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FINANCIAL ASSET SECURITIES CORP.,
Depositor
XXXXXX LOAN SERVICING LP,
Servicer
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2002
___________________________
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates, Series 2002-1
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
1.01. Defined Terms............................................................................................4
SECTION 1.02. Accounting.....................................................................................42
SECTION 1.03. Allocation of Certain Interest Shortfalls......................................................42
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans...................................................................44
SECTION 2.02. Acceptance by Trustee..........................................................................47
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by the Originator.................................48
SECTION 2.04. Intentionally Omitted..........................................................................50
SECTION 2.05. Representations, Warranties and Covenants of the Servicer......................................50
SECTION 2.06. Representations and Warranties of the Depositor................................................53
SECTION 2.07. Issuance of Certificates.......................................................................54
SECTION 2.08. [Reserved].....................................................................................54
SECTION 2.09. Conveyance of REMIC 1 Regular Interests and Acceptance of REMIC
1 by the Trustee; Issuance of Certificates.....................................................54
SECTION 2.10. Conveyance of the Class M-4 Interest and Acceptance of the Class M-4
Interest by the Trustee; Issuance of the Class M-4 Certificates................................55
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Servicer to Act as Servicer....................................................................57
SECTION 3.02. Sub-Servicing Agreements Between Servicer and Sub-Servicers....................................58
SECTION 3.03. Successor Sub-Servicers........................................................................60
SECTION 3.04. Liability of the Servicer......................................................................60
SECTION 3.05. No Contractual Relationship Between Sub-Servicers and the Trustee or
Certificateholders.............................................................................60
SECTION 3.06. Assumption or Termination of Sub-Servicing Agreements by Trustee61...............................
SECTION 3.07. Collection of Certain Mortgage Loan Payments...................................................61
SECTION 3.08. Sub-Servicing Accounts.........................................................................62
i
SECTION 3.09. Collection of Taxes, Assessments and Similar Items; Servicing Accounts
..............................................................................................62
SECTION 3.10. Collection Account and Distribution Account....................................................63
SECTION 3.11. Withdrawals from the Collection Account and Distribution Account65...............................
SECTION 3.12. Investment of Funds in the Collection Account and the Distribution
Account........................................................................................67
SECTION 3.13. [Reserved].....................................................................................68
SECTION 3.14. Maintenance of Hazard Insurance and Errors and Omissions and Fidelity
Coverage.......................................................................................69
SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption Agreements......................................70
SECTION 3.16. Realization Upon Defaulted Mortgage Loans......................................................71
SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files................................................73
SECTION 3.18. Servicing Compensation.........................................................................74
SECTION 3.19. Reports to the Trustee; Collection Account Statements..........................................75
SECTION 3.20. Statement as to Compliance.....................................................................75
SECTION 3.21. Independent Public Accountants' Servicing Report...............................................75
SECTION 3.22. Access to Certain Documentation; Filing of Reports by Trustee..................................76
SECTION 3.23. Title, Management and Disposition of REO Property..............................................77
SECTION 3.24. Obligations of the Servicer in Respect of Prepayment Interest Shortfalls.......................81
SECTION 3.25. [Reserved].....................................................................................81
SECTION 3.26. Obligations of the Servicer in Respect of Mortgage Rates and Monthly
Payments.......................................................................................81
SECTION 3.27. Solicitations..................................................................................81
SECTION 3.28. Net WAC Rate Carryover Reserve Account.........................................................82
SECTION 3.29. Advance Facility...............................................................................83
ARTICLE IV
FLOW OF FUNDS
SECTION 4.01. Distributions..................................................................................85
SECTION 4.02. Reserved.......................................................................................90
SECTION 4.03. Statements.....................................................................................90
SECTION 4.04. Remittance Reports; Advances...................................................................93
SECTION 4.05. [Reserved].....................................................................................94
SECTION 4.06. [Reserved].....................................................................................94
SECTION 4.07. Distributions on the REMIC Regular Interests...................................................94
SECTION 4.08. Allocation of Realized Losses..................................................................95
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates...............................................................................97
SECTION 5.02. Registration of Transfer and Exchange of Certificates..........................................97
ii
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.............................................102
SECTION 5.04. Persons Deemed Owners.........................................................................103
SECTION 5.05. Appointment of Paying Agent...................................................................103
ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
SECTION 6.01. Liability of the Servicer and the Depositor...................................................104
SECTION 6.02. Merger or Consolidation of, or Assumption of the Obligations of, the
Servicer or the Depositor.....................................................................104
SECTION 6.03. Limitation on Liability of the Servicer and Others............................................104
SECTION 6.04. Servicer Not to Resign........................................................................105
SECTION 6.05. Delegation of Duties..........................................................................106
SECTION 6.06. Reserved......................................................................................106
SECTION 6.07. Inspection....................................................................................106
ARTICLE VII
DEFAULT
SECTION 7.01. Servicer Events of Termination................................................................107
SECTION 7.02. Trustee to Act; Appointment of Successor......................................................108
SECTION 7.03. Waiver of Defaults............................................................................110
SECTION 7.04. Notification to Certificateholders............................................................110
SECTION 7.05. Survivability of Servicer Liabilities.........................................................110
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Duties of Trustee.............................................................................111
SECTION 8.02. Certain Matters Affecting the Trustee.........................................................112
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.........................................113
SECTION 8.04. Trustee May Own Certificates..................................................................114
SECTION 8.05. Trustee Fee and Expenses......................................................................114
SECTION 8.06. Eligibility Requirements for Trustee..........................................................115
SECTION 8.07. Resignation or Removal of Trustee.............................................................115
SECTION 8.08. Successor Trustee.............................................................................116
SECTION 8.09. Merger or Consolidation of Trustee............................................................116
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.................................................116
SECTION 8.11. Limitation of Liability.......................................................................118
SECTION 8.12. Trustee May Enforce Claims Without Possession of Certificates.................................118
SECTION 8.13. Suits for Enforcement.........................................................................118
SECTION 8.14. Waiver of Bond Requirement....................................................................119
SECTION 8.15. Waiver of Inventory, Accounting and Appraisal Requirement.....................................119
iii
ARTICLE IX
REMIC ADMINISTRATION
SECTION 9.01. REMIC Administration..........................................................................120
SECTION 9.02. Prohibited Transactions and Activities........................................................122
SECTION 9.03. Indemnification with Respect to Certain Taxes and Loss of REMIC Status
.............................................................................................122
ARTICLE X
TERMINATION
SECTION 10.01. Termination..........................................................................124
SECTION 10.02. Additional Termination Requirements..................................................126
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment............................................................................127
SECTION 11.02. Recordation of Agreement; Counterparts...............................................128
SECTION 11.03. Limitation on Rights of Certificateholders...........................................128
SECTION 11.04. Governing Law; Jurisdiction..........................................................129
SECTION 11.05. Notices..............................................................................129
SECTION 11.06. Severability of Provisions...........................................................130
SECTION 11.07. Article and Section References.......................................................130
SECTION 11.08. Notice to the Rating Agencies........................................................130
SECTION 11.09. Further Assurances...................................................................131
SECTION 11.10. Benefits of Agreement................................................................131
SECTION 11.11 Acts of Certificateholders...........................................................131
iv
Exhibits:
--------
Exhibit A-1 Form of Class A-1 Certificates
Exhibit A-2 Form of Class A-2 Certificates
Exhibit A-3 Form of Class M-1 Certificates
Exhibit A-4 Form of Class M-2 Certificates
Exhibit A-5 Form of Class M-3 Certificates
Exhibit A-6 Form of Class M-4 Certificates
Exhibit A-7 Form of Class C Certificates
Exhibit A-8 Form of Class P Certificates
Exhibit A-9 Form of Class R Certificates
Exhibit B [Reserved]
Exhibit C Form of Mortgage Loan Purchase Agreement
Exhibit D Mortgage Loan Schedule
Exhibit E Request for Release
Exhibit F-1 Form of Trustee's Initial Certification
Exhibit F-2 Form of Trustee's Final Certification
Exhibit F-3 Form of Receipt of Mortgage Note
Exhibit G [Reserved]
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of Limited Power of Attorney
Exhibit J Form of Investment Letter
Exhibit K Form of Transfer Affidavit for Residual Certificates
Exhibit L Form of Transferor Certificate
Exhibit M Form of ERISA Representation Letter
Exhibit N-1 Form of Depositor's Certification
Exhibit N-2 Form of Trustee's Certification
Exhibit N-3 Form of Servicer's Certification
Schedule I Prepayment Charge Schedule
v
This Pooling and Servicing Agreement is dated as of September
1, 2002 (the "Agreement"), among FINANCIAL ASSET SECURITIES CORP., as depositor
(the "Depositor"), XXXXXX LOAN SERVICING LP, as master servicer (the "Servicer")
and DEUTSCHE BANK NATIONAL TRUST COMPANY, as trustee (the "Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Trust Fund created hereunder. The Certificates will consist of ten classes
of certificates, designated as (i) the Class A-1 Certificates, (ii) the Class
A-2 Certificates, (iii) the Class M-1 Certificates, (iv) the Class M-2
Certificates, (v) the Class M-3 Certificates, (vi) the Class M-4 Certificates,
(vii) the Class C Certificates, (viii) the Class P Certificates, (ix) the Class
R Certificates and (x) the Class R-X Certificates.
REMIC 1
-------
As provided herein, the Trustee will make an election to treat
the segregated pool of assets consisting of the Group I Mortgage Loans, the
Group II Mortgage Loans and certain other related assets subject to this
Agreement (exclusive of the Net WAC Rate Carryover Reserve Account and any
Servicer Prepayment Charge Payment Amounts) as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes, and such segregated pool of
assets will be designated as "REMIC 1." The Class R-1 Interest will represent
the sole class of "residual interests" in REMIC 1 for purposes of the REMIC
Provisions (as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, the Uncertificated REMIC 1 Pass-Through
Rate, the initial Uncertificated Principal Balance, and solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each of the REMIC 1 Regular Interests. None of the REMIC 1
Regular Interests will be certificated.
Uncertificated REMIC 1 Initial Uncertificated Assumed Final
Designation Pass Through Rate Principal Balance Maturity Date(1)
----------- ----------------- ----------------- ----------------
LTAA Variable(2) $212,758,058.81 September 25, 2032
LTA1 Variable(2) $ 407,180.00 September 25, 2032
LTA2 Variable(2) $ 1,362,180.00 September 25, 2032
LTM1 Variable(2) $ 157,400.00 September 25, 2032
LTM2 Variable(2) $ 124,800.00 September 25, 2032
LTM3 Variable(2) $ 74,900.00 September 25, 2032
LTM4 Variable(2) $ 25,000.00 September 25, 2032
LTZZ Variable(2) $ 2,190,541.20 September 25, 0000
XXX Variable(2) $ 100.00 September 25, 2032
________________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest possible maturity date has been
designated as the "latest possible maturity date" for each REMIC 1 Regular
Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC 1
Pass-Through Rate" herein.
REMIC 2
-------
As provided herein, the Trustee shall make an election to
treat the segregated pool of assets consisting of the REMIC 1 Regular Interests
as a REMIC for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC 2." The Class R-2 Interest represents the sole
class of "residual interests" in REMIC 2 for purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for each Class of Certificates that represents one or more of the "regular
interests" in REMIC 2 created hereunder:
Original Class Certificate Assumed Final
Class Designation Principal Balance Pass Through Rate Maturity Date(1)
----------------- ----------------- ----------------- ----------------
Class A-1.................. $ 40,718,000.00 Variable(2) September 25, 2032
Class A-2.................. $ 136,218,000.00 Variable(2) September 25, 2032
Class M-1.................. $ 15,740,000.00 Variable(2) September 25, 2032
Class M-2.................. $ 12,480,000.00 Variable(2) September 25, 2032
Class M-3.................. $ 7,490,000.00 Variable(2) September 25, 2032
Class M-4 Interest......... $ 2,500,000.00 Variable(2) September 25, 2032
Class C.................... $ 1,954,060.01(3) Variable(2) September 25, 2032
Class P.................... $ 100.00 N/A(4) September 25, 2032
________________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest maturity date has been designated as
the "latest possible maturity date" for each REMIC 2 Regular Interest.
(2) Calculated in accordance with the definition of "Pass-Through Rate" herein.
(3) The Class C Certificates will accrue interest at their variable
Pass-Through Rate on the Notional Amount of the Class C Certificates
outstanding from time to time which shall equal the aggregate of the
Uncertificated Principal Balances of the REMIC 1 Regular Interests. The
Class C Certificates will not accrue interest on its Class Certificate
Principal Balance.
(4) The Class P Certificates will not accrue interest.
REMIC 3
-------
As provided herein, the Trustee shall make an election to
treat the Class M-4 Interest as a REMIC for federal income tax purposes, and
such segregated pool of assets will be designated as "REMIC 3." The Class R-X
Certificate represents the sole class of "residual interests" in REMIC 3 for
purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for the Class M-4 Certificate.
Original Class Certificate Assumed Final
Class Designation Principal Balance Pass-Through Rate Maturity Date(1)
----------------- ----------------- ----------------- ----------------
Class M-4 Variable(2) $2,500,000.00 September 25, 2032
________________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest possible maturity date has been
designated as the "latest possible maturity date" for the Class M-4
Certificates.
(2) The Class M-4 Certificates will receive 100% of amounts received in respect
of the Class M-4 Interest.
2
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Unless otherwise specified, all
calculations in respect of interest on the Class A Certificates and the
Mezzanine Certificates shall be made on the basis of the actual number of days
elapsed and a 360-day year and all other calculations of interest described
herein shall be made on the basis of a 360-day year consisting of twelve 30-day
months. The Class P Certificates and the Residual Certificates are not entitled
to distributions in respect of interest and, accordingly, will not accrue
interest.
"1933 Act": The Securities Act of 1933, as amended.
"Account": Either of the Collection Account and Distribution Account.
"Accrual Period": With respect to the Class A Certificates and the
Mezzanine Certificates and each Distribution Date, the period commencing on the
preceding Distribution Date (or in the case of the first such Accrual Period,
commencing on the Closing Date) and ending on the day preceding the current
Distribution Date. With respect to the Class C Certificates and each
Distribution Date, the calendar month prior to the month of such Distribution
Date.
"Adjustable-Rate Mortgage Loan": A first lien Mortgage Loan which
provides at any period during the life of such loan for the adjustment of the
Mortgage Rate payable in respect thereto. The Adjustable Rate Mortgage Loans are
identified as such on the Mortgage Loan Schedule.
"Adjusted Net Maximum Mortgage Rate": With respect to any Mortgage Loan
(or the related REO Property), as of any date of determination, a per annum rate
of interest equal to the applicable Maximum Mortgage Rate for such Mortgage Loan
(or the Mortgage Rate in the case of any Fixed-Rate Mortgage Loan) as of the
first day of the month preceding the month in which the related Distribution
Date occurs minus the sum of (i) the Trustee Fee Rate and (ii) the Servicing Fee
Rate.
"Adjusted Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property), as of any date of determination, a per annum rate of
interest equal to the applicable Mortgage Rate for such Mortgage Loan as of the
first day of the month preceding the month in which the related Distribution
Date occurs minus the sum of (i) the Trustee Fee Rate and (ii) the Servicing Fee
Rate.
"Adjustment Date": With respect to each Adjustable-Rate Mortgage Loan,
each adjustment date, on which the Mortgage Rate of such Mortgage Loan changes
pursuant to the related Mortgage Note. The first Adjustment Date following the
Cut-off Date as to each Adjustable-Rate Mortgage Loan is set forth in the
Mortgage Loan Schedule.
3
"Advance": As to any Mortgage Loan or REO Property, any advance made by
the Servicer in respect of any Distribution Date pursuant to Section 4.04.
"Advancing Person": As defined in Section 3.29 hereof.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise and "controlling" and "controlled" shall have meanings
correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
"Allocated Realized Loss Amount": With respect to any Distribution Date
and any Class of Mezzanine Certificates, the sum of (i) any Realized Losses
allocated to such Class of Certificates on such Distribution Date and (ii) the
amount of any Allocated Realized Loss Amount for such Class of Certificates
remaining unpaid from the previous Distribution Date.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect or
record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of Certificates, the
date set forth as such in the Preliminary Statement.
"Available Funds": With respect to any Distribution Date, an amount
equal to the excess of (i) the sum of (a) the aggregate of the related Monthly
Payments received on the Mortgage Loans on or prior to the related Determination
Date, (b) Net Liquidation Proceeds, Insurance Proceeds, Principal Prepayments,
proceeds from repurchases of and substitutions for such Mortgage Loans and other
unscheduled recoveries of principal and interest in respect of the Mortgage
Loans received during the related Prepayment Period, (c) the aggregate of any
amounts received in respect of a related REO Property withdrawn from any REO
Account and deposited in the Collection Account for such Distribution Date, (d)
the aggregate of any amounts deposited in the Collection Account by the Servicer
in respect of related Prepayment Interest Shortfalls for such Distribution Date,
(e) the aggregate of any Advances made by the Servicer for such Distribution
Date in respect of the Mortgage Loans, (f) the aggregate of any related advances
made by the Trustee in respect of the Mortgage Loans for such Distribution Date
pursuant to Section 7.02 and (g) the amount of any Prepayment Charges collected
by the Servicer in connection with the full or partial prepayment of any of the
Mortgage Loans and any Servicer Prepayment Charge Payment Amount over (ii) the
sum of (a) amounts reimbursable or payable to the Servicer pursuant to Section
3.11(a) or the Trustee pursuant to Section 3.11(b), (b) amounts deposited in the
Collection Account or the Distribution Account pursuant to clauses (a) through
(g) above, as the case may be, in error, (c) the amount of any
4
Prepayment Charges collected by the Servicer in connection with the full or
partial prepayment of any of the Mortgage Loans and any Servicer Prepayment
Charge Payment Amount, (d) the Trustee Fee payable from the Distribution Account
pursuant to Section 8.05 and (e) any indemnification payments or expense
reimbursements made by the Trust Fund pursuant to Section 8.05.
"Balloon Mortgage Loan": A Mortgage Loan that provides for the payment
of the unamortized principal balance of such Mortgage Loan in a single payment
at the maturity of such Mortgage Loan that is substantially greater than the
preceding monthly payment.
"Balloon Payment": A payment of the unamortized principal balance of a
Mortgage Loan in a single payment at the maturity of such Mortgage Loan that is
substantially greater than the preceding Monthly Payment.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Class A Certificates and the Mezzanine Certificates shall be
Book-Entry Certificates.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking or savings institutions in the State of Delaware, the State of New
York, the State of Texas, the State of California or in the city in which the
Corporate Trust Office of the Trustee is located are authorized or obligated by
law or executive order to be closed.
"Certificate": Any Regular Certificate or Residual Certificate.
"Certificateholder" or "Holder": The Person in whose name a Certificate
is registered in the Certificate Register, except that a Disqualified
Organization or non-U.S. Person shall not be a Holder of a Residual Certificate
for any purpose hereof and, solely for the purposes of giving any consent
pursuant to this Agreement, any Certificate registered in the name of the
Depositor or the Servicer or any Affiliate thereof shall be deemed not to be
outstanding and the Voting Rights to which it is entitled shall not be taken
into account in determining whether the requisite percentage of Voting Rights
necessary to effect any such consent has been obtained, except as otherwise
provided in Section 11.01. The Trustee may conclusively rely upon a certificate
of the Depositor or the Servicer in determining whether a Certificate is held by
an Affiliate thereof. All references herein to "Holders" or "Certificateholders"
shall reflect the rights of Certificate Owners as they may indirectly exercise
such rights through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Trustee shall be
required to recognize as a "Holder" or "Certificateholder" only the Person in
whose name a Certificate is registered in the Certificate Register.
5
"Certificate Margin": With respect to the Class A-1 Certificates on
each Distribution Date (A) on or prior to the Optional Termination Date, 0.39%
per annum and (B) after the Optional Termination Date, 0.78% per annum. With
respect to the Class A-2 Certificates on each Distribution Date (A) on or prior
to the Optional Termination Date, 0.38% per annum and (B) after the Optional
Termination Date, 0.76% per annum. With respect to the Class M-1 Certificates on
each Distribution Date (A) on or prior to the Optional Termination Date, 0.75%
per annum and (B) after the Optional Termination Date, 1.25% per annum. With
respect to the Class M-2 Certificates on each Distribution Date (A) on or prior
to the Optional Termination Date, 1.25% per annum and (B) after the Optional
Termination Date, 1.75% per annum. With respect to the Class M-3 Certificates on
each Distribution Date (A) on or prior to the Optional Termination Date, 2.00%
per annum and (B) after the Optional Termination Date, 2.50% per annum. With
respect to the Class M-4 Certificates on each Distribution Date (A) on or prior
to the Optional Termination Date, 2.35% per annum and (B) after the Optional
Termination Date, 2.85% per annum.
"Certificate Owner": With respect to each Book-Entry Certificate, any
beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of Regular
Certificates (other than the Class C Certificates) immediately prior to any
Distribution Date, will be equal to the Initial Certificate Principal Balance
thereof reduced by the sum of all amounts actually distributed in respect of
principal of such Class and, in the case of a Mezzanine Certificate, Realized
Losses allocated thereto on all prior Distribution Dates. With respect to the
Class C Certificates as of any date of determination, an amount equal to the
excess, if any, of (A) the then aggregate Uncertificated Principal Balances of
the REMIC 1 Regular Interests over (B) the then aggregate Certificate Principal
Balances of the Class A Certificates, the Mezzanine Certificates and the Class P
Certificates then outstanding.
"Certificate Register" and "Certificate Registrar": The register
maintained and registrar appointed pursuant to Section 5.02 hereof.
"Class": Collectively, Certificates which have the same priority of
payment and bear the same class designation and the form of which is identical
except for variation in the Percentage Interest evidenced thereby.
"Class A Certificates": Any Class A-1 Certificate or Class A-2
Certificate.
"Class A Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Class A-1 Principal Distribution Amount
and (ii) the Class A-2 Principal Distribution Amount.
"Class A-1 Certificate": Any one of the Class A-1 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-1, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC 2.
6
"Class A-1 Principal Distribution Amount": The excess of (x) the
Certificate Principal Balance of the Class A-1 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 63.00% and
(ii) the aggregate Stated Principal Balance of the Group I Mortgage Loans as of
the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Group I Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the related
Overcollateralization Floor.
"Class A-2 Certificate": Any one of the Class A-2 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-2, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC 2.
"Class A-2 Principal Distribution Amount": The excess of (x) the
Certificate Principal Balance of the Class A-2 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 63.00% and
(ii) the aggregate Stated Principal Balance of the Group II Mortgage Loans as of
the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Group II Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the related
Overcollateralization Floor.
"Class C Certificates": Any one of the Class C Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-7, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC 2.
"Class M-1 Certificate": Any one of the Class M-1 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-3, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC 2.
"Class M-1 Principal Distribution Amount": The excess of (x) the sum of
(i) the aggregate Certificate Principal Balance of the Class A Certificates
(after taking into account the payment of the Class A Principal Distribution
Amount on such Distribution Date) and (ii) the Certificate Principal Balance of
the Class M-1 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 77.50% and (ii) the Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related
7
Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) minus the related Overcollateralization
Floor.
"Class M-2 Certificate": Any one of the Class M-2 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-4, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC 2.
"Class M-2 Principal Distribution Amount": The excess of (x) the sum of
(i) the aggregate Certificate Principal Balance of the Class A Certificates
(after taking into account the payment of the Class A Principal Distribution
Amount on such Distribution Date), (ii) the Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the payment of the Class M-1
Principal Distribution Amount on such Distribution Date) and (iii) the
Certificate Principal Balance of the Class M-2 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 89.00% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the related Overcollateralization Floor.
"Class M-3 Certificate": Any one of the Class M-3 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-5, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC 2.
"Class M-3 Principal Distribution Amount": The excess of (x) the sum of
(i) the aggregate Certificate Principal Balance of the Class A Certificates
(after taking into account the payment of the Class A Principal Distribution
Amount on such Distribution Date), (ii) the Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the payment of the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2 Certificates (after taking into account the
payment of the Class M-2 Principal Distribution Amount on such Distribution
Date) and (iv) the Certificate Principal Balance of the Class M-3 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 95.90% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or
8
advanced, and unscheduled collections of principal received during the related
Prepayment Period) minus the related Overcollateralization Floor.
"Class M-4 Certificate": Any one of the Class M-4 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-6, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC 3.
"Class M-4 Interest": An uncertificated interest in the Trust Fund held
by the Trustee on behalf of the Holders of the Class M-4 Certificates,
evidencing a Regular Interest in REMIC 2 for purposes of the REMIC Provisions.
"Class M-4 Principal Distribution Amount": The excess of (x) the sum of
(i) the aggregate Certificate Principal Balance of the Class A Certificates
(after taking into account the payment of the Class A Principal Distribution
Amount on such Distribution Date), (ii) the Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the payment of the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2 Certificates (after taking into account the
payment of the Class M-2 Principal Distribution Amount on such Distribution
Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the payment of the Class M-3 Principal Distribution
Amount on such Distribution Date) and (v) the Certificate Principal Balance of
the Class M-4 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 98.20% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) minus the related Overcollateralization Floor.
"Class P Certificate": Any one of the Class P Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-8, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC 2.
"Class R Certificate": The Class R Certificate executed by the Trustee,
and authenticated and delivered by the Certificate Registrar, substantially in
the form annexed hereto as Exhibit A-9 and evidencing the ownership of the Class
R-1 Interest and the Class R-2 Interest.
"Class R Interest": The Class R-1 Interest or the Class R-2 Interest.
"Class R-1 Interest": The uncertificated Residual Interest in REMIC 1.
9
"Class R-2 Interest": The uncertificated Residual Interest in REMIC 2.
"Class R-X Certificate": The Class R-X Certificate executed by the
Trustee, and authenticated and delivered by the Certificate Registrar,
evidencing the ownership of the Residual Interest in REMIC 3.
"Close of Business": As used herein, with respect to any Business Day,
5:00 p.m. (New York time).
"Closing Date": September 30, 2002.
"Code": The Internal Revenue Code of 1986.
"Collection Account": The account or accounts created and maintained by
the Servicer pursuant to Section 3.10(a), which shall be entitled "Deutsche Bank
National Trust Company, as Trustee, in trust for registered Holders of Fremont
Home Loan Trust 2002-1, Asset-Backed Certificates, Series 2002-1," which must be
an Eligible Account.
"Compensating Interest": As defined in Section 3.24 hereof.
"Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at 0000 Xxxx Xx. Xxxxxx Xxxxx,
Xxxxx Xxx, XX 00000-0000, or at such other address as the Trustee may designate
from time to time by notice to the Certificateholders, the Depositor, the
Servicer, the Originator and the Seller.
"Corresponding Certificate": With respect to (i) REMIC 1 Regular
Interest LTA1, (ii) REMIC 1 Regular Interest LTA2, (iii) REMIC 1 Regular
Interest LTM1, (iv) REMIC 1 Regular Interest LTM2, (v) REMIC 1 Regular Interest
LTM3, (vi) REMIC 1 Regular Interest LTM4 and (vii) REMIC 1 Regular Interest LTP,
(i) the Class A-1 Certificates, (ii) the Class A-2 Certificates, (iii) the Class
M-1 Certificates, (iv) Class M-2 Certificates, (v) Class M-3 Certificates, (vi)
the Class M-4 Certificates and (vii) Class P Certificates, respectively.
"Credit Enhancement Percentage": For any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the sum of the
aggregate Certificate Principal Balances of the Mezzanine Certificates and the
Class C Certificates, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans, calculated prior to taking into account
payments of principal on the Mortgage Loans and distribution of the Group I
Principal Distribution Amount and the Group II Principal Distribution Amount to
the Holders of the Certificates then entitled to distributions of principal on
such Distribution Date.
"Cumulative Loss Percentage": With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses incurred from the Cut-off
10
Date to the last day of the preceding calendar month and the denominator of
which is the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date.
"Custodian": Deutsche Bank National Trust Company, as custodian of the
Mortgage Files, or any successor thereto.
"Cut-off Date": With respect to each Mortgage Loan, the later of (i)
the date of origination of such Mortgage Loan or (ii) September 1, 2002.
"Cut-off Date Principal Balance": With respect to any Mortgage Loan,
the unpaid principal balance thereof as of the Cut-off Date of such Mortgage
Loan (or as of the applicable date of substitution with respect to a Qualified
Substitute Mortgage Loan), after giving effect to scheduled payments due on or
before the Cut-off Date, whether or not received.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.02(c) hereof.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by
one or more Qualified Substitute Mortgage Loans.
"Delinquency Percentage": For any Distribution Date, the percentage
obtained by dividing (x) the aggregate Principal Balance of Mortgage Loans that
are Delinquent 60 days or more, that are in foreclosure, that have been
converted to REO Properties or that have been discharged by reason of bankruptcy
by (y) the aggregate Principal Balance of the Mortgage Loans, in each case, as
of the last day of the previous calendar month.
"Delinquent": With respect to any Mortgage Loan and related Monthly
Payment, the Monthly Payment due on a Due Date which is not made by the Close of
Business on the next scheduled Due Date for such Mortgage Loan. For example, a
Mortgage Loan is 60 or more days Delinquent if the Monthly Payment due on a Due
Date is not made by the Close of Business on the second scheduled Due Date after
such Due Date.
"Depositor": Financial Asset Securities Corp., a Delaware corporation,
or any successor in interest.
"Depository": The initial Depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the
11
Securities Exchange Act of 1934, as amended. The Depository shall initially be
the registered Holder of the Book-Entry Certificates. The Depository shall at
all times be a "clearing corporation" as defined in Section 8-102(3) of the
Uniform Commercial Code of the State of New York. Upon request, the Depository
may also be Clearstream Banking Luxembourg and the Euroclear System.
"Depository Participant": A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": With respect to any Distribution Date, the 15th
day of the calendar month in which such Distribution Date occurs or, if such
15th day is not a Business Day, the Business Day immediately preceding such 15th
day.
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by the REMIC other than through an
Independent Contractor; provided, however, that the Trustee (or the Servicer on
behalf of the Trustee) shall not be considered to Directly Operate an REO
Property solely because the Trustee (or the Servicer on behalf of the Trustee)
establishes rental terms, chooses tenants, enters into or renews leases, deals
with taxes and insurance, or makes decisions as to repairs or capital
expenditures with respect to such REO Property.
"Disqualified Organization": A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of: (i) the United
States, any state or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (ii) any organization (other than a cooperative described in Section
521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code
unless such organization is subject to the tax imposed by Section 511 of the
Code, (iii) any organization described in Section 1381(a)(2)(C) of the Code or
(iv) an "electing large partnership" within the meaning of Section 775 of the
Code. A corporation will not be treated as an instrumentality of the United
States or of any state or political subdivision thereof, if all of its
activities are subject to tax and, a majority of its board of directors is not
selected by a governmental unit. The term "United States", "state" and
"international organizations" shall have the meanings set forth in Section 7701
of the Code.
"Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.10(b) which shall be entitled
"Distribution Account, Deutsche Bank National Trust Company, as Trustee, in
trust for the registered Certificateholders of Fremont Home Loan Trust 2002-1,
Asset-Backed Certificates, Series 2002-1" and which must be an Eligible Account.
"Distribution Date": The 25th day of any calendar month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in October 2002.
12
"Due Date": With respect to each Mortgage Loan and any Distribution
Date, the first day of the calendar month in which such Distribution Date occurs
on which the Monthly Payment for such Mortgage Loan was due (or, in the case of
any Mortgage Loan under the terms of which the Monthly Payment for such Mortgage
Loan was due on a day other than the first day of the calendar month in which
such Distribution Date occurs, the day during the related Due Period on which
such Monthly Payment was due), exclusive of any days of grace.
"Due Period": With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month in which such
Distribution Date occurs and ending on the first day of the month in which such
Distribution Date occurs.
"Eligible Account": Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the short- term unsecured debt obligations of such holding company) are
rated A-1+ by S&P, F-1 by Fitch and P-1 by Xxxxx'x (or comparable ratings if
S&P, Fitch and Xxxxx'x are not the Rating Agencies) at the time any amounts are
held on deposit therein, (ii) an account or accounts the deposits in which are
fully insured by the FDIC (to the limits established by such corporation), the
uninsured deposits in which account are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to the Trustee and to each Rating
Agency, the Certificateholders will have a claim with respect to the funds in
such account or a perfected first priority security interest against such
collateral (which shall be limited to Permitted Investments) securing such funds
that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, (iii) a trust
account or accounts maintained with the trust department of a federal or state
chartered depository institution, national banking association or trust company
acting in its fiduciary capacity or (iv) an account otherwise acceptable to each
Rating Agency without reduction or withdrawal of their then current ratings of
the Certificates as evidenced by a letter from each Rating Agency to the
Trustee. Eligible Accounts may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, fire and hazard insurance premiums and other payments
required to be escrowed by the Mortgagor with the mortgagee pursuant to any
Mortgage Loan.
"Excess Overcollateralized Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and any Distribution Date, the
excess, if any, of (i) the Overcollateralized Amount for such Distribution Date,
assuming that 100% of the Principal Remittance Amount is applied as a principal
payment on such Distribution Date over (ii) the Overcollateralization Target
Amount for such Distribution Date.
"Extra Principal Distribution Amount": With respect to any Distribution
Date, the lesser of (x) the Monthly Interest Distributable Amount payable on the
Class C Certificates on such Distribution Date as
13
reduced by Realized Losses allocated thereto with respect to such Distribution
Date pursuant to Section 4.08 and (y) the Overcollateralization Deficiency
Amount for such Distribution Date.
"Xxxxxx Mae": Federal National Mortgage Association or any successor
thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor thereto.
"Final Recovery Determination": With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Originator or the Servicer pursuant to or as contemplated by Section 2.03
or 10.01), a determination made by the Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Servicer, in its
reasonable good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered. The Servicer shall maintain records, prepared by
a Servicing Officer, of each Final Recovery Determination made thereby.
"Fitch": Fitch Ratings, or its successor in interest.
"Fixed-Rate Mortgage Loan": A first lien Mortgage Loan which provides
for a fixed Mortgage Rate payable with respect thereto. The Fixed-Rate Mortgage
Loans are identified as such on the Mortgage Loan Schedule.
"Formula Rate": For any Distribution Date and the Class A Certificates
and the Mezzanine Certificates, the lesser of (i) LIBOR plus the related
Certificate Margin and (ii) the Maximum Cap Rate.
"Xxxxxxx Mac": The Federal Home Loan Mortgage Corporation, or any
successor thereto.
"Gross Margin": With respect to each Adjustable-Rate Mortgage Loan, the
fixed percentage set forth in the related Mortgage Note that is added to the
Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Mortgage Loan.
"Group I Allocation Percentage": With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is (i) the Group
I Principal Remittance Amount for such Distribution Date, and the denominator of
which is (ii) the Principal Remittance Amount for such Distribution Date.
"Group I Basic Principal Distribution Amount": With respect to any
Distribution Date, the excess of (i) the Group I Principal Remittance Amount for
such Distribution Date over (ii)(a) the Overcollateralization Release Amount, if
any, for such Distribution Date multiplied by (b) the Group I Allocation
Percentage.
"Group I Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Available Funds for such Distribution Date
attributable to interest received or advanced with respect to the Group I
Mortgage Loans.
14
"Group I Mortgage Loan": A Mortgage Loan assigned to Loan Group II with
a principal balance that may or may not conform to Xxxxxx Xxx and Xxxxxxx Mac
guidelines.
"Group I Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group I Basic Principal Distribution
Amount for such Distribution Date and (ii)(a) the Extra Principal Distribution
Amount for such Distribution Date multiplied by (b) the Group I Allocation
Percentage.
"Group I Principal Remittance Amount": With respect to any Distribution
Date, the sum of (i) each scheduled payment of principal collected or advanced
on the Group I Mortgage Loans by the Servicer that were due during the related
Due Period, (ii) the principal portion of all partial and full principal
prepayments of the Group I Mortgage Loans applied by the Servicer during the
related Prepayment Period, (iii) the principal portion of all related Net
Liquidation Proceeds and Insurance Proceeds received during such Prepayment
Period with respect to the Group I Mortgage Loans, (iv) that portion of the
Purchase Price, representing principal of any repurchased Group I Mortgage Loan,
deposited to the Collection Account during such Prepayment Period, (v) the
principal portion of any related Substitution Adjustments deposited in the
Collection Account during such Prepayment Period with respect to the Group I
Mortgage Loans and (vi) on the Distribution Date on which the Trust Fund is to
be terminated pursuant to Section 10.01, that portion of the Termination Price,
in respect of principal on the Group I Mortgage Loans.
"Group II Allocation Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is (i) the
Group II Principal Remittance Amount for such Distribution Date, and the
denominator of which is (ii) the Principal Remittance Amount for such
Distribution Date.
"Group II Basic Principal Distribution Amount": With respect to any
Distribution Date, the excess of (i) the Group II Principal Remittance Amount
for such Distribution Date over (ii)(a) the Overcollateralization Release
Amount, if any, for such Distribution Date multiplied by (b) the Group II
Allocation Percentage.
"Group II Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Available Funds for such Distribution Date
attributable to interest received or advanced with respect to the Group II
Mortgage Loans.
"Group II Mortgage Loan": A Mortgage Loan assigned to Loan Group I with
a principal balance that conforms to Xxxxxx Xxx and Xxxxxxx Mac guidelines.
"Group II Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group II Basic Principal Distribution
Amount for such Distribution Date and (ii)(a) the Extra Principal Distribution
Amount for such Distribution Date multiplied by (b) the Group II Allocation
Percentage.
"Group II Principal Remittance Amount": With respect to any
Distribution Date, the sum of (i) each scheduled payment of principal collected
or advanced on the Group II Mortgage Loans by the Servicer that were due during
the related Due Period, (ii) the principal portion of all partial and full
principal prepayments of the Group II Mortgage Loans applied by the Servicer
during the related Prepayment
15
Period, (iii) the principal portion of all related Net Liquidation Proceeds and
Insurance Proceeds received during such Prepayment Period with respect to the
Group II Mortgage Loans, (iv) that portion of the Purchase Price, representing
principal of any repurchased Group II Mortgage Loan, deposited to the Collection
Account during such Prepayment Period, (v) the principal portion of any related
Substitution Adjustments deposited in the Collection Account during such
Prepayment Period with respect to the Group II Mortgage Loans and (vi) on the
Distribution Date on which the Trust Fund is to be terminated pursuant to
Section 10.01, that portion of the Termination Price, in respect of principal on
the Group II Mortgage Loans.
"Independent": When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Servicer and their
respective Affiliates, (b) does not have any direct financial interest in or any
material indirect financial interest in the Depositor or the Servicer or any
Affiliate thereof, and (c) is not connected with the Depositor or the Servicer
or any Affiliate thereof as an officer, employee, promoter, underwriter,
trustee, partner, director or Person performing similar functions; provided,
however, that a Person shall not fail to be Independent of the Depositor or the
Servicer or any Affiliate thereof merely because such Person is the beneficial
owner of 1% or less of any class of securities issued by the Depositor or the
Servicer or any Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the
Servicer) that would be an "independent contractor" with respect to any of the
REMICs created hereunder within the meaning of Section 856(d)(3) of the Code if
such REMIC were a real estate investment trust (except that the ownership tests
set forth in that section shall be considered to be met by any Person that owns,
directly or indirectly, 35% or more of any Class of Certificates), so long as
each such REMIC does not receive or derive any income from such Person and
provided that the relationship between such Person and such REMIC is at arm's
length, all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or
(ii) any other Person (including the Servicer) if the Trustee has received an
Opinion of Counsel to the effect that the taking of any action in respect of any
REO Property by such Person, subject to any conditions therein specified, that
is otherwise herein contemplated to be taken by an Independent Contractor will
not cause such REO Property to cease to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for purposes of Section 860D(a) of the Code), or cause any
income realized in respect of such REO Property to fail to qualify as Rents from
Real Property.
"Index": With respect to each Adjustable-Rate Mortgage Loan and with
respect to each related Adjustment Date, the index as specified in the related
Mortgage Note.
"Initial Certificate Principal Balance": With respect to any Regular
Certificate, the amount designated "Initial Certificate Principal Balance" on
the face thereof.
"Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan, to the extent such proceeds are
received by the Servicer and are not to be applied to the restoration of the
related Mortgaged Property or released to the Mortgagor in accordance with the
16
procedures that the Servicer would follow in servicing mortgage loans held for
its own account, subject to the terms and conditions of the related Mortgage
Note and Mortgage.
"Interest Determination Date": With respect to the Class A Certificates
and the Mezzanine Certificates and each Accrual Period, the second LIBOR
Business Day preceding the commencement of such Accrual Period.
"Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any related
Due Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late payments or
collections of principal and/or interest due (without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but delinquent on a
contractual basis for such Due Period and not previously recovered.
"LIBOR": With respect to each Accrual Period, the rate determined by
the Trustee on the related Interest Determination Date on the basis of the
London interbank offered rate for one-month United States dollar deposits, as
such rate appears on the Telerate Page 3750, as of 11:00 a.m. (London time) on
such Interest Determination Date. If such rate does not appear on Telerate Page
3750, the rate for such Interest Determination Date will be determined on the
basis of the offered rates of the Reference Banks for one- month United States
dollar deposits, as of 11:00 a.m. (London time) on such Interest Determination
Date. The Trustee will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. On such Interest
Determination Date, LIBOR for the related Accrual Period will be established by
the Trustee as follows:
(i) If on such Interest Determination Date two or more Reference Banks
provide such offered quotations, LIBOR for the related Accrual Period shall
be the arithmetic mean of such offered quotations (rounded upwards if
necessary to the nearest whole multiple of 1/16 of 1%); and
(ii) If on such Interest Determination Date fewer than two Reference
Banks provide such offered quotations, LIBOR for the related Accrual Period
shall be the higher of (i) LIBOR as determined on the previous Interest
Determination Date and (ii) the Reserve Interest Rate.
"LIBOR Business Day": Any day on which banks in London, England and The
City of New York are open and conducting transactions in foreign currency and
exchange.
"Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage
Loan in respect of which the Servicer has determined, in accordance with the
servicing procedures specified herein, as of the end of the related Prepayment
Period, that all Liquidation Proceeds which it expects to recover with respect
to the liquidation of the Mortgage Loan or disposition of the related REO
Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full, (ii) a Final Recovery
Determination is made as to such Mortgage Loan or (iii) such Mortgage Loan is
removed from the Trust Fund by reason of its being purchased, sold or replaced
17
pursuant to or as contemplated by Section 2.03 or Section 10.01. With respect to
any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property or (ii) such REO Property is
removed from the Trust Fund by reason of its being sold or purchased pursuant to
Section 3.23 or Section 10.01.
"Liquidation Proceeds": The amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received by
the Servicer in connection with (i) the taking of all or a part of a Mortgaged
Property by exercise of the power of eminent domain or condemnation, (ii) the
liquidation of a defaulted Mortgage Loan by means of a trustee's sale,
foreclosure sale or otherwise or (iii) the repurchase, substitution or sale of a
Mortgage Loan or an REO Property pursuant to or as contemplated by Section 2.03,
Section 3.23 or Section 10.01.
"Loan-to-Value Ratio": As of any date and as to any Mortgage Loan, the
fraction, expressed as a percentage, the numerator of which is the Principal
Balance of the Mortgage Loan and the denominator of which is the Value of the
related Mortgaged Property.
"Loan Group": Either Loan Group I or Loan Group II, as the context
requires.
"Loan Group I": The group of Mortgage Loans identified in the Mortgage
Loan Schedule as having been assigned to Loan Group I.
"Loan Group II": The group of Mortgage Loans identified in the Mortgage
Loan Schedule as having been assigned to Loan Group II.
"Losses": As defined in Section 9.03.
"Lost Note Affidavit": With respect to any Mortgage Loan as to which
the original Mortgage Note has been permanently lost, misplaced or destroyed and
has not been replaced, an affidavit from the Originator certifying that the
original Mortgage Note has been lost, misplaced or destroyed (together with a
copy of the related Mortgage Note) and indemnifying the Trust against any loss,
cost or liability resulting from the failure to deliver the original Mortgage
Note in the form of Exhibit H hereto.
"Majority Certificateholders": The Holders of Certificates evidencing
at least 51% of the Voting Rights.
"Marker Rate": With respect to the Class C Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC 1 Pass-Through Rates for REMIC 1 Regular Interest
LTA1, REMIC 1 Regular Interest LTA2, REMIC 1 Regular Interest LTM1, REMIC 1
Regular Interest LTM2, REMIC 1 Regular Interest LTM3, REMIC 1 Regular Interest
LTM4 and REMIC 1 Regular Interest LTZZ, with the rate on REMIC 1 Regular
Interest LTA1 subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the Class A-1 Certificates and (ii) the Maximum Cap Rate
for the purpose of this calculation; with the rate on REMIC 1 Regular Interest
LTA2 subject to a cap equal to the lesser of (i) LIBOR plus the Certificate
Margin of the Class A-2 Certificates
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and (ii) the Maximum Cap Rate for the purpose of this calculation; with the rate
on REMIC 1 Regular Interest LTM1 subject to a cap equal to the lesser of (i)
LIBOR plus the Certificate Margin of the Class M-1 Certificates and (ii) the
Maximum Cap Rate for the purpose of this calculation; with the rate on REMIC 1
Regular Interest LTM2 subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the Class M-2 Certificates and (ii) the Maximum Cap Rate
for the purpose of this calculation; with the rate on REMIC 1 Regular Interest
LTM3 subject to a cap equal to the lesser of (i) LIBOR plus the Certificate
Margin of the Class M-3 Certificates and (ii) the Maximum Cap Rate for the
purpose of this calculation; with the rate on REMIC 1 Regular Interest LTM4
subject to a cap equal to the lesser of (i) LIBOR plus the Certificate Margin of
the Class M-4 Certificates and (ii) the Maximum Cap Rate for the purpose of this
calculation and with the rate on REMIC 1 Regular Interest LTZZ subject to a cap
of zero for the purpose of this calculation; provided, however, that for this
purpose, calculations of the Uncertificated REMIC 1 Pass-Through Rate and the
related caps with respect to REMIC 1 Regular Interest LTA1, REMIC 1 Regular
Interest LTA2, REMIC 1 Regular Interest LTM1, REMIC 1 Regular Interest LTM2,
REMIC 1 Regular Interest LTM3 and REMIC 1 Regular Interest LTM4 shall be
multiplied by a fraction, the numerator of which is the actual number of days in
the Accrual Period and the denominator of which is 30.
