating to such assets shall be such as to qualify such assets as, a "real
estate mortgage investment conduit" as defined in and in accordance with the
REMIC Provisions. In furtherance of such intention, the Trustee covenants and
agrees that it shall act as agent (and the Trustee is hereby appointed to act as
agent) on behalf of any the REMIC and that in such capacity it shall:
(a) prepare and file in a timely manner, a U.S. Real Estate
Mortgage Investment Conduit Income Tax Return (Form 1066 or any successor form
adopted by the Internal Revenue Service) and prepare and file with the Internal
Revenue Service and applicable state or local tax authorities income tax or
information returns for each taxable year with respect to any REMIC, described
in the Preliminary Statement containing such information and at the times and in
the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish to Certificateholders the schedules,
statements or information at such times and in such manner as may be required
thereby;
(b) within thirty days of the Closing Date, furnish to the
Internal Revenue Service, on Forms 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code;
(c) make an election that each of the Lower Tier REMIC and the
Upper Tier REMIC be treated as a REMIC on the federal tax return for its first
taxable year (and, if necessary, under applicable state law);
(d) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the Prepayment Assumption (as defined in the Prospectus
Supplement);
(e) provide information necessary for the computation of tax
imposed on the transfer of a Residual Certificate to a Person that is not a
Permitted Transferee, or an agent (including a broker, nominee or other
middleman) of a Non-Permitted Transferee, or a pass-
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through entity in which a Non-Permitted Transferee is the record holder of an
interest (the reasonable cost of computing and furnishing such information may
be charged to the Person liable for such tax);
(f) to the extent that they are under its control, conduct
matters relating to such assets at all times that any Certificates are
outstanding so as to maintain the status as a REMIC under the REMIC Provisions;
(g) not knowingly or intentionally take any action or omit to
take any action that would cause the termination of the REMIC status of any
REMIC created hereunder;
(h) pay, from the sources specified in the last paragraph of
this Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on any REMIC created hereunder
before its termination when and as the same shall be due and payable (but such
obligation shall not prevent the Trustee or any other appropriate Person from
contesting any such tax in appropriate proceedings and shall not prevent the
Trustee from withholding payment of such tax, if permitted by law, pending the
outcome of such proceedings);
(i) cause federal, state or local income tax or information
returns to be signed by the Trustee or such other person as may be required to
sign such returns by the Code or state or local laws, regulations or rules;
(j) maintain records relating to each REMIC created hereunder,
including the income, expenses, assets, and liabilities thereof on a calendar
year basis and on the accrual method of accounting and the fair market value and
adjusted basis of the assets determined at such intervals as may be required by
the Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; and
(k) as and when necessary and appropriate, represent each REMIC
created hereunder in any administrative or judicial proceedings relating to an
examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of each REMIC created
hereunder, enter into settlement agreements with any governmental taxing agency,
extend any statute of limitations relating to any tax item of any REMIC created
hereunder, and otherwise act on behalf of the REMIC in relation to any tax
matter or controversy involving it.
The Trustee shall treat the rights of the Class P
Certificateholders to Prepayment Charges as the beneficial ownership of
interests in a grantor trust, and not as an obligation of any REMIC created
hereunder, for federal income tax purposes.
To enable the Trustee to perform its duties under this Agreement,
the Depositor shall provide to the Trustee within ten days after the Closing
Date all information or data that the Trustee requests in writing and determines
to be relevant for tax purposes to the valuations and offering prices of the
Certificates, including the price, yield, prepayment assumption, and projected
cash flows of the Certificates and the Mortgage Loans. Moreover, the Depositor
shall provide information to the Trustee concerning the value to each Class of
Certificates of the right to receive Basis Risk CarryForward Amounts from the
Excess Reserve Fund Account.
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Thereafter, the Depositor shall provide to the Trustee promptly upon written
request therefor any additional information or data that the Trustee may, from
time to time, reasonably request to enable the Trustee to perform its duties
under this Agreement. The Depositor hereby indemnifies the Trustee for any
losses, liabilities, damages, claims, or expenses of the Trustee arising from
any errors or miscalculations of the Trustee that result from any failure of the
Depositor to provide, or to cause to be provided, accurate information or data
to the Trustee on a timely basis.
If 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 contribution to the REMIC after the Startup Day pursuant to
Section 860G(d) of the Code, or any other tax is imposed, including any minimum
tax imposed on the REMIC pursuant to Sections 23153 and 24874 of the California
Revenue and Taxation Code, if not paid as otherwise provided for herein, the tax
shall be paid by (i) the Trustee if such tax arises out of or results from
negligence of the Trustee in the performance of any of its obligations under
this Agreement, (ii) the Servicer, in the case of any such minimum tax, and
otherwise if such tax arises out of or results from a breach by the Servicer of
any of its obligations under this Agreement, (iii) a Responsible Party if such
tax arises out of or results from that Responsible Party's obligation to
repurchase a Mortgage Loan pursuant to Section 2.03, or (iv) in all other cases,
or if the Trustee, the Servicer, or the Responsible Party fails to honor its
obligations under the preceding clauses (i), (ii), or (iii), any such tax will
be paid with amounts otherwise to be distributed to the Certificateholders, as
provided in Section 4.02(a).
Section 8.12 PERIODIC FILINGS.
Pursuant to written instructions from the Depositor, the Trustee
shall prepare, execute and file all periodic reports required under the
Securities Exchange Act of 1934 in conformity with the terms of the relief
granted to issuers similar to the Trust Fund. In connection with the preparation
and filing of such periodic reports, the Depositor and the Servicer shall timely
provide to the Trustee all material information available to them which is
required to be included in such reports and not known to them to be in the
possession of the Trustee and such other information as the Trustee reasonably
may request from either of them and otherwise reasonably shall cooperate with
the Trustee. The Trustee shall have no liability with respect to any failure to
properly prepare or file such periodic reports resulting from or relating to the
Trustee's inability or failure to obtain any information not resulting from its
own negligence or willful misconduct.
Section 8.13 TAX CLASSIFICATION OF THE EXCESS RESERVE FUND
ACCOUNT.
For federal income tax purposes, the Trustee shall treat the
Excess Reserve Fund Account as an outside reserve fund, within the meaning of
Treasury Regulation ss. 1.860-2(h), that is beneficially owned by the holder of
the Class X Certificate. The Trustee shall treat the rights that each Class of
Certificates has to receive payments of Basis Risk CarryForward Amounts from the
Excess Reserve Fund Account as rights to receive payments under an interest rate
cap contract written by the Class X Certificateholder in favor of each Class.
Accordingly, each Class of Certificates (excluding the Class X, Class P and
Class R Certificates) will comprise
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two components - an Upper Tier Regular Interest and an interest in a cap
contract. The Trustee shall allocate the issue price for a Class of Certificates
between two components for purposes of determining the issue price of the Upper
Tier Regular Interest component based on information received from the
Depositor.
ARTICLE IX
TERMINATION
Section 9.01 TERMINATION UPON LIQUIDATION OR PURCHASE OF THE
MORTGAGE LOANS.
Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Servicer and the Trustee created hereby with respect to the
Trust Fund shall terminate upon the earlier of (a) the purchase by the Servicer
of all Mortgage Loans (and REO Properties) at the price equal to the sum of (i)
100% of the Stated Principal Balance of each Mortgage Loan (other than in
respect of REO Property) plus one month's accrued interest thereon at the
applicable Adjusted Mortgage Rate and (ii) the lesser of (x) the appraised value
of any REO Property as determined by the higher of two appraisals completed by
two independent appraisers selected by the Servicer at the expense of the
Servicer and (y) the Stated Principal Balance of each Mortgage Loan related to
any REO Property, in each case plus accrued and unpaid interest thereon at the
applicable Adjusted Net Mortgage Rate and (b) the later of (i) the maturity or
other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement. In no event shall the trusts
created hereby continue beyond the expiration of 21 years from the death of the
survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the
United States to the Court of St. James's, living on the date hereof.
The right to repurchase all Mortgage Loans and REO Properties
pursuant to clause (a) above shall be conditioned upon the aggregate Stated
Principal Balance of the Mortgage Loans, at the time of any such repurchase,
aggregating ten percent or less of the Cut-off Date Pool Principal Balance.
No such purchase will be permitted without the consent of FSA,
unless no draw on the Class A-2 Insurance Policy would be made on the final
Distribution Date for the Class A-2 Certificates.
Section 9.02 FINAL DISTRIBUTION ON THE CERTIFICATES.
If on any Determination Date, the Servicer determines that there
are no Outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than the funds in the Collection Account, the Servicer shall direct the
Trustee promptly to send a Notice of Final Distribution each Certificateholder.
If the Servicer elects to terminate the Trust Fund pursuant to clause (a) of
Section 9.01, at least 20 days prior to the date the Notice of Final
Distribution is to be mailed to the affected Certificateholders the Servicer
shall notify the Depositor and the Trustee of the date the Servicer intends to
terminate the Trust Fund and of the applicable repurchase price of the Mortgage
Loans and REO Properties.
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A Notice of Final Distribution, specifying the Distribution Date
on which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Trustee by
letter to Certificateholders mailed not earlier than the 15th day and not later
than the 10th day of the month next preceding the month of such final
distribution. Any such Notice of Final Distribution shall specify (a) the
Distribution Date upon which final distribution on the Certificates will be made
upon presentation and surrender of Certificates at the office therein
designated, (b) the amount of such final distribution, (c) the location of the
office or agency at which such presentation and surrender must be made, and (d)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Servicer will give such Notice
of Final Distribution to each Rating Agency at the time such Notice of Final
Distribution is given to Certificateholders.
In the event such Notice of Final Distribution is given, the
Servicer shall cause all funds in the Collection Account to be remitted to the
Trustee for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee of a Request for Release therefor, the
Trustee shall promptly release to the Servicer the Custodial Files for the
Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Certificateholders of each Class, in each
case on the final Distribution Date and in the order set forth in Section 4.02,
in proportion to their respective Percentage Interests, with respect to
Certificateholders of the same Class, an amount equal to (i) as to each Class of
Regular Certificates (except the Class X Certificate), the Certificate Balance
thereof plus for each such Class and the Class X Certificate accrued interest
thereon in the case of an interest-bearing Certificate and (ii) as to the
Residual Certificates, the amount, if any, which remains on deposit in the
Distribution Account (other than the amounts retained to meet claims) after
application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class R Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto.
Section 9.03 ADDITIONAL TERMINATION REQUIREMENTS.
In the event the Servicer exercises its purchase option with
respect to the Mortgage Loans as provided in Section 9.01, the Trust Fund shall
be terminated in accordance with the following additional requirements, unless
the Trustee has been supplied with an Opinion
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of Counsel, at the expense of the Servicer, to the effect that the failure to
comply with the requirements of this Section 9.03 will not (i) result in the
imposition of taxes on "prohibited transactions" on either REMIC as defined in
Section 860F of the Code, or (ii) cause either the Lower Tier REMIC or the Upper
Tier REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(a) The Trustee shall sell all of the assets of the Trust Fund
to the Servicer, and, within 90 days of such sale, shall distribute to the
Certificateholders the proceeds of such sale in complete liquidation of each of
the Lower Tier REMIC and the Upper Tier REMIC.
(b) The Trustee shall attach a statement to the final federal
income tax return for each of the Lower Tier REMIC and the Upper Tier REMIC
stating that pursuant to Treasury Regulation ss. 1.860F-1, the first day of the
90-day liquidation period for each such REMIC was the date on which the Trustee
sold the assets of the Trust Fund to the Servicer.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 AMENDMENT.
