EXHIBIT 4.1
LONG BEACH SECURITIES CORP.,
Depositor
LONG BEACH MORTGAGE COMPANY,
Master Servicer
FEDERAL NATIONAL MORTGAGE ASSOCIATION,
Guarantor (with respect to the Class I-A Certificates
and the Class I-S1 Certificates)
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 2002
______________________________
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates, Series 2002-4
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS...........................................................................................13
Section 1.01 Defined Terms...............................................................................13
Section 1.02 Accounting..................................................................................75
Section 1.03 Allocation of Certain Interest Shortfalls...................................................75
Section 1.04 Rights of the NIMS Insurer, the Certificate Insurer and the Guarantor.......................77
Section 1.05 Determination of Material Adverse Effect....................................................79
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES.......................................79
Section 2.01 Conveyance of Mortgage Loans................................................................79
Section 2.02 Acceptance of REMIC 1 by the Trustee........................................................82
Section 2.03 Cure, Repurchase or Substitution of Mortgage Loans by the Seller; Remedies
for Breaches by Depositor or Master Servicer; Remedies for Breaches
Relating to Prepayment Charges..............................................................83
Section 2.04 Representations, Warranties and Covenants of the Master Servicer............................86
Section 2.05 Representations and Warranties of the Depositor.............................................89
Section 2.06 Issuance of Certificates....................................................................90
Section 2.07 Reserved....................................................................................91
Section 2.08 Conveyance of REMIC Regular Interests and Acceptance of REMIC 1 by the
Trustee; Issuance of Certificates...........................................................91
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS...................................................93
Section 3.01 Master Servicer to Act as Master Servicer...................................................93
Section 3.02 Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers......................95
Section 3.03 Successor Sub-Servicers.....................................................................96
Section 3.04 Liability of the Master Servicer............................................................96
Section 3.05 No Contractual Relationship Between Sub-Servicers and the NIMS Insurer, the
Certificate Insurer, the Guarantor, the Trustee or Certificateholders.......................97
Section 3.06 Assumption or Termination of Sub-Servicing Agreements by Trustee............................97
Section 3.07 Collection of Certain Mortgage Loan Payments................................................97
Section 3.08 Sub-Servicing Accounts......................................................................99
Section 3.09 Collection of Taxes, Assessments and Similar Items; Servicing Accounts......................99
Section 3.10 Collection Account and Distribution Account................................................100
Section 3.11 Withdrawals from the Collection Account and Distribution Account...........................102
Section 3.12 Investment of Funds in the Collection Account and the Distribution Account.................104
Section 3.13 Agreement to Appoint a Special Servicer....................................................105
i
Section 3.14 Maintenance of Hazard Insurance and Errors and Omissions and Fidelity
Coverage...................................................................................107
Section 3.15 Enforcement of Due-On-Sale Clauses; Assumption Agreements..................................109
Section 3.16 Realization Upon Defaulted Mortgage Loans..................................................110
Section 3.17 Trustee to Cooperate; Release of Mortgage Files............................................113
Section 3.18 Servicing Compensation.....................................................................114
Section 3.19 Reports to the Trustee; Collection Account Statements......................................114
Section 3.20 Statement as to Compliance.................................................................115
Section 3.21 Independent Public Accountants' Servicing Report...........................................115
Section 3.22 Access to Certain Documentation............................................................116
Section 3.23 Title, Management and Disposition of REO Property..........................................116
Section 3.24 Obligations of the Master Servicer in Respect of Prepayment Interest
Shortfalls.................................................................................119
Section 3.25 Obligations of the Master Servicer in Respect of Mortgage Rates and Monthly
Payments..................................................................................120
Section 3.26 Reserve Funds..............................................................................120
Section 3.27 Advance Facility...........................................................................122
Section 3.28 Policy; Claims Under the PMI Policy........................................................123
Section 3.29 Group I Mortgage Loans Subject to Relief Act...............................................123
Section 3.30 Cap Agreements.............................................................................123
Section 3.31 Payments on the Certificate Insurance Policy...............................................124
ARTICLE IV FLOW OF FUNDS........................................................................................128
Section 4.01 Distributions..............................................................................128
Section 4.02 Preference Claims..........................................................................136
Section 4.03 Statements.................................................................................137
Section 4.04 Remittance Reports; Advances...............................................................141
Section 4.05 Distributions on the REMIC Regular Interests...............................................143
Section 4.06 Allocation of Realized Losses..............................................................147
Section 4.07 Compliance with Withholding Requirements...................................................149
Section 4.08 Commission Reporting.......................................................................149
Section 4.09 The Guaranty...............................................................................150
Section 4.10 Replacement Credit Enhancement.............................................................150
ARTICLE V THE CERTIFICATES......................................................................................151
Section 5.01 The Certificates...........................................................................151
Section 5.02 Registration of Transfer and Exchange of Certificates......................................153
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..........................................157
Section 5.04 Persons Deemed Owners......................................................................157
ARTICLE VI THE MASTER SERVICER AND THE DEPOSITOR................................................................158
Section 6.01 Liability of the Master Servicer and the Depositor.........................................158
Section 6.02 Merger or Consolidation of the Depositor or the Master Servicer............................158
ii
Section 6.03 Limitation on Liability of the Depositor, the Master Servicer and Others...................158
Section 6.04 Limitation on Resignation of Master Servicer...............................................160
Section 6.05 Rights of the Depositor, the NIMS Insurer, the Certificate Insurer, the
Guarantor and the Trustee in Respect of the Master Servicer................................160
ARTICLE VII DEFAULT.............................................................................................161
Section 7.01 Master Servicer Events of Default..........................................................161
Section 7.02 Trustee to Act; Appointment of Successor...................................................163
Section 7.03 Notification to Certificateholders.........................................................165
Section 7.04 Waiver of Master Servicer Events of Default................................................166
ARTICLE VIII THE TRUSTEE........................................................................................166
Section 8.01 Duties of Trustee..........................................................................166
Section 8.02 Certain Matters Affecting the Trustee......................................................167
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans......................................169
Section 8.04 Trustee May Own Certificates...............................................................169
Section 8.05 Trustee's Fees and Expenses................................................................169
Section 8.06 Eligibility Requirements for Trustee.......................................................170
Section 8.07 Resignation or Removal of Trustee..........................................................170
Section 8.08 Successor Trustee..........................................................................171
Section 8.09 Merger or Consolidation of Trustee.........................................................172
Section 8.10 Appointment of Co-Trustee or Separate Trustee..............................................172
Section 8.11 Appointment of Custodians..................................................................173
Section 8.12 Appointment of Office or Agency............................................................174
Section 8.13 Representations and Warranties of the Trustee..............................................174
Section 8.14 Cap Agreement..............................................................................175
ARTICLE IX TERMINATION..........................................................................................175
Section 9.01 Termination Upon Purchase or Liquidation of All Mortgage Loans.............................175
Section 9.02 Additional Termination Requirements........................................................178
ARTICLE X REMIC PROVISIONS......................................................................................178
Section 10.01 REMIC Administration.......................................................................178
Section 10.02 Prohibited Transactions and Activities.....................................................182
Section 10.03 Trustee, Master Servicer and Depositor Indemnification.....................................182
ARTICLE XI MISCELLANEOUS PROVISIONS.............................................................................183
Section 11.01 Amendment..................................................................................183
Section 11.02 Recordation of Agreement; Counterparts.....................................................184
Section 11.03 Limitation on Rights of Certificateholders.................................................184
Section 11.04 Governing Law; Jurisdiction................................................................185
Section 11.05 Notices....................................................................................185
Section 11.06 Severability of Provisions.................................................................186
iii
Section 11.07 Notice to the Rating Agencies, the NIMS Insurer, the Certificate Insurer
and the Guarantor..........................................................................186
Section 11.08 Article and Section References.............................................................187
Section 11.09 Third-Party Beneficiaries..................................................................187
Section 11.10 Grant of Security Interest.................................................................187
Section 11.11 Non-Petition...............................................................................188
iv
Exhibits
Exhibit A-1 Form of Class I-A Certificates
Exhibit A-2 Form of Class II-A Certificates
Exhibit A-3 Form of Class I-S1 Certificates
Exhibit A-4 Form of Class I-S2 Certificates
Exhibit A-5 Form of Class II-S1 Certificates
Exhibit A-6 Form of Class II-S2 Certificates
Exhibit A-7 Form of Class I-C Certificates
Exhibit A-8 Form of Class II-C Certificates
Exhibit A-9 Form of Class I-P Certificates
Exhibit A-10 Form of Class II-P Certificates
Exhibit A-11 Form of Class R Certificates
Exhibit A-12 Form of Class R-CX Certificates
Exhibit A-13 Form of Class R-PX Certificates
Exhibit B-1 Form of Group I Cap Agreement
Exhibit B-2 Form of Group II Cap Agreement
Exhibit C Form of Mortgage Loan Purchase Agreement
Exhibit D Mortgage Loan Schedule
Exhibit E-1 Request for Release (for Trustee/Custodian)
Exhibit E-2 Request for Release (Certificate - Mortgage Loan Paid in Full)
Exhibit F-1 Form of Trustee's Initial Certification
Exhibit F-2 Form of Trustee's Final Certification
Exhibit G Relief Act Forms
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of ERISA Representation
Exhibit J Form of Investment Letter
Exhibit K Form of Class R Certificate, Class R-CX Certificate Transfer Affidavit and Class R-PX
Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M Certificate Insurance Policy
Schedules
Schedule I Prepayment Charge Schedule
Schedule II Cap Premium Schedules
Schedule III [Reserved]
Schedule IV PMI Mortgage Loan Schedule (Not applicable)
v
This POOLING AND SERVICING AGREEMENT is dated as of October 1, 2002 (the
"Agreement"), among LONG BEACH SECURITIES CORP., as depositor (the "Depositor"),
LONG BEACH MORTGAGE COMPANY, as master servicer (the "Master Servicer"), FEDERAL
NATIONAL MORTGAGE ASSOCIATION, as Guarantor of the Class I-A Certificates and
the Class I-S1 Certificates (the "Guarantor") 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 thirteen classes of
certificates, designated as (i) the Class I-A Certificates, (ii) the Class II-A
Certificates, (iii) the Class I-S1 Certificates, (iv) the Class II-S1
Certificates, (v) the Class I-S2 Certificates, (vi) the Class II-S2
Certificates, (vii) the Class I-C Certificates, (viii) the Class II-C
Certificates, (ix) the Class I-P Certificates, (x) the Class II-P Certificates,
(xi) the Class R Certificates, (xii) the Class R-CX Certificates and (xiii)
Class R-PX Certificate.
1
REMIC 1
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement (exclusive of the Reserve Funds and the
Master Servicer Prepayment Charge Payment Amounts) as 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 Rate
REMIC 1 Initial Uncertificated Change Assumed Final
Designation Pass-Through Rate Principal Balance Date(3) Maturity Date(1)
----------- ----------------- ---------------------- -------------- --------------------
LT1A-A Variable(2) $499,306,184.50 N/A November 2032
LT1A-B Variable(2) 10,493,919.64 N/A November 2032
LT1IS1-1 Variable(2) 42,697,000.00 April 2005 November 2032
LT1IS1-2 Variable(2) 1,133,000.00 March 2005 November 2032
LT1IS1-3 Variable(2) 1,163,000.00 February 2005 November 2032
LT1IS1-4 Variable(2) 1,193,000.00 January 2005 November 2032
LT1IS1-5 Variable(2) 1,225,000.00 December 2004 November 2032
LT1IS1-6 Variable(2) 1,257,000.00 November 2004 November 2032
LT1IS1-7 Variable(2) 1,290,000.00 October 2004 November 2032
LT1IS1-8 Variable(2) 1,325,000.00 September 2004 November 2032
LT1IS1-9 Variable(2) 1,359,000.00 August 2004 November 2032
LT1IS1-10 Variable(2) 1,395,000.00 July 2004 November 2032
LT1IS1-11 Variable(2) 1,432,000.00 June 2004 November 2032
LT1IS1-12 Variable(2) 1,470,000.00 May 2004 November 2032
LT1IS1-13 Variable(2) 1,509,000.00 April 2004 November 2032
LT1IS1-14 Variable(2) 1,548,000.00 March 2004 November 2032
LT1IS1-15 Variable(2) 1,589,000.00 February 2004 November 2032
LT1IS1-16 Variable(2) 1,631,000.00 January 2004 November 2032
LT1IS1-17 Variable(2) 1,675,000.00 December 2003 November 2032
LT1IS1-18 Variable(2) 1,718,000.00 November 2003 November 2032
LT1IS1-19 Variable(2) 1,764,000.00 October 2003 November 2032
LT1IS1-20 Variable(2) 1,810,000.00 September 2003 November 2032
LT1IS1-21 Variable(2) 1,844,000.00 August 2003 November 2032
LT1IS1-22 Variable(2) 1,873,000.00 July 2003 November 2032
LT1IS1-23 Variable(2) 1,901,000.00 June 2003 November 2032
LT1IS1-24 Variable(2) 1,930,000.00 May 2003 November 2032
LT1IS1-25 Variable(2) 1,960,000.00 April 2003 November 2032
LT1IS1-26 Variable(2) 1,990,000.00 March 2003 November 2032
2
Uncertificated Rate
REMIC 1 Initial Uncertificated Change Assumed Final
Designation Pass-Through Rate Principal Balance Date(3) Maturity Date(1)
----------- ----------------- ---------------------- -------------- ------------------
LT1IS1-27 Variable(2) 2,022,000.00 February 2003 November 2032
LT1IS1-28 Variable(2) 2,053,000.00 January 2003 November 2032
LT1IS1-29 Variable(2) 2,087,000.00 December 2002 November 2032
LT1IS1-30 Variable(2) 2,122,000.00 November 2002 November 2032
LT1A-P Variable(2) 100.00 N/A November 2032
LT1B-A Variable(2) 313,877,351.40 N/A November 2032
LT1B-B Variable(2) 6,310,694.27 N/A November 2032
LT1IIS1-1 Variable(2) 38,403,000.00 April 2005 November 2032
LT1IIS1-2 Variable(2) 1,013,000.00 March 2005 November 2032
LT1IIS1-3 Variable(2) 1,040,000.00 February 2005 November 2032
LT1IIS1-4 Variable(2) 1,067,000.00 January 2005 November 2032
LT1IIS1-5 Variable(2) 1,095,000.00 December 2004 November 2032
LT1IIS1-6 Variable(2) 1,123,000.00 November 2004 November 2032
LT1IIS1-7 Variable(2) 1,153,000.00 October 2004 November 2032
LT1IIS1-8 Variable(2) 1,183,000.00 September 2004 November 2032
LT1IIS1-9 Variable(2) 1,214,000.00 August 2004 November 2032
LT1IIS1-10 Variable(2) 1,246,000.00 July 2004 November 2032
LT1IIS1-11 Variable(2) 1,279,000.00 June 2004 November 2032
LT1IIS1-12 Variable(2) 1,312,000.00 May 2004 November 2032
LT1IIS1-13 Variable(2) 1,346,000.00 April 2004 November 2032
LT1IIS1-14 Variable(2) 1,382,000.00 March 2004 November 2032
LT1IIS1-15 Variable(2) 1,417,000.00 February 2004 November 2032
LT1IIS1-16 Variable(2) 1,455,000.00 January 2004 November 2032
LT1IIS1-17 Variable(2) 1,493,000.00 December 2003 November 2032
LT1IIS1-18 Variable(2) 1,533,000.00 November 2003 November 2032
LT1IIS1-19 Variable(2) 1,572,000.00 October 2003 November 2032
LT1IIS1-20 Variable(2) 1,613,000.00 September 2003 November 2032
LT1IIS1-21 Variable(2) 1,642,000.00 August 2003 November 2032
LT1IIS1-22 Variable(2) 1,657,000.00 July 2003 November 2032
LT1IIS1-23 Variable(2) 1,671,000.00 June 2003 November 2032
LT1IIS1-24 Variable(2) 1,686,000.00 May 2003 November 2032
LT1IIS1-25 Variable(2) 1,701,000.00 April 2003 November 2032
LT1IIS1-26 Variable(2) 1,717,000.00 March 2003 November 2032
LT1IIS1-27 Variable(2) 1,733,000.00 February 2003 November 2032
LT1IIS1-28 Variable(2) 1,749,000.00 January 2003 November 2032
LT1IIS1-29 Variable(2) 1,767,000.00 December 2002 November 2032
LT1IIS1-30 Variable(2) 1,785,000.00 November 2002 November 2032
LT1B-P Variable(2) 100.00 N/A November 2032
________________________
1 Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month 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 1 Regular Interest.
2 Calculated in accordance with the definition of "Uncertificated REMIC 1
Pass-Through Rate" herein.
3
3 The rates for the REMIC 1 Regular Interests will not change. The "Rate
Change Date" listed here is solely for the purpose of calculating weighted
average rates for higher-tier REMIC interests.
4
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 irrevocably sets forth the designation, the Uncertificated REMIC
2 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 2 Regular Interests. None
of the REMIC 2 Regular Interests will be certificated.
Uncertificated
REMIC 2
Pass-Through Initial Uncertificated Rate Change Assumed Final
Designation Rate Principal Balance Date Maturity Date(1)
----------- ----------------- ---------------------- -------------- ------------------
LT2A-A Variable(2) $563,779,104.14 N/A November 2032
LT2IS2-1 Variable(2) 26,989,000.00 April 2005(7) November 2032
LT2IS2-2 Variable(2) 8,997,000.00 October 2004(7) November 2032
LT2IS1-1 Variable(3) N/A(5) April 2005 November 2032
LT2IS1-2 Variable(3) N/A(5) March 2005 November 2032
LT2IS1-3 Variable(3) N/A(5) February 2005 November 2032
LT2IS1-4 Variable(3) N/A(5) January 2005 November 2032
LT2IS1-5 Variable(3) N/A(5) December 2004 November 2032
LT2IS1-6 Variable(3) N/A(5) November 2004 November 2032
LT2IS1-7 Variable(3) N/A(5) October 2004 November 2032
LT2IS1-8 Variable(3) N/A(5) September 2004 November 2032
LT2IS1-9 Variable(3) N/A(5) August 2004 November 2032
LT2IS1-10 Variable(3) N/A(5) July 2004 November 2032
LT2IS1-11 Variable(3) N/A(5) June 2004 November 2032
LT2IS1-12 Variable(3) N/A(5) May 2004 November 2032
LT2IS1-13 Variable(3) N/A(5) April 2004 November 2032
LT2IS1-14 Variable(3) N/A(5) March 2004 November 2032
LT2IS1-15 Variable(3) N/A(5) February 2004 November 2032
LT2IS1-16 Variable(3) N/A(5) January 2004 November 2032
LT2IS1-17 Variable(3) N/A(5) December 2003 November 2032
LT2IS1-18 Variable(3) N/A(5) November 2003 November 2032
LT2IS1-19 Variable(3) N/A(5) October 2003 November 2032
LT2IS1-20 Variable(3) N/A(5) September 2003 November 2032
LT2IS1-21 Variable(3) N/A(5) August 2003 November 2032
LT2IS1-22 Variable(3) N/A(5) July 2003 November 2032
LT2IS1-23 Variable(3) N/A(5) June 2003 November 2032
LT2IS1-24 Variable(3) N/A(5) May 2003 November 2032
LT2IS1-25 Variable(3) N/A(5) April 2003 November 2032
LT2IS1-26 Variable(3) N/A(5) March 2003 November 2032
LT2IS1-27 Variable(3) N/A(5) February 2003 November 2032
LT2IS1-28 Variable(3) N/A(5) January 2003 November 2032
5
Uncertificated
REMIC 2
Pass-Through Initial Uncertificated Rate Change Assumed Final
Designation Rate Principal Balance Date Maturity Date(1)
----------- ----------------- ---------------------- -------------- ------------------
LT2IS1-29 Variable(3) N/A(5) December 2002 November 2032
LT2IS1-30 Variable(3) N/A(5) November 2002 November 2032
LT2A-P Variable(2) 100.00 N/A November 2032
LT2B-A Variable(2) 376,221,045.67 N/A November 2032
LT2IIS2-1 Variable(2) 18,011,000.00 April 2005(7) November 2032
LT2IIS2-2 Variable(4) 6,003,000.00 October 2004(7) November 2032
LT2IIS1-1 Variable(4) N/A(6) April 2005 November 2032
LT2IIS1-2 Variable(4) N/A(6) March 2005 November 2032
LT2IIS1-3 Variable(4) N/A(6) February 2005 November 2032
LT2IIS1-4 Variable(4) N/A(6) January 2005 November 2032
LT2IIS1-5 Variable(4) N/A(6) December 2004 November 2032
LT2IIS1-6 Variable(4) N/A(6) November 2004 November 2032
LT2IIS1-7 Variable(4) N/A(6) October 2004 November 2032
LT2IIS1-8 Variable(4) N/A(6) September 2004 November 2032
LT2IIS1-9 Variable(4) N/A(6) August 2004 November 2032
LT2IIS1-10 Variable(4) N/A(6) July 2004 November 2032
LT2IIS1-11 Variable(4) N/A(6) June 2004 November 2032
LT2IIS1-12 Variable(4) N/A(6) May 2004 November 2032
LT2IIS1-13 Variable(4) N/A(6) April 2004 November 2032
LT2IIS1-14 Variable(4) N/A(6) March 2004 November 2032
LT2IIS1-15 Variable(4) N/A(6) February 2004 November 2032
LT2IIS1-16 Variable(4) N/A(6) January 2004 November 2032
LT2IIS1-17 Variable(4) N/A(6) December 2003 November 2032
LT2IIS1-18 Variable(4) N/A(6) November 2003 November 2032
LT2IIS1-19 Variable(4) N/A(6) October 2003 November 2032
LT2IIS1-20 Variable(4) N/A(6) September 2003 November 2032
LT2IIS1-21 Variable(4) N/A(6) August 2003 November 2032
LT2IIS1-22 Variable(4) N/A(6) July 2003 November 2032
LT2IIS1-23 Variable(4) N/A(6) June 2003 November 2032
LT2IIS1-24 Variable(4) N/A(6) May 2003 November 2032
LT2IIS1-25 Variable(4) N/A(6) April 2003 November 2032
LT2IIS1-26 Variable(4) N/A(6) March 2003 November 2032
LT2IIS1-27 Variable(4) N/A(6) February 2003 November 2032
LT2IIS1-28 Variable(4) N/A(6) January 2003 November 2032
LT2IIS1-29 Variable(4) N/A(6) December 2002 November 2032
LT2IIS1-30 Variable(4) N/A(6) November 2002 November 2032
LT2B-P Variable(2) 100.00 N/A November 2032
___________________
1 Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month 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 "Uncertificated REMIC 2
Pass-Through Rate" herein.
3 Calculated in accordance with the definition of "Uncertificated REMIC 2
Pass-Through Rate" herein.
6
4 Calculated in accordance with the definition of "Uncertificated REMIC 2
Pass-Through Rate" herein.
5 The REMIC 2 IS1 Interests will not have Uncertificated Principal Balances
but will accrue interest on their respective Uncertificated Notional Amounts
from time to time which, in each case, will equal the Uncertificated Principal
Balance of the REMIC 1 IS1 Interest with the same numerical designation.
6 The REMIC 2 IIS1 Interests will not have Uncertificated Principal
Balances but will accrue interest on their respective Uncertificated Notional
Amounts from time to time which, in each case, will equal the Uncertificated
Principal Balance of the REMIC 1 IIS1 Interest with the same numerical
designation.
7 The REMIC 2 IS2 Interests and REMIC 2 IIS2 Interests will not change
rates. The "Rate Change Date" listed for these interests is solely for the
purpose of calculating weighted average rates for higher-tier REMIC interests.
7
REMIC 3
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the REMIC 2 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 3". The Class R-3 Interest represents the sole class of
"residual interests" in REMIC 3 for purposes of the REMIC Provisions. The
following table irrevocably sets forth the designation, the Uncertificated REMIC
3 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 3 Regular Interests. None
of the REMIC 3 Regular Interests will be certificated.
Uncertificated
REMIC 3 Rate
Pass-Through Initial Uncertificated Change Assumed Final
Designation Rate Principal Balance Date Maturity Date(1)
----------- ----------------- ---------------------- -------------- ------------------
LT3A-1 Variable(2) $587,769,802.06 N/A November 2032
LT3B-1 Variable(2) 5,997,650.00 N/A November 2032
LT3C-1 Variable(2) 5,997,652.08 N/A November 2032
LT3IS2-1 Variable(3) N/A(7) April 2005 November 2032
LT3IS2-2 Variable(3) N/A(7) October 2004 November 2032
LT3IS1 Variable(4) N/A(8) N/A November 2032
LT3A-2 Variable(2) 392,230,344.76 N/A November 2032
LT3B-2 Variable(2) 4,002,350.00 N/A November 2032
LT3C-2 Variable(2) 4,002,350.91 N/A November 2032
LT3IIS2-1 Variable(5) N/A(9) April 2005 November 2032
LT3IIS2-2 Variable(5) N/A(9) October 2004 November 2032
LT3IIS1 Variable(6) N/A10 N/A November 2032
LT3A-P Variable(2) 100.00 N/A November 2032
LT3B-P Variable(2) 100.00 N/A November 2032
___________________
1 Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month 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 3 Regular Interest.
2 Calculated in accordance with the definition of "Uncertificated REMIC 3
Pass-Through Rate" herein.
3 Each REMIC 3 IS2 Interest will have a Pass-Through Rate of 4.25% per
annum for each Distribution Date Starting in November 2002 and ending with the
Rate Change Date for such Regular Interest, and 0.00% per annum thereafter.
4 REMIC 3 Regular Interest LT3IS1 will have a Pass-Through Rate of 5.25%
per annum for each Distribution Date starting November 2002 and ending April
2005. For federal income tax purposes, REMIC 3 Regular Interest LT3IS1 will not
have a Pass-Through Rate but will be entitled to receive all of the interest
paid to REMIC 3 on the REMIC 2 IS1 Interests.
5 Each REMIC 3 IIS2 Interest will have a Pass-Through Rate of 4.25% per
annum for each Distribution Date Starting in November 2002 and ending with the
Rate Change Date for such Regular Interest, and 0.00% per annum thereafter.
6 REMIC 3 Regular Interest LT3IIS1 will have a Pass-Through Rate of 5.25%
per annum for each Distribution Date starting November 2002 and ending April
2005. For federal income tax purposes, REMIC 3 Regular Interest LT3IIS1 will not
have a Pass-Through Rate but will be entitled to receive all of the interest
paid to REMIC 3 on the REMIC 2 IIS1 Interests.
8
7 The REMIC 3 IS2 Interests will not have Uncertificated Principal
Balances, but will accrue interest on their respective Uncertificated Notional
Amounts from time to time which, in each case, will equal the Uncertificated
Principal Balance of the REMIC 2 IS2 Interest with the same numerical
designation.
8 REMIC 3 Regular Interest LT3IS1 will not have an Uncertificated Principal
Balance, but will accrue interest on its Uncertificated Notional Amount from
time to time which will at all times be equal to sum of the Uncertificated
Notional Amounts of the REMIC 2 IS1 Interests.
9 The REMIC 3 IIS2 Interests will not have Uncertificated Principal
Balances, but will accrue interest on their respective Uncertificated Notional
Amounts from time to time which, in each case, will equal the Uncertificated
Principal Balance of the REMIC 2 IIS2 Interest with the same numerical
designation.
10 REMIC 3 Regular Interest LT3IIS1 will not have an Uncertificated
Principal Balance, but will accrue interest on its Uncertificated Notional
Amount from time to time which will at all times be equal to sum of the
Uncertificated Notional Amounts of the REMIC 2 IIS1 Interests.
9
REMIC 4
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the REMIC 3 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 4." The Class R-4 Interest represents the sole class of
"residual interests" in REMIC 4 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 4 and each class of uncertificated "regular interests" in REMIC 4:
Original Class Certificate Pass-Through Assumed Final
Class Designation Principal Balance Rate Maturity Date(1)
------------------ ------------------------- -------------- ------------------
Class I-A $599,765,000.00 Variable(2) November 2032
Class II-A 400,235,000.00 Variable(2) November 2032
Class I-S1 N/A(3) N/A(3) November 2032
Class II-S1 N/A(4) N/A(4) November 2032
Class I-S2 N/A(5) N/A(5) November 2032
Class II-S2 N/A(6) N/A(6) November 2032
LT4-IC 104.14(7) Variable(2) November 2032
LT4-IIC 45.67(8) Variable(2) November 2032
LT4-IP 100.00 N/A(9) November 2032
LT4-IIP 100.00 N/A(9) November 2032
___________________
1 Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity date for
the Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each Class of Certificates or uncertificated
interests that represents one or more of the "regular interests" in REMIC 4.
2 Calculated in accordance with the definition of "Pass-Through Rate"
herein.
3 The Class I-S1 Certificates will receive all amounts distributed on REMIC
3 Regular Interest LT3IS1.
4 The Class II-S1 Certificates will receive all amounts distributed on
REMIC 3 Regular Interest LT3IIS1.
5 The Class I-S2 Certificates will receive all amounts distributed on REMIC
3 IS2 Interests.
6 The Class II-S2 Certificates will receive all amounts distributed to the
REMIC 3 IIS2 Interests.
7 REMIC 4 Regular Interest LT4-IC will accrue interest at its variable
Pass-Through Rate on its Notional Amount outstanding from time to time, which
shall equal the aggregate of the Uncertificated Principal Balances of the REMIC
3 Group I Regular Interests. REMIC 4 Regular Interest LT4-IC will not accrue
interest on its Uncertificated Principal Balance.