"Maximum Cap Rate": For any Distribution Date and the Class A
Certificates and the Mezzanine Certificates, a per annum rate equal to the
product of (x) the weighted average of the Adjusted Net Maximum Mortgage Rates
of the Mortgage Loans, weighted on the basis of the outstanding Principal
Balances of the Mortgage Loans as of the first day of the month preceding the
month of such Distribution Date and (y) a fraction, the numerator of which is 30
and the denominator of which is the actual number of days elapsed in the related
Accrual Period.
"Maximum Uncertificated Accrued Interest Deferral Amount": With respect
to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 1 Pass-Through Rate applicable to REMIC 1 Regular Interest
LTZZ for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LTZZ minus the REMIC 1
Overcollateralization Amount, in each case for such Distribution Date, over (b)
Uncertificated Accrued Interest on REMIC 1 Regular Interest LTA1 with the rate
on REMIC 1 Regular Interest LTA1 subject to a cap equal to the lesser of (i)
LIBOR plus the Certificate Margin of the Class A-1 Certificates and (ii) the
related Maximum Cap Rate for the purpose of this calculation; Uncertificated
Accrued Interest on REMIC 1 Regular Interest LTA2 with the rate on REMIC 1
Regular Interest LTA2 subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the Class A-2 Certificates and (ii) the related Maximum
Cap Rate for the purpose of this calculation; Uncertificated Accrued Interest on
REMIC 1 Regular Interest LTM1 with the rate on REMIC 1 Regular Interest LTM1
subject to a cap equal to the lesser of (i) LIBOR plus the Certificate Margin of
the Class M-1 Certificates and (ii) the related Maximum Cap Rate for the purpose
of this calculation; Uncertificated Accrued Interest on REMIC 1 Regular Interest
LTM2 with the rate on REMIC 1 Regular Interest LTM2 subject to a cap equal to
the lesser of (i) LIBOR plus the Certificate Margin of the Class M-2
Certificates and (ii) the related Maximum Cap Rate for the purpose of this
calculation; Uncertificated Accrued Interest on REMIC 1 Regular Interest LTM3
with the rate on REMIC 1 Regular Interest LTM3 subject to a cap equal to the
lesser of (i) LIBOR plus the Certificate Margin of the Class M-3 Certificates
and (ii) the related Maximum Cap Rate for the purpose of this calculation for
such
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Distribution Date; and Uncertificated Accrued Interest on REMIC 1 Regular
Interest LTM4 with the rate on REMIC 1 Regular Interest LTM4 subject to a cap
equal to the lesser of (i) LIBOR plus the Certificate Margin of the Class M-4
Certificates and (ii) the related Maximum Cap Rate for the purpose of this
calculation for such Distribution Date; provided, however, that for this
purpose, calculations of the Uncertificated REMIC 1 Pass-Through Rate and the
related caps with respect to REMIC 1 Regular Interest LTA1, REMIC 1 Regular
Interest LTA2, REMIC 1 Regular Interest LTM1, REMIC 1 Regular Interest LTM2,
REMIC 1 Regular Interest LTM3 and REMIC 1 Regular Interest LTM4 shall be
multiplied by a fraction, the numerator of which is the actual number of days in
the Accrual Period and the denominator of which is 30.
"Maximum Mortgage Rate": With respect to each Adjustable-Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the maximum
Mortgage Rate thereunder.
"Mezzanine Certificate": Any Class M-1 Certificate, Class M-2
Certificate, Class M-3 Certificate or Class M-4 Certificate.
"Minimum Mortgage Rate": With respect to each Adjustable-Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the minimum
Mortgage Rate thereunder.
"Monthly Interest Distributable Amount": With respect to the Class A
Certificates, Mezzanine Certificates and the Class C Certificates and any
Distribution Date, the amount of interest accrued during the related Accrual
Period at the related Pass-Through Rate on the Certificate Principal Balance (or
Notional Amount in the case of the Class C Certificates) of such Class
immediately prior to such Distribution Date, in each case, reduced by any Net
Prepayment Interest Shortfalls, Relief Act Interest Shortfalls or other
shortfalls allocated to such Certificate as provided in Section 1.03.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related Mortgagor from time to time under the related Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any reduction in
the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Servicer pursuant to Section 3.07; and (c) on the assumption that all other
amounts, if any, due under such Mortgage Loan are paid when due.
"Moody's": Xxxxx'x Investors Service, Inc., or its successor in
interest.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first lien on, or first priority security interest in, a Mortgaged Property
securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
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"Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to time held as
a part of the Trust Fund, the Mortgage Loans so held being identified in the
Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The agreement among the Originator,
the Seller and the Depositor, regarding the transfer of the Mortgage Loans by
the Seller to or at the direction of the Depositor, substantially in the form
attached hereto as Exhibit C.
"Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
included in REMIC 1 on such date, separately identifying the Group I Mortgage
Loans and the Group II Mortgage Loans, attached hereto as Exhibit D. The
Mortgage Loan Schedule shall be prepared by the Seller and shall set forth the
following information with respect to each Mortgage Loan, as applicable:
(1) the Mortgage Loan identifying number;
(2) the Mortgagor's name;
(3) the street address of the Mortgaged Property including the state
and zip code;
(4) a code indicating whether the Mortgaged Property was represented by
the borrower, at the time of origination, as being owner-occupied;
(5) the type of Residential Dwelling constituting the Mortgaged
Property;
(6) the original months to maturity;
(7) the stated remaining months to maturity from the Cut-off Date based
on the original amortization schedule;
(8) the Loan-to-Value Ratio at origination;
(9) the Mortgage Rate in effect immediately following the Cut-off Date;
(10) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(11) the stated maturity date;
(12) the amount of the Monthly Payment at origination;
(13) the amount of the Monthly Payment due on the first Due Date after
the Cut- off Date;
(14) the last Due Date on which a Monthly Payment was actually applied
to the unpaid Stated Principal Balance;
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(15) the original principal amount of the Mortgage Loan;
(16) the Stated Principal Balance of the Mortgage Loan as of the Close
of Business on the Cut- off Date;
(17) a code indicating the purpose of the Mortgage Loan (i.e., purchase
financing, rate/term refinancing, cash-out refinancing);
(18) the Mortgage Rate at origination;
(19) a code indicating the documentation program (i.e., full
documentation, limited income verification, no income verification,
alternative income verification);
(20) the risk grade;
(21) the Value of the Mortgaged Property;
(22) the sale price of the Mortgaged Property, if applicable;
(23) the actual unpaid principal balance of the Mortgage Loan as of the
Cut-off Date;
(24) the type and term of the related Prepayment Charge;
(25) with respect to any Adjustable-Rate Mortgage Loan, the rounding
code, the minimum Mortgage Rate, the maximum Mortgage Rate, the Gross
Margin, the next Adjustment Date and the Periodic Rate Cap; and
(26) the program code.
The Mortgage Loan Schedule shall set forth the following information,
with respect to the Mortgage Loans in the aggregate and for each Loan Group as
of the Cut-off Date: (1) the number of Mortgage Loans (separately identifying
the number of Fixed-Rate Mortgage Loans and the number of Adjustable-Rate
Mortgage Loans); (2) the current Principal Balance of the Mortgage Loans; (3)
the weighted average Mortgage Rate of the Mortgage Loans and (4) the weighted
average remaining term to maturity of the Mortgage Loans. The Mortgage Loan
Schedule shall be amended from time to time by the Servicer in accordance with
the provisions of this Agreement. With respect to any Qualified Substitute
Mortgage Loan, Cut-off Date shall refer to the related Cut-off Date for such
Mortgage Loan, determined in accordance with the definition of Cut-off Date
herein.
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
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"Mortgage Pool": The pool of Mortgage Loans, identified on Exhibit D
from time to time, and any REO Properties acquired in respect thereof.
"Mortgage Rate": With respect to each Fixed-Rate Mortgage Loan, the
rate set forth in the related Mortgage Note. With respect to each
Adjustable-Rate Mortgage Loan, the annual rate at which interest accrues on such
Mortgage Loan from time to time in accordance with the provisions of the related
Mortgage Note, which rate (A) as of any date of determination until the first
Adjustment Date following the Cut-off Date shall be the rate set forth in the
Mortgage Loan Schedule as the Mortgage Rate in effect immediately following the
Cut-off Date and (B) as of any date of determination thereafter shall be the
rate as adjusted on the most recent Adjustment Date, to equal the sum, rounded
to the next highest or nearest 0.125% (as provided in the Mortgage Note), of the
Index, determined as set forth in the related Mortgage Note, plus the related
Gross Margin subject to the limitations set forth in the related Mortgage Note.
With respect to each Mortgage Loan that becomes an REO Property, as of any date
of determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.
"Mortgaged Property": The underlying property securing a Mortgage Loan,
including any REO Property, consisting of a fee simple estate in a parcel of
real property improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property) the related Liquidation Proceeds and Insurance Proceeds net of
Advances, Servicing Advances, Servicing Fees and any other accrued and unpaid
servicing fees received and retained in connection with the liquidation of such
Mortgage Loan or Mortgaged Property.
"Net Monthly Excess Cashflow": With respect to each Distribution Date,
the sum of (a) any Overcollateralization Release Amount for such Distribution
Date and (b) the excess of (x) Available Funds for such Distribution Date over
(y) the sum for such Distribution Date of (A) the Monthly Interest Distributable
Amounts for the Class A Certificates and the Mezzanine Certificates, (B) the
Unpaid Interest Shortfall Amounts for the Class A Certificates and (C) the
Principal Remittance Amount.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the related
REO Property), as of any date of determination, a per annum rate of interest
equal to the then applicable Mortgage Rate for such Mortgage Loan minus the
Servicing Fee Rate.
"Net Prepayment Interest Shortfall": With respect to any Distribution
Date, the excess, if any, of any Prepayment Interest Shortfalls for such date
over the related Compensating Interest.
"Net WAC Rate": For any Distribution Date and the Class A Certificates
and the Mezzanine Certificates, a per annum rate equal to the product of (x) the
weighted average of the Adjusted Net Mortgage Rates of the Mortgage Loans,
weighted on the basis of the outstanding Principal Balances of the
23
Mortgage Loans as of the first day of the month preceding the month of such
Distribution Date and (y) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days elapsed in the related Accrual
Period. For federal income tax purposes, the economic equivalent of such rate
shall be expressed as the Uncertificated REMIC 1 Pass-Through Rate of the REMIC
1 Regular Interest for which such Class of Certificates is the Corresponding
Certificate.
"Net WAC Rate Carryover Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and any Distribution Date, the sum
of (A) the positive excess of (i) the amount of interest accrued on such Class
of Certificates on such Distribution Date calculated at the related Formula
Rate, over (ii) the amount of interest accrued on such Class of Certificates at
the Net WAC Rate for such Distribution Date and (B) the Net WAC Rate Carryover
Amount for the previous Distribution Date not previously paid, together with
interest thereon at a rate equal to the related Formula Rate for such Class of
Certificates for such Distribution Date and for such Accrual Period.
"Net WAC Rate Carryover Reserve Account": The account established and
maintained pursuant to Section 3.28.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed or extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.
"Nonrecoverable Advance": Any Advance or Servicing Advance previously
made or proposed to be made in respect of a Mortgage Loan or REO Property that,
in the good faith business judgment of the Servicer, will not be ultimately
recoverable from Late Collections, Insurance Proceeds, Liquidation Proceeds or
condemnation proceeds on such Mortgage Loan or REO Property as provided herein.
"Notional Amount": Immediately prior to any Distribution Date with
respect to the Class C Certificates, the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interests.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Servicer, the Seller or the
Depositor, as applicable.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor or the Servicer, acceptable
to the Trustee, except that any opinion of counsel relating to (a) the
qualification of any REMIC as a REMIC or (b) compliance with the REMIC
Provisions must be an opinion of Independent counsel.
"Optional Termination Date": The first Distribution Date on which the
Servicer may opt to terminate the Trust Fund pursuant to Section 10.01.
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"Original Class Certificate Principal Balance": With respect to the
Class A Certificates, the Mezzanine Certificates, the Class C Certificates and
the Class P Certificates, the corresponding amounts set forth opposite such
Class above in the Preliminary Statement.
"Original Mortgage Loan": Any of the Mortgage Loans included in the
Trust Fund as of the Closing Date. The aggregate principal balance of the
Original Mortgage Loans as of the Closing Date is equal to $217,100,160.01.
"Original Notional Amount": With respect to the Class C Certificates,
$217,100,160.01.
"Originator": Fremont Investment & Loan, a California corporation, or
its successor in interest.
"Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount on such Distribution Date (after
giving effect to distributions in respect of the Group I Basic Principal
Distribution Amount and the Group II Basic Principal Distribution Amount on such
Distribution Date).
"Overcollateralization Floor": With respect to the Class A-1
Certificate, $249,807.00. With respect to the Class A-2 Certificates,
$835,694.00. With respect to each class of the Mezzanine Certificates,
$1,085,501.00.
"Overcollateralization Release Amount": With respect to any
Distribution Date, the lesser of (x) the Principal Remittance Amount for such
Distribution Date and (y) the Excess Overcollateralized Amount.
"Overcollateralization Target Amount": With respect to any Distribution
Date, (i) prior to the Stepdown Date, $1,953,901.44 (ii) on or after the
Stepdown Date provided a Trigger Event is not in effect, the greater of (A) the
lesser of (x) 1.80% of the aggregate Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (y) $1,953,901.44 and (B) $1,085,500.80 and (iii)
on or after the Stepdown Date if a Trigger Event is in effect, the
Overcollateralization Target Amount for the immediately preceding Distribution
Date.
"Overcollateralized Amount": For any Distribution Date, the amount
equal to (i) the aggregate Principal Balance of the Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) as of the related Determination Date minus (ii) the sum of the aggregate
Certificate Principal Balance of the Class A Certificates, the Mezzanine
Certificates and the Class P Certificates as of such Distribution Date after
giving effect to distributions to be made on such Distribution Date.
25
"Ownership Interest": As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
"Pass-Through Rate": With respect to the Class A Certificates and the
Mezzanine Certificates and any Distribution Date, the lesser of (x) the related
Formula Rate for such Distribution Date and (y) the Net WAC Rate for such
Distribution Date. With respect to the Class C Certificates and any Distribution
Date, a per annum rate equal to the percentage equivalent of a fraction, the
numerator of which is the sum of the amounts calculated pursuant to clauses (A)
through (I) below, and the denominator of which is the aggregate of the
Uncertificated Principal Balances of the REMIC 1 Regular Interests. For purposes
of calculating the Pass-Through Rate for the Class C Certificates, the numerator
is equal to the sum of the following components:
(A) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LTAA minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTAA;
(B) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LTA1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTA1;
(C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LTA2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTA2;
(D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LTM1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTM1;
(E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LTM2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTM2;
(F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LTM3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTM3;
(G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LTM4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTM4;
26
(H) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LTZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTZZ; and
(I) 100% of the interest on the REMIC 1 Regular Interest LTP.
"Paying Agent": Any paying agent appointed pursuant to Section 5.05.
"Percentage Interest": With respect to any Certificate (other than a
Residual Certificate), a fraction, expressed as a percentage, the numerator of
which is the Initial Certificate Principal Balance represented by such
Certificate and the denominator of which is the Original Class Certificate
Principal Balance of the related Class. With respect to a Residual Certificate,
the portion of the Class evidenced thereby, expressed as a percentage, as stated
on the face of such Certificate; provided, however, that the sum of all such
percentages for each such Class totals 100%.
"Periodic Rate Cap": With respect to each Adjustable-Rate Mortgage Loan
and any Adjustment Date therefor, the fixed percentage set forth in the related
Mortgage Note, which is the maximum amount by which the Mortgage Rate for such
Mortgage Loan may increase or decrease (without regard to the Maximum Mortgage
Rate or the Minimum Mortgage Rate) on such Adjustment Date from the Mortgage
Rate in effect immediately prior to such Adjustment Date.
"Permitted Investments": Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued or managed by the Depositor, the Servicer, the Trustee or any
of their respective Affiliates or for which an Affiliate of the Trustee serves
as an advisor:
(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) (A) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by or federal funds sold by any depository
institution or trust company (including the Trustee or its agent acting in
their respective commercial capacities) incorporated under the laws of the
United States of America or any state thereof and subject to supervision
and examination by federal and/or state authorities, so long as, at the
time of such investment or contractual commitment providing for such
investment, such depository institution or trust company (or, if the only
Rating Agency is S&P, in the case of the principal depository institution
in a depository institution holding company, debt obligations of the
depository institution holding company) or its ultimate parent has a
short-term uninsured debt rating in one of the two highest available
ratings of Fitch and Xxxxx'x and the highest available rating category of
S&P and provided that each such investment has an original maturity of no
more than 365 days; and provided further that, if the only Rating Agency is
S&P and if the depository or trust company is a principal subsidiary of a
bank holding company and the debt obligations of such subsidiary are not
separately rated, the applicable rating shall be that of the bank holding
company; and,
27
provided further that, if the original maturity of such short- term
obligations of a domestic branch of a foreign depository institution or
trust company shall exceed 30 days, the short-term rating of such
institution shall be A-1+ in the case of S&P if S&P is the Rating Agency;
and (B) any other demand or time deposit or deposit which is fully insured
by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days with
respect to any security described in clause (i) above and entered into with
a depository institution or trust company (acting as principal) rated F1+
or higher by Fitch, P-1 by Xxxxx'x and rated A-1+ or higher by S&P,
provided, however, that collateral transferred pursuant to such repurchase
obligation must be of the type described in clause (i) above and must (A)
be valued daily at current market prices plus accrued interest, (B)
pursuant to such valuation, be equal, at all times, to 105% of the cash
transferred by the Trustee in exchange for such collateral and (C) be
delivered to the Trustee or, if the Trustee is supplying the collateral, an
agent for the Trustee, in such a manner as to accomplish perfection of a
security interest in the collateral by possession of certificated
securities;
(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 a Rating Agency in its
highest long-term unsecured rating category 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 a Rating Agency in its highest short-term unsecured debt
rating available at the time of such investment;
(vi) units of money market funds, including those money market funds
managed or advised by the Trustee or its Affiliates, that have been rated
"AAA" by Fitch (if rated by Fitch), "Aaa" by Xxxxx'x and "AAA" by S&P; 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 in writing as a
permitted investment of funds backing securities having ratings equivalent
to its highest initial rating of the Class A Certificates;
provided, that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any transferee of a Residual Certificate other
than a Disqualified Organization or a non-U.S. Person.
28
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan": Any employee benefit plan or certain other retirement plans and
arrangements, including individual retirement accounts and annuities, Xxxxx
plans and bank collective investment funds and insurance company general or
separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA and Section 4975 of the Code.
"Pool Balance": As of any date of determination, the aggregate
principal balance of the Mortgage Loans in both Loan Groups as of such date.
"Prepayment Assumption": As defined in the Prospectus Supplement.
"Prepayment Charge": With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof (other than any Servicer
Prepayment Charge Payment Amount).
"Prepayment Charge Schedule": As of any date, the list of Prepayment
Charges on the Mortgage Loans included in the Trust Fund on such date, attached
hereto as Schedule I (including the Prepayment Charge Summary attached thereto).
The Prepayment Charge Schedule shall set forth the following information with
respect to each Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination of the related Mortgage Loan;
(iv) the date on which the first monthly payment was due on the
related Mortgage Loan;
(v) the term of the related Prepayment Charge; and
(vi) the principal balance of the related Mortgage Loan as of the
Cut-off Date.
"Prepayment Interest Shortfall": With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a Principal Prepayment in full
during the portion of the related Prepayment Period occurring between the first
day of the related Prepayment Period and the last day of the calendar month
preceding the month in which such Distribution Date occurs, an amount equal to
interest at the applicable Net Mortgage Rate on the amount of such Principal
Prepayment for the number of days commencing on the date on which the prepayment
is applied and ending on the last day of the calendar month preceding the month
in which such Distribution Date occurs. The obligations of the Servicer in
respect of any Prepayment Interest Shortfall are set forth in Section 3.24.
29
"Prepayment Period": With respect to any Distribution Date, the
calendar month preceding the calendar month in which such Distribution Date
occurs.
"Principal Balance": As to any Mortgage Loan other than a Liquidated
Mortgage Loan, and any day, the related Cut-off Date Principal Balance, minus
all collections credited against the Cut-off Date Principal Balance of any such
Mortgage Loan. For purposes of this definition, a Liquidated Mortgage Loan shall
be deemed to have a Principal Balance equal to the Principal Balance of the
related Mortgage Loan as of the final recovery of related Liquidation Proceeds
and a Principal Balance of zero thereafter. As to any REO Property and any day,
the Principal Balance of the related Mortgage Loan immediately prior to such
Mortgage Loan becoming REO Property minus any REO Principal Amortization
received with respect thereto on or prior to such day.
"Principal Prepayment": Any payment of principal made by the Mortgagor
on a Mortgage Loan which is received in advance of its scheduled Due Date and
which is not accompanied by an amount of interest representing the full amount
of scheduled interest due on any Due Date in any month or months subsequent to
the month of prepayment.
"Principal Remittance Amount": With respect to any Distribution Date,
the sum of the Group I Principal Remittance Amount and the Group II Principal
Remittance Amount.
"Prospectus Supplement": That certain Prospectus Supplement dated
September 27, 2002 relating to the public offering of the Class A Certificates
and the Mezzanine Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO Property to
be purchased pursuant to or as contemplated by Section 2.03 or 10.01, and as
confirmed by an Officers' Certificate from the Servicer to the Trustee, an
amount equal to the sum of (i) 100% of the Principal Balance thereof as of the
date of purchase (or such other price as provided in Section 10.01), (ii) in the
case of (x) a Mortgage Loan, accrued interest on such Principal Balance at the
applicable Mortgage Rate in effect from time to time from the Due Date as to
which interest was last covered by a payment by the Mortgagor or an advance by
the Servicer, which payment or advance had as of the date of purchase been
distributed pursuant to Section 4.01, through the end of the calendar month in
which the purchase is to be effected, and (y) an REO Property, the sum of (1)
accrued interest on such Principal Balance at the applicable Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or an advance by the Servicer through the end of
the calendar month immediately preceding the calendar month in which such REO
Property was acquired, plus (2) REO Imputed Interest for such REO Property for
each calendar month commencing with the calendar month in which such REO
Property was acquired and ending with the calendar month in which such purchase
is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and Advances that as of the date of purchase had
been distributed as or to cover REO Imputed Interest pursuant to Section 4.04,
(iii) any unreimbursed Servicing Advances and Advances and any unpaid Servicing
Fees allocable to such Mortgage Loan or REO Property, (iv) any amounts
previously withdrawn from the Collection Account in respect of such Mortgage
Loan or REO Property pursuant to Section 3.23 and (v) in the case of a Mortgage
Loan required to be purchased pursuant to Section 2.03, expenses reasonably
incurred or to
30
be incurred by the Servicer or the Trustee in respect of the breach or defect
giving rise to the purchase obligation.
"Qualified Insurer": Any insurance company acceptable to Xxxxxx Xxx.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement or the Mortgage
Loan Purchase Agreement which must, on the date of such substitution, (i) have
an outstanding principal balance (or in the case of a substitution of more than
one mortgage loan for a Deleted Mortgage Loan, an aggregate principal balance),
after application of all scheduled payments of principal and interest due during
or prior to the month of substitution, not in excess of, and not more than 5%
less than, the outstanding principal balance of the Deleted Mortgage Loan as of
the Due Date in the calendar month during which the substitution occurs, (ii)
have a Mortgage Rate not less than (and not more than one percentage point in
excess of) the Mortgage Rate of the Deleted Mortgage Loan, (iii) if the
Qualified Substitute Mortgage Loan is an Adjustable-Rate Mortgage Loan, have a
Maximum Mortgage Rate not less than the Maximum Mortgage Rate on the Deleted
Mortgage Loan, (iv) if the Qualified Substitute Mortgage Loan is an
Adjustable-Rate Mortgage Loan, have a Minimum Mortgage Rate not less than the
Minimum Mortgage Rate of the Deleted Mortgage Loan, (v) if the Qualified
Substitute Mortgage Loan is an Adjustable-Rate Mortgage Loan, have a Gross
Margin equal to or greater than the Gross Margin of the Deleted Mortgage Loan,
(vi) if the Qualified Substitute Mortgage Loan is an Adjustable-Rate Mortgage
Loan, have a next Adjustment Date not more than two months later than the next
Adjustment Date on the Deleted Mortgage Loan, (vii) [reserved], (viii) have a
remaining term to maturity not greater than (and not more than one year less
than) that of the Deleted Mortgage Loan, (ix) be current as of the date of
substitution, (x) have a Loan-to-Value Ratio as of the date of substitution
equal to or lower than the Loan-to-Value Ratio of the Deleted Mortgage Loan as
of such date, (xi) have a risk grading determined by the Originator at least
equal to the risk grading assigned on the Deleted Mortgage Loan, (xii) have been
underwritten or reunderwritten by the Originator in accordance with the same
underwriting criteria and guidelines as the Deleted Mortgage Loan, (xiii)
[reserved]; and (xiv) conform to each representation and warranty set forth in
Section 3.01 of the Mortgage Loan Purchase Agreement applicable to the Deleted
Mortgage Loan. In the event that one or more mortgage loans are substituted for
one or more Deleted Mortgage Loans, the amounts described in clause (i) hereof
shall be determined on the basis of aggregate principal balances, the Mortgage
Rates described in clauses (ii) through (vi) hereof shall be satisfied for each
such mortgage loan, the risk gradings described in clause (x) hereof shall be
satisfied as to each such mortgage loan, the terms described in clause (viii)
hereof shall be determined on the basis of weighted average remaining term to
maturity (provided that no such mortgage loan may have a remaining term to
maturity longer than the Deleted Mortgage Loan), the Loan-to-Value Ratios
described in clause (x) hereof shall be satisfied as to each such mortgage loan
and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (xiv) hereof must be
satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate, as
the case may be.
"Rating Agency or Rating Agencies": Fitch, Xxxxx'x and S&P or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be such nationally recognized statistical rating
agencies, or other comparable Persons, designated by the Depositor, notice of
which designation shall be given to the Trustee and Servicer.
31
"Realized Loss": With respect to any Liquidated Mortgage Loan, the
amount of loss realized equal to the portion of the Principal Balance remaining
unpaid after application of all Net Liquidation Proceeds in respect of such
Mortgage Loan.
"Record Date": With respect to (i) the Class A Certificates and the
Mezzanine Certificates, the Close of Business on the Business Day immediately
preceding the related Distribution Date and (ii) the Class P Certificates, the
Class C Certificates and the Residual Certificates, the Close of Business on the
last Business Day of the calendar month preceding the month in which the related
Distribution Date occurs; provided, however, that following the date on which
Definitive Certificates for a Class A Certificate or a Mezzanine Certificate are
available pursuant to Section 5.02, the Record Date for such Certificates shall
be the last Business Day of the calendar month preceding the month in which the
related Distribution Date occurs.
"Reference Banks": Those banks (i) with an established place of
business in London, England, (ii) not controlling, under the control of or under
common control with the Originator or the Servicer or any affiliate thereof and
(iii) which have been designated as such by the Trustee after consultation with
the Depositor; provided, however, that if fewer than two of such banks provide a
LIBOR rate, then any leading banks selected by the Trustee after consultation
with the Depositor which are engaged in transactions in United States dollar
deposits in the international Eurocurrency market.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of which were
not used to purchase the related Mortgaged Property.
"Regular Certificate": Any of the Class A Certificates, Mezzanine
Certificates, Class C Certificates or Class P Certificates.
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
"Relief Act Interest Shortfall": With respect to any Distribution Date,
for any Mortgage Loan with respect to which there has been a reduction in the
amount of interest collectible thereon for the most recently ended Due Period as
a result of the application of the Relief Act, the amount by which (i) interest
collectible on such Mortgage Loan during such Due Period is less than (ii) one
month's interest on the Principal Balance of such Mortgage Loan at the Mortgage
Rate for such Mortgage Loan before giving effect to the application of the
Relief Act.
"REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
"REMIC 1": The segregated pool of assets subject hereto, constituting
the primary trust created hereby and to be administered hereunder, with respect
to which a REMIC election is to be made consisting of: (i) such Mortgage Loans
as from time to time are subject to this Agreement, together with the Mortgage
Files relating thereto, and together with all collections thereon and proceeds
thereof, (ii) any REO Property, together with all collections thereon and
proceeds thereof, (iii) the Trustee's rights with respect to the
32
Mortgage Loans under all insurance policies required to be maintained pursuant
to this Agreement and any proceeds thereof, (iv) the Depositor's rights under
the Mortgage Loan Purchase Agreement (including any security interest created
thereby), (v) [reserved] and (vi) the Collection Account, the Distribution
Account (subject to the last sentence of this definition) and any REO Account
and such assets that are deposited therein from time to time and any investments
thereof, together with any and all income, proceeds and payments with respect
thereto. Notwithstanding the foregoing, however, a REMIC election will not be
made with respect to the Net WAC Rate Carryover Reserve Account or any Servicer
Prepayment Charge Payment Amounts.
"REMIC 1 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Principal Balance of the Mortgage Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LTAA minus the Marker Rate, divided by (b) 12.
"REMIC 1 Overcollateralization Target Amount": 1% of the
Overcollateralization Target Amount.
"REMIC 1 Overcollateralization Amount": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC 1 Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interest LTA1, REMIC 1 Regular Interest
LTA2, REMIC 1 Regular Interest LTM1, REMIC 1 Regular Interest LTM2, REMIC 1
Regular Interest LTM3, REMIC 1 Regular Interest LTM4 and REMIC 1 Regular
Interest LTP, in each case as of such date of determination.
"REMIC 1 Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Principal
Balance of the Mortgage Loans and related REO Properties then outstanding and
(ii) 1 minus a fraction, the numerator of which is two times the aggregate of
the Uncertificated Principal Balances of REMIC 1 Regular Interest LTA1, REMIC 1
Regular Interest LTA2, REMIC 1 Regular Interest LTM1, REMIC 1 Regular Interest
LTM2, REMIC 1 Regular Interest LTM3 and REMIC 1 Regular Interest LTM4 and the
denominator of which is the aggregate of the Uncertificated Principal Balances
of REMIC 1 Regular Interest LTA1, REMIC 1 Regular Interest LTA2, REMIC 1 Regular
Interest LTM1, REMIC 1 Regular Interest LTM2, REMIC 1 Regular Interest LTM3,
REMIC 1 Regular Interest LTM4 and REMIC 1 Regular Interest LTZZ.
"REMIC 1 Regular Interest LTAA": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTAA shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LTA1": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTA1 shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in
33
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LTA2": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTA2 shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LTM1": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTM1 shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LTM2": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTM2 shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LTM3": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTM3 shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LTM4": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTM4 shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LTP": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTP shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions
34
hereof, in an aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement hereto.
"REMIC 1 Regular Interest LTZZ": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LTZZ shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interests": REMIC 1 Regular Interest LTAA, REMIC 1
Regular Interest LTA1, REMIC 1 Regular Interest LTA2, REMIC 1 Regular Interest
LTM1, REMIC 1 Regular Interest LTM2, REMIC 1 Regular Interest LTM3, REMIC 1
Regular Interest LTM4, REMIC 1 Regular Interest LTZZ and REMIC 1 Regular
Interest LTP.
"REMIC 2": The segregated pool of assets consisting of all of the REMIC
1 Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates and the Class R Certificates (in respect of
the Class R-2 Interest), pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC 2 Regular Interests": The Regular Certificates and the Class M-4
Interest.
"REMIC 3": The segregated pool of assets consisting of all of the Class
M-4 Interest conveyed in trust to the Trustee, for the benefit of the Holders of
the Class M-4 Certificates and the Class R-X Certificates, pursuant to Article
II hereunder, and all amounts deposited therein, with respect to which a
separate REMIC election is to be made.
"REMIC Provisions": Provisions of the federal income tax law relating
to real estate mortgage investment conduits which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.
"Remittance Report": A report prepared by the Servicer and delivered to
the Trustee pursuant to Section 4.04.
"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.
"REO Account": The account or accounts maintained by the Servicer in
respect of an REO Property pursuant to Section 3.23.
"REO Disposition": The sale or other disposition of an REO Property on
behalf of the Trust Fund.
35
"REO Imputed Interest": As to any REO Property, for any calendar month
during which such REO Property was at any time part of the Trust Fund, one
month's interest at the applicable Net Mortgage Rate on the Principal Balance of
such REO Property (or, in the case of the first such calendar month, of the
related Mortgage Loan if appropriate) as of the Close of Business on the
Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO Property, for any
calendar month, the excess, if any, of (a) the aggregate of all amounts received
in respect of such REO Property during such calendar month, whether in the form
of rental income, sale proceeds (including, without limitation, that portion of
the Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 10.01 that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i) payable pursuant
to Section 3.23 in respect of the proper operation, management and maintenance
of such REO Property or (ii) payable or reimbursable to the Servicer pursuant to
Section 3.23 for unpaid Servicing Fees in respect of the related Mortgage Loan
and unreimbursed Servicing Advances and Advances in respect of such REO Property
or the related Mortgage Loan, over (b) the REO Imputed Interest in respect of
such REO Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Servicer on behalf
of the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.23.
"Request for Release": A release signed by a Servicing Officer, in the
form of Exhibit E attached hereto.
"Reserve Interest Rate": With respect to any Interest Determination
Date, the rate per annum that the Trustee determines to be either (i) the
arithmetic mean (rounded upwards if necessary to the nearest whole multiple of
1/16 of 1%) of the one-month United States dollar lending rates which banks in
The City of New York selected by the Depositor are quoting on the relevant
Interest Determination Date to the principal London offices of leading banks in
the London interbank market or (ii) in the event that the Trustee can determine
no such arithmetic mean, in the case of any Interest Determination Date after
the initial Interest Determination Date, the lowest one-month United States
dollar lending rate which such New York banks selected by the Depositor are
quoting on such Interest Determination Date to leading European banks.
"Residential Dwelling": Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a Xxxxxx Xxx eligible condominium project, (iv) a
manufactured home, or (v) a detached one-family dwelling in a planned unit
development, none of which is a co-operative or mobile home.
"Residual Certificate": The Class R Certificates and the Class R-X
Certificates.
"Residual Interest": The sole class of "residual interests" in a REMIC
within the meaning of Section 860G(a)(2) of the Code.
36
"Responsible Officer": When used with respect to the Trustee, any
director, any vice president, any assistant vice president, the Secretary, any
assistant secretary, the Treasurer, any assistant treasurer or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and, with respect to a particular matter,
to whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"S&P": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or its successor in interest.
"Seller": Greenwich Capital Financial Products, Inc., a Delaware
corporation, in its capacity as Seller under the Mortgage Loan Purchase
Agreement.
"Servicer": Xxxxxx Loan Servicing LP, a Delaware limited partnership,
or any successor servicer appointed as herein provided, in its capacity as
Servicer hereunder.
"Servicer Event of Termination": One or more of the events described in
Section 7.01.
"Servicer Prepayment Charge Payment Amount": The amounts payable by the
Servicer in respect of any waived Prepayment Charges pursuant to Section 2.05 or
Section 3.01.
"Servicer Remittance Date": With respect to any Distribution Date, the
Business Day prior to such Distribution Date.
"Servicer Termination Test": With respect to any Distribution Date, the
Servicer Termination Test will be failed if the Cumulative Loss Percentage the
applicable percentages set forth below with respect to such Distribution Date:
Distribution Date Percentage
October 2005 through September 2006 3.50%
October 2006 through September 2007 4.50%
October 2007 through September 2008 5.50%
October 2008 through September 2009 6.25%
October 2009 and thereafter 6.75%
"Servicing Account": The account or accounts created and maintained
pursuant to Section 3.09.
"Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and expenses)
incurred by the Servicer in the performance of its servicing obligations,
including, but not limited to, the cost of (i) the preservation, restoration,
inspection and protection of the Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures, (iii) the management and
liquidation of the REO Property and (iv) compliance with the
37
obligations under Sections 3.01, 3.09, 3.14, 3.16, and 3.23. The Servicer shall
not be required to make any Servicing Advance that would be a Nonrecoverable
Advance.
"Servicing Rights Pledgee": One or more lenders, selected by the
Servicer, to which the Servicer will pledge and assign all of its right, title
and interest in, to and under this Agreement, including Wachovia Bank, National
Association, as the representative of certain lenders.
"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. A
portion of such Servicing Fee may be retained by any Sub-Servicer as its
servicing compensation.
"Servicing Fee Rate": 0.50% per annum.
"Servicing Officer": Any officer of the Servicer involved in, or
responsible for, the administration and servicing of Mortgage Loans, whose name
and specimen signature appear on a list of servicing officers furnished by the
Servicer to the Trustee and the Depositor on the Closing Date, as such list may
from time to time be amended.
"Servicing Transfer Costs": Shall mean all reasonable costs and
expenses incurred by the Trustee in connection with the transfer of master
servicing from a predecessor servicer, including, without limitation, any
reasonable costs or expenses associated with the complete transfer of all master
servicing data and the completion, correction or manipulation of such master
servicing data as may be required by the Trustee to correct any errors or
insufficiencies in the master servicing data or otherwise to enable the Trustee
(or any successor servicer appointed pursuant to Section 7.02) to service the
Mortgage Loans properly and effectively.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan: (a) as
of any date of determination up to but not including the Distribution Date on
which the proceeds, if any, of a Liquidation Event with respect to such Mortgage
Loan would be distributed, the outstanding principal balance of such Mortgage
Loan as of the Cut-off Date as shown in the Mortgage Loan Schedule, minus the
sum of (i) the principal portion of each Monthly Payment due on a Due Date
subsequent to the Cut-off Date to the extent received from the Mortgagor or
advanced by the Servicer and distributed pursuant to Section 4.01 on or before
such date of determination, (ii) all Principal Prepayments received after the
Cut-off Date to the extent distributed pursuant to Section 4.01 on or before
such date of determination, (iii) all Liquidation Proceeds and Insurance
Proceeds to the extent distributed pursuant to Section 4.01 on or before such
date of determination, and (iv) any Realized Loss incurred with respect thereto
as a result of a Deficient Valuation made during or prior to the Due Period for
the most recent Distribution Date coinciding with or preceding such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the
38
Distribution Date on which the proceeds, if any, of a Liquidation Event with
respect to such Mortgage Loan would be distributed, zero. With respect to any
REO Property: (a) as of any date of determination up to but not including the
Distribution Date on which the proceeds, if any, of a Liquidation Event with
respect to such REO Property would be distributed, an amount (not less than
zero) equal to the Stated Principal Balance of the related Mortgage Loan as of
the date on which such REO Property was acquired on behalf of the Trust Fund,
minus the aggregate amount of REO Principal Amortization in respect of such REO
Property for all previously ended calendar months, to the extent distributed
pursuant to Section 4.01 on or before such date of determination; and (b) as of
any date of determination coinciding with or subsequent to the Distribution Date
on which the proceeds, if any, of a Liquidation Event with respect to such REO
Property would be distributed, zero.
"Stepdown Date": The earlier to occur of (i) the Distribution Date on
which the aggregate Certificate Principal Balance of the Class A Certificates
has been reduced to zero and (ii) the later to occur of (x) the Distribution
Date occurring in October 2005 and (y) the first Distribution Date on which the
Credit Enhancement Percentage (calculated for this purpose only after taking
into account payments of principal on the Mortgage Loans and distribution of the
Group I Principal Distribution Amount and the Group II Principal Distribution
Amount to the Certificates then entitled to distributions of principal on such
Distribution Date) is equal to or greater than 37.00%.
"Sub-Servicer": Any Person with which either Servicer has entered into
a Sub- Servicing Agreement and which meets the qualifications of a Sub-Servicer
pursuant to Section 3.02.
"Sub-Servicing Account": An account established by a Sub-Servicer which
meets the requirements set forth in Section 3.08 and is otherwise acceptable to
the applicable Servicer.
"Sub-Servicing Agreement": The written contract between either Servicer
and a Sub- Servicer relating to servicing and administration of certain Mortgage
Loans as provided in Section 3.02.
"Substitution Adjustment": As defined in Section 2.03(d) hereof.
"Tax Matters Person": The tax matters person appointed pursuant to
Section 9.01(e) hereof.
"Tax Returns": The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed by the Trustee on behalf of each REMIC, together with any and
all other information reports or returns that may be required to be furnished to
the Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.
"Termination Price": As defined in Section 10.01(a) hereof.
"Terminator": As defined in Section 10.01(a) hereof.
39
"Trigger Event": A Trigger Event is in effect with respect to any
Distribution Date on or after the Stepdown Date if:
(a) the Delinquency Percentage exceeds 40% of the Credit Enhancement
Percentage or
(b) the aggregate amount of Realized Losses incurred since the Cut-off
Date through the last day of the related Due Period divided by the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date exceeds the
applicable percentages set forth below with respect to such Distribution Date:
DISTRIBUTION DATE OCCURRING IN PERCENTAGE
--------------------------------------------------------------------
October 2005 through September 2006 3.25%
October 2006 through September 2007 4.25%
October 2007 through September 2008 5.25%
October 2008 through September 2009 6.00%
October 2009 and thereafter 6.50%
"Trust": Fremont Home Trust 2002-1, the trust created hereunder.
"Trust Fund": All of the assets of the Trust, which is the trust
created hereunder consisting of REMIC 1, REMIC 2, REMIC 3 and the Net WAC Rate
Carryover Reserve Account.
"Trustee": Deutsche Bank National Trust Company, a national banking
association, or any successor trustee appointed as herein provided.
"Trustee Fee": The amount payable to the Trustee on each Distribution
Date pursuant to Section 8.05 as compensation for all services rendered by it in
the execution of the trust hereby created and in the exercise and performance of
any of the powers and duties of the Trustee hereunder, which amount shall equal
one twelfth of the product of (i) the Trustee Fee Rate, multiplied by (ii) the
aggregate Principal Balance of the Mortgage Loans and any REO Properties (after
giving effect to scheduled payments of principal due during the Due Period
relating to the previous Distribution Date, to the extent received or advanced
and prepayments collected during the Prepayment Period relating to the previous
Distribution Date).
"Trustee Fee Rate": 0.01% per annum.
"Unadjusted Net WAC 30/360 Rate": For any Distribution Date, a per
annum rate equal to the weighted average of the Adjusted Net Mortgage Rates of
the Mortgage Loans for such Distribution Date.
"Uncertificated Accrued Interest": With respect to each REMIC 1 Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the related Uncertificated REMIC 1 Pass- Through Rate on the Uncertificated
Principal Balance of such REMIC 1 Regular Interest. In each case,
40
Uncertificated Accrued Interest will be reduced by any Net Prepayment Interest
Shortfalls, Relief Act Interest Shortfalls or other shortfalls allocated to such
Certificate as provided in Section 1.03.
"Uncertificated Principal Balance": With respect to each REMIC 1
Regular Interest, the amount of such REMIC 1 Regular Interest outstanding as of
any date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC 1 Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC 1
Regular Interest shall be reduced by all distributions of principal made on such
REMIC 1 Regular Interest on such Distribution Date pursuant to Section 4.07 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.08, and the
Uncertificated Principal Balances of REMIC 1 Regular Interest LTZZ shall be
increased by interest deferrals as provided in Section 4.07.
"Uncertificated REMIC 1 Pass-Through Rate": For any Distribution Date
and each REMIC 1 Regular Interest, the Unadjusted Net WAC 30/360 Rate of the
Mortgage Loans for such Distribution Date.
"Uninsured Cause": Any cause of damage to a Mortgaged Property such
that the complete restoration of such property is not fully reimbursable by the
hazard insurance policies required to be maintained pursuant to Section 3.14.
"United States Person" or "U.S. Person": A citizen or resident of the
United States, a corporation, partnership (or other entity treated as a
corporation or partnership for United States federal income tax purposes)
created or organized in, or under the laws of, the United States, any state
thereof, or the District of Columbia (except in the case of a partnership, to
the extent provided in Treasury regulations) provided that, for purposes solely
of the restrictions on the transfer of Residual Certificates, no partnership or
other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are required by
the applicable operative agreement to be United States Persons, or an estate the
income of which from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States, or
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have authority to control all substantial decisions of the trust. The
term "United States" shall have the meaning set forth in Section 7701 of the
Code or successor provisions.
"Unpaid Interest Shortfall Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and (i) the first Distribution Date,
zero, and (ii) any Distribution Date after the first Distribution Date, the
amount, if any, by which (a) the sum of (1) the Monthly Interest Distributable
Amount for such Class for the immediately preceding Distribution Date and (2)
the outstanding Unpaid Interest Shortfall Amount, if any, for such Class for
such preceding Distribution Date exceeds (b) the aggregate amount distributed on
such Class in respect of interest pursuant to clause (a) of this definition on
such preceding Distribution Date, plus interest on the amount of interest due
but not paid on the Certificates of such Class
41
on such preceding Distribution Date, to the extent permitted by law, at the
Pass-Through Rate for such Class for the related Accrual Period.