This Agreement may be amended from time to time by the Depositor,
the Responsible Party, the Servicer and the Trustee without the consent of any
of the Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct
any defective provision herein or to supplement any provision herein which may
be inconsistent with any other provision herein, (iii) to add to the duties of
the Depositor or the Servicer, (iv) to add any other provisions with respect to
matters or questions arising hereunder or (v) to modify, alter, amend, add to or
rescind any of the terms or provisions contained in this Agreement; PROVIDED,
that any action pursuant to clauses (iv) or (v) above shall not, as evidenced by
an Opinion of Counsel (which Opinion of Counsel shall not be an expense of the
Trustee or the Trust Fund), adversely affect in any material respect the
interests of any Certificateholder; and PROVIDED, FURTHER, that the amendment
shall not be deemed to adversely affect in any material respect the interests of
the Certificateholders if the Person requesting the amendment obtains a letter
from each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates; it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. The Trustee, the Depositor, the Responsible Party and
the Servicer also may at any time and from time to time amend this Agreement
without the consent of the Certificateholders to modify, eliminate or add to any
of its provisions to such extent as shall be necessary or helpful to (i)
maintain the qualification of the Lower Tier REMIC and the Upper Tier REMIC
under the Code, (ii) avoid or minimize the risk of the imposition of any tax on
the Lower Tier REMIC or the Upper Tier REMIC pursuant to the Code that would be
a claim at any time prior to the final redemption of the Certificates or (iii)
comply with any other requirements of the Code; PROVIDED, that the Trustee has
been provided an Opinion of Counsel, which opinion shall be an expense of the
party requesting such opinion but in any case shall not be an expense of the
Trustee or the Trust Fund, to the effect that such action is necessary or
helpful to, as applicable, (i) maintain
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such qualification, (ii) avoid or minimize the risk of the imposition of such a
tax or (iii) comply with any such requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Responsible Party and the Trustee with the consent
of the Holders of Certificates evidencing Percentage Interests aggregating not
less than 66-2/3% of each Class of Certificates affected thereby 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 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 each Holder of Certificates of such Class, or (iii)
reduce the aforesaid percentages of Certificates the Holders of which are
required to consent to any such amendment, without the consent of the Holders of
all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any REMIC or the Certificateholders or cause
any REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
Notwithstanding the foregoing provisions of this Section 10.01,
with respect to any amendment that significantly modifies the permitted
activities of the Trustee or the Servicer, any Certificate beneficially owned by
the Depositor or any of its Affiliates or by the Responsible Party or any of its
Affiliates shall be deemed not to be outstanding (and shall not be considered
when determining the percentage of Certificateholders consenting or when
calculating the total number of Certificates entitled to consent) for purposes
of determining if the requisite consents of Certificateholders under this
Section 10.01 have been obtained.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 10.01 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 may prescribe.
Nothing in this Agreement shall require the Trustee to enter into
an amendment without receiving an Opinion of Counsel (which Opinion shall not be
an expense of the Trustee or the Trust Fund), satisfactory to the Trustee that
(i) such amendment is permitted and is not prohibited by this Agreement and that
all requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material
101
respect the interests of any Certificateholder or (B) the conclusion set forth
in the immediately preceding clause (A) is not required to be reached pursuant
to this Section 10.01.
Notwithstanding the foregoing, any amendment to this Agreement
shall require the prior written consent of FSA if such amendment adversely
affects in any respect the rights or interests of FSA or of the Class A-2
Certificateholders (without regard to the Class A-2 Insurance Policy).
Section 10.02 RECORDATION OF AGREEMENT; COUNTERPARTS.
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 its expense, but only upon
receipt of 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 10.03 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 10.04 INTENTION OF PARTIES.
It is the express intent of the parties hereto that the conveyance
(i) of the Mortgage Loans by the Depositor and (ii) of the Trust Fund by the
Depositor to the Trustee each be, and be construed as, an absolute sale thereof.
It is, further, not the intention of the parties that such conveyances be deemed
a pledge thereof. However, in the event that, notwithstanding the intent of the
parties, such assets are held to be the property of the Depositor, as the case
may be, or if for any other reason this Agreement is held or deemed to create a
security interest in either such assets, then (i) this Agreement shall be deemed
to be a security agreement within the meaning of the Uniform Commercial Code of
the State of New York and (ii) the conveyances provided for in this Agreement
shall be deemed to be an assignment and a grant by the Depositor to the Trustee,
for the benefit of the Certificateholders, of a security interest in all of the
assets transferred, whether now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Trust Fund, such security interest
102
would be deemed to be a perfected security interest of first priority under
applicable law and will be maintained as such throughout the term of the
Agreement. The Depositor shall arrange for filing any Uniform Commercial Code
continuation statements in connection with any security interest granted or
assigned to the Trustee for the benefit of the Certificateholders.
Section 10.05 NOTICES.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency 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 Event of Default that has not been
cured;
3. The resignation or termination of the Servicer or the
Trustee and the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant
to Section 2.03; and
5. The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to each
Rating Agency copies of the following:
1. Each report to Certificateholders described in Section
4.03; and
2. Any notice of a purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03 or 3.11.
All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when delivered to (a) in the case of
the Depositor or the Underwriter, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. or
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq., (b) in the case of the Servicer, Ocwen Federal
Bank FSB, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Secretary, or such other address as may be hereafter furnished
to the Depositor, the Responsible Party and the Trustee by the Servicer in
writing, (c) in the case of the Trustee to the Corporate Trust Office, U.S. Bank
National Association, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Structured Finance/MSDW 2001-NC4, or such other address as the
Trustee may hereafter furnish to the Depositor, the Responsible Party or
Servicer; (d) in the case of the Responsible Party, NC Capital Corporation,
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, President, or such other address as the Responsible Party may
hereafter furnish to the Depositor, the Trustee or the Servicer; (e) in the case
of each of the Rating Agencies, the address specified therefor in the definition
corresponding to the name of such Rating Agency and (f) in the case of FSA to
Financial Security Assurance Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Managing Director - Transaction Oversight Re: Mortgage Pass-Through
Certificates, Series 2001-NC4, Policy No.: 51221-N; Telecopy No.: (212)
339-3518, Confirmation No.: (212) 826-
103
0100. Notices to Certificateholders shall be deemed given when mailed, first
class postage prepaid, to their respective addresses appearing in the
Certificate Register.
Section 10.06 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 10.07 ASSIGNMENT; SALES; ADVANCE FACILITIES.
Notwithstanding anything to the contrary contained herein, except
as provided in Section 6.02, this Agreement may not be assigned by the Servicer
without the prior written consent of the Trustee and Depositor; PROVIDED,
HOWEVER, the Servicer is hereby authorized to enter into an Advance Facility
under which (l) the Servicer sells, assigns or pledges to an Advancing Person
the Servicer's rights under this Agreement to be reimbursed for any P&I Advances
or Servicing Advances and/or (2) an Advancing Person agrees to fund some or all
P&I Advances or Servicing Advances required to be made by the Servicer pursuant
to this Agreement. No consent of the Trustee, Certificateholders or any other
party is required before the Servicer may enter into an Advance Facility.
Notwithstanding the existence of any Advance Facility under which an Advancing
Person agrees to fund P&I Advances and/or Servicing Advances on the Servicer's
behalf, the Servicer shall remain obligated pursuant to this Agreement to make
P&I Advances and Servicing Advances pursuant to and as required by this
Agreement, and shall not be relieved of such obligations by virtue of such
Advance Facility.
Reimbursement amounts shall consist solely of amounts in respect
of P&I Advances and/or Servicing Advances made with respect to the Mortgage
Loans for which the Servicer would be permitted to reimburse itself in
accordance with this Agreement, assuming the Servicer had made the related P&I
Advance(s) and/or Servicing Advance(s).
The Servicer shall maintain and provide to any successor Servicer
a detailed accounting on a loan-by-loan basis as to amounts advanced by, pledged
or assigned to, and reimbursed to any Advancing Person. The successor Servicer
shall be entitled to rely on any such information provided by the predecessor
Servicer, and the successor Servicer shall not be liable for any errors in such
information.
An Advancing Person who purchases or receives an assignment or
pledge of the rights to be reimbursed for P&I Advances and/or Servicing
Advances, and/or whose obligations hereunder are limited to the funding of P&I
Advances and/or Servicing Advances shall not be required to meet the criteria
for qualification of a Sub-Servicer set forth in this Agreement.
The documentation establishing any Advance Facility shall require
that Reimbursement Amounts distributed with respect to each Mortgage Loan be
allocated to outstanding ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first-in, first out"
(FIFO) basis. Such documentation shall also require the Servicer to provide to
the related Advancing Person or its designee loan-by-loan
104
information with respect to each Reimbursement Amount distributed to such
Advancing Person or Advance Facility Trustee on each Distribution Date, to
enable the Advancing Person or Advance Facility Trustee to make the FIFO
allocation of each Reimbursement Amount with respect to each Mortgage Loan. The
Servicer shall remain entitled to be reimbursed by the Advancing Person or
Advance Facility Trustee for all P&I Advances and Servicing Advances funded by
the Servicer to the extent the related rights to be reimbursed therefor have not
been sold, assigned or pledged to an Advancing Person.
Any amendment to this Section 10.07 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 10.07, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Seller and the Servicer without the consent of any
Certificateholder but with the consent of FSA, notwithstanding anything to the
contrary in this Agreement. Prior to entering into an Advance Facility, the
Servicer shall notify the lender under such facility in writing that: (a) the
Advances financed by and/or pledged to the lender are obligations owed to the
Servicer on a non-recourse basis payable only from the cash flows and proceeds
received under this Agreement for reimbursement of Advances only to the extent
provided herein, and the Trustee and the Trust are not otherwise obligated or
liable to repay any Advances financed by the lender; (b) the Servicer will be
responsible for remitting to the lender the applicable amounts collected by it
as reimbursement for Advances funded by the lender, subject to the restrictions
and priorities created in this Agreement; and (c) the Trustee shall not have any
responsibility to track or monitor the administration of the financing
arrangement between the Servicer and the lender.
Section 10.08 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the trust created hereby, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or 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
provided 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 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 party 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 or by availing
itself of any provisions 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 an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have
105
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 60 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 being understood and intended, and being 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
whatever by virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb or prejudice the rights of the Holders of any other
of the 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 common benefit of all Certificateholders.
For the protection and enforcement of the provisions of this Section 10.08, each
and every Certificateholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
Section 10.09 INSPECTION AND AUDIT RIGHTS.
The Servicer agrees that, on reasonable prior notice, it will
permit any representative of the Depositor or the Trustee during such Person's
normal business hours, to examine all the books of account, records, reports and
other papers of such Person relating to the Mortgage Loans, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants selected by the Depositor or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its officers,
employees and independent public accountants (and by this provision the Servicer
hereby authorizes said accountants to discuss with such representative such
affairs, finances and accounts), all at such reasonable times and as often as
may be reasonably requested. Any out-of-pocket expense of the Servicer incident
to the exercise by the Depositor or the Trustee of any right under this Section
10.09 shall be borne by the Servicer.
Section 10.10 CERTIFICATES NONASSESSABLE AND FULLY PAID.
It is the intention of the Depositor that Certificate holders
shall not be personally liable for obligations of the Trust Fund, that the
interests in the Trust Fund represented by the Certificates shall be
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Trustee pursuant to this Agreement, are and shall
be deemed fully paid.