8 REMIC 4 Regular Interest LT4-IIC will accrue interest at its variable
Pass-Through Rate on its Notional Amount outstanding from time to time, which
shall equal the aggregate of the Uncertificated Principal Balances of the REMIC
3 Group II Regular Interests. REMIC 4 Regular Interest LT4-IIC will not accrue
interest on its Uncertificated Principal Balance.
9 REMIC 4 Regular Interest LT4-IP and REMIC 4 Regular Interest LT4-IIP will
not accrue interest.
10
REMIC CX
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of REMIC 4 Regular Interest LT4-IC, REMIC 4
Regular Interest LT4-IIC as a REMIC for federal income tax purposes, and such
segregated pool of assets will be designated as "REMIC CX." The Class R-CX
Interest will represent the sole class of "residual interests" in REMIC CX for
purposes of the REMIC Provisions (as defined herein) under federal income tax
law. The following table irrevocably sets forth the designation, the
Pass-Through Rate, Original Class Certificate 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 CX Regular Interests.
Uncertificated REMIC CX Initial Uncertificated Assumed Final
Designation Pass-Through Rate Principal Balance Maturity Date(1)
--------------- ----------------------- ---------------------- ----------------
Class I-C Variable $104.14(2) November 2032
Class II-C Variable 45.67(2) November 2032
_________________________
1 Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month 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 CX Regular Interest.
2 The Class I-C Certificates and Class II-C Certificates will not accrue
interest on their respective Certificate Principal Balances. Instead, the
monthly interest due on the Class I-C Certificates will be 100% of the interest
paid on REMIC 4 Regular Interest LT4-IC. The monthly interest due on the Class
II-C Certificates will be 100% of the interest paid on the REMIC 4 Regular
Interest LT4-IIC.
11
REMIC PX
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of REMIC 4 Regular Interest LT4-IP and
REMIC 4 Regular Interest LT4-IIP as a REMIC for federal income tax purposes, and
such segregated pool of assets will be designated as "REMIC PX." The Class R-PX
Interest will represent the sole class of "residual interests" in REMIC PX for
purposes of the REMIC Provisions (as defined herein) under federal income tax
law. The following table irrevocably sets forth the designation, the
Pass-Through Rate, Original Class Certificate 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 PX Regular Interests.
Uncertificated REMIC PX Initial Uncertificated Assumed Final
Designation Pass-Through Rate Principal Balance Maturity Date(1)
--------------- ----------------------- ---------------------- ----------------
Class I-P N/A(2) $100.00 November 2032
Class II-P N/A(2) 100.00 November 2032
_________________________
1 Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month 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 X Regular Interest.
2 The Class I-P Certificates and the Class II-P Certificates will not
accrue interest.
12
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 shall be made on
the basis of the actual number of days elapsed on the basis of 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 S Certificates, Class C
Certificates, the REMIC 1 Regular Interests, the REMIC 2 Regular Interests,
REMIC 3 Regular Interest LT3IS1, REMIC 3 Regular Interest LT3IIS1, the REMIC 3
IS2 Interests, the REMIC 3 IIS2 Interests, REMIC 4 Regular Interest LT4-IC and
REMIC 4 Regular Interest LT4-IIC, and each Distribution Date, the calendar month
prior to the month of such Distribution Date. With respect to the Class A
Certificates, the remaining REMIC 3 Regular Interests and each Distribution
Date, the period commencing on the immediately preceding Distribution Date (or
in the case of the first such Accrual Period, commencing on the Closing Date)
and ending on the day immediately preceding such Distribution Date.
"Adjustable Rate Mortgage Loan": A Mortgage Loan which provides for an
adjustable Mortgage Rate payable with respect thereto.
"Adjusted Net Maximum Mortgage Rate": With respect to any Mortgage Loan (or
the related REO Property), as of any Distribution Date, a per annum rate of
interest equal to the Maximum Mortgage Rate for such Mortgage Loan (if such
Mortgage Loan is an Adjustable Rate Mortgage Loan) or the Mortgage Rate for such
Mortgage Loan (if such Mortgage Loan is a Fixed Rate Mortgage Loan), in either
such case as of the first day of the month preceding the month in which such
Distribution Date occurs, minus the sum of (i) the Servicing Fee Rate, (ii) the
PMI Insurer Fee Rate, if applicable, and (iii) the Trustee Fee Rate.
13
"Adjusted Net Minimum Mortgage Rate": With respect to any Mortgage Loan (or
the related REO Property), as of any Distribution Date, a per annum rate of
interest equal to the Minimum Mortgage Rate for such Mortgage Loan (if such
Mortgage Loan is an Adjustable Rate Mortgage Loan) or the Mortgage Rate for such
Mortgage Loan (if such Mortgage Loan is a Fixed Rate Mortgage Loan), in either
such case as of the Cut-off Date, minus the sum of (i) the Servicing Fee Rate,
(ii) the PMI Insurer Fee Rate, if applicable, (iii) the Trustee Fee Rate, (iv)
with respect to a Group I Mortgage Loan, the Guaranty Fee Rate and (v) with
respect to a Group I Mortgage Loan, the highest possible Group I Certificate
Insurer Premium Rate, whether or not then in effect, or with respect to a Group
II Mortgage Loan, the highest possible Group II Certificate Insurer Premium Rate
whether or not then in effect.
"Adjusted Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property), as of any Distribution Date, a per annum rate of interest
equal to the Mortgage Rate for such Mortgage Loan as of the first day of the
month preceding the month in which such Distribution Date occurs, minus the sum
of (i) the Servicing Fee Rate, (ii) the PMI Insurer Fee Rate, if applicable, and
(iii) the Trustee Fee Rate.
"Adjustment Date": With respect to each Adjustable Rate Mortgage Loan, each
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.
"Advance": As to any Mortgage Loan or REO Property, any advance made by the
Master Servicer in respect of any Distribution Date pursuant to Section 4.04.
"Advancing Person": As defined in Section 3.27 hereof.
"Adverse REMIC Event": As defined in Section 10.01(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.
"Approved Rating Thresholds": As defined in Section 3.30(b) hereof.
"Assignment": An assignment of Mortgage, notice of transfer or equivalent
instrument, in recordable form (excepting therefrom, if applicable, the mortgage
recordation information which has not been required pursuant to Section 2.01
hereof or returned by the applicable recorder's office), which is sufficient
under the laws of the jurisdiction wherein the related Mortgaged Property is
located to reflect or record the sale of the Mortgage.
"Balloon Mortgage Loan": A Mortgage Loan that provides for a Balloon
Payment.
"Balloon Payment": With respect to any Balloon Mortgage Loan, the payment
of the unamortized principal balance of a Mortgage Loan in a single payment at
the maturity of such Mortgage Loan.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
14
"Bankruptcy Loss": With respect to any Mortgage Loan, a Realized Loss
resulting from a Deficient Valuation or Debt Service Reduction.
"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 Class S1 Certificates shall be Book-Entry
Certificates.
"Book-Entry Custodian": The custodian appointed pursuant to Section
5.01(b).
"Business Day": Any day other than a Saturday, a Sunday or a day on which
the Guarantor or banking or savings institutions in the State of California, the
State of Delaware, the State of Maryland, the State of New York, the State of
Washington, 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.
"Cap Agreements": The Group I Cap Agreement and the Group II Cap Agreement.
"Cap Provider": Bank of America, N.A. or any successor thereto.
"Certificate": Any Regular Certificate or Residual Certificate.
"Certificate Insurance Policy": The Certificate Insurance Policy (No.
CA00345A) dated October 4, 2002, issued by the Certificate Insurer for the
benefit of the Holders of the Insured Certificates, pursuant to which the
Certificate Insurer guarantees payment of Insured Payments. A copy of the
Certificate Insurance Policy is attached hereto as Exhibit M.
"Certificate Insurer": XL Capital Assurance, Inc., a monoline financial
guaranty insurance company incorporated in the State of New York, or any
successor thereto.
"Certificate Insurer Default": The existence and continuance of any of the
following:
(a) the Certificate Insurer fails to make a payment required under the
Certificate Insurance Policy in accordance with its terms;
(b) the Certificate Insurer (i) files any petition or commences any case or
proceeding under any state or federal law relating to insolvency or bankruptcy,
(ii) consents to the entry of any decree or order for relief in an involuntary
case or proceeding under any state or federal bankruptcy or insolvency law,
(iii) makes a general assignment for the benefit of its creditors or (iv) admits
in writing its inability to pay its debts as they come due; or
(c) a court of competent jurisdiction, the New York Department of Insurance
or other competent regulatory agency enters an order, judgment or decree under
any state or federal bankruptcy or insolvency law which has continued in effect
and unstayed for a period of 60 or more consecutive days (i) appointing a
custodian, trustee, agent or receiver for the Certificate Insurer or for all or
any material portion of its property or (ii) authorizing the taking of
possession by a custodian, trustee, agent or receiver of the Certificate Insurer
or the taking of possession of all or any material portion of its property.
15
"Certificate Insurer Deficiency Amount": With respect to the Insured
Certificates and any Distribution Date, the excess, if any, of (A) the sum of
(i) the Monthly Interest Distributable Amount plus any Unpaid Interest Shortfall
Amount for each class of the Insured Certificates, (ii) the Insured Principal
Amount, (iii) the Group I Certificate Insurer Premium, (iv) the Group II
Certificate Insurer Premium and (v) the Guarantor Fee, in each case for such
Distribution Date over (B) the sum of the Group I Available Funds and the Group
II Available Funds for such Distribution Date.
"Certificate Insurer Premiums": The Group I Certificate Insurer Premium and
the Group II Certificate Insurer Premium.
"Certificate Insurer Reimbursement Amounts": The Group I Certificate
Insurer Reimbursement Amount and the Group II Certificate Insurer Reimbursement
Amount.
"Certificate Margin": With respect to the Class I-A Certificates on each
Distribution Date (A) on or prior to the Optional Termination Date, 0.20% per
annum and (B) after the Optional Termination Date, 0.40% per annum. With respect
to the Class II-A Certificates on each Distribution Date (A) on or prior to the
Optional Termination Date, 0.46% per annum and (B) after the Optional
Termination Date, 0.92% per annum.
"Certificate Owner": With respect to each Book-Entry Certificate, any
beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class A Certificates
or Class P Certificates immediately prior to any Distribution Date, an amount
equal to the Initial Certificate Principal Balance thereof reduced by the sum of
all amounts actually distributed in respect of principal of such Class. With
respect to any Class I-C Certificates as of any date of determination, an amount
equal to the Uncertificated Principal Balance of REMIC 4 Regular Interest
LT4-IC. With respect to any Class II-C Certificates as of any date of
determination, an amount equal to the Uncertificated Principal Balance of REMIC
4 Regular Interest LT4-IIC. The Class S Certificates and the Residual
Certificates will not have a Certificate Principal Balance.
"Certificate Register": The register established and maintained pursuant to
Section 5.02 hereof.
"Certificateholder" or "Holder": The Person in whose name a Certificate is
registered in the Certificate Register, except that a Disqualified Organization
or a Non-United States Person shall not be a Holder of a Residual Certificate
for any purposes hereof and, solely for the purpose of giving any consent,
direction or taking any other action pursuant to this Agreement, any Certificate
registered in the name of the Depositor or the Master 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 consent, direction or other
16
action has been obtained, except as otherwise provided in Section 11.01. The
Trustee, the Certificate Insurer, the NIMS Insurer and the Guarantor may
conclusively rely upon a certificate of the Depositor or the Master 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, the Certificate Insurer, the NIMS
Insurer and the Guarantor shall be required to recognize as a "Holder" or
"Certificateholder" only the Person in whose name a Certificate is registered in
the Certificate Register.
"Certificates Controlling Person": As of any date of determination: (i) the
Certificate Insurer, so long as (A) the Insured Certificates are outstanding or
any amounts are owed to the Certificate Insurer under this Agreement or the
Insurance Agreement and (B) no Certificate Insurer Default has occurred and is
continuing; (ii) the Guarantor, so long as (A) the Guaranteed Certificates are
outstanding or any amounts are owed to the Guarantor under this Agreement, (B)
no event of default has occurred and is continuing under the Guaranty and (C)
the Certificate Insurer is not the Certificates Controlling Person under clause
(i) above; and (iii) none, so long as neither the Certificate Insurer nor the
Guarantor is the Certificates Controlling Person pursuant to clause (i) or (ii)
above.
"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 I-A Certificate": Any one of the Class I-A Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-1 executed, authenticated and delivered by the Trustee, representing
the rights to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 4.
"Class I-C Certificate": Any one of the Class I-C Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-7, executed, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC CX.
"Class I-P Certificate": Any one of the Class I-P Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-9, executed, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC PX.
"Class I-S1 Certificate": Any one of the Class I-S1 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-3, executed, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 4.
"Class I-S2 Cap Rate": For any Distribution Date, a per annum rate equal to
the excess, if any, of (i) the weighted average of the Adjusted Net Mortgage
Rates of the Group I Mortgage Loans, weighted on the basis of the Stated
Principal Balances thereof as of the Due Date in the month preceding the month
of such Distribution Date, over (ii) the percentage equivalent of a fraction,
(1) the numerator of which is the sum of (A) the Group I Certificate Insurer
Premium, (B) the Guaranty Fee and (C) the product of (I) the Pass-Through Rate
for the Class I-S1 Certificates for such Distribution Date and (II) the Notional
17
Amount with respect to the Class I-S1 Certificates immediately prior to such
Distribution Date, and (2) the denominator of which is the aggregate Stated
Principal Balance of the Group I Mortgage Loans as of the Due Date in the month
preceding the month of such Distribution Date.
"Class I-S2 Certificate": Any one of the Class I-S2 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-4, executed, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 4.
"Class I-S Certificates": The Class I-S1 Certificates and the Class I-S2
Certificates.
"Class II-A Certificates": Any one of the Class II-A Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-2 executed, authenticated and delivered by the Trustee, representing
the rights to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 4.
"Class II-C Certificate": Any one of the Class II-C Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-8, executed, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC CX.
"Class II-P Certificate": Any one of the Class II-P Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-10, executed, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC PX.
"Class II-S1 Certificate": Any one of the Class II-S1 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-5, executed, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 4.
"Class II-S2 Cap Rate": For any Distribution Date, a per annum rate equal
to the excess, if any, of (i) the weighted average of the Adjusted Net Mortgage
Rates of the Group II Mortgage Loans, weighted on the basis of the Stated
Principal Balances thereof as of the Due Date in the month preceding the month
of such Distribution Date, over (ii) the percentage equivalent of a fraction,
(1) the numerator of which is the sum of (A) the Group II Certificate Insurer
Premium and (B) the product of (I) the Pass-Through Rate for the Class II-S1
Certificates for such Distribution Date and (II) the Notional Amount with
respect to the Class II-S1 Certificates immediately prior to such Distribution
Date, and (2) the denominator of which is the aggregate Stated Principal Balance
of the Group II Mortgage Loans as of the Due Date in the month preceding the
month of such Distribution Date.
"Class II-S2 Certificate": Any one of the Class II-S2 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-6, executed, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 4.
18
"Class II-S Certificates": The Class II-S1 Certificates and the Class II-S2
Certificates.
"Class A Certificates": The Class I-A Certificates and the Class II-A
Certificates.
"Class C Certificates": The Class I-C Certificates and the Class II-C
Certificates.
"Class Factors": The Trustee will determine a Class Factor (carried to
eight decimal places) for each Class of Regular Certificates in connection with
each Distribution Date. When the Class Factor is multiplied by the Original
Class Certificate Principal Balance (or Original Class Notional Amount) of a
Certificate of that Class, the product will equal the Certificate Principal
Balance (or Notional Amount) of such Certificate (after giving effect to the
distribution to Certificateholders on such Distribution Date of, to the extent
part of the Group I Available Funds or the Group II Available Funds, as
applicable, for such Distribution Date, 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).
"Class P Certificates": The Class I-P Certificates and the Class II-P
Certificates.
"Class R Certificate": Any one of the Class R Certificates as designated on
the face thereof substantially in the form annexed hereto as Exhibit A-11,
executed, authenticated and delivered by the Trustee, evidencing the ownership
of the Class R-1 Interest, the Class R-2 Interest, the Class R-3 Interest and
the Class R-4 Interest.
"Class R-1 Interest": The Residual Interest in REMIC 1.
"Class R-2 Interest": The Residual Interest in REMIC 2.
"Class R-3 Interest": The Residual Interest in REMIC 3.
"Class R-4 Interest": The Residual Interest in REMIC 4.
"Class R-CX Certificate": Any one of the Class R-CX Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-12, executed, authenticated and delivered by the Trustee, evidencing
the ownership of the Class R-CX Interest.
"Class R-CX Interest": The Residual Interest in REMIC CX.
"Class R-PX Certificate": Any one of the Class R-PX Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-13, executed, authenticated and delivered by the Trustee, evidencing
the ownership of the Class R-PX Interest.
"Class R-PX Interest": The Residual Interest in REMIC PX.
"Class S Certificates": The Class S1 Certificates and the Class S2
Certificates.
"Class S1 Certificates": The Class I-S1 Certificates and the Class II-S1
Certificates.
"Class S2 Certificates": The Class I-S2 Certificates and the Class II-S2
Certificates.
19
"Close of Business": As used herein, with respect to any Business Day, 5:00
p.m. (New York time).
"Closing Date": October 4, 2002.
"Closing Date Mortgage Loans": The Group I Closing Date Mortgage Loans and
the Group II Closing Date Mortgage Loans.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The account or accounts created and maintained by the
Master Servicer pursuant to Section 3.10(a), which shall be entitled "Deutsche
Bank National Trust Company, in trust for registered Holders of Long Beach
Mortgage Loan Trust 2002-4, Asset-Backed Certificates, Series 2002-4," which
must at all times be an Eligible Account.
"Commission": The Securities and Exchange Commission.
"Compensating Interest": As defined in Section 3.24.
"Controlling Insurer": As of any date of determination: (i) the NIMS
Insurer, so long as (A) Insured NIM Notes are outstanding or any amounts are
owed to the NIMS Insurer under the Indenture and (B) no NIMS Insurer Default has
occurred and is continuing; (ii) the Certificate Insurer, so long as (A) the
Insured Certificates are outstanding or any amounts are owed to the Certificate
Insurer under this Agreement or the Insurance Agreement, (B) the NIMS Insurer is
not the Controlling Insurer pursuant to clause (i) above and (C) no Certificate
Insurer Default has occurred and is continuing; or (iii) none, so long as
neither the NIMS Insurer nor the Certificate Insurer is the Controlling Insurer
pursuant to clause (i) or (ii) above.
"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, Xxxxxxxxxx 00000, or at such other address as the Trustee may
designate from time to time by notice to the Certificateholders, the Depositor
and the Master Servicer.
"Corresponding Certificates": With respect to (i) REMIC 3 Regular Interest
LT3B-1, (ii) REMIC 3 Regular Interest LT3B-2, (iii) REMIC 3 Regular Interest
LT3P-1, and (iv) REMIC 3 Regular Interest LT3P-2, (i) the Class I-A
Certificates, (ii) the Class II-A Certificates, (iii) REMIC 4 Regular Interest
LT4-IP, and (iv) REMIC 4 Regular Interest LT4-IIP, respectively.
"Cumulative Loss Percentage": With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses incurred from the Cut-off Date to the last day of the
calendar month preceding such Distribution Date and the denominator of which is
the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date.
"Custodial Agreement": Any agreement that may be entered into by the
Trustee and any Custodian or any agreement assigned to the Trustee, in either
case with the consent of the Certificate Insurer, providing for holding and
safekeeping of Mortgage Files on behalf of the Trust.
20
"Custodian": A custodian, appointed as provided in Section 8.11 hereof
pursuant to a Custodial Agreement.
"Cut-off Date": With respect to each Closing Date Mortgage Loan, October 1,
2002; and with respect to each Qualified Substitute Mortgage Loan, its date of
substitution, as applicable.
"Cut-off Date Aggregate Principal Balance": The aggregate of the Cut-off
Date Principal Balances of the Mortgage Loans.
"Cut-off Date Principal Balance": With respect to any Mortgage Loan, the
unpaid principal balance thereof as of the Cut-off Date (with respect to a
Closing Date 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 5.01(b) hereof.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by one
or more Qualified Substitute Mortgage Loans.
"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": Long Beach 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 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.
21
"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 Master
Servicer on behalf of the Trustee) shall not be considered to Directly Operate
an REO Property solely because the Trustee (or the Master 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": Any: (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, or (iii) any organization described in Section 1381(a)(2)(C) of the Code;
(B) "electing large partnership" within the meaning of Section 775 of the Code;
or (C) other Person so designated by the Trustee based upon an Opinion of
Counsel provided by nationally recognized counsel to the Trustee that the
holding of an ownership interest in a Residual Certificate by such Person may
cause the Trust Fund or any Person having an ownership interest in any Class of
Certificates (other than such Person) to incur liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the transfer
of an ownership interest in a Residual Certificate to such Person. 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 income
tax and a majority of its board of directors is not selected by a governmental
unit. The terms "United States," "state" and "international organization" 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 Long Beach Mortgage Loan Trust
2002-4, Asset-Backed Certificates, Series 2002-4" 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 November 2002.
22
"Due Date": With respect to each Distribution Date, the first day of the
calendar month in which such Distribution Date occurs, which is the day of the
month on which the Monthly Payment is due on a Mortgage Loan, 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.
"Effective Date": As defined in Section 3.13 hereof.
"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 no lower than P-1 by Xxxxx'x, F-1 by Fitch and A-1 by S&P (or comparable
ratings if Xxxxx'x, Fitch and S&P are not the Rating Agencies) at the time any
amounts are held on deposit therein; provided that so long as Washington Mutual
Bank, FA is the Sub-Servicer, any account maintained with Washington Mutual
Bank, FA shall be an Eligible Account if the long-term unsecured debt
obligations of Washington Mutual Bank, FA are rated no lower than "A2" by
Xxxxx'x or "A" by Fitch and the short-term unsecured debt obligations of
Washington Mutual Bank, FA are rated no lower than A-2 by S&P, provided that if
the short-term unsecured debt obligations of Washington Mutual Bank, FA are
downgraded by S&P to a rating lower than A-2, Washington Mutual Bank, FA shall
transfer the deposits in any account maintained by Washington Mutual Bank, FA
(unless any such account is otherwise qualified as an Eligible Account pursuant
to (ii), (iii) or (iv) of the definition of Eligible Account) to an Eligible
Account within ten (10) Business Days of notification of such downgrade, (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 the Certificate Insurer and each Rating Agency
without reduction or withdrawal of their then current ratings of the
Certificates (without regard to the Certificate Insurance Policy) 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": As defined in Section 3.09 hereof.
"Extraordinary Trust Fund Expense": Any amounts reimbursable to the
Trustee, or any director, officer, employee or agent of the Trustee, from the
Trust Fund pursuant to Section 8.05, any amounts payable from the Distribution
Account in respect of taxes pursuant to Section 10.01(g)(iii), any amounts
payable from the Distribution Account in respect of any REMIC pursuant to
Section 10.01(c), any amounts payable from the Trust Fund as a trustee fee for
any successor trustee and any amounts payable by the Trustee for the recording
of the assignments of mortgage pursuant to Section 2.01.
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"Xxxxxx Xxx": 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
Seller or the Master Servicer pursuant to or as contemplated by Section 2.03 or
9.01), a determination made by the Master Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Master Servicer,
in its reasonable good faith judgment, expects to be finally recoverable in
respect thereof have been so recovered. The Master Servicer shall maintain
records, prepared by a Servicing Representative, of each Final Recovery
Determination made thereby.
"Fitch": Fitch Ratings, Inc., or its successor in interest.
"Fixed Rate Mortgage Loan": A Mortgage Loan which provides for a fixed
Mortgage Rate payable with respect thereto.
"Formula Rate": For any Distribution Date and the Class A Certificates, the
lesser of (i) LIBOR plus the related Certificate Margin and (ii) the related
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 Available Funds": With respect to any Distribution Date, an amount
equal to the excess of (i) the sum of (a) the aggregate of the Monthly Payments
on the Group I Mortgage Loans due on the related Due Date and received on or
prior to the related Determination Date, (b) Liquidation Proceeds, Insurance
Proceeds, Principal Prepayments and other unscheduled recoveries of principal
and interest in respect of the Group I Mortgage Loans during the related
Prepayment Period (other than any Prepayment Charges collected by the Master
Servicer in connection with the full or partial prepayment of any of the Group I
Mortgage Loans and any Master Servicer Prepayment Charge Payment Amount in
connection with Group I Mortgage Loans), (c) the aggregate of any amounts
received in respect of an REO Property acquired in respect of a Group I Mortgage
Loan 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 Master Servicer in respect of related Prepayment
Interest Shortfalls on the Group I Mortgage Loans for such Distribution Date,
(e) the aggregate of any Advances made by the Master Servicer or the Trustee for
24
such Distribution Date with respect to the Group I Mortgage Loans, (f) the
aggregate of any related advances made by or on behalf of the Trustee for such
Distribution Date with respect to the Group I Mortgage Loans pursuant to Section
7.02(b) and (g) the aggregate of any amounts constituting proceeds of
repurchases or substitutions of the Group I Mortgage Loans occurring during the
related Prepayment Period over (ii) the sum, without duplication, of (a) amounts
reimbursable or payable to the Depositor, the Master Servicer, the Trustee, the
Seller, the Guarantor, the Certificate Insurer or any Sub-Servicer pursuant to
Section 3.11 or Section 3.12 in respect of the Group I Mortgage Loans or
otherwise payable in respect of Extraordinary Trust Fund Expenses in connection
with the Group I Mortgage Loans, (b) amounts deposited in the Collection Account
or the Distribution Account pursuant to clauses (i)(a) through (g) above, as the
case may be, in connection with the Group I Mortgage Loans, in error, (c) Stayed
Funds in connection with the Group I Mortgage Loans, (d) any Group I Trustee Fee
pursuant to Section 8.05 and any indemnification payments or expense
reimbursements made by the Trust Fund pursuant to Section 8.05 in connection
with the Group I Mortgage Loans and (e) amounts reimbursable to the Trustee for
an advance made pursuant to Section 7.02(b) in connection with the Group I
Mortgage Loans which advance the Trustee has determined to be nonrecoverable
from the Stayed Funds in respect of which it was made.
"Group I Cap Agreement": The interest rate cap agreement with respect to
the Group I Reserve Fund consisting of the ISDA Master Agreement and the
schedule and confirmation thereto, each dated October 4, 2002 between the
Trustee, on behalf of the Trust, and the Cap Provider, as such agreement may be
amended and supplemented in accordance with its terms and any replacement
interest rate cap agreement acceptable to the Trustee.
"Group I Cap Controlling Person": The Controlling Insurer; or, if there is
no Controlling Insurer, the Guarantor; or if the Class I-A Certificates are no
longer outstanding, the majority of the Percentage Interest of the Holders of
the Class I-C Certificates.
"Group I Certificate Insurer Premium": For any Distribution Date and with
respect to the Class I-A Certificates and the Class I-S1 Certificates, the
premium due to the Certificate Insurer on such Distribution Date, which amount
shall be equal to the product of one-twelfth of the Group I Certificate Insurer
Premium Rate and the aggregate Certificate Principal Balance of the Class I-A
Certificates immediately prior to such Distribution Date.
"Group I Certificate Insurer Premium Rate": For any Distribution Date, a
per annum rate set forth in a letter agreement between the Certificate Insurer,
the Depositor, the Master Servicer and the Trustee, which rate may increase as
provided in the letter agreement for any Distribution Date on which an event of
default under the Insurance Agreement is continuing.
"Group I Certificate Insurer Reimbursement Amount": The sum of (i) any
unreimbursed Insured Payments applied by the Trustee as payments on the Class
I-A Certificates and the Class I-S1 Certificates, (ii) all other amounts owed to
the Certificate Insurer under the Insurance Agreement and allocable to the Class
I-A Certificates and the Class I-S1 Certificates and (iii) 50% of all other
amounts owed to the Certificate Insurer under the Insurance Agreement and which
cannot be allocated to either the Class I-A Certificates and the Class I-S1
Certificates or the Class II-A Certificates and the Class II-S1 Certificates, in
each case together with interest on such amounts at the Late Payment Rate.
"Group I Certificates": The Class I-A Certificates, the Class I-S
Certificates, the Class I-C Certificates and the Class I-P Certificates.
25
"Group I Closing Date Mortgage Loan": Any of the Group I Mortgage Loans
included in the Trust Fund on the Closing Date. The aggregate Cut-off Date
Principal Balance of the Group I Closing Date Mortgage Loans is equal to
$599,765,204.14.
"Group I Cumulative Loss Trigger Event": A Group I Cumulative Loss Trigger
Event has occurred with respect to a Distribution Date on or after the
Distribution Date in November 2005, if the percentage obtained by dividing (x)
the aggregate amount of Realized Losses incurred with respect to the Group I
Mortgage Loans from the Cut-off Date through the last day of the related Due
Period by (y) the aggregate Stated Principal Balance of the Group I Mortgage
Loans as of the Cut-off Date, exceeds the applicable percentage set forth below
for such Distribution Date:
Distribution Date Occurring in Cumulative Loss Percentage
---------------------------------- -----------------------------------------------------
November 2005 through October 2006 2.45% for the first month, plus an additional 1/12th
of 1.70% for each month thereafter.
November 2006 through October 2007 4.15% for the first month, plus an additional 1/12th
of 0.95% for each month thereafter.
November 2007 through October 2008 5.10% for the first month, plus an additional 1/12th
of 0.75% for each month thereafter.
November 2008 through October 2009 5.85% for the first month, plus an additional 1/12th
of 0.70% for each month thereafter.