"Value": With respect to any Mortgaged Property, the lesser of (i) the
lesser of (a) the value thereof as determined by an appraisal made for the
originator of the Mortgage Loan at the time of origination of the Mortgage Loan
by an appraiser who met the minimum requirements of Xxxxxx Xxx and Xxxxxxx Mac,
and (b) the value thereof as determined by a review appraisal conducted by the
Originator in the event any such review appraisal determines an appraised value
ten percent or more lower than the value thereof as determined by the appraisal
referred to in clause (i)(a) above and (ii) the purchase price paid for the
related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage
Loan, provided, however, in the case of a Refinanced Mortgage Loan, such value
of the Mortgaged Property is based solely upon the lesser of (1) the value
determined by an appraisal made for the Originator of such Refinanced Mortgage
Loan at the time of origination of such Refinanced Mortgage Loan by an appraiser
who met the minimum requirements of Xxxxxx Mae and Xxxxxxx Mac and (2) the value
thereof as determined by a review appraisal conducted by the Originator in the
event any such review appraisal determines an appraised value ten percent or
more lower than the value thereof as determined by the appraisal referred to in
clause (ii)(1) above.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. At all times the Class A
Certificates, the Mezzanine Certificates and the Class C Certificates shall have
98% of the Voting Rights (allocated among the Holders of the Class A
Certificates, the Mezzanine Certificates and the Class C Certificates in
proportion to the then outstanding Certificate Principal Balances of their
respective Certificates), the Class P Certificates shall have 1% of the Voting
Rights and the Residual Certificates shall have 1% of the Voting Rights. The
Voting Rights allocated to any Class of Certificates (other than the Class P
Certificates and the Residual Certificates) shall be allocated among all Holders
of each such Class in proportion to the outstanding Certificate Principal
Balance of such Certificates and the Voting Rights allocated to the Class P
Certificates and the Residual Certificates shall be allocated among all Holders
of each such Class in proportion to such Holders' respective Percentage
Interest; provided, however that when none of the Regular Certificates are
outstanding, 100% of the Voting Rights shall be allocated among Holders of the
Residual Certificates in accordance with such Holders' respective Percentage
Interests in the Certificates of such Class.
SECTION 1.02. Accounting.
Unless otherwise specified herein, for the purpose of any definition or
calculation, whenever amounts are required to be netted, subtracted or added or
any distributions are taken into account such definition or calculation and any
related definitions or calculations shall be determined without duplication of
such functions.
SECTION 1.03. Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class A Certificates, the Mezzanine Certificates
and the Class C Certificates for any Distribution Date, (1) the
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aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, among the Class C Certificates on a
PRO RATA basis based on, and to the extent of, one month's interest at the then
applicable Pass-Through Rate on the Notional Amount of each such Certificate
and, thereafter, among the Class A Certificates and the Mezzanine Certificates
on a PRO RATA basis based on, and to the extent of, one month's interest at the
then applicable respective Pass-Through Rate on the respective Certificate
Principal Balance of each such Certificate and (2) the aggregate amount of any
Realized Losses and Net WAC Rate Carryover Amounts, incurred for any
Distribution Date shall be allocated among the Class C Certificates on a PRO
RATA basis based on, and to the extent of, one month's interest at the then
applicable Pass- Through Rate on the Notional Amount of each such Certificate.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC 1 Regular Interests for any Distribution Date, the
aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Accrued Interest
payable to REMIC 1 Regular Interest LTAA and REMIC 1 Regular Interest LTZZ up to
an aggregate amount equal to the REMIC 1 Interest Loss Allocation Amount, 98%
and 2%, respectively, and thereafter among REMIC 1 Regular Interest LTAA, REMIC
1 Regular Interest LTA1, REMIC 1 Regular Interest LTA2, REMIC 1 Regular Interest
LTM1, REMIC 1 Regular Interest LTM2, REMIC 1 Regular Interest LTM3, REMIC 1
Regular Interest LTM4 and REMIC 1 Regular Interest LTZZ PRO RATA based on, and
to the extent of, one month's interest at the then applicable respective
Uncertificated REMIC 1 Pass-Through Rate on the respective Uncertificated
Principal Balance of each such REMIC 1 Regular Interest.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to (i) each Mortgage Loan
identified on the Mortgage Loan Schedule, including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest in
any insurance policies in respect of the Mortgage Loans; (iv) the rights of the
Depositor under the Mortgage Loan Purchase Agreement, (v) [reserved], (vi) all
other assets included or to be included in the Trust Fund and (vii) all proceeds
of any of the foregoing. Such assignment includes all interest and principal due
and collected by the Depositor or the Servicer after the Cut-off Date with
respect to the Mortgage Loans.
In connection with such transfer and assignment, the Depositor, does
hereby deliver to, and deposit with the Trustee, or its designated agent (the
"Custodian"), the following documents or instruments with respect to each
Original Mortgage Loan so transferred and assigned, the following documents or
instruments (with respect to each Mortgage Loan, a "Mortgage File") :
(i) the original Mortgage Note, endorsed either (A) in blank, in which
case the Trustee shall cause the endorsement to be completed or (B) in the
following form: "Pay to the order of Deutsche Bank National Trust Company,
as Trustee, without recourse" or with respect to any lost Mortgage Note, an
original Lost Note Affidavit stating that the original mortgage note was
lost, misplaced or destroyed, together with a copy of the related mortgage
note; provided, however, that such substitutions of Lost Note Affidavits
for original Mortgage Notes may occur only with respect to Mortgage Loans,
the aggregate Cut-off Date Principal Balance of which is less than or equal
to 1.00% of the Pool Balance as of the Cut-off Date;
(ii) the original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed pursuant
to a power of attorney, with evidence of recording thereon or, if such
Mortgage or power of attorney has been submitted for recording but has not
been returned from the applicable public recording office, has been lost or
is not otherwise available, a copy of such Mortgage or power of attorney,
as the case may be, certified to be a true and complete copy of the
original submitted for recording;
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(iii) an original Assignment, in form and substance acceptable for
recording. The Mortgage shall be assigned either (A) in blank or (B) to
"Deutsche Bank National Trust Company, as Trustee, without recourse";
(iv) an original copy of any intervening assignment of Mortgage showing
a complete chain of assignments;
(v) the original or a certified copy of lender's title insurance
policy; and
(vi) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any.
The Depositor herewith also delivers to the Trustee an executed copy of
the Mortgage Loan Purchase Agreement.
If any of the documents referred to in Section 2.01(ii), (iii) or (iv)
above has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable public recording office or (y) has been
lost or such public recording office has retained the original of such document,
the obligations of the Depositor to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Trustee or the Custodian no later than the
Closing Date, of a copy of each such document certified by the Originator in the
case of (x) above or the applicable public recording office in the case of (y)
above to be a true and complete copy of the original that was submitted for
recording and (2) if such copy is certified by the Originator, delivery to the
Trustee or the Custodian, promptly upon receipt thereof of either the original
or a copy of such document certified by the applicable public recording office
to be a true and complete copy of the original. If the original lender's title
insurance policy, or a certified copy thereof, was not delivered pursuant to
Section 2.01(v) above, the Depositor shall deliver or cause to be delivered to
the Trustee or the Custodian, the original or a copy of a written commitment or
interim binder or preliminary report of title issued by the title insurance or
escrow company, with the original or a certified copy thereof to be delivered to
the Trustee or the Custodian, promptly upon receipt thereof. The Servicer or the
Depositor shall deliver or cause to be delivered to the Trustee or the Custodian
promptly upon receipt thereof any other documents constituting a part of a
Mortgage File received with respect to any Mortgage Loan, including, but not
limited to, any original documents evidencing an assumption or modification of
any Mortgage Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Trustee
shall notify the Servicer and the Servicer (or, to the extent provided in
Section 3.02, the Trustee) shall enforce the obligations of the Originator under
the Mortgage Loan Purchase Agreement to cure such defect or deliver such missing
document to the Trustee or the Custodian within 90 days. If the Originator does
not cure such defect or deliver such missing document within such time period,
the Servicer (or, to the extent provided in Section 3.02, the Trustee) shall
enforce the obligations of the Originator to either repurchase or substitute for
such Mortgage Loan in accordance with Section 2.03. In connection with the
foregoing, it is understood that the Trustee shall have no duty
45
to discover any such defects except in the course of performing its review of
the Mortgage Files to the extent set forth herein.
The Trustee shall enforce the obligations of the Seller under the
Mortgage Loan Purchase Agreement to cause the Assignments which were delivered
in blank to be completed and to record all Assignments referred to in Section
2.01(iii) hereof and, to the extent necessary, in Section 2.01(iv) hereof. The
Trustee shall enforce the obligations of the Seller under the Mortgage Loan
Purchase Agreement to deliver such assignments for recording within 180 days of
the Closing Date. In the event that any such Assignment is lost or returned
unrecorded because of a defect therein, the Trustee shall enforce the
obligations of the Seller under the Mortgage Loan Purchase Agreement to promptly
have a substitute Assignment prepared or have such defect cured, as the case may
be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, the Assignments of Mortgage shall not be
required to be submitted for recording with respect to any Mortgage Loan in any
jurisdiction where the Rating Agencies do not require recordation in order to
receive the ratings on the Certificates at the time of their initial issuance
(which jurisdictions, as of such time of their initial issuance, are Maryland
and Florida); provided, however, each Assignment shall be submitted for
recording in the manner described above, at no expense to the Trust Fund or
Trustee, upon the earliest to occur of: (i) reasonable direction by the Holders
of Certificates entitled to at least 25% of the Voting Rights, (ii) the
occurrence of a Servicer Event of Termination, (iii) the occurrence of a
bankruptcy, insolvency or foreclosure relating to the Seller, (iv) the
occurrence of a servicing transfer as described in Section 7.02 hereof, (v) upon
receipt of notice from the Servicer, the occurrence of a bankruptcy, insolvency
or foreclosure relating to the Mortgagor under the related Mortgage and (vi)
upon receipt of notice from the Servicer, any Mortgage Loan that is 90 days or
more Delinquent. In the event of (i) through (vi) set forth in the immediately
preceding sentence, the Trustee shall enforce the obligations of the Seller to
deliver such Assignments for recording as provided above, promptly and in any
event within 30 days following receipt of notice by the Seller. Notwithstanding
the foregoing, if the Seller fails to pay the cost of recording the Assignments,
such expense will be paid by the Trustee and the Trustee shall be reimbursed for
such expenses by the Trust.
In the event that any Mortgage Note is endorsed in blank as of the
Closing Date, promptly following the Closing Date, the Trustee shall cause (at
the Seller's expense) to be completed such endorsements "Pay to the order of
Deutsche Bank National Trust Company, as Trustee, without recourse."
The Servicer shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within two weeks of
their execution; provided, however, that the Servicer shall provide the
Custodian with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall provide the original of
any document submitted for recordation or a copy of such document certified by
the appropriate public recording office to be a true and complete copy of the
original within 365 days of its submission for recordation. In the event that
the Servicer cannot provide a copy of such document certified by the public
recording office within such 365 day period, the Servicer shall deliver to the
Custodian, within such 365 day period, an Officers' Certificate of the Servicer
which shall (A)
46
identify the recorded document, (B) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (C) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, if known and (D) specify the date the applicable recorded document
is expected to be delivered to the Custodian, and, upon receipt of a copy of
such document certified by the public recording office, the Servicer shall
immediately deliver such document to the Custodian. In the event the appropriate
public recording office will not certify as to the accuracy of such document,
the Servicer shall deliver a copy of such document certified by an officer of
the Servicer to be a true and complete copy of the original to the Custodian.
SECTION 2.02. Acceptance by Trustee.
Subject to the provisions of Section 2.01 and subject to the review
described below and any exceptions noted on the exception report described in
the next paragraph below, the Trustee acknowledges receipt of the documents
referred to in Section 2.01 above and all other assets included in the
definition of "Trust Fund" and declares that it holds and will hold such
documents and the other documents delivered to it constituting a Mortgage File,
and that it holds or will hold all such assets and such other assets included in
the definition of "Trust Fund" in trust for the exclusive use and benefit of all
present and future Certificateholders.
The Trustee agrees to execute and deliver (or cause the Custodian to
execute and deliver) to the Depositor and the Servicer on or prior to the
Closing Date an acknowledgment of receipt of the related original Mortgage Note
for each Mortgage Loan (with any exceptions noted), substantially in the form
attached as Exhibit F-3 hereto.
The Trustee agrees, for the benefit of the Certificateholders, to
review, or that it has reviewed pursuant to Section 2.01 (or to cause the
Custodian to review or that it has caused the Custodian to have reviewed) each
Mortgage File on or prior to the Closing Date, with respect to each Original
Mortgage Loan (or, with respect to any document delivered after the Startup Day,
within 45 days of receipt and with respect to any Qualified Substitute Mortgage,
within 45 days after the assignment thereof). The Trustee further agrees, for
the benefit of the Certificateholders, to certify to the Depositor and the
Servicer in substantially the form attached hereto as Exhibit F-1, within 45
days after the Closing Date, with respect to each Original Mortgage Loan (or,
with respect to any document delivered after the Startup Day, within 45 days of
receipt and with respect to any Qualified Substitute Mortgage, within 45 days
after the assignment thereof) that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in the exception report annexed thereto as
not being covered by such certification), (i) all documents required to be
delivered to it pursuant Section 2.01 of this Agreement are in its possession,
(ii) such documents have been reviewed by it and have not been mutilated,
damaged or torn and appear on their face to relate to such Mortgage Loan and
(iii) based on its examination and only as to the foregoing, the information set
forth in the Mortgage Loan Schedule that corresponds to items (1) and (2) of the
Mortgage Loan Schedule accurately reflects information set forth in the Mortgage
File. It is herein acknowledged that, in conducting such review, the Trustee (or
the Custodian, as applicable) is under no duty or obligation to inspect, review
or examine any
47
such documents, instruments, certificates or other papers to determine that they
are genuine, legally enforceable, valid or binding or appropriate for the
represented purpose or that they have actually been recorded or that they are
other than what they purport to be on their face.
Prior to the first anniversary date of this Agreement the Trustee shall
deliver (or cause the Custodian to deliver) to the Depositor and the Servicer a
final certification in the form annexed hereto as Exhibit F-2, with any
applicable exceptions noted thereon.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the Trustee
(or the Custodian, as applicable) finds any document or documents constituting a
part of a Mortgage File to be missing or not to conform with respect to any
characteristics which are within the scope of the Trustee's (or the Custodian's,
as applicable) review as provided herein, at the conclusion of its review, the
Trustee shall so notify the Seller, the Depositor, the Originator and the
Servicer. In addition, upon the discovery by the Depositor or the Servicer (or
upon receipt by the Trustee of written notification of such breach) of a breach
of any of the representations and warranties made by the Originator in the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects such Mortgage Loan or the interests of the related
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties to this Agreement.
The Depositor and the Trustee intend that the assignment and transfer
herein contemplated constitute a sale of the Mortgage Loans, the related
Mortgage Notes and the related documents, conveying good title thereto free and
clear of any liens and encumbrances, from the Depositor to the Trustee in trust
for the benefit of the Certificateholders and that such property not be part of
the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee a first
priority perfected security interest in all of the Depositor's right, title and
interest in and to the Mortgage Loans, the related Mortgage Notes and the
related documents, and that this Agreement shall constitute a security agreement
under applicable law.
SECTION 2.03. Repurchase or Substitution of Mortgage Loans
by the Originator.
(a) Upon discovery or receipt of written notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
the breach by the Originator of any representation, warranty or covenant under
the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders, the Trustee shall promptly notify the
Servicer of such defect, missing document or breach and the Servicer shall
request that the Originator deliver such missing document or that the Originator
cure such defect or breach within 90 days from the date the Originator was
notified of such missing document, defect or breach, and if the Originator does
not deliver such missing document or if the Originator does not cure such defect
or breach in all material respects during such period, the Servicer (or, to the
extent provided in Section 3.02, the Trustee) shall enforce the Originator's
obligation under the
48
Mortgage Loan Purchase Agreement and cause the Originator to repurchase such
Mortgage Loan from the Trust Fund at the Purchase Price on or prior to the
Determination Date following the expiration of such 90 day period (subject to
Section 2.03(e)). The Purchase Price for the repurchased Mortgage Loan shall be
remitted to the Servicer for deposit in the Collection Account, and the Trustee,
upon receipt of written certification from the Servicer of such deposit, shall
release to the Originator the related Mortgage File and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as the Originator shall furnish to it and as shall be necessary to
vest in the Originator any Mortgage Loan released pursuant hereto and the
Trustee shall have no further responsibility with regard to such Mortgage File
(it being understood that the Trustee shall have no responsibility for
determining the sufficiency of such assignment for its intended purpose). In
lieu of repurchasing any such Mortgage Loan as provided above, the Originator
may cause such Mortgage Loan to be removed from the Trust Fund (in which case it
shall become a Deleted Mortgage Loan) and substitute one or more Qualified
Substitute Mortgage Loans in the manner and subject to the limitations set forth
in Section 2.03(d). It is understood and agreed that the obligation of the
Originator to cure or to repurchase (or to substitute for) any Mortgage Loan as
to which a document is missing, a material defect in a constituent document
exists or as to which such a breach has occurred and is continuing shall
constitute the sole remedy against the Originator respecting such omission,
defect or breach available to the Trustee on behalf of the Certificateholders.
(b) Within 90 days of the earlier of discovery by the Depositor or
receipt of notice by the Depositor of the breach of any representation, warranty
or covenant of the Depositor set forth in Section 2.06, which materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the Depositor shall cure such breach in all material respects.
(c) Within 90 days of the earlier of discovery by the Servicer or
receipt of notice by the Servicer of the breach of any representation, warranty
or covenant of the Servicer set forth in Section 2.05 which materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the Servicer shall cure such breach in all material respects.
(d) Any substitution of Qualified Substitute Mortgage Loans for Deleted
Mortgage Loans made pursuant to Section 2.03(a) must be effected prior to the
last Business Day that is within two years after the Closing Date. As to any
Deleted Mortgage Loan for which the Originator substitutes a Qualified
Substitute Mortgage Loan or Loans, such substitution shall be effected by the
Originator delivering to the Trustee, for such Qualified Substitute Mortgage
Loan or Loans, the Mortgage Note, the Mortgage and the Assignment to the
Trustee, and such other documents and agreements, with all necessary
endorsements thereon, as are required by Section 2.01, together with an
Officers' Certificate providing that each such Qualified Substitute Mortgage
Loan satisfies the definition thereof and specifying the Substitution Adjustment
(as described below), if any, in connection with such substitution. The Trustee
shall acknowledge receipt for such Qualified Substitute Mortgage Loan or Loans
and, within 45 days thereafter, shall review such documents as specified in
Section 2.02 and deliver to the Servicer, with respect to such Qualified
Substitute Mortgage Loan or Loans, a certification substantially in the form
attached hereto as Exhibit F-1, with any applicable exceptions noted thereon.
Within one year of the date of substitution, the Trustee shall deliver to the
Servicer a certification substantially in the form of Exhibit F-2 hereto with
respect to such Qualified Substitute Mortgage Loan or Loans, with any applicable
exceptions noted
49
thereon. Monthly Payments due with respect to Qualified Substitute Mortgage
Loans in the month of substitution are not part of the Trust Fund and will be
retained by the Originator. For the month of substitution, distributions to
Certificateholders will reflect the collections and recoveries in respect of
such Deleted Mortgage Loan in the Due Period preceding the month of substitution
and the Originator shall thereafter be entitled to retain all amounts
subsequently received in respect of such Deleted Mortgage Loan. The Servicer
shall give or cause to be given written notice to the Trustee, who shall forward
such notice to the Certificateholders, that such substitution has taken place,
shall amend the Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan from the terms of this Agreement and the substitution of the
Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of such
amended Mortgage Loan Schedule to the Trustee. Upon such substitution by the
Originator, such Qualified Substitute Mortgage Loan or Loans shall constitute
part of the Mortgage Pool and shall be subject in all respects to the terms of
this Agreement and the Mortgage Loan Purchase Agreement, including all
applicable representations and warranties thereof included in the Mortgage Loan
Purchase Agreement as of the date of substitution.
For any month in which the Originator substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer
will determine the amount (the "Substitution Adjustment"), if any, by which the
aggregate Purchase Price of all such Deleted Mortgage Loans exceeds the
aggregate, as to each such Qualified Substitute Mortgage Loan, of the principal
balance thereof as of the date of substitution, together with one month's
interest on such principal balance at the applicable Mortgage Rate. On the date
of such substitution, the Originator will deliver or cause to be delivered to
the Servicer for deposit in the Collection Account an amount equal to the
Substitution Adjustment, if any, and the Trustee, upon receipt of the related
Qualified Substitute Mortgage Loan or Loans and certification by the Servicer of
such deposit, shall release to the Originator the related Mortgage File or Files
and shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, as the Originator shall deliver to it and as shall
be necessary to vest therein any Deleted Mortgage Loan released pursuant hereto.
In addition, the Originator shall obtain at its own expense and deliver
to the Trustee an Opinion of Counsel to the effect that such substitution will
not cause (a) any federal tax to be imposed on the Trust Fund, including without
limitation, any federal tax imposed on "prohibited transactions" under Section
860F(a)(I) of the Code or on "contributions after the startup date" under
Section 860G(d)(I) of the Code or (b) any REMIC to fail to qualify as a REMIC at
any time that any Certificate is outstanding. If such Opinion of Counsel can not
be delivered, then such substitution may only be effected at such time as the
required Opinion of Counsel can be given.
(e) Upon discovery by the Depositor, 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 within
two Business Days give written notice thereof to the other parties hereto. In
connection therewith, the Originator or the Depositor, as the case may be, shall
repurchase or, subject to the limitations set forth in Section 2.03(d),
substitute one or more Qualified Substitute Mortgage Loans for the affected
Mortgage Loan within 90 days of the earlier of discovery or receipt of such
notice with respect to such affected Mortgage Loan. Such repurchase or
substitution shall be made (i) by the Originator if the affected Mortgage Loan's
status as a non-qualified mortgage is or results from a breach of any
50
representation, warranty or covenant made by the Originator under the Mortgage
Loan Purchase Agreement or (ii) the Depositor, if the affected Mortgage Loan's
status as a non-qualified mortgage is a breach of any representation or warranty
of the Depositor set forth in Section 2.06, or if its status as a non- qualified
mortgage is a breach of no representation or warranty. Any such repurchase or
substitution shall be made in the same manner as set forth in Section 2.03(a) or
2.03(d), if made by the Originator, or Section 2.03(b), if made by the
Depositor. The Trustee shall reconvey to the Depositor or the Originator, as the
case may be, 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.
SECTION 2.04. Intentionally Omitted.
SECTION 2.05. Representations, Warranties and Covenants of
the Servicer.
The Servicer hereby represents, warrants and covenants to the Trustee,
for the benefit of each of the Trustee and the Certificateholders and to the
Depositor that as of the Closing Date or as of such date specifically provided
herein:
(i) The Servicer is a limited partnership duly formed, validly existing
and in good standing as a limited partnership under the laws of the State
of Delaware and is duly authorized and qualified to transact any and all
business contemplated by this Agreement to be conducted by the Servicer in
any state in which a Mortgaged Property is located or is otherwise not
required under applicable law to effect such qualification and, in any
event, is in compliance with the doing business laws of any such State, to
the extent necessary to ensure its ability to enforce each Mortgage Loan
and to service the Mortgage Loans in accordance with the terms of this
Agreement;
(ii) The Servicer has the full power and authority to conduct its
business as presently conducted by it and to execute, deliver and perform,
and to enter into and consummate, all transactions contemplated by this
Agreement. The Servicer has duly authorized the execution, delivery and
performance of this Agreement, has duly executed and delivered this
Agreement, and this Agreement, assuming due authorization, execution and
delivery by the Depositor and the Trustee, constitutes a legal, valid and
binding obligation of the Servicer, enforceable against it in accordance
with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity;
(iii) The execution and delivery of this Agreement by the Servicer, the
servicing of the Mortgage Loans by the Servicer hereunder, the consummation
by the Servicer of any other of the transactions herein contemplated, and
the fulfillment of or compliance with the terms hereof are in the ordinary
course of business of the Servicer and will not (A) result in a breach of
any term or provision of the limited partnership agreement of the Servicer
or (B) conflict with, result in a breach, violation or acceleration of, or
result in a default under, the terms of any other material agreement or
instrument to which the Servicer is a party or by which it may be bound, or
any statute, order or regulation applicable to the Servicer of any court,
regulatory body, administrative agency or governmental body having
51
jurisdiction over the Servicer; and the Servicer is not a party to, bound
by, or in breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it, which materially and
adversely affects or, to the Servicer's knowledge, would in the future
materially and adversely affect, (x) the ability of the Servicer to perform
its obligations under this Agreement, (y) the business, operations,
financial condition, properties or assets of the Servicer taken as a whole
or (z) the legality, validity or enforceability of this Agreement;
(iv) The Servicer is a HUD approved mortgagee pursuant to Section 203
and Section 211 of the National Housing Act. No event has occurred,
including but not limited to a change in insurance coverage, that would
make the Servicer unable to comply with HUD eligibility requirements or
that would require notification to HUD;
(v) The Servicer does not believe, nor does it have any reason or cause
to believe, that it cannot perform each and every covenant made by it and
contained in this Agreement;
(vi) No litigation is pending against the Servicer that would
materially and adversely affect the execution, delivery or enforceability
of this Agreement or the ability of the Servicer to service the Mortgage
Loans or to perform any of its other obligations hereunder in accordance
with the terms hereof;
(vii) There are no actions or proceedings against, or investigations
known to it of, the Servicer before any court, administrative or other
tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the consummation of the transactions contemplated by
this Agreement or (C) that might prohibit or materially and adversely
affect the performance by the Servicer of its obligations under, or the
validity or enforceability of, this Agreement;
(viii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, this
Agreement or the consummation by it of the transactions contemplated by
this Agreement, except for such consents, approvals, authorizations or
orders, if any, that have been obtained prior to the Closing Date;
(ix) [reserved];
(x) Neither this Agreement nor any information, certificate of an
officer, statement furnished in writing or report delivered to the Trustee
by the Servicer in connection with the transactions contemplated hereby
contains or will contain any untrue statement of a material fact;
(xi) The Servicer will not waive any Prepayment Charge unless it is
waived in accordance with the standard set forth in Section 3.01; and
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(xii) The Servicer has fully furnished and will continue to fully
furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian and Trans Union Credit Information Company or their successors
(the "Credit Repositories") in a timely manner.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.05 shall survive delivery of the Mortgage
Files to the Trustee and shall inure to the benefit of the Trustee, the
Depositor and the Certificateholders. Upon discovery by any of the Depositor,
the Servicer or the Trustee of a breach of any of the foregoing representations,
warranties and covenants which materially and adversely affects the value of any
Mortgage Loan, Prepayment Charge or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following such discovery)
to the Servicer and the Trustee. Notwithstanding the foregoing, within 90 days
of the earlier of discovery by the Servicer or receipt of notice by the Servicer
of the breach of the representation or covenant of the Servicer set forth in
Section 2.05(xi) above which materially and adversely affects the interests of
the Holders of the Class P Certificates in any Prepayment Charge, the Servicer
must 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. The foregoing shall not, however, limit any remedies
available to the Certificateholders, the Depositor or the Trustee on behalf of
the Certificateholders, pursuant to the Mortgage Loan Purchase Agreement
respecting a breach of the representations, warranties and covenants of the
Originator made in its capacity as a party to the Mortgage Loan Purchase
Agreement.
SECTION 2.06. Representations and Warranties of the
Depositor.
The Depositor represents and warrants to the Trust and the Trustee on
behalf of the Certificateholders as follows:
(i) This agreement constitutes a legal, valid and binding obligation of
the Depositor, enforceable against the Depositor in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity);
(ii) Immediately prior to the sale and assignment by the Depositor to
the Trustee on behalf of the Trust of each Mortgage Loan, the Depositor had
good and marketable title to each Mortgage Loan (insofar as such title was
conveyed to it by the Seller) subject to no prior lien, claim,
participation interest, mortgage, security interest, pledge, charge or
other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred all right,
title and interest in the Mortgage Loans to the Trustee on behalf of the
Trust;
53
(iv) The Depositor has not transferred the Mortgage Loans to the
Trustee on behalf of the Trust with any intent to hinder, delay or defraud
any of its creditors;
(v) The Depositor has been duly incorporated and is validly existing as
a corporation in good standing under the laws of Delaware, with full
corporate power and authority to own its assets and conduct its business as
presently being conducted;
(vi) The Depositor is not in violation of its articles of incorporation
or by-laws or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Depositor is a party or by which it or its properties may be
bound, which default might result in any material adverse changes in the
financial condition, earnings, affairs or business of the Depositor or
which might materially and adversely affect the properties or assets, taken
as a whole, of the Depositor;
(vii) The execution, delivery and performance of this Agreement by the
Depositor, and the consummation of the transactions contemplated thereby,
do not and will not result in a material breach or violation of any of the
terms or provisions of, or, to the knowledge of the Depositor, constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Depositor is a party or by which
the Depositor is bound or to which any of the property or assets of the
Depositor is subject, nor will such actions result in any violation of the
provisions of the articles of incorporation or by-laws of the Depositor or,
to the best of the Depositor's knowledge without independent investigation,
any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Depositor or any of its
properties or assets (except for such conflicts, breaches, violations and
defaults as would not have a material adverse effect on the ability of the
Depositor to perform its obligations under this Agreement);
(viii) To the best of the Depositor's knowledge without any independent
investigation, no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the
United States or any other jurisdiction is required for the issuance of the
Certificates, or the consummation by the Depositor of the other
transactions contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as (a) may be
required under State securities or Blue Sky laws, (b) have been previously
obtained or (c) the failure of which to obtain would not have a material
adverse effect on the performance by the Depositor of its obligations
under, or the validity or enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations pending before
or, to the Depositor's knowledge, threatened by any court, administrative
agency or other tribunal to which the Depositor is a party or of which any
of its properties is the subject: (a) which if determined adversely to the
Depositor would have a material adverse effect on the business, results of
operations or financial condition of the Depositor; (b) asserting the
invalidity of this Agreement or the Certificates; (c) seeking to prevent
the issuance of the Certificates or the consummation by the Depositor of
any of the transactions contemplated by this Agreement, as the case may be;
or (d) which might materially and
54
adversely affect the performance by the Depositor of its obligations under,
or the validity or enforceability of, this Agreement.
SECTION 2.07. Issuance of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery to it of the Mortgage Files, subject to the provisions of Sections
2.01 and 2.02, together with the assignment to it of all other assets included
in the Trust Fund, receipt of which is hereby acknowledged. Concurrently with
such assignment and delivery and in exchange therefor, the Trustee, pursuant to
the written request of the Depositor executed by an officer of the Depositor,
has executed, authenticated and delivered to or upon the order of the Depositor,
the Certificates in authorized denominations. The interests evidenced by the
Certificates constitute the entire beneficial ownership interest in the Trust
Fund.
SECTION 2.08. [Reserved].
SECTION 2.09. Conveyance of REMIC 1 Regular Interests and
Acceptance of REMIC 1 by the Trustee;
Issuance of Certificates.
(a) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC 1 Regular Interests for the benefit of the holders of the
Certificates. The Trustee acknowledges receipt of the REMIC 1 Regular Interests
(which are uncertificated) and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the Certificates. The
interests evidenced by the Class R-1 Interest, together with the REMIC 1 Regular
Interests, constitute the entire beneficial ownership interest in REMIC 1.
(b) In exchange for the REMIC 1 Regular Interests and, concurrently
with the assignment to the Trustee thereof, pursuant to the written request of
the Depositor executed by an officer of the Depositor, the Trustee has executed,
authenticated and delivered to or upon the order of the Depositor, the Regular
Certificates in authorized denominations and the Class M-4 Interest evidencing
(together with the Class R-2 Interest) the entire beneficial ownership interest
in REMIC 2.
(c) Concurrently with (i) the assignment and delivery to the Trustee of
REMIC 1 (including the Residual Interest therein represented by the Class R-1
Interest) and the acceptance by the Trustee thereof, pursuant to Section 2.01,
Section 2.02 and Section 2.09(a) and (ii) the assignment and delivery to the
Trustee of REMIC 2 (including the Residual Interest therein represented by the
Class R-2 Interest) and the acceptance by the Trustee thereof, pursuant to
Section 2.09(b), the Trustee, pursuant to the written request of the Depositor
executed by an officer of the Depositor, has executed, authenticated and
delivered to or upon the order of the Depositor, the Class R Certificates in
authorized denominations evidencing the Class R-1 Interest and the Class R-2
Interest.
SECTION 2.10. Conveyance of the Class M-4 Interest and
Acceptance of the Class M-4 Interest by the
Trustee; Issuance of the Class M-4
Certificates.
55
(a) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the Class M-4 Interest for the benefit of the holders of the Class M-4
Certificates. The Trustee acknowledges receipt of the Class M-4 Interest (which
is uncertificated) and declares that it holds and will hold the same in trust
for the exclusive use and benefit of the holders of the Class M-4Certificates.
The interests evidenced by the Class R-X Certificates, together with the Class
M-4 Certificates, constitute the entire beneficial ownership interest in REMIC
3.
(b) In exchange for the Class M-4 Interest and, concurrently with the
assignment to the Trustee thereof, pursuant to the written request of the
Depositor executed by an officer of the Depositor, the Trustee has executed,
authenticated and delivered to or upon the order of the Depositor, the Class M-4
Certificates in authorized denominations evidencing (together with the Class R-X
Certificates) the entire beneficial ownership interest in REMIC 3.
(c) Concurrently with (i) the assignment and delivery to the Trustee of
REMIC 3 (including the Residual Interest therein represented by the Class R-X
Certificates) and the acceptance by the Trustee thereof, pursuant to Section
2.01, Section 2.02 and Section 2.10(a) and (ii) the assignment and delivery to
the Trustee of REMIC 3 (including the Residual Interest therein represented by
the Class R-X Certificates) and the acceptance by the Trustee thereof, pursuant
to Section 2.09(b), the Trustee, pursuant to the written request of the
Depositor executed by an officer of the Depositor, has executed, authenticated
and delivered to or upon the order of the Depositor, the Class R-X Certificates
in authorized denominations.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Servicer to Act as Servicer.
The Servicer shall service and administer the Mortgage Loans on behalf
of the Trust and in the best interests of and for the benefit of the
Certificateholders (as determined by the Servicer in its reasonable judgment) in
accordance with the terms of this Agreement and the 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 Sub-Servicer or any
Affiliate of the Servicer or any Sub-Servicer 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 Advances or Servicing Advances;
or
(iv) the Servicer's or any Sub-Servicer's right to receive compensation
for its services hereunder or with respect to any particular transaction.
To the extent consistent with the foregoing, the Servicer (a) shall
seek the timely and complete recovery of principal and interest on the Mortgage
Notes and (b) shall waive (or permit a Sub-Servicer to waive) a Prepayment
Charge only under the following circumstances: (i) such waiver is standard and
customary in servicing similar Mortgage Loans and (ii) either (A) 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 (B) the collection of such Prepayment Charge is prohibited by applicable law.
If a Prepayment Charge is waived other than as permitted by meeting the
standards described in clauses (i) and (ii) above, then as a remedy for the
breach of such covenant, the Servicer shall 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. Notwithstanding any other provisions of
this Agreement, any payments made by the Servicer in respect of any Prepayment
Charges waived other than as permitted above shall be deemed to be paid outside
of the Trust Fund.
Subject only to the above-described servicing standards and the terms
of this Agreement and of the Mortgage Loans, the Servicer shall have full power
and authority, acting alone or through Sub-Servicers as provided in Section
3.02, to do or cause to be done any and all things in connection with such
servicing
57
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 Sub-Servicer 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, on behalf of the
Certificateholders and the Trustee, and upon notice to the Trustee, 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 and Certificateholders. The Servicer shall service and administer
the Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Servicer shall also comply in the performance of this Agreement with all
reasonable rules and requirements of each insurer under any standard hazard
insurance policy. Subject to Section 3.17, within 15 days of the Closing Date,
the Trustee shall execute, at the written request of the Servicer, and furnish
to the Servicer and any Sub-Servicer a limited power of attorney in the form of
Exhibit I, executed by each payee or last endorsee, as applicable, of each of
the Mortgage Notes and each mortgagee or last assignee, as applicable, of each
of the Mortgages and other documents necessary or appropriate to enable the
Servicer or any Sub-Servicer to carry out their servicing and administrative
duties hereunder; provided, such limited powers of attorney or other documents
shall be prepared by the Servicer and submitted to the Trustee for execution.
The Trustee shall not be liable for the actions of the Servicer or any
Sub-Servicers under such powers of attorney.
Subject to Section 3.09 hereof, in accordance with the standards of the
preceding paragraph, the Servicer, on escrowed accounts, shall advance or cause
to be advanced funds as necessary for the purpose of effecting the 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, and further as provided in Section
3.11. Any cost incurred by the Servicer or by Sub- Servicers in effecting the
payment of taxes and assessments on a Mortgaged Property shall not, for the
purpose of calculating distributions to Certificateholders, be added to the
unpaid Principal Balance of the related Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit.
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 4.04) 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 (unless, as provided in Section 3.07, the Mortgagor is in default
with respect to the Mortgage Loan or such default is, in the judgment of the
Servicer, reasonably foreseeable) or (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
Treasury regulations promulgated thereunder) and (B) cause any REMIC created
hereunder to fail to qualify as a REMIC under the Code or the imposition of any
tax on "prohibited transactions" or "contributions after the startup date" under
the REMIC Provisions.
SECTION 3.02. Sub-Servicing Agreements Between Servicer
and Sub-Servicers.
58
(a) The Servicer may enter into Sub-Servicing Agreements with
Sub-Servicers for the servicing and administration of the Mortgage Loans;
provided, however, that such agreements would not result in a withdrawal or a
downgrading by any Rating Agency of the rating on any Class of Certificates. The
Trustee is hereby authorized to acknowledge, at the request of the Servicer, any
Sub-Servicing Agreement that meets the requirements applicable to Sub-Servicing
Agreements set forth in this Agreement and that is otherwise permitted under
this Agreement. No such acknowledgment shall be deemed to imply that the Trustee
has consented to any such Sub-Servicing Agreement, has passed upon whether such
Sub-Servicing Agreement meets the requirements applicable to Sub-Servicing
Agreements set forth in this Agreement or has passed upon whether such
Sub-Servicing Agreement is otherwise permitted under this Agreement.
Each Sub-Servicer shall be (i) authorized to transact business in the
state or states where the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing
Agreement and (ii) a Xxxxxxx Mac or Xxxxxx Mae approved mortgage servicer. Each
Sub-Servicing Agreement must impose on the Sub-Servicer 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 Sub-Servicing Agreement and will be familiar with the terms
thereof. The terms of any Sub-Servicing Agreement will not be inconsistent with
any of the provisions of this Agreement. The Servicer and the Sub- Servicers may
enter into and make amendments to the Sub-Servicing Agreements or enter into
different forms of Sub-Servicing 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 Certificateholders without the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights; provided,
further, that the consent of the Holders of Certificates entitled to at least
66% of the Voting Rights shall not be required (i) to cure any ambiguity or
defect in a Sub-Servicing Agreement, (ii) to correct, modify or supplement any
provisions of a Sub- Servicing Agreement, or (iii) to make any other provisions
with respect to matters or questions arising under a Sub-Servicing Agreement,
which, in each case, shall not be inconsistent with the provisions of this
Agreement. Any variation without the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights from the provisions set forth in
Section 3.08 relating to insurance or priority requirements of Sub-Servicing
Accounts, or credits and charges to the Sub- Servicing Accounts or the timing
and amount of remittances by the Sub-Servicers to the Servicer, are conclusively
deemed to be inconsistent with this Agreement and therefore prohibited. The
Servicer shall deliver to the Trustee copies of all Sub-Servicing 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, for
the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement and
(except as otherwise provided in Section 2.01) of the Originator and the Seller
under the Mortgage Loan Purchase Agreement, including, without limitation, any
obligation to make advances in respect of delinquent payments as required by a
Sub-Servicing Agreement, or to purchase a Mortgage Loan on account of missing or
defective documentation or on account of a breach of a representation, warranty
or covenant, as described in Section 2.03(a). Such enforcement, including,
without limitation, the legal prosecution of claims, termination of
Sub-Servicing Agreements, and the pursuit of other appropriate
59
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 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. Except as otherwise
provided in Section 2.01, enforcement of the Mortgage Loan Purchase Agreement
against the Originator and the Seller shall be effected by the Servicer to the
extent it is not the Originator or the Seller and otherwise by the Trustee in
accordance with the foregoing provisions of this paragraph.
SECTION 3.03. Successor Sub-Servicers.
The Servicer shall be entitled to terminate any Sub-Servicing Agreement
and the rights and obligations of any Sub-Servicer pursuant to any Sub-Servicing
Agreement in accordance with the terms and conditions of such Sub-Servicing
Agreement. In the event of termination of any Sub-Servicer, all servicing
obligations of such Sub-Servicer shall be assumed simultaneously by the Servicer
without any act or deed on the part of such Sub-Servicer or the Servicer, and
the Servicer either shall service directly the related Mortgage Loans or shall
enter into a Sub- Servicing Agreement with a successor Sub-Servicer which
qualifies under Section 3.02.
Any Sub-Servicing Agreement shall include the provision that such
agreement may be immediately terminated by the Servicer or the Trustee (if the
Trustee is acting as Servicer) without fee, in accordance with the terms of this
Agreement, in the event that the Servicer (or the Trustee, if such party is then
acting as Servicer) shall, for any reason, no longer be the Servicer (including
termination due to a Servicer Event of Termination).
SECTION 3.04. Liability of the Servicer.
Notwithstanding any Sub-Servicing Agreement or the provisions of this
Agreement relating to agreements or arrangements between the Servicer and a
Sub-Servicer or reference to actions taken through a Sub-Servicer or otherwise,
the Servicer shall remain obligated and primarily liable to the Trustee and the
Certificateholders 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 Sub- Servicing Agreements or
arrangements or by virtue of indemnification from the Sub-Servicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Mortgage Loans. The Servicer shall be
entitled to enter into any agreement with a Sub- Servicer for indemnification of
the Servicer by such Sub-Servicer and nothing contained in this Agreement shall
be deemed to limit or modify such indemnification.
SECTION 3.05. No Contractual Relationship Between
Sub-Servicers and the Trustee or
Certificateholders.
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Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Servicer alone, and the Trustee or Certificateholders shall not be deemed
parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section
3.06. The Servicer shall be solely liable for all fees owed by it to any Sub-
Servicer, irrespective of whether the Servicer's compensation pursuant to this
Agreement is sufficient to pay such fees.
SECTION 3.06. Assumption or Termination of Sub-Servicing
Agreements by Trustee.
In the event the Servicer shall for any reason no longer be the
servicer (including by reason of the occurrence of a Servicer Event of
Termination), the Trustee shall thereupon assume all of the rights and
obligations of the Servicer under each Sub-Servicing Agreement that the Servicer
may have entered into, unless the Trustee elects to terminate any Sub-Servicing
Agreement in accordance with its terms as provided in Section 3.03. Upon such
assumption, the Trustee (or the successor servicer appointed pursuant to Section
7.02) shall be deemed, subject to Section 3.03, to have assumed all of the
departing Servicer's interest therein and to have replaced the departing
Servicer as a party to each Sub-Servicing Agreement to the same extent as if
each Sub-Servicing Agreement had been assigned to the assuming party, except
that (i) the departing Servicer shall not thereby be relieved of any liability
or obligations under any Sub- Servicing Agreement that arose before it ceased to
be the Servicer and (ii) neither the Trustee nor 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 Sub-Servicing
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 Sub-Servicing
Agreements to the assuming party. All Servicing Transfer Costs shall be paid by
the predecessor Servicer upon presentation of reasonable documentation of such
costs, and if such predecessor Servicer defaults in its obligation to pay such
costs, such costs shall be paid by the successor Servicer or the Trustee (in
which case the successor Servicer or the Trustee, as applicable, shall be
entitled to reimbursement therefor from the assets of the Trust).
SECTION 3.07. Collection of Certain Mortgage Loan
Payments.
The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans, and shall, to
the extent such procedures shall be consistent with this Agreement 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 in its discretion (i) waive any late payment charge or, if
applicable, any penalty interest, or (ii) extend the due dates for the Monthly
Payments due on a Mortgage Note for a period of not greater than 180 days;
provided, however, 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
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to clause (ii) above, the Servicer shall make timely advances on such Mortgage
Loan during such extension pursuant to Section 4.04 and in accordance with the
amortization schedule of such Mortgage Loan without modification thereof by
reason of such arrangement. Notwithstanding the foregoing, in the event that any
Mortgage Loan is in default or, in the judgment of the Servicer, such default is
reasonably foreseeable, the Servicer, consistent with the standards set forth in
Section 3.01, may also waive, modify or vary any term of such Mortgage Loan
(including modifications that would change the Mortgage Rate, forgive the
payment of principal or interest or extend the final maturity date of such
Mortgage Loan), accept payment from the related Mortgagor of an amount less than
the Stated Principal Balance in final satisfaction of such Mortgage Loan, or
consent to the postponement of strict compliance with any such term or otherwise
grant indulgence to any Mortgagor (any and all such waivers, modifications,
variances, forgiveness of principal or interest, postponements, or indulgences
collectively referred to herein as "forbearance"). The Servicer's analysis
supporting any forbearance and the conclusion that any forbearance meets the
standards of Section 3.01 shall be reflected in writing in the Mortgage File.
SECTION 3.08. Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage Loan
pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
comply with all requirements of this Agreement relating to the Collection
Account. The Sub-Servicer shall deposit in the clearing 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 Sub-Servicer's receipt thereof, all
proceeds of Mortgage Loans received by the Sub-Servicer less its servicing
compensation to the extent permitted by the Sub-Servicing Agreement, and shall
thereafter deposit such amounts in the Sub-Servicing Account, in no event more
than two Business Days after the receipt of such amounts. The Sub-Servicer 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 Sub-Servicing
Account. For purposes of this Agreement, the Servicer shall be deemed to have
received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.
SECTION 3.09. Collection of Taxes, Assessments and Similar
Items; Servicing Accounts.