Section 10.11 THE CLASS A-2 CERTIFICATE INSURER DEFAULT.
Any right conferred to FSA hereunder shall be suspended during any
period in which a Class A-2 Certificate Insurer Default exists. At such time as
the Class A-2 Certificates are no longer outstanding hereunder, and no amounts
owed to FSA hereunder remain unpaid, the Class A-2 Certificate Insurer's rights
hereunder shall terminate.
Section 10.12 THIRD PARTY BENEFICIARY.
The parties agree that FSA is intended and shall have all rights
of a third-party beneficiary of this Agreement.
106
Section 10.13 WAIVER OF JURY TRIAL.
EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
(TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREES THAT
ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
Section 10.14 LIMITATION OF DAMAGES.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE
PARTIES AGREE HERETO THAT NO PARTY HERETO SHALL BE LIABLE TO ANY OTHER PARTY
HERETO FOR ANY SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES WHATSOEVER, WHETHER IN
CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR ANY OTHER LEGAL OR
EQUITABLE PRINCIPLES; PROVIDED THAT, THE FOREGOING PROVISION SHALL NOT LIMIT OR
RELIEVE ANY PARTY HERETO OF ANY OBLIGATION UNDER THIS AGREEMENT TO INDEMNIFY ANY
OTHER PARTY HERETO AGAINST ANY DAMAGES IMPOSED UPON SUCH PARTY BY A FINAL ORDER
OF ANY COURT OF COMPETENT JURISDICTION IN CONNECTION WITH ANY LEGAL ACTION
BROUGHT AGAINST SUCH PARTY HERETO BY ANY THIRD PARTY.
* * * * * * *
107
IN WITNESS WHEREOF, the Depositor, the Trustee, the Responsible
Party and the Servicer have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above
written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL I INC.
as Depositor
By:
------------------------------------------------
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
solely as Trustee and not in its individual capacity
By:
------------------------------------------------
Name:
Title:
OCWEN FEDERAL BANK FSB
as Servicer
By:
------------------------------------------------
Name:
Title:
NC CAPITAL CORPORATION
as Responsible Party
By:
------------------------------------------------
Name:
Title:
SCHEDULE I
Mortgage Loan Schedule
[Delivered at Closing to Trustee]
S-I-1
SCHEDULE II
Mortgage Pass-Through Certificates,
Series 2001-NC4
REPRESENTATIONS AND WARRANTIES OF THE SERVICER
OCWEN FEDERAL BANK FSB (the "SERVICER") hereby makes the
representations and warranties set forth in this Schedule II to the Depositor
and the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date. Capitalized terms used but not otherwise defined in this Schedule
II shall have the meanings ascribed thereto in the Pooling and Servicing
Agreement (the "POOLING AND SERVICING AGREEMENT") relating to the
above-referenced Series.
(1) The Servicer is a federal savings bank duly organized,
validly existing and in good standing under the laws of the United States of
America and is duly authorized and qualified to transact any and all business
contemplated by this Pooling and Servicing Agreement to be conducted by the
Servicer in any state in which a Mortgaged Property is located or is otherwise
not required under applicable law to effect such qualification and, in any
event, is in compliance with the doing business laws of any such State, to the
extent necessary to ensure its ability to enforce each Mortgage Loan and to
service the Mortgage Loans in accordance with the terms of this Pooling and
Servicing Agreement;
(2) The Servicer has the full power and authority to service
each Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Pooling and Servicing Agreement
and has duly authorized by all necessary action on the part of the Servicer the
execution, delivery and performance of this Pooling and Servicing Agreement; and
this Pooling and Servicing Agreement, assuming the due authorization, execution
and delivery thereof by the Depositor, the Responsible Party and the Trustee,
constitutes a legal, valid and binding obligation of the Servicer, enforceable
against the Servicer in accordance with its terms, except to the extent that (a)
the enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing
Agreement by the Servicer, the servicing of the Mortgage Loans by the Servicer
hereunder, the consummation by the Servicer of any other of the transactions
herein contemplated, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of the Servicer and will not (A) result
in a breach of any term or provision of the organizational documents of the
Servicer or (B) conflict with, result in a breach, violation or acceleration of,
or result in a default under, the terms of any other material agreement or
instrument to which the Servicer is a party or by which it may be bound, or any
statute, order or regulation applicable to the Servicer of any court, regulatory
body, administrative agency or governmental body having jurisdiction over the
Servicer; and the Servicer is not a party to, bound by, or in breach or
violation of any indenture or other agreement or instrument, or subject to or in
violation of any statute, order or regulation
S-II-1
of any court, regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to the
Servicer's knowledge, would in the future materially and adversely affect, (x)
the ability of the Servicer to perform its obligations under this Pooling and
Servicing Agreement or (y) the business, operations, financial condition,
properties or assets of the Servicer taken as a whole;
(4) The Servicer is an approved seller/servicer for ▇▇▇▇▇▇ Mae
or ▇▇▇▇▇▇▇ Mac in good standing and is a HUD approved mortgagee pursuant to
Section 203 and Section 211 of the National Housing Act;
(5) No litigation is pending against the Servicer that would
materially and adversely affect the execution, delivery or enforceability of
this Pooling and Servicing Agreement or the ability of the Servicer to service
the Mortgage Loans or to perform any of its other obligations hereunder in
accordance with the terms hereof;
(6) 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 Pooling
and Servicing Agreement or the consummation by the Servicer of the transactions
contemplated by this Pooling and Servicing Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained prior to
the Closing Date; and
(7) The Servicer covenants that its computer and other systems
used in servicing the Mortgage Loans operate in a manner such that the Servicer
can service the Mortgage Loans in accordance with the terms of this Pooling and
Servicing Agreement.
S-II-2
SCHEDULE III
Mortgage Pass-Through Certificates,
Series 2001-NC4
REPRESENTATIONS AND WARRANTIES AS TO THE MORTGAGE LOANS
NC Capital Corporation hereby makes the representations and
warranties set forth in this Schedule III as to the Mortgage Loans only to the
Depositor and the Trustee, as of December 27, 2001 or date of origination of the
Mortgage Loan (as applicable). Capitalized terms used but not otherwise defined
in this Schedule III shall have the meanings ascribed thereto in the Pooling and
Servicing Agreement.
(1) MORTGAGE LOANS AS DESCRIBED. NC Capital Corporation has
delivered to the Purchaser, as of December 1, 2001, the Data Tape
Information and that Data Tape Information is true and correct,
including, without limitation, the terms of the Prepayment Charges, if
any, as of December 27, 2001;
(2) PAYMENTS CURRENT. All payments required to be made up to
December 1, 2001 for the Mortgage Loan under the terms of the Mortgage
Note have been made and credited. No payment required under the Mortgage
Loan is 30 days or more delinquent nor has any payment under the Mortgage
Loan been 30 days or more delinquent at any time since the origination of
the Mortgage Loan. The first Monthly Payment was or shall be made with
respect to the Mortgage Loan on its Due Date or within the grace period,
all in accordance with the terms of the related Mortgage Note;
(3) NO OUTSTANDING CHARGES. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing have been
paid, or an escrow of funds has been established in an amount sufficient
to pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable. Neither NC Capital Corporation
nor any Affiliate has advanced funds, or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required under the
Mortgage Loan, except for interest accruing from the date of the Mortgage
Note or date of disbursement of the Mortgage Loan proceeds, whichever is
earlier, to the day which precedes by one month the Due Date of the first
installment of principal and interest;
(4) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in any
respect from the date of origination, except by a written instrument
which has been recorded, if necessary to protect the interests of the
Purchaser, and which has been delivered to the Trustee and the terms of
which are reflected in the Mortgage Loan Schedule, the Data Tape
Information or included in the Mortgage File. The substance of any such
waiver, alteration or modification has been approved by the title
insurer, if any, to the extent required by the policy, and its terms are
reflected on the Mortgage Loan Schedule. No
S-III-1
Mortgagor has been released, in whole or in part, except in connection
with an assumption agreement approved by the title insurer, to the extent
required by the policy, and which assumption agreement is part of the
Mortgage Loan File delivered to the Trustee and the terms of which are
reflected in the Mortgage Loan Schedule and the Data Tape Information;
(5) NO DEFENSES. The Mortgage Loan is not subject to any right
of rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury, nor will the operation of any of the
terms of the Mortgage Note or the Mortgage, or the exercise of any right
thereunder, render either the Mortgage Note or the Mortgage
unenforceable, in whole or in part, and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto,
and no Mortgagor was a debtor in any state or Federal bankruptcy or
insolvency proceeding at the time the Mortgage Loan was originated;
(6) HAZARD INSURANCE. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are
insured by a generally acceptable insurer against loss by fire, hazards
of extended coverage and such other hazards as are provided for in the
▇▇▇▇▇▇ ▇▇▇ Guides or by ▇▇▇▇▇▇▇ Mac, as well as all additional
requirements set forth in Section 3.13 of the Pooling and Servicing
Agreement. If required by the Flood Disaster Protection Act of 1973, as
amended, the Mortgage Loan is covered by a flood insurance policy meeting
the requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to ▇▇▇▇▇▇ ▇▇▇ and
▇▇▇▇▇▇▇ Mac, as well as all additional requirements set forth in Section
3.13 of the Pooling and Servicing Agreement. All individual insurance
policies contain a standard mortgagee clause naming NC Capital
Corporation and its successors and assigns as mortgagee, and all premiums
thereon have been paid. The Mortgage obligates the Mortgagor thereunder
to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder
of the Mortgage to obtain and maintain such insurance at such Mortgagor's
cost and expense, and to seek reimbursement therefor from the Mortgagor.
Where required by state law or regulation, the Mortgagor has been given
an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance
policy covering a condominium, or any hazard insurance policy covering
the common facilities of a planned unit development. The hazard insurance
policy is the valid and binding obligation of the insurer, is in full
force and effect, and will be in full force and effect and inure to the
benefit of the Trustee upon the consummation of the transactions
contemplated by this Agreement. NC Capital Corporation has not engaged
in, and has no knowledge of the Mortgagor's having engaged in, any act or
omission which would impair the coverage of any such policy, the benefits
of the endorsement provided for herein, or the validity and binding
effect of either, including, without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind
has been or will be received, retained or realized by any attorney, firm
or other person or entity, and no such unlawful items have been received,
retained or realized by NC Capital Corporation;
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(7) COMPLIANCE WITH APPLICABLE LAWS. Any and all requirements
of any federal, state or local law, including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity and disclosure laws applicable to
the Mortgage Loan have been complied with, the consummation of the
transactions contemplated hereby will not involve the violation of any
such laws or regulations, and NC Capital Corporation shall maintain in
its possession, available for the Purchaser's or the Trustee's
inspection, and shall deliver to the Purchaser upon demand, evidence of
compliance with all such requirements;
(8) NO SATISFACTION OF MORTGAGE. The Mortgage has not been
satisfied, cancelled, subordinated or rescinded, in whole or in part, and
the Mortgaged Property has not been released from the lien of the
Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission.