November 2009 and thereafter 6.55% for each month
"Group I Delinquency Percentage": With respect to any Distribution Date,
the percentage obtained by dividing (x) the aggregate Stated Principal Balance
of (i) Group I Mortgage Loans Delinquent 60 days or more (including Mortgage
Loans repurchased since the prior Distribution Date), (ii) REO Properties
related to the Group I Mortgage Loans and (iii) Group I Mortgage Loans in
foreclosure and in bankruptcy (excluding any such Group I Mortgage Loans which
are less than 60 days Delinquent under the bankruptcy plan) by (y) the aggregate
Stated Principal Balance of the Group I Mortgage Loans, in each case, calculated
prior to taking into account payments of principal on the Group I Mortgage Loans
due on the related Due Date or received during the related Prepayment Period.
"Group I Delinquency Trigger Event": A Group I Delinquency Trigger Event
has occurred with respect to a Distribution Date if the Group I Delinquency
Percentage exceeds 17%.
"Group I Early Termination Date": An early termination date under the Group
I Cap Agreement.
"Group I Excess Overcollateralized Amount": With respect to the Class I-A
Certificates and any Distribution Date, the excess, if any, of (i) the Group I
Overcollateralized Amount for such Distribution Date (assuming that 100% of the
Group I Principal Remittance Amount is applied as a principal payment on such
Distribution Date) over (ii) the Group I Overcollateralization Target Amount for
such Distribution Date.
26
"Group I Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (x) the Group I Net Monthly Excess Cashflow for
such Distribution Date and (y) the Group I Overcollateralization Deficiency
Amount for such Distribution Date.
"Group I Insured Principal Amount": (a) for any Distribution Date (other
than the Distribution Date in November 2032) the amount, if any, by which the
aggregate Certificate Principal Balance of the Class I-A Certificates (after
giving effect to distributions in respect of principal to be made on such
Distribution Date and without regard to any payments made by the Certificate
Insurer or the Guarantor) exceeds the aggregate Stated Principal Balance of the
Group I Mortgage Loans on 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) for the Distribution Date
in November 2032, an amount equal to the aggregate Certificate Principal Balance
of the Class I-A Certificates (after giving effect to distributions in respect
of principal to be made on such Distribution Date and without regard to any
payments made by the Certificate Insurer or the Guarantor).
"Group I Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Group I Available Funds for such Distribution Date
attributable to interest received or advanced with respect to the Group I
Mortgage Loans or to Compensating Interest paid by the Master Servicer with
respect to the Group I Mortgage Loans.
"Group I Mortgage Loans": Those Mortgage Loans identified as Group I
Mortgage Loans on the Mortgage Loan Schedule.
"Group I Net Monthly Excess Cashflow": With respect to each Distribution
Date, the sum of (a) any Group I Overcollateralization Release Amount for such
Distribution Date and (b) the positive excess of (x) Group I Available Funds for
such Distribution Date over (y) the sum for such Distribution Date of (A) the
Monthly Interest Distributable Amounts for the Class I-A Certificates and the
Class I-S Certificates, (B) the Unpaid Interest Shortfall Amounts for the Class
I-A Certificates and the Class I-S1 Certificates, (C) the Group I Principal
Remittance Amount, (D) the Guarantor Reimbursement Amount, (E) the Guaranty Fee,
(F) the Group I Certificate Insurer Premium, (G) the Group I Certificate Insurer
Reimbursement Amount and (H) the Group II Certificate Insurer Reimbursement
Amount to the extent paid out of the Group I Interest Remittance Amount.
"Group I Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Group I
Overcollateralization Target Amount exceeds the Group I Overcollateralized
Amount on such Distribution Date (assuming that 100% of the aggregate Group I
Principal Remittance Amount is applied as a principal payment on such
Distribution Date).
"Group I Overcollateralization Floor": 0.50% of the aggregate Cut-off Date
Principal Balance of the Group I Closing Date Mortgage Loans.
27
"Group I Overcollateralization Release Amount": With respect to any
Distribution Date, the lesser of (x) the Group I Principal Remittance Amount for
such Distribution Date and (y) the Group I Excess Overcollateralized Amount.
"Group I Overcollateralization Target Amount": With respect to any
Distribution Date (i) prior to the Group I Stepdown Date, 1.90% of the aggregate
Cut-off Date Principal Balance of the Group I Closing Date Mortgage Loans, (ii)
on or after the Group I Stepdown Date provided a Group I Trigger Event is not in
effect, the greater of (x) the lesser of (I) 1.90% of the aggregate Cut-off Date
Principal Balance of the Group I Closing Date Mortgage Loans and (II) 3.80% of
the aggregate Stated Principal Balance of the Group I Mortgage Loans on 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) the Group I Overcollateralization Floor, and (iii) on or after
the Group I Stepdown Date if a Group I Trigger Event is in effect, the Group I
Overcollateralization Target Amount for the immediately preceding Distribution
Date.
"Group I Overcollateralized Amount": With respect to any Distribution Date,
the amount, if any, by which (i) the aggregate Stated Principal Balance of the
Group I Mortgage Loans on 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) exceeds (ii) the sum of the
aggregate Certificate Principal Balances of the Class I-A Certificates and the
Uncertificated Principal Balance of REMIC 4 Regular Interest LT4-IP as of such
Distribution Date (after giving effect to distributions of the Group I Principal
Remittance Amount to be made on such Distribution Date).
"Group I Principal Distribution Amount": The sum of (i) (x) the Group I
Principal Remittance Amount minus (y) the amount of any Group I
Overcollateralization Release Amount for such Distribution Date, and (ii) the
Group I Extra Principal Distribution Amount for such Distribution Date.
"Group I Principal Remittance Amount": With respect to any Distribution
Date, the sum of (i) all scheduled payments of principal collected or advanced
on the Group I Mortgage Loans by the Master Servicer that were due during the
related Due Period, (ii) all partial and full principal prepayments of the Group
I Mortgage Loans applied by the Master Servicer during the related Prepayment
Period, (iii) the principal portion of all Net Liquidation Proceeds and
Insurance Proceeds received during the related 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 the related Prepayment Period, (v) the principal
portion of any Substitution Adjustments deposited in the Collection Account
during the related Prepayment Period with respect to the Group I Mortgage Loans
and (vi) on the Distribution Date on which the Trust is to be terminated in
accordance with this Agreement, that portion of the Termination Price
representing principal with respect to the Group I Mortgage Loans.
"Group I Reserve Fund": The reserve fund established pursuant to Section
3.26.
"Group I Stepdown Date": The Distribution Date in November 2005.
28
"Group I Trigger Event": A Group I Trigger Event has occurred with respect
to a Distribution Date if either a Group I Cumulative Loss Trigger Event or a
Group I Delinquency Trigger Event has occurred with respect to such Distribution
Date.
"Group I Trustee Fee": With respect to each Distribution Date, one-twelfth
of the Trustee Fee Rate multiplied by the aggregate Stated Principal Balance of
the Group I Mortgage Loans as of the last day of the related Due Period (prior
to 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).
"Group II Available Funds": With respect to any Distribution Date, an
amount equal to the excess of (i) the sum of (a) the aggregate of the Monthly
Payments on the Group II Mortgage Loans due on the related Due Date and received
on or prior to the related Determination Date, (b) Liquidation Proceeds,
Insurance Proceeds, Principal Prepayments and other unscheduled recoveries of
principal and interest in respect of the Group II Mortgage Loans during the
related Prepayment Period (other than any Prepayment Charges collected by the
Master Servicer in connection with the full or partial prepayment of any of the
Group II Mortgage Loans and any Master Servicer Prepayment Charge Payment Amount
in connection with Group II Mortgage Loans), (c) the aggregate of any amounts
received in respect of an REO Property acquired in respect of a Group II
Mortgage Loan 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 Master Servicer in respect of related
Prepayment Interest Shortfalls on the Group II Mortgage Loans for such
Distribution Date, (e) the aggregate of any Advances made by the Master Servicer
or the Trustee for such Distribution Date with respect to the Group II Mortgage
Loans, (f) the aggregate of any related advances made by or on behalf of the
Trustee for such Distribution Date with respect to the Group II Mortgage Loans
pursuant to Section 7.02(b) and (g) the aggregate of any amounts constituting
proceeds of repurchases or substitutions of the Group II Mortgage Loans
occurring during the related Prepayment Period over (ii) the sum, without
duplication, of (a) amounts reimbursable or payable to the Depositor, the Master
Servicer, the Trustee, the Seller, the Guarantor, the Certificate Insurer or any
Sub-Servicer pursuant to Section 3.11 or Section 3.12 in respect of the Group II
Mortgage Loans or otherwise payable in respect of Extraordinary Trust Fund
Expenses in connection with the Group II Mortgage Loans, (b) amounts deposited
in the Collection Account or the Distribution Account pursuant to clauses (i)(a)
through (g) above, as the case may be, in connection with the Group II Mortgage
Loans, in error, (c) Stayed Funds in connection with the Group II Mortgage
Loans, (d) the PMI Insurer Fee payable from the Distribution Account, (e) any
Group II Trustee Fee pursuant to Section 8.05 and any indemnification payments
or expense reimbursements made by the Trust Fund pursuant to Section 8.05 in
connection with the Group II Mortgage Loans and (f) amounts reimbursable to the
Trustee for an advance made pursuant to Section 7.02(b) in connection with the
Group II Mortgage Loans which advance the Trustee has determined to be
nonrecoverable from the Stayed Funds in respect of which it was made.
"Group II Cap Agreement": The interest rate cap agreement with respect to
the Group II Reserve Fund consisting of the ISDA Master Agreement and the
schedule and confirmation thereto, dated as of October 4, 2002 between the
Trustee, on behalf of the Trust, and the Cap Provider, as such agreement may be
amended and supplemented in accordance with its terms and any replacement
interest rate cap agreement acceptable to the Trustee.
29
"Group II Cap Controlling Person": The Controlling Insurer; or, if there is
no Controlling Insurer, the majority of the Percentage Interest of the Holders
of the Class II-C Certificates.
"Group II Certificates": The Class II-A Certificates, the Class II-S
Certificates, the Class II-C Certificates and the Class II-P Certificates.
"Group II Certificate Insurer Premium": For any Distribution Date and with
respect to the Class II-A Certificates and the Class II-S1 Certificates, the
premium due to the Certificate Insurer on such Distribution Date, which amount
shall be equal to the product of one-twelfth of the Group II Certificate Insurer
Premium Rate and the aggregate Certificate Principal Balance of the Class II-A
Certificates immediately prior to such Distribution Date.
"Group II Certificate Insurer Premium Rate": For any Distribution Date, a
per annum rate set forth in a letter agreement between the Certificate Insurer,
the Depositor, the Master Servicer and the Trustee, which rate may increase as
provided in the letter agreement for any Distribution Date on which an event of
default under the Insurance Agreement is continuing.
"Group II Certificate Insurer Reimbursement Amount": The sum of (i) any
unreimbursed Insured Payments applied by the Trustee as payments on the Class
II-A Certificates and the Class II-S1 Certificates, (ii) all other amounts owed
to the Certificate Insurer under the Insurance Agreement and allocable to the
Class II-A Certificates and the Class II-S1 Certificates and (iii) 50% of all
other amounts owed to the Certificate Insurer under the Insurance Agreement and
which cannot be allocated to either the Class I-A Certificates and the Class
I-S1 Certificates or the Class II-A Certificates and the Class II-S1
Certificates, in each case together with interest on such amounts at the Late
Payment Rate.
"Group II Closing Date Mortgage Loan": Any of the Group II Mortgage Loans
included in the Trust Fund on the Closing Date. The aggregate Cut-off Date
Principal Balance of the Group II Closing Date Mortgage Loans is equal to
$400,235,145.67.
"Group II Cumulative Loss Trigger Event": A Group II Cumulative Loss
Trigger Event has occurred with respect to a Distribution Date on or after the
Distribution Date in November 2005, if the percentage obtained by dividing (x)
the aggregate amount of Realized Losses incurred with respect to the Group II
Mortgage Loans from the Cut-off Date through the last day of the related Due
Period by (y) the aggregate Stated Principal Balance of the Group II Mortgage
Loans as of the Cut-off Date, exceeds the percentage set forth below for such
Distribution Date:
30
Distribution Date Occurring in Cumulative Loss Percentage
---------------------------------- -----------------------------------------------------
November 2005 through 1.85% for the first month, plus an additional 1/12th
October 2006 of 1.25% for each month thereafter.
November 2006 through 3.10% for the first month, plus an additional 1/12th
October 2007 of 0.75% for each month thereafter.
November 2007 through 3.85% for the first month, plus an additional 1/12th
October 2008 of 0.55% for each month thereafter.
November 2008 through 4.40% for the first month, plus an additional 1/12th
October 2009 of 0.55% for each month thereafter.
November 2009 and thereafter 4.95% for each month
"Group II Delinquency Percentage": With respect to any Distribution Date,
the percentage obtained by dividing (x) the aggregate Stated Principal Balance
of (i) Group II Mortgage Loans Delinquent 60 days or more (including Mortgage
Loans repurchased since the prior Distribution Date), (ii) REO Properties
related to the Group II Mortgage Loans and (iii) Group II Mortgage Loans in
foreclosure and in bankruptcy (excluding any such Group II Mortgage Loans which
are less than 60 days Delinquent under the bankruptcy plan) by (y) the aggregate
Stated Principal Balance of the Group II Mortgage Loans, in each case,
calculated prior to taking into account payments of principal on the Group II
Mortgage Loans due on the related Due Date or received during the related
Prepayment Period.
"Group II Delinquency Trigger Event": A Group II Delinquency Trigger Event
has occurred with respect to a Distribution Date if the Group II Delinquency
Percentage exceeds 14%.
"Group II Early Termination Date": An early termination date under the
Group II Cap Agreement.
"Group II Excess Overcollateralized Amount": With respect to the Class II-A
Certificates and any Distribution Date, the excess, if any, of (i) the Group II
Overcollateralized Amount for such Distribution Date (assuming that 100% of the
Group II Principal Remittance Amount is applied as a principal payment on such
Distribution Date) over (ii) the Group II Overcollateralization Target Amount
for such Distribution Date.
"Group II Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (x) the Group II Net Monthly Excess Cashflow
for such Distribution Date and (y) the Group II Overcollateralization Deficiency
Amount for such Distribution Date.
"Group II Insured Principal Amount": (a) for any Distribution Date (other
than the Distribution Date in November 2032) the amount, if any, by which the
aggregate Certificate Principal Balance of the Class II-A Certificates (after
giving effect to distributions in respect of principal to be made on such
Distribution Date and without regard to any payments made by the Certificate
Insurer) exceeds the aggregate Stated Principal Balance of the Group II Mortgage
Loans on 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
31
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) and (b) for the Distribution Date in November
2032, an amount equal to the aggregate Certificate Principal Balance of the
Class II-A Certificates (after giving effect to distributions in respect of
principal to be made on such Distribution Date and without regard to any
payments made by the Certificate Insurer).
"Group II Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Group II Available Funds for such Distribution Date
attributable to interest received or advanced with respect to the Group II
Mortgage Loans or to Compensating Interest paid by the Master Servicer with
respect to the Group II Mortgage Loans.
"Group II Mortgage Loans": Those Mortgage Loans identified as Group II
Mortgage Loans on the Mortgage Loan Schedule.
"Group II Net Monthly Excess Cashflow": With respect to each Distribution
Date, the sum of (a) any Group II Overcollateralization Release Amount for such
Distribution Date and (b) the positive excess of (x) Group II Available Funds
for such Distribution Date over (y) the sum for such Distribution Date of (A)
the Monthly Interest Distributable Amounts for the Class II-A Certificates and
the Class II-S Certificates, (B) the Unpaid Interest Shortfall Amounts for the
Class II-A Certificates and the Class II-S1 Certificates, (C) the Group II
Principal Remittance Amount, (D) the Group II Certificate Insurer Premium, (E)
the Group II Certificate Insurer Reimbursement Amount and (F) the Group I
Certificate Insurer Reimbursement Amount to the extent paid out of the Group II
Interest Remittance Amount.
"Group II Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Group II
Overcollateralization Target Amount exceeds the Group II Overcollateralized
Amount on such Distribution Date (assuming that 100% of the aggregate Group II
Principal Remittance Amount is applied as a principal payment on such
Distribution Date).
"Group II Overcollateralization Floor": 0.50% of the aggregate Cut-off Date
Principal Balance of the Group II Closing Date Mortgage Loans.
"Group II Overcollateralization Release Amount": With respect to any
Distribution Date, the lesser of (x) the Group II Principal Remittance Amount
for such Distribution Date and (y) the Group II Excess Overcollateralized
Amount.
"Group II Overcollateralization Target Amount": With respect to any
Distribution Date (i) prior to the Group II Stepdown Date, 1.90% of the
aggregate Cut-off Date Principal Balance of the Group II Closing Date Mortgage
Loans, (ii) on or after the Group II Stepdown Date provided a Group II Trigger
Event is not in effect, the greater of (x) the lesser of (I) 1.90% of the
aggregate Cut-off Date Principal Balance of the Group II Closing Date Mortgage
Loans and (II) 3.80% of the aggregate Stated Principal Balance of the Group II
Mortgage Loans on 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) the Group II Overcollateralization Floor,
and (iii) on or after the Group II Stepdown Date if a Group II Trigger Event is
in effect, the Group II Overcollateralization Target Amount for the immediately
preceding Distribution Date.
32
"Group II Overcollateralized Amount": With respect to any Distribution
Date, the amount, if any, by which (i) the aggregate Stated Principal Balance of
the Group II Mortgage Loans on 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) exceeds (ii) the sum of
the aggregate Certificate Principal Balances of the Class II-A Certificates and
the Uncertificated Principal Balance of REMIC 4 Regular Interest LT4-IIP as of
such Distribution Date (after giving effect to distributions of the Group II
Principal Remittance Amount to be made on such Distribution Date).
"Group II Principal Distribution Amount": With respect to any Distribution
Date, the sum of (i) (x) the Group II Principal Remittance Amount minus (y) the
amount of any Group II Overcollateralization Release Amount for such
Distribution Date, and (ii) the Group II Extra Principal Distribution Amount for
such Distribution Date.
"Group II Principal Remittance Amount": With respect to any Distribution
Date, the sum of (i) all scheduled payments of principal collected or advanced
on the Group II Mortgage Loans by the Master Servicer that were due during the
related Due Period, (ii) all partial and full principal prepayments of the Group
II Mortgage Loans applied by the Master Servicer during the related Prepayment
Period, (iii) the principal portion of all Net Liquidation Proceeds and
Insurance Proceeds received during the related 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 the related Prepayment Period, (v) the principal
portion of any Substitution Adjustments deposited in the Collection Account
during the related Prepayment Period with respect to the Group II Mortgage Loans
and (vi) on the Distribution Date on which the Trust is to be terminated in
accordance with this Agreement, that portion of the Termination Price
representing principal with respect to the Group II Mortgage Loans.
"Group II Reserve Fund": The reserve fund established pursuant to Section
3.26.
"Group II Stepdown Date": The Distribution Date in November 2005.
"Group II Trigger Event": A Group II Trigger Event has occurred with
respect to a Distribution Date if either a Group II Cumulative Loss Trigger
Event or a Group II Delinquency Trigger Event has occurred with respect to such
Distribution Date.
"Group II Trustee Fee": With respect to each Distribution Date, one-twelfth
of the Trustee Fee Rate multiplied by the aggregate Stated Principal Balance of
the Group II Mortgage Loans as of the last day of the related Due Period (prior
to 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).
"Guaranteed Certificates": The Class I-A Certificates and the Class I-S1
Certificates.
33
"Guaranteed Interest Distribution Amount": With respect to any Distribution
Date and the Guaranteed Certificates, the amount, if any, after giving effect to
the distributions of the Monthly Interest Remittance Amount and the Insured
Payment, if any, on such Distribution Date, by which the (i) sum of (x) the
Monthly Interest Distributable Amount and the Unpaid Interest Shortfall Amount
payable on the Guaranteed Certificates for such Distribution Date and (y) the
Net Prepayment Interest Shortfalls and the Relief Act Interest Shortfalls
allocated to the Guaranteed Certificates for such Distribution Date exceeds (ii)
the amount of interest actually paid (without giving effect to any Guarantor
Payment) to the Holders of the related Classes of Guaranteed Certificates on
such Distribution Date.
"Guaranteed Principal Distribution Amount": With respect to (a) any
Distribution Date other than the Distribution Date in November 2032, the amount,
if any, by which (i) the aggregate Certificate Principal Balance of the Class
I-A Certificates (after giving effect to all amounts distributable and allocable
to principal on such Class I-A Certificates, including any Insured Payment, but
prior to giving effect to any Guarantor Payment on such Distribution Date)
exceeds (ii) the aggregate Stated Principal Balance of the Group I Mortgage
Loans (after giving effect to the principal portion of Monthly Payments 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 Distribution Date in November 2032, the amount equal to the
Certificate Principal Balance of the Class I-A Certificates (after giving effect
to all amounts distributable and allocable to principal on such Class I-A
Certificates, including any Insured Payment, but prior to giving effect to any
Guarantor Payment on such Distribution Date).
"Guarantor": Xxxxxx Xxx, or its successor in interest.
"Guarantor Deficiency Amount": With respect to any Distribution Date, the
sum of (i) the Guaranteed Interest Distribution Amount and (ii) the Guaranteed
Principal Distribution Amount.
"Guarantor Interest Reimbursement Amount": With respect to any Distribution
Date, (i) the sum of any accrued but unpaid Guaranty Fees, not including the
Guaranty Fee due on such Distribution Date, and (ii) the sum of all amounts paid
by the Guarantor in respect of the Guaranteed Interest Distribution Amounts on
all prior Distribution Dates to the extent not previously reimbursed.
"Guarantor Payment": Any payment made by the Guarantor in respect of a
Guaranteed Interest Distribution Amount or a Guaranteed Principal Distribution
Amount.
"Guarantor Principal Reimbursement Amount": With respect to any
Distribution Date, the sum of all amounts paid by the Guarantor in respect of
Guaranteed Principal Distribution Amounts on all prior Distribution Dates to the
extent not previously reimbursed.
"Guarantor Reimbursement Amount": With respect to any Distribution Date,
the sum of Guarantor Interest Reimbursement Amount and the Guarantor Principal
Reimbursement Amount.
"Guaranty": The obligations of the Guarantor pursuant to Section 4.09.
34
"Guaranty Fee": With respect to any Distribution Date and with respect to
the Guaranteed Certificates, the fee payable to the Guarantor in respect of its
services as Guarantor that accrues at the applicable Guaranty Fee Rate for such
Guaranteed Certificates on a balance equal to the aggregate Certificate
Principal Balance of the Class I-A Certificates immediately prior to such
Distribution Date computed on the basis of a 360 day year and the actual number
of days elapsed in the related Accrual Period.
"Guaranty Fee Rate": The per annum rate set forth in a side letter of the
Guarantor, addressed to the Trustee, the Seller and the Master Servicer.
"Indenture": The indenture or a document of similar import, if any, entered
into following the Closing Date, by one or more Affiliates of the Depositor or
one or more entities sponsored by an Affiliate of the Depositor relating to the
NIM Notes to be issued thereunder.
"Independent": When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Master 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 Master
Servicer or any Affiliate thereof, and (c) is not connected with the Depositor
or the Master Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, trust administrator, partner, director or Person
performing similar functions; provided, however, that a Person shall not fail to
be Independent of the Depositor or the Master Servicer or any Affiliate thereof
merely because such Person is the beneficial owner of $500,000.00 or less of any
class of securities issued by the Depositor or the Master Servicer or any
Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the Master
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 Master 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.
"Information Supplement": The Information Supplement of the Depositor dated
October 1, 2002, relating to the Guaranteed Certificates.
35
"Initial Certificate Principal Balance": With respect to any Regular
Certificate other than any Class S Certificate, the amount designated "Initial
Certificate Principal Balance" on the face thereof.
"Initial Notional Amount": With respect to any Class S Certificate or Class
C Certificate, the amount designated "Initial Notional Amount" on the face
thereof.
"Insurance Agreement": An Insurance and Indemnity Agreement dated as of
October 4, 2002, among the Master Servicer, the Depositor and the Certificate
Insurer.
"Insurance Proceeds": Proceeds of any title policy, hazard policy or other
insurance policy covering a Mortgage Loan or the related Mortgaged Property, to
the extent such proceeds are not to be applied to the restoration of the related
Mortgaged Property (including any related PMI Policy) or released to the
Mortgagor in accordance with the procedures that the Master 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.
"Insured Certificates": The Class A Certificates and the Class S1
Certificates.
"Insured NIM Notes": Net interest margin securities, if any, issued by one
or more Affiliates of the Depositor or by one or more entities sponsored by an
Affiliate of the Depositor which are backed by the cashflow on certain or all of
the Class S2 Certificates, Class C Certificates and Class P Certificates and
insured by the NIMS Insurer.
"Insured Payment": As of any Distribution Date, the sum of (i) any
Certificate Insurer Deficiency Amount and (ii) any Preference Amount.
"Insured Principal Amount": The sum of the Group I Insured Principal Amount
and the Group II Insured Principal Amount.
"Interest Determination Date": With respect to the Class A 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.
"Late Payment Rate": As defined in the Insurance Agreement.
"LIBOR": With respect to each Accrual Period, the rate determined by the
Trustee on the related Interest Determination Date on the basis of the "Interest
Settlement Rate" for United States dollar deposits of one-month maturity set
forth by the British Bankers' Association (the "BBA"), as such rate appears on
the Telerate Page 3750, as of 11:00 a.m. (London time) on such Interest
Determination Date. With respect to any Interest Determination Date, if the
BBA's Interest Settlement Rate does not appear on Telerate Page 3750 as of 11:00
a.m. (London time) on such date, or if Telerate Page 3750 is not available on
36
such date the Trustee will obtain such rate from Reuters Monitor Money Rates
Service page "LIBOR01" or Bloomberg L.P. page "BBAM." Alternatively, the Trustee
may 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 multiples of 0.03125%); 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.
The Trustee will select a particular index as the alternative index only if
it receives an Opinion of Counsel that the selection of such index will not
cause any REMIC to lose its classification as a REMIC for federal income tax
purposes.
"LIBOR Business Day": Any day on which banks in London, England and The
City of New York are open for conducting transactions in foreign currency and
exchange.
"Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage Loan
in respect of which the Master 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
pursuant to or as contemplated by Section 2.03 or Section 9.01. With respect to
any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property or (ii) such REO Property is
removed from the Trust Fund by reason of its being sold or purchased pursuant to
Section 3.23 or Section 9.01.
"Liquidation Proceeds": The amount (other than amounts received in respect
of the rental of any REO Property prior to REO Disposition) received by the
Master 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 9.01.
"Loan Group I": All of the Group I Mortgage Loans collectively.
37
"Loan Group II": All of the Group II Mortgage Loans collectively.
"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 (x) Principal
Balance of the Mortgage Loan (if such Mortgage Loan is secured by a first lien
on the related Mortgaged Property) or the sum of the Principal Balance of the
Mortgage Loan and any other mortgage loan secured by a senior lien on the
related Mortgaged Property (if such Mortgage Loan is secured by a junior lien on
the related Mortgaged Property) and the denominator of which is (y) the Value of
the related Mortgaged Property.
"Lost Note Affidavit": With respect to any Mortgage Loan as to which the
original Mortgage Note has been permanently lost or destroyed and has not been
replaced, an affidavit from the Seller certifying that the original Mortgage
Note has been lost 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.
"Marker Rate 1": With respect to REMIC 4 Regular Interest LT4-IC and any
Distribution Date, a per annum rate equal to 2 times the weighted average of the
Uncertificated REMIC 3 Pass-Through Rates for REMIC 3 Regular Interest LT3B-1
and REMIC 3 Regular Interest LT3C-1, calculated as follows:
o with the rate on REMIC 3 Regular Interest LT3B-1 subject to a cap
equal to the lesser of (i) LIBOR plus the Certificate Margin of the
Class I-A Certificates and (ii) the lower of the Net WAC Rate and the
Maximum Cap Rate applicable to the Class I-A Certificates,
o with the rate on REMIC 3 Regular Interest LT3C-1 subject to a cap of
zero for the purpose of this calculation,
provided that in each case the rate used herein shall be multiplied by a
fraction the numerator of which is the actual number of days elapsed in the
Accrual Period and the denominator of which is 30.
"Marker Rate 2": With respect to REMIC 4 Regular Interest LT4-IIC and any
Distribution Date, a per annum rate equal to 2 times the weighted average of the
Uncertificated REMIC 3 Pass-Through Rates for REMIC 3 Regular Interest LT3B-2
and REMIC 3 Regular Interest LT3C-2, calculated as follows:
o with the rate on REMIC 3 Regular Interest LT3B-2 subject to a cap
equal to the lesser of (i) LIBOR plus the Certificate Margin of the
Class II-A Certificates and (ii) the lower of the Net WAC Rate and the
Maximum Cap Rate applicable to the Class II-A Certificates;
o with the rate on REMIC 3 Regular Interest LT3C-2 subject to a cap of
zero for the purpose of this calculation,
provided that in each case the rate used herein 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.
38
"Master Servicer": Long Beach Mortgage Company, a Delaware corporation, or
any successor servicer appointed as herein provided, in its capacity as Master
Servicer hereunder.
"Master Servicer Event of Default": One or more of the events described in
Section 7.01.
"Master Servicer Prepayment Charge Payment Amount": The amounts (i) payable
by the Master Servicer in respect of any Prepayment Charges waived other than in
accordance with the standard set forth in Section 2.04(a)(viii) or (ii)
collected from the Master Servicer in its capacity as Seller in respect of a
remedy for the breach of the representation and warranty made by the Master
Servicer in its capacity as Seller set forth in Section 2.04(a)(vii).