The Servicer shall establish and maintain, or cause to be established
and maintained, one or more accounts (the "Servicing Accounts"), into which all
Escrow Payments shall be deposited and retained. Servicing Accounts shall be
Eligible Accounts. The Servicer shall deposit in the clearing 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 Escrow
Payments collected on account of the Mortgage Loans and shall thereafter deposit
such Escrow Payments in the Servicing Accounts, in no event more than two
Business Days after the receipt of such Escrow Payments, all Escrow Payments
collected on account of the Mortgage Loans for the purpose of effecting the
payment of any such items as required under the terms of this Agreement.
Withdrawals of amounts from a Servicing Account may be made only to (i) effect
payment of taxes, assessments, hazard
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insurance premiums, and comparable items in a manner and at a time that assures
that the lien priority of the Mortgage is not jeopardized (or, with respect to
the payment of taxes, in a manner and at a time that avoids the loss of the
Mortgaged Property due to a tax sale or the foreclosure as a result of a tax
lien); (ii) reimburse the Servicer (or a Sub-Servicer to the extent provided in
the related Sub-Servicing Agreement) out of related collections for any
Servicing Advances made pursuant to Section 3.01 (with respect to taxes and
assessments) and Section 3.14 (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 Servicing
Account; or (v) clear and terminate the Servicing Account at the termination of
the Servicer's obligations and responsibilities in respect of the Mortgage Loans
under this Agreement in accordance with Article X. In the event the Servicer
shall deposit in a Servicing Account any amount not required to be deposited
therein, it may at any time withdraw such amount from such Servicing Account,
any provision herein to the contrary notwithstanding. The Servicer will be
responsible for the administration of the Servicing Accounts and will be
obligated to make Servicing Advances to such accounts when and as necessary to
avoid the lapse of insurance coverage on the Mortgaged Property, or which the
Servicer knows, or in the exercise of the required standard of care of the
Servicer hereunder should know, is necessary to avoid the loss of the Mortgaged
Property due to a tax sale or the foreclosure as a result of a tax lien. If any
such payment has not been made and the Servicer receives notice of a tax lien
with respect to the Mortgage being imposed, the Servicer will, promptly and to
the extent required to avoid loss of the Mortgaged Property, advance or cause to
be advanced funds necessary to discharge such lien on the Mortgaged Property. As
part of its servicing duties, the Servicer or Sub-Servicers shall pay to the
Mortgagors interest on funds in the Servicing Accounts, to the extent required
by law and, to the extent that interest earned on funds in the Servicing
Accounts is insufficient, to pay such interest from its or their own funds,
without any reimbursement therefor. The Servicer may pay to itself any excess
interest on funds in the Servicing Accounts, to the extent such action is in
conformity with the servicing standard set forth in Section 3.01, is permitted
by law and such amounts are not required to be paid to Mortgagors or used for
any of the other purposes set forth above.
SECTION 3.10. Collection Account and Distribution Account.
(a) On behalf of the Trust Fund, the Servicer shall establish and
maintain, or cause to be established and maintained, one or more accounts (such
account or accounts, the "Collection Account"), held in trust for the benefit of
the Trustee and the Certificateholders. On behalf of the Trust Fund, the
Servicer shall deposit or cause to be deposited in the clearing 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 Servicer's receipt thereof, 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 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 (but not Prepayment Charges), on the Mortgage Loans;
(ii) all payments on account of interest (net of the related Servicing
Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds and condemnation
proceeds (other than proceeds collected in respect of any particular REO
Property and amounts paid in connection with a purchase of Mortgage Loans
and REO Properties pursuant to Section 10.01);
(iv) any amounts required to be deposited pursuant to Section 3.12 in
connection with any losses realized on Permitted Investments with respect
to funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer pursuant to
the second paragraph of Section 3.14(a) in respect of any blanket policy
deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with Section 2.03 or Section 10.01;
(vii) all amounts required to be deposited in connection with
Substitution Adjustments pursuant to Section 2.03; and
(viii) all Prepayment Charges collected by the Servicer and any
Servicer Prepayment Charge Payment Amounts in connection with the Principal
Prepayment of any of the Mortgage Loans.
The foregoing requirements for deposit in the Collection Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of Servicing Fees, late
payment charges, assumption fees, insufficient funds charges and ancillary
income (other than Prepayment Charges) need not be deposited by the Servicer in
the Collection Account and may be retained by the Servicer as additional
compensation. In the event the Servicer shall deposit in the Collection Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Collection Account, any provision herein to the contrary
notwithstanding.
(b) On behalf of the Trust Fund, the Trustee shall establish and
maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Servicer shall deliver to
the Trustee in immediately available funds for deposit in the Distribution
Account on or before 1:00 p.m. New York time (i) on the Servicer Remittance
Date, that portion of the Available Funds (calculated without regard to the
references in the definition thereof to amounts that may be withdrawn from the
Distribution Account) for the related Distribution Date then on deposit in the
Collection Account, the amount of all Prepayment Charges collected during the
applicable Prepayment Period by the Servicer and Servicer Prepayment Charge
Payment Amounts in connection with the Principal Prepayment of any of the
Mortgage Loans then on deposit in the Collection Account and the amount of any
funds reimbursable to an Advancing Person
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pursuant to Section 3.29 and (ii) on each Business Day as of the commencement of
which the balance on deposit in the Collection Account exceeds $75,000 following
any withdrawals pursuant to the next succeeding sentence, the amount of such
excess, but only if the Collection Account constitutes an Eligible Account
solely pursuant to clause (ii) of the definition of "Eligible Account." If the
balance on deposit in the Collection Account exceeds $75,000 as of the
commencement of business on any Business Day and the Collection Account
constitutes an Eligible Account solely pursuant to clause (ii) of the definition
of "Eligible Account," the Servicer shall, on or before 1:00 p.m. New York time
on such Business Day, withdraw from the Collection Account any and all amounts
payable or reimbursable to the Servicer, the Trustee or any Sub-Servicer
pursuant to Section 3.11 and shall pay such amounts to the Persons entitled
thereto.
(c) Funds in the Collection Account and the Distribution Account may be
invested in Permitted Investments in accordance with the provisions set forth in
Section 3.12. The Servicer shall give written notice to the Trustee of the
location of the Collection Account maintained by it when established and prior
to any change thereof. The Trustee shall give notice to the Servicer and the
Depositor of the location of the Distribution Account when established and prior
to any change thereof.
(d) Funds held in the Collection Account at any time may be delivered
by the Servicer to the Trustee for deposit in an account (which may be the
Distribution Account and must satisfy the standards for the Distribution Account
as set forth in the definition thereof) and for all purposes of this Agreement
shall be deemed to be a part of the Collection Account; provided, however, that
the Trustee shall have the sole authority to withdraw any funds held pursuant to
this subsection (d). In the event the Servicer shall deliver to the Trustee for
deposit in the Distribution Account any amount not required to be deposited
therein, it may at any time request that the Trustee withdraw such amount from
the Distribution Account and remit to it any such amount, any provision herein
to the contrary notwithstanding. In addition, the Servicer, with respect to
items (i) through (iv) below, shall deliver to the Trustee from time to time for
deposit, and the Trustee, with respect to items (i) through (iv) below, shall so
deposit, in the Distribution Account:
(i) any Advances, as required pursuant to Section 4.04;
(ii) any amounts required to be deposited pursuant to Section 3.23(d)
or (f) in connection with any REO Property;
(iii) any amounts to be paid in connection with a purchase of Mortgage
Loans and REO Properties pursuant to Section 10.01;
(iv) any Compensating Interest to be deposited pursuant to Section 3.24
in connection with any Prepayment Interest Shortfall; and
(v) any amounts required to be paid to the Trustee pursuant to the
Agreement, including, but not limited to Section 3.06 and Section 7.02.
SECTION 3.11. Withdrawals from the Collection Account and
Distribution Account.
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(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
4.04:
(i) to remit to the Trustee for deposit in the Distribution Account the
amounts required to be so remitted pursuant to Section 3.10(b) or permitted
to be so remitted pursuant to the first sentence of Section 3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Servicer for (a) any
unreimbursed Advances to the extent of amounts received which represent
Late Collections (net of the related Servicing Fees), Liquidation Proceeds
and Insurance Proceeds on Mortgage Loans with respect to which such
Advances were made in accordance with the provisions of Section 4.04; or
(b) any unreimbursed Advances with respect to the final liquidation of a
Mortgage Loan that are Nonrecoverable Advances, but only to the extent that
Late Collections, Liquidation Proceeds and Insurance Proceeds received with
respect to such Mortgage Loan are insufficient to reimburse the Servicer
for such unreimbursed Advances;
(iii) subject to Section 3.16(d), to pay the Servicer or any
Sub-Servicer (a) any unpaid Servicing Fees, (b) any unreimbursed Servicing
Advances with respect to each Mortgage Loan, but only to the extent of any
Late Collections, Liquidation Proceeds and Insurance Proceeds received with
respect to such Mortgage Loan, and (c) any Servicing Advances made with
respect to a Mortgage Loan that, upon a Final Recovery Determination with
respect to such Mortgage Loan are Nonrecoverable Advances, but only to the
extent that Late Collections, Liquidation Proceeds, Insurance Proceeds and
condemnation proceeds received with respect to such Mortgage Loan are
insufficient to reimburse the Servicer or any Sub-Servicer for Servicing
Advances;
(iv) to pay to the Servicer as servicing compensation (in addition to
the Servicing Fee) on the Servicer Remittance Date any interest or
investment income earned on funds deposited in the Collection Account;
(v) to pay the Originator with respect to each Mortgage Loan that has
previously been purchased or replaced pursuant to Section 2.03 all amounts
received thereon subsequent to the date of purchase or substitution, and to
pay the Servicer with respect to each Mortgage Loan that has previously
been purchased pursuant to Section 3.16(c) all amounts received thereon
subsequent to the date of purchase;
(vi) to reimburse the Servicer for any Advance or Servicing Advance
previously made which the Servicer has determined to be a Nonrecoverable
Advance in accordance with the provisions of Section 4.04;
(vii) to pay, or to reimburse the Servicer for Servicing Advances in
respect of, expenses incurred in connection with any Mortgage Loan pursuant
to Section 3.16(b);
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(viii) to reimburse the Servicer for expenses incurred by or
reimbursable to the Servicer pursuant to Section 6.03;
(ix) [reserved];
(x) to reimburse itself for expenses incurred pursuant to Section
9.01(c)(i);
(xi) [reserved]; and
(xii) to clear and terminate the Collection Account pursuant to Section
10.01.
The foregoing requirements for withdrawal from the Collection Account
shall be exclusive. 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.
The Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Collection Account, to the extent held by or on behalf of it, pursuant to
subclauses (ii), (iii), (iv), (v), (vi) and (vii) above. The Servicer shall
provide written notification to the Trustee, on or prior to the next succeeding
Servicer Remittance Date, upon making any withdrawals from the Collection
Account pursuant to subclause (vi) above; provided that an Officers' Certificate
in the form described under Section 4.04(d) shall suffice for such written
notification to the Trustee in respect hereof.
(b) The Trustee shall, from time to time, make withdrawals from the
Distribution Account, for any of the following purposes, without priority:
(i) to make distributions in accordance with Section 4.01;
(ii) to pay itself the Trustee Fee pursuant to Section 8.05;
(iii) to pay any amounts in respect of taxes pursuant to Section
9.01(g);
(iv) to clear and terminate the Distribution Account pursuant to
Section 10.01;
(v) to pay any amounts required to be paid to the Trustee pursuant to
this Agreement, including but not limited to funds required to be paid
pursuant to Section 3.06, Section 7.02 and Section 8.05;
(vi) to pay to the Trustee, any interest or investment income earned on
funds deposited in the Distribution Account; and
(vii) to pay to an Advancing Person reimbursements for Advances and/or
Servicing Advances pursuant to Section 3.29.
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SECTION 3.12. Investment of Funds in the Collection
Account and the Distribution Account.
(a) The Servicer may direct any depository institution maintaining the
Collection Account to invest the funds on deposit in such account, and the
Trustee may direct any depository institution maintaining the Distribution
Account to invest the funds on deposit in such account or to hold such funds
uninvested (each such account, for the purposes of this Section 3.12, an
"Investment Account"). All investments pursuant to this Section 3.12 shall be in
one or more Permitted Investments bearing interest or sold at a discount, and
maturing, unless payable on demand, (i) no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the Trustee
is the obligor thereon or if such investment is managed or advised by a Person
other than the Trustee or an Affiliate of the Trustee, and (ii) no later than
the date on which such funds are required to be withdrawn from such account
pursuant to this Agreement, if the Trustee is the obligor thereon or if such
investment is managed or advised by the Trustee or any Affiliate. All such
Permitted Investments shall be held to maturity, unless payable on demand. Any
investment of funds in an Investment Account shall be made in the name of the
Trustee (in its capacity as such), or in the name of a nominee of the Trustee.
The Trustee 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
Trustee or its agent, together with any document of transfer necessary to
transfer title to such investment to the Trustee or its nominee. In the event
amounts on deposit in an Investment Account are at any time invested in a
Permitted Investment payable on demand, the Trustee shall:
(x) consistent with any notice required to be given thereunder, demand
that payment thereon be made on the last day such Permitted Investment may
otherwise mature hereunder in an amount equal to the lesser of (1) all
amounts then payable thereunder and (2) the amount required to be withdrawn
on such date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Trustee that such Permitted
Investment would not constitute a Permitted Investment in respect of funds
thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds deposited
in the Collection Account and any REO 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 accordance with Section 3.11, Section 3.31 or Section 3.23, as
applicable. The Servicer shall deposit in the Collection Account or any REO
Account, as applicable, the amount of any loss of principal incurred in respect
of any such Permitted Investment made with funds in such Account immediately
upon realization of such loss.
(c) All income and gain realized from the investment of funds deposited
in the Distribution Account shall be for the benefit of the Trustee. The Trustee
shall deposit in the Distribution Account the amount of any loss of principal
incurred in respect of any such Permitted Investment made with funds in
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such Account immediately upon realization of such loss. Notwithstanding the
foregoing, the Trustee may at its discretion, and without liability, hold the
funds in the Distribution Account uninvested.
(d) 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 may and, subject to Section 8.01 and Section 8.02(a)(v),
upon the request of the Holders of Certificates representing more than 50% of
the Voting Rights allocated to any Class of Certificates, shall take such action
as may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings.
SECTION 3.13. [Reserved].
SECTION 3.14. Maintenance of Hazard Insurance and Errors
and Omissions and Fidelity Coverage.
(a) The Servicer shall cause to be maintained for each Mortgage Loan
hazard insurance with extended coverage on the 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 necessary to fully compensate for any damage
or loss to the improvements that are a part of such property on a replacement
cost basis, in each case in an amount not less than such amount as is necessary
to avoid the application of any coinsurance clause contained in the related
hazard insurance policy and (iii) the maximum insurable value of the
improvements which are a part of such Mortgaged Property. The Servicer shall
also cause to be maintained hazard 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. The Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by the Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the Collection
Account, subject to withdrawal pursuant to Section 3.11, if received in respect
of a Mortgage Loan, or in the REO Account, subject to withdrawal pursuant to
Section 3.23, if received in respect of an REO Property. Any cost incurred by
the Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to Certificateholders, be added to the unpaid
Principal Balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require any Mortgagor to obtain 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
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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 B:VI or better in
Best's Key Rating Guide (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 3.14, it being understood and agreed that
such policy may contain a deductible clause, in which case the Servicer shall,
in the event that there shall not have been maintained on the related Mortgaged
Property or REO Property a policy complying with the first two sentences of this
Section 3.14, and there shall have been one or more losses which would have been
covered by such policy, deposit to the Collection Account from its own funds the
amount not otherwise payable under the blanket policy because of such deductible
clause. In connection with its activities as administrator and servicer of the
Mortgage Loans, the Servicer agrees to prepare and present, on behalf of itself,
the Trustee and Certificateholders, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy.
(b) The Servicer shall keep in force during the term of this Agreement
a policy or policies of insurance covering errors and omissions for failure in
the performance of the Servicer's obligations under this Agreement, which policy
or policies shall be in such form and amount that would meet the requirements of
Xxxxxx Xxx or Xxxxxxx Mac if it were the purchaser of the Mortgage Loans, unless
the Servicer has obtained a waiver of such requirements from Xxxxxx Mae or
Xxxxxxx Mac. The Servicer shall also maintain a fidelity bond in the form and
amount that would meet the requirements of Xxxxxx Mae or Xxxxxxx Mac, unless the
Servicer has obtained a waiver of such requirements from Xxxxxx Mae or Xxxxxxx
Mac. The Servicer shall be deemed to have complied with this provision if an
Affiliate of the Servicer has such errors and omissions and fidelity bond
coverage and, by the terms of such insurance policy or fidelity bond, the
coverage afforded thereunder extends to the Servicer. Any such errors and
omissions policy and fidelity bond shall by its terms not be cancelable without
thirty days' prior written notice to the Trustee. The Servicer shall also cause
each Sub-Servicer to maintain a policy of insurance covering errors and
omissions and a fidelity bond which would meet such requirements.
SECTION 3.15. Enforcement of Due-On-Sale Clauses;
Assumption Agreements.
The Servicer will, to the extent it has actual 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
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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 and has a credit risk rating at least equal to that of the original
Mortgagor. In connection with any assumption or substitution, the Servicer shall
apply such underwriting standards and follow such practices and procedures as
shall be normal and usual in its general mortgage servicing activities and as it
applies to other mortgage loans owned solely by it. The Servicer shall not take
or enter into any assumption and modification agreement, however, unless (to the
extent practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy. Any fee collected by the Servicer in respect of an assumption,
modification or substitution of liability agreement shall be retained by the
Servicer as additional servicing compensation. In connection with any such
assumption, no material term of the Mortgage Note (including but not limited to
the related Mortgage Rate and the amount of the Monthly Payment) may be amended
or modified, except as otherwise required pursuant to the terms thereof. The
Servicer shall notify the Trustee that any such substitution, modification or
assumption agreement has been completed by forwarding to the Trustee the
executed original of such substitution, modification 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 whatsoever. For purposes of this Section 3.15, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
SECTION 3.16. Realization Upon Defaulted Mortgage Loans.
(a) The Servicer shall use its best efforts, consistent with the
servicing standards set forth in Section 3.01, to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.07. The Servicer shall be responsible for all costs and expenses
incurred by it in any such proceedings; provided, however, that such costs and
expenses will be recoverable as Servicing Advances by the Servicer as
contemplated in Section 3.11(a) and Section 3.23. The foregoing is subject to
the provision that, in any case in which a Mortgaged Property shall have
suffered damage from an Uninsured Cause, the Servicer shall not be required to
expend its own funds toward the restoration of such property unless it shall
determine in its discretion that such restoration will increase the proceeds of
liquidation of the related Mortgage Loan after reimbursement to itself for such
expenses.
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(b) Notwithstanding the foregoing provisions of this Section 3.16 or
any other provision of this Agreement, with respect to any Mortgage Loan as to
which the Servicer has received actual notice of, or has actual knowledge of,
the presence of any toxic or hazardous substance on the related Mortgaged
Property, the Servicer shall not, on behalf of the Trustee, either (i) obtain
title to such Mortgaged Property as a result of or in lieu of foreclosure or
otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property, if, as a result of any such action,
the Trustee, the Trust Fund or the Certificateholders would be considered to
hold title to, to be a "mortgagee-in-possession" of, or to be an "owner" or
"operator" of such Mortgaged Property within the meaning of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended from
time to time, or any comparable law, unless the Servicer has also previously
determined, based on its reasonable judgment and a report prepared by a Person
who regularly conducts environmental audits using customary industry standards,
that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Trust Fund to take such actions as are necessary to bring
the Mortgaged Property into compliance therewith; and
(2) there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous substances,
hazardous materials, hazardous wastes, or petroleum-based materials for
which investigation, testing, monitoring, containment, clean-up or
remediation could be required under any federal, state or local law or
regulation, or that if any such materials are present for which such action
could be required, that it would be in the best economic interest of the
Trust Fund to take such actions with respect to the affected Mortgaged
Property.
The cost of the environmental audit report contemplated by this Section
3.16 shall be advanced by the Servicer, subject to the Servicer's right to be
reimbursed therefor from the Collection Account as provided in Section
3.11(a)(vii), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received in
respect of the affected Mortgage Loan or other Mortgage Loans.
For the purposes of this Section 3.16(b), actual notice and actual
knowledge of the Servicer means actual notice to or actual knowledge of a
Responsible Officer of the Servicer involved in the servicing of the relevant
Mortgage Loan. Actual knowledge of the Servicer does not include knowledge
imputable by virtue of the availability of or accessibility to information
relating to environmental or hazardous waste sites or the locations thereof.
If the Servicer determines, as described above, that it is in the best
economic interest of the Trust Fund to take such actions as are necessary to
bring any such Mortgaged Property into compliance with applicable environmental
laws, or to take such action with respect to the containment, clean-up or
remediation of hazardous substances, hazardous materials, hazardous wastes or
petroleum-based materials affecting any such Mortgaged Property, then the
Servicer shall take such action as it deems to be in the best economic interest
of the Trust Fund; provided that any amounts disbursed by the Servicer pursuant
to this Section 3.16(b) shall constitute Servicing Advances, subject to Section
4.04(d). The cost of any such
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compliance, containment, clean-up or remediation shall be advanced by the
Servicer, subject to the Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(vii), such right of
reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.
(c) The Servicer may, at its option, purchase a Mortgage Loan which has
become 90 or more days delinquent or for which the Servicer has accepted a deed
in lieu of foreclosure. Prior to purchase pursuant to this Section 3.16(c), the
Servicer shall be required to continue to make Advances pursuant to Section
4.04. The Servicer shall not use any procedure in selecting Mortgage Loans to be
repurchased which is materially adverse to the interests of the
Certificateholders. The Servicer shall purchase such delinquent Mortgage Loan at
a price equal to the Purchase Price of such Mortgage Loan. Any such purchase of
a Mortgage Loan pursuant to this Section 3.16(c) shall be accomplished by
deposit in the Collection Account of the amount of the Purchase Price. Upon the
satisfaction of the requirements set forth in Section 3.17(a), the Trustee shall
immediately deliver the Mortgage File and any related documentation to the
Servicer and will execute such documents provided to it as are necessary to
convey the Mortgage Loan to the Servicer.
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds, Liquidation Proceeds or condemnation proceeds, in respect of
any Mortgage Loan, will be applied in the following order of priority: first, to
unpaid Servicing Fees; second, to reimburse the Servicer or any Sub-Servicer for
any related unreimbursed Servicing Advances pursuant to Section 3.11(a)(iii) and
Advances pursuant to Section 3.11(a)(ii); third, to accrued and unpaid interest
on the Mortgage Loan, to the date of the Final Recovery Determination, or to the
Due Date prior to the Distribution Date on which such amounts are to be
distributed if not in connection with a Final Recovery Determination; and
fourth, as a recovery of principal of the Mortgage Loan. If the amount of the
recovery so allocated to interest is less than the full amount of accrued and
unpaid interest due on such Mortgage Loan, the amount of such recovery will be
allocated by the Servicer as follows: first, to unpaid Servicing Fees; and
second, to the balance of the interest then due and owing. The portion of the
recovery so allocated to unpaid Servicing Fees shall be reimbursed to the
Servicer or any Sub-Servicer pursuant to Section 3.11(a)(iii).
SECTION 3.17. Trustee to Cooperate; 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 shall deliver to the Trustee,
in written (with two executed copies) or electronic format, a Request for
Release in the form of Exhibit E hereto (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)
signed by a Servicing Officer (or in a mutually agreeable electronic format that
will, in lieu of a signature on its face, originate from a Servicing Officer)
and shall request delivery to it of the Mortgage File. Upon receipt of such
certification and request, the Trustee shall, within three Business Days,
release and send by overnight mail, at the expense of the Servicer, the related
Mortgage File to the Servicer. No expenses incurred in connection
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with any instrument of satisfaction or deed of reconveyance shall be chargeable
to the Collection Account or the Distribution 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 any
request made by or on behalf of the Servicer and delivery to the Trustee, in
written (with two executed copies) or electronic format, of a Request for
Release in the form of Exhibit E hereto signed by a Servicing Officer (or in a
mutually agreeable electronic format that will, in lieu of a signature on its
face, originate from a Servicing Officer), release the related Mortgage File to
the Servicer within three Business Days, and the Trustee shall, at the written
direction of the Servicer, execute such documents as shall be necessary to the
prosecution of any such proceedings. Such Request for Release shall obligate the
Servicer to return each and every document previously requested from the
Mortgage File to the Trustee when the need therefor by the Servicer no longer
exists, unless the Mortgage Loan has been liquidated and the Liquidation
Proceeds relating to the Mortgage Loan have been deposited in the Collection
Account or the Mortgage File or such document has been delivered to an attorney,
or to a public trustee or other public official as required by law, for purposes
of initiating or pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property either judicially or non-judicially, and the Servicer
has delivered, or caused to be delivered, to the Trustee an additional Request
for Release certifying as to such liquidation or action or proceedings. Upon the
request of the Trustee, the Servicer shall provide notice to the Trustee of 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
Request for Release, in written (with two executed copies) or electronic format,
from 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, such Mortgage Loan shall
be released by the Trustee to the Servicer or its designee within three Business
Days.
(c) Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the Servicer or the Sub-Servicer, as the case may
be, copies of, any court pleadings, requests for trustee's sale or other
documents necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment,
or to enforce any other remedies or rights provided by the Mortgage Note or
Mortgage or otherwise available at law or in equity. Each such certification
shall include a request that such pleadings or documents be executed by the
Trustee and a statement as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee will not
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee's sale.
SECTION 3.18. Servicing Compensation.
As compensation for the activities of the Servicer hereunder, the
Servicer shall be entitled to the Servicing Fee with respect to each Mortgage
Loan payable solely from payments of interest in respect of such Mortgage Loan,
subject to Section 3.24. In addition, the Servicer shall be entitled to recover
unpaid
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Servicing Fees out of Insurance Proceeds, Liquidation Proceeds or condemnation
proceeds to the extent permitted by Section 3.11(a)(iii) and out of amounts
derived from the operation and sale of an REO Property to the extent permitted
by Section 3.23. Except as provided in Section 3.29 or Section 6.04, 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 Sub-Servicer pursuant to a Sub-
Servicing Agreement entered into under Section 3.02.
Additional servicing compensation in the form of assumption fees, late
payment charges, insufficient funds charges, ancillary income or otherwise
(other than Prepayment Charges) shall be retained by the Servicer only to the
extent such fees or charges are received by the Servicer. The Servicer shall
also be entitled pursuant to Section 3.11(a)(iv) to withdraw from the Collection
Account and pursuant to Section 3.23(b) to withdraw from any REO Account, as
additional servicing compensation, interest or other income earned on deposits
therein, subject to Section 3.12 and Section 3.24. The Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including premiums for the insurance required by Section
3.14, to the extent such premiums are not paid by the related Mortgagors or by a
Sub-Servicer and servicing compensation of each Sub-Servicer) and shall not be
entitled to reimbursement therefor except as specifically provided herein.
SECTION 3.19. Reports to the Trustee; Collection Account
Statements.
Not later than twenty days after each Distribution Date, the Servicer
shall forward, upon request, to the Trustee and the Depositor the most current
available bank statement for the Collection Account. 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
request at the expense of the requesting party, provided such statement is
delivered by the Servicer to the Trustee.
SECTION 3.20. Statement as to Compliance.
The Servicer will deliver to the Trustee and the Depositor not later
than 120 days following the end of the fiscal year of the Servicer (which, as of
the Closing Date, ends on the last day of December), commencing in 2003, an
Officers' Certificate stating, as to each signatory thereof, that (i) a review
of the activities of the Servicer during the preceding year and of performance
under this Agreement has been made under such officers' supervision and (ii) to
the best of such 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 officer and the nature and status
thereof. Copies of any 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 request at the expense of the requesting
party, provided such statement is delivered by the Servicer to the Trustee.
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SECTION 3.21. Independent Public Accountants' Servicing
Report.
Not later than 120 days following the end of each fiscal year of the
Servicer (which, as of the Startup Day, ends on the last day of December),
commencing in 2003, the Servicer, at its expense, shall cause a nationally
recognized firm of independent certified public accountants to furnish to the
Servicer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Servicer which includes an
assertion that the Servicer has complied with certain minimum residential
mortgage loan servicing standards, identified in the Uniform Single Attestation
Program for Mortgage Bankers established by the Mortgage Bankers Association of
America, with respect to the servicing of residential mortgage loans during the
most recently completed fiscal year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. In rendering its report such firm may rely, as to
matters relating to the direct servicing of residential mortgage loans by
Sub-Servicers, 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 Sub-Servicers. Immediately upon receipt of such report, the Servicer shall
furnish a copy of such report to the Trustee and each Rating Agency. Copies of
such statement shall be provided by the Trustee to any Certificateholder upon
request at the Servicer's expense, provided that such statement is delivered by
the Servicer to the Trustee.
SECTION 3.22. Access to Certain Documentation; Filing of
Reports by Trustee.
(a) The Servicer shall provide to the Office of Thrift Supervision, the
FDIC, and any other federal or state banking or insurance regulatory authority
that may exercise authority over any Certificateholder, access to the
documentation regarding the Mortgage Loans required by applicable laws and
regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the
Servicer designated by it. In addition, access to the documentation regarding
the Mortgage Loans will be provided to any Certificateholder, the Trustee and to
any Person identified to the Servicer as a prospective transferee of a
Certificate, upon reasonable request during normal business hours at the offices
of the Servicer designated by it at the expense of the Person requesting such
access.
(b)(i) The Trustee and the Servicer shall reasonably cooperate with the
Depositor in connection with the Trust's satisfying the reporting requirements
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
Trustee shall prepare on behalf of the Trust any Forms 8-K and 10-K customary
for similar securities as required by the Exchange Act and the Rules and
Regulations of the Securities and Exchange Commission thereunder, and the
Depositor shall sign (or shall cause another entity acceptable to the Securities
and Exchange Commission to sign) and the Trustee shall file (via the Securities
and Exchange Commission's Electronic Data Gathering and Retrieval System) such
forms on behalf of the Depositor (or such other entity). The Depositor hereby
grants to the Trustee a limited power of attorney to execute any Form 8-K and
file each such document on behalf of the Depositor. Such power of attorney shall
continue until the earlier of (i) receipt by the Trustee from the Depositor of
written termination of such
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power of attorney and (ii) the termination of the Trust. Notwithstanding
anything herein to the contrary, the Depositor, and not the Trustee, shall be
responsible for executing each Form 10-K filed on behalf of the Trust.
(ii) Each Form 8-K shall be filed by the Trustee within 15 days after
each Distribution Date, with a copy of the statement to the Certificateholders
for such Distribution Date as an exhibit thereto. Prior to March 30th of each
year (or such earlier date as may be required by the Exchange Act and the Rules
and Regulations of the Securities and Exchange Commission), the Trustee shall
file a Form 10-K, in substance as required by applicable law or applicable
Security and Exchange Commission staff's interpretations. Such Form 10-K shall
include as exhibits the Servicer's annual statement of compliance described
under Section 3.20 and the accountant's report described under Section 3.21, in
each case to the extent they have been timely delivered to the Trustee. If they
are not so timely delivered, the Trustee shall file an amended Form 10-K
including such documents as exhibits reasonably promptly after they are
delivered to 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. The Form 10-K shall
also include a certification in the form attached hereto as Exhibit N-1 (the
"Certification"), which shall be signed by the senior officer of the Depositor
in charge of securitization.
(iii) In addition, the Trustee shall sign a certification (in the form
attached hereto as Exhibit N-2) for the benefit of the Depositor and its
officers, directors and Affiliates regarding certain aspects of items 1 through
3 of the Certification (provided, however, that the Trustee shall not undertake
an analysis of the accountant's report attached as an exhibit to the Form 10-K),
and the Servicer shall sign a certification in the form attached hereto as
Exhibit N-3) for the benefit of the Depositor, the Trustee and their officers,
directors and Affiliates regarding certain aspects of items 1, 2, 3, 4 and 5 of
the Certification.
In addition, (i) the Trustee shall indemnify and hold harmless the
Depositor and its officers, directors and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon a breach of the Trustee's obligations under this Section 3.22(b)
caused by the Trustee's negligence, bad faith or willful misconduct in
connection therewith, and (ii) the Servicer shall indemnify and hold harmless
the Depositor, the Trustee and their respective officers, directors and
Affiliates from and against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other costs
and expenses arising out of or based upon a breach of the Servicer's obligations
under this Section 3.22(b) or the Servicer's negligence, bad faith or willful
misconduct in connection therewith. If the indemnification provided for herein
is unavailable or insufficient to hold harmless the Depositor, then (i) the
Trustee agrees that it shall contribute to the amount paid or payable by the
Depositor as a result of the losses, claims, damages or liabilities of the
Depositor in such proportion as is appropriate to reflect the relative fault of
the Depositor on the one hand and the Trustee on the other in connection with a
breach of the Trustee's obligations under this Section 3.22(b) caused by the
Trustee's negligence, bad faith or willful misconduct in connection therewith
and (ii) the Servicer agrees that it shall contribute to the amount paid or
payable by the Depositor as a result of the losses, claims, damages or
liabilities of the Depositor in such proportion as is appropriate to reflect the
relative fault of the Depositor on the one hand and the
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Servicer on the other in connection with a breach of the Servicer's obligations
under this Section 3.22(b) or the Servicer's negligence, bad faith or willful
misconduct in connection therewith
(iv) Upon any filing with the Securities and Exchange Commission, the
Trustee shall promptly deliver to the Depositor a copy of any executed report,
statement or information.
(v) Prior to January 30 of the first year in which the Trustee is able
to do so under applicable law, the Trustee shall file a Form 15D Suspension
Notification with respect to the Trust.
(vi) To the extent that, following the Closing Date, the Depositor
certifies that reports and certifications differing from those required under
this Section 3.22(b) comply with the reporting requirements under the Exchange
Act, the Trustee and the Servicer hereby agree that they will reasonably
cooperate to amend the provisions of this Section 3.22(b) in order to comply
with such amended reporting requirements and such amendment of this Section
3.22(b); provided, however, that the Trustee shall not be responsible for
executing any Form 10-K or the Certification. Any such amendment may result in
the reduction of the reports filed by the Depositor under the Exchange Act.
SECTION 3.23. Title, Management and Disposition of REO
Property.
(a) The deed or certificate of sale of any REO Property shall be taken
in the name of the Trustee, or its nominee, in trust for the benefit of the
Certificateholders. The Servicer, on behalf of REMIC 1, shall sell any REO
Property as soon as practicable and in any event no later than the end of the
third full taxable year after the taxable year in which such REMIC acquires
ownership of such REO Property for purposes of Section 860G(a)(8) of the Code or
request from the Internal Revenue Service, no later than 60 days before the day
on which the three-year grace period would otherwise expire, an extension of
such three-year period, unless the Servicer shall have delivered to the Trustee
an Opinion of Counsel, addressed to the Trustee and the Depositor, to the effect
that the holding by the REMIC of such REO Property subsequent to three years
after its acquisition will not result in the imposition on the REMIC of taxes on
"prohibited transactions" thereof, as defined in Section 860F of the Code, or
cause any of the REMICs created hereunder to fail to qualify as a REMIC under
Federal law at any time that any Certificates are outstanding. The Servicer
shall manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any of the REMICs created hereunder of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code,
or any "net income from foreclosure property" which is subject to taxation under
the REMIC Provisions.
(b) The Servicer shall separately account for all funds collected and
received in connection with the operation of any REO Property and shall
establish and maintain, or cause to be established and maintained, with respect
to REO Properties an account held in trust for the Trustee for the benefit of
the Certificateholders (the "REO Account"), which shall be an Eligible Account.
The Servicer shall be permitted to allow the Collection Account to serve as the
REO Account, subject to separate ledgers for
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each REO Property. The Servicer shall be entitled to retain or withdraw any
interest income paid on funds deposited in the REO Account.
(c) The Servicer shall have full power and authority, subject only to
the specific requirements and prohibitions of this Agreement, to do any and all
things in connection with any REO Property as are consistent with the manner in
which the Servicer manages and operates similar property owned by the Servicer
or any of its Affiliates, all on such terms and for such period (subject to the
requirement of prompt disposition set forth in Section 3.23(a))as the Servicer
deems to be in the best interests of Certificateholders. In connection
therewith, the Servicer shall deposit, or cause to be deposited in the clearing
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 REO Account, in no event more than
two Business Days after the Servicer's receipt thereof, all revenues received by
it with respect to an REO Property and shall withdraw therefrom funds necessary
for the proper operation, management and maintenance of such REO Property
including, without limitation:
(i) all insurance premiums due and payable in respect of such REO
Property;
(ii) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO Property.
To the extent that amounts on deposit in the REO Account with respect
to an REO Property are insufficient for the purposes set forth in clauses (i)
through (iii) above with respect to such REO Property, the Servicer shall
advance from its own funds such amount as is necessary for such purposes if, but
only if, the Servicer would make such advances if the Servicer owned the REO
Property and if in the Servicer's judgment, the payment of such amounts will be
recoverable from the rental or sale of the REO Property.
Notwithstanding the foregoing, neither the Servicer nor the Trustee
shall:
(A) authorize the Trust Fund to enter into, renew or extend any New
Lease with respect to any REO Property, if the New Lease by its terms will
give rise to any income that does not constitute Rents from Real Property;
(B) authorize any amount to be received or accrued under any New Lease
other than amounts that will constitute Rents from Real Property;
(C) authorize any construction on any REO Property, other than the
completion of a building or other improvement thereon, and then only if
more than ten percent of the construction of such building or other
improvement was completed before default on the related Mortgage Loan
became imminent, all within the meaning of Section 856(e)(4)(B) of the
Code; or
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(D) authorize any Person to Directly Operate any REO Property on any
date more than 90 days after its date of acquisition by the Trust Fund;
unless, in any such case, the Servicer has obtained an Opinion of Counsel,
provided to the Trustee, to the effect that such action will not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code at any time that it is held by the REMIC, in
which case the Servicer may take such actions as are specified in such Opinion
of Counsel.
The Servicer may contract with any Independent Contractor for the
operation and management of any REO Property, provided that:
(1) the terms and conditions of any such contract shall not be
inconsistent herewith;
(2) any such contract shall require, or shall be administered to
require, that the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed above and remit all related revenues (net
of such costs and expenses) to the Servicer as soon as practicable, but in
no event later than thirty days following the receipt thereof by such
Independent Contractor;
(3) none of the provisions of this Section 3.23(c) relating to any such
contract or to actions taken through any such Independent Contractor shall
be deemed to relieve the Servicer of any of its duties and obligations to
the Trustee on behalf of the Certificateholders with respect to the
operation and management of any such REO Property; and
(4) the Servicer shall be obligated with respect thereto to the same
extent as if it alone were performing all duties and obligations in
connection with the operation and management of such REO Property.
The Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Servicer by such Independent
Contractor, and nothing in this Agreement shall be deemed to limit or modify
such indemnification. The Servicer shall be solely liable for all fees owed by
it to any such Independent Contractor, irrespective of whether the Servicer's
compensation pursuant to Section 3.18 is sufficient to pay such fees; provided,
however, that to the extent that any payments made by such Independent
Contractor would constitute Servicing Advances if made by the Servicer, such
amounts shall be reimbursable as Servicing Advances made by the Servicer.
(d) In addition to the withdrawals permitted under Section 3.23(c), the
Servicer may from time to time make withdrawals from the REO Account for any REO
Property: (i) to pay itself or any Sub- Servicer unpaid Servicing Fees in
respect of the related Mortgage Loan; and (ii) to reimburse itself or any
Sub-Servicer for unreimbursed Servicing Advances and Advances made in respect of
such REO Property or the related Mortgage Loan. On the Servicer Remittance Date,
the Servicer shall withdraw from each REO Account maintained by it and deposit
into the Distribution Account in accordance with Section
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3.10(d)(ii), for distribution on the related Distribution Date in accordance
with Section 4.01, the income from the related REO Property received during the
prior calendar month, net of any withdrawals made pursuant to Section 3.23(c) or
this Section 3.23(d).
(e) Subject to the time constraints set forth in Section 3.23(a), each
REO Disposition shall be carried out by the Servicer in a manner, at such price
and upon such terms and conditions as shall be normal and usual in the servicing
standard set forth in Section 3.01.
(f) The proceeds from the REO Disposition, net of any amount required
by law to be remitted to the Mortgagor under the related Mortgage Loan and net
of any payment or reimbursement to the Servicer or any Sub-Servicer as provided
above, shall be deposited in the Distribution Account in accordance with Section
3.10(d)(ii) on the Servicer Remittance Date in the month following the receipt
thereof for distribution on the related Distribution Date in accordance with
Section 4.01. Any REO Disposition shall be for cash only (unless changes in the
REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration).
(g) The Servicer shall file information returns with respect to the
receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of any Mortgaged Property and cancellation of
indebtedness income with respect to any Mortgaged Property as required by
Sections 6050H, 6050J and 6050P of the Code, respectively. Such reports shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 6050J and 6050P of the Code.
SECTION 3.24. Obligations of the Servicer in Respect of
Prepayment Interest Shortfalls.
Not later than 1:00 p.m. New York time on each Servicer Remittance
Date, the Servicer shall remit to the Distribution Account an amount
("Compensating Interest") equal to the lesser of (A) the aggregate of the
Prepayment Interest Shortfalls for the related Distribution Date and (B) 50% of
its aggregate Servicing Fee received in the related Due Period. The Servicer
shall not have the right to reimbursement for any amounts remitted to the
Trustee in respect of Compensating Interest. Such amounts so remitted shall be
included in the Available Funds and distributed therewith on the next
Distribution Date. The Servicer shall not be obligated to pay Compensating
Interest with respect to Relief Act Interest Shortfalls.
SECTION 3.25. [Reserved].
SECTION 3.26. Obligations of the Servicer in Respect of
Mortgage Rates and Monthly Payments.
In the event that a shortfall in any collection on or liability with
respect to the Mortgage Loans in the aggregate results from or is attributable
to adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances
that were made by the Servicer in a manner not consistent with the terms of the
related Mortgage Note and this Agreement, the Servicer, upon discovery or
receipt of notice thereof, immediately shall deposit in the Collection Account
from its own funds the amount of any such shortfall and shall indemnify and hold
harmless the Trust Fund, the Trustee, the Depositor and any successor servicer
in
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respect of any such liability. Such indemnities shall survive the termination or
discharge of this Agreement. Notwithstanding the foregoing, this Section 3.26
shall not limit the ability of the Servicer to seek recovery of any such amounts
from the related Mortgagor under the terms of the related Mortgage Note, as
permitted by law.
SECTION 3.27. Solicitations.
From and after the Closing Date, the Servicer agrees that it will not
take any action or permit or cause any action to be taken by any of its agents
and Affiliates, or by any independent contractors or independent mortgage
brokerage companies on the Servicer's behalf, to personally, by telephone or
mail, solicit the Mortgagor under any Mortgage Loan for the purpose of
refinancing such Mortgage Loan; provided, that the Servicer may solicit any
Mortgagor for whom the Servicer has received a request for verification of
mortgage, a request for demand for payoff, a mortgagor initiated written or
verbal communication indicating a desire to prepay the related Mortgage Loan,
another mortgage company has pulled a credit report on the mortgagor or the
mortgagor initiates a title search; provided further, it is understood and
agreed that promotions undertaken by the Servicer or any of its Affiliates which
(i) concern optional insurance products or other additional products or (ii) are
directed to the general public at large, including, without limitation, mass
mailings based on commercially acquired mailing lists, newspaper, radio,
telephone and television advertisements shall not constitute solicitation under
this Section, nor is the Servicer prohibited from responding to unsolicited
requests or inquiries made by a Mortgagor or an agent of a Mortgagor.
Furthermore, the Servicer shall be permitted to include in its monthly
statements to borrowers or otherwise, statements regarding the availability of
the Servicer's counseling services with respect to refinancing mortgage loans.
SECTION 3.28. Net WAC Rate Carryover Reserve Account.
No later than the Closing Date, the Trustee shall establish and
maintain with itself a separate, segregated trust account titled, "Net WAC Rate
Carryover Reserve Account, Deutsche Bank National Trust Company, as Trustee, in
trust for registered Holders of Fremont Home Loan Trust 2002-1, Asset- Backed
Certificates, Series 2002-1." On the Closing Date, the Depositor will deposit,
or cause to be deposited, into the Net WAC Rate Carryover Reserve Account
$1,000.
On each Distribution Date as to which there is a Net WAC Rate Carryover
Amount payable to the Class A Certificates or the Mezzanine Certificates, the
Trustee has been directed by the Class C Certificateholders to, and therefore
will, deposit into the Net WAC Rate Carryover Reserve Account the amounts
described in Section 4.01(d)(x), rather than distributing such amounts to the
Class C Certificateholders. On each such Distribution Date, the Trustee shall
hold all such amounts for the benefit of the Holders of the Class A Certificates
and the Mezzanine Certificates, and will distribute such amounts to the Holders
of the Class A Certificates and the Mezzanine Certificates in the amounts and
priorities set forth in Section 4.01(d). If no Net WAC Rate Carryover Amounts
are payable on a Distribution Date, the Trustee shall deposit into the Net WAC
Rate Carryover Reserve Account on behalf of the Class C Certificateholders, from
amounts otherwise distributable to the Class C Certificateholders, an amount
such
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that when added to other amounts already on deposit in the Net WAC Rate
Carryover Reserve Account, the aggregate amount on deposit therein is equal to
$1,000.
On each Distribution Date, any amounts remaining in the Net WAC Rate
Reserve Account (other than $1,000 as set forth above) after the payment of any
Net WAC Rate Carryover Amounts on the Offered Certificates for such Distribution
Date, shall be payable to the Holders of the Class C Certificates.
For federal and state income tax purposes, the Class C
Certificateholders will be deemed to be the owners of the Net WAC Rate Carryover
Reserve Account and all amounts deposited into the Net WAC Rate Carryover
Reserve Account (other than the initial deposit therein of $1,000) shall be
treated as amounts distributed by REMIC 2 to the Holders of the Class C
Certificates. The Net WAC Rate Carryover Reserve Account will be an "outside
reserve fund" within the meaning of Treasury regulation Section 1.860G-2(h).