NC Capital Corporation has not waived the performance by the Mortgagor of
any action, if the Mortgagor's failure to perform such action would cause
the Mortgage Loan to be in default, nor has NC Capital Corporation waived
any default resulting from any action or inaction by the Mortgagor;
(9) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged
Property is located in the state identified in the Mortgage Loan Schedule
and consists of a single parcel of real property with a detached single
family residence erected thereon, or a two- to four-family dwelling, or
an individual condominium unit in a low rise condominium project, or an
individual unit in a planned unit development or a de minimis planned
unit development which is in each case four stories or less; PROVIDED,
HOWEVER, that any condominium unit, planned unit development, mobile home
(double wide only) or manufactured dwelling shall conform with the
applicable ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac requirements regarding such
dwellings and that no Mortgage Loan is secured by a single parcel of real
property with a cooperative housing corporation , a log home or, except
as described in Exhibit I hereto, a mobile home erected thereon or by a
mixed use property, a property in excess of 10 acres or other unique
property types. As of the date of origination, no portion of the
Mortgaged Property has been used for commercial purposes, and since the
date of origination, no portion of the Mortgaged Property was used for
commercial purposes; PROVIDED, that Mortgaged Properties which contain a
home office shall not be considered as being used for commercial purposes
as long as the Mortgaged Property has not been altered for commercial
purposes and is not storing any chemicals or raw materials other than
those commonly used for homeowner repair, maintenance and/or household
purposes. With respect to any Mortgage Loan secured by a Mortgaged
Property improved by manufactured housing, (i) the related manufactured
housing unit is permanently affixed to the land, and (ii) the related
manufactured housing unit and the related land are subject to a Mortgage
properly filed in the appropriate public recording office and naming NC
Capital Corporation as mortgagee;
(10) VALID FIRST LIEN. The Mortgage is a valid, subsisting,
enforceable and perfected first lien on the Mortgaged Property, including
all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air
conditioning systems located in or annexed to such buildings, and all
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additions, alterations and replacements made at any time with respect to
the foregoing. The lien of the Mortgage is subject only to:
(i) the lien of current real property taxes and
assessments not yet due and payable;
(ii) covenants, conditions and restrictions, rights of
way, easements and other matters of the public record as of the
date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of the
Mortgage Loan and (a) specifically referred to or otherwise
considered in the appraisal made for the originator of the
Mortgage Loan or (b) which do not adversely affect the Appraised
Value of the Mortgaged Property set forth in such appraisal; and
(iii) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged
Property.
(11) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid
and binding obligation of the maker thereof enforceable in accordance
with its terms. All parties to the Mortgage Note, the Mortgage and any
other such related agreement had legal capacity to enter into the
Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage
and any such agreement, and the Mortgage Note, the Mortgage and any other
such related agreement have been duly and properly executed by other such
related parties. No fraud, error, omission, misrepresentation, negligence
or similar occurrence with respect to a Mortgage Loan has taken place on
the part of any Person, including, without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan. NC Capital Corporation has reviewed all
of the documents constituting the Servicing File and has made such
inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein;
(12) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed
and there is no requirement for future advances thereunder, and any and
all requirements as to completion of any on-site or off-site improvement
and as to disbursements of any escrow funds therefor have been complied
with. All costs, fees and expenses incurred in making or closing the
Mortgage Loan and the recording of the Mortgage were paid, and the
Mortgagor is not entitled to any refund of any amounts paid or due under
the Mortgage Note or Mortgage;
(13) OWNERSHIP. Immediately prior to the transfer contemplated
by the NCCC Purchase Agreements, NC Capital Corporation was the sole
owner of record and holder of the Mortgage Loan and the indebtedness
evidenced by each Mortgage Note and upon the sale of the Mortgage Loans
to the Purchaser, NC Capital Corporation retained the Mortgage Files or
any part thereof with respect thereto not delivered to the Purchaser or
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the Purchaser's designee, in trust only for the purpose of servicing and
supervising the servicing of each Mortgage Loan. The Mortgage Loan was
not assigned or pledged, and NC Capital Corporation had good,
indefeasible and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim
or security interest, and has full right and authority subject to no
interest or participation of, or agreement with, any other party, to sell
and assign each Mortgage Loan pursuant to the NCCC Purchase Agreements
and following the sale of each Mortgage Loan, the Purchaser will own such
Mortgage Loan free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest;
(14) DOING BUSINESS. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise,
are (or, during the period in which they held and disposed of such
interest, were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is
located, and (2) either (i) organized under the laws of such state, or
(ii) qualified to do business in such state, or (iii) a federal savings
and loan association, a savings bank or a national bank having a
principal office in such state, or (3) not doing business in such state;
(15) LTV. No Mortgage Loan has an LTV greater than 100%;
(16) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for
which the related Mortgaged Property is located in California a CLTA
lender's title insurance policy, or other generally acceptable form of
policy or insurance acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac with respect
to Mortgage Loans and each such title insurance policy is issued by a
title insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and qualified to do
business in the jurisdiction where the Mortgaged Property is located,
insuring NC Capital Corporation, its successors and assigns, as to the
first priority lien of the Mortgage in the original principal amount of
the Mortgage Loan, subject only to the exceptions contained in clauses
(i), (ii) and (iii) of representation 10 of this Schedule III, and in the
case of Adjustable Rate Mortgage Loans, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions
of the Mortgage providing for adjustment to the Mortgage Rate and
Scheduled Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the
required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein.
NC Capital Corporation, its successor and assigns, are the sole insureds
of such lender's title insurance policy, and such lender's title
insurance policy is valid and remains in full force and effect and will
be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such
lender's title insurance policy, and no prior holder of the related
Mortgage, including NC Capital Corporation, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy, including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or
will be received, retained or realized by
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any attorney, firm or other person or entity, and no such unlawful items
have been received, retained or realized by NC Capital Corporation;
(17) NO DEFAULTS. Other than payments due but not yet 30 days
delinquent, there is no default, breach, violation or event which would
permit acceleration existing under the Mortgage or the Mortgage Note and
no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default,
breach, violation or event which would permit acceleration, and neither
NC Capital Corporation nor its affiliates or any of their respective
predecessors have waived any default, breach, violation or event which
would permit acceleration;
(18) NO MECHANICS' LIENS. As of the date of origination, there
are no mechanics' or similar liens or claims which have been filed for
work, labor or material (and no rights are outstanding that under law
could give rise to such liens) affecting the related Mortgaged Property
which are or may be liens prior to, or equal or coordinate with, the lien
of the related Mortgage;
(19) LOCATION OF IMPROVEMENTS; NO ENCROACHMENTS. All
improvements which were considered in determining the Appraised Value of
the Mortgaged Property lay wholly within the boundaries and building
restriction lines of the Mortgaged Property, and no improvements on
adjoining properties encroach upon the Mortgaged Property. As of the date
of origination, there are no improvements located on or being part of the
Mortgaged Property in violation of any applicable zoning law or
regulation;
(20) ORIGINATION; PAYMENT TERMS. Either (a) the Mortgage Loan
was originated by a Mortgagee approved by the Secretary of Housing and
Urban Development pursuant to Sections 203 and 211 of the National
Housing Act, a savings and loan association, a savings bank, a commercial
bank, credit union, insurance company or other similar institution which
is supervised and examined by a federal or state authority, or (b) the
following requirements have been met with respect to the Mortgage Loan:
NC Capital Corporation meets the requirements set forth in clause (a),
and (i) such Mortgage Loan was underwritten in accordance with standards
established by NC Capital Corporation, using application forms and
related credit documents approved by NC Capital Corporation, (ii) NC
Capital Corporation approved each application and the related credit
documents before a commitment by the correspondent was issued, and no
such commitment was issued until NC Capital Corporation agreed to fund
such Mortgage Loan, (iii) the closing documents for such Mortgage Loan
were prepared on forms approved by NC Capital Corporation, and (iv) such
Mortgage Loan was actually funded by NC Capital Corporation and was
purchased by NC Capital Corporation at closing or soon thereafter. The
documents, instruments and agreements submitted for loan underwriting
were not falsified and contain no untrue statement of material fact or
omit to state a material fact required to be stated therein or necessary
to make the information and statements therein not misleading. Principal
payments on the Mortgage Loan commenced no more than sixty days after
funds were disbursed in connection with the Mortgage Loan. The Mortgage
Rate is as set forth on Mortgage Loan Schedule hereto (including in the
case of Adjustable Rate Mortgage Loans, the interest rate and payment
limitations set forth on Mortgage Loan Schedule hereto). All
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Mortgage Loans have Due Dates on the first day of each month except as
specified on the Mortgage Loan Schedule. Each Mortgage Note is payable in
equal monthly installments of principal and interest, which installments
of interest, with respect to Adjustable Rate Mortgage Loans, are subject
to change due to the adjustments to the Mortgage Rate on each Interest
Rate Adjustment Date, with interest calculated and payable in arrears and
is not calculated on a simple interest basis. The monthly principal
payments on each Mortgage Loan is sufficient to amortize the Mortgage
Loan fully by the stated maturity date, over an original term of not more
than thirty years from commencement of amortization. There is no negative
amortization allowed in the terms of any Mortgage Note. None of the
Mortgage Loans allows for negative amortization or the conversion of the
interest rate thereon from an adjustable rate to a fixed rate or from a
fixed rate to an adjustable rate. No Mortgage Loan is a Balloon Loan;
(21) CUSTOMARY PROVISIONS. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including, (i)
in the case of a Mortgage designated as a deed of trust, by trustee's
sale, and (ii) otherwise by judicial foreclosure. Upon default by a
Mortgagor on a Mortgage Loan and foreclosure on, or trustee's sale of,
the Mortgaged Property pursuant to the proper procedures, the holder of
the Mortgage Loan will be able to deliver good and merchantable title to
the Mortgaged Property. There is no homestead or other exemption
available to a Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial
precedent with respect to bankruptcy and right of redemption or similar
law;
(22) INDEX. With respect to Adjustable Rate Mortgage Loans, the
Index set forth in the Mortgage Note is LIBOR;
(23) OCCUPANCY OF THE MORTGAGED PROPERTY. As of the Closing Date
the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with
respect to the use and occupancy of the same, including, but not limited
to, certificates of occupancy and fire underwriting certificates, have
been made or obtained from the appropriate authorities;
(24) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding
Mortgage and the security interest of any applicable security agreement
or chattel mortgage;
(25) DEEDS OF TRUST. In the event the Mortgage constitutes a
deed of trust, a trustee, authorized and duly qualified under applicable
law to serve as such, has been properly designated and currently so
serves and is named in the Mortgage, and no fees or expenses are or will
become payable by the Purchaser to the trustee under the deed of trust,
except in connection with a trustee's sale after default by the
Mortgagor;
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(26) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to
be delivered under this Agreement for each Mortgage Loan have been
delivered to the Purchaser;
(27) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage is
in recordable form, other than the assignee's name and recording
information not yet returned from the recording office, and is acceptable
for recording under the laws of the jurisdiction in which the Mortgaged
Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by NC Capital Corporation are not
subject to the bulk transfer or similar statutory provisions in effect in
any applicable jurisdiction;
(28) DUE-ON-SALE. With respect to each Fixed Rate Mortgage Loan,
the Mortgage contains an enforceable provision for the acceleration of
the payment of the unpaid principal balance of the Mortgage Loan in the
event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder, and to the best of NC
Capital Corporation's knowledge, such provision is enforceable;
(29) NO BUYDOWN PROVISIONS NO GRADUATED PAYMENTS OR CONTINGENT
INTERESTS. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or partially paid with funds deposited in
any separate account established by NC Capital Corporation, the
Mortgagor, or anyone on behalf of the Mortgagor, or paid by any source
other than the Mortgagor nor does it contain any other similar provisions
which may constitute a "buydown" provision. The Mortgage Loan is not a
graduated payment mortgage loan and the Mortgage Loan does not have a
shared appreciation or other contingent interest feature;
(30) ASSUMABILITY. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first
Interest Rate Adjustment Date, a related Mortgage Loan may only be
assumed if the party assuming such Mortgage Loan meets certain credit
requirements stated in the Mortgage Loan Documents;
(31) CONSOLIDATION OF FUTURE ADVANCES. Any future advances made
to the Mortgagor prior to the Cut-off Date have been consolidated with
the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and
single repayment term. The lien of the Mortgage securing the consolidated
principal amount is expressly insured as having first lien priority by a
title insurance policy, an endorsement to the policy insuring the
mortgagee's consolidated interest or by other title evidence acceptable
to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac. The consolidated principal amount does not
exceed the original principal amount of the Mortgage Loan;
(32) MORTGAGED PROPERTY UNDAMAGED; NO CONDEMNATION PROCEEDINGS.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely
S-III-8
the value of the Mortgaged Property as security for the Mortgage Loan or
the use for which the premises were intended and each Mortgaged Property
is in good repair. There have not been any condemnation proceedings with
respect to the Mortgaged Property and NC Capital Corporation has no
knowledge of any such proceedings in the future;
(33) COLLECTION PRACTICES; ESCROW PAYMENTS; INTEREST RATE
ADJUSTMENTS. The origination, servicing and collection practices used by
NC Capital Corporation and its Affiliates with respect to the Mortgage
Loan have been in all respects in compliance with Accepted Servicing
Practices, applicable laws and regulations, and have been in all respects
legal and proper. With respect to escrow deposits and Escrow Payments, if
any, all such payments are in the possession of, or under the control of,
NC Capital Corporation and there exist no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not
been made. All Escrow Payments have been collected in full compliance
with state and federal law and the provisions of the related Mortgage
Note and Mortgage. An escrow of funds is not prohibited by applicable law
and has been established in an amount sufficient to pay for every item
that remains unpaid and has been assessed but is not yet due and payable.