"Master Servicer Remittance Date": With respect to any Distribution Date,
3:00 p.m. New York time on the Business Day preceding the Distribution Date.
"Master Servicer Termination Test": With respect to any Distribution Date,
the Master Servicer Termination Test will be failed with respect to the Master
Servicer if the Cumulative Loss Percentage exceeds 5.400%.
"Maximum Cap Rate": For any Distribution Date and the Class I-A
Certificates, (a) a per annum rate equal to the excess, if any, of (i) the
weighted average of the Adjusted Net Maximum Mortgage Rates of the Group I
Mortgage Loans, weighted on the basis of the Stated Principal Balances thereof
as of the Due Date in the month preceding the month of such Distribution Date,
over (ii) the percentage equivalent of a fraction, (1) the numerator of which is
the sum of (A) the Group I Certificate Insurer Premium, (B) the Guaranty Fee,
(C) the product of (I) the Pass-Through Rate for the Class I-S1 Certificates for
such Distribution Date and (II) the Notional Amount with respect to the Class
I-S1 Certificates immediately prior to such Distribution Date, and (D) the
product of (I) the Pass-Through Rate for the Class I-S2 Certificates for such
Distribution Date and (II) the Notional Amount with respect to the Class I-S2
Certificates immediately prior to such Distribution Date, and (2) the
denominator of which is the aggregate Stated Principal Balance of the Group I
Mortgage Loans as of the Due Date in the month preceding the month of such
Distribution Date multiplied by (b) 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 any Distribution Date and the Class II-A Certificates, (a) a per annum
rate equal to the excess, if any, of (i) the weighted average of the Adjusted
Net Maximum Mortgage Rates of the Group II Mortgage Loans, weighted on the basis
of the Stated Principal Balances thereof as of the Due Date in the month
preceding the month of such Distribution Date, over (ii) the percentage
equivalent of a fraction, (1) the numerator of which is the sum of (A) the Group
II Certificate Insurer Premium, (B) the product of (I) the Pass-Through Rate for
the Class II-S1 Certificates for such Distribution Date and (II) the Notional
Amount with respect to the Class II-S1 Certificates immediately prior to such
Distribution Date, and (C) the product of (I) the Pass-Through Rate for the
Class II-S2 Certificates for such Distribution Date and (II) the Notional Amount
with respect to the Class II-S2 Certificates immediately prior to such
Distribution Date, and (2) the denominator of which is the aggregate Stated
Principal Balance of the Group II Mortgage Loans as of the Due Date in the month
preceding the month of such Distribution Date multiplied by (b) 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.
39
"Maximum LT3C-1 Uncertificated Accrued Interest Deferral Amount": With
respect to any Distribution Date, the sum of:
(A) the excess of (a) accrued interest at the Uncertificated REMIC 3
Pass-Through Rate applicable to REMIC 3 Regular Interest LT3C-1 for such
Distribution Date on a balance equal to the Uncertificated Principal Balance of
REMIC 3 Regular Interest LT3C-1 minus the REMIC 3 Overcollateralized Amount 1,
in each case for such Distribution Date, over (b) Uncertificated Accrued
Interest on REMIC 3 Regular Interest LT3B-1 with the rate on REMIC 3 Regular
Interest LT3B-1 subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the Class I-A Certificates and (ii) the lower of the Net
WAC Rate and the Maximum Cap Rate applicable to the Class I-A Certificates,
provided, that in each case the rates set forth in clauses (i) above shall be
multiplied by a fraction the numerator of which is the actual number of days
elapsed in the Accrual Period and the denominator of which is 30, and
(B) the REMIC 3 Group I Diverted Excess Spread.
"Maximum LT3C-2 Uncertificated Accrued Interest Deferral Amount": With
respect to any Distribution Date, the sum of:
(A) the excess of (a) accrued interest at the Uncertificated REMIC 3
Pass-Through Rate applicable to REMIC 3 Regular Interest LT3C-2 for such
Distribution Date on a balance equal to the Uncertificated Principal Balance of
REMIC 3 Regular Interest LT3C-2 minus the REMIC 3 Overcollateralized Amount 2,
in each case for such Distribution Date, over (b) Uncertificated Accrued
Interest on REMIC 3 Regular Interest LT3B-2 with the rate on REMIC 3 Regular
Interest LT3B-2 subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the Class II-A Certificates and (ii) the lower of the Net
WAC Rate and the Maximum Cap Rate applicable to the Class II-A Certificates;
provided, that in each case the rates set forth in clauses (i) above shall be
multiplied by a fraction the numerator of which is the actual number of days
elapsed in the Accrual Period and the denominator of which is 30, and
(B) the REMIC 3 Group II Diverted Excess Spread.
"Maximum Mortgage Rate": With respect to each Mortgage Loan, the percentage
set forth in the related Mortgage Note as the maximum Mortgage Rate thereunder.
"Minimum Mortgage Rate": With respect to each Mortgage Loan, the percentage
set forth in the related Mortgage Note as the minimum Mortgage Rate thereunder.
"Monthly Interest Distributable Amount": With respect to any Distribution
Date and the Class A Certificates, the Class S Certificates, REMIC 4 Regular
Interest LT4-IC and REMIC 4 Regular Interest LT4-IIC 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 S Certificates, REMIC 4 Regular Interest LT4-IC and REMIC
40
4 Regular Interest LT4-IIC) of such Class immediately prior to such Distribution
Date, in each case, reduced by any Net Prepayment Interest Shortfalls and Relief
Act Interest Shortfalls and in each case as such shortfall allocations are set
forth in Section 1.03. With respect to the Class I-C Certificates and any
Distribution Date, the Monthly Interest Distributable Amount shall equal the
Monthly Interest Distributable Amounts for REMIC 4 Regular Interest LT4-IC for
such Distribution Date. With respect to the Class II-C Certificates and any
Distribution Date, the Monthly Interest Distributable Amount shall equal the
Monthly Interest Distributable Amounts for REMIC 4 Regular Interest LT4-IIC for
such Distribution Date.
Notwithstanding the foregoing, for federal income tax purposes and under
the REMIC Provisions, the Monthly Interest Distributable Amount for the Class
I-S1 Certificates and any Distribution Date will be equal to the Uncertificated
Accrued Interest for REMIC 3 Regular Interest LT3IS1 for such Distribution Date;
the Monthly Interest Distributable Amount for the Class II-S1 Certificates and
any Distribution Date will be equal to the Uncertificated Accrued Interest for
REMIC 3 Regular Interest LT3IIS1 for such Distribution Date; the Monthly
Interest Distributable Amount for the Class I-S2 Certificates and any
Distribution Date will be equal to the sum of the Uncertificated Accrued
Interest for the REMIC 3 IS2 Interests for such Distribution Date; and the
Monthly Interest Distributable Amount for the Class II-S2 Certificates and any
Distribution Date will be equal to the sum of the Uncertificated Accrued
Interest for the REMIC 3 IIS2 Interests for such Distribution Date.
"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
Master Servicer pursuant to Sections 3.01 and 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 or second lien on, or first priority security interest or second
priority security interest in, a Mortgaged Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned to the Trustee
and delivered to the Trustee or a Custodian 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 between the Master
Servicer, in its capacity as 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.
41
"Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
included in REMIC 1 on such date, attached hereto as Exhibit D. The Mortgage
Loan Schedule shall be prepared by the Seller and shall set forth the following
information as of the Cut-off Date with respect to each Mortgage Loan, as
applicable:
(i) the Mortgagor's name and the originator's Mortgage Loan identifying
number;
(ii) the street address of the Mortgaged Property including the state and
zip code;
(iii) a code indicating whether the Mortgaged Property is owner-occupied;
(iv) the type of Residential Dwelling constituting the Mortgaged Property;
(v) the original months to maturity;
(vi) the Loan-to-Value Ratio and the combined Loan-to-Value Ratio at
origination;
(vii) the Mortgage Rate in effect immediately following the Cut-off Date;
(viii) the date on which the first Monthly Payment was due on the Mortgage
Loan;
(ix) the stated maturity date;
(x) the amount of the Monthly Payment due on the first Due Date after the
Cut-off Date;
(xi) the last Due Date on which a Monthly Payment was actually applied to
the unpaid Stated Principal Balance;
(xii) the original principal amount of the Mortgage Loan;
(xiii) the Stated Principal Balance of the Mortgage Loan as of the Close of
Business on the Cut-off Date;
(xiv) whether such Mortgage Loan is a Fixed Rate Mortgage Loan or an
Adjustable Rate Mortgage Loan, and with respect to each Adjustable Rate Mortgage
Loan: (a) the Gross Margin, (b) the Maximum Mortgage Rate, (c) the Minimum
Mortgage Rate, (d) the Periodic Rate Cap for the first Adjustment Date and each
subsequent Adjustment Date and (e) the next Adjustment Date immediately
following the Cut-off Date;
(xv) a code indicating the purpose of the Mortgage Loan (i.e., purchase
financing, rate/term refinancing, cash-out refinancing);
42
(xvi) the Mortgage Rate at origination;
(xvii) a code indicating the documentation program;
(xviii) the Seller's risk grade and the FICO score;
(xix) the Value of the Mortgaged Property;
(xx) the sale price of the Mortgaged Property, if applicable;
(xxi) whether such Mortgage Loan is secured by a first lien or a second
lien on the related Mortgaged Property;
(xxii) the date of origination;
(xxiii) the stated remaining months to maturity as of the Cut-off Date;
(xxiv) the current principal and interest payment of the Mortgage Loan as
of the Cut-off Date;
(xxv) the interest "paid to date" of the Mortgage Loan as of the Cut-off
Date;
(xxvi) a code indicating whether the Mortgage Loan is a Group I Mortgage
Loan or a Group II Mortgage Loan;
(xxvii) a code indicating the Index that is associated with such Mortgage
Loan (if such Mortgage Loan is an Adjustable Rate Mortgage Loan);
(xxviii) the rate adjustment frequency (if such Mortgage Loan is an
Adjustable Rate Mortgage Loan);
(xxix) the number of years the prepayment penalty is in effect; and
(xxx) a code indicating that such Mortgage Loan is covered under the PMI
Policy.
The Mortgage Loan Schedule shall set forth the following information, with
respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1) the
number of Mortgage Loans; (2) the Cut-off Date Principal Balance of the Mortgage
Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans and (4) the
weighted average maturity of the Mortgage Loans. The Mortgage Loan Schedule
shall be amended from time to time by the Master 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. The
Mortgage Loan Schedule shall clearly identify the Mortgage Loans that are
included in Group I Mortgage Loans and those that are included in Group II
Mortgage Loans.
43
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"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 annual
rate set forth in the related Mortgage Note, as amended, modified or
supplemented from time to time. 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 net of Advances, Servicing Advances, Servicing
Fees and any other Servicing Fees received and retained in connection with the
liquidation of such Mortgage Loan or Mortgaged Property in accordance with the
terms of this Agreement.
"Net Monthly Excess Cashflow": With respect to each Distribution Date, the
Group I Net Monthly Excess Cashflow or Group II Net Monthly Excess Cashflow.
"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 I-A Certificates,
(a) a per annum rate equal to the excess, if any, of (i) the weighted average of
the Adjusted Net Mortgage Rates of the Group I Mortgage Loans, weighted on the
basis of the Stated Principal Balances thereof as of the Due Date in the month
preceding the month of such Distribution Date, over (ii) the percentage
equivalent of a fraction, (1) the numerator of which is the sum of (A) the Group
44
I Certificate Insurer Premium, (B) the Guaranty Fee, (C) the product of (I) the
Pass-Through Rate for the Class I-S1 Certificates for such Distribution Date and
(II) the Notional Amount with respect to the Class I-S1 Certificates immediately
prior to such Distribution Date and (D) the product of (I) the Pass-Through Rate
for the Class I-S2 Certificates for such Distribution Date and (II) the Notional
Amount with respect to the Class I-S2 Certificates immediately prior to such
Distribution Date, and (2) the denominator of which is the aggregate Stated
Principal Balance of the Group I Mortgage Loans as of the Due Date in the month
preceding the month of such Distribution Date multiplied by (b) 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 any Distribution Date and the Class II-A Certificates, (a) a per annum
rate equal to the excess, if any, of (i) the weighted average of the Adjusted
Net Mortgage Rates of the Group II Mortgage Loans, weighted on the basis of the
Stated Principal Balances thereof as of the Due Date in the month preceding the
month of such Distribution Date, over (ii) the percentage equivalent of a
fraction, (1) the numerator of which is the sum of (A) the Group II Insurer
Premium, (B) the product of (I) the Pass-Through Rate for the Class II-S1
Certificates for such Distribution Date and (II) the Notional Amount with
respect to the Class II-S1 Certificates immediately prior to such Distribution
Date and (C) the product of (I) the Pass-Through Rate for the Class II-S2
Certificates for such Distribution Date and (II) the Notional Amount with
respect to the Class II-S2 Certificates immediately prior to such Distribution
Date, and (2) the denominator of which is the aggregate Stated Principal Balance
of the Group II Mortgage Loans as of the Due Date in the month preceding the
month of such Distribution Date multiplied by (b) 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.
"Net WAC Rate Carryover Amount": With respect to the Class A Certificates
and any Distribution Date for which the Pass-Through Rate for such Class of
Certificates for such Distribution Date is the Net WAC Rate, the sum of (i) the
positive excess of (A) the amount of interest that would have been payable to
such Class of Certificates on such Distribution Date if the Pass-Through Rate
for such Class of Certificates for such Distribution Date were calculated at the
related Formula Rate over (B) the amount of interest payable on such Class of
Certificates at the Net WAC Rate for such Distribution Date and (ii) the related
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 the most recently ended Accrual Period.
"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.
"NIM Notes": The Insured NIM Notes and the Other NIM Notes.
"NIMS Insurer": A Person, or any of its successors that shall be the
insurer under an insurance policy insuring certain payments on Insured NIM
Notes, if any, provided, however, upon the occurrence of certain events (as set
forth in the Indenture and/or any other agreement among such Person, Long Beach
45
Asset Holdings Corp., the Master Servicer, the Trustee and other Persons), the
NIMS Insurer shall be the Person designated in the Indenture or such other
agreement. If none of the net interest margin securities have been issued by one
or more of the Affiliates of the Depositor or by one or more entities which are
sponsored by an Affiliate of the Depositor, that are insured by an insurance
policy, there shall be no NIMS Insurer under this Agreement, all references to
the NIMS Insurer or Insured NIM Notes in this agreement are for administrative
convenience only, shall be completely disregarded and no Person shall have any
rights of the NIMS Insurer under this Agreement.
"NIMS Insurer Default": The existence and continuation of a failure by the
NIMS Insurer to make a payment under an insurance policy or policies issued in
connection with the Indenture or any other event of default by the NIMS Insurer
under any documents relating to the Indenture.
"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 Master Servicer, will not or, in the
case of a proposed Advance or Servicing Advance, would not be ultimately
recoverable from related late payments, Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
"Notice of Claim": The notice required to be furnished by the Trustee to
the Certificate Insurer in the event an Insured Payment is required to be paid
under the Certificate Insurance Policy with respect to any Distribution Date, in
the form set forth as an exhibit to the Certificate Insurance Policy.
"Notional Amount": With respect to the Class I-S1 Certificates, the lesser
of (i) the following amounts:
Class I-S1
Distribution Date Notional Amount
------------------------------ ----------------------
November 2002................ $ 89,965,000
December 2002................ 87,843,000
January 2003................. 85,756,000
February 2003................ 83,703,000
March 2003................... 81,681,000
April 2003................... 79,691,000
May 2003..................... 77,731,000
June 2003.................... 75,801,000
July 2003.................... 73,900,000
August 2003.................. 72,027,000
September 2003............... 70,183,000
October 2003................. 68,373,000
November 2003................ 66,609,000
December 2003................ 64,891,000
January 2004................. 63,216,000
February 2004................ 61,585,000
March 2004................... 59,996,000
46
Class I-S1
Distribution Date Notional Amount
------------------------------ ----------------------
April 2004................... 58,448,000
May 2004..................... 56,939,000
June 2004.................... 55,469,000
July 2004.................... 54,037,000
August 2004.................. 52,642,000
September 2004............... 51,283,000
October 2004................. 49,958,000
November 2004................ 48,668,000
December 2004................ 47,411,000
January 2005................. 46,186,000
February 2005................ 44,993,000
March 2005................... 43,830,000
April 2005................... 42,697,000
and (ii) the sum of the Uncertificated Principal Balances of REMIC 1 Regular
Interest LT1A-A, REMIC I Regular Interest LT1A-P and the REMIC 1 IS1 Interests,
in each case immediately prior to such Distribution Date.
With respect to the Class II-S1 Certificates, the lesser of (i) the
following amounts:
Class II-S1
Distribution Date Notional Amount
----------------------------- ---------------------
November 2002................ $ 80,047,000
December 2002................ 78,262,000
January 2003................. 76,495,000
February 2003................ 74,746,000
March 2003................... 73,013,000
April 2003................... 71,296,000
May 2003..................... 69,595,000
June 2003.................... 67,909,000
July 2003.................... 66,238,000
August 2003.................. 64,581,000
September 2003............... 62,939,000
October 2003................. 61,326,000
November 2003................ 59,754,000
December 2003................ 58,221,000
January 2004................. 56,728,000
February 2004................ 55,273,000
March 2004................... 53,856,000
April 2004................... 52,474,000
May 2004..................... 51,128,000
June 2004.................... 49,816,000
July 2004.................... 48,537,000
August 2004.................. 47,291,000
47
Class II-S1
Distribution Date Notional Amount
----------------------------- ---------------------
September 2004............... 46,077,000
October 2004................. 44,894,000
November 2004................ 43,741,000
December 2004................ 42,618,000
January 2005................. 41,523,000
February 2005................ 40,456,000
March 2005................... 39,416,000
April 2005................... 38,403,000
and (ii) the sum of the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1B-A, REMIC 1 Regular Interest LT1B-P and the REMIC 1 IIS1 Interests,
in each case immediately prior to such Distribution Date.
With respect to the Class I-S2 Certificates, immediately prior to any
Distribution Date will be equal to the lesser of (i) $35,986,000 for the
November 2002 Distribution Date through the October 2004 Distribution Date and
$26,989,000 for the November 2004 Distribution Date through the April 2005
Distribution Date and (ii) the aggregate Uncertificated Principal Balance of
REMIC 1 Regular Interest LT1A-A, REMIC 1 Regular Interest LT1A-B, REMIC 1
Regular Interest LT1A-P, and the REMIC 1 IS1 Interests, in each case immediately
prior to such Distribution Date.
With respect to the Class II-S2 Certificates, immediately prior to any
Distribution Date will be equal to $24,014,000 for the November 2002
Distribution Date through the October 2004 Distribution Date and $18,011,000 for
the November 2004 Distribution Date through the April 2005 Distribution Date,
and (ii) the aggregate Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1B-A, REMIC 1 Regular Interest LT1B-P, and the REMIC 1 IIS1
Interests, in each case immediately prior to such Distribution Date.
With respect to REMIC 4 Regular Interest LT4-IC, immediately prior to any
Distribution Date, an amount equal to the aggregate of the Uncertificated
Principal Balances of the REMIC 3 Group I Regular Interests. With respect to the
REMIC 4 Regular Interest LT4-IIC, immediately prior to any Distribution Date, an
amount equal to the aggregate of the Uncertificated Principal Balances of the
REMIC 3 Group II Regular Interests. With respect to the Class I-C Certificates,
immediately prior to any Distribution Date, an amount equal to the Notional
Amount of REMIC 4 Regular Interest LT4-IC. With respect to the Class II-C
Certificates, immediately prior to any Distribution Date, an amount equal to the
Notional Amount of REMIC 4 Regular Interest LT4-IIC.
"Notional Regular Interest": Each of the Regular Interests described in the
Preliminary Statement as not having an Uncertificated Principal Balance.
"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 Master Servicer, the Seller or the
Depositor, as applicable.
48
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor or the Master Servicer,
reasonably acceptable to the Trustee, if such opinion is delivered to the
Trustee, except that any opinion of counsel relating to (a) the qualification of
any Trust 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
Terminator may elect to terminate the Trust Fund pursuant to Section 9.01.
"Original Class Certificate Principal Balance": With respect to the Class A
Certificates and the Class P Certificate, the corresponding Certificate
Principal Balance on the Closing Date.
"Original Class Notional Amount": With respect to the Class I-S1
Certificates, $89,965,000. With respect to the Class II-S1 Certificates,
$80,047,000. With respect to the Class I-S2 Certificates, $35,986,000. With
respect to the Class II-S2 Certificates, $24,014,000. With respect to REMIC 4
Regular Interest LT4-IC, $104.14. With respect to REMIC 4 Regular Interest
LT4-IIC, $45.67.
"Order": As defined in Section 3.31(b) hereof.
"Other NIM Notes": Net Interest Margin Securities, if any, issued by one or
more Affiliates of the Depositor or by one or more entities sponsored by an
Affiliate of the Depositor, which are backed by the cashflow on certain Class S2
Certificates, Class C Certificates and Class P Certificates and not insured by
any NIMS Insurer.
"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 for any Distribution Date, the
lesser of (x) the related Formula Rate for such Distribution Date and (y) the
related Net WAC Rate for such Certificates for such Distribution Date.
With respect to the Class I-S1 Certificates and any Distribution Date, a
per annum rate equal to 5.25% for the Distribution Date in November 2002 through
the Distribution Date in April 2005 and 0.00% thereafter.
With respect to the Class II-S1 Certificates and any Distribution Date, a
per annum rate equal to 5.25% for the Distribution Date in November 2002 through
the Distribution Date in April 2005 and 0.00% thereafter.
With respect to the Class I-S2 Certificates and any Distribution Date, a
per annum rate equal to the lesser of (x) 4.25% per annum and (y) the Class I-S2
Cap Rate, for the Distribution Date in November 2002 through the Distribution
Date in April 2005 and 0.00% thereafter.
49
With respect to the Class II-S2 Certificates and any Distribution Date, a
per annum rate equal to the lesser of (x) 4.25% per annum and (y) the Class
II-S2 Cap Rate, for the Distribution Date in November 2002 through the
Distribution Date in April 2005 and 0.00% thereafter.
However, for federal income tax purposes and under the REMIC Provisions,
(A) the Class S Certificates will not have a Pass-Through Rate, and (B) the
Monthly Interest Distributable Amounts for the Class S Certificates and any
Distribution Date for federal income tax purposes will be as specified in the
definition of Monthly Interest Distributable Amount.
With respect to REMIC 4 Regular Interest LT4-IC and any Distribution Date,
a per annum rate equal to the percentage equivalent of a fraction, the numerator
of which is the excess of (a) the sum of the amounts calculated pursuant to
clauses (A) through (D) below over (b) the sum of the Guaranty Fee and the Group
I Certificate Insurer Premium for such Distribution Date, and the denominator of
which is the aggregate of the Uncertificated Principal Balances of the REMIC 3
Group I Regular Interests. For purposes of calculating the Pass-Through Rate for
REMIC 4 Regular Interest LT4-IC, the numerator is equal to the sum of the
following components:
(A) the Uncertificated REMIC 3 Pass-Through Rate for REMIC 3 Regular
Interest LT3A-1 minus Marker Rate 1, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 3 Regular Interest LT3A-1;
(B) the Uncertificated REMIC 3 Pass-Through Rate for REMIC 3 Regular
Interest LT3B-1 minus Marker Rate 1, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 3 Regular Interest LT3B-1;
(C) the Uncertificated REMIC 3 Pass-Through Rate for REMIC 3 Regular
Interest LT3C-1 minus Marker Rate 1, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 3 Regular Interest LT3C-1; and
(D) 100% of the interest on REMIC 4 Regular Interest LT4P-1.
With respect to REMIC 4 Regular Interest LT4-IIC and any Distribution Date,
a per annum rate equal to the percentage equivalent of a fraction, the numerator
of which is the excess of (a) the sum of the amounts calculated pursuant to
clauses (A) through (D) below over (b) the Group II Certificate Insurer Premium
for such Distribution Date, and the denominator of which is the aggregate of the
Uncertificated Principal Balances of the REMIC 4 Group II Regular Interests. For
purposes of calculating the Pass-Through Rate for REMIC 4 Regular Interest
LT4-IIC, the numerator is equal to the sum of the following components:
(A) the Uncertificated REMIC 3 Pass-Through Rate for REMIC 3 Regular
Interest LT3A-2 minus Marker Rate 2, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 3 Regular Interest LT3A-2;
(B) the Uncertificated REMIC 3 Pass-Through Rate for REMIC 3 Regular
Interest LT3B-2 minus Marker Rate 2, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 3 Regular Interest LT3B-2;
50
(C) the Uncertificated REMIC 3 Pass-Through Rate for REMIC 3 Regular
Interest LT3C-2 minus Marker Rate 2, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 3 Regular Interest LT3C-2; and
(D) 100% of the interest on REMIC 4 Regular Interest LT4P-2.
The Class I-C Certificates and the Class II-C Certificates will not have a
Pass-Through Rate.
"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 or Initial Notional Amount
represented by such Certificate and the denominator of which is the Original
Class Certificate Principal Balance or Original Class Notional Amount 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, with respect to each Class referred to in this
paragraph, 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 Master Servicer, the NIMS
Insurer, the Certificate Insurer, the Trustee or any of their respective
Affiliates or for which an Affiliate of the NIMS Insurer, the Certificate
Insurer or 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 respective agents acting in their
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 the highest available rating category of Xxxxx'x
and 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
51
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,
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 F-1+ or higher by
Fitch, rated A-1+ or higher by S&P and rated A2 or higher by Xxxxx'x;
(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 taxable money market funds (which may be 12b-1 funds, as
contemplated under the rules promulgated by the Securities and Exchange
Commission under the Investment Company Act of 1940), which funds have the
highest rating available for such securities from the Rating Agencies or which
have been designated in writing by the Rating Agencies as Permitted Investments;
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 II-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.
"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.
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"Plan": Any employee benefit plan or certain other retirement plans and
arrangements, including individual retirement accounts and annuities, Xxxxx
plans and bank collective investment funds and insurance company general or
separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA or Section 4975 of the Code.
"PMI Insurer": None of the Mortgage Loans are insured by a primary mortgage
insurance policy. References to the PMI Insurer, PMI Insurer Fee, PMI Insurer
Fee Rate, PMI Mortgage Loans and PMI Policy are left in this Agreement for
administrative convenience and shall be completely disregarded. There are no PMI
Mortgage Loans nor any PMI Insurer under this Agreement and no Person shall have
any rights of the PMI Insurer under this Agreement.
"PMI Insurer Fee": The amount payable to the PMI Insurer on each
Distribution Date, which amount shall equal one twelfth of the product of (i)
the PMI Insurer Fee Rate, multiplied by (ii) the aggregate Stated Principal
Balance of the PMI Mortgage Loans and any related REO Properties as of the first
day of the related Due Period.
"PMI Insurer Fee Rate": 0.00% per annum.
"PMI Mortgage Loans": The Mortgage Loans insured by the PMI Insurer set
forth on the list of Mortgage Loans attached hereto as Schedule IV. There are no
PMI Mortgage Loans under this Agreement.
"PMI Policy": Not applicable.
"Policy Payment Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.31(a) which shall be entitled
"Policy Payment Account, Deutsche Bank National Trust Company, as Trustee, in
trust for the registered Certificateholders of Long Beach Mortgage Loan Trust
2002-4, Asset-Backed Certificates, Series 2002-4" and which must at all times be
an Eligible Account.
"Preference Amount": Any amount previously distributed to a Holder of an
Insured Certificate (other than the portion of the Guaranteed Interest
Distribution Amount attributable to any Prepayment Interest Shortfalls or Relief
Act Interest Shortfalls) that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy in a proceeding under the United
States Bankruptcy Code (11 U.S.C. Section 101 et seq.), as amended from time to
time, or in any other applicable bankruptcy, insolvency, receivership,
readjustment of debt, reorganization, marshalling of assets and liabilities or
similar proceeding by or against the obligor on a Mortgage Loan, in accordance
with a final nonappealable order of a court having competent jurisdiction.
"Prepayment Assumption": The pricing prepayment assumption as described 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 Master
Servicer Prepayment Charge Payment Amount).
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"Prepayment Charge Schedule": As of the Cut-off Date, a list attached
hereto as Schedule I (including the Prepayment Charge Summary attached thereto),
setting 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.
The Prepayment Charge Schedule shall be amended from time to time by the
Master Servicer in accordance with the provisions of this Agreement and a copy
of each related amendment shall be furnished by the Master Servicer to the NIMS
Insurer.
"Prepayment Interest Shortfall": With respect to any Distribution Date, for
each Mortgage Loan that was during the related Prepayment Period the subject of
a Principal Prepayment in full or in part that was applied by the Master
Servicer to reduce the outstanding principal balance of such loan on a date
preceding the Due Date in the succeeding Prepayment Period, an amount equal to
interest at the applicable Net Mortgage Rate on the amount of such Principal
Prepayment for the lesser of (i) the number of days commencing on the date on
which the prepayment is applied and ending on the last day of the related
Prepayment Period and (ii) 30 days. The obligations of the Master Servicer in
respect of any Prepayment Interest Shortfall are set forth in Section 3.24.
"Prepayment Period": With respect to the first Distribution Date, the
period from September 1, 2002 through October 31, 2002, and with respect to any
Distribution Date thereafter, the calendar month immediately preceding the
calendar month in which such Distribution Date occurs.
"Prime Rate": The prime rate of United States money center commercial banks
as published in The Wall Street Journal.