Upon the termination of the Trust, or the payment in full of the Class A
Certificates and the Mezzanine Certificates, all amounts remaining on deposit in
the Net WAC Rate Carryover Reserve Account will be released by the Trust and
distributed to the Class C Certificateholders or their designees. The Net WAC
Rate Carryover Reserve Account will be part of the Trust but not part of any
REMIC and any payments to the Holders of the Class A Certificates or the
Mezzanine Certificates of Net WAC Rate Carryover Amounts will not be payments
with respect to a "regular interest" in a REMIC within the meaning of Code
Section 860(G)(a)(1).
By accepting a Class C Certificate, each Class C Certificateholder
hereby agrees to direct the Trustee, and the Trustee hereby is directed, to
deposit into the Net WAC Rate Carryover Reserve Account the amounts described
above on each Distribution Date as to which there is any Net WAC Rate Carryover
Amount rather than distributing such amounts to the Class C Certificateholders.
By accepting a Class C Certificate, each Class C Certificateholder further
agrees that such direction is given for good and valuable consideration, the
receipt and sufficiency of which is acknowledged by such acceptance.
At the direction of the Holders of a majority in Percentage Interest in
the Class C Certificates, the Trustee shall direct any depository institution
maintaining the Net WAC Rate Carryover Reserve Account to invest the funds in
such account in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, (i) no later than the Business
Day immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if a Person other than
the Trustee or an Affiliate manages or advises such investment, and (ii) no
later than the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if the Trustee or an Affiliate manages or
advises such investment. If no investment direction of the Holders of a majority
in Percentage Interest in the Class C Certificates with respect to the Net WAC
Rate Carryover Reserve Account is received by the Trustee, the Trustee shall
invest the funds in such account in the following Permitted Investment for so
long as such Permitted Investment is managed by the Trustee or an Affiliate of
the Trustee and is of the kind described in clause (vi) of the definition of
Permitted Investments: Deutsche Bank Treasury Money Fund No. 835.
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For federal tax return and information reporting, the right of the
Holders of the Class A Certificates and the Holders of the Mezzanine
Certificates to receive payments from the Net WAC Rate Carryover Reserve Account
in respect of any Net WAC Rate Carryover Amount shall be assigned a value of
zero.
SECTION 3.29. Advance Facility.
(a) The Trustee on behalf of the Trust Fund, upon request of the
Servicer, is hereby authorized to enter into a facility with any Person which
provides that such Person (an "Advancing Person") may make all or a portion of
the Advances and/or Servicing Advances to the Trust Fund under this Agreement
and the Trustee is further authorized, subject to Section 11.01, to enter into
any amendment of this Agreement in connection with such facility. No such
facility shall reduce or otherwise affect the Servicer's obligation to fund such
Advances and/or Servicing Advances. To the extent that an Advancing Person makes
all or a portion of any Advance or any Servicing Advance and provides the
Trustee with notice acknowledged by the Servicer that such Advancing Person is
entitled to reimbursement, such Advancing Person shall be entitled to receive
reimbursement pursuant to this Agreement for such amount to the extent provided
in Section 3.29(b). Such notice from the Advancing Person must specify the
amount of the reimbursement and must specify which Section of this Agreement
permits the applicable Advance or Servicing Advance to be reimbursed. The
Trustee shall be entitled to conclusively rely without independent investigation
on the Advancing Person's statement with respect to the amount of any
reimbursement pursuant to this Section 3.29 and with respect to the Advancing
Person's statement with respect to the Section of this Agreement that permits
the applicable Advance or Servicing Advance to be reimbursed. An Advancing
Person whose obligations are limited to the making of Advances and/or Servicing
Advances shall not be required to meet the qualifications of a Servicer or a
Sub-Servicer and will not be deemed to be a Sub-Servicer under this Agreement.
(b) If an advancing facility is entered into and so provides, then the
Servicer shall not be permitted to reimburse itself therefor under Section
3.11(a)(ii), Section 3.11(a)(iii), Section 3.11(a)(v), Section 3.11(a)(vi),
Section 3.11(a)(vii) and Section 4.04(b) prior to the remittance to the Trust
Fund, but instead, in such event, the Servicer shall include such amounts in the
applicable remittance to the Trustee made pursuant to Section 3.10(a). The
Trustee is hereby authorized to pay to the Advancing Person, reimbursements for
Advances and Servicing Advances from the Distribution Account to the same extent
the Servicer would have been permitted to reimburse itself for such Advances
and/or Servicing Advances in accordance with Section 3.11(a)(ii), Section
3.11(a)(iii), Section 3.11(a)(v), Section 3.11(a)(vi), Section 3.11(a)(vii) or
Section 4.04(b), as the case may be, had the Servicer itself funded such Advance
or Servicing Advance. The Trustee is hereby authorized to pay directly to the
Advancing Person such portion of the Servicing Fee as the parties to any
advancing facility agree.
(c) Upon request of the Servicer, the Trustee agrees to execute such
acknowledgments, certificates and other documents recognizing the interests of
any Advancing Person in the Servicer's reimbursements rights relating to such
Advances and Servicing Advances as may be reasonably requested from time to time
by the Servicer or such Advancing Person.
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ARTICLE IV
FLOW OF FUNDS
SECTION 4.01. Distributions.
(a)(I) On each Distribution Date, the Trustee shall withdraw from the
Distribution Account that portion of Available Funds for such Distribution Date
consisting of the Group I Interest Remittance Amount for such Distribution Date,
and make the following disbursements and transfers in the order of priority
described below, in each case to the extent of the Group I Interest Remittance
Amount remaining for such Distribution Date:
(i) to the Holders of the Class A-1 Certificates, the Monthly Interest
Distributable Amount and the Unpaid Interest Shortfall Amount, if any, for such
Certificates; and
(ii) to the Holders of the Class A-2 Certificates, an amount equal to
the excess, if any, of (x) the amount required to be distributed pursuant
to Section 4.01(a)(II)(i) below for such Distribution Date over (y) the
amount actually distributed pursuant to such clause from the Group II
Interest Remittance Amount.
(II) On each Distribution Date the Trustee shall withdraw from the
Distribution Account that portion of Available Funds for such Distribution Date
consisting of the Group II Interest Remittance Amount for such Distribution
Date, and make the following disbursements and transfers in the order of
priority described below, in each case to the extent of the Group II Interest
Remittance Amount remaining for such Distribution Date.
(i) to the Holders of the Class A-2 Certificates, the Monthly Interest
Distributable Amount and the Unpaid Interest Shortfall Amount, if any, for
such Certificates; and
(ii) to the Holders of the Class A-1 Certificates, an amount equal to
the excess, if any, of (x) the amount required to be distributed pursuant
to Section 4.01(a)(I)(i) above for such Distribution Date over (y) the
amount actually distributed pursuant to such clause from the Group I
Interest Remittance Amount.
(III) On each Distribution Date, following the distributions made
pursuant to Section 4.01(a)(I) and (II) above, the Trustee shall make the
following disbursements and transfers in the order of priority described below,
in each case to the extent of the sum of the Group I Interest Remittance Amount
and the Group II Interest Remittance Amount remaining undistributed for such
Distribution Date.
(i) to the Holders of the Class M-1 Certificates, the Monthly Interest
Distributable Amount allocable to such Certificates;
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(ii) to the Holders of the Class M-2 Certificates, the Monthly Interest
Distributable Amount allocable to such Certificates;
(iii) to the Holders of the Class M-3 Certificates, the Monthly
Interest Distributable Amount allocable to such Certificates; and
(iv) to the Holders of the Class M-4 Certificates, the Monthly Interest
Distributable Amount allocable to such Certificates
(b)(I) On each Distribution Date (a) prior to the Stepdown Date or (b)
on which a Trigger Event is in effect, distributions in respect of principal to
the extent of the Group I Principal Distribution Amount shall be made in the
following amounts and order of priority:
(i) first, to the Holders of the Class A-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and
(ii) second, after taking into account the amount distributed to the
Holders of the Class A-2 Certificates pursuant to clause (b)(II)(i) below
on such Distribution Date, to the Holders of the Class A-2 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero.
(II) On each Distribution Date (a) prior to the Stepdown Date or (b) on
which a Trigger Event is in effect, distributions in respect of principal to the
extent of the Group II Principal Distribution Amount shall be made in the
following amounts and order of priority:
(i) first, to the Holders of the Class A-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and
(ii) second, after taking into account the amount distributed to the
Holders of the Class A-1 Certificates pursuant to clause (b)(I)(i) above on
such Distribution Date, to the Holders of the Class A-1 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero.
(III) On each Distribution Date (a) prior to the Stepdown Date or (b)
on which a Trigger Event is in effect, distributions in respect of principal to
the extent of the sum of the Group I Principal Distribution Amount and the Group
II Principal Distribution Amount remaining undistributed for such Distribution
Date shall be made in the following amounts and order of priority:
(i) first, to the Holders of the Class M-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
(ii) second, to the Holders of the Class M-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
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(iii) third, to the Holders of the Class M-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and
(iv) fourth, to the Holders of the Class M-4 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero.
(c)(I) On each Distribution Date (a) on or after the Stepdown Date and
(b) on which a Trigger Event is not in effect, distributions in respect of
principal to the extent of the Group I Principal Distribution Amount shall be
made in the following amounts and order of priority:
(i) first, to the Holders of the Class A-1 Certificates, the Class A-1
Principal Distribution Amount until the Certificate Principal Balance
thereof has been reduced to zero; and
(ii) second, to the extent of the portion, if any, of the Class A-1
Principal Distribution Amount remaining undistributed pursuant to clause
(c)(I)(i) above on such Distribution Date, and after taking into account
the amount distributed to the Holders of the Class A-2 Certificates
pursuant to clause (c)(II)(i) below on such Distribution Date, to the
Holders of the Class A-2 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; and
(iii) third, to the holders of the Class A-2 Certificates, an amount
equal to the excess, if any, of (x) the amount required to be distributed
pursuant to clause (c)(II)(i) below for such Distribution Date over (y) the
sum of (A) the amount actually distributed pursuant to clause (c)(II)(i)
below from the Group II Principal Distribution Amount on such Distribution
Date and (B) the amount, if any, distributed to the Holders of the Class
A-2 Certificates pursuant to clause (c)(I)(ii) above on such Distribution
Date.
(II) On each Distribution Date (a) on or after the Stepdown Date and
(b) on which a Trigger Event is not in effect, distributions in respect of
principal to the extent of the Group II Principal Distribution Amount shall be
made in the following amounts and order of priority:
(i) first, to the Holders of the Class A-2 Certificates, the Class A-2
Principal Distribution Amount until the Certificate Principal Balance
thereof has been reduced to zero;
(ii) second, to the extent of the portion, if any, of the Class A-2
Principal Distribution Amount remaining undistributed pursuant to clause
(c)(II)(i) above on such Distribution Date, and after taking into account
the amount distributed to the holders of the Class A-1 Certificates
pursuant to clause (c)(I)(i) above on such Distribution Date, to the
holders of the Class A-1 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; and
(iii) third, to the holders of the Class A-1 Certificates, an amount
equal to the excess, if any, of (x) the amount required to be distributed
pursuant to clause (c)(I)(i) above for such Distribution Date over (y) the
sum of (A) the amount actually distributed pursuant to clause (c)(I)(i)
above from the Group I Principal Distribution Amount on such Distribution
Date and (B) the amount, if any, distributed
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to the holders of the Class A-1 Certificates pursuant to clause (c)(II)(ii)
above on such Distribution Date.
(III) On each Distribution Date (a) on or after the Stepdown Date and
(b) on which a Trigger Event is not in effect, distributions in respect of
principal to the extent of the sum of the Group I Principal Distribution Amount
and the Group II Principal Distribution Amount remaining undistributed for such
Distribution Date shall be made in the following amounts and order of priority:
(i) first, to the Holders of the Class M-1 Certificates, the Class M-1
Principal Distribution Amount until the Certificate Principal Balance
thereof has been reduced to zero;
(ii) second, to the Holders of the Class M-2 Certificates, the Class
M-2 Principal Distribution Amount until the Certificate Principal Balance
thereof has been reduced to zero;
(iii) third, to the Holders of the Class M-3 Certificates, the Class
M-3 Principal Distribution Amount until the Certificate Principal Balance
thereof has been reduced to zero; and
(iv) fourth, to the Holders of the Class M-4 Certificates, the Class
M-4 Principal Distribution Amount until the Certificate Principal Balance
thereof has been reduced to zero.
(d) On each Distribution Date, the Net Monthly Excess Cashflow shall be
distributed as follows:
(i) to the Holders of the Class or Classes of Certificates then
entitled to receive distributions in respect of principal, in an amount
equal to any Extra Principal Distribution Amount, distributable to such
Holders as part of the Group I Principal Distribution Amount and/or the
Group II Principal Distribution Amount as described under Section 4.01(b)
and Section 4.01(c) above;
(ii) to the Holders of the Class M-1 Certificates, in an amount equal
to the Unpaid Interest Shortfall Amount allocable to such Certificates;
(iii) to the Holders of the Class M-1 Certificates, in an amount equal
to the Allocated Realized Loss Amount allocable to such Certificates;
(iv) to the Holders of the Class M-2 Certificates, in an amount equal
to the Unpaid Interest Shortfall Amount allocable to such Certificates;
(v) to the Holders of the Class M-2 Certificates, in an amount equal to
the Allocated Realized Loss Amount allocable to such Certificates;
(vi) to the Holders of the Class M-3 Certificates, in an amount equal
to the Unpaid Interest Shortfall Amount allocable to such Certificates;
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(vii) to the Holders of the Class M-3 Certificates, in an amount equal
to the Allocated Realized Loss Amount allocable to such Certificates;
(viii) to the Holders of the Class M-4 Certificates, in an amount equal
to the Unpaid Interest Shortfall Amount allocable to such Certificates;
(ix) to the Holders of the Class M-4 Certificates, in an amount equal
to the Allocated Realized Loss Amount allocable to such Certificates;
(x) to the Net WAC Rate Carryover Reserve Account, the sum of (A) the
excess, if any, of $1,000 over the amount on deposit therein (exclusive of
any amounts therein representing any investment income on such account) and
(B) the aggregate of any Net WAC Rate Carryover Amounts for the Class A
Certificates and Class M Certificates;
(xi) to the Holders of the Class C Certificates, the Monthly Interest
Distributable Amount for such Class and any remaining Overcollateralization
Release Amount for such Distribution Date;
(xii) if such Distribution Date follows the Prepayment Period during
which occurs the latest date on which a Prepayment Charge may be required
to be paid in respect of any Mortgage Loans, to the Holders of the Class P
Certificates, in reduction of the Certificate Principal Balance thereof,
until the Certificate Principal Balance thereof is reduced to zero; and
(xiii) any remaining amounts to the Holders of the Residual
Certificates (in respect of the Class R-1 Interest, Class R-2 Interest or
Class R-X Certificates, as appropriate).
On each Distribution Date, after making the distributions of the
Available Funds as set forth above, the Trustee will first, withdraw from the
Net WAC Rate Carryover Reserve Account all income from the investment of funds
in the Net WAC Rate Carryover Reserve Account and distribute such amount to the
Holders of the Class C Certificates, and second, withdraw from the Net WAC Rate
Carryover Reserve Account, to the extent of amounts remaining on deposit
therein, the amount of any Net WAC Rate Carryover Amount for such Distribution
Date. The Trustee will distribute such amount first, concurrently to the Class
A-1 Certificates and the Class A-2 Certificates, on a PRO RATA basis based on
the Net WAC Rate Carryover Amounts for each such Class, until each such amount
has been distributed in full; second, to the Class M-1 Certificates, third, to
the Class M-2 Certificates; fourth, to the Class M-3 Certificates; and fifth, to
the Class M-4 Certificates, in each case to the extent of the Net WAC Rate
Carryover Amount allocable to each such Class.
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Mortgage Loans received during the related Prepayment Period
and any Servicer Prepayment Charge Amounts paid by the Servicer during the
related Prepayment Period will be withdrawn from the Distribution Account and
distributed by the Trustee to the Holders of the Class P Certificates and shall
not be available for distribution to the Holders of any other Class of
Certificates. The payment of the foregoing amounts to the Holders of the Class P
Certificates shall not reduce the Certificate Principal Balances thereof.
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(e) The Trustee shall make distributions in respect of a Distribution
Date to each Certificateholder of record on the related Record Date (other than
as provided in Section 10.01 respecting the final distribution), in the case of
Certificateholders of the Regular Certificates, by check or money order mailed
to such Certificateholder at the address appearing in the Certificate Register,
or by wire transfer. Distributions among Certificateholders shall be made in
proportion to the Percentage Interests evidenced by the Certificates held by
such Certificateholders.
(f) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. All such credits
and disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the Certificates. None of the Trustee, the Depositor or the Servicer shall have
any responsibility therefor except as otherwise provided by applicable law.
SECTION 4.02. Reserved.
SECTION 4.03. Statements.
(a) On each Distribution Date, based, as applicable, on information
provided to it by the Servicer, the Trustee shall prepare and make available to
each Holder of the Regular Certificates, the Servicer and the Rating Agencies, a
statement as to the distributions made on such Distribution Date:
(i) the amount of the distribution made on such Distribution Date to
the Holders of each Class of Regular Certificates, separately identified,
allocable to principal and the amount of the distribution made to the
Holders of the Class P Certificates allocable to Prepayment Charges and
Servicer Prepayment Charge Payment Amounts;
(ii) the amount of the distribution made on such Distribution Date to
the Holders of each Class of Regular Certificates (other than the Class P
Certificates) allocable to interest, separately identified;
(iii) the Overcollateralized Amount, the Overcollateralization Release
Amount, the Overcollateralization Deficiency Amount and the
Overcollateralization Target Amount as of such Distribution Date and the
Excess Overcollateralized Amount for the Mortgage Pool for such
Distribution Date;
(iv) the aggregate amount of servicing compensation received by the
Servicer with respect to the related Due Period and such other customary
information as the Trustee deems necessary or desirable, or which a
Certificateholder reasonably requests, to enable Certificateholders to
prepare their tax returns;
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(v) the aggregate amount of Advances for the related Due Period;
(vi) the Pool Balance at the Close of Business at the end of the
related Due Period;
(vii) the number, aggregate principal balance, weighted average
remaining term to maturity and weighted average Mortgage Rate of the
Mortgage Loans as of the related Determination Date;
(viii) the number and aggregate unpaid principal balance of Mortgage
Loans that were (A) Delinquent (exclusive of Mortgage Loans in bankruptcy
or foreclosure and REO Properties) (1) 30 to 59 days, (2) 60 to 89 days and
(3) 90 or more days, (B) as to which foreclosure proceedings have been
commenced and Delinquent (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or
more days, (C) in bankruptcy and Delinquent (1) 30 to 59 days, (2) 60 to 89
days and (3) 90 or more days, in each case as of the Close of Business on
the last day of the calendar month preceding such Distribution Date and (D)
REO Properties;
(ix) [reserved];
(x) the total number and cumulative principal balance of all REO
Properties as of the Close of Business of the last day of the preceding
Prepayment Period;
(xi) the aggregate amount of Principal Prepayments made during the
related Prepayment Period;
(xii) the aggregate amount of Realized Losses incurred during the
related Prepayment Period and the cumulative amount of Realized Losses;
(xiii) the aggregate amount of extraordinary Trust Fund expenses
withdrawn from the Collection Account for such Distribution Date;
(xiv) the Certificate Principal Balance of the Class A Certificates,
the Mezzanine Certificates and the Class C Certificates, after giving
effect to the distributions made on such Distribution Date;
(xv) the Monthly Interest Distributable Amount in respect of each Class
of Class A Certificates, each Class of Mezzanine Certificates and the Class
C Certificates for such Distribution Date and the Unpaid Interest Shortfall
Amount, if any, with respect to the Class A Certificates, the Mezzanine
Certificates and the Class C Certificates for such Distribution Date;
(xvi) the aggregate amount of any Prepayment Interest Shortfalls for
such Distribution Date, to the extent not covered by payments by the
Servicer pursuant to Section 3.26;
(xvii) the Credit Enhancement Percentage for such Distribution Date;
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(xviii) the Net WAC Rate Carryover Amount for each Class of Class A
Certificates and each Class of Mezzanine Certificates, if any, for such
Distribution Date and the amount remaining unpaid after reimbursements
therefor on such Distribution Date;
(xix) any Overcollateralization Target Amount, Overcollateralized
Amount and Overcollateralization Deficiency Amount after giving effect to
the distribution of principal on such Distribution Date;
(xx) when the Stepdown Date or a Trigger Event has occurred;
(xxi) the Available Funds; and
(xxii) the respective Pass-Through Rates applicable to each Class of
Class A Certificates, each Class of Mezzanine Certificates and the Class C
Certificates for such Distribution Date and the Pass- Through Rate
applicable to each Class of Class A Certificates and each Class of
Mezzanine Certificates for the immediately succeeding Distribution Date.
The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders and the Rating Agencies via the
Trustee's internet website. The Trustee's internet website shall initially be
located at "xxx.xxxxxxxxxxxxxx.xx.xxx". Assistance in using the website can be
obtained by calling the Trustee's customer service desk at (000) 000-0000.
Parties that are unable to use the above distribution option are entitled to
have a paper copy mailed to them via first class mail by calling the customer
service desk and indicating such. The Trustee shall have the right to change the
way such statements are distributed in order to make such distribution more
convenient and/or more accessible to the above parties and the Trustee shall
provide timely and adequate notification to all above parties regarding any such
changes. As a condition to access to the Trustee's internet website, the Trustee
may require registration and the acceptance of a disclaimer. The Trustee will
not be liable for the dissemination of information in accordance with this
Agreement. The Trustee shall also be entitled to rely on but shall not be
responsible for the content or accuracy of any information provided by third
parties for purposes of preparing the Distribution Date statement and may affix
thereto any disclaimer it deems appropriate in its reasonable discretion
(without suggesting liability on the part of any other party thereto).
In the case of information furnished pursuant to subclauses (i) through
(iii) above, the amounts shall be expressed in a separate section of the report
as a dollar amount for each Class for each $1,000 original dollar amount as of
the Cut-off Date.
(b) Within a reasonable period of time after the end of each calendar
year, the Trustee shall, upon written request, furnish to each Person who at any
time during the calendar year was a Certificateholder of a Regular Certificate,
if requested in writing by such Person, such information as is reasonably
necessary to provide to such Person a statement containing the information set
forth in subclauses (i) through (iii) above, aggregated for such calendar year
or applicable portion thereof during which such Person was a Certificateholder.
Such obligation of the Trustee shall be deemed to have been
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satisfied to the extent that substantially comparable information shall be
prepared and furnished by the Trustee to Certificateholders pursuant to any
requirements of the Code as are in force from time to time.
(c) On each Distribution Date, the Trustee shall make available to the
Residual Certificateholders a copy of the reports forwarded to the Regular
Certificateholders in respect of such Distribution Date with such other
information as the Trustee deems necessary or appropriate.
(d) Within a reasonable period of time after the end of each calendar
year, the Trustee shall deliver to each Person who at any time during the
calendar year was a Residual Certificateholder, if requested in writing by such
Person, such information as is reasonably necessary to provide to such Person a
statement containing the information provided pursuant to the previous paragraph
aggregated for such calendar year or applicable portion thereof during which
such Person was a Residual Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be prepared and furnished to Certificateholders by
the Trustee pursuant to any requirements of the Code as from time to time in
force.
SECTION 4.04. Remittance Reports; Advances.
(a) On the second Business Day following each Determination Date, the
Servicer shall deliver to the Trustee by telecopy or electronic mail (or by such
other means as the Servicer and the Trustee may agree from time to time) a
Remittance Report with respect to the related Distribution Date. Not later than
the second Business Day following each Determination Date, the Servicer shall
deliver or cause to be delivered to the Trustee in addition to the information
provided on the Remittance Report, such other information reasonably available
to it with respect to the Mortgage Loans as the Trustee may reasonably require
to perform the calculations necessary to make the distributions contemplated by
Section 4.01 and to prepare the statements to Certificateholders contemplated by
Section 4.03. The Trustee shall not be responsible to recompute, recalculate or
verify any information provided to it by the Servicer.
(b) The amount of Advances to be made by the Servicer for any
Distribution Date shall equal, subject to Section 4.04(d), the sum of (i) the
aggregate amount of Monthly Payments (net of the related Servicing Fee), due
during the related Due Period in respect of the Mortgage Loans, which Monthly
Payments were delinquent on a contractual basis as of the Close of Business on
the related Determination Date and (ii) with respect to each REO Property, which
REO Property was acquired during or prior to the related Due Period and as to
which REO Property an REO Disposition did not occur during the related Due
Period, an amount equal to the excess, if any, of the REO Imputed Interest on
such REO Property for the most recently ended calendar month, over the net
income from such REO Property transferred to the Distribution Account pursuant
to Section 3.23 for distribution on such Distribution Date. For purposes of the
preceding sentence, the Monthly Payment on each Balloon Mortgage Loan with a
delinquent Balloon Payment is equal to the assumed monthly payment that would
have been due on the related Due Date based on the original principal
amortization schedule for the such Balloon Mortgage Loan.
On or before 3:00 p.m. New York time on the Servicer Remittance Date,
the Servicer shall remit in immediately available funds to the Trustee for
deposit in the Distribution Account an amount equal to the
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aggregate amount of Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.04, used by the
Servicer in discharge of any such Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of Advances to be made
by the Servicer with respect to the Mortgage Loans and REO Properties. Any
amounts held for future distribution used by the Servicer to make an Advance as
permitted in the preceding sentence shall be appropriately reflected in the
Servicer's records and replaced by the Servicer by deposit in the Collection
Account on or before any future Servicer Remittance Date to the extent that the
Available Funds for the related Distribution Date (determined without regard to
Advances to be made on the Servicer Remittance Date) shall be less than the
total amount that would be distributed to the Classes of Certificateholders
pursuant to Section 4.01 on such Distribution Date if such amounts held for
future distributions had not been so used to make Advances. The Trustee will
provide notice to the Servicer by telecopy by the Close of Business on any
Servicer Remittance Date in the event that the amount remitted by the Servicer
to the Trustee on such date is less than the Advances required to be made by the
Servicer for the related Distribution Date, as set forth in the related
Remittance Report.
(c) The obligation of the Servicer to make such Advances is mandatory,
notwithstanding any other provision of this Agreement but subject to (d) below,
and, with respect to any Mortgage Loan, shall continue until the Mortgage Loan
is paid in full or until all Liquidation Proceeds thereon have been recovered,
or a Final Recovery Determination has been made thereon.
(d) Notwithstanding anything herein to the contrary, no Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if such
Advance or Servicing Advance would, if made, constitute a Nonrecoverable
Advance. The determination by the Servicer that it has made a Nonrecoverable
Advance or that any proposed Advance or Servicing Advance, if made, would
constitute a Nonrecoverable Advance, shall be evidenced by an Officers'
Certificate of the Servicer delivered to the Depositor and the Trustee.
SECTION 4.05. [Reserved]
SECTION 4.06. [Reserved]
SECTION 4.07. Distributions on the REMIC Regular
Interests.
(a) On each Distribution Date, the Trustee shall cause in the following
order of priority, the following amounts to be distributed by REMIC 1 to REMIC 2
on account of the REMIC 1 Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class R Certificates (in respect
of the Class R-1 Interest), as the case may be:
(i) first, to the extent of Available Funds, to Holders of REMIC 1
Regular Interest LTAA, REMIC 1 Regular Interest LTA1, REMIC 1 Regular
Interest LTA2, REMIC 1 Regular Interest
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LTM1, REMIC 1 Regular Interest LTM2, REMIC 1 Regular Interest LTM3, REMIC 1
Regular Interest LTM4, REMIC 1 Regular Interest LTZZ and REMIC 1 Regular
Interest LTP, PRO RATA, in an amount equal to (A) the Uncertificated
Accrued Interest for such Distribution Date, plus (B) any amounts in
respect thereof remaining unpaid from previous Distribution Dates. Amounts
payable as Uncertificated Accrued Interest in respect of REMIC 1 Regular
Interest LTZZ shall be reduced and deferred when the REMIC 1
Overcollateralization Amount is less than the REMIC 1 Overcollateralization
Target Amount, by the lesser of (x) the amount of such difference and (y)
the Maximum Uncertificated Accrued Interest Deferral Amount; and
(ii) second, to the Holders of REMIC 1 Regular Interests, in an amount
equal to the remainder of the Available Funds for such Distribution Date
after the distributions made pursuant to clause (i) above, allocated as
follows:
(a) to the Holders of REMIC 1 Regular Interest LTAA and REMIC
1 Regular Interest LTP, 98.00% of such remainder, until the
Uncertificated Principal Balance of such Uncertificated REMIC 1 Regular
Interest is reduced to zero; provided, however, that REMIC 1 Regular
Interest LTP shall not be reduced until the Distribution Date
immediately following the expiration of the latest Prepayment Charge as
identified on the Prepayment Charge Schedule or any Distribution Date
thereafter, at which point such amount shall be distributed to REMIC 1
Regular Interest LTP, until $100 has been distributed pursuant to this
clause;
(b) to the Holders of REMIC 1 Regular Interest LTA1, REMIC 1
Regular Interest LTA2, REMIC 1 Regular Interest LTM1, REMIC 1 Regular
Interest LTM2, REMIC 1 Regular Interest LTM3 and REMIC 1 Regular
Interest LTM4, 1.00% of such remainder, in the same proportion as
principal payments are allocated to the Corresponding Certificates,
until the Uncertificated Principal Balances of such REMIC 1 Regular
Interests are reduced to zero;
(c) to the Holders of REMIC 1 Regular Interest LTZZ, 1.00% of
such remainder, until the Uncertificated Principal Balance of such
REMIC 1 Regular Interest is reduced to zero; and
(d) any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-1 Interest);
provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Release Amount shall be allocated
to Holders of (i) REMIC 1 Regular Interest LTAA and REMIC 1 Regular Interest
LTP, in that order and (ii) REMIC 1 Regular Interest LTZZ, respectively;
provided that REMIC 1 Regular Interest LTP shall not be reduced until the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter, at which point such amount shall be distributed to REMIC 1 Regular
Interest LT1P, until $100 has been distributed pursuant to this clause.
SECTION 4.08. Allocation of Realized Losses.
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(a) All Realized Losses on the Mortgage Loans allocated to any Regular
Certificate shall be allocated by the Trustee on each Distribution Date as
follows: first, to Net Monthly Excess Cashflow; second, to the Class C
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; third, to the Class M-4 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero, fourth, to the Class M-3 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; fifth,
to the Class M-2 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero; and sixth, to the Class M-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero. All Realized
Losses to be allocated to the Certificate Principal Balances of all Classes on
any Distribution Date shall be so allocated after the actual distributions to be
made on such date as provided above. All references above to the Certificate
Principal Balance of any Class of Certificates shall be to the Certificate
Principal Balance of such Class immediately prior to the relevant Distribution
Date, before reduction thereof by any Realized Losses, in each case to be
allocated to such Class of Certificates, on such Distribution Date.
Any allocation of Realized Losses to a Mezzanine Certificate on any
Distribution Date shall be made by reducing the Certificate Principal Balance
thereof by the amount so allocated; any allocation of Realized Losses to a Class
C Certificates shall be made first by reducing the amount otherwise payable in
respect thereof pursuant to Section 4.01(d)(xi). No allocations of any Realized
Losses shall be made to the Certificate Principal Balances of the Class A
Certificates or the Class P Certificates.
(b) All Realized Losses on the Mortgage Loans shall be deemed to have
been allocated in the specified percentages, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC 1 Regular Interest LTAA and
REMIC 1 Regular Interest LTZZ up to an aggregate amount equal to the REMIC 1
Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LTAA and REMIC 1
Regular Interest LTZZ up to an aggregate amount equal to the REMIC 1 Principal
Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Principal Balances of REMIC 1 Regular Interest LTAA, REMIC 1 Regular Interest
LTM4 and REMIC 1 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTM4 has been
reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC 1
Regular Interest LTAA, REMIC 1 Regular Interest LTM3 and REMIC 1 Regular
Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LTM3 has been reduced to zero; fifth, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LTAA, REMIC 1
Regular Interest LTM2 and REMIC 1 Regular Interest LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LTM2 has been reduced to zero; and sixth, to the Uncertificated
Principal Balances of REMIC 1 Regular Interest LTAA, REMIC 1 Regular Interest
LTM1 and REMIC 1 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTM1 has been
reduced to zero.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
Each of the Class A Certificates, the Mezzanine Certificates, the Class
P Certificates, the Class C Certificates and the Residual Certificates shall be
substantially in the forms annexed hereto as exhibits, and shall, on original
issue, be executed, authenticated and delivered by the Trustee to or upon the
order of the Depositor concurrently with the sale and assignment to the Trustee
of the Trust Fund. The Class A Certificates and the Mezzanine Certificates shall
be initially evidenced by one or more Certificates representing a Percentage
Interest with a minimum dollar denomination of $50,000 and integral dollar
multiples of $1.00 in excess thereof, except that one Certificate of each such
Class of Certificates may be in a different denomination so that the sum of the
denominations of all outstanding Certificates of such Class shall equal the
Certificate Principal Balance of such Class on the Closing Date. The Class P
Certificates, the Class C Certificates and the Residual Certificates are
issuable in any Percentage Interests; provided, however, that the sum of all
such percentages for each such Class totals 100% and no more than ten
Certificates of each Class may be issued and outstanding at any one time.
The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of 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 such Certificate shall have been
manually authenticated by the Trustee substantially in the form provided for
herein, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Subject to Section 5.02(c), the Class A Certificates
and the Mezzanine Certificates shall be Book-Entry Certificates. The other
Classes of Certificates shall not be Book-Entry Certificates.
SECTION 5.02. Registration of Transfer and Exchange of
Certificates.
(a) The Certificate Registrar shall cause to be kept at the Corporate
Trust Office a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. The Trustee shall initially serve as Certificate Registrar for
the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate at any
office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of a Residual Certificate,
upon satisfaction of the conditions set forth below, the Trustee on behalf of
the Trust
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shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same aggregate
Percentage Interest.
At the option of the Certificateholders, Certificates may be exchanged
for other Certificates in authorized denominations and the same aggregate
Percentage Interests, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for
exchange, the Trustee shall execute on behalf of the Trust and 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 (if so required by the Trustee or the Certificate
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer satisfactory to the Trustee and the Certificate Registrar duly executed
by, the Holder thereof or his attorney duly authorized in writing. In addition,
with respect to each Class R Certificate, the holder thereof may exchange, in
the manner described above, such Class R Certificate for two separate
certificates, each representing such holder's respective Percentage Interest in
the Class R-1 Interest and the Class R-2 Interest that was evidenced by the
Class R Certificate being exchanged.
(b) Except as provided in paragraph (c) 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 such 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 Certificates; (iii) ownership
and transfers of registration of such 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 for all
purposes deal with the Depository as representative of the Certificate Owners of
the Certificates for purposes of exercising the rights of Holders under this
Agreement, and requests and directions for and votes of such representative
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; (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; and (vii)
the direct participants of the Depository shall have no rights under this
Agreement under or with respect to any of the Certificates held on their behalf
by the Depository, and the Depository may be treated by the Trustee and its
agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
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 Owners. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners
that it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The parties hereto are
hereby authorized to execute a Letter of Representations with the Depository or
take such other action as may be necessary or desirable to register a Book-Entry
Certificate to the Depository. In the event of any conflict between the terms of
any such Letter of Representation and this Agreement, the terms of this
Agreement shall control.
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(c) If (i)(x) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to discharge properly
its responsibilities as Depository and (y) the Trustee or the Depositor is
unable to locate a qualified successor, (ii) the Depositor, at its sole option,
with the consent of the Trustee, elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of a Servicer Event of
Termination, the Certificate Owners of the Book-Entry Certificates representing
Percentage Interests of such Classes aggregating not less than 51% advise the
Trustee and Depository through the Financial Intermediaries and the Depository
Participants in writing that the continuation of a book-entry system through the
Depository to the exclusion of definitive, fully registered certificates (the
"Definitive Certificates") to Certificate Owners is no longer in the best
interests of the Certificate Owners. Upon surrender to the Certificate Registrar
of the Book-Entry Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Trustee shall, at the
Depositor's expense, in the case of (ii) above, or the Servicer's expense, in
the case of (i) and (iii) above, execute on behalf of the Trust and authenticate
the Definitive Certificates. Neither the Depositor nor the Trustee shall be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Certificates, the Trustee, the Certificate Registrar, the
Servicer, any Paying Agent and the Depositor shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder.
(d) No transfer, sale, pledge or other disposition of any Class C
Certificate, Class P Certificate or Residual Certificate 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 laws. In the event of any
such transfer, except with respect to the initial transfer of any Class C
Certificate, Class P Certificate or Residual Certificates by the Depositor (i)
unless such transfer is made in reliance upon Rule 144A (as evidenced by the
investment letter delivered to the Trustee, in substantially the form attached
hereto as Exhibit J) under the 1933 Act, the Trustee and the Depositor shall
require a written Opinion of Counsel (which may be in-house counsel) acceptable
to and in form and substance reasonably satisfactory to the Trustee and the
Depositor 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 not be an expense
of the Trustee or the Depositor or (ii) the Trustee shall require the transferor
to execute a transferor certificate (in substantially the form attached hereto
as Exhibit L) and the transferee to execute an investment letter (in
substantially the form attached hereto as Exhibit J) acceptable to and in form
and substance reasonably satisfactory to the Depositor and the Trustee
certifying to the Depositor and the Trustee the facts surrounding such transfer,
which investment letter shall not be an expense of the Trustee or the Depositor.
The Holder of a Class C Certificate, Class P Certificate or Residual Certificate
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor 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.
Notwithstanding the foregoing, no certification or Opinion of Counsel
described in this Section 5.02(d) will be required in connection with the
transfer, on the Closing Date, of any Residual Certificate by the Depositor to
an "accredited investor" within the meaning of Rule 501 of the 1933 Act.
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No transfer of a Class C Certificate, Class P Certificate or Residual
Certificate or any interest therein shall be made to any Plan subject to ERISA
or Section 4975 of the Code, any Person acting, directly or indirectly, on
behalf of any such Plan or any Person acquiring such Certificates with "Plan
Assets" of a Plan within the meaning of the Department of Labor regulation
promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets"), as certified by such
transferee in the form of Exhibit M, unless the Depositor, the Trustee and the
Servicer are provided with an Opinion of Counsel which establishes to the
satisfaction of the Depositor, the Trustee and the Servicer that the purchase of
such Certificates is permissible under applicable law, will not constitute or
result in any prohibited transaction under ERISA or Section 4975 of the Code and
will not subject the Depositor, the Servicer, the Trustee or the Trust Fund to
any obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Depositor, the Servicer,
the Trustee or the Trust Fund. Neither a certification nor an Opinion of Counsel
will be required in connection with the initial transfer of any such Certificate
by the Depositor to an affiliate of the Depositor (in which case, the Depositor
or any affiliate thereof shall have deemed to have represented that such
affiliate is not a Plan or a Person investing Plan Assets) and the Trustee shall
be entitled to conclusively rely upon a representation (which, upon the request
of the Trustee, shall be a written representation) from the Depositor of the
status of such transferee as an affiliate of the Depositor.
Each Transferee of a Mezzanine Certificate will be deemed to have
represented by virtue of its purchase or holding of such Certificate (or
interest therein) that either (a) such Transferee is not a Plan or purchasing
such Certificate with Plan Assets, (b) it has acquired and is holding such
Certificate in reliance on Prohibited Transaction Exemption ("PTE") 90-59, 55
Fed. Reg. 36724 (September 6, 1990), as amended by PTE 2000-58, 65 Fed. Reg.
67765 (November 13, 2000) and PTE 2002-41 67 Fed. Reg. 54487 (August 22, 2002)
(the "Exemption"), and that it understands that there are certain conditions to
the availability of the Exemption including that such Certificate must be rated,
at the time of purchase, not lower than "BBB-" (or its equivalent) by a Rating
Agency or (c) the following conditions are satisfied: (i) such Transferee is an
insurance company, (ii) the source of funds used to purchase or hold such
Certificate (or interest therein) is an "insurance company general account" (as
defined in U.S. Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60, and (iii) the conditions set forth in Sections I and III of PTCE
95-60 have been satisfied.
If any Class C Certificate, Class P Certificate or Residual Certificate
or any interest therein is acquired or held in violation of the provisions of
the second preceding paragraph, the next preceding permitted beneficial owner
will be treated as the beneficial owner of that Certificate retroactive to the
date of transfer to the purported beneficial owner. Any purported beneficial
owner whose acquisition or holding of any such Certificate or interest therein
was effected in violation of the provisions of the preceding paragraph shall
indemnify and hold harmless the Depositor, the Servicer, the Trustee and the
Trust from and against any and all liabilities, claims, costs or expenses
incurred by those parties as a result of that acquisition or holding.
Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Depositor or its designee as its attorney-in-fact
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to negotiate the terms of any mandatory sale under clause (v) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, 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 Person shall acquire an Ownership Interest in a Residual
Certificate unless such Ownership Interest is a PRO RATA undivided
interest.
(iii) In connection with any proposed transfer of any Ownership
Interest in a Residual Certificate, the Trustee shall as a condition to
registration of the transfer, require delivery to it, in form and substance
satisfactory to it, of each of the following:
(A) an affidavit in the form of Exhibit K hereto from the proposed
transferee to the effect that such transferee is a Permitted
Transferee and that it is not acquiring its Ownership Interest
in the Residual Certificate that is the subject of the
proposed transfer as a nominee, trustee or agent for any
Person who is not a Permitted Transferee; and
(B) a covenant of the proposed transferee to the effect that the
proposed transferee agrees to be bound by and to abide by the
transfer restrictions applicable to the Residual Certificates.
(iv) Any attempted or purported transfer of any Ownership Interest in a
Residual Certificate in violation of the provisions of this Section shall be
absolutely null and void and shall vest no rights in the purported transferee.
If any purported transferee shall, in violation of the provisions of this
Section, become a Holder of a Residual Certificate, then the prior Holder of
such Residual Certificate that is a Permitted Transferee shall, upon discovery
that the registration of transfer of such Residual Certificate was not in fact
permitted by this Section, 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 this Section or for making any distributions due on such Residual 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 Trustee received the
documents specified in clause (iii). The Trustee shall be entitled to recover
from any Holder of a Residual Certificate that was in fact not a Permitted
Transferee at the time such distributions were made all distributions made on
such Residual Certificate. Any such distributions so recovered by the Trustee
shall be distributed and delivered by the Trustee to the prior Holder of such
Residual Certificate that is a Permitted Transferee.
(v) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Residual Certificate in violation of the restrictions in
this Section, then the Trustee shall have the right but not the obligation,
without notice to the Holder of such Residual Certificate or any other Person
having an
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Ownership Interest therein, to notify the Depositor to arrange for the sale of
such Residual Certificate. The proceeds of such sale, net of commissions (which
may include commissions payable to the Depositor or its affiliates in connection
with such sale), expenses and taxes due, if any, will be remitted by the Trustee
to the previous Holder of such Residual Certificate that is a Permitted
Transferee, except that in the event that the Trustee determines that the Holder
of such Residual Certificate may be liable for any amount due under this Section
or any other provisions of this Agreement, the Trustee may withhold a
corresponding amount from such remittance as security for such claim. The terms
and conditions of any sale under this clause (v) shall be determined in the sole
discretion of the Trustee and it shall not be liable to any Person having an
Ownership Interest in a Residual Certificate as a result of its exercise of such
discretion.
(vi) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Residual Certificate in violation of the restrictions in
this Section, then the Trustee upon receipt of reasonable compensation will
provide to the Internal Revenue Service, and to the persons specified in
Sections 860E(e)(3) and (6) of the Code, information needed to compute the tax
imposed under Section 860E(e)(5) of the Code on transfers of residual interests
to disqualified organizations.
The foregoing provisions of this Section shall cease to apply to
transfers occurring on or after the date on which there shall have been
delivered to the Trustee, in form and substance satisfactory to the Trustee, (i)
written notification from each Rating Agency that the removal of the
restrictions on transfer set forth in this Section will not cause such Rating
Agency to downgrade its rating of the Certificates and (ii) an Opinion of
Counsel to the effect that such removal will not cause any REMIC created
hereunder to fail to qualify as a REMIC.
(e) No service charge shall be made for any registration of transfer or
exchange of Certificates of any Class, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer or exchange
shall be canceled by the Certificate Registrar and disposed of pursuant to its
standard procedures.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (ii) there is delivered to
the Trustee, the Depositor and the Certificate Registrar such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Trustee or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute on behalf of the Trust, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Trustee or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee and the Certificate Registrar) in
connection therewith. Any duplicate Certificate issued pursuant to this Section,
shall constitute
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complete and indefeasible evidence of ownership in the Trust, 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 Depositor, the Trustee, the Certificate Registrar,
any Paying Agent and any agent of the Servicer, the Depositor, the Trustee, the
Certificate Registrar or any Paying Agent may treat the Person, including a
Depository, in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 4.01
and for all other purposes whatsoever, and none of the Servicer, the Trust, the
Trustee nor any agent of any of them shall be affected by notice to the
contrary.
SECTION 5.05. Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to Certificateholders
from the Distribution Account pursuant to Section 4.01 and shall report the
amounts of such distributions to the Trustee. The duties of the Paying Agent may
include the obligation (i) to withdraw funds from the Collection Account
pursuant to Section 3.11(a) and for the purpose of making the distributions
referred to above and (ii) to distribute statements and provide information to
Certificateholders as required hereunder. The Paying Agent hereunder shall at
all times be an entity duly organized and validly existing under the laws of the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
federal or state authorities. The Paying Agent shall initially be the Trustee.