No escrow deposits or Escrow Payments or other charges or payments due NC
Capital Corporation have been capitalized under the Mortgage or the
Mortgage Note. All Mortgage Rate adjustments have been made in strict
compliance with state and federal law and the terms of the related
Mortgage Note. Any interest required to be paid pursuant to state,
federal and local law has been properly paid and credited;
(34) OTHER INSURANCE POLICIES. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or
will result in the exclusion from, denial of, or defense to coverage
under any insurance policy related to the Mortgage Loans, irrespective of
the cause of such failure of coverage. In connection with the placement
of any such insurance, no commission, fee, or other compensation has been
or will be received by NC Capital Corporation or by any officer,
director, or employee of NC Capital Corporation or any designee of NC
Capital Corporation or any corporation in which NC Capital Corporation or
any officer, director, or employee had a financial interest at the time
of placement of such insurance;
(35) NO VIOLATION OF ENVIRONMENTAL LAWS. There is no pending
action or proceeding directly involving the Mortgaged Property in which
compliance with any environmental law, rule or regulation is an issue;
there is no violation of any environmental law, rule or regulation with
respect to the Mortgaged Property; and nothing further remains to be done
to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(36) SOLDIERS' AND SAILORS' CIVIL RELIEF ACT. The Mortgagor has
not notified NC Capital Corporation, and NC Capital Corporation has no
knowledge of any relief requested or allowed to the Mortgagor under the
Soldiers' and Sailors' Civil Relief Act of 1940;
(37) APPRAISAL. The Mortgage File contains an appraisal of the
related Mortgaged Property signed by a qualified appraiser, acceptable to
NC Capital
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Corporation, who had no interest, direct or indirect in the Mortgaged
Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the
Mortgage Loan, and the appraisal and appraiser both satisfy the
requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated;
(38) DISCLOSURE MATERIALS. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure
materials required by, and the originator has complied with all
applicable law with respect to the making of the Mortgage Loans;
(39) CONSTRUCTION OR REHABILITATION OF MORTGAGED PROPERTY. No
Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property or facilitating the trade-in or
exchange of a Mortgaged Property;
(40) VALUE OF MORTGAGED PROPERTY. NC Capital Corporation has no
knowledge of any circumstances existing that could reasonably be expected
to adversely affect the value or the marketability of any Mortgaged
Property or Mortgage Loan or to cause the Mortgage Loans to prepay during
any period materially faster or slower than similar mortgage loans held
by NC Capital Corporation generally secured by properties in the same
geographic area as the related Mortgaged Property;
(41) NO DEFENSE TO INSURANCE COVERAGE. No action has been taken
or failed to be taken, no event has occurred and no state of facts exists
or has existed on or prior to the Closing Date (whether or not known to
NC Capital Corporation on or prior to such date) which has resulted or
will result in an exclusion from, denial of, or defense to coverage under
any primary mortgage insurance (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the
availability of the timely payment of the full amount of the loss
otherwise due thereunder to the insured) whether arising out of actions,
representations, errors, omissions, negligence, or fraud of NC Capital
Corporation, the related Mortgagor or any party involved in the
application for such coverage, including the appraisal, plans and
specifications and other exhibits or documents submitted therewith to the
insurer under such insurance policy, or for any other reason under such
coverage, but not including the failure of such insurer to pay by reason
of such insurer's breach of such insurance policy or such insurer's
financial inability to pay;
(42) ESCROW ANALYSIS. With respect to each Mortgage, NC Capital
Corporation or its Affiliate has within the last twelve months (unless
such Mortgage was originated within such twelve month period) analyzed
the required Escrow Payments for each Mortgage and adjusted the amount of
such payments so that, assuming all required payments are timely made,
any deficiency will be eliminated on or before the first anniversary of
such analysis, or any overage will be refunded to the Mortgagor, in
accordance with RESPA and any other applicable law;
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(43) PRIOR SERVICING. Each Mortgage Loan has been serviced in
all material respects in strict compliance with Accepted Servicing
Practices;
(44) CREDIT INFORMATION. As to each consumer report (as defined
in the Fair Credit Reporting Act, Public Law 91-508) or other credit
information furnished by NC Capital Corporation to the Purchaser, that
Seller has full right and authority and is not precluded by law or
contract from furnishing such information to the Purchaser;
(45) LEASEHOLDS. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple
interest in the land; (2) the terms of such lease expressly permit the
mortgaging of the leasehold estate, the assignment of the lease without
the lessor's consent and the acquisition by the holder of the Mortgage of
the rights of the lessee upon foreclosure or assignment in lieu of
foreclosure or provide the holder of the Mortgage with substantially
similar protections; (3) the terms of such lease do not (a) allow the
termination thereof upon the lessee's default without the holder of the
Mortgage being entitled to receive written notice of, and opportunity to
cure, such default, (b) allow the termination of the lease in the event
of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving
proceeds of insurance) under the hazard insurance policy or policies
relating to the Mortgaged Property or (d) permit any increase in rent
other than pre-established increases set forth in the lease; (4) the
original term of such lease is not less than 15 years; (5) the term of
such lease does not terminate earlier than five years after the maturity
date of the Mortgage Note; and (6) the Mortgaged Property is located in a
jurisdiction in which the use of leasehold estates in transferring
ownership in residential properties is a generally accepted practice;
(46) PREDATORY LENDING REGULATIONS; HIGH COST LOANS; PREPAYMENT
CHARGES. None of the Mortgage Loans are classified as (a) "high cost"
loans under the Home Ownership and Equity Protection Act of 1994 or (b)
"high cost," "threshold," or "predatory" loans under any other applicable
state, federal or local law; each Prepayment Charge is enforceable under
applicable law, and no Prepayment Charge extends beyond five years from
the origination date of the related Mortgage Loan
(47) [Reserved]
(48) [Reserved]
(49) CONFORMANCE WITH AGENCY AND UNDERWRITING STANDARDS. The
Mortgage Loan was underwritten in accordance with the
Underwriting Standards (as defined in the NCCC Purchase
Agreements). The Mortgage Note and Mortgage are on forms
acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ ▇▇▇ and neither the NC
Capital Corporation nor any Affiliate has made any
representations to a Mortgagor that are inconsistent with
the mortgage instruments used;
(50) NO CREDIT INSURANCE. No proceeds from any Mortgage Loan
were used to acquire a single premium credit life insurance policy;
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(51) ACCEPTABLE INVESTMENT. There are no circumstances or
conditions with respect to the Mortgage, the Mortgaged Property, the
Mortgagor, the Mortgage File or the Mortgagor's credit standing that can
reasonably be expected to cause private institutional investors who
invest in mortgage loans similar to the Mortgage Loan to regard the
Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to
become delinquent, or adversely affect the value or marketability of the
Mortgage Loan, or cause the Mortgage Loans to prepay during any period
materially faster or slower than the mortgage loans originated by the
Seller generally;
(52) CONDOMINIUMS/PLANNED UNIT DEVELOPMENTS. If the Mortgaged
Property is a condominium unit or a planned unit development (other than
a de minimis planned unit development) such condominium or planned unit
development project such Mortgage Loan was originated in accordance with,
and the Mortgaged Property meets the guidelines set forth in the
Originator's Underwriting Guidelines.
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SCHEDULE IV
NC Capital Corporation hereby makes the representations and
warranties set forth in this Schedule IV to the Depositor and the Trustee, as of
the Closing Date.
(a) DUE ORGANIZATION AND AUTHORITY. The Responsible Party is a corporation
duly organized, validly existing and in good standing under the laws of
the state of California 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 wherein it owns or leases any material properties
or 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 Responsible Party, and in any event the Responsible
Party is in compliance with the laws of any such state to the extent
necessary; the Responsible Party has the full corporate power, authority
and legal right to execute and deliver this Agreement and to perform its
obligations hereunder; the execution, delivery and performance of this
Agreement by the Responsible Party and the consummation of the
transactions contemplated hereby have been duly and validly authorized;
this Agreement and all agreements contemplated hereby have been duly
executed and delivered and constitute the valid, legal, binding and
enforceable obligations of the Responsible Party, regardless of whether
such enforcement is sought in a proceeding in equity or at law; and all
requisite corporate action has been taken by the Responsible Party to
make this Agreement and all agreements contemplated hereby valid and
binding upon the Responsible Party in accordance with their terms;
(b) NO CONFLICTS. Neither the execution and delivery of this Agreement, the
consummation of 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 Responsible Party's charter or by-laws or any legal
restriction or any agreement or instrument to which the Responsible Party
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
Responsible Party or its property is subject, or result in the creation
or imposition of any lien, charge or encumbrance that would have an
adverse effect upon any of its properties pursuant to the terms of any
mortgage, contract, deed of trust or other instrument;
(c) NO LITIGATION PENDING. There is no action, suit, proceeding or
investigation pending or threatened against the Responsible Party, before
any court, administrative agency or other tribunal asserting the
invalidity of this Agreement, seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or 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 Responsible Party, or in any material impairment of the
right or ability of the Responsible Party to carry on its business
substantially as now conducted, or in any material liability on the part
of the Responsible Party, 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 Responsible Party contemplated herein, or
which would be likely to impair materially the ability of the Responsible
Party to perform under the terms of this Agreement;
S-IV-1
(d) NO CONSENT REQUIRED. No consent, approval, authorization or order of, or
registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the VA is required for the
execution, delivery and performance by the Responsible Party of or
compliance by the Responsible Party with this Agreement or the
consummation of the transactions contemplated by this Agreement, or if
required, such approval has been obtained prior to the Closing Date;
S-IV-2
EXHIBIT A
[[To be added to the Class A-1 Certificate while it remains a Private
Certificate.] IF THIS CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER THIS
CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED
TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER (THE "TRANSFEROR LETTER")
IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
TRUSTEE RECEIVES A RULE 144A LETTER (THE "144A LETTER") IN THE FORM OF EXHIBIT I
TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF
COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE
MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL BE
DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR
LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH
CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE.]