"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 shall equal 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.
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"Principal Distribution Amount": With respect to any Distribution Date, the
sum of the Group I Principal Distribution Amount and the Group II Principal
Distribution Amount.
"Principal Prepayment": Any payment of principal made by the Mortgagor on a
Mortgage Loan which is received in advance of its scheduled Due Date and which
is not accompanied by an amount of interest representing the full amount of
scheduled interest due on any Due Date in any month or months subsequent to the
month of prepayment.
"Principal Remittance Amount": 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 October
1, 2002 relating to the public offering of the Class II-A Certificates and the
Class II-S1 Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO Property to be
purchased pursuant to or as contemplated by Section 2.03, Section 3.16(c) or
Section 9.01, and as confirmed by an Officers' Certificate from the Master
Servicer to the Trustee, an amount equal to the sum of (i) 100% of the Stated
Principal Balance thereof as of the date of purchase (or such other price as
provided in Section 9.01) (without giving effect to clauses (a)(iv) and (b) of
the first sentence and clause (b) of the second sentence of the definition of
the "Stated Principal Balance"), (ii) in the case of (x) a Mortgage Loan,
accrued interest on such Stated Principal Balance at the applicable Net Mortgage
Rate in effect from time to time from the Due Date as to which interest was last
paid by the Mortgagor or by an advance by the Master Servicer through the end of
the calendar month in which the purchase is to be effected and (y) an REO
Property, the sum of (1) accrued interest on such Stated Principal Balance at
the applicable Net Mortgage Rate in effect from time to time from the Due Date
as to which interest was last paid by the Mortgagor or by an advance by the
Master 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 in respect of REO Imputed Interest
pursuant to Section 4.01, (iii) any unreimbursed Servicing Advances, Advances
and Nonrecoverable Advances and any unpaid Servicing Fees allocable to such
Mortgage Loan or REO Property, (iv) any amounts previously withdrawn from the
Collection Account in respect of such Mortgage Loan or REO Property pursuant to
Section 3.11 (a)(ix) and Section 3.16(b), and (v) in the case of a Mortgage Loan
required to be purchased pursuant to Section 2.03, enforcement expenses
reasonably incurred or to be incurred by the Certificate Insurer, the NIMS
Insurer, the Master Servicer, the Guarantor or the Trustee in respect of the
breach or defect giving rise to the purchase obligation.
Notwithstanding the foregoing, if an amount of Mortgage Loans (measured by
the aggregate principal balance) that is in excess of 2.00% of the aggregate
principal balance of the Closing Date Mortgage Loans as of the Cut-Off Date has
previously been repurchased (exclusive of any Mortgage Loans purchased by the
Master Servicer pursuant to Section 3.16(c)) or substituted for, then in
addition to those requirements set forth above, the Purchase Price shall include
the amount of any related Prepayment Charge (other than with respect to a
Purchase Price paid in connection with Section 9.01).
55
"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 5.00%
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 greater than the Maximum Mortgage Rate on the Deleted
Mortgage Loan and have a Minimum Mortgage Rate not less than the Minimum
Mortgage Rate of the Deleted Mortgage Loan, (iv) 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, (v) 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, (vi) have a remaining term to maturity not
greater than (and not more than one year less than) that of the Deleted Mortgage
Loan, (vii) be current (with no contractual delinquencies outstanding) as of the
date of substitution, (viii) 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, (ix) have a risk grading determined by the Seller
at least equal to the risk grading assigned on the Deleted Mortgage Loan, (x)
have been underwritten or reunderwritten by the Seller in accordance with the
same or, as determined by the Seller, more favorable, underwriting criteria and
guidelines as the Deleted Mortgage Loan, (xi) with respect to Qualified
Substituted Mortgage Loans substituted for Deleted Mortgage Loans that are Group
I Mortgage Loans, have had an original Principal Balance that conformed to
Xxxxxx Xxx loan limits as of the date of its origination and be otherwise
acceptable to the Guarantor, (xii) be secured by the same property type as the
Deleted Mortgage Loan, (xiii) have a lien priority equal to or superior to that
of the Deleted Mortgage Loan, (xiv) be covered by the PMI Policy if the Deleted
Mortgage Loan that is a Group II Mortgage Loan was covered by the PMI Policy,
(xv) conform to each representation and warranty set forth in Section 6 of the
Mortgage Loan Purchase Agreement applicable to the Deleted Mortgage Loan, (xvi)
have a FICO score no lower than the FICO score of the Deleted Mortgage Loan,
(xvii) be an adjustable-rate Mortgage Loan if the Deleted Mortgage Loan is an
adjustable-rate Mortgage Loan or be a fixed-rate Mortgage Loan if the Deleted
Mortgage Loan is a fixed-rate Mortgage Loan; and (xviii) is not secured by
Mortgaged Property located in the State of California unless the Deleted
Mortgage Loan is secured by Mortgaged Property located in the State of
California. 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 (applied separately
for the Group I Mortgage Loans and Group II Mortgage Loans), the Mortgage Rates
described in clauses (ii) through (v) hereof shall be satisfied for each such
mortgage loan, the risk gradings described in clause (ix) hereof shall be
satisfied as to each such mortgage loan, the terms described in clause (vi)
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
56
described in clause (viii) 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 (xv) hereof must be satisfied
as to each Qualified Substitute Mortgage Loan or in the aggregate, as the case
may be.
Notwithstanding the foregoing, if an amount of Mortgage Loans (measured by
the aggregate principal balance) that is in excess of 2.00% of the aggregate
principal balance of the Closing Date Mortgage Loans as of the Cut-Off Date has
previously been repurchased (exclusive of any Mortgage Loans purchased by the
Master Servicer pursuant to Section 3.16(c)) or substituted for, then in
addition to clauses (i) through (xiv) above, each Qualified Substitute Mortgage
Loan shall also have a Prepayment Charge provision at least as favorable to the
Holders of the related Class P Certificates as the Prepayment Charge provisions
in the Deleted Mortgage Loan.
"Rate Change Date": The date specified in the Preliminary Statement on
which the Uncertificated Pass-Through Rate for certain REMIC Regular Interest
changes.
"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 the Master Servicer.
"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 and Insurance Proceeds in
respect of such Mortgage Loan.
"Record Date": With respect to (i) the Class S Certificates, the Class P
Certificates, the Class C Certificates, the Residual Certificates and any
Definitive Certificates, the Close of Business on the last Business Day of the
calendar month preceding the month in which the related Distribution Date occurs
and (ii) with respect to the Class A Certificates, the Close of Business on the
Business Day immediately preceding the related Distribution Date; provided,
however, that following the date on which Definitive Certificates for a Class A
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.
"Recording Documents": As defined in Section 2.01 hereof.
"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 Depositor, the Seller or the Master Servicer or any affiliate
thereof and (iii) which have been designated as such by the Trustee with the
consent of the Controlling Insurer; provided, however, that if fewer than two of
such banks provide a LIBOR rate, then any leading banks selected by the Trustee
with the consent of the Controlling Insurer 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.
57
"Regular Certificates": The Class A Certificates, the Class S Certificates,
the Class C Certificates and the 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 a
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 acquired with respect to a Mortgage Loan,
together with all collections thereon and proceeds thereof, (iii) the Trustee's
rights with respect to the Mortgage Loans under all insurance policies,
including the PMI Policy, required to be maintained pursuant to this Agreement
and any proceeds thereof, (iv) the Depositor's rights with respect to the
Mortgage Loans under the Mortgage Loan Purchase Agreement (including any
security interest created thereby), (v) the obligations of the Guarantor to the
Holders of the Guaranteed Certificates under the Guaranty, (vi) the obligations
of the Certificate Insurer to the Holders of the Insured Certificates under the
Certificate Insurance Policy and (vii) the Collection Account, the Distribution
Account (subject to the last sentence of this definition), the Policy Payments
Account and any REO Account and such assets that are deposited therein from time
to time and any investments thereof, together with any and all income, proceeds
and payments with respect thereto. Notwithstanding the foregoing, however, a
REMIC election will not be made with respect to the Reserve Funds and Master
Servicer Prepayment Charge Payment Amounts.
"REMIC 1 Group I Regular Interests": REMIC 1 Regular Interest LT1A-A, REMIC
1 Regular Interest LT1A-B, REMIC 1 Regular Interest LT1A-P, and the REMIC 1 IS1
Interests.
"REMIC 1 Group II Regular Interests": REMIC 1 Regular Interest LT1B-A,
REMIC 1 Regular Interest LT1B-B, REMIC 1 Regular Interest LT1B-P, and the REMIC
1 IIS1 Interests.
"REMIC 1 IS1 Interests": The regular interests in REMIC 1 that are
described in the Preliminary Statement and designated as LT1IS1-1 through
LT1IS1-30. Each REMIC 1 IS1 Interest 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 IIS1 Interests": The regular interests in REMIC 1 that are
described in the Preliminary Statement and designated as LT1IIS1-1 through
LT1IIS1-30. Each REMIC 1 IIS1 Interest shall accrue interest at the related
58
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 LT1A-A": 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 LT1A-A 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 LT1A-B": 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 LT1A-B 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 LT1A-P": 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 LT1A-P shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to any Prepayment Charges relating to the
Group I Mortgage Loans collected by the Master Servicer and to a distribution 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 LT1B-A": 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 LT1B-A 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 LT1B-B": 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 LT1B-B 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 LT1B-P": 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 LT1B-P shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to any Prepayment Charges relating to the
Group II Mortgage Loans collected by the Master Servicer and to a distribution
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.
59
"REMIC 1 Regular Interests": REMIC 1 Regular Interest LT1A-A, REMIC 1
Regular Interest LT1A-B, REMIC 1 Regular Interest LT1A-P, REMIC 1 Regular
Interest LT1B-A, REMIC 1 Regular Interest LT1B-P, the REMIC 1 IS1 Interests and
the REMIC 1 IIS1 Interests.
"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 REMIC 3,
as holder of the REMIC 2 Regular Interests, and the Class R Certificateholders,
as holders 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 IS1 Interests": The regular interests in REMIC 2 that are
described in the Preliminary Statement and designated as LT2IS1-1 through
LT2IS1-30. Each REMIC 2 IS1 Interest shall accrue interest at the related
Uncertificated REMIC 2 Pass-Through Rate in effect from time to time.
"REMIC 2 IIS1 Interests": The regular interests in REMIC 2 that are
described in the Preliminary Statement and designated as LT2IIS1-1 through
LT2IIS1-30. Each REMIC 2 IIS1 Interest shall accrue interest at the related
Uncertificated REMIC 2 Pass-Through Rate in effect from time to time.
"REMIC 2 IS2 Interests": The regular interests in REMIC 2 that are
described in the Preliminary Statement and designated as LT2IS2-1 and LT2IS2-2.
Each REMIC 2 IS2 Interest shall accrue interest at the related Uncertificated
REMIC 2 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 2 IIS2 Interests": The regular interests in REMIC 2 that are
described in the Preliminary Statement and designated as LT2IIS2-1 and
LT2IIS2-2. Each REMIC 2 IIS2 Interest shall accrue interest at the related
Uncertificated REMIC 2 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 2 Regular Interest LT2A-A": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2A-A shall accrue
interest at the related Uncertificated REMIC 2 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 2 Regular Interest LT2A-P": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2A-P shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to any amounts distributed to REMIC 1
Regular Interest LT1A-P.
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"REMIC 2 Regular Interest LT2B-A": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2B-A shall accrue
interest at the related Uncertificated REMIC 2 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 2 Regular Interest LT2B-P": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2B-P shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to any amounts distributed to REMIC 1
Regular Interest LT1B-P.
"REMIC 2 Regular Interests": REMIC 2 Regular Interest LT2A-A, REMIC 2
Regular Interest LT2B-A, REMIC 2 Regular Interest LT2A-P, REMIC 2 Regular
Interest LT2B-P, the REMIC 2 IS1 Interests, the REMIC 2 IIS1 Interests, the
REMIC 2 IS2 Interests, and the REMIC 2 IIS2 Interests.
"REMIC 3": The segregated pool of assets consisting of all of the REMIC 2
Regular Interests conveyed in trust to the Trustee, for the benefit of REMIC 4,
as holder of the REMIC 3 Regular Interests, and the Class R Certificateholders,
as holders of the Class R-3 Interest, pursuant to Article II hereunder, and all
amounts deposited therein, with respect to which a separate REMIC election is to
be made.
"REMIC 3 IS2 Interests": The REMIC 3 Regular Interests described in the
Preliminary Statement and designated as LT3IS2-1 and LT3IS2-2. Each REMIC 3 IS2
Interest shall accrue interest at the related Uncertificated REMIC 3
Pass-Through Rate in effect from time to time.
"REMIC 3 IIS2 Interests": The regular interests in REMIC 3 that are
described in the Preliminary Statement and designated as LT3IIS2-1 and
LT3IIS2-2. Each REMIC 3 IIS2 Interest shall accrue interest at the related
Uncertificated REMIC 3 Pass-Through Rate in effect from time to time.
"REMIC 3 Regular Interest LT3A-1": One of the separate non-certified
beneficial ownership interests in REMIC 3 issued hereunder and designated as a
Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3A-1 shall accrue
interest at the unrelated Uncertificated REMIC 3 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 3 Regular Interest LT3B-1": One of the separate non-certified
beneficial ownership interests in REMIC 3 issued hereunder and designated as a
Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3B-1 shall accrue
interest at the unrelated Uncertificated REMIC 3 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.
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"REMIC 3 Regular Interest LT3C-1": One of the separate non-certified
beneficial ownership interests in REMIC 3 issued hereunder and designated as a
Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3C-1 shall accrue
interest at the unrelated Uncertificated REMIC 3 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 3 Regular Interest LT3A-P": One of the separate non-certificated
beneficial ownership interests in REMIC 3 issued hereunder and designated as a
Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3A-P shall accrue
interest at the related Uncertificated REMIC 3 Pass-Through Rate in effect from
time to time, and shall be entitled to any amounts distributed to REMIC 2 A
Regular Interest LT2A-P.
"REMIC 3 Regular Interest LT3A-2": One of the separate non-certified
beneficial ownership interests in REMIC 3 issued hereunder and designated as a
Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3A-2 shall accrue
interest at the related Uncertificated REMIC 3 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 3 Regular Interest LT3B-2": One of the separate non-certified
beneficial ownership interests in REMIC 3 issued hereunder and designated as a
Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3B-2 shall accrue
interest at the unrelated Uncertificated REMIC 3 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 3 Regular Interest LT3C-2": One of the separate non-certified
beneficial ownership interests in REMIC 3 issued hereunder and designated as a
Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3C-2 shall accrue
interest at the unrelated Uncertificated REMIC 3 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 3 Regular Interest LT3B-P": One of the separate non-certificated
beneficial ownership interests in REMIC 3 issued hereunder and designated as a
Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3B-P shall accrue
interest at the related Uncertificated REMIC 3 Pass-Through Rate in effect from
time to time, and shall be entitled to any amounts distributed to REMIC 2B
Regular Interest LT2B-P.
"REMIC 3 Regular Interest LT3IS1": The regular interest in REMIC 3 that is
described in the Preliminary Statement and designated as LT3IS1. The REMIC 3
Regular Interest LT3IS1 shall accrue interest at the related Uncertificated
REMIC 3 Pass-Through Rate in effect from time to time.
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"REMIC 3 Regular Interest LT3IIS1": The regular interest in REMIC 3 that is
described in the Preliminary Statement and designated as LT3IIS1. The REMIC 3
Regular Interest LTIIS1 shall accrue interest at the related Uncertificated
REMIC 3 Pass-Through Rate in effect from time to time.
"REMIC 3 Regular Interests": REMIC 3 Regular Interest LT3A-1, REMIC 3
Regular Interest LT3B-1, REMIC 3 Regular Interest LT3C-1, REMIC 3 Regular
Interest LT3IS1, REMIC 3 IS2 Interests, REMIC 3 Regular Interest LT3A-2, REMIC 3
Regular Interest LT3B-2, REMIC 3 Regular Interest LT3C-2, REMIC 3 Regular
Interest LT3IIS1, the REMIC 3 IIS2 Interests, REMIC 3 Regular Interest LT3A-P
and REMIC 3 Regular Interest LT3B-P.
"REMIC 3 Group I Diverted Excess Spread": 1% of any amount of Group I Net
Monthly Excess Cash Flow that, pursuant to Section 4.01(d)(i)(f), is used to
make payments to the Class II-A Certificates.
"REMIC 3 Group I 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 Group I Mortgage Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC 3 Pass-Through Rate for REMIC 3
Regular Interest LT3A-1 minus Marker Rate 1, divided by (b) 12.
"REMIC 3 Group I Regular Interests": REMIC 3 Regular Interest LT3A-1, REMIC
3 Regular Interest LT3B-1, REMIC 3 Regular Interest LT3C-1, REMIC Regular
Interest LT3IS1, REMIC Regular Interest LT3A-P, and REMIC 3 IS2 Interests.
"REMIC 3 Group II Diverted Excess Spread": 1% of any amount of Group II Net
Monthly Excess Cash Flow that, pursuant to Section 4.01(d)(ii)(d), is used to
make payments to the Class I-A Certificates.
"REMIC 3 Group II 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 Group II Mortgage Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC 3 Pass-Through Rate for REMIC 3
Regular Interest LT3A-2 minus Marker Rate 2, divided by (b) 12.
"REMIC 3 Group II Regular Interests": REMIC 3 Regular Interest LT3A-2,
REMIC 3 Regular Interest LT3B-2, REMIC 3 Regular Interest LT3C-2, REMIC Regular
Interest LT3B-P, REMIC 3 Regular Interest LT3IIS1 and the REMIC 3 IIS2 Interest.
"REMIC 3 Overcollateralization Target Amount 1": 1% of the Group I
Overcollateralization Target Amount.
"REMIC 3 Overcollateralization Target Amount 2": 1% of the Group II
Overcollateralization Target Amount.
"REMIC 3 Overcollateralized Amount 1": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC 3 Regular Interest LT3A-1, REMIC 3 Regular Interest LT3B-1, REMIC 3
Regular Interest LT3C-1 and REMIC 3 Regular Interest LT3A-P, minus (ii) the
Uncertificated Principal Balance of REMIC 3 Regular Interest LT3B-1, in each
case as of such date of determination.
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"REMIC 3 Overcollateralized Amount 2": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC 3 Regular Interest LT3A-2, REMIC 3 Regular Interest LT3B-2, REMIC 3
Regular Interest LT3C-2 and REMIC 3 Regular Interest LT3B-P minus (ii) the
Uncertificated Principal Balances of REMIC 3 Regular Interest LT3B-2, in each
case as of such date of determination.
"REMIC 3 Principal Loss Allocation Amount 1": With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Principal
Balance of the Group I Mortgage Loans and related REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is 2 times the
Uncertificated Principal Balance of REMIC 3 Regular Interest LT3B-1 and the
denominator of which is the aggregate of the Uncertificated Principal Balances
of REMIC 3 Regular Interest LT3B-1 and REMIC 3 Regular Interest LT3C-1.
"REMIC 3 Principal Loss Allocation Amount 2": With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Principal
Balance of the Group II Mortgage Loans and related REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is 2 times the
Uncertificated Principal Balances of REMIC 3 Regular Interest LT3B-2 and the
denominator of which is the aggregate of the Uncertificated Principal Balances
of REMIC 3 Regular Interest LT3B-2 and REMIC 3 Regular Interest LT3C-2.
"REMIC 4": The segregated pool of assets consisting of all of the REMIC 3
Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates (other than the Class C Certificates and the
Class P Certificates), REMIC CX, as the holder of the REMIC 4 Regular Interests
LT4-IC and REMIC 4 Regular Interest LT4-IIC, REMIC PX as holder of REMIC 4
Regular Interest LT4-IP and REMIC 4 Regular Interest LT4-IIP, and the Class R
Certificateholders, as holders of the Class R-4 Interest, pursuant to Article II
hereunder, and all amounts deposited therein, with respect to which a separate
REMIC election is to be made.
"REMIC 4 Regular Interest LT4-IC": One of the separate non-certificated
beneficial ownership interests in REMIC 4 issued hereunder and designated as a
Regular Interest in REMIC 4. REMIC 4 Regular Interest LT4-IC shall accrue
interest at the related Pass-Through Rate in effect from time to time on its
Notional Amount outstanding 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 4 Regular Interest LT4-IP": One of the separate non-certificated
beneficial ownership interests in REMIC 4 issued hereunder and designated as a
Regular Interest in REMIC 4. REMIC 4 Regular Interest LT4-IP shall be entitled
to any amounts distributed to REMIC 3 Regular Interest LT3P-1.
"REMIC 4 Regular Interest LT4-IIC": One of the separate non-certificated
beneficial ownership interests in REMIC 4 issued hereunder and designated as a
Regular Interest in REMIC 4. REMIC 4 Regular Interest LT4-IIC shall accrue
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interest at the related Pass-Through Rate in effect from time to time on its
Notional Amount outstanding 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 4 Regular Interest LT4-IIP": One of the separate non-certificated
beneficial ownership interests in REMIC 4 issued hereunder and designated as a
Regular Interest in REMIC 4. REMIC 4 Regular Interest LT4-IIP shall be entitled
to any amounts distributed to REMIC 3 Regular Interest LT3P-2.
"REMIC 4 Regular Interests": REMIC 4 Regular Interest LT4-IC, REMIC 4
Regular Interest LT4-IIC, REMIC 4 Regular Interest LT4-IP and REMIC 4 Regular
Interest LT4-IIP.
"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.
"REMIC Regular Interests": The REMIC 1 Regular Interests, the REMIC 2
Regular Interests, the REMIC 3 Regular Interests and the REMIC 4 Regular
Interests.
"REMIC CX": The segregated pool of assets consisting of the REMIC 4 Regular
Interests LT4-IC and REMIC 4 Regular Interest LT4-IIC, conveyed in trust to the
Trustee, for the benefit of the Holders of the Class C Certificates and the
Class R-CX Certificates, pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC PX": The segregated pool of assets consisting of REMIC 4 Regular
Interest LT4-IP and REMIC 4 Regular Interest LT4-IIP, conveyed in trust to the
Trustee, for the benefit of the Holders of the Class P Certificates and the
Class R-PX Certificates, pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"Remittance Report": A report prepared by the Master Servicer and delivered
to the NIMS Insurer, the Certificate Insurer, the Guarantor and 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 Master 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.
"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.
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"REO Principal Amortization": With respect to any REO Property, for any
calendar month, the excess, if any, of (a) the aggregate of all amounts received
in respect of such REO Property during such calendar month, whether in the form
of rental income, sale proceeds (including, without limitation, that portion of
the Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 9.01 that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i) payable pursuant
to Section 3.23 in respect of the proper operation, management and maintenance
of such REO Property or (ii) payable or reimbursable to the Master 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 Master 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 Representative, in
the form of Exhibit E-1 or E-2 attached hereto.
"Reserve Funds": The Group I Reserve Fund and the Group II Reserve Fund.
"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 0.03125%) of
the one-month United States dollar lending rates which banks in The City of New
York selected by the Trustee with the consent of the Controlling Insurer 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 Trustee with the consent of the Controlling Insurer 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 Certificates": The Class R Certificates, the Class R-CX
Certificates and the R-PX Certificates.
"Residual Interest": The sole class of "residual interests" in a REMIC
within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee, the Chairman
or Vice Chairman of the Board of Directors or trustees, the Chairman or Vice
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Chairman of the Executive or Standing Committee of the Board of Directors or
trustees, the President, any vice president, any assistant vice president, the
Secretary, any assistant secretary, the Treasurer, any assistant treasurer, the
Cashier, any assistant cashier, any trust officer or assistant trust officer,
the Controller and any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and, with respect to a particular matter, to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
"S&P": Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., or
its successor in interest.
"Seller": Long Beach Mortgage Company, a Delaware corporation, or its
successor in interest, in its capacity as seller under the Mortgage Loan
Purchase Agreement.
"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 Master Servicer in the performance of its servicing obligations
in connection with a default, delinquencies or other unanticipated event or
where reimbursement is otherwise permitted in accordance with any of the terms
of this Agreement, 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
obligations under Sections 3.01, 3.09, 3.16, and 3.23.
"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 Representative": Any officer or employee of the Master Servicer
involved in, or responsible for, the administration and servicing of Mortgage
Loans, whose name and specimen signature appear on a list of servicing
representatives furnished by the Master Servicer to the Trustee and the
Depositor on the Closing Date, as such list may from time to time be amended.
"Special Servicer": As defined in Section 3.13 hereof.
"Specially Serviced Mortgage Loan": A Mortgage Loan that (i) has been
delinquent in payment with respect to three or more monthly payments (provided,
however, that the third such payment shall not be deemed to be delinquent for
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purposes of this clause (i) until the close of business on the last day of the
month in which such payment first became due), and (ii) has been transferred to
the Special Servicer in accordance with Section 3.13.
"Startup Day": As defined in Section 10.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan: (a) as of
any date of determination up to but not including the Distribution Date on which
the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan
would be distributed, the related Cut-off Date Principal Balance, 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 Master 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 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.
"Stayed Funds": If the Master Servicer is the subject of a proceeding under
the federal Bankruptcy Code and the making of a Remittance (as defined in
Section 7.02(b)) is prohibited by Section 362 of the federal Bankruptcy Code,
funds that are in the custody of the Master Servicer, a trustee in bankruptcy or
a federal bankruptcy court and should have been the subject of such Remittance
absent such prohibition.
"Stepdown Date": The Group I Stepdown Date or the Group II Stepdown Date.
"Sub-Servicer": Any Person with which the Master 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 or accounts established by a
Sub-Servicer which meets the requirements set forth in Section 3.08 and is
otherwise acceptable to the applicable Master Servicer.
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"Sub-Servicing Agreement": The written contract between the Master Servicer
and a Sub-Servicer relating to servicing and administration of certain Mortgage
Loans as provided in Section 3.02.
"Substitution Adjustment": An amount equal to the excess of the Principal
Balance of the related Deleted Mortgage Loan over the Principal Balance of such
Qualified Substitute Mortgage Loan that the Seller is required to deposit in the
Collection Account on or prior to the next succeeding Determination Date in
connection with a substitution of a Qualified Substitute Mortgage Loan.
"Substitution Shortfall Amounts": As defined in Section 2.03(d) hereof.
"Tax Returns": The federal income tax return on Internal Revenue Service
Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holder of 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.
"Telerate Page 3750": The display designated as page "3750" on the Dow
Xxxxx Telerate Capital Markets Report (or such other page as may replace page
3750 on that report for the purpose of displaying London interbank offered rates
of major banks).
"Termination Price": As defined in Section 9.01(a) hereof.
"Terminator": As defined in Section 9.01(b).
"Term of the Policy": The period from and including the date of issuance of
the Certificate Insurance Policy to and including the first date on which the
Certificate Principal Balance for each class of the Class A Certificates is
reduced to zero and interest ceased to accrue on the Class S1 Certificates, plus
such additional period, to the extent specified in the Certificate Insurance
Policy, during which any Payment on the applicable class of Insured Certificates
could be avoided in whole or in part as a Preference Amount.
"Transfer": Any direct or indirect transfer, sale, pledge, hypothecation,
or other form of assignment of any Ownership Interest in a Certificate.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
"Trigger Event": The Group I Trigger Event or the Group II Trigger Event.
"Trust": Long Beach Mortgage Loan Trust 2002-4, the trust created
hereunder.
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"Trust Fund": All of the assets of the Trust, which is the trust created
hereunder consisting of REMIC 1, REMIC 2, REMIC 3, REMIC 4, REMIC CX, REMIC PX,
the Reserve Funds and any Master Servicer Prepayment Charge Payment Amounts and
the Trust's rights under the Cap Agreements.
"Trust REMIC": Any of REMIC 1, REMIC 2, REMIC 3, REMIC 4, REMIC CX and/or
REMIC PX.
"Trustee": Deutsche Bank National Trust Company, a national banking
association, or its successor in interest, or any successor Trustee appointed as
herein provided.
"Trustee Fee": The Group I Trustee Fee and the Group II Trustee Fee.
"Trustee Fee Rate": 0.0020% per annum.
"Uncertificated Accrued Interest": With respect to each REMIC Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the related Uncertificated Pass-Through Rate on the Uncertificated Principal
Balance or Uncertificated Notional Amount of such REMIC Regular Interest. In
each case, Uncertificated Accrued Interest will be reduced by any Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls allocated to such REMIC
Regular Interests pursuant to Section 1.03.
"Uncertificated Notional Amount":
(a) With respect to REMIC 3 Regular Interest LT3IS1 and any Distribution
Date, the sum of the Uncertificated Notional Amounts of the REMIC 2 IS1
Interests;
(b) With respect to REMIC 3 Regular Interest LT3IIS1 and any Distribution
Date, the sum of the Uncertificated Notional Amounts of the REMIC 2 IIS1
Interests;
(c) With respect to any REMIC 3 IS2 Interest and any Distribution Date, the
Uncertificated Principal Balance of the REMIC 2 IS2 Interest with the same
numerical designation for such Distribution Date; and
(d) With respect to any REMIC 3 IIS2 Interest and any Distribution Date,
the Uncertificated Principal Balance of the REMIC 2 IIS2 Interest with the same
numerical designation for such Distribution Date.
(e) With respect to any REMIC 2 IS1 Interest and any Distribution Date, the
Uncertificated Principal Balance of the REMIC 1 IS1 Interest with the same
numerical designation for such Distribution Date.
(f) With respect to any REMIC 2 IIS1 Interest and any Distribution Date,
the Uncertificated Principal Balance of the REMIC 1 IIS1 Interest with the same
numerical designation for such Distribution Date.