The Trustee may appoint a successor to act as Paying Agent, which appointment
shall be reasonably satisfactory to the Depositor.
(b) The Trustee shall cause the Paying Agent (if other than the
Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent shall hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to such Certificateholders and shall agree that it shall comply with all
requirements of the Code regarding the withholding of payments in respect of
Federal income taxes due from Certificate Owners and otherwise comply with the
provisions of this Agreement applicable to it.
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ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
SECTION 6.01. Liability of the Servicer and the Depositor.
The Servicer shall be liable in accordance herewith only to the extent
of the obligations specifically imposed upon and undertaken by Servicer herein.
The Depositor shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by the Depositor.
SECTION 6.02. Merger or Consolidation of, or Assumption of
the Obligations of, the Servicer or the
Depositor.
Any entity into which the Servicer or Depositor may be merged or
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Servicer or the Depositor shall be a party, or any
corporation succeeding to the business of the Servicer or the Depositor, shall
be the successor of the Servicer or the Depositor, 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 Servicer shall satisfy
all the requirements of Section 7.02 with respect to the qualifications of a
successor Servicer.
SECTION 6.03. Limitation on Liability of the Servicer and
Others.
Neither the Servicer or the Depositor nor any of the directors or
officers or employees or agents of the Servicer or the Depositor shall be under
any liability to the Trust or the Certificateholders for any action taken or for
refraining from the taking of any action by the Servicer or the Depositor in
good faith pursuant to this Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Servicer, the Depositor or
any such Person against any liability which would otherwise be imposed by reason
of its willful misfeasance, bad faith or negligence in the performance of duties
of the Servicer or the Depositor, as the case may be, or by reason of its
reckless disregard of its obligations and duties of the Servicer or the
Depositor, as the case may be, hereunder; provided, further, that this provision
shall not be construed to entitle the Servicer to indemnity in the event that
amounts advanced by the Servicer to retire any senior lien exceed Liquidation
Proceeds (in excess of related liquidation expenses) realized with respect to
the related Mortgage Loan. The Servicer and any director or officer or 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 and the Depositor, and any director or officer
or employee or agent of the Servicer or the Depositor, shall be indemnified by
the Trust and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense 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 its willful misfeasance, bad faith or negligence
in the performance of duties hereunder or by reason of its reckless disregard of
obligations and duties hereunder. The Servicer or the Depositor may undertake
any such
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action which it may deem necessary or desirable in respect of this Agreement,
and the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, unless the Depositor or the
Servicer acts without the consent of the Holders of Certificates entitled to at
least 51% of the Voting Rights, the reasonable legal expenses and costs of such
action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust and the Servicer shall be entitled to be reimbursed
therefor from the Collection Account as and to the extent provided in Section
3.11, any such right of reimbursement being prior to the rights of the
Certificateholders to receive any amount in the Collection Account. The
Servicer's right to indemnity or reimbursement pursuant to this Section shall
survive any resignation or termination of the Servicer pursuant to Section 6.04
or 7.01 with respect to any losses, expenses, costs or liabilities arising prior
to such resignation or termination (or arising from events that occurred prior
to such resignation or termination). This paragraph shall apply to the Servicer
solely in its capacity as Servicer hereunder and in no other capacities.
SECTION 6.04. Servicer Not to Resign.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination pursuant to the
preceding sentence permitting the resignation of the Servicer shall be evidenced
by an Opinion of Counsel to such effect obtained at the expense of the Servicer
and delivered to the Trustee. No resignation of the Servicer shall become
effective until the Trustee or a successor servicer shall have assumed the
Servicer's responsibilities, duties, liabilities (other than those liabilities
arising prior to the appointment of such successor) and obligations under this
Agreement.
Except as expressly provided herein, the Servicer shall not assign or
transfer any of its rights, benefits or privileges hereunder to any other
Person, or delegate to or subcontract with, or authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed by
the Servicer hereunder. The foregoing prohibition on assignment shall not
prohibit the Servicer from designating a Sub-Servicer as payee of any
indemnification amount payable to the Servicer hereunder; provided, however, no
Sub-Servicer shall be a third-party beneficiary hereunder and the parties hereto
shall not be required to recognize any Subservicer as an indemnitee under this
Agreement.
The Trustee and the Depositor hereby specifically (i) consent to the
pledge and assignment by the Servicer of all of the Servicer's right, title and
interest in, to and under this Agreement to the Servicing Rights Pledgee, for
the benefit of certain lenders and (ii) provided that no Servicer Event of
Termination exists, agree that upon delivery to the Trustee by the Servicing
Rights Pledgee of a letter signed by the Servicer whereunder the Servicer shall
resign as Servicer under this Agreement, the Trustee shall, in accordance with
Section 7.02, appoint the Servicing Rights Pledgee or its designee as successor
Servicer, provided that at the time of such appointment, the Servicing Rights
Pledgee or such designee meets the requirements of a successor Servicer pursuant
to Section 7.02(a) hereof and agrees to be subject to the terms of this
Agreement. If, pursuant to any provision hereof, the duties of the Servicer are
transferred to a successor servicer, the entire amount of the Servicing Fee and
other compensation payable to the Servicer pursuant hereto shall thereafter be
payable to such successor servicer.
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SECTION 6.05. Delegation of Duties.
In the ordinary course of business, the Servicer at any time may
delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01. Such delegation shall not relieve
the Servicer of its liabilities and responsibilities with respect to such duties
and shall not constitute a resignation within the meaning of Section 6.04.
Except as provided in Section 3.02, no such delegation is permitted that results
in the delegee subservicing any Mortgage Loans. The Servicer shall provide the
Trustee with 60 days prior written notice prior to the delegation of any of its
duties to any Person other than any of the Servicer's Affiliates or their
respective successors and assigns.
SECTION 6.06. Reserved.
SECTION 6.07. Inspection.
The Servicer, in its capacity as Servicer, shall afford the Trustee,
upon reasonable notice, during normal business hours, access to all records
maintained by the Servicer in respect of its rights and obligations hereunder
and access to officers of the Servicer responsible for such obligations. Upon
request, the Servicer shall furnish to the Trustee its most recent publicly
available financial statements and such other information relating to its
capacity to perform its obligations under this Agreement.
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ARTICLE VII
DEFAULT
SECTION 7.01. Servicer Events of Termination.
(a) If any one of the following events ("Servicer Events of
Termination") shall occur and be continuing:
(i) (A) The failure by the Servicer to make any Advance; or (B) any
other failure by the Servicer to deposit in the Collection Account or
Distribution Account any deposit 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 shall have been
given to the Servicer by the Trustee or to the Servicer and the Trustee by
any Holders of a Regular Certificate evidencing at least 25% of the Voting
Rights; or
(ii) The failure by the Servicer to make any required Servicing Advance
which failure continues unremedied for a period of 30 days, or the failure
by the Servicer duly to observe or perform, in any material respect, any
other covenants, obligations or agreements of the Servicer as set forth in
this Agreement, which failure continues unremedied for a period of 30 days,
after the date (A) on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Servicer by the Trustee
or to the Trustee by any Holders of a Regular Certificate evidencing at
least 25% of the Voting Rights or (B) of actual knowledge of such failure
by a Servicing Officer of the Servicer; or
(iii) The entry against the Servicer of a decree or order by a court or
agency or supervisory authority having jurisdiction in the premises for the
appointment of a trustee, conservator, receiver or liquidator in any
insolvency, conservatorship, receivership, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 days; or
(iv) The Servicer shall voluntarily go into liquidation, consent to the
appointment of a conservator or receiver or liquidator or similar person in
any insolvency, 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 a decree or order of a court
or agency or supervisory authority having jurisdiction in the premises for
the appointment of a conservator, receiver, liquidator or similar person in
any insolvency, 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, unbonded or unstayed for a
period of 60 days; or the Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend payment
of its obligations; or
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(v) Any failure by the Servicer of the Servicer Termination Test;
(b) then, and in each and every such case, so long as a Servicer Event
of Termination shall not have been remedied within the applicable grace period,
(x) with respect solely to clause (i)(A) above, if such Advance is not made by
11:00 A.M., New York time, on the Business Day immediately following the
Servicer Remittance Date (provided the Trustee shall give the Servicer notice of
such failure to advance by 5:00 P.M. New York time on the Servicer Remittance
Date), the Trustee shall terminate all of the rights and obligations of the
Servicer under this Agreement, to the extent permitted by law, and in and to the
Mortgage Loans and the proceeds thereof and the Trustee, or a successor servicer
appointed in accordance with Section 7.02, shall immediately make such Advance
and assume, pursuant to Section 7.02, the duties of a successor Servicer and (y)
in the case of (i)(B), (ii), (iii), (iv) and (v) above, the Trustee shall, at
the direction of the Holders of each Class of Regular Certificates evidencing
Percentage Interests aggregating not less than 51%, by notice then given in
writing to the Servicer (and to the Trustee if given by Holders of
Certificates), terminate all of the rights and obligations of the Servicer as
servicer under this Agreement. Any such notice to the Servicer shall also be
given to each Rating Agency, the Depositor and the Servicer. On or after the
receipt by the Servicer (and by the Trustee if such notice is given by the
Holders) of such written notice, all authority and power of the Servicer under
this Agreement, whether with respect to the Certificates or the Mortgage Loans
or otherwise, shall pass to and be vested in the Trustee pursuant to and under
this Section; and, without limitation, and 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 of each Mortgage Loan and related documents or otherwise. The
Servicer agrees to cooperate with the Trustee (or the applicable successor
Servicer) in effecting the termination of the responsibilities and rights of the
Servicer hereunder, including, without limitation, the delivery to the Trustee
of all documents and records requested by it to enable it to assume the
Servicer's functions under this Agreement within ten Business Days subsequent to
such notice, the transfer within one Business Day subsequent to such notice to
the Trustee (or the applicable successor Servicer) for the administration by it
of all cash amounts that shall at the time be held by the Servicer and to be
deposited by it in the Collection Account, the Distribution Account, any REO
Account or any Servicing Account or that have been deposited by the Servicer in
such accounts or thereafter received by the Servicer with respect to the
Mortgage Loans or any REO Property received by the Servicer. All reasonable
costs and expenses (including attorneys' fees) incurred in connection with
transferring the Mortgage Files to the successor Servicer and amending this
Agreement to reflect such succession as Servicer pursuant to this Section shall
be paid by the predecessor Servicer (or if the predecessor Servicer is the
Trustee, the initial Servicer) upon presentation of reasonable documentation of
such costs and expenses and to the extent not paid by the Servicer, by the
Trust.
SECTION 7.02. Trustee to Act; Appointment of Successor.
(a) Within 90 days of the time the Servicer (and the Trustee, if notice
is sent by the Holders) receives a notice of termination pursuant to Section
7.01 or 6.04, the Trustee (or such other successor Servicer as is approved in
accordance with this Agreement) shall be the successor in all respects to the
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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 arising on and after its succession.
Notwithstanding the foregoing, the parties hereto agree that the Trustee, in its
capacity as successor Servicer, immediately will assume all of the obligations
of the Servicer to make advances. Notwithstanding the foregoing, the Trustee, in
its capacity as successor Servicer, shall not be responsible for the lack of
information and/or documents that it cannot obtain through reasonable efforts.
As compensation therefor, the Trustee (or such other successor Servicer) shall
be entitled to such compensation as the Servicer would have been entitled to
hereunder if no such notice of termination had been given. Notwithstanding the
above, (i) if the Trustee is unwilling to act as successor Servicer or (ii) if
the Trustee is legally unable so to act, the Trustee shall appoint or petition a
court of competent jurisdiction to appoint, any established housing and home
finance institution, bank or other mortgage loan or home equity loan servicer
having a net worth of not less than $50,000,000 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; provided, that the appointment of any
such successor Servicer will not result in the qualification, reduction or
withdrawal of the ratings assigned to the Certificates by the Rating Agencies as
evidenced by a letter to such effect from the Rating Agencies. Pending
appointment of a successor to the Servicer hereunder, the Trustee shall act in
such capacity as hereinabove provided. In connection with such appointment and
assumption, the successor shall be entitled to receive compensation out of
payments on Mortgage Loans in an amount equal to the compensation which the
Servicer would otherwise have received pursuant to Section 3.18 (or such other
compensation as the Trustee and such successor shall agree, not to exceed the
Servicing Fee). The appointment of a successor Servicer shall not affect any
liability of the predecessor Servicer which may have arisen under this Agreement
prior to its termination as Servicer to pay any deductible under an insurance
policy pursuant to Section 3.14 or to reimburse the Trustee pursuant to Section
3.06), nor shall any successor Servicer be liable for any acts or omissions of
the predecessor Servicer or for any breach by such Servicer of any of its
representations or warranties contained herein or in any related document or
agreement. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
All Servicing Transfer Costs shall be paid by the predecessor Servicer upon
presentation of reasonable documentation of such costs, and if such predecessor
Servicer defaults in its obligation to pay such costs, such costs shall be paid
by the successor Servicer or the Trustee (in which case the successor Servicer
or the Trustee, as applicable, shall be entitled to reimbursement therefor from
the assets of the Trust).
(b) Any successor to the Servicer, including the Trustee, shall during
the term of its service as servicer continue to service and administer the
Mortgage Loans for the benefit of Certificateholders, and maintain in force a
policy or policies of insurance covering errors and omissions in the performance
of its obligations as Servicer hereunder and a fidelity bond in respect of its
officers, employees and agents to the same extent as the Servicer is so required
pursuant to Section 3.14.
(c) In the event of a Servicer Event of Termination, notwithstanding
anything to the contrary above, the Trustee and the Depositor hereby agree that
upon delivery to the Trustee by the Servicing Rights Pledgee of a letter signed
by the Servicer within ten Business Days of when notification of such event
shall have been provided to the Trustee, whereunder the Servicer shall resign as
Servicer under this Agreement,
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the Trustee shall, in accordance with Section 7.02, appoint the Servicing Rights
Pledgee or its designee as successor Servicer, provided that at the time of such
appointment, the Servicing Rights Pledgee or such designee meets the
requirements of a successor Servicer set forth above (including, but not limited
to the requirement that the appointment of any such successor Servicer will not
result in the qualification, reduction or withdrawal of the ratings assigned to
the Certificates by the Rating Agencies as evidenced by a letter to such effect
from the Rating Agencies) and the Servicing Rights Pledgee or such designee
agrees to be subject to the terms of this Agreement.
SECTION 7.03. Waiver of Defaults.
The Majority Certificateholders may, on behalf of all
Certificateholders, waive any events permitting removal of the Servicer as
servicer pursuant to this Article VII, provided, however, that the Majority
Certificateholders may not waive a default in making a required distribution on
a Certificate without the consent of the Holder of such Certificate. Upon any
waiver of a past default, such default shall cease to exist and any Servicer
Event of Termination arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereto except to the extent
expressly so waived. Notice of any such waiver shall be given by the Trustee to
the Rating Agencies.
SECTION 7.04. Notification to Certificateholders.
(a) Upon any termination or appointment of a successor to the Servicer
pursuant to this Article VII or Section 6.04, the Trustee shall give prompt
written notice thereof to the Certificateholders at their respective addresses
appearing in the Certificate Register and each Rating Agency.
(b) No later than 60 days after the occurrence of any event which
constitutes or which, with notice or a lapse of time or both, would constitute a
Servicer Event of Termination for five Business Days after a Responsible Officer
of the Trustee becomes aware of the occurrence of such an event, the Trustee
shall transmit by mail to all Certificateholders notice of such occurrence
unless such default or Servicer Event of Termination shall have been waived or
cured.
SECTION 7.05. Survivability of Servicer Liabilities.
Notwithstanding anything herein to the contrary, upon termination of
the Servicer hereunder, any liabilities of the Servicer which accrued prior to
such termination shall survive such termination.
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ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of a Servicer Event of Termination
and after the curing of all Servicer Events of Termination which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If a Servicer Event of Termination has
occurred (which has not been cured) of which a Responsible Officer has
knowledge, 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 man would exercise or use under the circumstances in the conduct of
his own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that the
Trustee will not be responsible for the accuracy or content of any such
resolutions, certificates, statements, opinions, reports, documents or other
instruments. If any such instrument is found not to conform to the requirements
of this Agreement in a material manner the Trustee shall take such action as it
deems appropriate to have the instrument corrected, and if the instrument is not
corrected to the Trustee's satisfaction, the Trustee will provide notice thereof
to the Certificateholders.
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 misconduct; provided, however, that:
(i) prior to the occurrence of a Servicer Event of Termination, and
after the curing of all such Servicer Events of Termination which may have
occurred, 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 such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and, in
the absence of bad faith on the part of the Trustee, 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;
(ii) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer of the Trustee, unless
it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Majority Certificateholders relating
to the time, method and place of conducting any proceeding for any remedy
112
available to the Trustee, or exercising or omitting to exercise any trust
or power conferred upon the Trustee, under this Agreement; and
(iv) the Trustee shall not be charged with knowledge of any failure by
the Servicer to comply with the obligations of the Servicer referred to in
clauses (i) and (ii) of Section 7.01(a) or of the existence of any Servicer
Termination Event unless a Responsible Officer of the Trustee at the
Corporate Trust Office obtains actual knowledge of such failure or the
Trustee receives written notice of such failure from the Depositor, the
Servicer or the Majority Certificateholders.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Servicer in accordance with the
terms of this Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon, and shall be protected in
acting or refraining from acting upon, any resolution, Officers'
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document reasonably believed by it to be genuine and
to have been signed or presented by the proper party or parties, and the
manner of obtaining consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe;
(ii) the Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise any of the
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 the
provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby; the
right of the Trustee to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and the Trustee shall not be
answerable for other than its negligence or willful misconduct in the
performance of any such act;
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(iv) the Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Agreement;
(v) prior to the occurrence of a Servicer Event of Termination and
after the curing of all Servicer Events of Termination which may have
occurred, 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 documents, unless requested in writing to do so by
the Majority Certificateholder; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Agreement, the Trustee may
require reasonable indemnity against such cost, expense or liability as a
condition to such proceeding. The reasonable expense of every such
examination shall be paid by the Servicer or, if paid by the Trustee, shall
be reimbursed by the Servicer upon demand and, if not reimbursed by the
Servicer, shall be reimbursed by the Trust. Nothing in this clause (v)
shall derogate from the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the
Mortgagors;
(vi) the Trustee shall not be accountable, shall have no liability and
makes no representation as to any acts or omissions hereunder of the
Servicer until such time as the Trustee may be required to act as Servicer
pursuant to Section 7.02 and thereupon only for the acts or omissions of
the Trustee as successor Servicer;
(vii) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, custodians or nominees;
(viii) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act; and
(ix) the Trustee shall not be personally liable for any loss resulting
from the investment of funds held in the Collection Account or the REO
Account made at the direction of the Servicer pursuant to Section 3.12.
SECTION 8.03. Trustee Not Liable for Certificates or
Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
authentication of the Trustee on the Certificates) shall be taken as the
statements of the Depositor, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or related document. The Trustee shall not be accountable for the
use or application by the Servicer, or for the use or application of any funds
paid to the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Servicer. The
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Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Mortgage or any
Mortgage Loan, or the perfection and priority of any Mortgage or the maintenance
of any such perfection and priority, or for or with respect to the sufficiency
of the Trust or its ability to generate the payments to be distributed to
Certificateholders under this Agreement, including, without limitation: the
existence, condition and ownership of any Mortgaged Property; the existence and
enforceability of any hazard insurance thereon (other than if the Trustee shall
assume the duties of the Servicer pursuant to Section 7.02); the validity of the
assignment of any Mortgage Loan to the Trustee or of any intervening assignment;
the completeness of any Mortgage Loan; the performance or enforcement of any
Mortgage Loan (other than if the Trustee shall assume the duties of the Servicer
pursuant to Section 7.02); the compliance by the Depositor, the Originator, the
Seller or the Servicer with any warranty or representation made under this
Agreement or in any related document or the accuracy of any such warranty or
representation prior to the Trustee's receipt of notice or other discovery of
any non- compliance therewith or any breach thereof; any investment of monies by
or at the direction of the Servicer or any loss resulting therefrom, it being
understood that the Trustee shall remain responsible for any Trust property that
it may hold in its individual capacity; the acts or omissions of any of the
Servicer (other than if the Trustee shall assume the duties of the Servicer
pursuant to Section 7.02), any Sub-Servicer or any Mortgagor; any action of the
Servicer (other than if the Trustee shall assume the duties of the Servicer
pursuant to Section 7.02), or any Sub- Servicer taken in the name of the
Trustee; the failure of the Servicer or any Sub-Servicer to act or perform any
duties required of it as agent of the Trustee hereunder; or any action by the
Trustee taken at the instruction of the Servicer (other than if the Trustee
shall assume the duties of the Servicer pursuant to Section 7.02); provided,
however, that the foregoing shall not relieve the Trustee of its obligation to
perform its duties under this Agreement, including, without limitation, the
Trustee's duty to review the Mortgage Files pursuant to Section 2.01. The
Trustee shall have no responsibility for filing 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).
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 Trustee and may transact any banking and trust business with the
Originator, the Servicer, the Depositor or their Affiliates.
SECTION 8.05. Trustee Fee and Expenses.
(a) The Trustee shall withdraw from the Distribution Account on each
Distribution Date and pay to itself the Trustee Fee prior to making any
distributions to Certificateholders. The Trustee, or any director, officer,
employee or agent of the Trustee, shall be indemnified by REMIC 1 and held
harmless against any loss, liability or expense (not including expenses and
disbursements incurred or made by the Trustee, including the compensation and
the expenses and disbursements of its agents and counsel, in the ordinary course
of the Trustee's performance in accordance with the provisions of this
Agreement) incurred by the Trustee arising out of or in connection with the
acceptance or administration of its obligations and duties under this Agreement,
other than any loss, liability or expense (i) resulting from a breach of the
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Servicer's obligations and duties under this Agreement for which the Trustee is
indemnified under Section 8.05(b) or (ii) any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence of the
Trustee in the performance of its duties hereunder or by reason of the Trustee's
reckless disregard of obligations and duties hereunder or as a result of a
breach of the Trustee's obligations under Article X hereof. Any amounts payable
to the Trustee, or any director, officer, employee or agent of the Trustee, in
respect of the indemnification provided by this Section 8.05(a), or pursuant to
any other right of reimbursement from the Trust Fund that the Trustee, or any
director, officer, employee or agent of the Trustee, may have hereunder in its
capacity as such, may be withdrawn by the Trustee from the Distribution Account
at any time. The foregoing indemnity shall survive the resignation or removal of
the Trustee.
(b) The Servicer agrees to indemnify the Trustee or any director,
officer, employee or agent of the Trustee from, and hold it harmless against,
any loss, liability or expense resulting from a breach of the Servicer's
obligations and duties under this Agreement. Such indemnity shall survive the
termination or discharge of this Agreement and the resignation or removal of the
Trustee and the Servicer for actions prior to such resignation or removal. Any
payment hereunder made by the Servicer to the Trustee shall be from the
Servicer's own funds, without reimbursement from the Trust Fund therefor.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be an entity duly organized
and validly existing under the laws of the United States of America or any state
thereof, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal or state authority. If such entity 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 entity shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. The principal office of the Trustee (other than the
initial Trustee) shall be in a state with respect to which an Opinion of Counsel
has been delivered to such Trustee at the time such Trustee is appointed Trustee
to the effect that the Trust will not be a taxable entity under the laws of such
state. In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 8.06, the Trustee shall resign immediately
in the manner and with the effect specified in Section 8.07.
SECTION 8.07. Resignation or Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Depositor, the Servicer
and each Rating Agency. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor Trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor Trustee. If no successor Trustee shall have been so
appointed and having accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
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If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Depositor or if at any time the Trustee shall be legally
unable to act, or shall be adjudged a 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, then the Depositor or
the Servicer may remove the Trustee. If the Depositor or the Servicer removes
the Trustee under the authority of the immediately preceding sentence, the
Depositor shall promptly appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
The Majority Certificateholders may at any time remove the Trustee by
written instrument or instruments delivered to the Servicer, the Depositor and
the Trustee; the Depositor shall thereupon use its best efforts to appoint a
successor trustee in accordance with this Section.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 8.07 shall
not become effective until 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, the Servicer and to its
predecessor Trustee 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 like effect as if originally
named as Trustee. 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 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 such acceptance such successor Trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor Trustee shall not result in a downgrading of the Regular Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 8.08, the successor Trustee shall mail notice of the appointment of
a successor Trustee hereunder to all Holders of Certificates at their addresses
as shown in the Certificate Register and to each Rating Agency.
SECTION 8.09. Merger or Consolidation of Trustee.
Any entity into which the Trustee may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the business of the Trustee, shall be the successor of the Trustee
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hereunder, provided such entity shall be eligible under the provisions of
Section 8.06 and 8.08, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate
Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust or any Mortgaged Property may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust, or any part thereof, 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 necessary or
desirable. Any such co-trustee or separate trustee shall be subject to the
written approval of the Servicer. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, or in
the case a Servicer Event of Termination 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. The Servicer shall be responsible for the fees of any co-trustee
or separate trustee appointed hereunder.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee 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 Trust
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;
(ii) no trustee hereunder shall be held personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Servicer and the Trustee, acting jointly, may at any time
accept the resignation of or remove any separate trustee or co-trustee
except that following the occurrence of a Servicer Event of Termination,
the Trustee acting alone may accept the resignation or remove any separate
trustee or co- trustee.
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Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the 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 Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Depositor and the Servicer.
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. Limitation of Liability.
The Certificates are executed by the Trustee, not in its individual
capacity but solely as Trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it by the Trust Agreement. Each of the
undertakings and agreements made on the part of the Trustee 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.
SECTION 8.12. Trustee May Enforce Claims Without
Possession of Certificates.
(a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this Agreement. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.
(b) The Trustee shall afford the Seller, the Depositor, the Servicer
and each Certificateholder upon reasonable prior notice during normal business
hours, access to all records maintained by the Trustee in respect of its duties
hereunder and access to officers of the Trustee responsible for performing such
duties. Upon request, the Trustee shall furnish the Depositor, the Servicer and
any requesting Certificateholder with its most recent financial statements. The
Trustee shall cooperate fully with the Seller, the Servicer, the Depositor and
such Certificateholder and shall make available to the Seller, the Servicer, the
Depositor and such Certificateholder for review and copying such books,
documents or records as may be requested with respect to the Trustee's duties
hereunder. The Seller, the Depositor, the Servicer and
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the Certificateholders shall not have any responsibility or liability for any
action or failure to act by the Trustee and are not obligated to supervise the
performance of the Trustee under this Agreement or otherwise.
SECTION 8.13. Suits for Enforcement.
In case a Servicer Event of Termination or other default by the
Servicer or the Depositor hereunder shall occur and be continuing, the Trustee,
shall, at the direction of the Majority Certificateholders, or may, proceed to
protect and enforce its rights and the rights of the Certificateholders under
this Agreement by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this Agreement or in aid of the execution of any power granted in this Agreement
or for the enforcement of any other legal, equitable or other remedy, as the
Trustee, being advised by counsel, and subject to the foregoing, shall deem most
effectual to protect and enforce any of the rights of the Trustee and the
Certificateholders.
SECTION 8.14. Waiver of Bond Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.
SECTION 8.15. Waiver of Inventory, Accounting and
Appraisal Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
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ARTICLE IX
REMIC ADMINISTRATION
SECTION 9.01. REMIC Administration.
(a) REMIC elections as set forth in the Preliminary Statement shall be
made by the Trustee on Form 1066 or other appropriate federal tax or information
return for the taxable year ending on the last day of the calendar year in which
the Certificates are issued. The regular interests and residual interest in each
REMIC shall be as designated in the Preliminary Statement.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 860G(a)(9) of the Code.
(c) The Trustee shall pay any and all expenses relating to any tax
audit of any REMIC caused by the Trustee (including, but not limited to, any
professional fees or any administrative or judicial proceedings with respect to
any Trust REMIC that involve the Internal Revenue Service or state tax
authorities), including the expense of obtaining any tax related Opinion of
Counsel. The Trustee shall be entitled to reimbursement of expenses incurred
pursuant to this Section 9.01(c) to the extent provided in Section 8.05.
(d) The Trustee shall prepare, sign and file, all of the REMICs'
federal and state tax and information returns (including Form 8811) as the
direct representative each REMIC created hereunder. The expenses of preparing
and filing such returns shall be borne by the Trustee.
(e) The Holder of the Class R Certificate at any time holding the
largest Percentage Interest thereof shall be the "tax matters person" as defined
in the REMIC Provisions (the "Tax Matters Person") with respect to REMIC 1 and
REMIC 2 and shall act as Tax Matters Person for REMIC 1 and REMIC 2. The Holder
of the Class R-X Certificate shall be the "tax matters person" as defined in the
REMIC Provisions (the "Tax Matters Person") with respect to REMIC 3 and shall
act as Tax Matters Person for REMIC 3. The Trustee, as agent for the Tax Matters
Person, shall perform on behalf of each REMIC all reporting and other tax
compliance duties that are the responsibility of such REMIC under the Code, the
REMIC Provisions, or other compliance guidance issued by the Internal Revenue
Service or any state or local taxing authority. Among its other duties, if
required by the Code, the REMIC Provisions, or other such guidance, the Trustee,
as agent for the Tax Matters Person, shall provide (i) to the Treasury or other
governmental authority such information as is necessary for the application of
any tax relating to the transfer of a Residual Certificate to any disqualified
person or organization and (ii) to the Certificateholders such information or
reports as are required by the Code or REMIC Provisions. The Trustee, as agent
for the Tax Matters Person, shall represent each REMIC 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
any REMIC, enter into settlement agreements with any government taxing agency,
extend any statute of limitations relating to any item of any REMIC and
otherwise act on behalf of any REMIC in relation to any tax matter involving the
Trust.
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(f) The Trustee, the Servicer and the Holders of Certificates shall
take any action or cause the REMIC to take any action necessary to create or
maintain the status of each REMIC as a REMIC under the REMIC Provisions and
shall assist each other as necessary to create or maintain such status. Neither
the Trustee, the Servicer nor the Holder of any Residual Certificate shall take
any action, cause any REMIC created hereunder to take any action or fail to take
(or fail to cause to be taken) any action that, under the REMIC Provisions, if
taken or not taken, as the case may be, could (i) endanger the status of such
REMIC as a REMIC or (ii) result in the imposition of a tax upon such REMIC
(including but not limited to the tax on prohibited transactions as defined in
Code Section 860F(a)(2) and the tax on prohibited contributions set forth on
Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless the Trustee and the Servicer have received an Opinion of Counsel (at the
expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such status or result in the imposition of
such a tax. In addition, prior to taking any action with respect to any REMIC
created hereunder or the assets therein, or causing such REMIC to take any
action, which is not expressly permitted under the terms of this Agreement, any
Holder of a Residual Certificate will consult with the Trustee and the Servicer,
or their respective designees, in writing, with respect to whether such action
could cause an Adverse REMIC Event to occur with respect to any REMIC, and no
such Person shall take any such action or cause any REMIC to take any such
action as to which the Trustee or the Servicer has advised it in writing that an
Adverse REMIC Event could occur.
(g) Each Holder of a Residual Certificate shall pay when due any and
all taxes imposed on each REMIC created hereunder by federal or state
governmental authorities. To the extent that such Trust taxes are not paid by a
Residual Certificateholder, the Trustee shall pay any remaining REMIC taxes out
of current or future amounts otherwise distributable to the Holder of the
Residual Certificate in the REMICs or, if no such amounts are available, out of
other amounts held in the Distribution Account, and shall reduce amounts
otherwise payable to Holders of regular interests in the related REMIC. Subject
to the foregoing, in the event that a REMIC incurs a state or local tax,
including franchise taxes, as a result of a determination that such REMIC is
domiciled in the State of California for state tax purposes by virtue of the
location of the Servicer, the Servicer agrees to pay on behalf of such REMIC
when due, any and all state and local taxes imposed as a result of such a
determination, in the event that the Holder of the related Residual Certificate
fails to pay such taxes, if any, when imposed.
(h) The Trustee, as agent for the Tax Matters Person, shall, for
federal income tax purposes, maintain books and records with respect to each
REMIC created hereunder on a calendar year and on an accrual basis.
(i) No additional contributions of assets shall be made to any REMIC
created hereunder, except as expressly provided in this Agreement with respect
to eligible substitute mortgage loans.
(j) Neither the Trustee nor the Servicer shall enter into any
arrangement by which any REMIC created hereunder will receive a fee or other
compensation for services.
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(k) On or before April 15 of each calendar year beginning in 2003, the
Servicer shall deliver to the Trustee and each Rating Agency an Officers'
Certificate stating the Servicer's compliance with the provisions of this
Section 9.01.
(l) The Trustee will apply for an Employee Identification Number from
the Internal Revenue Service via a Form SS-4 or other acceptable method for all
tax entities and shall complete the Form 8811.
SECTION 9.02. Prohibited Transactions and Activities.
Neither the Depositor, the Servicer nor the Trustee shall sell, dispose
of, or substitute for any of the Mortgage Loans, except in a disposition
pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the
Trust Fund, (iii) the termination of any REMIC created hereunder pursuant to
Article X of this Agreement, (iv) a substitution pursuant to Article II of this
Agreement or (v) a repurchase of Mortgage Loans pursuant to Article II of this
Agreement, nor acquire any assets for any REMIC, nor sell or dispose of any
investments in the Distribution Account for gain, nor accept any contributions
to either REMIC after the Closing Date, unless it has received an Opinion of
Counsel (at the expense of the party causing such sale, disposition, or
substitution) that such disposition, acquisition, substitution, or acceptance
will not (a) affect adversely the status of any REMIC created hereunder as a
REMIC or of the interests therein other than the Residual Certificates as the
regular interests therein, (b) affect the distribution of interest or principal
on the Certificates, (c) result in the encumbrance of the assets transferred or
assigned to the Trust Fund (except pursuant to the provisions of this Agreement)
or (d) cause any REMIC created hereunder to be subject to a tax on prohibited
transactions or prohibited contributions pursuant to the REMIC Provisions.
SECTION 9.03. Indemnification with Respect to Certain
Taxes and Loss of REMIC Status.
(a) In the event that any REMIC fails to qualify as a REMIC, loses its
status as a REMIC, or incurs federal, state or local taxes as a result of a
prohibited transaction or prohibited contribution under the REMIC Provisions due
to the negligent performance by the Servicer of its duties and obligations set
forth herein, the Servicer shall indemnify the Trustee and the Trust Fund
against any and all losses, claims, damages, liabilities or expenses ("Losses")
resulting from such negligence; provided, however, that the Servicer shall not
be liable for any such Losses attributable to the action or inaction of the
Trustee, the Depositor or the Holder of such Residual Certificate, as
applicable, nor for any such Losses resulting from misinformation provided by
the Holder of such Residual Certificate on which the Servicer has relied. The
foregoing shall not be deemed to limit or restrict the rights and remedies of
the Holder of such Residual Certificate now or hereafter existing at law or in
equity. Notwithstanding the foregoing, however, in no event shall the Servicer
have any liability (1) for any action or omission that is taken in accordance
with and in compliance with the express terms of, or which is expressly
permitted by the terms of, this Agreement, (2) for any Losses other than arising
out of a negligent performance by the Servicer of its duties and obligations set
forth herein, and (3) for any special or consequential damages to
Certificateholders (in addition to payment of principal and interest on the
Certificates).
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(b) In the event that any REMIC fails to qualify as a REMIC, loses its
status as a REMIC, or incurs federal, state or local taxes as a result of a
prohibited transaction or prohibited contribution under the REMIC Provisions due
to the negligent performance by the Trustee of its duties and obligations set
forth herein, the Trustee shall indemnify the Trust Fund against any and all
Losses resulting from such negligence; provided, however, that the Trustee shall
not be liable for any such Losses attributable to the action or inaction of the
Servicer, the Depositor or the Holder of such Residual Certificate, as
applicable, nor for any such Losses resulting from misinformation provided by
the Holder of such Residual Certificate on which the Trustee has relied. The
foregoing shall not be deemed to limit or restrict the rights and remedies of
the Holder of such Residual Certificate now or hereafter existing at law or in
equity. Notwithstanding the foregoing, however, in no event shall the Trustee
have any liability (1) for any action or omission that is taken in accordance
with and in compliance with the express terms of, or which is expressly
permitted by the terms of, this Agreement, (2) for any Losses other than arising
out of a negligent performance by the Trustee of its duties and obligations set
forth herein, and (3) for any special or consequential damages to
Certificateholders (in addition to payment of principal and interest on the
Certificates).
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ARTICLE X
TERMINATION
SECTION 10.01. Termination.
(a) The respective obligations and responsibilities of the Servicer,
the Depositor and the Trustee created hereby (other than the obligation of the
Trustee to make certain payments to Certificateholders after the final
Distribution Date and the obligation of the Servicer to send certain notices as
hereinafter set forth) shall terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust, (iii) the
optional purchase by the Servicer of the Mortgage Loans as described below and
(iv) the Distribution Date in September 2032. Notwithstanding the foregoing, in
no event shall the trust created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late ambassador of the United States to the Court of St. James's,
living on the date hereof.
The majority Holder of the Class C Certificates (unless such Holder is
the Seller, Greenwich Capital Markets, Inc. or an Affiliate of either of them),
or if such Holder fails to exercise such option or if such Holder is the Seller,
Greenwich Capital Markets, Inc. or an Affiliate of either of them, the Servicer
(either Holder or the Servicer, as applicable, the "Terminator"), may, at its
option, terminate this Agreement on any date on which the aggregate of the
Principal Balances of the Mortgage Loans (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) on such date is equal to or less than 10% of the
aggregate Principal Balances of the Original Mortgage Loans on the Cut- off
Date, by purchasing, on the next succeeding Distribution Date, all of the
outstanding Mortgage Loans and REO Properties at a price equal to the fair
market value of the Mortgage Loans and REO Properties (as determined as of the
close of business on the third Business Day next preceding the date upon which
notice of any such termination is furnished to the related Certificateholders
pursuant to Section 10.01(c) by (x) the Servicer, if it is the Terminator, (y)
the majority Holder of the Class C Certificates and (z) if the Class A
Certificates or a Class of Mezzanine Certificates will not receive all amounts
owed to it as a result of the termination, the Trustee, provided that if this
clause (z) applies to such determination, such determination shall be based
solely upon an appraisal obtained as provided in the last sentence of this
paragraph), plus accrued and unpaid interest thereon at the weighted average of
the Mortgage Rates through the end of the Due Period preceding the final
Distribution Date plus unreimbursed Servicing Advances, Advances, any unpaid
Servicing Fees allocable to such Mortgage Loans and REO Properties, any accrued
and unpaid Net WAC Rate Carryover Amount (the "Termination Price"); provided,
however, such option may only be exercised if (i) the Termination Price is
sufficient to pay all interest accrued on, as well as amounts necessary to
retire the principal balance of, each class of notes issued pursuant to the
Indenture, dated September 30, 2002, among Fremont NIM Trust 2002-1 as issuer
and the Trustee as indenture trustee and (ii) the fair market value of the
Mortgage Loans and REO Properties described above is at least equal to the
Principal Balance of the Mortgage Loans (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled
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collections of principal received during the related Prepayment Period) and the
appraised value of the REO Properties. If the determination of the fair market
value of the Mortgage Loans and REO Properties shall be required to be made by
the Servicer, if it is the Terminator, the majority Holder of the Class C
Certificates and the Trustee as provided above, such determination shall be
based on an appraisal of the value of the Mortgage Loans and REO Properties
conducted by an independent appraiser mutually agreed upon by the Servicer, if
it is the Terminator, the majority Holder of the Class C Certificates and the
Trustee in their reasonable discretion, and such appraisal shall be obtained at
no expense to the Trustee.
In connection with any such purchase pursuant to the preceding
paragraph, the Terminator shall deposit in the Distribution Account all amounts
then on deposit in the Collection Account, which deposit shall be deemed to have
occurred immediately preceding such purchase.
Any such purchase shall be accomplished by deposit into the
Distribution Account on the Determination Date before such Distribution Date of
the Termination Price.
(b) Notice of any termination, specifying the Distribution Date (which
shall be a date that would otherwise be a Distribution Date) upon which the
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee upon the Trustee receiving notice of such date from the Terminator, by
letter to the Certificate Insurer and to the Certificateholders mailed not
earlier than the 15th day and not later than the 25th day of the month next
preceding the month of such final distribution specifying (1) the Distribution
Date upon which final distribution of the Certificates will be made upon
presentation and surrender of such Certificates at the office or agency of the
Trustee therein designated, (2) the amount of any such final distribution and
(3) 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 or agency of the Trustee therein specified.
(c) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Holders of the Certificates on the
Distribution Date for such final distribution, in proportion to the Percentage
Interests of their respective Class and to the extent that funds are available
for such purpose, an amount equal to the amount required to be distributed to
such Holders in accordance with the provisions of Section 4.01 for such
Distribution Date. By acceptance of the Residual Certificates, the Holders of
the Residual Certificates agree, in connection with any termination hereunder,
to assign and transfer any amounts in excess of the par value of the Mortgage
Loans, and to the extent received in respect of such termination, to pay any
such amounts to the Holders of the Class C Certificates.
(d) In the event that all Certificateholders shall not surrender their
Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate Servicing Account for
the benefit of such Certificateholders, and the Servicer (if the Servicer has
exercised its right to purchase the Mortgage Loans) or the Trustee (in any other
case) shall give a second written notice to the remaining Certificateholders, to
surrender their Certificates for cancellation and receive the
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final distribution with respect thereto. If within nine months after the second
notice all the Certificates shall not have been surrendered for cancellation,
the Residual Certificateholders shall be entitled to all unclaimed funds and
other assets which remain subject hereto, and the Trustee upon transfer of such
funds shall be discharged of any responsibility for such funds, and the
Certificateholders shall look to the Residual Certificateholders for payment.
SECTION 10.02. Additional Termination Requirements.
(a) In the event that the Terminator exercises its purchase option as
provided in Section 10.01, each REMIC shall be terminated in accordance with the
following additional requirements, unless the Trustee shall have been furnished
with an Opinion of Counsel to the effect that the failure of the Trust to comply
with the requirements of this Section will not (i) result in the imposition of
taxes on "prohibited transactions" of the Trust as defined in Section 860F of
the Code or (ii) cause any REMIC constituting part of the Trust Fund to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(i) Within 90 days prior to the final Distribution Date, the Terminator
shall adopt and the Trustee shall sign a plan of complete liquidation of
each REMIC created hereunder meeting the requirements of a "Qualified
Liquidation" under Section 860F of the Code and any regulations thereunder;
and
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Trustee
shall sell all of the assets of the Trust Fund to the Terminator for cash
pursuant to the terms of the plan of complete liquidation.
(b) By their acceptance of Certificates, the Holders thereof hereby
agree to appoint the Trustee as their attorney in fact to: (i) adopt such a plan
of complete liquidation (and the Certificateholders hereby appoint the Trustee
as their attorney in fact to sign such plan) as appropriate and (ii) to take
such other action in connection therewith as may be reasonably required to carry
out such plan of complete liquidation all in accordance with the terms hereof.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee; and without the consent of the Certificateholders (i)
to cure any ambiguity, (ii) to correct or supplement any provisions herein which
may be defective or inconsistent with any other provisions herein (iii) to amend
the provisions of Section 3.22(b) or (iv) to make any other provisions with
respect to matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement; provided that such action
shall not, as evidenced by either (a) an Opinion of Counsel delivered to the
Trustee or (b) written notice to the Depositor, the Servicer and the Trustee
from the Rating Agencies that such action will not result in the reduction or
withdrawal of the rating of any outstanding Class of Certificates with respect
to which it is a Rating Agency, adversely affect in any material respect the
interests of any Certificateholder. No amendment shall be deemed to adversely
affect in any material respect the interests of any Certificateholder who shall
have consented thereto, and no Opinion of Counsel or Rating Agency confirmation
shall be required to address the effect of any such amendment on any such
consenting Certificateholder. Notwithstanding the foregoing, neither an Opinion
of Counsel or written notice to the Depositor, the Servicer and the Trustee from
the Rating Agencies will be required in connection with an amendment to the
provisions of Section 3.22(b).
In addition, this Agreement may be amended from time to time by the
Depositor, the Servicer and the Trustee with the consent of the Majority
Certificateholders 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 or waiver shall (x) reduce in any manner the
amount of, or delay the timing of, payments on the Certificates or distributions
which are required to be made on any Certificate without the consent of the
Holder of such Certificate, (y) adversely affect in any material respect the
interests of the Holders of any Class of Certificates (as evidenced by either
(i) an Opinion of Counsel delivered to the Trustee or (ii) written notice to the
Depositor, the Servicer and the Trustee from the Rating Agencies that such
action will not result in the reduction or withdrawal of the rating of any
outstanding Class of Certificates with respect to which it is a Rating Agency)
in a manner other than as described in clause (x) above, without the consent of
the Holders of Certificates of such Class evidencing at least a 66% Percentage
Interest in such Class, or (z) reduce the percentage of Voting Rights required
by clause (y) above without the consent of the Holders of all Certificates of
such Class then outstanding. Upon approval of an amendment, a copy of such
amendment shall be sent to the Rating Agencies.
Notwithstanding any provision of this Agreement to the contrary, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, delivered by (and at the expense of)
the Person seeking such Amendment, to the effect that such amendment will not
result in the imposition of a tax on any REMIC created hereunder constituting
part of the Trust Fund pursuant to the REMIC Provisions or cause any REMIC
created hereunder constituting part of the Trust
128
to fail to qualify as a REMIC at any time that any Certificates are outstanding
and that the amendment is being made in accordance with the terms hereof.
Promptly after the execution of any such amendment the Trustee shall
furnish, at the expense of the Person that requested the amendment if such
Person is the Servicer (but in no event at the expense of the Trustee),
otherwise at the expense of the Trust, a copy of such amendment and the Opinion
of Counsel referred to in the immediately preceding paragraph to the Servicer
and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment;
instead 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.