In the event that a transfer of a Private Certificate which is a Book-Entry
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer will be deemed to
have made as of the transfer date each of the certifications set forth in the
Transferor Certificate in respect of such Certificate and the transferee will be
deemed to have made as of the transfer date each of the certifications set forth
in the Rule 144A Letter in respect of such Certificate, in each case as if such
Certificate were evidenced by a Physical Certificate.
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN 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, AS AMENDED (THE "CODE") AND CERTAIN OTHER ASSETS.
Certificate No. :
Cut-off Date : December 1, 2001
A-1
First Distribution Date : January 25, 2002
Initial Certificate Balance of this Certificate
("DENOMINATION") : $
Initial Certificate Balances of all Certificates
of this Class : $
CUSIP :
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. Trust 2001-NC4
Mortgage Pass-Through Certificates, Series 2001-NC4
[Class A-][Class M-][Class B-1]
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly
as set forth herein. Accordingly, the Certificate Balance at any time may be
less than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Responsible Party, the Servicer or the Trustee referred to below
or any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "AGREEMENT") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Capital I Inc., as depositor (the "DEPOSITOR"), Ocwen Federal Bank FSB as
servicer (the "SERVICER"), NC Capital Corporation, as responsible party (the
"RESPONSIBLE PARTY") and U.S. Bank National Association, as trustee (the
"TRUSTEE"). 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.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
A-2
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity, but solely
as Trustee
By:
---------------------------------------
Countersigned:
By:
--------------------------------------------------
Authorized Signatory of
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Trustee
A-3
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. Trust 2001-NC4
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. Trust 2001-NC4 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "CERTIFICATES"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "DISTRIBUTION DATE"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
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
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Date immediately preceding such Distribution
Date, provided, however, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder 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 offices designated by the Trustee for such
purposes, or such other location specified in the notice to Certificateholders
of such final distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Responsible Party the Servicer and the Trustee with the
consent of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any
A-4
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 therefor 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 of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee and the Certificate Registrar 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 and evidencing
the same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations 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
and 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, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Responsible Party and the Trustee
and any agent of the Depositor or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Trustee, nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
A-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code
of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
A-6
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.
A-7
EXHIBIT B
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
EXCEPT WITH RESPECT TO THE TRANSFER OF THIS CERTIFICATE TO THE NIMS TRUST ON THE
CLOSING DATE, NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE
TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE EITHER (i) A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NEITHER AN EMPLOYEE
BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A
PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW MATERIALLY SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW"), NOR A PERSON ACTING
ON BEHALF OF ANY SUCH PLAN OR USING THE ASSETS OF ANY SUCH PLAN TO EFFECT SUCH
TRANSFER, OR (ii) AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AND THE
SERVICER, TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS CERTIFICATE WILL
NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE "PLAN ASSETS" AND
SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE OR
SIMILAR PROVISIONS OF SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE OR THE
SERVICER TO ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THE
AGREEMENT OR TO ANY LIABILITY. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A
PLAN SUBJECT TO SIMILAR LAW, OR TO ANY PERSON ACTING ON BEHALF OF OR USING THE
ASSETS OF ANY SUCH PLAN WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE
TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : December 1, 2001
First Distribution Date : January 25, 2002
Percentage Interest of this Certificate
("DENOMINATION") : 100%
CUSIP :
B-1
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. Trust 2001-NC4
Mortgage Pass-Through Certificates, Series 2001-NC4
Class P
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Responsible
Party, the Servicer or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that U.S. Bank National Association, as Indenture
Trustee, is the registered owner of the Percentage Interest evidenced by this
Certificate (obtained by dividing the denomination of this Certificate by the
aggregate of the denominations of all Certificates of the Class to which this
Certificate belongs) in certain monthly distributions pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"AGREEMENT") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc., as depositor (the
"DEPOSITOR"), Ocwen Federal Bank FSB, as servicer (the "SERVICER"), NC Capital
Corporation, as responsible Party (the "RESPONSIBLE PARTY"), and U.S. Bank
National Association, as trustee (the "TRUSTEE"). 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.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Trustee for such purpose, or the office or agency
maintained by the Trustee.
No transfer of a Certificate of this Class shall be made unless
such disposition is exempt from the registration requirements of the Securities
Act of 1933, as amended (the "1933 ACT"), and any applicable state securities
laws or is made in accordance with the 1933 Act and such laws. In the event of
any such transfer, the Trustee shall require the transferor to execute a
transferor certificate (in substantially the form attached to the Pooling and
Servicing Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
Except with respect to the transfer of this Certificate to the
NIMs Trust on the Closing Date, no transfer of this Certificate shall be made
unless the Trustee shall have received
B-2
either (i) a representation from the transferee, acceptable to and in form and
substance satisfactory to the Trustee, to the effect that such transferee is
neither an employee benefit plan or arrangement subject to Section 406 of ERISA,
a plan subject to Section 4975 of the Code or a plan subject to any Federal,
state or local law materially similar to the foregoing provisions of ERISA or
the Code ("SIMILAR LAW"), nor a person acting on behalf of any such plan or
using the assets of any such plan or to effect such transfer, or (ii) if this
Certificate is presented for registration in the name of an employee benefit
plan subject to Title I of ERISA, a plan subject to Section 4975 of the Code or
a plan subject to Similar Law, or a trustee of any such plan or any other person
acting on behalf of or using the assets of any such plan, an Opinion of Counsel
satisfactory to the Trustee and the Servicer, which Opinion of Counsel shall not
be an expense of the Trustee, the Servicer or the Trust Fund, addressed to the
Trustee, to the effect that the purchase or holding of this Certificate will not
result in the assets of the Trust Fund being deemed to be "plan assets" and
subject to the prohibited transaction provisions of ERISA and the Code or
similar provisions of Similar Law and will not subject the Trustee or the
Servicer to any obligation in addition to those expressly undertaken in the
Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
B-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity, but solely
as Trustee
By:
---------------------------------------
Countersigned:
By:
--------------------------------------------------
Authorized Signatory of
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Trustee
B-4
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. Trust 2001-NC4
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. Trust 2001-NC4 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "CERTIFICATES"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution 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 (the "DISTRIBUTION DATE"), commencing on
the first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
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
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder 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 offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Responsible Party and the Trustee with the
consent of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. 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
B-5
transfer hereof or in exchange therefor 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 of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar 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 and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations 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
and 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, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Responsible Party and the Trustee
and any agent of the Depositor or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Trustee, nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
B-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
Dated:
_________________________________________
Signature by or on behalf of assignor
B-7
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.
B-8
EXHIBIT C
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
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, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS NEITHER AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN
SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO ANY FEDERAL, STATE OR
LOCAL LAW MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE
("SIMILAR LAW"), NOR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING THE
ASSETS OF ANY SUCH PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS VIOLATED, OR
ANY ATTEMPT IS MADE TO TRANSFER TO AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I
OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO
SIMILAR LAW, OR TO ANY PERSON ACTING ON BEHALF OF OR USING THE ASSETS OF ANY
SUCH PLAN, SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO
EFFECT.
Certificate No. : 1
Cut-off Date : December 1, 2001
First Distribution Date : January 25, 2002
Percentage Interest of this Certificate
("DENOMINATION") : 100%
CUSIP :
C-1
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. Trust 2001-NC4
Mortgage Pass-Through Certificates, Series 2001-NC4
Class $
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R Certificate has no Certificate Balance
and is not entitled to distributions in respect of principal or interest. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, the Responsible Party or the Trustee
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated is the
registered owner of the Percentage Interest specified above of any monthly
distributions due to the Class R Certificates pursuant to a Pooling and
Servicing Agreement dated as of the Cut-Off Date specified above (the
"AGREEMENT") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc., as depositor (the
"DEPOSITOR"), Ocwen Federal Bank FSB, as servicer (the "SERVICER"), NC Capital
Corporation, as responsible party (the "RESPONSIBLE PARTY") and U.S. Bank
National Association, as trustee (the "TRUSTEE"). 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.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Trustee for such purposes or the
office or agency maintained by the Trustee in California.
No transfer of this Class R Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is neither an employee benefit plan
subject to Title I of ERISA, a plan subject to Section 4975 of the Code or a
plan subject to Similar Law, nor a person acting on behalf of any such plan or
using the assets of any such plan to effect such transfer, which representation
letter shall not be an expense of the Trustee, the Servicer or the Trust Fund.
In the event that such representation is violated, or any attempt is made to
transfer to an employee benefit plan subject to Title I of ERISA, a plan subject
to Section 4975 of the Code or a plan subject to Similar Law, or to any person
acting on behalf of or using the assets of any such plan, such attempted
transfer or acquisition shall be void and of no effect.
Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R Certificate are
expressly subject to the following provisions: (i) each Person holding or
C-2
acquiring any Ownership Interest in this Class R Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class R Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class R
Certificate and (C) not to Transfer the Ownership Interest in this Class R
Certificate or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person is
not a Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class R Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
C-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity, but solely
as Trustee
By:
---------------------------------------
Countersigned:
By:
---------------------------------
Authorized Signatory of
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Trustee
C-4
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. Trust 2001-NC4
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. Trust 2001-NC4 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "CERTIFICATES"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "DISTRIBUTION DATE"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
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
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder 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 offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Responsible Party and the Trustee with the
consent of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. 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 therefor or in lieu hereof whether or
not notation of such consent
C-5
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 of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in California,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar 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 and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations 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
and 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, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Responsible Party and the Trustee
and any agent of the Depositor or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Trustee, nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
C-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
C-7
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.
C-8
EXHIBIT D
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, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
EXCEPT WITH RESPECT TO THE TRANSFER OF THIS CERTIFICATE TO THE NIMS TRUST ON THE
CLOSING DATE, NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE
TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE EITHER (i) A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NEITHER AN EMPLOYEE
BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A
PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW MATERIALLY SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW"), (ii) IF THIS
CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING (AS SUCH
TERM IS DEFINED IN THE AGREEMENT), A REPRESENTATION LETTER TO THE EFFECT THAT
THE TRANSFEREE IS AN INSURANCE COMPANY THAT IS PURCHASING THIS WITH FUNDS
CONTAINED IN AN "INSURANCE COMPANY GENERAL ACCOUNT" (AS SUCH TERM IS DEFINED IN
SECTION V(E) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60") AND
THAT THE PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTIONS I
AND III OF PTCE 95-60 OR (III) AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE
AND THE SERVICER, TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS CERTIFICATE
WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE "PLAN ASSETS"
AND SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE OR
SIMILAR PROVISIONS OF SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE OR THE
SERVICER TO ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THE
AGREEMENT OR TO ANY LIABILITY. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A
PLAN SUBJECT TO SIMILAR LAW, OR TO ANY PERSON ACTING ON BEHALF OF OR USING THE
ASSETS OF ANY SUCH PLAN WITHOUT THE REPRESENTATION LETTER DESCRIBED IN (ii)
ABOVE OR THE OPINION OF COUNSEL SATISFACTORY
D-1
TO THE TRUSTEE AS DESCRIBED IN (iii) ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : December 1, 2001
First Distribution Date : January 25, 2002
Percentage Interest of this Certificate
("DENOMINATION") : 100%
--------------
CUSIP :
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. Trust 2001-NC4
Mortgage Pass-Through Certificates, Series 2001-NC4
Class X
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Servicer, the
Responsible Party or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that U.S. Bank National Association, as
Indenture Trustee, is the registered owner of the Percentage Interest evidenced
by this Certificate (obtained by dividing the denomination of this Certificate
by the aggregate of the denominations of all Certificates of the Class to which
this Certificate belongs) in certain monthly distributions pursuant to a Pooling
and Servicing Agreement dated as of the Cut-off Date specified above (the
"AGREEMENT") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc., as depositor (the
"DEPOSITOR"), Ocwen Federal Bank FSB, as servicer (the "SERVICER"), NC Capital
Corporation, as responsible party (the "RESPONSIBLE PARTY") and U.S. Bank
National Association, as trustee (the "TRUSTEE"). 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.