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"Uncertificated Pass-Through Rate": The Uncertificated REMIC 1 Pass-Through
Rate, the Uncertificated REMIC 2 Pass-Through Rate, or the Uncertificated REMIC
3 Pass-Through Rate.
"Uncertificated Principal Balance": With respect to each REMIC Regular
Interest (other than the Notional Regular Interests), the principal amount of
such REMIC Regular Interest outstanding as of any date of determination. As of
the Closing Date, the Uncertificated Principal Balance of each REMIC Regular
Interest (other than the Notional Regular Interests) 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 Regular Interest shall be reduced by all distributions of
principal made on such REMIC Regular Interest on such Distribution Date pursuant
to Section 4.05 and, if and to the extent necessary and appropriate, shall be
further reduced on such Distribution Date by Realized Losses as provided in
Section 4.06, and the Uncertificated Principal Balances of REMIC 3 Regular
Interest LT3C-1 and REMIC 3 Regular Interest LT3C-2 shall be increased by
interest deferrals as provided in Section 4.05. The Uncertificated Principal
Balance of each REMIC Regular Interest that has an Uncertificated Principal
Balance shall never be less than zero. Notwithstanding the foregoing, the
Uncertificated Principal Balance of (i) REMIC 4 Regular Interest LT4-IC shall
always be equal to the excess, if any, of (A) the then aggregate Uncertificated
Principal Balances of the REMIC 3 Group I Regular Interests over (B) the sum of
the Certificate Principal Balance of the Class I-A Certificates and the
Uncertificated Principal Balance of REMIC 4 Regular Interest LT4-IP and (ii)
REMIC 4 Regular Interest LT4-IIC shall always be equal to the excess, if any, of
(A) the then aggregate Uncertificated Principal Balances of the REMIC 3 Group II
Regular Interests over (B) the sum of the Certificate Principal Balances of the
Class II-A Certificates and the Uncertificated Principal Balance of REMIC 4
Regular Interest LT4-IIP.
"Uncertificated REMIC 1 Pass-Through Rate": With respect to REMIC 1 Regular
Interest LT1A-A, REMIC Regular Interest LT1A-P and the REMIC 1 IS1 Interests and
any Distribution Date, a per annum rate equal to the weighted average of the
Adjusted Net Mortgage Rates of those Group I Mortgage Loans that have Adjusted
Net Minimum Mortgage Rates of 5.25% or greater, weighted on the basis of the
Stated Principal Balances of such Group I Mortgage Loans as of the Due Date in
the month preceding the month of such Distribution Date. With respect to REMIC 1
Regular Interest LT1A-B and any Distribution Date, a per annum rate equal to the
weighted average of the Adjusted Net Mortgage Rates of those Group I Mortgage
Loans that have Adjusted Net Minimum Mortgage Rates of less than 5.25%, weighted
on the basis of the Stated Principal Balances of such Group I Mortgage Loans as
of the Due Date in the month preceding the month of such Distribution Date. With
respect to REMIC 1 Regular Interest LT1B-A, REMIC Regular Interest LT1B-P and
the REMIC 1 IIS1 Interests and any Distribution Date, a per annum rate equal to
the weighted average of the Adjusted Net Mortgage Rates of those Group II
Mortgage Loans that have Adjusted Net Minimum Mortgage Rates of 5.25% or
greater, weighted on the basis of the Stated Principal Balances of such Group II
Mortgage Loans as of the Due Date in the month preceding the month of such
Distribution Date. With respect to REMIC 1 Regular Interest LT1B-B and any
Distribution Date, a per annum rate equal to the weighted average of the
Adjusted Net Mortgage Rates of those Group II Mortgage Loans that have Adjusted
Net Minimum Mortgage Rates of less than 5.25%, weighted on the basis of the
Stated Principal Balances of such Group II Mortgage Loans as of the Due Date in
the month preceding the month of such Distribution Date.
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"Uncertificated REMIC 2 Pass-Through Rate":
(a) With respect to REMIC 2 Regular Interest LT2A-A, the REMIC 2 IS2
Interests, and REMIC 2 Regular Interest LT2A-P, and any Distribution Date, a per
annum rate equal to the weighted average of (x) the Uncertificated REMIC 1
Pass-Through Rates with respect to REMIC 1 Regular Interest LT1A-A, REMIC 1
Regular Interest LT1A-B, and REMIC 1 Regular Interest LT1A-P for such
Distribution Date, and (y) the excess, if any, of (i) the Uncertificated REMIC 1
Pass-Through Rate for each REMIC 1 IS1 Interest over (i) 5.25% per annum for
each Distribution Date in November 2002 through the Rate Change Date for such
REMIC 1 IS1 Interest, and (ii) 0.00% per annum for each Distribution Date after
the Rate Change Date for such REMIC 1 IS1 Interest, weighted on the basis of the
Uncertificated Principal Balances of the respective REMIC 1 Regular Interests;
(b) With respect to REMIC 2 Regular Interest LT2B-A, the REMIC 2 IIS2
Interests, and REMIC 2 Regular Interest LT2B-P, and any Distribution Date, a per
annum rate equal to the weighted average of (x) the Uncertificated REMIC 1
Pass-Through Rates with respect to REMIC 1 Regular Interest LT2B-A, REMIC 1
Regular Interest LT2B-B and REMIC 2 Regular Interest LT2B-P for such
Distribution Date, and (y) the excess, if any, of (i) the Uncertificated REMIC 1
Pass-Through Rate for each REMIC 1 IIS1 Interest over (i) 5.25% per annum for
each Distribution Date in November 2002 through the Rate Change Date for such
REMIC 1 IIS1 Interest, and (ii) 0.00% per annum for each Distribution Date after
the Rate Change Date for such REMIC 1 IIS1 Interest, weighted on the basis of
the Uncertificated Principal Balances of the respective REMIC 1 Regular
Interests;
(c) With respect to each REMIC 2 IS1 Interest, 5.25% per annum for each
Distribution Date starting with the Distribution Date in November 2002 and
ending with the Rate Change Date for such REMIC 2 Regular Interest, and 0.00%
per annum for each Distribution Date thereafter;
(d) With respect to each REMIC 2 IIS1 Interest, 5.25% per annum for each
Distribution Date starting with the Distribution Date in November 2002 and
ending with the Rate Change Date for such REMIC 2 Regular Interest, and 0.00%
per annum for each Distribution Date thereafter;
"Uncertificated REMIC 3 Pass-Through Rate":
(a) With respect to REMIC 3 Regular Interest LT3A-1, REMIC 3 Regular
Interest LT3B-1, REMIC 3 Regular Interest LT3C-1, and REMIC 3 Regular Interest
LT3A-P and any Distribution Date, a per annum rate equal to the weighted average
of (x) the Uncertificated REMIC 2 Pass-Through Rates with respect to REMIC 2
Regular Interest LT2A-A and REMIC 2 Regular Interest LT2A-P for such
Distribution Date, and (y) the excess, if any, of (i) the Uncertificated REMIC 2
Pass-Through Rate for each REMIC 2 IS2 Interest over (i) 4.25% per annum for
each Distribution Date in November 2002 through the Rate Change Date for such
REMIC 2 IS2 Interest, and (ii) 0.00% per annum for each Distribution Date after
the Rate Change Date for such REMIC 2 IS2 Interest, weighted on the basis of the
Uncertificated Principal Balances of the respective REMIC 2 Regular Interests;
multiplied by a fraction, the numerator of which is 30 and the denominator of
which is the actual number of days in the related Accrual Period;
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(b) With respect to REMIC 3 Regular Interest LT3A-2, REMIC 3 Regular
Interest LT3B-2, REMIC 3 Regular Interest LT3C-2, and REMIC 3 Regular Interest
LT3B-P and any Distribution Date, a per annum rate equal to the weighted average
of (x) the Uncertificated REMIC 2 Pass-Through Rates with respect to REMIC 2
Regular Interest LT2B-A and REMIC 2 Regular Interest LT2B-P for such
Distribution Date, and (y) the excess, if any, of (i) the Uncertificated REMIC 2
Pass-Through Rate for each REMIC 2 IIS2 Interest over (i) 4.25% per annum for
each Distribution Date in November 2002 through the Rate Change Date for such
REMIC 2 IIS2 Interest, and (ii) 0.00% per annum for each Distribution Date after
the Rate Change Date for such REMIC 2 IIS2 Interest, weighted on the basis of
the Uncertificated Principal Balances of the respective REMIC 2 Regular
Interests; multiplied by a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the related Accrual Period;
(c) With respect to REMIC 3 Regular Interest LT3IS1, 5.25% per annum for
each Distribution Date starting with the Distribution Date in November 2002 and
ending with the Distribution Date in April 2005, and 0.00% per annum for each
Distribution Date thereafter. For federal income tax purposes, REMIC 3 Regular
Interest LT3IS1 will be entitled to 100% of the interest paid on the REMIC 2 IS1
Interests;
(d) With respect to REMIC 3 Regular Interest LT3IIS1, 5.25% per annum for
each Distribution Date starting with the Distribution Date in November 2002 and
ending with the Distribution Date in April 2005, and 0.00% per annum for each
Distribution Date thereafter. For federal income tax purposes, REMIC 3 Regular
Interest LTIIS1 will be entitled to 100% of the interest paid on the REMIC 2
IIS1 Interests;
(e) With respect to each REMIC 3 IS2 Interest and each Distribution Date
starting with the Distribution Date in November 2002 and ending with the Rate
Change Date for such REMIC 3 Regular Interest, the lesser of 4.25% per annum and
the Class I-S2 Cap Rate and, for each Distribution Date thereafter, 0.00% per
annum. For federal income tax purposes, each REMIC 3 IS2 Interest will be
entitled to 100% of the interest paid on the REMIC 2 IS2 Interest with the same
numerical designation;
(f) With respect to each REMIC 3 IIS2 Interest and each Distribution Date
starting with the Distribution Date in November 2002 and ending with the Rate
Change Date for such REMIC 3 Regular Interest, the lesser of 4.25% per annum and
the Class II-S2 Cap Rate and, for each Distribution Date thereafter, 0.00% per
annum. For federal income tax purposes, each REMIC 3 IIS2 Interest will be
entitled to 100% of the interest paid on the REMIC 2 IIS2 Interest with the same
numerical designation;
"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": (i) A citizen or resident of the
United States; (ii) a corporation, partnership or other entity classified as a
corporation or partnership for tax purposes created or organized in, or under
the laws of, the United States or any political subdivision thereof (except, in
the case of a partnership or entity treated as a partnership, to the extent
provided in regulations) provided that, solely for purposes of the restrictions
on the transfer of the Residual Certificates, no partnership or other entity
73
treated as a partnership shall be treated as a United States Person unless all
persons that own an interest in such partnership or other entity, 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; (iii) an estate the income of which is subject to
United States federal income taxation regardless of its source, or (iv) a trust
if a court within the United States is able to exercise primary supervision over
the administration of the trust and one or more United States Persons have the
authority to control all substantial decisions of the trust or if the trust was
in existence on August 20, 1996, was treated as a United States Person on August
19, 1996, and made a valid election to continue to be treated as a United States
Person. 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 Class S 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 of Certificates for the immediately preceding Distribution
Date and (2) the outstanding Unpaid Interest Shortfall Amount, if any, for such
Class of Certificates for such preceding Distribution Date exceeds (b) the
aggregate amount distributed on such Class of Certificates 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
such Class of Certificates on such preceding Distribution Date, to the extent
permitted by law, at the Pass-Through Rate for such Class of Certificates for
the related Accrual Period.
"Value": With respect to any Mortgaged Property, the lesser of (i) 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 (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 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.
"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 and the Class C Certificates shall have 97% of the Voting Rights
(allocated among the Holders of the Class A Certificates and the Class C
Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates), the Class S Certificates shall have
1% of the Voting Rights, the Class P Certificates shall have 1% of the Voting
Rights and the Class R Certificates shall have 1% of the Voting Rights, provided
that, if and for so long as the Class S2 Certificates, the Class C Certificates
and the Class P Certificates are held by one or more foreign entities and serve
as collateral for the NIM Notes, the total combined voting power of such Classes
of Certificates shall not exceed 9.9%. The Voting Rights allocated to any Class
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of Certificates (other than the Class P Certificates and the Class R
Certificates) shall be allocated among all Holders of each such Class in
proportion to the outstanding Certificate Principal Balance or Notional Amount
of such Certificates and the Voting Rights allocated to the Class P Certificates
and the Class R 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 Class R Certificates in
accordance with such Holders' respective Percentage Interests in the
Certificates of such Class. Notwithstanding any of the foregoing, (i) unless a
Certificate Insurer Default is continuing, on any date on which any Insured
Certificates are outstanding or any amounts are owed to the Certificate Insurer
under the Insurance Agreement or this Agreement, the Certificate Insurer will
have all voting rights of the Insured Certificates, and (ii) unless the
Guarantor defaults on its obligation under the Guaranty, on any date on which a
Certificate Insurer Default is continuing and any amounts are owed to the
Guarantor under this Agreement, the Guarantor will have all voting rights of the
Guaranteed Certificates. So long as the Certificate Insurer and the Guarantor
have the Voting Rights pursuant to the preceding sentence, the reference to
"holders of Certificates representing Voting Rights" shall be deemed to refer to
the Certificate Insurer or the Guarantor, as applicable.
"Washington Mutual Custodian": None of the Mortgage Loans are held by the
Washington Mutual Custodian as custodian. References to the Washington Mutual
Custodian are left in this Agreement for administrative convenience and shall be
completely disregarded. There is no Washington Mutual Custodian under this
Agreement and no Person shall have any rights of the Washington Mutual Custodian
under this Agreement.
"Washington Mutual Mortgage Loans": The Mortgage Loans acquired by the
Seller from Washington Mutual Bank, FA, Washington Mutual Bank fsb, or from any
of their subsidiaries.
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 I-A Certificates, the Class I-S Certificates
and REMIC 4 Regular Interest LT4-IC for any Distribution Date, the aggregate
amount of any Net Prepayment Interest Shortfalls and any Relief Act Interest
Shortfalls incurred in respect of the Group I Mortgage Loans for any
Distribution Date shall be allocated first to REMIC 4 Regular Interest LT4-IC to
the extent of one month's interest at the then applicable Pass-Through Rate on
the Notional Amount of such Regular Interest and, then, among the Class I-A
Certificates and the Class I-S Certificates on a pro rata basis based on, and to
the extent of, interest for the related Accrual Period at the then applicable
respective Pass-Through Rate on the respective Certificate Principal Balance or
Notional Amount of each such Certificate.
For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class II-A Certificates, the Class II-S
Certificates and REMIC 4 Regular Interest LT4-IIC for any Distribution Date, the
aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred in respect of the Group II Mortgage Loans for any
Distribution Date shall be allocated first to REMIC 4 Regular Interest LT4-IIC
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to the extent of one month's interest at the then applicable Pass-Through Rate
on the Notional Amount of such Regular Interest and, then, among the Class II-A
Certificates and the Class II-S Certificates on a pro rata basis based on, and
to the extent of, interest for the related Accrual Period at the then applicable
respective Pass-Through Rate on the respective Certificate Principal Balance or
Notional Amount of each such Certificate.
For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class I-C Certificates for any Distribution Date,
the aggregate amount of any Net Prepayment Interest Shortfalls and any Relief
Act Interest Shortfalls allocated to REMIC 4 Regular Interest LT4-IC pursuant to
the paragraphs above shall be allocated among the Class I-C Certificates on a
pro rata basis based on one month's interest.
For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class II-C Certificates for any Distribution Date,
the aggregate amount of any Net Prepayment Interest Shortfalls and any Relief
Act Interest Shortfalls allocated to REMIC 4 Regular Interest LT4-IIC pursuant
to the paragraphs above shall be allocated among the Class II-C Certificates on
a pro rata basis based on one month's interest.
For purposes of calculating the amount of Uncertificated Accrued Interest
for the REMIC 1 Group I Regular Interests for any Distribution Date, the
aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred for any Distribution Date (i) in respect of those
Group I Mortgage Loans with Adjusted Net Minimum Mortgage Rates of less than
5.25% shall be allocated to REMIC 1 Regular Interest LT1A-B, (ii) in respect of
those Group I Mortgage Loans with Adjusted Net Minimum Mortgage Rates of 5.25%
or greater shall be allocated first to REMIC 1 Regular Interest LT1A-A and then
to each of the REMIC 1 IS1 Interests in descending numerical order, in each case
to the extent of interest for the related Accrual Period at the then applicable
respective Uncertificated REMIC 1 Pass-Through Rate on the respective
Uncertificated Principal Balance of each such REMIC 1 Regular Interest.
For purposes of calculating the amount of Uncertificated Accrued Interest
for the REMIC 1 Group II Regular Interests for any Distribution Date, the
aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred for any Distribution Date (i) in respect of those
Group II Mortgage Loans with Adjusted Net Minimum Mortgage Rates of less than
5.25% shall be allocated to REMIC 1 Regular Interest LT1B-B, (ii) in respect of
those Group II Mortgage Loans with Adjusted Net Minimum Mortgage Rates of 5.25%
or greater shall be allocated first to REMIC 1 Regular Interest LT1B-A and then
to each of the REMIC 1 IIS1 Interests in descending numerical order, in each
case to the extent of interest for the related Accrual Period at the then
applicable respective Uncertificated REMIC 1 Pass-Through Rate on the respective
Uncertificated Principal Balance of each such REMIC 1 Regular Interest.
For purposes of calculating the amount of Uncertificated Accrued Interest
for the REMIC 2 Regular Interests for any Distribution Date, the aggregate
amount of any Net Prepayment Interest Shortfalls and any Relief Act Interest
Shortfalls incurred (i) in respect of the Group I Mortgage Loans shall be
allocated first to REMIC 2 Regular Interest LT2A-A and then to each REMIC 2 IS2
Interest in descending numerical order, in each case to the extent of interest
for the related Accrual Period at the then applicable respective Uncertificated
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REMIC 2 Pass-Through Rate on the respective Uncertificated Principal Balance or
Uncertificated Notional Amount of each such REMIC 2 Regular Interest.
For purposes of calculating the amount of Uncertificated Accrued Interest
for the REMIC 2 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 Group II Mortgage Loans shall be allocated
first to REMIC 2 Regular Interest LT2B-A and then to each REMIC 2 IIS2 Interest
in descending numerical order, in each case to the extent of interest for the
related Accrual Period at the then applicable respective Uncertificated REMIC 2
Pass-Through Rate on the respective Uncertificated Principal Balance or
Uncertificated Notional Amount of each such REMIC 2 Regular Interest.
For purposes of calculating the amount of Uncertificated Accrued Interest
for the REMIC 3 Group I 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 Group I Mortgage Loans shall be
allocated first, pro rata to REMIC 3 Regular Interest LT3A-1 and REMIC 3 Regular
Interest LT3C-1, up to an aggregate amount equal to the REMIC 3 Group I Interest
Loss Allocation Amount, with allocations between REMIC 3 Regular Interest LT3A-1
and REMIC 3 Regular Interest LT3C-1 being made 98% and 2%, respectively. Then,
Net Prepayment Interest Shortfalls and any Relief Act Interest Shortfalls
incurred in respect of the Group I Mortgage Loans for any Distribution Date
shall be allocated pro rata among REMIC 3 Regular Interest LT3A-1, REMIC 3
Regular Interest LT3B-1, REMIC 3 Regular Interest LT3C-1, REMIC 3 Regular
Interest LT3IS1 and the REMIC 3 IS2 Interests.
For purposes of calculating the amount of Uncertificated Accrued Interest
for the REMIC 3 Group II 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 Group II Mortgage Loans for any
Distribution Date shall be allocated first, pro rata to REMIC 3 Regular Interest
LT3A-2 and REMIC 3 Regular Interest LT3C-2, up to an aggregate amount equal to
the REMIC 3 Group II Interest Loss Allocation Amount, with allocations between
REMIC 3 Regular Interest LT3A-2 and REMIC 3 Regular Interest LT3C-2 being made
98% and 2%, respectively. Then, Net Prepayment Interest Shortfalls and any
Relief Act Interest Shortfalls incurred in respect of the Group II Mortgage
Loans for any Distribution Date shall be allocated pro rata among REMIC 3
Regular Interest LT3A-2, REMIC 3 Regular Interest LT3B-2, REMIC 3 Regular
Interest LT3C-2, REMIC 3 Regular Interest LT3IIS1 and the REMIC 3 IIS2
Interests.
For purposes of the preceding paragraphs, pro rata allocations shall be
based on interest for the related Accrual Period at the then applicable
respective Uncertificated REMIC 3 Pass-Through Rate, Uncertificated REMIC 2
Pass-Through Rate or Uncertificated REMIC 1 Pass-Through Rate on the respective
Uncertificated Principal Balance or Uncertificated Notional Amount of each such
REMIC 3 Group I Regular Interest, REMIC 3 Group II Regular Interest, REMIC 2
Regular Interest or REMIC 1 Regular Interest.
Section 1.04 Rights of the NIMS Insurer, the Certificate Insurer and the
Guarantor.
(a) Each of the rights of the NIMS Insurer set forth in this Agreement
shall exist so long as the Insured NIM Notes remain outstanding; provided,
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however, the NIMS Insurer shall not have any rights hereunder (except as
provided in Section 9.01) so long as any NIMS Insurer Default is continuing.
(b) If and when (i) there is no Controlling Insurer, (ii) any Guaranteed
Certificates remain outstanding and (iii) no default under the Guaranty shall
have occurred and be continuing, the Guarantor shall be entitled to exercise the
rights of the Controlling Insurer set forth in this Agreement.
(c) Notwithstanding anything to the contrary anywhere in this Agreement,
all rights of the Guarantor hereunder, except any rights to indemnification,
shall permanently terminate upon the later to occur of (A) such time as the
Guaranteed Certificates shall no longer be outstanding and (B) the payment in
full to the Guarantor of any amounts owed to the Guarantor in respect of its
guarantee of payment on the Guaranteed Certificates; provided that the Guarantor
shall not have any rights hereunder, except indemnification rights, so long as
any default has occurred and is continuing under the Guaranty.
(d) (i) Notwithstanding anything to the contrary anywhere in this
Agreement, all rights and benefits of the NIMS Insurer hereunder shall
permanently terminate upon such time as the Insured NIM Notes shall no longer be
outstanding.
(ii) Notwithstanding anything to the contrary anywhere in this Agreement,
all rights of the Certificate Insurer hereunder, except any rights to
indemnification, shall permanently terminate upon the later to occur of (A) such
time as the Insured Certificates shall no longer be outstanding and (B) the
payment in full to the Certificate Insurer of any amounts owed to the
Certificate Insurer hereunder or under the Insurance Agreement; provided that
the Certificate Insurer shall not have any rights hereunder, except
indemnification rights and the right to receive reports and distributions
pursuant to Article IV, so long as any Certificate Insurer Default has occurred
and is continuing.
(e) The rights of the NIMS Insurer or the Certificates Controlling Person
referenced in Sections 3.02(a), 3.03, 6.04, 7.01, 7.02(a), 7.04, 8.07 and 8.10
of this Agreement shall be applied as follows:
(i) If any Insured NIM Notes are outstanding, the NIMS Insurer shall have
the right to act, after consultation with the Certificates Controlling Person;
and
(ii) If no Insured NIM Notes have been issued or are outstanding, the
Certificates Controlling Person shall have the sole right to act provided that
for so long as the Certificate Insurer is the Certificates Controlling Person,
such rights shall be allocated as may be agreed between the NIMS Insurer and the
Certificates Controlling Person (with the Guarantor's consent which cannot be
unreasonably withheld or delayed) from time to time, and notified in writing to
the Trustee.
The NIMS Insurer and the Certificates Controlling Person shall promptly
consult each other with regard to the rights referred to in this sub-section. If
this consultation would create a delay that would have a material adverse effect
on this transaction, each party may act individually with respect to their
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rights and consult with the other party after such action has been taken. Any
consents required between the NIMS Insurer and the Certificates Controlling
Person shall not be unreasonably withheld or delayed.
If the Certificate Insurer is the Certificates Controlling Person
hereunder, prior to taking any action as the Certificates Controlling Person
under this Section 1.04(e), the Certificate Insurer shall (i) obtain the
Guarantor's prior written consent to such action if such action is taken
pursuant to Section 8.07 or 8.10 of this Agreement, which consent shall not be
unreasonably withheld by the Guarantor or (ii) consult with the Guarantor, if
such action is taken pursuant to Section 3.02(a), 3.03, 6.04, 7.01, 7.02(a) or
7.04 of this Agreement.
Section 1.05 Determination of Material Adverse Effect.
Whenever a determination is to be made under this Agreement as to whether a
given action, course of conduct, event or set of facts or circumstances could or
would have a material adverse effect on the Trust or the Certificateholders (or
any similar or analogous determination), such determination shall be made
without giving effect to the insurance provided by the Certificate Insurance
Policy.
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 to the Trustee without
recourse for the benefit of the Certificateholders and the Certificate Insurer
all the right, title and interest of the Depositor, including any security
interest therein for the benefit of the Depositor, in and to the Mortgage Loans
identified on the Mortgage Loan Schedule, the rights of the Depositor under the
Mortgage Loan Purchase Agreement (other than the Depositor's rights under
Section 17 thereof) and all other assets included or to be included in REMIC 1.
Such assignment includes all scheduled payments on the Mortgage Loans due after
the Cut-off Date and all unscheduled collections in respect of the Mortgage
Loans received after September 1, 2002 (other than the portion of such
collections due on or prior to the Cut-off Date). The Depositor herewith
delivers to the Trustee an executed copy of the Mortgage Loan Purchase Agreement
and the PMI Policy. The Depositor shall cause the Certificate Insurer to deliver
the Certificate Insurance Policy to the Trustee and the Certificateholders.
If the assignment and transfer of the Mortgage Loans and the other property
specified in Section 2.01 from the Depositor to the Trustee pursuant to this
Agreement is held or deemed not to be a sale or is held or deemed to be a pledge
of security for a loan, the Depositor intends that the rights and obligations of
the parties shall be established pursuant to the terms of this Agreement and
that, in such event, (i) the Depositor shall be deemed to have granted and does
hereby grant to the Trustee as of the Closing Date a perfected, first priority
security interest in the entire right, title and interest of the Depositor in
and to the Mortgage Loans and all other property conveyed to the Trust Fund
pursuant to this Section 2.01 and all proceeds thereof and (ii) this Agreement
shall constitute a security agreement under applicable law.
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In connection with such transfer and assignment, the Depositor does hereby
deliver to, and deposit with, (i) the Trustee as custodian (in which capacity it
will, unless otherwise specified, be acting under this Article II) the following
documents or instruments with respect to each Mortgage Loan (other than a
Washington Mutual Loan) and (ii) the Washington Mutual Custodian as custodian
for the Trustee, the following documents or instruments with respect to each
Washington Mutual Mortgage Loan, in each case, so transferred and assigned (with
respect to each Mortgage Loan, a "Mortgage File"):
(a) the original Mortgage Note, endorsed in blank or in the following form:
"Pay to the order of Deutsche Bank National Trust Company, as Trustee under the
applicable agreement, without recourse," with all prior and intervening
endorsements showing a complete chain of endorsement from the originator to the
Person so endorsing to the Trustee or (in the case of not more than 1.00% of the
Mortgage Loans, by aggregate principal balance as of the Cut-off Date) a copy of
such original Mortgage Note with an accompanying Lost Note Affidavit executed by
the Seller;
(b) the original Mortgage with evidence of recording thereon, and a copy,
certified by the appropriate recording office, of the recorded power of
attorney, if the Mortgage was executed pursuant to a power of attorney, with
evidence of recording thereon;
(c) an original Assignment in blank;
(d) the original recorded Assignment or Assignments showing a complete
chain of assignment from the originator to the Person assigning the Mortgage to
the Trustee or in blank;
(e) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(f) the original lender's title insurance policy, together with all
endorsements or riders issued with or subsequent to the issuance of such policy
(or a copy of the above, in the case of the Washington Mutual Mortgage Loans),
insuring the priority of the Mortgage as a first lien or second lien on the
Mortgaged Property represented therein as a fee interest vested in the
Mortgagor, or in the event such title policy is unavailable, a written
commitment or uniform binder or preliminary report of title issued by the title
insurance or escrow company.
The Master Servicer, in its capacity as Seller, shall promptly (and in no
event later than thirty (30) Business Days, subject to extension upon a mutual
agreement between the Master Servicer and the Trustee), following the later of
the Closing Date and the date of receipt by the Master Servicer of the recording
information for a Mortgage submit or cause to be submitted for recording, at no
expense to the Trust Fund, the Trustee, the Certificate Insurer, the NIMS
Insurer, the Guarantor or the Depositor, in the appropriate public office for
real property records, each Assignment referred to in Sections 2.01(c) and (d)
above and shall execute each original Assignment referred to in clause (c) above
in the following form: "Deutsche Bank National Trust Company, as Trustee under
applicable agreement, without recourse." In the event that any such Assignment
is lost or returned unrecorded because of a defect therein, the Master Servicer,
in its capacity as Seller, shall promptly prepare or cause to be prepared a
substitute Assignment or cure or cause to be cured such defect, as the case may
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be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, the Assignments shall not be required to be
completed and submitted for recording with respect to any Mortgage Loan if each
Rating Agency does not require recordation in order for such Rating Agency to
assign the initial ratings to the Class II-A Certificates, the Class II-S1
Certificates (without regard to the Certificate Insurance Policy) and the NIM
Notes and the Certificate Insurer does not require recordation in order for the
Certificate Insurer to issue the Certificate Insurance Policy; provided further,
however, each Assignment shall be submitted for recording by the Master
Servicer, in its capacity as Seller, in the manner described above, at no
expense to the Trust Fund or the Trustee, upon the earliest to occur of: (i)
reasonable direction by Holders of Certificates entitled to at least 25% of the
Voting Rights, (ii) the occurrence of a Master Servicer Event of Default, (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 and (v) if the Seller is not the Master Servicer and with respect to any
one Assignment, the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Mortgagor under the related Mortgage. The Master Servicer shall
pay the cost of such recording. Notwithstanding the foregoing, if the Master
Servicer fails to pay the cost of recording the Assignments, such expense shall
be paid by the Trustee and shall be reimbursable to the Trustee as an
Extraordinary Trust Fund Expense.