The Trustee may, but shall not be obligated to, enter into any
amendment pursuant to this Section 11.01 that affects its rights, duties and
immunities under this Agreement or otherwise.
SECTION 11.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the expense of the Trust, but only upon direction of
Certificateholders accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.
SECTION 11.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not (i) operate
to terminate this Agreement or the Trust, (ii) entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, or (iii)
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
Except as expressly provided for herein, no Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust, 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
129
any Certificateholder be under any liability to any third person by reason of
any action taken by the parties to this Agreement pursuant to any provision
hereof.
No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 15 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action, suit or proceeding. It is understood
and intended, and expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 11.04. Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws of the
State of New York, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. With respect to any
claim arising out of this Agreement, each party irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of or
relating hereto brought in any such courts, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum and further irrevocably waives the right to object,
with respect to such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.
SECTION 11.05. Notices.
All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first class mail, postage prepaid, by facsimile or by express delivery service,
to (a) in the case of the Servicer, Xxxxxx Loan Servicing LP 0000 Xxxx Xxxxxxx
Xxxxx, Xxxxxxx, Xxxxx 00000, Attention: Xxxxxx XxXxxxx (telecopy number: (713)
960-0539), or such other address or telecopy number as may hereafter be
furnished to the Depositor and the Trustee in writing by the Servicer, (b) in
the case of the Trustee, Deutsche Bank National Trust Company, 0000 Xxxx Xx.
000
Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000-0000, Attention: GC02F1 (telecopy
number: (000) 000-0000), or such other address or telecopy number as may
hereafter be furnished to the Depositor and the Servicer in writing by the
Trustee, and (c) in the case of the Depositor, Financial Asset Securities Corp.,
000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention: Legal, or such
other address as may be furnished to the Servicer and the Trustee in writing by
the Depositor. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Notice of any
Servicer Event of Termination shall be given by telecopy and by certified mail.
Any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have duly been given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder shall also be mailed to the appropriate party in the manner
set forth above.
SECTION 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 11.07. Article and Section References.
All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
SECTION 11.08. Notice to the Rating Agencies.
(a) Each of the Trustee and the Servicer shall be obligated to use its
best reasonable efforts promptly to provide notice to the Rating Agencies with
respect to each of the following of which a Responsible Officer of the Trustee
or Servicer, as the case may be, has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Servicer Event of Termination that has not
been cured or waived;
(iii) the resignation or termination of the Servicer or the Trustee;
(iv) the final payment to Holders of the Certificates of any Class;
(v) any change in the location of any Account; and
(vi) if the Trustee is acting as successor Servicer pursuant to Section
7.02 hereof, any event that would result in the inability of the Trustee to
make Advances.
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(b) In addition, the Trustee shall promptly make available to each
Rating Agency copies of each Statement to Certificateholders described in
Sections 4.03 and 3.19 hereof and the Servicer shall promptly furnish to each
Rating Agency copies of the following:
(i) each annual statement as to compliance described in Section 3.20
hereof;
(ii) each annual independent public accountants' servicing report
described in Section 3.21 hereof; and
(iii) each notice delivered pursuant to Section 7.01(a) hereof which
relates to the fact that the Servicer has not made an Advance.
Any such notice pursuant to this Section 11.08 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to (i) Fitch
Ratings, Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, (ii) Xxxxx'x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (iii)
Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attention: Residential Mortgage
Surveillance Group.
SECTION 11.09. Further Assurances.
Notwithstanding any other provision of this Agreement, neither the
Regular Certificateholders nor the Trustee shall have any obligation to consent
to any amendment or modification of this Agreement unless they have been
provided reasonable security or indemnity against their out-of-pocket expenses
(including reasonable attorneys' fees) to be incurred in connection therewith.
SECTION 11.10. Benefits of Agreement.
Nothing in this Agreement or in the Certificates, expressed or implied,
shall give to any Person, other than the Certificateholders and the parties
hereto and their successors hereunder, any benefit or any legal or equitable
right, remedy or claim under this Agreement.
SECTION 11.11 Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing, and such action shall become effective when
such instrument or instruments are delivered to the Trustee and the Servicer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "act" of the Certificateholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the Trust,
if made in the manner provided in this Section 11.11.
132
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by any Certificateholder shall bind every future Holder
of such Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Trustee or the
Trust in reliance thereon, whether or not notation of such action is made upon
such Certificate.
133
IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized, all as of the day and year first above written.
FINANCIAL ASSET SECURITIES CORP.,
as Depositor
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice-President
XXXXXX LOAN SERVICING LP, as Servicer
By: /s/ Xxxxxx XxXxxxx
--------------------------------
Name: Xxxxxx XxXxxxx
Title: Senior Vice-President
DEUTSCHE BANK NATIONAL TRUST COMPANY, as
Trustee
By: /s/ Xxxxxxx X. Xxxx
--------------------------------
Name: Xxxxxxx X. Xxxx
Title: Associate
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Assistant Secretary
134
STATE OF )
) ss.:
COUNTY OF )
On the ___th day of September, 2002 before me, a notary public in and
for said State, personally appeared _______________ known to me to be a
______________ of Financial Asset Securities Corp., a Delaware corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_____________________________
Notary Public
STATE OF )
) ss.:
COUNTY OF )
On the ___th day of September, 2002 before me, a notary public in and
for said State, personally appeared _______________ known to me to be a
_______________ of Xxxxxx Loan Servicing LP, a corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_____________________________
Notary Public
STATE OF )
) ss.:
COUNTY OF )
On the ___th day of September, 2002 before me, a notary public in and
for said State, personally appeared __________________, known to me to be an
_____________________ of Deutsche Bank National Trust Company, a
____________________ that executed the within instrument, and also known to me
to be the person who executed it on behalf of said association, and acknowledged
to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_____________________________
Notary Public
135
EXHIBIT A-1
FORM OF CLASS A-1 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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 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").
Certificate No. : 1
Cut-off Date : September 1, 2002
First Distribution Date : October 25, 2002
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $40,718,000.00
Original Class Certificate
Principal Balance of this Class : $40,718,000.00
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P AA 8
Class : A-1
Assumed Maturity Date : [month/year]
A-1-1
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class A-1
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first lien adjustable rate and fixed rate
mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class A-1
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class A-1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class A-1 Certificate (obtained by dividing the
Denomination of this Class A-1 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of September 1, 2002 (the "Agreement") among
the Depositor, Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), and
Deutsche Bank National Trust Company, a national banking association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class A-1 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class A-1 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 Class A-1
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 Class A-1 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-1-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2002
FREMONT HOME LOAN TRUST 2002-1
By: DEUTSCHE BANK NATIONAL
TRUST COMPANY, not in its
individual capacity, but solely as
Trustee
By_________________________________
This is one of the Class A-1 Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-1-3
[Reverse of Class A-1 Certificate]
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2002-1, Asset-Backed Certificates, Series
2002-1 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust 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, then the
Business Day immediately following such Distribution Date (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.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee 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 and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified 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 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.
A-1-4
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 Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
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 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 and the Trustee and any agent of the Depositor,
the Servicer or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Trustee, the Servicer or any such agent shall be affected by any notice to
the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-1-5
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.
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-1-6
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.
X-0-0
XXXXXXX X-0
FORM OF CLASS A-2 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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 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").
Certificate No. : 1
Cut-off Date : September 1, 2002
First Distribution Date : October 25, 2002
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $136,218,000.00
Original Class Certificate
Principal Balance of this Class : $136,218,000.00
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P AB 6
Class : A-2
Assumed Maturity Date : [month/year]
A-2-1
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class A-2
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first lien adjustable rate and fixed rate
mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class A-2
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class A-2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class A-2 Certificate (obtained by dividing the
Denomination of this Class A-2 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of September 1, 2002 (the "Agreement") among
the Depositor, Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), and
Deutsche Bank National Trust Company, a national banking association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class A-2 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class A-2 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 Class A-2
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 Class A-2 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-2-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2002
FREMONT HOME LOAN TRUST 2002-1
By: DEUTSCHE BANK NATIONAL
TRUST COMPANY, not in its
individual capacity, but solely as
Trustee
By_________________________________
This is one of the Class A-2 Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-2-3
[Reverse of Class A-2 Certificate]
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2002-1, Asset-Backed Certificates, Series
2002-1 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust 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, then the
Business Day immediately following such Distribution Date (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.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee 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 and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified 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 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.
A-2-4
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 Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
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 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 and the Trustee and any agent of the Depositor,
the Servicer or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Trustee, the Servicer or any such agent shall be affected by any notice to
the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-2-5
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.
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-2-6
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.
X-0-0
XXXXXXX X-0
FORM OF CLASS M-1 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES AND THE CLASS A-2
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
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").
Certificate No. : 1
Cut-off Date : September 1, 2002
First Distribution Date : October 25, 2002
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $15,740,000.00
Original Class Certificate
Principal Balance of this Class : $15,740,000.00
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P AC 4
Class : M-1
Assumed Maturity Date : [month/year]
A-2-1
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class M-1
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first lien adjustable rate and fixed rate
mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class M-1
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class M-1 Certificate (obtained by dividing the
Denomination of this Class M-1 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of September 1, 2002 (the "Agreement") among
the Depositor, Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), and
Deutsche Bank National Trust Company, a national banking association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class M-1 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-1 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 Class M-1
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 Class M-1 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-2-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2002
FREMONT HOME LOAN TRUST 2002-1
By: DEUTSCHE BANK NATIONAL TRUST
COMPANY, not in its individual
capacity, but solely as Trustee
By__________________________________
This is one of the Class M-1 Certificates
referenced in the within-mentioned Agreement
By_________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-2-3
[Reverse of Class M-1 Certificate]
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2002-1, Asset-Backed Certificates, Series
2002-1 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust 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, then the
Business Day immediately following such Distribution Date (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.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee 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 and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified 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 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.
A-2-4
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 Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
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 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 and the Trustee and any agent of the Depositor,
the Servicer or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Trustee, the Servicer or any such agent shall be affected by any notice to
the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-2-5
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.
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-2-6
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.
X-0-0
XXXXXXX X-0
FORM OF CLASS M-2 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE A-2
CERTIFICATES AND THE CLASS M-1 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
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").
Certificate No. : 1
Cut-off Date : September 1, 2002
First Distribution Date : October 25, 2002
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $12,480,000.00
Original Class Certificate
Principal Balance of this Class : $12,480,000.00
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P AD 2
Class : M-2
Assumed Maturity Date : [month/year]
A-4-1
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class M-2
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first lien adjustable rate and fixed rate
mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class M-2
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class M-2 Certificate (obtained by dividing the
Denomination of this Class M-2 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of September 1, 2002 (the "Agreement") among
the Depositor, Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), and
Deutsche Bank National Trust Company, a national banking association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class M-2 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-2 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 Class M-2
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 Class M-2 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-4-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2002
FREMONT HOME LOAN TRUST 2002-1
By: DEUTSCHE BANK NATIONAL TRUST
COMPANY, not in its individual
capacity, but solely as Trustee
By___________________________________
This is one of the Class M-2 Certificates
referenced in the within-mentioned Agreement
By______________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-4-3
[Reverse of Class M-2 Certificate]
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2002-1, Asset-Backed Certificates, Series
2002-1 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust 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, then the
Business Day immediately following such Distribution Date (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.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee 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 and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified 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 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.
A-4-4
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 Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
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 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 and the Trustee and any agent of the Depositor,
the Servicer or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Trustee, the Servicer or any such agent shall be affected by any notice to
the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-4-5
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.
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-4-6
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.
X-0-0
XXXXXXX X-0
FORM OF CLASS M-3 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE A-2
CERTIFICATES, THE CLASS M-1 CERTIFICATES AND THE CLASS M-2 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
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").
Certificate No. : 1
Cut-off Date : September 1, 2002
First Distribution Date : October 25, 2002
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $7,490,000.00
Original Class Certificate
Principal Balance of this Class : $7,490,000.00
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P AE 0
Class : M-3
Assumed Maturity Date : [month/year]
A-5-1
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class M-3
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first lien adjustable rate and fixed rate
mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class M-3
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-3
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class M-3 Certificate (obtained by dividing the
Denomination of this Class M-3 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of September 1, 2002 (the "Agreement") among
the Depositor, Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), and
Deutsche Bank National Trust Company, a national banking association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class M-3 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-3 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 Class M-3
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 Class M-3 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-5-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2002
FREMONT HOME LOAN TRUST 2002-1
By: DEUTSCHE BANK NATIONAL TRUST
COMPANY, not in its individual
capacity, but solely as Trustee
By__________________________________
This is one of the Class M-3 Certificates
referenced in the within-mentioned Agreement
By_______________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-5-3
[Reverse of Class M-3 Certificate]
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2002-1, Asset-Backed Certificates, Series
2002-1 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust 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, then the
Business Day immediately following such Distribution Date (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.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee 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 and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified 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 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.
A-5-4
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 Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
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 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 and the Trustee and any agent of the Depositor,
the Servicer or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Trustee, the Servicer or any such agent shall be affected by any notice to
the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-5-5
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.
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-5-6
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.
X-0-0
XXXXXXX X-0
FORM OF CLASS M-4 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE A-2
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES AND THE
CLASS M-3 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
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").
Certificate No. : 1
Cut-off Date : September 1, 2002
First Distribution Date : October 25, 2002
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $2,500,000.00
Original Class Certificate
Principal Balance of this Class : $2,500,000.00
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P AF 7
Class : M-4
Assumed Maturity Date : [month/year]
A-6-1
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class M-4
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first lien adjustable rate and fixed rate
mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class M-4
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-4
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class M-4 Certificate (obtained by dividing the
Denomination of this Class M-4 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of September 1, 2002 (the "Agreement") among
the Depositor, Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), and
Deutsche Bank National Trust Company, a national banking association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class M-4 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-4 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 Class M-4
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 Class M-4 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-6-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2002
FREMONT HOME LOAN TRUST 2002-1
By: DEUTSCHE BANK NATIONAL TRUST
COMPANY, not in its individual
capacity, but solely as Trustee
By_________________________________
This is one of the Class M-4 Certificates
referenced in the within-mentioned Agreement
By_______________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-6-3
[Reverse of Class M-4 Certificate]
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2002-1, Asset-Backed Certificates, Series
2002-1 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust 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, then the
Business Day immediately following such Distribution Date (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.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee 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 and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified 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 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.
A-6-4
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 Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
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 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 and the Trustee and any agent of the Depositor,
the Servicer or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Trustee, the Servicer or any such agent shall be affected by any notice to
the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-6-5
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.
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-6-6
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.
X-0-0
XXXXXXX X-0
FORM OF CLASS C CERTIFICATES
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").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE A-2
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS
M-3 CERTIFICATES AND THE CLASS M-4 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : September 1, 2002
First Distribution Date : October 25, 2002
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $1,954,060.01
Original Class Certificate
Principal Balance of this Class : $1,954,060.01
Percentage Interest : 100.00%
Class : C
A-7-1
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class C
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first lien adjustable rate and fixed rate
mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class C
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class C
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that [__________] is the registered owner of the Percentage
Interest evidenced by this Class C Certificate (obtained by dividing the
Denomination of this Class C Certificate by the Original Class Certificate
Principal Balance) in certain distributions with respect to a Trust consisting
primarily of the Mortgage Loans deposited by Financial Asset Securities Corp.
(the "Depositor"). The Trust was created pursuant to a Pooling and Servicing
Agreement dated as of September 1, 2002 (the "Agreement") among the Depositor,
Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), and Deutsche Bank
National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class C Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Class C Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor 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.
A-7-2
No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any person using Plan Assets to acquire this Certificate shall be made
except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class C
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 Class C 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-7-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2002
FREMONT HOME LOAN TRUST 2002-1
By: DEUTSCHE BANK NATIONAL TRUST
COMPANY, not in its individual
capacity, but solely as Trustee
By_________________________________
This is one of the Class C Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-7-4
[Reverse of Class C Certificate]
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2002-1, Asset-Backed Certificates, Series
2002-1 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust 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, then the
Business Day immediately following such Distribution Date (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.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee 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 and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified 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 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.
A-7-5
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 Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
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 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 and the Trustee and any agent of the Depositor,
the Servicer or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Trustee, the Servicer or any such agent shall be affected by any notice to
the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-7-6
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.
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-7-7
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.
X-0-0
XXXXXXX X-0
FORM OF CLASS P CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : September 1, 2002
First Distribution Date : October 25, 2002
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $100.00
Original Class Certificate
Principal Balance of this Class : $100.00
Percentage Interest : 100.00%
Class : P
A-8-1
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class P
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first lien adjustable rate and fixed rate
mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class P
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class P
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that [__________] is the registered owner of the Percentage
Interest evidenced by this Class P Certificate (obtained by dividing the
Denomination of this Class P Certificate by the Original Class Certificate
Principal Balance) in certain distributions with respect to a Trust consisting
primarily of the Mortgage Loans deposited by Financial Asset Securities Corp.
(the "Depositor"). The Trust was created pursuant to a Pooling and Servicing
Agreement dated as of September 1, 2002 (the "Agreement") among the Depositor,
Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), and Deutsche Bank
National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class P Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Class P 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.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect
A-8-2
such transfer shall, and does hereby agree to, indemnify the Trustee and the
Depositor against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any person using Plan Assets to acquire this Certificate shall be made
except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class P
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 Class P 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-8-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2002
FREMONT HOME LOAN TRUST 2002-1
By: DEUTSCHE BANK NATIONAL TRUST
COMPANY, not in its individual
capacity, but solely as Trustee
By____________________________________
This is one of the Class P Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-8-4
[Reverse of Class P Certificate]
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2002-1, Asset-Backed Certificates, Series
2002-1 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust 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, then the
Business Day immediately following such Distribution Date (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.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee 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 and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified 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 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.
A-8-5
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 Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
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 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 and the Trustee and any agent of the Depositor,
the Servicer or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Trustee, the Servicer or any such agent shall be affected by any notice to
the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-8-6
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.
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-8-7
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.
X-0-0
XXXXXXX X-0
FORM OF CLASS R CERTIFICATES
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").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
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.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : September 1, 2002
First Distribution Date : October 25, 2002
Percentage Interest : 100.00%
Class : R
A-9-1
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class R
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting primarily of a pool of first lien adjustable
rate and fixed rate mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
This Certificate does not evidence an obligation of, or an interest in, and
is not guaranteed by the Depositor, the Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that [__________] is the registered owner of the Percentage
Interest evidenced by this Certificate specified above in the interest
represented by all Certificates of the Class to which this Certificate belongs
in a Trust consisting primarily of the Mortgage Loans deposited by Financial
Asset Securities Corp. (the "Depositor"). The Trust was created pursuant to a
Pooling and Servicing Agreement dated as of September 1, 2002 (the "Agreement")
among the Depositor, Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), and
Deutsche Bank National Trust Company, a national banking 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 principal 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 Corporate Trust Office or the office or agency maintained by the Trustee in
Minneapolis, Minnesota.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor 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.
A-9-2
No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any person using Plan Assets to acquire this Certificate shall be made
except in accordance with Section 5.02(d) of the Agreement.
Each Holder of this Certificate will be deemed to have agreed to be bound
by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest in
this Certificate may be transferred without delivery to the Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Agreement, (iii) each person holding or acquiring any Ownership Interest in this
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee. Pursuant to the Agreement, The Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R
Certificate in violation of the restrictions mentioned above.
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
officer of the Trustee.
A-9-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2002
FREMONT HOME LOAN TRUST 2002-1
By: DEUTSCHE BANK NATIONAL TRUST
COMPANY, not in its individual
capacity, but solely as Trustee
By_________________________________
This is one of the Class R Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-9-4
[Reverse of Class R Certificate]
Fremont Home Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2002-1, Asset-Backed Certificates, Series
2002-1 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust 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, then the
Business Day immediately following such Distribution Date (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.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee 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 and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified 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 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.
A-9-5
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 Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
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 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 and the Trustee and any agent of the Depositor,
the Servicer or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Trustee, the Servicer or any such agent shall be affected by any notice to
the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-9-6
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.
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-9-7
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.
A-9-8
EXHIBIT B
[RESERVED]
A-8-1
EXHIBIT C
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
C-1
FREMONT INVESTMENT & LOAN,
as Originator
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
as Seller
and
FINANCIAL ASSET SECURITIES CORP.,
as Purchaser
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of September 27, 2002
Adjustable-Rate and Fixed-Rate Mortgage Loans
Fremont Home Loan Trust 2002-1
TABLE OF CONTENTS
Page
----
ARTICLE I.
DEFINITIONS
Section 1.01 Definitions.................................................2
ARTICLE II.
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 Sale of Mortgage Loans......................................3
Section 2.02 Obligations of the Seller and Seller Upon Sale..............3
Section 2.03 Payment of Purchase Price for the Mortgage Loans............5
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Originator Representations and Warranties Relating to the
Mortgage Loans..............................................6
Section 3.02 Originator Representations and Warranties Relating to
the Originator..............................................6
Section 3.03 Seller Representations and Warranties Relating to
the Seller..................................................7
Section 3.04 Remedies for Breach of Representations and Warranties.......9
ARTICLE IV.
ORIGINATOR'S AND SELLER'S COVENANTS
Section 4.01 Covenants of the Originator and the Seller.................11
Section 5.01 Indemnification............................................12
ARTICLE VI.
TERMINATION
Section 6.01 Termination................................................15
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 Amendment..................................................15
Section 7.02 Governing Law..............................................15
Section 7.03 Notices. ..................................................15
Section 7.05 Counterparts...............................................15
Section 7.06 Further Agreements.........................................16
Section 7.07 Intention of the Parties...................................16
Section 7.08 Successors and Assigns; Assignment of Purchase Agreement...16
Section 7.09 Survival...................................................17
i
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of September 27, 2002 (the
"Agreement"), among Fremont Investment & Loan (the "Originator"), Greenwich
Capital Financial Products, Inc. (the "Seller") and Financial Asset Securities
Corp. (the "Purchaser").
WITNESSETH
WHEREAS, the Seller is the owner of (a) the notes or other evidence of
indebtedness (the "Mortgage Notes") so indicated on Schedule I hereto referred
to below and (b) the other documents or instruments constituting the Mortgage
File (collectively, the "Mortgage Loans"); and
WHEREAS, the Seller, as of the date hereof, owns the mortgages (the
"Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights to (a) any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise and (b) the proceeds of any insurance
policies covering the Mortgage Loans or the Mortgaged Properties or the obligors
on the Mortgage Loans; and
WHEREAS, the parties hereto desire that the Seller sell the Mortgage
Loans to the Purchaser pursuant to the terms of this Agreement; and
WHEREAS, the Originator originated the Mortgage Loans and previously
sold the Mortgage Loans; and
WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement
dated as of September 1, 2002 (the "Pooling and Servicing Agreement") among the
Purchaser as depositor, Xxxxxx Loan Servicing LP as servicer and Deutsche Bank
National Trust Company as trustee (the "Trustee"), the Purchaser will convey the
Mortgage Loans to Fremont Home Loan Trust 2002-1 (the "Trust"); and
WHEREAS, the Originator is obligated , in connection with the
transactions contemplated by this Agreement, to make certain representations,
warranties and covenants with respect to itself and the Mortgage Loans.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01 DEFINITIONS. All capitalized terms used but not defined
herein and below shall have the meanings assigned thereto in the Pooling and
Servicing Agreement.
ARTICLE II.
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 SALE OF MORTGAGE LOANS. The Seller, concurrently with the
execution and delivery of this Agreement, does hereby sell, assign, set over,
and otherwise convey to the Purchaser, without recourse, (i) all of its right,
title and interest in and to each Mortgage Loan, including the related Cut-off
Date Principal Balance, all interest accruing thereon on or after the Cut-off
Date and all collections in respect of interest and principal due after the
Cut-off Date; (ii) property which secured such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest in
any insurance policies in respect of the Mortgage Loans and (iv) all proceeds of
any of the foregoing.
Section 2.02 OBLIGATIONS OF THE SELLER AND SELLER UPON SALE. In connection
with any transfer pursuant to Section 2.01 hereof, the Seller further agrees, at
its own expense on or prior to the Closing Date, (a) to cause its books and
records to indicate that the Mortgage Loans have been sold to the Purchaser
pursuant to this Agreement and (b) to deliver to the Purchaser and the Trustee a
computer file containing a true and complete list of all such Mortgage Loans
specifying for each such Mortgage Loan, as of the Cut-off Date, (i) its account
number and (ii) the Cut-off Date Principal Balance. Such file, which forms a
part of Exhibit C to the Pooling and Servicing Agreement, shall also be marked
as Schedule I to this Agreement and is hereby incorporated into and made a part
of this Agreement.
In connection with any conveyance by the Seller, the Seller shall on
behalf of the Purchaser deliver to, and deposit with the Trustee, as assignee of
the Purchaser, on or before the Closing Date, the following documents or
instruments with respect to each Mortgage Loan:
(i) the original Mortgage Note, endorsed either (A) in blank, in which
case the Trustee shall cause the endorsement to be completed or (B) in the
following form: "Pay to the order of Deutsche Bank National Trust Company,
as Trustee, without recourse" or with respect to any lost Mortgage Note, an
original Lost Note Affidavit stating that the original mortgage note was
lost, misplaced or destroyed, together with a copy of the related mortgage
note; provided, however, that such substitutions of Lost Note Affidavits
for original Mortgage Notes may occur only with respect to Mortgage Loans,
the aggregate Cut-off Date Principal Balance of which is less than or equal
to 1.00% of the Pool Balance as of the Cut- off Date;
(ii) the original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed pursuant
to a power of attorney, with evidence of recording thereon or, if such
Mortgage or power of attorney has been submitted for recording but has not
been returned from the applicable public recording office, has been lost or
is not otherwise available, a copy of such Mortgage or power of attorney,
as the case may be, certified to be a true and complete copy of the
original submitted for recording;
3
(iii) an original Assignment, in form and substance acceptable for
recording. The Mortgage shall be assigned either (A) in blank or (B) to
"Deutsche Bank National Trust Company, as Trustee, without recourse";
(iv) an original copy of any intervening assignment of Mortgage
showing a complete chain of assignments;
(v) the original or a certified copy of lender's title insurance
policy; and
(vi) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any.
The Seller hereby confirms to the Purchaser and the Trustee that it
has caused the appropriate entries to be made in its general accounting records
to indicate that such Mortgage Loans have been transferred to the Trustee and
constitute part of the Trust in accordance with the terms of the Pooling and
Servicing Agreement.
If any of the documents referred to in Section 2.02(ii), (iii) or (iv)
above has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable public recording office or (y) has been
lost or such public recording office has retained the original of such document,
the obligations of the Seller to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Trustee or the Custodian, no later than the
Closing Date, of a copy of each such document certified by the Originator in the
case of (x) above or the applicable public recording office in the case of (y)
above to be a true and complete copy of the original that was submitted for
recording and (2) if such copy is certified by the Originator, delivery to the
Trustee or the Custodian, promptly upon receipt thereof of either the original
or a copy of such document certified by the applicable public recording office
to be a true and complete copy of the original. If the original lender's title
insurance policy, or a certified copy thereof, was not delivered pursuant to
Section 2.02(v) above. The Seller shall deliver or cause to be delivered to the
Trustee or the Custodian, the original or a copy of a written commitment or
interim binder or preliminary report of title issued by the title insurance or
escrow company, with the original or a certified copy thereof to be delivered to
the Trustee or the Custodian, promptly upon receipt thereof. The Seller shall
deliver or cause to be delivered to the Trustee or the Custodian promptly upon
receipt thereof any other documents constituting a part of a Mortgage File
received with respect to any Mortgage Loan, including, but not limited to, any
original documents evidencing an assumption or modification of any Mortgage
Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Originator
shall have 90 days to cure such defect or deliver such missing document to the
Purchaser. If the Originator does not cure such defect or deliver such missing
document within such time period, the Originator shall either repurchase or
substitute for such Mortgage Loan pursuant to Section 2.03 of the Pooling and
Servicing Agreement.
The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to Section 2.01.
4
The parties hereto intend that the transaction set forth herein be a
sale by the Seller to the Purchaser of all the Seller's right, title and
interest in and to the Mortgage Loans and other property described above. In the
event the transaction set forth herein is deemed not to be a sale, the Seller
hereby grants to the Purchaser a security interest in all of the Seller's right,
title and interest in, to and under the Mortgage Loans and other property
described above, whether now existing or hereafter created, to secure all of the
Seller's obligations hereunder; and this Agreement shall constitute a security
agreement under applicable law.
The Seller shall cause the Assignments which were delivered in blank
to be completed and shall cause all Assignments referred to in Section 2.02(iii)
hereof and, to the extent necessary, in Section 2.02(iv) hereof to be recorded.
The Seller shall be required to deliver such assignments for recording within
180 days of the Closing Date. The Seller shall furnish the Trustee, or its
designated agent, with a copy of each Assignment submitted for recording. In the
event that any such Assignment is lost or returned unrecorded because of a
defect therein, the Trustee shall, at the expense of the Seller, promptly have a
substitute Assignment prepared or have such defect cured, as the case may be,
and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, the Assignments of Mortgage shall not
be required to be submitted for recording with respect to any Mortgage Loan in
any jurisdiction where the Rating Agencies do not require recordation in order
to receive the ratings on the Certificates at the time of their initial
issuance; provided, however, each Assignment shall be submitted for recording in
the manner described above, at the expense to the Trust Fund or Trustee, upon
the earliest to occur of: (i) reasonable direction by the Holders of
Certificates entitled to at least 25% of the Voting Rights, (ii) the occurrence
of a Servicer Event of Termination, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Seller, (iv) the occurrence of a
servicing transfer as described in Section 7.02 hereof, (v) upon receipt of
notice from the Servicer, the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Mortgagor under the related Mortgage and (vi) upon
receipt of notice from the Servicer, any Mortgage Loan that is 90 days or more
Delinquent. In the event of (i) through (vi) set forth in the immediately
preceding sentence, the Trustee shall enforce the obligations of the Seller to
deliver such Assignments for recording as provided above, promptly and in any
event within 30 days following receipt of notice by the Seller.
In the event that any Mortgage Note is endorsed in blank as of the
Closing Date, promptly following the Closing Date, the Trustee shall cause (at
the Seller's expense) to be completed such endorsements "Pay to the order of
Deutsche Bank National Trust Company, as Trustee, without recourse."
Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.
In consideration of the sale of the Mortgage Loans from the Seller to
the Purchaser on the Closing Date, the Purchaser agrees to pay to the Seller on
the Closing Date (the "Purchase Price") by transfer of (i) immediately available
funds in an amount equal to the net sale proceeds of the Class A-1 Certificates,
the Class A-2 Certificates, the Class M-1 Certificates, the Class M-2
Certificates and the Class M-3 Certificates and (ii) the Class C Certificates,
the Class P Certificates, the Class R Certificates (collectively the
"Non-Offered Certificates") which Non-Offered Certificates shall be registered
in the name of Greenwich Capital Markets, Inc. or its designee. The Seller shall
5
pay, and be billed directly for, all expenses incurred by the Purchaser in
connection with the issuance of the Certificates, including, without limitation,
printing fees incurred in connection with the prospectus relating to the
Certificates, blue sky registration fees and expenses, fees and expenses of
Purchaser's counsel, fees of the rating agencies requested to rate the
Certificates, accountant's fees and expenses and the fees and expenses of the
Trustee and other out-of-pocket costs, if any.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
MORTGAGE LOANS. The Originator hereby makes representations and warranties set
forth in Exhibit A to the Purchaser with respect to the Mortgage Loans as of the
Closing Date or as of such other date specifically provided herein.
Section 3.02 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
ORIGINATOR. The Originator represents, warrants and covenants to the Purchaser
as of the Closing Date or as of such other date specifically provided herein:
(a) The Originator is duly organized, validly existing and in good
standing under the laws of the state of California and is and will remain in
compliance with the laws of each state in which any Mortgaged Property is
located to the extent necessary to ensure the enforceability of each Mortgage
Loan and the servicing of the Mortgage Loan in accordance with the terms of this
Agreement;
(b) The Originator has the full power and authority to hold each
Mortgage Loan, to sell each Mortgage Loan to the Seller, and to execute, deliver
and perform, and to enter into and consummate, all transactions contemplated by
this Agreement. The Originator has duly authorized the execution, delivery and
performance of this Agreement, has duly executed and delivered this Agreement,
and this Agreement, assuming due authorization, execution and delivery by the
Purchaser, constitutes a legal, valid and binding obligation of the Originator,
enforceable against it in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency or reorganization;
(c) The execution and delivery of this Agreement by the Originator and
the performance of and compliance with the terms of this Agreement will not
violate the Originator's articles of incorporation or by-laws or constitute a
default under or result in a breach or acceleration of, any material contract,
agreement or other instrument to which the Originator is a party or which may be
applicable to the Originator or its assets;
(d) The Originator is not in violation of, and the execution and
delivery of this Agreement by the Originator and its performance and compliance
with the terms of this Agreement will not constitute a violation with respect
to, any order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency having jurisdiction over the Originator
or its assets, which violation might have consequences that would materially and
6
adversely affect the condition (financial or otherwise) or the operation of the
Originator or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder;
(e) The Originator does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained in
this Agreement;
(f) Immediately prior to the Mortgage Loans to the Seller, the
Originator was the owner of record of the related Mortgage and the indebtedness
evidenced by the related Mortgage Note and in the event that the Originator
retains record title, the Originator shall retain such record title to each
Mortgage, each related Mortgage Note and the related Mortgage Files with respect
thereto in trust for the Seller as the owner thereof and only for the purpose of
servicing and supervising the servicing of each Mortgage Loan;
(h) There are no actions or proceedings against, or investigations of,
the Originator before any court, administrative or other tribunal (A) that might
prohibit its entering into this Agreement, (B) seeking to prevent the sale of
the Mortgage Loans or the consummation of the transactions contemplated by this
Agreement or (C) that might prohibit or materially and adversely affect the
performance by the Originator of its obligations under, or the validity or
enforceability of, this Agreement;
(i) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Originator of, or compliance by the Originator with, this
Agreement or the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations or orders, if
any, that have been obtained prior to the Closing Date;
(j) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Originator, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Originator to the Seller are not subject to the bulk transfer or any similar
statutory provisions;
(k) Neither this Agreement nor any written statement, report or other
document prepared and furnished or to be prepared and furnished by the
Originator pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading;
Section 3.03 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLER.
The Seller represents, warrants and covenants to the Purchaser as of the Closing
Date or as of such other date specifically provided herein:
(a) The Seller is duly organized, validly existing and in good
standing as a corporation under the laws of the State of Delaware and is and
will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of each
Mortgage Loan in accordance with the terms of this Agreement;
7
(b) The Seller has the full power and authority to hold each Mortgage
Loan, to sell each Mortgage Loan, to execute, deliver and perform, and to enter
into and consummate, all transactions contemplated by this Agreement. The Seller
has duly authorized the execution, delivery and performance of this Agreement,
has duly executed and delivered this Agreement and this Agreement, assuming due
authorization, execution and delivery by the Purchaser, constitutes a legal,
valid and binding obligation of the Seller, enforceable against it in accordance
with its terns except as the enforceability thereof may be limited by
bankruptcy, insolvency or reorganization;
(c) The execution and delivery of this Agreement by the Seller and the
performance of and compliance with the terms of this Agreement will not violate
the Seller's articles of incorporation or by-laws or constitute a default under
or result in a breach or acceleration of, any material contract, agreement or
other instrument to which the Seller is a party or which may be applicable to
the Seller or its assets;
(d) The Seller is not in violation of, and the execution and delivery
of this Agreement by the Seller and its performance and compliance with the
terms of this Agreement will not constitute a violation with respect to, any
order or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the Seller or its
assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Seller or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder;
(e) The Seller is a HUD approved mortgagee pursuant to Section 203 and
Section 211 of the National Housing Act. No event has occurred, including but
not limited to a change in insurance coverage, which would make the Seller
unable to comply with HUD eligibility requirements or which would require
notification to HUD;
(f) Immediately prior to the payment of the Purchase Price for each
Mortgage Loan, the Seller was the owner of the related Mortgage and the
indebtedness evidenced by the related Mortgage Note and upon the payment of the
Purchase Price by the Purchaser, in the event that the Seller retains record
title, the Seller shall retain such record title to each Mortgage, each related
Mortgage Note and the related Mortgage Files with respect thereto in trust for
the Purchaser as the owner thereof,
(g) The Seller has not transferred the Mortgage Loans to the Purchaser
with any intent to hinder, delay or defraud any of its creditors;
(h) There are no actions or proceedings against, or investigations
known to it of, the Seller before any court, administrative or other tribunal
(A) that might prohibit its entering into this Agreement, (B) seeking to prevent
the sale of the Mortgage Loans or the consummation of the transactions
contemplated by this Agreement or (C) that might prohibit or materially and
adversely affect the performance by the Seller of its obligations under, or
validity or enforceability of, this Agreement;
8
(i) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this Agreement
or the consummation of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations or orders, if any, that have been
obtained;
(j) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller. The sale of the
Mortgage Loans is in the ordinary course of business of the Seller and the
assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller
are not subject to the bulk transfer or any similar statutory provisions;
(k) Except with respect to liens released immediately prior to the
transfer herein contemplated, each Mortgage Note and related Mortgage have not
been assigned or pledged and immediately prior to the transfer and assignment
herein contemplated, the Seller held good, marketable and indefeasible title to,
and was the sole owner and holder of, each Mortgage Loan subject to no liens,
charges, mortgages, claims, participation interests, equities, pledges or
security interests of any nature, encumbrances or rights of others
(collectively, a "Lien"); the Seller has full right and authority under all
governmental and regulatory bodies having jurisdiction over the Seller, subject
to no interest or participation of, or agreement with, any party, to sell and
assign the same pursuant to this Agreement; and immediately upon the transfers
and assignments herein contemplated. the Seller shall have transferred all of
its right, title and interest in and to each Mortgage Loan and the Trustee will
hold good, marketable and indefeasible title to, and be the sole owner of, each
Mortgage Loan subject to no Liens.
(l) The Seller does not believe, nor does it have any reason or cause
to believe, that it cannot perform each and every covenant contained in this
Agreement;
(m) The information delivered by the Seller to the Purchaser with
respect to the Seller's loan loss, foreclosure and delinquency experience on
mortgage loans underwritten to similar standards as the Mortgage Loans and
covering mortgaged properties similar to the Mortgaged Properties, is true and
correct in all material respects as of the date of such report; and
(n) Except with respect to any statement regarding the intentions of
the Purchaser, or any other statement contained herein the truth or falsity of
which is dependant solely upon the actions of the Purchaser, this Agreement does
not contain any untrue statement of material fact or omit to state a material
fact necessary to make the statements contained herein not misleading. The
written statements, reports and other documents prepared and furnished or to be
prepared and furnished by the Seller pursuant to this Agreement or in connection
with the transactions contemplated hereby taken in the aggregate do not contain
any untrue statement of material fact or omit to state a material fact necessary
to make the statements contained therein not misleading.
Section 3.04 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES. It is
understood and agreed that the representations and warranties set forth in
Subsections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to the
Purchaser and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment or the
examination or lack of examination of any Mortgage File. With respect to the
representations and
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warranties contained herein that are made to the knowledge or the best knowledge
of the Originator or as to which the Originator has no knowledge, if it is
discovered that the substance of any such representation and warranty is
inaccurate and the inaccuracy materially and adversely affects the value of the
related Mortgage Loan, or the interest therein of the Purchaser or the
Purchaser's assignee, designee or transferee, then notwithstanding the
Originator's lack of knowledge with respect to the substance of such
representation and warranty being inaccurate at the time the representation and
warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation and warranty and the Originator shall take such action described
in the following paragraphs of this Section 3.04 in respect of such Mortgage
Loan. Upon discovery by any of the Originator, the Seller or the Purchaser of a
breach of any of the foregoing representations and warranties that materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser (or which materially and adversely affects the interests of the
Purchaser in the related Mortgage Loan in the case of a representation and
warranty relating to a particular Mortgage Loan), the party discovering such
breach shall give prompt written notice to the others.
Within 90 days of the earlier of either discovery by or notice to the
Originator of any breach of a representation or warranty made by the Originator
that materially and adversely affects the value of a Mortgage Loan or the
Mortgage Loans or the interest therein of the Purchaser, the Originator shall
use its best efforts promptly to cure such breach in all material respects and,
if such breach cannot be cured, the Originator shall, at the Purchaser's option,
repurchase such Mortgage Loan at the Purchase Price. The Originator may, at the
request of the Purchaser and assuming the Originator has a Qualified Substitute
Mortgage Loan, rather than repurchase a deficient Mortgage Loan as provided
above, remove such Mortgage Loan and substitute in its place a Qualified
Substitute Mortgage Loan or Loans. If the Originator does not provide a
Qualified Substitute Mortgage Loan or Loans, it shall repurchase the deficient
Mortgage Loan. Any repurchase of a Mortgage Loan(s) pursuant to the foregoing
provisions of this Section 3.04 shall occur on a date designated by the
Purchaser and shall be accomplished by deposit in accordance with Section 2.03
of the Pooling and Servicing Agreement. Any repurchase or substitution required
by this Section shall be made in a manner consistent with Section 2.03 of the
Pooling and Servicing Agreement.
Notwithstanding the foregoing, within 90 days of the earlier of
discovery by the Originator or receipt of notice by the Originator of the breach
of the representation of the Originator of representation (aaa) of Exhibit A,
which materially and adversely affects the interests of the Holders of the Class
P Certificates in any Prepayment Charge, the Originator shall pay the amount of
the scheduled Prepayment Charge, for the benefit of the Holders of the Class P
Certificates, by depositing such amount into the Collection Account, net of any
amount previously collected by the Master Servicer and paid by the Master
Servicer, for the benefit of the Holders of the Class P Certificates, in respect
of such Prepayment Charge.
At the time of substitution or repurchase of any deficient Mortgage
Loan, the Purchaser and the Originator shall arrange for the reassignment of the
repurchased or substituted Mortgage Loan to the Originator and the delivery to
the Originator of any documents held by the Trustee relating to the deficient or
repurchased Mortgage Loan. In the event the Purchase Price is deposited in the
Collection Account. The Originator shall, simultaneously with such deposit, give
written notice to the Purchaser that such deposit has taken place. Upon such
repurchase, the
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Mortgage Loan Schedule shall be amended to reflect the withdrawal of the
repurchased Mortgage Loan from this Agreement.
As to any Deleted Mortgage Loan for which the Originator substitutes a
Qualified Substitute Mortgage Loan or Loans, the Originator shall effect such
substitution by delivering to the Purchaser or its designee for such Qualified
Substitute Mortgage Loan or Loans the Mortgage Note, the Mortgage, the
Assignment and such other documents and agreements as are required by the
Pooling and Servicing Agreement. with the Mortgage Note endorsed as required
therein. The Originator shall remit for deposit in the Collection Account the
Monthly Payment due on such Qualified Substitute Mortgage Loan or Loans in the
month following the date of such substitution. Monthly payments due with respect
to Qualified Substitute Mortgage Loans in the month of substitution will be
retained by the Originator. For the month of substitution, distributions to the
Purchaser will include the Monthly Payment due on such Deleted Mortgage Loan in
the month of substitution, and the Originator shall thereafter be entitled to
retain all amounts subsequently received by the Originator in respect of such
Deleted Mortgage Loan. Upon such substitution, the Qualified Substitute Mortgage
Loans shall be subject to the terms of this Agreement in all respects, and the
Originator shall be deemed to have made with respect to such Qualified
Substitute Mortgage Loan or Loans as of the date of substitution, the covenants,
representations and warranties set forth in Subsections 3.01 and 3.02.
It is understood and agreed that the representations and warranties
set forth in Sections 3.01 and 3.02 shall survive delivery of the respective
Mortgage Files to the Trustee on behalf of the Purchaser.
It is understood and agreed that the obligations of the Originator set
forth in this Section 3.04 to cure, repurchase and substitute for a defective
Mortgage Loan and the obligations of the Originator to indemnify the Purchaser
as provided in Section 5.01 constitute the sole remedies of the Purchaser
respecting a missing or defective document or a breach of the representations
and warranties contained in Section 3.01 or 3.02.
ARTICLE IV.
ORIGINATOR'S AND SELLER'S COVENANTS
Section 4.01 COVENANTS OF THE ORIGINATOR AND THE SELLER. The Originator and
the Seller hereby covenants that except for the transfer by the Originator to
the Seller under the Master Mortgage Loan Purchase and Interim Servicing
Agreement, dated July 1, 2002, between the Originator and the Seller (and the
Confirmations relating to the Mortgage Loans)and the transfer hereunder, neither
the Originator nor the Seller will sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any Lien on any
Mortgage Loan, or any interest therein; the Originator and the Seller will
notify the Trustee, as assignee of the Purchaser, of the existence of any Lien
on any Mortgage Loan immediately upon discovery thereof, and the Originator and
the Seller will defend the right, title and interest of the Trust, as assignee
of the Purchaser, in, to and under the Mortgage Loans, against all claims of
third parties claiming through or under the Originator or the Seller; PROVIDED,
HOWEVER, that nothing in this Section 4.01 shall prevent or be deemed to
prohibit the Originator or the Seller from suffering to exist upon any of the
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Mortgage Loans any Liens for municipal or other local taxes and other
governmental charges if such taxes or governmental charges shall not at the time
be due and payable or if the Originator or the Seller shall currently be
contesting the validity thereof in good faith by appropriate proceedings and
shall have set aside on its books adequate reserves with respect thereto.
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01 INDEMNIFICATION.