This Certificate does not have a Certificate Balance or
Pass-Through Rate and will be entitled to distributions only to the extent set
forth in the Agreement. In addition, any distribution of the proceeds of any
remaining assets of the Trust will be made only upon presentment and surrender
of this Certificate at the offices designated by the Trustee for such purposes
or the office or agency maintained by the Trustee.
D-2
No transfer of a Certificate of this Class shall be made
unless such disposition is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "1933 ACT"), and any applicable state
securities laws or is made in accordance with the 1933 Act and such laws. In the
event of any such transfer, the Trustee shall require the transferor to execute
a transferor certificate (in substantially the form attached to the Pooling and
Servicing Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
Except with respect to the transfer of this Certificate to the
NIMs Trust on the Closing Date, no transfer of this Certificate shall be made
unless the Trustee shall have received either (i) a representation letter from
the transferee, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is neither an employee benefit plan
or arrangement subject to Section 406 of ERISA, a plan subject to Section 4975
of the Code or a plan subject to any Federal, state or local law materially
similar to the foregoing provisions of ERISA or the Code ("SIMILAR LAW"), nor a
person acting on behalf of any such plan or using the assets of any such plan or
to effect such transfer, (ii) if this Certificate has been the subject of an
ERISA-Qualifying Underwriting (as such term is defined in the Agreement), a
representation letter from the transferee, acceptable to and in form and
substance satisfactory to the Trustee, to the effect that such transferee is an
insurance company and is acquiring this Certificate with funds contained in an
"insurance company general account" (as such term is defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60") and that the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60 or (iii) if this Certificate is presented for registration in the
name of an employee benefit plan subject to Title I of ERISA, a plan subject to
Section 4975 of the Code or a plan subject to Similar Law, or a trustee of any
such plan or any other person acting on behalf of or using the assets of any
such plan, an Opinion of Counsel satisfactory to the Trustee and the Servicer,
which Opinion of Counsel shall not be an expense of the Trustee, the Servicer or
the Trust Fund, addressed to the Trustee, to the effect that the purchase or
holding of this Certificate will not result in the assets of the Trust Fund
being deemed to be "plan assets" and subject to the prohibited transaction
provisions of ERISA and the Code or similar provisions of Similar Law and will
not subject the Trustee or the Servicer to any obligation in addition to those
expressly undertaken in the Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
D-3
WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity, but solely as
Trustee
By:
-----------------------------------------------
Countersigned:
By:
--------------------------------------------------
Authorized Signatory of
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Trustee
D-4
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. Trust 2001-NC4
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. Trust
2001-NC4 Mortgage Pass-Through Certificates, of the Series specified on the face
hereof (herein collectively called the "CERTIFICATES"), and representing a
beneficial ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution 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 (the "DISTRIBUTION DATE"), commencing on
the first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
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
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account of the Holder hereof at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder 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 offices designated by the
Trustee for such purposes or such other location specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Servicer, the Responsible Party and
the Trustee with the consent of the Holders of Certificates affected by such
amendment evidencing the requisite Percentage Interest, as provided in the
Agreement. 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
D-5
transfer hereof or in exchange therefor 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 of the Trustee upon surrender of this Certificate
for registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar 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 and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations 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
and 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, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Responsible Party and the
Trustee and any agent of the Depositor or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Depositor, the Trustee, nor any such agent shall be affected by
any notice to the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 10% of the
Cut-off Date Principal Balance, the Servicer will have the option to repurchase,
in whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
D-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
-------------------------------------------------------------------------------.
Dated:
------------------------------------------------
Signature by or on behalf of assignor
D-7
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. --------------------------------------------------,
D-8
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Servicer]
[Originator]
---------------------
---------------------
Re: Pooling and Servicing Agreement among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc., as Depositor, Ocwen Federal
Bank FSB, as and Servicer, NC Capital Corporation, as
Responsible Party, and U.S. Bank National Association,
as Trustee, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL I INC.
TRUST, SERIES 2001-NC4
--------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement (the "POOLING AND SERVICING AGREEMENT"), for each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
listed in the attached schedule), it has received:
(i) the original Mortgage Note, endorsed as provided
in the following form: "Pay to the order of ________, without
recourse"; and
(ii) a duly executed assignment of the Mortgage (which may
be included in a blanket assignment or assignments).
Based on its review and examination and only as to the
foregoing documents, such documents appear regular on their face and related to
such Mortgage Loan.
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 each 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.
E-1
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-------------------------------
Name:
Title:
E-2
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF TRUSTEE
[date]
[Depositor]
[Servicer]
[Originator]
---------------------
---------------------
Re: Pooling and Servicing Agreement among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc., as Depositor, Ocwen
Federal Bank FSB, as and Servicer, NC Capital
Corporation, as Responsible Party, and U.S. Bank
National Association, as Trustee, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ CAPITAL I INC. TRUST, SERIES 2001-NC4
----------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement (the "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 attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form provided
in Section 2.01 of the Pooling and Servicing Agreement, with all
intervening endorsements showing a complete chain of endorsement from
the originator to the last endorsee.
(ii) The original recorded Mortgage.
(iii) A duly executed assignment of the Mortgage in the form
provided in Section 2.01 of the Pooling and Servicing Agreement; or, if
the Responsible Party has certified or the Trustee otherwise knows that
the related Mortgage has not been returned from the applicable
recording office, a copy of the assignment of the Mortgage (excluding
information to be provided by the recording office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment from
the originator to the last endorsee.
F-1
(v) The original or duplicate original lender's title policy
and all riders thereto or, any one of an original title binder, an
original preliminary title report or an original title commitment, or a
copy thereof certified by the title company.
Based on its review and examination and only as to the
foregoing documents, (a) such documents appear regular on their face and related
to such Mortgage Loan, and (b) the information set forth in items (1), (2), (7),
and (9) of the Mortgage Loan Schedule and items (1), (9) and (17) of the Data
Tape Information accurately reflects information set forth in the Custodial
File.
The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review of the Custodial
File 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 each 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. Notwithstanding anything herein to the contrary, the Trustee has
made no determination and makes no representations as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-------------------------------
Name:
Title:
F-2
EXHIBIT G
TRANSFER AFFIDAVIT
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. Trust 2001-NC4,
Mortgage Pass-Through Certificates,
Series 2001-NC4
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class R Certificate (the
"CERTIFICATE") issued pursuant to the Pooling and Servicing Agreement, (the
"AGREEMENT"), relating to the above-referenced Series, by and among ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc., as depositor (the "DEPOSITOR"), Ocwen
Federal Bank FSB, as servicer, NC Capital Corporation, as Responsible Party, and
U.S. Bank National Association, as Trustee. Capitalized terms used, but not
defined herein or in Exhibit 1 hereto, shall have the meanings ascribed to such
terms in the Agreement. The Transferee has authorized the undersigned to make
this affidavit on behalf of the Transferee for the benefit of the Depositor and
the Trustee.
2. The Transferee is, as of the date hereof, and will be, as
of the date of the Transfer, a Permitted Transferee. The Transferee is acquiring
its Ownership Interest in the Certificate for its own account. The Transferee
has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that
(i) a tax will be imposed on Transfers of the Certificate to Persons that are
not Permitted Transferees; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a
tax will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (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 and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
G-1
5. The Transferee has reviewed the provisions of Section
5.02(c) of the Agreement and understands the legal consequences of the
acquisition of an Ownership Interest in the Certificate, including, without
limitation, the restrictions on subsequent Transfers and the provisions
regarding voiding the Transfer and mandatory sales. The Transferee expressly
agrees to be bound by and to abide by the provisions of Section 5.02(c) of the
Agreement and the restrictions noted on the face of the Certificate. The
Transferee understands and agrees that any breach of any of the representations
included herein shall render the Transfer to the Transferee contemplated hereby
null and void.
6. The Transferee agrees to require a Transfer Affidavit from
any Person to whom the Transferee attempts to Transfer its Ownership Interest in
the Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit H to the Agreement (a "TRANSFEROR CERTIFICATE") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate.
8. The Transferee's taxpayer identification number is
__________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to 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 was to impede the assessment or collection of tax.
11. *[The Transferee has computed any consideration paid to it
to acquire the Class [R][LR] Certificate in accordance with proposed U.S.
Treasury Regulations Sections 1.860E-1(a)(4)(iii) and 1.860E-1(c)(5) (or, after
they have been finalized, the final regulations) by computing present values
using a discount rate equal to the applicable Federal rate prescribed by Section
1274(d) of the Code, compounded semi-annually.]
[The Transferee has computed any consideration paid to it to
acquire the Class [R][LR] Certificate in accordance with proposed U.S. Treasury
Regulations Sections 1.860E-1(a)(4)(iii) and 1.860E-1(c)(5) (or, after they have
been finalized, the final regulations) by computing present values using a
discount rate at least equal to the rate at which the Transferee regularly
borrows, in the ordinary course of its trade or business, substantial funds from
-----------------------
* Insert appropriate paragraph, if applicable.
G-2
unrelated third parties. The Transferee has provided all information necessary
to demonstrate to the transferor that it regularly borrows at such rate.]
[The transfer of the Class [R][LR] Certificate complies with
Section 6 of Revenue Procedure 2001-12 (the "REVENUE PROCEDURE"), 2001-3 I.R.B.
335 (January 16, 2001) (or comparable provisions of applicable final U.S.
Treasury Regulations) and, accordingly,
(i) the Transferee is an "eligible corporation," as
defined in Section 860L(a)(2) of the Code, as to
which income from Class [R][LR] Certificate will only
be taxed in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of
the transfer, the Transferee had gross assets for
financial reporting purposes (excluding any
obligation of a person related to the Investor within
the meaning of Section 860L(g) of the Code) in excess
of $100 million and net assets in excess of $10
million;
(iii) the Transferee will transfer the Class [R][LR]
Certificate only to another "eligible corporation,"
as defined in Section 860(a)(2) of the Code, in a
transaction that satisfies the requirements of
Section 4 of the Revenue Procedure; and
(iv) the Transferee determined the consideration paid to
it to acquire the Class [R][LR] Certificate based on
reasonable market assumptions (including, but not
limited to, borrowing and investment rates,
prepayment and loss assumptions, expense and
reinvestment assumptions, tax rates and other factors
specific to the Transferee) that it has determined in
good faith.]
[Reserved]
12. (i) [Class A, Class M, Class B. The Transferee qualifies
as an accredited investor as defined in Rule 501(a)(1) of Regulation D of the
Securities Act.]
(ii) Class X (ERISA Qualifying Underwriting). The
Transferee either (i) is not an employee benefit plan which is subject to Title
I of ERISA, a plan which is subject to Section 4975 of the Code, or a plan
subject to any federal, state or local law that is materially similar to the
foregoing provisions of ERISA or the Code, and the Transferee is not acting on
behalf of or using the assets of such a plan or (ii) is an insurance company
using the assets of its general account (within the meaning of PTCE 95-60) to
effect such purpose and is eligible for and satisfies all of the conditions set
forth in Sections I and III of PTCE 95-60.