If any of the documents referred to in Sections 2.01(b), (c), (d) or (e)
above (collectively, the "Recording Documents") 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 Master Servicer,
in its capacity as the Seller, to deliver such Recording Documents shall be
deemed to be satisfied upon (1) delivery to the Trustee or the applicable
Custodian of a copy of each such Recording Document certified by the Seller 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 Seller, delivery to the
Trustee or the applicable Custodian promptly upon receipt thereof, and in any
event no later than one year after the Closing Date, of either the original or a
copy of such Recording Document certified by the applicable public recording
office to be a true and complete copy of the original. In instances where, due
to a delay on the part of the recording office where any such Recording
Documents have been delivered for recordation, the Recording Documents cannot be
delivered to the Trustee or the applicable Custodian within one year after the
Closing Date, the Master Servicer, in its capacity as the Seller, shall deliver
to the Trustee or the applicable Custodian within such time period an Officer's
Certificate stating the date by which the Master Servicer, in its capacity as
the Seller, expects to receive such Recording Documents from the applicable
recording office. In the event that Recording Documents have still not been
received by the Master Servicer, in its capacity as the Seller, and delivered to
the Trustee or the applicable Custodian by the date specified in its previous
Officer's Certificate delivered to the Trustee or the applicable Custodian, as
the case may be, the Master Servicer, in its capacity as the Seller, shall
deliver to the Trustee or the applicable Custodian by such date an additional
Officer's Certificate stating a revised date by which the Master Servicer, in
its capacity as the Seller, expects to receive the applicable Recording
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Documents. This procedure shall be repeated until the Recording Documents have
been received by the Master Servicer, in its capacity as the Seller, and
delivered to the Trustee or the applicable Custodian. If the original lender's
title insurance policy (or a copy thereof, in the case of the Washington Mutual
Mortgage Loans) was not delivered pursuant to Section 2.01(f) above, the Master
Servicer, in its capacity as the Seller, shall deliver or cause to be delivered
to the Trustee or the applicable Custodian promptly after receipt thereof, and
in any event within 120 days after the Closing Date, the original lender's title
insurance policy (or a copy thereof, in the case of the Washington Mutual
Mortgage Loans). The Master Servicer, in its capacity as the Seller, shall
deliver or cause to be delivered to the Trustee or the applicable Custodian
promptly upon receipt thereof any other original documents constituting a part
of a Mortgage File received with respect to any Mortgage Loan, including, but
not limited to, any original documents evidencing an assumption or modification
of any Mortgage Loan.
All original documents relating to the Mortgage Loans that are not
delivered to the Trustee or the applicable Custodian are and shall be held by or
on behalf of the Seller, the Depositor or the Master Servicer, as the case may
be, in trust for the benefit of the Trustee on behalf of the Certificateholders
and the Certificate Insurer. In the event that any such original document is
required pursuant to the terms of this Section to be a part of a Mortgage File,
such document shall be delivered promptly to the Trustee or the applicable
Custodian. Any such original document delivered to or held by the Depositor that
is not required pursuant to the terms of this Section to be a part of a Mortgage
File, shall be delivered promptly to the Master Servicer.
Section 2.02 Acceptance of REMIC 1 by the Trustee.
Subject to the provisions of Section 2.01 and subject to any exceptions
noted on the exception report described in the next paragraph below, the Trustee
or Custodian, as applicable, on behalf of the Trustee acknowledges receipt of
the documents referred to in Section 2.01 above and all other assets included in
the definition of "REMIC 1" under clauses (i), (iii), (iv) and (vii) (to the
extent of amounts deposited into the Distribution Account) and declares that it
holds and will hold such documents and the other documents delivered to it
constituting the Mortgage File, and all such assets and such other assets
included in the definition of "REMIC 1" in trust for the exclusive use and
benefit of all present and future Certificateholders and the Certificate
Insurer.
Except with respect to the Washington Mutual Mortgage Loans, the Trustee or
Custodian, as applicable, agrees, for the benefit of the Certificateholders and
the Certificate Insurer, to review each Mortgage File on or before the Closing
Date, with respect to each Mortgage Loan and to certify to the Trustee, the
Guarantor, the NIMS Insurer, the Certificate Insurer, the Depositor and the
Master Servicer in substantially the form attached hereto as Exhibit F-1 that,
as to each Closing Date Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in the exception report annexed thereto as not being covered by such
certification), (i) all documents constituting part of such Mortgage File (other
than such documents described in Section 2.01(e)) required to be delivered to it
pursuant to this Agreement are in its possession, (ii) such documents have been
reviewed by the Trustee or the Washington Mutual Custodian, as applicable and
are not mutilated, torn or defaced unless initialed by the related borrower and
relate to such Mortgage Loan and (iii) based on the Trustee's examination and
only as to the foregoing, the information set forth in the Mortgage Loan
Schedule that corresponds to items (i), (ii), (ix), (xii), (xiv) (to the extent
of the Periodic Rate Cap for the first Adjustment Date and subsequent Adjustment
Dates) and (xvi) of the definition of "Mortgage Loan Schedule" accurately
reflects information set forth in the Mortgage File. It is herein acknowledged
that, in conducting such review, neither the Trustee nor any Custodian is under
any duty or obligation (i) to inspect, review or examine any such documents,
instruments, certificates or other papers to determine whether they are genuine,
enforceable, or appropriate for the represented purpose (including with respect
to Section 2.01(f), whether such title insurance policy (a) contains all
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necessary endorsements, (b) insures the priority of the Mortgage as a first lien
or (c) whether the interest vested in the Mortgagor is a fee interest) or
whether they have actually been recorded or that they are other than what they
purport to be on their face or (ii) to determine whether any Mortgage File
should include any of the documents specified in clause (e) of Section 2.01.
Prior to the first anniversary date of this Agreement, the Trustee shall
deliver (or, with respect to the Mortgage Loans held by another Custodian, such
Custodian shall deliver) to the Depositor, the Master Servicer, the NIMS
Insurer, the Certificate Insurer and the Guarantor a final certification in the
form annexed hereto as Exhibit F-2 evidencing the completeness of the Mortgage
Files, with any applicable exceptions noted thereon.
If in the process of reviewing the Mortgage Files and making or preparing,
as the case may be, the certifications referred to above, the Trustee holding
such Mortgage Files or any Custodian holding such Mortgage Files finds any
document or documents constituting a part of a Mortgage File to be missing or
defective in any material respect, at the conclusion of its review the Trustee
shall so notify or such other Custodian shall notify the Depositor, the Seller,
the Trustee (if it is not sending such notice), the Guarantor, the NIMS Insurer,
the Certificate Insurer and the Master Servicer. In addition, upon the discovery
by the Depositor, the Master Servicer, the Guarantor, the Trustee or the
Custodian of a breach of any of the representations and warranties made by the
Seller in the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan
which materially and adversely affects the value of such Mortgage Loan or the
interests of the related Certificateholders or the Certificate Insurer in such
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties.
Section 2.03 Cure, Repurchase or Substitution of Mortgage
Loans by the Seller; Remedies for Breaches by
Depositor or Master Servicer; Remedies for Breaches
Relating to Prepayment Charges.
(a) Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, the Mortgage File or of the
breach by the Seller of any representation, warranty or covenant under the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially and adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders or the Certificate Insurer (in the case of any
such representation or warranty made to the knowledge or the best of knowledge
of the Seller, as to which the Seller has no knowledge, without regard to the
Seller's lack of knowledge with respect to the substance of such representation
or warranty being inaccurate at the time it was made), the Trustee shall
promptly notify the Depositor, the Seller, the NIMS Insurer, the Guarantor, the
Certificate Insurer and the Master Servicer of such defect, missing document or
breach and request that the Seller deliver such missing document or cure such
defect or breach within 90 days from the date the Seller was notified of such
missing document, defect or breach (except as described in Section 2.03(e)), and
if the Seller does not deliver such missing document or cure such defect or
breach in all material respects during such period, the Master Servicer (or, in
accordance with Section 3.02(b), the Trustee) shall enforce the obligations of
the Seller under the Mortgage Loan Purchase Agreement to repurchase such
Mortgage Loan from REMIC 1 at the Purchase Price within 90 days after the date
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on which the Seller was notified (subject to Section 2.03(e)) of such missing
document, defect or breach, if and to the extent that the Seller is obligated to
do so under the Mortgage Loan Purchase Agreement. In addition to the foregoing,
the Certificate Insurer may identify Mortgage Loans for removal from the Trust
Fund by repurchase or substitution pursuant to Section 2.2(t) of the Insurance
Agreement. The Purchase Price for the repurchased Mortgage Loan shall be
deposited in the Collection Account, and the Trustee, or a Custodian, as
applicable, upon receipt of written certification from the Master Servicer of
such deposit, shall release to the Seller the related Mortgage File, and the
Trustee, or Custodian, as applicable, on behalf of the Trustee, shall execute
and deliver such instruments of transfer or assignment, in each case without
recourse, as the Seller shall furnish to it or such Custodian, as applicable,
and as shall be necessary to vest in the Seller any Mortgage Loan released
pursuant hereto, and neither the Trustee nor any Custodian shall have any
further responsibility with regard to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as provided above, if so provided in the
Mortgage Loan Purchase Agreement, the Seller may cause such Mortgage Loan to be
removed from REMIC 1 (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 Seller 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 respecting such
omission, defect or breach available to the Certificateholders, the Trustee on
behalf of the Certificateholders and the Certificate Insurer, and the NIMS
Insurer, the Certificate Insurer and the Guarantor.
(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 or warranty of
the Depositor set forth in Section 2.05 with respect to any Mortgage Loan (in
the case of any such representation or warranty made to the knowledge or the
best of knowledge of the Seller, as to which the Seller has no knowledge,
without regard to the Seller's lack of knowledge with respect to the substance
of such representation or warranty being inaccurate at the time it was made),
which materially adversely affects the value of such Mortgage Loan or the
interest therein of the Certificateholders or the Certificate Insurer, the
Depositor shall cure such breach in all material respects.
(c) As promptly as practicable (and no later than 90 days) after the
earlier of discovery by the Master Servicer or receipt of notice by the Master
Servicer of the breach of any representation, warranty or covenant of the Master
Servicer set forth in Section 2.04 which materially and adversely affects the
value of any Mortgage Loan or the interests of the Certificateholders or the
Certificate Insurer in any Mortgage Loan, the Master Servicer shall cure such
breach in all material respects.
Within 90 days of the earlier of discovery by the Master Servicer or
receipt of notice by the Master Servicer of the breach of any representation,
warranty or covenant of the Master Servicer set forth in Section 2.04(a)(vii) or
(viii) which materially and adversely affects the interests of the Holders of
the Class P Certificates to any Prepayment Charge, the Master Servicer shall
cure such breach in all material respects. If the representation made by the
Master Servicer in its capacity as Seller in Section 2.04(a)(vii) is breached,
the Master Servicer in its capacity as Seller shall pay into the Collection
Account the amount of the scheduled Prepayment Charge, less any amount
previously collected and deposited by, or paid by, the Master Servicer into the
Collection Account; and if the covenant made by the Master Servicer in Section
2.04(a)(viii) is breached, the Master Servicer shall pay into the Collection
Account the amount of the waived Prepayment Charge.
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(d) Any substitution of Qualified Substitute Mortgage Loans for Deleted
Mortgage Loans made pursuant to Section 2.03(a) shall be effected prior to the
date which is two years after the Startup Date for REMIC 1.
As to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, such substitution shall be effected
by the Seller delivering to the Trustee (or, with respect to the Mortgage Loans
held by another Custodian, to such Custodian) on behalf of the Trustee, for such
Qualified Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage,
the Assignment to the Trustee, and such other documents and agreements, with all
necessary endorsements thereon, as are required by Section 2.01, together with
an Officers' Certificate providing that each such Qualified Substitute Mortgage
Loan satisfies the definition thereof and specifying the Substitution Shortfall
Amounts (as described below), if any, in connection with such substitution. The
Trustee shall acknowledge or with respect to the Mortgage Loans held by another
Custodian such other Custodian shall acknowledge receipt for such Qualified
Substitute Mortgage Loan or Loans and, within ten Business Days thereafter,
review such documents as specified in Section 2.02 and deliver to the Depositor,
the Master Servicer, the NIMS Insurer, the Certificate Insurer and the
Guarantor, 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 or with respect to the Mortgage Loans
held by another Custodian, such other Custodian shall deliver to the Depositor,
the Seller, the Trustee (if it is not sending such certification), the NIMS
Insurer, the Certificate Insurer, the Guarantor and the Master 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 thereon. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution are not part of REMIC 1 and will be
retained by the Seller. For the month of substitution, distributions to
Certificateholders will reflect the Monthly Payment due on such Deleted Mortgage
Loan on or before the Due Date in the month of substitution, and the Seller
shall thereafter be entitled to retain all amounts subsequently received in
respect of such Deleted Mortgage Loan. The Trustee or the applicable Custodian
shall give written notice to the Guarantor, the Trustee (if it is not sending
such notice), the NIMS Insurer, the Certificate Insurer and the
Certificateholders that such substitution has taken place, and the Master
Servicer shall amend or cause to be amended 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
Guarantor, the NIMS Insurer, the Certificate Insurer and the Trustee. Upon such
substitution, such Qualified Substitute Mortgage Loan or Loans shall constitute
part of the Mortgage Pool and shall be subject in all respects to the terms of
this Agreement and the Mortgage Loan Purchase Agreement, including all
applicable representations and warranties thereof included in the Mortgage Loan
Purchase Agreement as of the date of substitution.
For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amounts (the "Substitution Shortfall Amounts"), if
any, by which the aggregate Purchase Price of all such Deleted Mortgage Loans in
Loan Group I or Loan Group II, respectively, exceeds the aggregate of the Stated
Principal Balance of the Qualified Substitute Mortgage Loans that will become
part of Loan Group I or Loan Group II, respectively, as of the date of
substitution, together with one month's interest on such Stated Principal
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Balance at the applicable Net Mortgage Rate, plus all outstanding Advances and
Servicing Advances with respect to such Deleted Mortgage Loan. On the date of
such substitution, the Seller will deliver or cause to be delivered to the
Master Servicer for deposit in the Collection Account an amount equal to the sum
of Substitution Shortfall Amounts, if any (which for federal income tax purposes
will be treated as payment for the repurchase of that portion of the Deleted
Mortgage Loans), and the Trustee, upon receipt of the related Qualified
Substitute Mortgage Loan or Loans (or acknowledgement of such receipt by another
Custodian) and certification by the Master Servicer of such deposit, shall
release or, if such Mortgage File is held by another Custodian, such Custodian
shall release to the Seller the related Mortgage File or Files and the Trustee
shall execute and deliver or, if such Mortgage File is held by another
Custodian, such Custodian shall execute and deliver such instruments of transfer
or assignment, without recourse, as the Seller shall deliver to it or such
Custodian, as applicable, and as shall be necessary to vest therein any Deleted
Mortgage Loan released pursuant hereto.
In addition, the Master Servicer in its capacity as Seller shall obtain at
its own expense and deliver to the NIMS Insurer, the Certificate Insurer, the
Guarantor and the Trustee an Opinion of Counsel to the effect that such
substitution will not cause (a) any federal tax to be imposed on REMIC 1,
created hereunder, including without limitation, any federal tax imposed on
"prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code, or
(b) any Trust REMIC hereunder to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
(e) Upon discovery by the Depositor, the Seller, the Master 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.
In connection therewith, the Master Servicer in its capacity as Seller 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. Any such repurchase or
substitution shall be made in the same manner as set forth in Section 2.03(a).
The Trustee shall reconvey to the Seller 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 Representations, Warranties and Covenants of the Master
Servicer.
(a) The Master Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of the Trustee and the Certificateholders, and to the
Guarantor and the Certificate Insurer and the Depositor, that as of the Closing
Date or as of such date specifically provided herein:
(i) The Master Servicer is a corporation duly organized, validly existing
and in good standing under the laws of the state of its incorporation, is duly
authorized and qualified to transact any and all business contemplated by this
Agreement and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in the states where
the Mortgaged Properties are located if the laws of such state require licensing
or qualification in order to conduct business of the type conducted by the
Master Servicer or to ensure the enforceability or validity of each Mortgage
Loan and, in any event, is in compliance with the doing business laws of any
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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 Master Servicer has the full power and authority to service each
Mortgage Loan, to execute, deliver and perform, and to enter into and consummate
the transactions contemplated by this Agreement and has duly authorized by all
necessary action on the part of the Master Servicer the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery thereof by the Depositor, the Guarantor
and the Trustee, constitutes a legal, valid and binding obligation of the Master
Servicer, enforceable against the Master Servicer in accordance with its terms,
except to the extent that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws relating
to creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(iii) The execution and delivery of this Agreement by the Master Servicer,
the servicing of the Mortgage Loans by the Master Servicer hereunder, the
consummation by the Master 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 Master Servicer and will not (A) result
in a breach of any term or provision of the charter or by-laws of the Master
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 Master Servicer is a party or by which it may be bound,
or any statute, order or regulation applicable to the Master Servicer of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Master Servicer; and the Master 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 Master
Servicer's knowledge, would in the future materially and adversely affect, (x)
the ability of the Master Servicer to perform its obligations under this
Agreement or (y) the business, operations, financial condition, properties or
assets of the Master Servicer taken as a whole;
(iv) The Master Servicer is an approved seller/servicer for Xxxxxx Xxx or
Xxxxxxx Mac in good standing and is a HUD approved mortgagee pursuant to Section
203 and Section 211 of the National Housing Act;
(v) No litigation is pending against the Master Servicer that would
materially and adversely affect the execution, delivery or enforceability of
this Agreement or the ability of the Master Servicer to service the Mortgage
Loans or to perform any of its other obligations hereunder in accordance with
the terms hereof;
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of, or compliance by the Master Servicer
with, this Agreement or the consummation by the Master Servicer 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;
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(vii) The information set forth in the Prepayment Charge Schedule is
complete, true and correct in all material respects at the date or dates
respecting which such information is furnished and each Prepayment Charge is
permissible and enforceable in accordance with its terms under applicable law
upon the Mortgagor's full and voluntary principal prepayment (except to the
extent that: (1) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally; or (2) the collectability thereof may be limited
due to acceleration in connection with a foreclosure or other involuntary
prepayment); provided that the representation, warranty and covenant contained
in this clause (vii) is made by the Master Servicer only in its capacity as
Seller;
(viii) The Master Servicer will not waive any Prepayment Charge or part of
a Prepayment Charge unless such waiver is related to a default or a reasonably
foreseeable default and would maximize recovery of total proceeds taking into
account the value of such Prepayment Charge and related Mortgage Loan and doing
so is standard and customary in servicing mortgage loans similar to the Mortgage
Loans (including any waiver of a Prepayment Charge in connection with a
refinancing of a Mortgage Loan that is related to a default or a reasonably
foreseeable default); and
(ix) For each Mortgage Loan, the Master Servicer will accurately, fully and
in a timely manner report its borrower credit files to each of Equifax,
Transunion, and Experian (the "Credit Repositories").
(b) It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee or a Custodian, as the case may be, and shall inure to the
benefit of the Trustee, the Depositor, the Guarantor, the Certificate Insurer
and the Certificateholders. Upon discovery by any of the Depositor, the Master
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 or the Certificate Insurer, the party discovering such breach
shall give prompt written notice (but in no event later than two Business Days
following such discovery) to the other of such parties. The obligation of the
Master Servicer set forth in Section 2.03(c) to cure breaches (or, in the case
of (a)(vii) or (a)(viii) above, to pay a Master Servicer Prepayment Charge
Payment Amount) shall constitute the sole remedy against the Master Servicer
available to the Certificateholders, the Depositor, the Guarantor, the NIMS
Insurer or the Trustee on behalf of the Certificateholders and the Certificate
Insurer respecting a breach of the representations, warranties and covenants
contained in this Section 2.04. The preceding sentence shall not, however, limit
any remedies available to the Certificateholders, the Certificate Insurer, the
Depositor, the Guarantor, the NIMS Insurer or the Trustee on behalf of the
Certificateholders, (i) pursuant to the Mortgage Loan Purchase Agreement signed
by the Master Servicer in its capacity as Seller, respecting a breach of the
representations, warranties and covenants of the Master Servicer in its capacity
as Seller contained in the Mortgage Loan Purchase Agreement or (ii) pursuant to
Section 7.01 hereof.
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Section 2.05 Representations and Warranties of the Depositor.
The Depositor hereby represents, warrants and covenants to the Trustee, for
the benefit of the Trustee and the Certificateholders, and to the Guarantor, the
Certificate Insurer and the Master Servicer, that as of the Closing Date or as
of such date specifically provided herein:
(i) Each of this Agreement and the Mortgage Loan Purchase 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 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 interest in the Mortgage Loans to the Trustee on behalf of the Trust;
(iv) The Depositor is solvent and will not be made insolvent by the
transfer of the Mortgage Loans. The Depositor has not transferred the Mortgage
Loans to the Trustee 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 and the
Mortgage Loan Purchase Agreement by the Depositor, and the consummation of the
transactions contemplated hereby and 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
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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 or the Mortgage Loan
Purchase 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 or the Mortgage Loan Purchase 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 or the Mortgage Loan
Purchase Agreement;
(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, the Mortgage Loan Purchase 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 or the Mortgage Loan
Purchase Agreement, as the case may be; or (d) which might materially and
adversely affect the performance by the Depositor of its obligations under, or
the validity or enforceability of, this Agreement or the Mortgage Loan Purchase
Agreement; and
(x) The Depositor has the full power and authority to execute, deliver and
perform, and to enter into and consummate the transactions contemplated by this
Agreement and has duly authorized by all necessary action on the part of the
Depositor the execution, delivery and performance of this Agreement and this
Agreement, assuming the due authorization, execution and delivery thereof by the
parties thereto other than the Depositor, constitutes a legal, valid and binding
obligation of the Depositor, enforceable against the Depositor in accordance
with its terms, except to the extent that (a) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
Section 2.06 Issuance of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage Loans and the
delivery to it or a Custodian 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
written 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.
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Section 2.07 Reserved.
Section 2.08 Conveyance of REMIC 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 REMIC
2 Regular Interests and the Class R-2 Interest. 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 REMIC 2 Regular Interests and the Class R-2 Interest. The
interests evidenced by the Class R-2 Interest, together with the REMIC 2 Regular
Interests, constitute the entire beneficial ownership interest in REMIC 2.
(b) 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 2 Regular Interests for the benefit of the holders of the REMIC
3 Regular Interests and the Class R-3 Interest. The Trustee acknowledges receipt
of the REMIC 2 Regular Interests (which are uncertificated) and declares that it
holds and will hold the same in trust for the exclusive use and benefit of the
holders of the REMIC 3 Regular Interests and the Class R-3 Interest. The
interests evidenced by the Class R-3 Interest, together with the REMIC 3 Regular
Interests, constitute the entire beneficial ownership interest in REMIC 3.
(c) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC 3 Regular Interests for the benefit of the holders of the
Certificates (other than the Class C Certificates, the Class P Certificates, the
Class R-CX Certificates and the Class R-PX Certificates), REMIC CX, as holder of
REMIC 4 Regular Interest LT4-IC and REMIC 4 Regular Interest LT4-IIC, and REMIC
PX, as holder of REMIC 4 Regular Interest LT4-IP and REMIC 4 Regular Interest
LT4-IIP. The Trustee acknowledges receipt of the REMIC 3 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
(other than the Class C Certificates, the Class P Certificates, the Class R-CX
Certificates and the Class R-PX Certificates), and REMIC CX, as holder of REMIC
4 Regular Interests LT4-IC and REMIC 4 Regular Interest LT4-IIC, and REMIC PX,
as holder of REMIC 4 Regular Interest LT4-IP and REMIC 4 Regular Interest
LT4-IIP. The interests evidenced by the Class R-4 Interest, the Regular
Certificates (other than the Class C Certificates and the Class P Certificates),
and the REMIC 4 Regular Interests, constitute the entire beneficial ownership
interest in REMIC 4.
(d) In exchange for the REMIC 3 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
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Certificates (other than the Class C Certificates and the Class P Certificates)
in authorized denominations evidencing (together with the Class R-4 Interest and
the REMIC 4 Regular Interests) the entire beneficial ownership interest in REMIC
4.
(e) 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 4 Regular Interest LT4-IC and REMIC 4 Regular Interest LT4-IIC
for the benefit of the holders of the Class C Certificates and the Class R-CX
Interest. The Trustee acknowledges receipt of the REMIC 4 Regular Interest
LT4-IC and REMIC 4 Regular Interest LT4-IIC and declares that it holds and will
hold the same in trust for the exclusive use and benefit of the holders of the
Class C Certificates and the Class R-CX Interest. The interests evidenced by the
Class C Certificates and the Class R-CX Interest constitute the entire
beneficial ownership interest in REMIC CX.
(f) In exchange for REMIC 4 Regular Interest LT4-IC and REMIC 4 Regular
Interest LT4-IIC 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 C Certificates in authorized denominations
evidencing (together with the Class R-CX Interest) the entire beneficial
ownership interest in REMIC CX.
(g) 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 REMIC 4 Regular Interest LT4-IP and REMIC 4 Regular Interest LT4-IIP for
the benefit of the holders of the Class P Certificates and the Class R-PX
Interest. The Trustee acknowledges receipt of REMIC 4 Regular Interest LT4-IP
and REMIC 4 Regular Interest LT4-IIP and declares that it holds and will hold
the same in trust for the exclusive use and benefit of the holders of the Class
P Certificates and the Class R-PX Interest. The interests evidenced by the Class
P Certificates and the Class R-PX Interest constitute the entire beneficial
ownership interest in REMIC PX.
(h) In exchange for REMIC 4 Regular Interest LT4-IP and REMIC 4 Regular
Interest LT4-IIP 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 P Certificates in authorized denominations
evidencing (together with the Class R-PX Interest) the entire beneficial
ownership interest in REMIC PX.
(i) 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 2.08(a), (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 2.08(b), (iii) the assignment and delivery to the Trustee of REMIC 3
(including the Residual Interest therein represented by the Class R-3 Interest)
and the acceptance by the Trustee thereof, pursuant to Section 2.08(c), (iv) the
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assignment and delivery to the Trustee of the REMIC 4 Regular Interests
(including the Residual Interest in REMIC 4 represented by the Class R-4
Interest) and the acceptance by the Trustee thereof, pursuant to Sections
2.08(e) and 2.08(g), 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, the Class R-2
Interest, the Class R-3 Interest, and the Class R-4 Interest, the Class R-CX
Certificates evidencing the Class R-CX Interest and the Class R-PX Certificates
evidencing the Class R-PX Interest.
ARTICLE III
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 3.01 Master Servicer to Act as Master Servicer.
The Master Servicer shall service and administer the Mortgage Loans on
behalf of the Trustee and in the best interests of and for the benefit of the
Certificateholders and the Certificate Insurer (as determined by the Master
Servicer in its reasonable judgment) in accordance with the terms of this
Agreement and the respective Mortgage Loans and, to the extent consistent with
such terms, in the same manner in which it services and administers similar
mortgage loans for its own portfolio, giving due consideration to customary and
usual standards of practice of mortgage lenders and loan servicers administering
similar mortgage loans in the local areas where the related Mortgaged Property
is located but without regard to:
(i) any relationship that the Master Servicer, any Sub-Servicer or any
Affiliate of the Master Servicer or any Sub-Servicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the Master
Servicer or any Affiliate of the Master Servicer;
(ii) the Master Servicer's obligation to make Advances or Servicing
Advances; or
(iv) the Master 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 Master Servicer shall seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Master
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 and administration in accordance with
policies and procedures generally accepted in the mortgage banking industry.
Without limiting the generality of the foregoing, the Master Servicer in its own
name or in the name of a Sub-Servicer is hereby authorized and empowered by the
Trustee when the Master 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, the Certificate Insurer 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,
Certificateholders and the Certificate Insurer. The Master 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 Master Servicer shall also comply in the
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performance of this Agreement with all reasonable rules and requirements of each
insurer under any standard hazard insurance policy. Subject to Section 3.17, the
Trustee shall execute, at the written direction of the Master Servicer, and
furnish to the Master Servicer and any Sub-Servicer such documents as are
necessary or appropriate to enable the Master Servicer or any Sub-Servicer to
carry out their servicing and administrative duties hereunder, and the Trustee
hereby grants to the Master Servicer and each Sub-Servicer a power of attorney
to carry out such duties including a power of attorney to take title to
Mortgaged Properties after foreclosure on behalf of the Trustee, the
Certificateholders and the Certificate Insurer. The Trustee, at the direction of
the Master Servicer, shall execute a separate power of attorney in favor of (and
furnish such power of attorney to) the Master Servicer and/or each Sub-Servicer
for the purposes described herein to the extent necessary or desirable to enable
the Master Servicer to perform its duties hereunder. The Trustee shall not be
liable for the actions of the Master 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 Master Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from collections on the related
Mortgage Loans from the Mortgagors pursuant to Section 3.09, and further as
provided in Section 3.11. Any cost incurred by the Master Servicer or by
Sub-Servicers in effecting the timely 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 Master
Servicer may not make any future advances to a Mortgagor with respect to a
Mortgage Loan (except as provided in Section 4.04) and the Master 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 Master 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 final, temporary or proposed Treasury regulations
promulgated thereunder) and (B) cause any Trust REMIC 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.