(a) The Originator indemnifies and holds harmless the Seller, the
Purchaser, the Underwriters, their respective officers and directors and each
person, if any, who controls the Seller, the Purchaser and any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, as follows:
(i) against any and all losses, claims, expenses, damages or
liabilities, joint or several, to which the Purchaser or such controlling person
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof including,
but not limited to, any loss, claim, expense, damage or liability related to
purchases and sales of the Certificates) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Prospectus Supplement, or any amendment or supplement thereto, or arise out
of, or are based upon, the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
made therein not misleading, to the extent that any untrue statement or alleged
untrue statement therein results (or is alleged to have resulted) from an error
or material omission in the information under the heading "Fremont Investment &
Loan" of the Prospectus Supplement, which error was not superseded or corrected
by the delivery to the Purchaser of corrected written or electronic information,
or for which the Originator provided written notice of such error to the
Purchaser prior to the confirmation of the sale of the Certificates; and will
reimburse the Purchaser and each such controlling person for any legal or other
expenses reasonably incurred by the Purchaser or such controlling person in
connection with investigating or defending any such loss, claim, damage.
liability or action as such expenses are incurred;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, to the extent of the aggregate amount paid in settlement of
any litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
if such settlement is effected with the written consent of the Purchaser; and
(iii) against any and all expense whatsoever (including the fees
and disbursements of counsel chosen by the Purchaser), reasonably incurred in
investigating, preparing or defending against any litigation, or investigation
or proceeding by any governmental agency or body. commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such expense
is not paid under clause (i) or clause (ii) above.
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This indemnity agreement will be in addition to any liability which
the Originator may otherwise have.
(b) Promptly after receipt by any indemnified party under this Article
V of notice of any claim or the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Article V, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article V except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Article V.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Article V for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Purchaser, if the indemnified parties
under this Article V consist of the Purchaser.
Each indemnified party, as a condition of the indemnity agreements
contained in Section 5.01 (a) and (b) hereof, shall use its best efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the
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foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to consent to a settlement of any action, the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request
and the indemnifying party has not previously provided the indemnified party
with written notice of its objection to such settlement. No indemnifying party
shall effect any settlement of any pending or threatened proceeding in respect
of which an indemnified party is or could have been a party and indemnity is or
could have been sought hereunder, without the written consent of such
indemnified party, unless settlement includes an unconditional release of such
indemnified party from all liability and claims that are the subject matter of
such proceeding.
(c) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Article is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Seller, on the one hand, and the Purchaser, on the other, shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity agreement incurred by the Seller and
the Purchaser in such proportions as shall be appropriate to reflect the
relative benefits received by the Seller on the one hand and the Purchaser on
the other from the sale of the Mortgage Loans; PROVIDED, HOWEVER, that no person
guilty of fraudulent misrepresentation (within the meaning of Section 11 (f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section,
each officer and director of the Purchaser and each person, if any, who controls
the Purchaser within the meaning of Section 15 of the Securities Act shall have
the same rights to contribution as the Purchaser and each director of the
Seller, each officer of the Seller, and each person, if any, who controls the
Seller within the meaning of Section 15 of the Securities Act shall have the
same rights to contribution as the Seller.
(d) The Originator and the Seller agree to indemnify and to hold each
of the Purchaser, the Trustee, each of the officers and directors of each such
entity and each person or entity who controls each such entity or person and
each Certificateholder harmless against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, fees and expenses that the Purchaser, the Trustee, or any such person or
entity and any Certificateholder may sustain in any way (i) related to the
failure of the Originator or the Seller, as the case may be, to perform its
duties in compliance with the terms of this Agreement, (ii) with respect to the
Originator, arising from a breach by the Originator of its representations and
warranties in Sections 3.01 and 3.02 of this Agreement, (iii) with respect to
the Seller, arising from a breach by the Seller of its representations and
warranties in Sections 3.03 of this Agreement or (iv) related to the servicing
of the Mortgage Loans by reason of any acts, omissions, or alleged acts or
omissions of the Originator, the Seller or any servicer. The Originator and the
Seller shall immediately notify the Purchaser, the Trustee and each
Certificateholder if a claim is made by a third party with respect to this
Agreement. The Originator and the Seller shall assume the defense of any such
claim and pay all expenses in connection therewith, including reasonable counsel
fees, and promptly pay, discharge and satisfy any judgment or decree which may
be entered against the Purchaser, the Trustee or any such person or entity
and/or any Certificateholder in respect of such claim.
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ARTICLE VI.
TERMINATION
Section 6.01 TERMINATION. The respective obligations and responsibilities
of the Originator, the Seller and the Purchaser created hereby shall terminate,
except for the Seller's indemnity obligations as provided herein upon the
termination of the Trust as provided in Article X of the Pooling and Servicing
Agreement.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 AMENDMENT. This Agreement may be amended from time to time by
the Originator, the Seller and the Purchaser, by written agreement signed by the
Originator, the Seller and the Purchaser.
Section 7.02 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Section 7.03 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, postage prepaid, addressed as
follows: (i) if to the Originator, Fremont Investment & Loan, 000 Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxxx, or such
other address as may hereafter be furnished by the Originator, (ii) if to the
Seller, Greenwich Capital Financial Products, Inc., 000 Xxxxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention: Legal, or such other address as may
hereafter be furnished by the Seller and (iii) if to the Purchaser, Financial
Asset Securities Corp., 000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000,
Attention: Legal, or such other address as may hereafter be furnished by the
Purchaser.
Section 7.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, 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 of
enforceability of the other provisions of this Agreement.
Section 7.05 COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
Section 7.06 FURTHER AGREEMENTS. The Originator, the Purchaser and the
Seller each agree to execute and deliver to the other such additional documents,
instruments or agreements as may be necessary or reasonable and appropriate to
effectuate the purposes of this Agreement or in
15
connection with the issuance of any Series of Certificates representing
interests in the Mortgage Loans.
Without limiting the generality of the foregoing, as a further inducement
for the Purchaser to purchase the Mortgage Loans from the Seller, the Originator
and the Seller will cooperate with the Purchaser in connection with the sale of
any of the securities representing interests in the Mortgage Loans. In that
connection, the Originator and the Seller will provide to the Purchaser any and
all information and appropriate verification of information, whether through
letters of its auditors and counsel or otherwise, as the Purchaser shall
reasonably request and will provide to the Purchaser such additional
representations and warranties, covenants, opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Originator or
the Seller as are reasonably required in connection with such transactions and
the offering of investment grade securities rated by the Rating Agencies.
Section 7.07 INTENTION OF THE PARTIES. It is the intention of the parties
that the Purchaser is purchasing, and the Seller is selling, the Mortgage Loans
rather than pledging the Mortgage Loans to secure a loan by the Purchaser to the
Seller. Accordingly, the parties hereto each intend to treat the transaction for
federal income tax purposes and all other purposes as a sale by the Seller, and
a purchase by the Purchaser, of the Mortgage Loans. The Purchaser will have the
right to review the Mortgage Loans and the related Mortgage Files to determine
the characteristics of the Mortgage Loans which will affect the federal income
tax consequences of owning the Mortgage Loans and the Seller will cooperate with
all reasonable requests made by the Purchaser in the course of such review.
Section 7.08 SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT. This
Agreement shall bind and inure to the benefit of and be enforceable by the
Originator, the Seller, the Purchaser and the Trustee.
The obligations of the Originator and the Seller under this Agreement
cannot be assigned or delegated to a third party without the consent of the
Purchaser which consent shall be at the Purchaser's sole discretion, except that
the Purchaser acknowledges and agrees that the Originator and the Seller may
assign its obligations hereunder to any Person into which the Originator or the
Seller is merged or any corporation resulting from any merger, conversion or
consolidation to which the Seller or the Originator is a party or any Person
succeeding to the business of the Seller or the Originator. The parties hereto
acknowledge that the Purchaser is acquiring the Mortgage Loans for the purpose
of contributing them to a trust that will issue a series of Certificates
representing undivided interests in such Mortgage Loans. As an inducement to the
Purchaser to purchase the Mortgage Loans, the Seller acknowledges and consents
to the assignment by the Purchaser to the Trustee of all of the Purchaser's
rights against the Seller pursuant to this Agreement insofar as such rights
relate to Mortgage Loans transferred to the Trustee and to the enforcement or
exercise of any right or remedy against the Seller pursuant to this Agreement by
the Trustee. Such enforcement of a right or remedy by the Trustee shall have the
same force and effect as if the right or remedy had been enforced or exercised
by the Purchaser directly.
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Section 7.09 SURVIVAL. The representations and warranties set forth in
Sections 3.01, 3.02 and 3.03 and the provisions of Article V hereof shall
survive the purchase of the Mortgage Loans hereunder.
17
IN WITNESS WHEREOF, the Originator, the Seller and the Purchaser have
caused their names to be signed to this Mortgage Loan Purchase Agreement by
their respective officers thereunto duly authorized as of the day and year fist
above written.
FREMONT INVESTMENT & LOAN,
as Originator
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice-President
FINANCIAL ASSET SECURITIES CORP.,
as Purchaser
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Senior Vice-President
GREENWICH CAPITAL FINANCIAL
PRODUCTS, INC., as Seller
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Senior Vice-President
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SCHEDULE I
MORTGAGE LOANS
AVAILABLE UPON REQUEST
19
EXHIBIT A
Representation and Warranties with Respect to the Mortgage Loans
The Originator hereby represents and warrants to the Purchaser that, as to each
Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) The information set forth in the data tape relating to the
Mortgage Loans in the form most recently provided by the servicer of the
Mortgage Loans to the Purchaser is true and correct;
(b) The Mortgage Loan is in compliance with all requirements set forth
in the related Confirmation, and the characteristics of the related Mortgage
Loan Package as set forth in the related Confirmation are true and correct,
provided, however, that in the event of any conflict between the terms of any
Confirmation and this agreement, the terms of this agreement shall control;
(c) All payments required to be made up to the close of business on
the Closing Date for such Mortgage Loan under the terms of the Mortgage Note
have been made; the Originator has not advanced funds, or induced, solicited or
knowingly received any advance of funds from a party other than the owner of the
related Mortgaged Property, directly or indirectly, for the payment of any
amount required by the Mortgage Note or Mortgage; and there has been no
delinquency, exclusive of any period of grace, in any payment by the Mortgagor
thereunder since the origination of the Mortgage Loan;
(d) To the best of the Originator's knowledge, there are no delinquent
taxes, ground rents, water charges, sewer rents, assessments, insurance
premiums, leasehold payments, including assessments payable in future
installments or other outstanding charges affecting the related Mortgaged
Property;
(e) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments, recorded in the applicable public recording office if necessary to
maintain the lien priority of the Mortgage, and which have been delivered to the
Custodian; the substance of any such waiver, alteration or modification has been
approved by the title insurer, to the extent required by the related policy, and
is reflected on the related Mortgage Loan Schedule. No instrument of waiver,
alteration or modification has been executed, and no Mortgagor has been
released, in whole or in part, except in connection with an assumption agreement
approved by the title insurer, to the extent required by the policy, and which
assumption agreement has been delivered to the Custodian and the terms of which
are reflected in the related Mortgage Loan Schedule;
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(f) The Mortgage Note and the Mortgage are not subject to any right of
rescission, set off, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission, set
off, counterclaim or defense, including the defense of usury and no such right
of rescission, set off, counterclaim or defense has been asserted with respect
thereto;
(g) All buildings upon the Mortgaged Property are insured by a
generally acceptable insurer in the secondary market against loss by fire,
hazards of extended coverage and such other hazards as are customary in the area
where the Mortgaged Property is located, pursuant to insurance policies
conforming to the requirements of the Servicing Addendum. All such insurance
policies contain a standard mortgagee clause naming the Originator, its
successors and assigns as mortgagee and all premiums thereon have been paid. If
the Mortgaged Property is in an area identified on a Flood Hazard Map or Flood
Insurance Rate Map issued by the Federal Emergency Management Agency as having
special flood hazards (and such flood insurance has been made available) a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect which policy conforms to the
requirements of FNMA and FHLMC. The Mortgage obligates the Mortgagor thereunder
to maintain all such insurance at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to maintain
such insurance at Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor;
(h) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth in lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, fair housing
or disclosure laws applicable to the origination and servicing of mortgage loans
of a type similar to the Mortgage Loans have been complied with;
(i) The Mortgage has not been satisfied, cancelled, subordinated or
rescinded, in whole or in part, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such satisfaction, cancellation, subordination,
rescission or release;
(j) The Mortgage is a valid, existing and enforceable first lien on
the Mortgaged Property, including all improvements on the Mortgaged Property
subject only to (a) the lien of current real property taxes and assessments not
yet due and payable, (b) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of recording
being acceptable to mortgage lending institutions generally and specifically
referred to in the lender's title insurance policy delivered to the originator
of the Mortgage Loan and which do not adversely affect the Appraised Value of
the Mortgaged Property, and (c) other matters to which like properties are
commonly subject which do not materially interfere with the benefits of the
security
21
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property. Any security agreement, chattel
mortgage or equivalent document related to and delivered in connection with the
Mortgage Loan establishes and creates a valid, existing and enforceable first
lien and first priority security interest on the property described therein and
the Originator has full right to sell and assign the same to the Purchaser. The
Mortgaged Property was not, as of the date of origination of the Mortgage Loan,
subject to a mortgage, deed of trust, deed to secure debt or other security
instrument creating a lien subordinate to the lien of the Mortgage;
(k) The Mortgage Note and the related Mortgage are genuine and each is
the legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms;
(l) All parties to the Mortgage Note and the Mortgage had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage, and the Mortgage Note and the Mortgage have been duly and
properly executed by such parties. The Mortgagor is a natural person;
(m) The proceeds of the Mortgage Loan have been fully disbursed to or
for the account of the Mortgagor and there is no obligation for the Mortgagee to
advance additional funds thereunder and any and all requirements as to
completion of any on site or off site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage have been paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due to the Mortgagee pursuant to the Mortgage Note or Mortgage;
(n) The Originator is the sole legal, beneficial and equitable owner
of the Mortgage Note and the Mortgage and has full right to transfer and sell
the Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
lien, pledge, charge, claim or security interest;
(o) All parties which have had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) in compliance with any
and all applicable "doing business" and licensing requirements of the laws of
the state wherein the Mortgaged Property is located;
(p) The Mortgage Loan is covered by an American Land Title Association
("ALTA") ALTA lender's title insurance policy (which, in the case of an
Adjustable Rate Mortgage Loan has an adjustable rate mortgage endorsement in the
form of ALTA 6.0 or 6.1) acceptable to FNMA and FHLMC, issued by a title insurer
acceptable to FNMA and FHLMC and qualified to do business in the jurisdiction
where the Mortgaged Property is located, insuring (subject to the exceptions
contained in (x)(a) and (b) above) the Originator, its successors and assigns as
to the first priority lien of the Mortgage in the original principal amount of
the Mortgage Loan and, with respect
22
to any Adjustable Rate Mortgage Loan, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions of the
Mortgage providing for adjustment in the Mortgage Interest Rate and Monthly
Payment. Additionally, such lender's title insurance policy affirmatively
insures ingress and egress to and from the Mortgaged Property, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Originator is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in full
force and effect upon the consummation of the transactions contemplated by this
Agreement. No claims are pending under such lender's title insurance policy, and
no prior holder of the related Mortgage, including the Originator, has done, by
act or omission, anything which would impair the coverage of such lender's title
insurance policy;
(q) There is no default, breach, violation or event of 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 of acceleration, and the
Originator has not waived any default, breach, violation or event of
acceleration;
(r) As of the date of origination of the Mortgage Loan and to the best
of the Originator's knowledge as of the Closing Date, there are no mechanics' or
similar liens or claims which have been filed for work, labor or material (and
no rights are outstanding that under law could give rise to such lien) affecting
the related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) All improvements which were considered in determining the
Appraised Value of the related Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property, and no
improvements on adjoining properties encroach upon the Mortgaged Property;
(t) The Mortgage Loan was originated by the Originator or by a savings
and loan association, a savings bank, a commercial bank or similar banking
institution which is supervised and examined by a federal or state authority, or
by a mortgagee approved as such by the Secretary of HUD;
(u) Principal payments on the Mortgage Loan commenced no more than
sixty days after the proceeds of the Mortgage Loan were disbursed. The Mortgage
Loan bears interest at the Mortgage Interest Rate. With respect to each Mortgage
Loan, the Mortgage Note is payable on the first or fifteenth day of each month
in Monthly Payments, which, in the case of a Fixed Rate Mortgage Loans, are
sufficient to fully amortize the original principal balance over the original
term thereof and to pay interest at the related Mortgage Interest Rate, and, in
the case of an Adjustable Rate Mortgage Loan, are changed on each Adjustment
Date, and in any case, are sufficient to fully
23
amortize the original principal balance over the original term thereof and to
pay interest at the related Mortgage Interest Rate. The Index for each
Adjustable Rate Mortgage Loan is as listed on the Mortgage Loan Schedule. The
Mortgage Note does not permit negative amortization. No Mortgage Loan is a
Convertible Mortgage Loan;
(v) The origination and collection practices used by the Originator
with respect to each Mortgage Note and Mortgage have been in all respects legal,
proper, prudent and customary in the mortgage origination and servicing
industry. The Mortgage Loan has been serviced by the Originator and any
predecessor servicer in accordance with the terms of the Mortgage Note. With
respect to escrow deposits and Escrow Payments, if any, all such payments are in
the possession of, or under the control of, the Originator and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. No escrow deposits or Escrow Payments or
other charges or payments due the Originator have been capitalized under any
Mortgage or the related Mortgage Note and no such escrow deposits or Escrow
Payments are being held by the Originator for any work on a Mortgaged Property
which has not been completed;
(w) To the best of Originator's knowledge, the Mortgaged Property is
free of damage and waste and there is no proceeding pending for the total or
partial condemnation thereof;
(x) The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (a) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (b) otherwise by
judicial foreclosure. The Mortgaged Property is not subject to any bankruptcy
proceeding or foreclosure proceeding and the Mortgagor is not subject to
protection under applicable bankruptcy laws. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage. The Mortgagor has not notified the Originator and the Originator has
no knowledge of any relief requested or allowed to the Mortgagor under the
Soldiers and Sailors Civil Relief Act of 1940;
(y) The Mortgage Loan was underwritten in accordance with the
underwriting standards of the Originator in effect at the time the Mortgage Loan
was originated; and the Mortgage Note and Mortgage are on forms acceptable to
FNMA and FHLMC;
(z) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage referred to in (x) above;
(aa) The Mortgage File contains an appraisal of the related Mortgaged
Property which satisfied the standards of FNMA and FHLMC and was made and
signed, prior to the funding
24
of the Mortgage Loan application, by a qualified appraiser, duly appointed by
the Originator, who had no interest, direct or indirect in the Mortgaged
Property or in any loan made on the security thereof, whose compensation is not
affected by the approval or disapproval of the Mortgage Loan and who met the
minimum qualifications of FNMA and FHLMC. Each appraisal of the Mortgage Loan
was made in accordance with the relevant provisions of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989;
(bb) In the event the Mortgage constitutes a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Purchaser to the trustee under the
deed of trust, except in connection with a trustee's sale after default by the
Mortgagor or the reconveyance of the deed of trust;
(cc) No Mortgage Loan contains provisions pursuant to which Monthly
Payments are (a) paid or partially paid with funds deposited in any separate
account established by the Originator, the Mortgagor, or anyone on behalf of the
Mortgagor, (b) paid by any source other than the Mortgagor or (c) contains any
other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(dd) The Mortgagor has executed a statement to the effect that the
Mortgagor has received all disclosure materials required by applicable law with
respect to the making of fixed rate mortgage loans in the case of Fixed Rate
Mortgage Loans, and adjustable rate mortgage loans in the case of Adjustable
Rate Mortgage Loans and rescission materials with respect to Refinanced Mortgage
Loans, and such statement is and will remain in the Mortgage File;
(ee) No Mortgage Loan was made in connection with (a) the construction
or rehabilitation of a Mortgaged Property or (b) facilitating the trade in or
exchange of a Mortgaged Property;
(ff) The Originator has no knowledge of any circumstances or condition
with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the
Mortgagor's credit standing that can reasonably be expected to cause the
Mortgage Loan to be an unacceptable investment, cause the Mortgage Loan to
become delinquent, or adversely affect the value of the Mortgage Loan;
(gg) As of the date of origination of the Mortgage Loan and to the
best of the Originator's knowledge 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
25
same, including but not limited to certificates of occupancy, have been made or
obtained from the appropriate authorities;
(hh) No error, omission, misrepresentation, negligence, fraud or
similar occurrence with respect to a Mortgage Loan has taken place on the part
of any person, including without limitation the Mortgagor, any appraiser, any
builder or developer, or any other party involved in the origination of the
Mortgage Loan or in the application of any insurance in relation to such
Mortgage Loan;
(ii) The Assignment of Mortgage is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;
(jj) Any principal advances made to the Mortgagor prior to the Cut off
Date have been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a single
interest rate and single repayment term. The lien of the Mortgage securing the
consolidated principal amount is expressly insured as having first lien priority
by a title insurance policy, an endorsement to the policy insuring the
mortgagee's consolidated interest or by other title evidence acceptable to FNMA
and FHLMC. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(kk) No Mortgage Loan has a balloon payment feature;
(ll) The source of the down payment with respect to each Mortgage Loan
has been fully verified by the Originator pursuant to the Originator's
underwriting guidelines;
(mm) Interest on each Mortgage Loan is calculated on the basis of a
360-day year consisting of twelve 30-day months;
(nn) The Mortgaged Property is in material compliance with all
applicable environmental laws pertaining to environmental hazards including,
without limitation, asbestos, and neither the Originator nor, to the
Originator's knowledge, the related Mortgagor, has received any notice of any
violation or potential violation of such law;
(oo) Each Mortgage Loan is covered by a fully assignable, life of loan
Tax Service Contract which is assignable to the Purchaser or its designee
without the payment of any fee by the Purchaser or its designee;
(pp) Each Mortgage Loan is covered by a Flood Zone Service Contract
which is assignable to the Purchaser or its designee or, for each Mortgage Loan
not covered by such Flood Zone Service Contract, the Originator agrees to
purchase such Flood Zone Service Contract;
26
(qq) No Mortgage Loan is subject to the provisions of the
Homeownership and Equity Protection Act of 1994 as amended ("HOEPA") or any
comparable state or local statutes or regulations. The total combined points and
fees charged in connection with the originator of the Mortgage Loan does not
exceed 8% of the original principal balance of the Mortgage Loan.
(rr) No predatory or deceptive lending practices, including but not
limited to, the extension of credit to a mortgagor without regard for the
mortgagor's ability to repay the Mortgage Loan and the extension of credit to a
mortgagor which has no apparent benefit to the mortgagor, were employed in
connection with the origination of the Mortgage Loan;
(ss) The debt-to-income ratio of the related Mortgagor was not greater
than 60% at the origination of the related Mortgage Loan;
(tt) None of the proceeds of the Mortgage Loan were used to finance
the purchase of single premium credit life or disability insurance policies or
any comparable insurance.
(uu) No Mortgage loan is secured by property located in the city of
Oakland, California is subject to the provisions of the City of Oakland,
California Anti-Predatory Lending Ordinance No. 12361.
(vv) No Mortgage Loan had a Loan-to-Value Ratio in excess of 100%
origination of such Mortgage Loan;
(ww) The Mortgage Loans were not selected from the outstanding fixed
and adjustable rate one to four-family mortgage loans in the Originator's
portfolio at the related Closing Date as to which the representations and
warranties set forth in this Agreement could be made in a manner so as to affect
adversely the interests of the Purchaser;
(xx) The related Mortgagor under the Mortgage Loan had a FICO Score
not less than 500 at the time of the origination of the Mortgage Loan, unless
such Mortgage Loan was originated under an origination program which does not
require FICO scores to be obtained under the Originator's underwriting
guidelines;
(yy) 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;
(zz) The Mortgage Loan complies with all applicable consumer credit
statutes and regulations, including, without limitation, the respective Uniform
Consumer Credit Code laws in effect in Colorado, Idaho, Indiana, Iowa, Kansas,
Maine, Oklahoma, South Carolina, Utah and
27
Wyoming, has been originated by a properly licensed entity, and in all other
respects, complies with all of the material requirements of any such applicable
laws;
(aaa) The information set forth in the Prepayment Charge schedule is
complete, true and correct in all material respects and each Prepayment Charge
is permissible, enforceable and collectable under applicable federal and state
law;
(bbb) The Mortgage Loan was not prepaid in full prior to the Closing
Date and the Originator has not received notification from a Mortgagor that a
prepayment in full shall be made after the Closing Date; and
(ccc) The Originator has no knowledge of any circumstances or
condition with respect to the Mortgage, the mortgaged property, the Mortgagor or
the Mortgagor's credit standing that can be reasonably be expected to cause the
mortgage Loan to be an unacceptable investment, cause the Mortgage Loan to
become delinquent, or adversely affect the value of the Mortgage Loan.
28
EXHIBIT D
MORTGAGE LOAN SCHEDULE
[FILED BY PAPER]
[SEE SCHEDULE I OF MORTGAGE LOAN PURCHASE AGREEMENT]
D-1
EXHIBIT E
REQUEST FOR RELEASE OF DOCUMENTS
To: Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Re: Pooling and Servicing Agreement dated as of September 1, 2002, among
the Finance Asset Securities Corp. as Depositor, Xxxxxx Loan Servicing
LP, as Servicer, and Deutsche Bank National Trust Company, a national
banking association, as Trustee
Inconnection with the administration of the Mortgage Loans held by you as
Trustee pursuant to the above-captioned Pooling and Servicing Agreement, we
request the release, and hereby acknowledge receipt of the Trustee's Mortgage
File Or the Mortgage Loan described below, for the reason indicated.
MORTGAGE LOAN NUMBER:
MORTGAGOR NAME, ADDRESS & ZIP CODE:
REASON FOR REQUESTING DOCUMENTS (CHECK ONE):
_________ 1. Mortgage Paid in Full
_________ 2. Foreclosure
_________ 3. Substitution
_________ 4. Other Liquidation (Repurchases, etc.)
_________ 5. Nonliquidation Reason:_____________________
Address to which Trustee should deliver
the Trustee's Mortgage File:
________________________________________________________________________________
________________________________________________________________________________
E-1
By: __________________________________
(authorized signer)
Issuer: _______________________________
Address: ______________________________
______________________________
Date: _________________________________
TRUSTEE
Deutsche Bank National Trust Company
Please acknowledge the execution of the above request by your signature and
date below:
______________________________ ________________
Signature Date
Documents returned to Trustee:
______________________________ __________________
Trustee Date
E-2
EXHIBIT F-1
FORM OF TRUSTEE'S INITIAL CERTIFICATION
September __, 2002
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Re: Pooling and Servicing Agreement dated as of September 1, 2002, among
the Finance Asset Securities Corp. as Depositor, Xxxxxx Loan Servicing
LP, as Servicer, and Deutsche Bank National Trust Company, a national
banking association, as Trustee
Ladies and Gentlemen:
Attached is the Trustee's preliminary exception report delivered in
accordance with Section 2.02 of the referenced Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
The Trustee has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the Pooling and
Servicing Agreement. The Trustee makes no representations as to (i) the
validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in the Mortgage File pertaining to the Mortgage Loans
identified on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan or (iii) whether any
Mortgage File includes any of the documents specified in clause (v) of Section
2.01 of the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
By: __________________________________
Name:
Title:
F-1-1
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
________________
[Date]
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Re: Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of September 1, 2002 among Financial Asset Securities Corp., as
Depositor, Xxxxxx Loan Servicing LP, as Servicer and Deutsche Bank
National Trust Company, as Trustee with respect to Fremont Home Loan
Trust 2002-1, Asset-Backed Certificates, Series 2002-1
------------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of 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 Schedule I hereto) it (or its custodian) has received the applicable
documents listed in Section 2.01 of the Pooling and Servicing Agreement.
The undersigned hereby certifies that as to each Mortgage Loan identified
on the Mortgage Loan Schedule, other than any Mortgage Loan listed on Schedule I
hereto, it has reviewed the documents listed above and has determined that each
such document appears to be complete and, based on an examination of such
documents, the information set forth in items 1, 2, 3, 10, 11, 15 and 28 of the
definition of Mortgage Loan Schedule in the Pooling and Servicing Agreement
accurately reflects information in the Mortgage File.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Trustee
By: _______________________________
Name:
Title:
F-2-1
EXHIBIT F-3
FORM OF RECEIPT OF MORTGAGE NOTE
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Re: Fremont Home Loan Trust 2002-1,
Asset-backed Certificates Series 2002-1
---------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of September 1, 2002 among
Financial Asset Securities Corp., as Depositor, Xxxxxx Loan Servicing LP, as
Servicer and Deutsche Bank National Trust Company, as Trustee, we hereby
acknowledge the receipt of the original Mortgage Notes (a copy of which is
attached hereto as Exhibit 1) with any exceptions thereto listed on Exhibit 2.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By: _________________________________
Name:
Title:
F-3-1
EXHIBIT G
[RESERVED]
G-1
EXHIBIT H
FORM OF LOST NOTE AFFIDAVIT
---------------------------
Personally appeared before me the undersigned authority to administer
oaths, ________________ who first being duly sworn deposes and says: Deponent is
________________ of ________________, successor by merger to ___________________
("Seller") and who has personal knowledge of the facts set out in this
affidavit.
On _______________________________, _______________________________ did execute
and deliver a promissory note in the principal amount of $__________________.
That said note has been misplaced or lost through causes unknown and is
presently lost and unavailable after diligent search has been made. Seller's
records show that an amount of principal and interest on said note is still
presently outstanding, due, and unpaid, and Seller is still owner and holder in
due course of said lost note.
Seller executes this Affidavit for the purpose of inducing Deutsche Bank
National Trust Company, as trustee on behalf of Fremont Home Loan Trust 2002-1,
Asset-Backed Certificates Series 2002-1, to accept the transfer of the above
described loan from Seller.
Seller agrees to indemnify Deutsche Bank National Trust Company and
Financial Asset Securities Corp. harmless for any losses incurred by such
parties resulting from the above described promissory note has been lost or
misplaced.
By: _______________________
_______________________
STATE OF )
) SS:
COUNTY OF )
On this ______ day of ______________, 20_, before me, a Notary Public, in
and for said County and State, appeared , who acknowledged the extension of the
foregoing and who, having been duly sworn, states that any representations
therein contained are true.
Witness my hand and Notarial Seal this _________ day of 20__.
____________________________
____________________________
My commission expires __________________________.
H-1
EXHIBIT I
FORM OF LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that [NAME OF MORTGAGEE, ASSIGNEE OR LAST
ENDORSEE, AS APPLICABLE], [a ___________________ corporation][a national banking
organization], having its principal place of business at
__________________________, (the "Undersigned"), pursuant to that Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") among Financial
Asset Securities Corp. (the "Owner"), Deutsche Bank National Trust Company and
Xxxxxx Loan Servicing LP ("Xxxxxx"), hereby constitutes and appoints Xxxxxx, by
and through Litton's officers, the Undersigned's true and lawful
Attorney-in-Fact, in the Undersigned's name, place and stead, as their interests
may appear, and for the Undersigned's respective benefit, in connection with all
Mortgage Loans serviced by Xxxxxx pursuant to the Pooling and Servicing
Agreement, for the purpose of performing all acts and executing all documents in
the name of the Undersigned as may be customarily and reasonably necessary and
appropriate to effectuate the following enumerated transactions in respect of
any of the mortgages, deeds of trust or security instrument (each a "Mortgage"
or a "Deed of Trust" respectively) and promissory notes secured thereby (each a
"Mortgage Note") for which the Undersigned is acting as Servicer pursuant to the
Pooling and Servicing Agreement (whether the Undersigned is named therein as
mortgagee or beneficiary or has become mortgagee by virtue of endorsement of the
Mortgage Note secured by any such Mortgage or Deed of Trust) all subject to the
terms of the related Pooling and Servicing Agreement.
This appointment shall apply to the following enumerated transactions only:
1. The modification or re-recording of a Mortgage or Deed of Trust, where said
modification or re-recording is for the purpose of correcting the Mortgage or
Deed of Trust to conform same to the original intent of the parties thereto or
to correct title errors discovered after such title insurance was issued and
said modification or re-recording, in either instance, does not adversely affect
the lien of the Mortgage or Deed of Trust as insured.
2. The subordination of the lien of a Mortgage or Deed of Trust to an easement
in favor of a public utility company or a governmental agency or authority
thereunder with powers of eminent domain; this section shall include, without
limitation, the execution of partial satisfaction/release, partial reconveyances
or the execution of requests to trustees to accomplish same.
3. The conveyance of the properties to the mortgage insurer, or the closing of
the title to the property to be acquired as real estate owned, or conveyance of
title to real estate owned.
4. The completion of loan assumption agreements.
5. The full satisfaction/release of a Mortgage or Deed of Trust or full
reconveyance upon payment and discharge of all sums secured thereby, including,
without limitation, cancellation of the related Mortgage Note.
I-1
6. The assignment of any Mortgage or Deed of Trust and the related Mortgage
Note, in connection with the repurchase of the mortgage loan secured and
evidenced thereby.
7. The full assignment of a Mortgage or Deed of Trust upon payment and discharge
of all sums secured thereby in conjunction with the refinancing thereof,
including, without limitation, the assignment of the related Mortgage Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure, the taking of
a deed in lieu of foreclosure, or the completion of judicial or non-judicial
foreclosure or termination, cancellation or rescission of any such foreclosure,
including, without limitation, any and all of the following acts:
a) the substitution of trustee(s) serving under a Deed of Trust, in
accordance with state law and the Deed of Trust;
b) the preparation and issuance of statements of breach or non-performance;
c) the preparation and filing of notices of default and/or notices of sale;
d) the cancellation/rescission of notices of default and/or notices of sale;
e) the taking of a deed in lieu of foreclosure; and f)the preparation and
execution of such other documents and performance of such other actions as may
be necessary under the terms of the Mortgage, Deed of Trust or state law to
expeditiously complete said transactions in paragraphs 8(a) through 8(e) above.
9. The full assignment of a Mortgage or Deed of Trust upon sale of a loan
pursuant to a mortgage loan sale agreement for the sale of a loan or pool of
loans, including, without limitation, the assignment of the related Mortgage
Note.
The Undersigned gives said Attorney-in-Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney, each subject to the terms and conditions set forth in the
related Pooling and Servicing Agreement and in accordance with the standard of
care applicable to servicers in the Pooling and Servicing Agreement as fully as
the undersigned might or could do, and hereby does ratify and confirm to all
that said Attorney-in-Fact shall lawfully do or cause to be done by authority
hereof. This Limited Power of Attorney shall be effective as of [SERVICING
TRANSFER EFFECTIVE DATE].
Nothing contained herein shall (i) limit in any manner any indemnification
provided by Xxxxxx to the Owner under the Pooling and Servicing Agreement, or
(ii) be construed to xxxxx Xxxxxx the power to initiate or defend any suit,
litigation or proceeding in the name of the Undersigned except as specifically
provided for herein or under the Pooling and Servicing Agreement.
The Owner hereby agrees to indemnify and hold the Undersigned and its directors,
officers, employees and agents harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever incurred by
reason or result of or in connection with the exercise by Xxxxxx of the powers
granted to it hereunder.
I-2
The foregoing indemnity shall survive the termination of this Limited Power of
Attorney and the Pooling and Servicing Agreement or the earlier resignation or
removal of the Undersigned under the Pooling and Servicing Agreement.
Any third party without actual notice of fact to the contrary may rely upon the
exercise of the power granted under this Limited Power of Attorney; and may be
satisfied that this Limited Power of Attorney shall continue in full force and
effect and has not been revoked unless an instrument of revocation has been made
in writing by the undersigned, and such third party put on notice thereof. This
Limited Power of Attorney shall be in addition to and shall not revoke or in any
way limit the authority granted by any previous power of attorney executed by
the Undersigned.
IN WITNESS WHEREOF, ____________________ pursuant to the Pooling and Servicing
Agreement, has caused its corporate seal to be hereto affixed and these presents
to be signed and acknowledged in its name and behalf by ______________________,
its duly elected and authorized _________________________ this ___ day of
_________________, 2002.
By:____________________________
Name: _________________________
Title: ________________________
Acknowledged and Agreed
Xxxxxx Loan Servicing LP
By:_________________________
Name:
Title:
I-3
EXHIBIT J
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Deutsche Bank National Trust Company
Re: Fremont Home Loan Trust 2002-1,
Asset-backed Certificates Series 2002-1
---------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned 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 are an
"accredited investor," as defined in Regulation D under the Act, and 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 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, (e) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with clause
(g) below), (f) 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, or taken any other action which
would result in a violation of Section 5 of the Act, and (g) we will not sell,
transfer or otherwise dispose of any Certificates unless (1) such sale, transfer
or other disposition is made pursuant to an effective registration statement
under the Act or is exempt from such registration requirements, and if
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this Certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Certificate has executed and delivered to you a certificate
to substantially the same effect as this certificate, and (3) the purchaser or
transferee has otherwise complied with any conditions for transfer set forth in
the Pooling and Servicing Agreement.
Very truly yours,
[NAME OF TRANSFEREE]
By: _______________________________
Authorized Officer
FORM OF RULE 144A INVESTMENT LETTER
J-1
[DATE]
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Re: Fremont Home Loan Trust 2002-1,
Asset-backed Certificates Series 2002-1
---------------------------------------
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 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, (c) we are not an employee benefit plan that is subject to the
Employee Retirement Income Security Act of 1974, as amended, or a plan 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, (d) 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 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, (e) 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.
Very truly yours,
[NAME OF TRANSFEREE]
By:______________________________
Authorized Officer
J-2
ANNEX 1 TO EXHIBIT J
--------------------
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.
_______ BROKER-DEALER. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
---------------------
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.
J-3
_______ 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.
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.
J-4
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 Buyer
By:_______________________________
Name:
Title:
Date: ____________________________
J-5
ANNEX 2 TO EXHIBIT J
--------------------
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. Inconnection 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 Buyers 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, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
J-6
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 Buyer or Adviser
By: _________________________________
Name:
Title:
IF AN ADVISER:
_____________________________________
Print Name of Buyer
Date: _______________________________
J-7
EXHIBIT K
AFFIDAVIT OF TRANSFER OF R CERTIFICATES
PURSUANT TO SECTION 5.02(d)
FREMONT HOME LOAN TRUST 2002-1
ASSET-BACKED CERTIFICATES, SERIES 2002-1
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 Class R Certificates (the "Certificate") issued pursuant
to the Pooling and Servicing Agreement, (the "Agreement"), relating to the
above-referenced Certificates, among Financial Asset Securities Corp., as
Depositor, Xxxxxx Loan Servicing LP, as Servicer (the "Servicer") and Deutsche
Bank National Trust Company, as Trustee (the "Trustee"). Capitalized terms used,
but not defined herein 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.
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 either (i) for its own account or (ii) as nominee,
trustee or agent for another Person and has attached hereto an affidavit from
such Person in substantially the same form as this affidavit. 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) to
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).
K-1
5. The Transferee has reviewed the provisions of Section 5.02(d) 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(d) 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 K 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 is not an employee benefit plan that is subject to ERISA
or a plan that is subject to Section 4975 of the Code, nor is it acting on
behalf of such a plan.
K-2
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 __________, ___.
[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 _______, ___.
______________________________________________
NOTARY PUBLIC
My Commission expires the __ day of ____, ___.
K-3
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Re: Fremont Home Loan Trust 2002-1,
Asset-backed Certificates Series 2002-1
---------------------------------------
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, (c) to
the extent we are disposing of a Class [ ] Certificate, we have no knowledge the
Transferee is not a Permitted Transferee and (d) no purpose of the proposed
disposition of a Class [ ] Certificate is to impede the assessment or collection
of tax.
Very truly yours,
TRANSFEROR
By: __________________________________
Name:
Title:
L-1
EXHIBIT M
FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE
_____________, 20__
Financial Asset Securities Corp. Deutsche Bank National Trust Company
000 Xxxxxxxxx Xxxx 0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000 Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Re: Fremont Home Loan Trust 2002-1,
Asset-backed Certificates Series 2002-1
---------------------------------------
Dear Sirs:
_______________________ (the "Transferee") intends to acquire from
_____________________ (the "Transferor") $____________ Initial Certificate
Principal Balance Fremont Home Loan Trust 2002-1, Asset-Backed Certificates
Series 2002-1, Class [C][P][R] (the "Certificates"), issued pursuant to a
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement") dated as
of September 1, 2002 among Financial Asset Securities Corp. as depositor (the
"Depositor"), Xxxxxx Loan Servicing LP as servicer (the "Servicer") and Deutsche
Bank National Trust Company as trustee (the "Trustee"). Capitalized terms used
herein and not otherwise defined shall have the meanings assigned thereto in the
Pooling and Servicing Agreement. The Transferee hereby certifies, represents and
warrants to, and covenants with the Depositor, the Trustee and the Servicer the
following:
The Certificates (i) are not being acquired by, and will not be transferred
to, any employee benefit plan within the meaning of section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or other
retirement arrangement, including individual retirement accounts and annuities,
Xxxxx plans and bank collective investment funds and insurance company general
or separate accounts in which such plans, accounts or arrangements are invested,
that is subject to Section 406 of ERISA or Section 4975 of the Internal Revenue
Code of 1986 (the "Code") (any of the foregoing, a "Plan"), (ii) are not being
acquired with "plan assets" of a Plan within the meaning of the Department of
Labor ("DOL") regulation, 29 C.F.R.ss.2510.3-101, and (iii) will not be
transferred to any entity that is deemed to be investing in plan assets within
the meaning of the DOL regulation at 29 X.X.X.xx. 2510.3-101.
Very truly yours,
[Transferee]
By:_____________________________
Name:
Title:
M-1
EXHIBIT N-1
FORM CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K
Re: Fremont Home Loan Trust, Series 2002-1
Asset Backed Certificates, Series 2002-1
I, [identify the certifying individual], certify that:
l. I have reviewed this annual report on Form 10-K, and all reports
on Form 8-K containing Distribution Date reports filed in respect of periods
included in the year covered by this annual report, of Financial Asset
Securities Corp. (the "Registrant");
2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;
3. Based on my knowledge, the servicing information required to be
provided to the Trustee by the Servicer under the Pooling and Servicing
Agreement is included in these reports;
4. I am responsible for reviewing the activities performed by the
Servicer under the Pooling and Servicing Agreement and based upon the review
required under the Pooling and Servicing Agreement, and except as disclosed in
the report, the Servicer has fulfilled its obligations under the Pooling and
Servicing Agreement; and
5. I have disclosed to the Registrant's certified public accountants
all significant deficiencies relating to the Servicer's compliance with the
minimum servicing standards in accordance with a review conducted in compliance
with the Uniform Single Attestation Program for Mortgage Bankers or similar
standard as set forth in the Pooling and Servicing Agreement.
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated September 1, 2002
(the "Pooling and Servicing Agreement"), among the Registrant as Depositor,
Xxxxxx Loan Servicing L.P. as servicer and Deutsche Bank National Trust Company
as trustee.
FINANCIAL ASSET SECURITIES CORP.
By:______________________________
Name:
Title:
Date:
N-1
EXHIBIT N-2
FORM CERTIFICATION TO BE
PROVIDED TO DEPOSITOR BY THE TRUSTEE
Re: Fremont Home Loan Trust 2002-1 (the "Trust")
Asset-Backed Certificates, Series 2002-1
I, [identify the certifying individual], a [title] of Deutsche Bank
National Trust Company, as Trustee of the Trust, hereby certify to Financial
Asset Securities Corp. (the "Depositor"), and its officers, directors and
affiliates, and with the knowledge and intent that they will rely upon this
certification, that:
1. I have reviewed the annual report on Form 10-K for the fiscal year
[___], and all reports on Form 8-K containing distribution reports filed in
respect of periods included in the year covered by that annual report, of the
Depositor relating to the above-referenced trust;
2. Based on my knowledge, the information in these distribution
reports prepared by the Trustee, taken as a whole, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading as of the last day of the period covered by that
annual report; and
3. Based on my knowledge, the distribution information required to be
provided by the Trustee under the Pooling and Servicing Agreement is included in
these reports.
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated September 1, 2002
(the "Pooling and Servicing Agreement"), among the Depositor as depositor,
Xxxxxx Loan Servicing LP as servicer and Deutsche Bank National Trust Company as
trustee.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:__________________________________
Name:
Title:
Date:
N-2-1
EXHIBIT N-3
FORM CERTIFICATION TO BE
PROVIDED TO DEPOSITOR BY THE SERVICER
Re: Fremont Home Loan Trust, Series 2002-1
Asset Backed Certificates, Series 2002-1
I, [identify the certifying individual], certify to Financial Asset
Securities Corp. (the "Depositor"), and its officers, directors and affiliates,
and with the knowledge and intent that they will rely upon this certification,
that:
1. I have reviewed the information provided to the Trustee by the
Servicer pursuant to Sections [____, _____, _____, and _____] of the Pooling and
Servicing Agreement and information correctly derived by the Trustee from such
information and included in the annual report on Form 10-K for the fiscal year
[___] and on all reports on Form 8-K filed in respect of periods included in the
year covered by that annual report, of the Depositor relating to the Trust Fund
(the "Servicing Information");
2. Based on my knowledge, the Servicing Information in these reports,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading as of
the last day of the period covered by that annual report;
3. Based on my knowledge, the Servicing Information is correct;
4. I am responsible for reviewing the activities performed by the
Servicer under the Pooling and Servicing Agreement and based upon the review
required under the Pooling and Servicing Agreement, and except as disclosed to
the Depositor and the Trustee, the Servicer has fulfilled its obligations under
the Pooling and Servicing Agreement; and
5. I have disclosed to the Servicer's certified public accountants and
the Depositor all significant deficiencies relating to the Servicer's compliance
with the minimum servicing standards in accordance with a review conducted in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
similar standard as set forth in the Pooling and Servicing Agreement.
N-3-1
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated September 1, 2002
(the "Pooling and Servicing Agreement"), among the Depositor, Xxxxxx Loan
Servicing L.P. as servicer and Deutsche Bank National Trust Company as trustee.
XXXXXX LOAN SERVICING L.P.
By:____________________________
Name:
Title:
Date:
N-3-2
SCHEDULE I
PREPAYMENT CHARGE SCHEDULE