(iii) Class X (no ERISA Qualifying Underwriting), Class R,
Class P. The Transferee is not an employee benefit plan that is subject to Title
I of ERISA, a plan that is subject to Section 4975 of the Code or a plan subject
to any federal, state or local law that is materially similar to the foregoing
provisions of ERISA or the Code, and the Transferee is not acting on behalf of
or using the assets of such a plan.
* * *
G-3
IN WITNESS WHEREOF, the Transferee has caused this instrument
to be executed on its behalf, pursuant to authority of its Board of Directors,
by its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this day of , 20 .
-------------------------------------
Print Name of Transferee
By:
----------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
-------------------------------------
[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 the ___________ of the Transferee, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the
Transferee.
Subscribed and sworn before me this _____ day of __________,
20__.
----------------------------------------
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
G-4
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
U.S. Bank National Association,
as Trustee,
U.S. Bank Trust Center
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Structured Finance/MSDW 2001-NC4
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. Trust, Series
2001-NC4, Mortgage Pass-Through Certificates, Series
2001-NC4, Class ___
Ladies and Gentlemen:
In connection with our disposition of the above Certificates
we certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "ACT"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Residual Certificate, we have no
knowledge the Transferee is not a Permitted Transferee.
Very truly yours,
Print Name of Transferor
------------------------------------------------
By:
---------------------------------------------
Authorized Officer
H-1
EXHIBIT I
FORM OF RULE 144A LETTER
__________, 20__
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
U.S. Bank National Association,
as Trustee,
U.S. Bank Trust Center
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Structured Finance/MSDW 2001-NC4
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc. Trust, Series
2001-NC4, Mortgage Pass-Through Certificates, Series
2001-NC4, Class ___
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "ACT"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan or arrangement that is subject to Section 4975 of the Internal Revenue Code
of 1986, as amended, nor are we acting on behalf of any such plan or arrangement
nor using the assets of any such plan or arrangement to effect such acquisition
or, with respect to a Class X Certificate, the purchaser is an insurance company
that is purchasing this certificate with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60") and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE 95-60,
(e) we have not, nor has anyone acting on our behalf offered, transferred,
pledged, sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Certificates, any interest
in the Certificates or any other similar security from, or otherwise approached
or negotiated with respect to the Certificates, any interest in the Certificates
or any other similar security with, any person in any manner, or made any
general
I-1
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (f) to the extent that the
Certificate transferred is a Class X Certificate, we are a bankruptcy-remote
entity and (g) we are a "qualified institutional buyer" as that term is defined
in Rule 144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are aware
that the sale to us is being made in reliance on Rule 144A. We are acquiring the
Certificates for our own account or for resale pursuant to Rule 144A and
further, understand that such Certificates 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 Securities Act.
I-2
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "BUYER") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President,
Chief Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer
is a "qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933, as amended ("RULE 144A") because (i) the Buyer 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 Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
____ CORPORATION, ETC. The Buyer is a corporation (other
than a bank, savings and loan association or similar
institution), Massachusetts or similar business
trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended.
____ BANK. The Buyer (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 Buyer (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) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in securities.
I-3
____ BROKER-DEALER. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange Act
of 1934.
____ INSURANCE COMPANY. The Buyer 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 Buyer 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 Buyer is an employee benefit plan
within the meaning of Title I of the Employee
Retirement Income Security Act of 1974.
____ INVESTMENT ADVISOR. The Buyer is an investment
advisor registered under the Investment Advisors Act
of 1940.
____ SMALL BUSINESS INVESTMENT COMPANY. Buyer is a small
business investment company licensed by the U.S.
Small Business Administration under Section 301(c) or
(d) of the Small Business Investment Act of 1958.
____ BUSINESS DEVELOPMENT COMPANY. Buyer is a business
development company as defined in Section 202(a)(22)
of the Investment Advisors Act of 1940.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE
(i) securities of issuers that are affiliated with the Buyer, (ii) securities
that are part of an unsold allotment to or subscription by the Buyer, if the
Buyer 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 Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis
of their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and the
Buyer is not itself a reporting company under the Securities Exchange Act of
1934, as amended.
I-4
5. The Buyer acknowledges that it is familiar with Rule
144A and understands that the seller to it 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 Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A
Securities, the Buyer 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 Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification as of the date of such
purchase. In addition, if the Buyer is a bank or savings and loan is provided
above, the Buyer agrees that it will furnish to such parties updated annual
financial statements promptly after they become available.
---------------------------------------------
Print Name of Transferor
By:
------------------------------------------
Name:
Title:
Date:
----------------------------------------
I-5
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "BUYER") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President,
Chief Financial Officer or Senior Vice President of the Buyer or, if the Buyer
is a "qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933, as amended ("RULE 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer'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 Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
____ The Buyer owned $ in securities (other than the
excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
____ The Buyer 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 Buyer'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 Buyer or are part of the
Buyer'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,
I-6
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands
that the parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
Print Name of Transferor
By:
----------------------------------------
Name:
Title:
IF AN ADVISER:
-------------------------------------------
Print Name of Buyer
Date:
--------------------------------------
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EXHIBIT J
REQUEST FOR RELEASE
(for Trustee)
To: [Address]
Re:
In connection with the administration of the Mortgage Loans
held by you as the Trustee on behalf of the Certificateholders, we request the
release, and acknowledge receipt, of the (Custodial File/[specify documents])
for the Mortgage Loan described below, for the reason indicated.
MORTGAGOR'S NAME, ADDRESS & ZIP CODE:
------------------------------------
MORTGAGE LOAN NUMBER:
--------------------
SEND CUSTODIAL FILE TO:
----------------------
REASON FOR REQUESTING DOCUMENTS (check one)
-------------------------------
____1. Mortgage Loan Paid in Full. (The Company hereby certifies that all
amounts received in connection therewith have been credited to the
Collection Account as provided in the Pooling and Servicing
Agreement.)
____2. Mortgage Loan Repurchase Pursuant to Subsection 2.03 of the
Pooling and Servicing Agreement. (The Company hereby certifies
that the repurchase price has been credited to the Collection
Account as provided in the Pooling and Servicing Agreement.)
____3. Mortgage Loan Liquidated By _________________. (The Company hereby
certifies that all proceeds of foreclosure, insurance,
condemnation or other liquidation have been finally received and
credited to the Collection Account pursuant to the Pooling and
Servicing Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other (explain).
-----------------------------------------------
If box 1, 2 or 3 above is checked, and if all or part of the
Custodial File was previously released to us, please release to us our previous
request and receipt on file with you, as well as any additional documents in
your possession relating to the specified Mortgage Loan.
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If box 4 or 5 above is checked, upon our return of all of the
above documents to you as the Trustee, please acknowledge your receipt by
signing in the space indicated below, and returning this form.
OCWEN FEDERAL BANK FSB
By:
------------------------------------------
Name:
Title:
Date:
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EXHIBIT K
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall
include each of the following items, which shall be available for inspection by
the Purchaser and which shall be retained by the Servicer or delivered to and
retained by the Trustee, as applicable:
(a) The original Mortgage Note bearing all intervening
endorsements, showing a complete chain of endorsement
from the originator to the last endorsee endorsed
"Pay to the order of _________________without
recourse" and signed (which may be by facsimile
signature) in the name of the last endorsee by an
authorized officer. To the extent that there is no
room on the face of the Mortgage Notes for
endorsements, the endorsement may be contained on an
allonge, if state law so allows and the Trustee is so
advised by the Responsible Party that state law so
allows.
(b) The original of any guaranty executed in connection
with the Mortgage Note.
(c) The original Mortgage, with evidence of recording
thereon or a certified true copy of such Mortgage
submitted for recording. If in connection with any
Mortgage Loan, the Responsible Party cannot deliver
or cause to be delivered the original Mortgage with
evidence of recording thereon on or prior to the
Closing Date because of a delay caused by the public
recording office where such Mortgage has been
delivered for recordation or because such Mortgage
has been lost or because such public recording office
retains the original recorded Mortgage, the
Responsible Party shall deliver or cause to be
delivered to the Trustee, a photocopy of such
Mortgage, together with (i) in the case of a delay
caused by the public recording office, an Officer's
Certificate of the Responsible Party or a certificate
from an escrow company, a title company or closing
attorney stating that such Mortgage has been
dispatched to the appropriate public recording office
for recordation and that the original recorded
Mortgage or a copy of such Mortgage certified by such
public recording office to be a true and complete
copy of the original recorded Mortgage will be
promptly delivered to the Trustee upon receipt
thereof by the Responsible Party; or (ii) in the case
of a Mortgage where a public recording office retains
the original recorded Mortgage or in the case where a
Mortgage is lost after recordation in a public
recording office, a copy of such Mortgage certified
by such public recording office to be a true and
complete copy of the original recorded Mortgage.
(d) The originals of all assumption, modification,
consolidation or extension agreements, with evidence
of recording thereon or a certified true copy of such
agreement submitted for recording.
K-1
(e) The original Assignment of Mortgage for each Mortgage
Loan endorsed in blank.
(f) Originals of all intervening assignments of mortgage
(if any) evidencing a complete chain of assignment
from the applicable originator to the last endorsee
with evidence of recording thereon or a certified
true copy of such intervening assignments of mortgage
submitted for recording, or if any such intervening
assignment has not been returned from the applicable
recording office or has been lost or if such public
recording office retains the original recorded
assignments of mortgage, the Responsible Party shall
deliver or cause to be delivered to the Trustee, a
photocopy of such intervening assignment, together
with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of the
Responsible Party or a certificate from an escrow
company, a title company or a closing attorney
stating that such intervening assignment of mortgage
has been dispatched to the appropriate public
recording office for recordation and that such
original recorded intervening assignment of mortgage
or a copy of such intervening assignment of mortgage
certified by the appropriate public recording office
to be a true and complete copy of the original
recorded intervening assignment of mortgage will be
promptly delivered to the Trustee upon receipt
thereof by the Responsible Party; or (ii) in the case
of an intervening assignment where a public recording
office retains the original recorded intervening
assignment or in the case where an intervening
assignment is lost after recordation in a public
recording office, a copy of such intervening
assignment certified by such public recording office
to be a true and complete copy of the original
recorded intervening assignment.
(g) The original mortgagee title insurance policy or
attorney's opinion of title and abstract of title.
(h) The original of any security agreement, chattel
mortgage or equivalent document executed in
connection with the Mortgage (if provided).
(i) Residential loan application.
(j) Mortgage Loan closing statement.
(k) Verification of employment and income, if applicable.
(l) Verification of acceptable evidence of source and
amount of down payment.
(m) Credit report on Mortgagor.
(n) Residential appraisal report.
(o) Photograph of the Mortgaged Property.
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(p) Survey of the Mortgaged Property.
(q) Copy of each instrument necessary to complete
identification of any exception set forth in the
exception schedule in the title policy, I.E., map or
plat, restrictions, ---- easements, sewer agreements,
home association declarations, etc.
(r) All required disclosure statements.
(s) If required in an appraisal, termite report,
structural engineer's report, water potability and
septic certification.
(t) Sales Contract, if applicable.
Evidence of payment of taxes and insurance, insurance claim files,
correspondence, current and historical computerized data files (which include
records of tax receipts and payment history from the date of origination), and
all other processing, underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are required to document
the Mortgage Loan or to service the Mortgage Loan.
K-3