The Master Servicer may delegate its responsibilities under this Agreement;
provided, however, that no such delegation shall release the Master Servicer
from the responsibilities or liabilities arising under this Agreement.
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For each Mortgage Loan, the Master Servicer will accurately and fully
report its borrower credit files to each of the Credit Repositories in a timely
manner.
Section 3.02 Sub-Servicing Agreements Between the Master Servicer and
Sub-Servicers.
(a) The Master Servicer may enter into Sub-Servicing Agreements provided
(i) that such agreements would not result in a withdrawal or a downgrading by
any Rating Agency of the ratings on any Class of Certificates or any of the NIM
Notes, as evidenced by a letter to that effect delivered by each Rating Agency
to the Depositor, the Certificate Insurer, the NIMS Insurer and the Guarantor
and (ii) that, except in the case of any Sub-Servicing Agreements the Master
Servicer may enter into with Washington Mutual, Inc. or any Affiliate thereof,
the NIMS Insurer or the Certificates Controlling Person (as provided in Section
1.04) shall have consented to such Sub-Servicing Agreements (which consent shall
not be unreasonably withheld) with Sub-Servicers, for the servicing and
administration of the Mortgage Loans. That certain Subservicing Agreement by and
between the Master Servicer and Washington Mutual Bank, FA dated April 9, 2001
is hereby acknowledged as being permitted under this Agreement and meeting the
requirements applicable to Sub-Servicing Agreements set forth in this Agreement.
The Trustee is hereby authorized to acknowledge, at the request of the Master
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.
Each Sub-Servicer shall be (i) authorized to transact business in the state
or states in which the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution the deposit accounts in which
are insured by the FDIC and (iii) a Xxxxxx Xxx approved mortgage servicer. Each
Sub-Servicing Agreement must impose on the Sub-Servicer requirements conforming
to the provisions set forth in Section 3.08. The Master 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 Master 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 or the Certificate Insurer,
without the consent of the Holders of Certificates entitled to at least 66% of
the Voting Rights. 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 Master
Servicer, are conclusively deemed to be inconsistent with this Agreement and
therefore prohibited. The Master Servicer shall deliver to the Guarantor, the
NIMS Insurer, the Certificate Insurer and the Trustee copies of all
Sub-Servicing Agreements, and any amendments or modifications thereof, promptly
upon the Master Servicer's execution and delivery of such instruments.
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(b) As part of its servicing activities hereunder, the Master Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, the Certificateholders and the Certificate Insurer,
shall enforce the obligations of each Sub-Servicer under the related
Sub-Servicing Agreement and, subject to the last sentence of this paragraph, of
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 or otherwise remedy as
contemplated herein 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 remedies, shall be in such form
and carried out to such an extent and at such time as the Master Servicer, in
its good faith business judgment, would require were it the owner of the related
Mortgage Loans. The Master 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. Enforcement of the Mortgage
Loan Purchase Agreement against the Seller shall be effected by the Master
Servicer to the extent it is not the Seller, and otherwise by the Trustee, in
accordance with the foregoing provisions of this paragraph.
Section 3.03 Successor Sub-Servicers.
The Master Servicer, with the written consent of the NIMS Insurer or the
Certificates Controlling Person (as provided in Section 1.04), 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 Master Servicer without any act or deed
on the part of such Sub-Servicer or the Master Servicer, and the Master 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 Trustee without fee, in accordance with the
terms of this Agreement, and the Trustee shall so terminate such Sub-Servicing
Agreement at the direction of the NIMS Insurer or the Certificates Controlling
Person (as provided in Section 1.04) in the event that the Master Servicer (or
the Trustee, if then acting as Master Servicer) shall, for any reason, no longer
be the Master Servicer (including termination due to a Master Servicer Event of
Default).
Section 3.04 Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer and
a Sub-Servicer or reference to actions taken through a Sub-Servicer or
otherwise, the Master Servicer shall remain obligated and primarily liable to
the Trustee, the Certificateholders and the Certificate Insurer for the
servicing and administering of the Mortgage Loans in accordance with the
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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 Master Servicer alone were servicing and
administering the Mortgage Loans. The Master Servicer shall be entitled to enter
into any agreement with a Sub-Servicer for indemnification of the Master
Servicer by such Sub-Servicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification and no such indemnification shall
be an expense of the Trust.
Section 3.05 No Contractual Relationship Between Sub-Servicers and the
NIMS Insurer, the Certificate Insurer, the Guarantor, the
Trustee or Certificateholders.
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 Master
Servicer alone, and the Trustee, the NIMS Insurer, the Certificate Insurer, the
Guarantor and the 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 Master Servicer shall
be solely liable for all fees owed by it to any Sub-Servicer, irrespective of
whether the Master Servicer's compensation pursuant to this Agreement is
sufficient to pay such fees and such fees shall not be an expense of the Trust.
Section 3.06 Assumption or Termination of Sub-Servicing Agreements by
Trustee.
In the event the Master Servicer shall for any reason no longer be the
master servicer (including by reason of the occurrence of a Master Servicer
Event of Default), the Trustee or its designee shall thereupon assume all of the
rights and obligations of the Master Servicer under each Sub-Servicing Agreement
that the Master 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, its designee or the
successor servicer for the Trustee appointed pursuant to Section 7.02 shall be
deemed, subject to Section 3.03, to have assumed all of the Master Servicer's
interest therein and to have replaced the Master 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 Master Servicer
shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement that arose before it ceased to be the Master Servicer
and (ii) none of the Trustee, its designee or any successor Master Servicer
shall be deemed to have assumed any liability or obligation of the Master
Servicer that arose before it ceased to be the Master Servicer.
The Master Servicer at its own expense and without reimbursement 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.
Section 3.07 Collection of Certain Mortgage Loan Payments.
The Master 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
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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
Master 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 that any extension pursuant to this clause (ii) shall not affect the
amortization schedule of any Mortgage Loan for purposes of any computation
hereunder, except as provided below. In the event of any such arrangement
pursuant to clause (ii) above, the Master 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 arrangements, subject to Section 4.04(d)
pursuant to which the Master Servicer shall not be required to make any such
advances that are Nonrecoverable Advances. Notwithstanding the foregoing, in the
event that any Mortgage Loan is in default or, in the judgment of the Master
Servicer, such default is reasonably foreseeable, the Master 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 no later than two years with
respect to a Group I Mortgage Loan), accept payment from the related Mortgagor
of an amount less than the Stated Principal Balance in final satisfaction of
such Mortgage Loan (such payment, a "Short Pay-off") or consent to the
postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor; provided, that in the judgment of the Master
Servicer, any such modification, waiver or amendment could reasonably be
expected to result in collections and other recoveries in respect of such
Mortgage Loans in excess of Net Liquidation Proceeds that would be recovered
upon the foreclosure of, or other realization upon, such Mortgage Loan and
provided further, that the Controlling Insurer's prior written consent shall be
required for any modification, waiver or amendment if the aggregate number of
outstanding Mortgage Loans which have been modified, waived or amended exceeds
5% of the number of Closing Date Mortgage Loans as of the Cut-off Date. If the
Class C Certificates are no longer outstanding, the Master Servicer shall not
take any action pursuant to the preceding sentence with respect to a Group I
Mortgage Loan without obtaining the prior written consent of the Guarantor to
such modification. The Master Servicer shall submit to the Guarantor with its
request for consent, such information related to the proposed modification as
can be expected to be needed by the Guarantor to evaluate the Master Servicer's
request, including the terms of the proposed modification and the reasons for
the Master Servicer's decision that such Group I Mortgage Loan should be
modified. The Guarantor shall be deemed to have consented to the Master
Servicer's request in the event that the Guarantor does not either provide the
Master Servicer with its written consent to such requested modification or
written notice of its objection to such modification within five Business Days
of its receipt of the Master Servicer's request. Requests for modification shall
be sent to the Guarantor at: Xxxxxx Xxx, 0000 Xxxxxxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000, Attn: Vice President-Loss Mitigation. With respect to
each Group I Mortgage Loan which is modified with the consent of the Guarantor,
the Master Servicer shall give written notice to the NIMS Insurer and the
Certificate Insurer to the addresses set forth in Section 11.05 and to the
Guarantor to the following address: Xxxxxx Xxx, 0000 Xxxxxxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000, Attn: Bond Administration. Such notice shall be
delivered within thirty Business Days following such modification and shall
include information with respect to the modification, including, without
limitation, the interest rate, the principal balance and the maturity date of
such Group I Mortgage Loan before and after such modification.
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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 shall 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 be entitled
"Deutsche Bank National Trust Company, as Trustee, in trust for registered
Holders of Long Beach Mortgage Loan Trust 2002-4, Asset-Backed Certificates,
Series 2002-4. The Sub-Servicer shall be required to deposit in the clearing
account (which account must be an Eligible Account) in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event more than
one Business Day after the 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 deposit of such funds into the clearing account. The
Sub-Servicer shall thereafter be required to deposit such proceeds in the
Collection Account or remit such proceeds to the Master 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
Master 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 Master Servicer shall establish and maintain, or cause to be
established and maintained, one or more accounts (the "Servicing Accounts").
Servicing Accounts shall be Eligible Accounts. The Master Servicer shall deposit
in the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Master Servicer's receipt thereof, all
collections from the Mortgagors (or related advances from Sub-Servicers) for the
payment of taxes, assessments, hazard insurance premiums and comparable items
for the account of the Mortgagors ("Escrow Payments") collected on account of
the Mortgage Loans and shall thereafter deposit such Escrow Payments in the
Servicing Accounts, in no event more than two Business Days after the deposit of
such funds in the clearing account, for the purpose of effecting the payment of
any such items as required under the terms of this Agreement. Withdrawals of
amounts from a Servicing Account may be made only to (i) effect payment of
taxes, assessments, hazard insurance premiums, and comparable items; (ii)
reimburse the Master Servicer (or a Sub-Servicer to the extent provided in the
related Sub-Servicing Agreement) out of related collections for any advances
made pursuant to Section 3.01 (with respect to taxes and assessments) and
Section 3.14 (with respect to hazard insurance); (iii) refund to Mortgagors any
sums as may be determined to be overages; (iv) pay interest, if required and as
described below, to Mortgagors on balances in the Servicing Account; (v) clear
and terminate the Servicing Account upon the termination of the Master
Servicer's obligations and responsibilities in respect of the Mortgage Loans
under this Agreement in accordance with Article IX or (vi) recover amounts
deposited in error. As part of its servicing duties, the Master Servicer or
Sub-Servicers shall pay to the Mortgagors interest on funds in Servicing
Accounts, to the extent required by law and, to the extent that interest earned
on funds in the Servicing Accounts is insufficient, to pay such interest from
its or their own funds, without any reimbursement therefor. To the extent that a
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Mortgage does not provide for Escrow Payments, the Master Servicer shall
determine whether any such payments are made by the Mortgagor in a manner and at
a time that avoids the loss of the Mortgaged Property due to a tax sale or the
foreclosure of a tax lien. The Master Servicer assumes full responsibility for
the payment of all such bills within such time and shall effect payments of all
such bills irrespective of the Mortgagor's faithful performance in the payment
of same or the making of the Escrow Payments and shall make advances from its
own funds to effect such payments; provided, however, that such advances shall
constitute Servicing Advances.
Section 3.10 Collection Account and Distribution Account.
(a) On behalf of the Trust Fund, the Master 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, the Certificateholders and the Certificate Insurer. On behalf of
the Trust Fund, the Master Servicer shall deposit or cause to be deposited in
the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Master Servicer's receipt thereof, and
shall thereafter deposit in the Collection Account, in no event more than two
Business Days after the deposit of such funds into the clearing account, as and
when received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the related Mortgage Loans due on or before
the Cut-off Date or payments (other than Principal Prepayments) received by it
on or prior to the Cut-off Date but allocable to a Due Period subsequent
thereto):
(i) all payments on account of principal, including Principal Prepayments,
on the Mortgage Loans;
(ii) all payments on account of interest (net of the related Servicing Fee)
on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds (other than proceeds
collected in respect of any particular REO Property and amounts paid by the
Master Servicer in connection with a purchase of Mortgage Loans and REO
Properties pursuant to Section 9.01);
(iv) any amounts required to be deposited pursuant to Section 3.12 in
connection with any losses realized on Permitted Investments with respect to
funds held in the Collection Account;
(v) any amounts required to be deposited by the Master 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, Section 3.16 or Section 9.01 and all Master
Servicer Prepayment Charge Payment Amounts required to be deposited in the
Collection Account pursuant to Section 2.03;
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(vii) all Substitution Shortfall Amounts;
(viii) all Prepayment Charges collected by the Master Servicer; and
(ix) without duplication, all payments of claims received by the Master
Servicer under the PMI Policy.
For purposes of the immediately preceding sentence, the Cut-off Date with
respect to any Qualified Substitute Mortgage Loan shall be deemed to be the date
of substitution.
The foregoing requirements for deposit in the Collection Accounts shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges, NSF fees,
reconveyance fees, assumption fees and other similar fees and charges (other
than Prepayment Charges) need not be deposited by the Master Servicer in the
Collection Account and shall, upon collection, belong to the Master Servicer as
additional compensation for its servicing activities. In the event the Master
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, the Certificateholders and the
Certificate Insurer. On behalf of the Trust Fund, the Master Servicer shall
deliver to the Trustee in immediately available funds for deposit in the
Distribution Account on or before 3:00 p.m. New York time (i) on the Master
Servicer Remittance Date, that portion of the Group I Available Funds and the
Group II 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 on the Prepayment Charge Schedule
collected by the Master Servicer in connection with any of the Mortgage Loans
and any Master Servicer Prepayment Charge Payment Amounts then on deposit in the
Collection Account and the amount of any funds reimbursable to an Advancing
Person pursuant to Section 3.27 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 Master Servicer shall, on or before 3:00 p.m. New
York time on such Business Day, withdraw from the Collection Account any and all
amounts payable or reimbursable to the Depositor, the Master Servicer, the
Trustee, the Seller or any Sub-Servicer pursuant to Section 3.11 and shall pay
such amounts to the Persons entitled thereto.
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(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 Master Servicer shall give notice to the Trustee, the NIMS
Insurer, the Guarantor, the Certificate Insurer and the Depositor 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 Master Servicer, the
NIMS Insurer, the Guarantor, the Certificate Insurer 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 Master 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 Master 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, and the
Trustee shall withdraw, such amount from the Distribution Account and remit to
the Master Servicer any such amount, any provision herein to the contrary
notwithstanding. In addition, the Master Servicer shall deliver to the Trustee
from time to time for deposit, and the Trustee shall so deposit, in the
Distribution Account:
(i) any Advances, as required pursuant to Section 4.04, unless delivered
directly to the Trustee by an Advancing Person;
(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 by the Master Servicer in connection with a
purchase of Mortgage Loans and REO Properties pursuant to Section 9.01;
(iv) any amounts required to be deposited pursuant to Section 3.24 in
connection with any Prepayment Interest Shortfalls; and
(v) any Stayed Funds, as soon as permitted by the federal bankruptcy court
having jurisdiction in such matters.
(e) Promptly upon receipt of any Stayed Funds, whether from the Master
Servicer, a trustee in bankruptcy, federal bankruptcy court or other source, the
Trustee shall deposit such funds in the Distribution Account, subject to
withdrawal thereof pursuant to Section 7.02(b) or as otherwise permitted
hereunder.
Section 3.11 Withdrawals from the Collection Account and Distribution
Account.
(a) The Master 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, without priority:
(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);
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(ii) subject to Section 3.16(d), to reimburse the Master Servicer for
Advances, but only to the extent of amounts received which represent Late
Collections (net of the related Servicing Fees) of Monthly Payments on the
related Mortgage Loans in accordance with the provisions of Section 4.04;
(iii) subject to Section 3.16(d), to pay the Master Servicer or any
Sub-Servicer (a) any unpaid Servicing Fees or (b) any unreimbursed Servicing
Advances with respect to each Mortgage Loan, but only to the extent of any Late
Collections, Liquidation Proceeds, Insurance Proceeds or other amounts as may be
collected by the Master Servicer from a Mortgagor, or otherwise received with
respect to such Mortgage Loan;
(iv) to pay to the Master Servicer as servicing compensation (in addition
to the Servicing Fee) on the Master Servicer Remittance Date any interest or
investment income earned on funds deposited in the Collection Account;
(v) to pay to the Master Servicer or the Seller, as the case may be, with
respect to each Mortgage Loan that has previously been purchased or replaced
pursuant to Section 2.03 or Section 3.16(c) all amounts received thereon
subsequent to the date of purchase or substitution, as the case may be;
(vi) to reimburse the Master Servicer for any Advance or Servicing Advance
previously made which the Master Servicer has determined to be a Nonrecoverable
Advance in accordance with the provisions of Section 4.04;
(vii) to reimburse the Master Servicer or the Depositor for expenses
incurred by or reimbursable to the Master Servicer or the Depositor, as the case
may be, pursuant to Section 6.03;
(viii) to reimburse the Guarantor (with respect to Group I Mortgage Loans
only), the NIMS Insurer, the Certificate Insurer, the Master Servicer or the
Trustee, as the case may be, for enforcement expenses reasonably incurred in
respect of the breach or defect giving rise to the purchase obligation under
Section 2.03 of this Agreement that were included in the Purchase Price of the
Mortgage Loan, including any expenses arising out of the enforcement of the
purchase obligation; provided, however, that the reimbursement to the NIMS
Insurer pursuant to this clause shall be limited to an annual amount of $25,000;
(ix) to pay, or to reimburse the Master Servicer for advances in respect
of, expenses incurred in connection with any Mortgage Loan pursuant to Section
3.16(b); and
(x) to clear and terminate the Collection Account pursuant to Section 9.01.
The Master Servicer shall keep and maintain separate accounting, on an
individual Mortgage Loan basis, for the purpose of justifying any withdrawal
from the Collection Account, to the extent held by or on behalf of it, pursuant
to subclauses (ii), (iii), (v), (vi), (viii) and (ix) above. The Master Servicer
shall provide written notification to the Trustee, the NIMS Insurer, the
Certificate Insurer and the Guarantor, on or prior to the next succeeding Master
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Servicer Remittance Date, upon making any withdrawals from the Collection
Account pursuant to subclause (vii) above.
(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 to Certificateholders, the Certificate Insurer
and the Guarantor in accordance with Section 4.01;
(ii) to pay to itself and the Trustee amounts to which it is entitled
pursuant to Section 8.05 or to pay any other Extraordinary Trust Fund Expenses;
(iii) to pay to itself any interest income earned on funds deposited in the
Distribution Account pursuant to Section 3.12(c);
(iv) to reimburse itself and the Trustee pursuant to Section 7.02 or
pursuant to Section 7.01 to the extent such amounts in Section 7.01 were not
reimbursed by the Master Servicer;
(v) to pay any amounts in respect of taxes pursuant to Section 10.01(g);
(vi) to remit to the Master Servicer any amount deposited in the
Distribution Account by the Master Servicer but not required to be deposited
therein in accordance with Section 3.10(d);
(vii) to pay to an Advancing Person reimbursements for Advances and/or
Servicing Advances pursuant to Section 3.27;
(viii) to clear and terminate the Distribution Account pursuant to Section
9.01;
(ix) to pay the PMI Insurer the PMI Insurer Fee based on information
received from the Master Servicer; and
(x) to pay itself the Trustee Fee.
Section 3.12 Investment of Funds in the Collection Account and the
Distribution Account.
(a) The Master Servicer may direct any depository institution maintaining
the Collection Account and any REO Account (for purposes of this Section 3.12,
an "Investment Account"), and the Trustee, in its individual capacity, may
direct any depository institution maintaining the Distribution Account (for
purposes of this Section 3.12, the Distribution Account is also an "Investment
Account"), to invest the funds in such Investment Account in one or more
Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand, (i) no later than the Business Day immediately
preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if a Person other than the Trustee is the
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obligor thereon and (ii) no later than the date on which such funds are required
to be withdrawn from such account pursuant to this Agreement, if the Trustee is
the obligor thereon. 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 REO 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 actual
notice 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 Master
Servicer shall be for the benefit of the Master Servicer and shall be subject to
its withdrawal in accordance with Section 3.11 or Section 3.23, as applicable.
The Master 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 accounts immediately upon
realization of such loss.
(c) All income and gain realized from the investment of funds deposited in
the Distribution Account held by or on behalf of the Trustee shall be for the
benefit of the Trustee and shall be subject to its withdrawal at any time. 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 such accounts immediately upon realization of such loss.
(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(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 Agreement to Appoint a Special Servicer.
(a) The Guarantor (with the consent of the Certificate Insurer, which
consent shall not be unreasonably withheld) may require the Master Servicer to
enter into a special subservicing agreement with a servicer with expertise in
servicing delinquent mortgage loans as designated by the Guarantor (the "Special
Servicer") on or after the earliest Distribution Date with respect to which the
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aggregate Certificate Principal Balance of the Class C Certificates has been
reduced to zero. Such special subservicing agreement shall relate to the
servicing of only Group I Mortgage Loans that (x) have been delinquent in
payment with respect to three or more Monthly Payments (provided, however, that
the third such Monthly Payment shall not be deemed to be delinquent for purposes
of this clause (x) until the close of business on the last day of the month in
which such Monthly Payment first became due) and (y) have been transferred to
the Special Servicer in accordance with this Section 3.13 and the related
special subservicing agreement (a "Specially Serviced Mortgage Loan").
(b) The special subservicing agreement shall be consistent with the
provisions of this Agreement, including but not limited to this Section 3.13,
Section 3.02 (a), Section 3.02 (b), and Section 3.08, except as provided
otherwise in this Section 3.13. In addition, the special subservicing agreement
shall be on terms which shall be reasonably acceptable to the Guarantor and the
Master Servicer and shall provide, at a minimum that:
(1) the Special Servicer shall at all times meet the eligibility criteria
described in Section 3.02(a);
(2) the Special Servicer shall service only the Specially Serviced Mortgage
Loans in a manner consistent with the provisions with this Agreement except as
provided otherwise in the special subservicing agreement;
(3) the Special Servicer shall use the Xxxxxx Xxx foreclosure network (and
pay the customary fees therefor) for foreclosures and bankruptcies relating to
Specially Serviced Mortgage Loans;
(4) the Special Servicer shall use the Xxxxxx Mae disposition service (and
pay the customary fees therefor) for the disposition of REO Property related to
Specially Serviced Mortgage Loans;
(5) the Special Servicer shall make Servicing Advances on the Specially
Serviced Mortgage Loans to the same extent and in the same manner as the Master
Servicer with respect to the Group I Mortgage Loans pursuant to this Agreement;
(6) the Special Servicer shall be entitled to receive the Servicing Fee
with respect to all Specially Serviced Mortgage Loans;
(7) prior to the transfer of servicing to the Special Servicer, the Master
Servicer and the Special Servicer shall have provided all notices relating to
such transfer of servicing as required to be delivered to the borrowers by
applicable state and federal law;
(8) the Special Servicer shall indemnify the Master Servicer and the
Trustee for any liabilities to them arising from failures of the Special
Servicer to perform its obligations according to the terms of the subservicing
agreement;
(9) the Master Servicer shall promptly give notice thereof to the Trustee,
the NIMS Insurer, the Certificate Insurer and the Guarantor of the transfer of
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servicing to the Special Servicer, including the loan number together with the
borrower's name and the unpaid principal balance of the transferred Mortgage
Loan at the time of transfer;
(10) each of the respective obligations, duties, and liabilities of the
Master Servicer and the Special Servicer (or either of them) with respect to the
servicing of the Specially Serviced Mortgage Loans that have arisen prior to the
date on which the servicing of such Specially Serviced Mortgage Loan was
transferred to the Special Servicer (the "Effective Date"), or that arise on and
after the Effective Date, under this Agreement and the subservicing agreement
and that remain unperformed or unsatisfied shall survive any transfer of
servicing;
(11) once a Group I Mortgage Loan becomes a Specially Serviced Mortgage
Loan, such Mortgage Loan shall remain a Specially Serviced Mortgage Loan, and
shall continue to be serviced by the Special Servicer, until the earlier of the
liquidation or other disposition of such Mortgage Loan or the termination of the
subservicing agreement, regardless of delinquency status or otherwise;
(12) the Guarantor may remove the Special Servicer if the Special Servicer
at any time fails to meet any of the above criteria or otherwise, in the
judgment of the Guarantor, fails to perform according to the terms of the
subservicing agreement and the provisions of this Section 3.13; provided that
prior to any such removal the Guarantor shall designate a successor Special
Servicer meeting the requirements of this Section 3.13, and no removal of a
Special Servicer shall be effective until a successor Special Servicer has
entered into a special subservicing agreement meeting the requirements of this
Section 3.13 and agreed to assume the duties of the Special Servicer or the
Master Servicer has undertaken such duties; and
(13) in connection with any transfer of a Group I Mortgage Loan to the
Special Servicer as a Specially Serviced Mortgage Loan, the Master Servicer
shall execute any appropriate assignments or other documents reasonable and
necessary to further the prosecution of the Special Servicer obligations under
the special subservicing agreement.
Section 3.14 Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage.
(a) The Master Servicer shall cause to be maintained for each Mortgage Loan
fire insurance with extended coverage on the related Mortgaged Property in an
amount which is at least equal to the least of (i) the then 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 and (iii) the maximum insurable value of the improvements
which are a part of such Mortgaged Property, in each case in an amount not less
than such amount as is necessary to avoid the application of any coinsurance
clause contained in the related hazard insurance policy. The Master Servicer
shall also cause to be maintained fire insurance with extended coverage on each
REO Property in an amount which is at least equal to the lesser of (i) the
maximum insurable value of the improvements which are a part of such property
and (ii) the outstanding principal balance of the related Mortgage Loan at the
time it became an REO Property, plus accrued interest at the Mortgage Rate and
related Servicing Advances. The Master 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 Master
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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
Master 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 Master Servicer in maintaining any such
insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
It is understood and agreed that no earthquake or other additional insurance is
to be required of any Mortgagor other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property or REO Property is at any time
in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards and flood insurance has been
made available, the Master Servicer will cause to be maintained a flood
insurance policy in respect thereof. Such flood insurance shall be in an amount
equal to the lesser of (i) the unpaid principal balance of the related Mortgage
Loan and (ii) the maximum amount of such insurance available for the related
Mortgaged Property under the national flood insurance program (assuming that the
area in which such Mortgaged Property is located is participating in such
program).
In the event that the Master Servicer shall obtain and maintain a blanket
policy with an insurer having a General Policy Rating of A:X or better in Best's
Key Rating Guide (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 Master 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 Master Servicer agrees to
prepare and present, on behalf of itself, the Trustee, the Certificateholders
and the Certificate Insurer, claims under any such blanket policy in a timely
fashion in accordance with the terms of such policy.
(b) The Master 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 Master 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 if it were the purchaser of the Mortgage
Loans, unless the Master Servicer or any of its Affiliates has obtained a waiver
of such requirements from Xxxxxx Mae. The Master Servicer shall also maintain a
fidelity bond in the form and amount that would meet the requirements of Xxxxxx
Xxx, unless the Master Servicer or any of its Affiliates has obtained a waiver
of such requirements from Xxxxxx Mae. The Master Servicer shall provide the
Trustee, the NIMS Insurer, the Certificate Insurer and the Guarantor (upon such
party's reasonable request) with copies of any such insurance policies and
fidelity bond. The Master Servicer shall be deemed to have complied with this
provision if an Affiliate of the Master Servicer has such errors and omissions
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and fidelity bond coverage and, by the terms of such insurance policy or
fidelity bond, the coverage afforded thereunder extends to the Master 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 Master
Servicer shall also cause each Sub-Servicer to maintain a comparable policy of
insurance covering errors and omissions and a fidelity bond meeting such
requirements.
Section 3.15 Enforcement of Due-On-Sale Clauses; Assumption Agreements.
The Master Servicer shall, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Master Servicer shall not be required to take such action if in its sole
business judgment the Master Servicer believes that the collections and other
recoveries in respect of such Mortgage Loans could reasonably be expected to be
maximized if the Mortgage Loan were not accelerated, and the Master Servicer
shall not exercise any such rights if prohibited by law from doing so. If the
Master 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 Master Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. The Master Servicer
may also 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 Master Servicer and has a credit risk
rating at least equal to that of the original Mortgagor. In connection with any
assumption, modification or substitution, the Master 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 Master Servicer shall not take
or enter into any assumption and modification agreement, however, unless (to the
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extent practicable under the circumstances) it shall have received confirmation,
in writing, of the continued effectiveness of any applicable hazard insurance
policy, or a new policy meeting the requirements of this Section is obtained.
Any fee collected by the Master Servicer in respect of any assumption,
modification or substitution of liability agreement will be retained by the
Master 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 Master Servicer shall notify the Trustee, the NIMS Insurer, the
Certificate Insurer and the Guarantor that any such substitution, modification
or assumption agreement has been completed by forwarding to the Trustee (with a
copy to the NIMS Insurer and the Certificate Insurer) 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. If the Class C Certificates are no
longer outstanding, the Master Servicer shall not take or enter into any
substitution, assumption or modification agreement with respect to a Group I
Mortgage Loan without obtaining the prior written consent of the Guarantor to
such substitution, assumption or modification agreement. The Master Servicer
shall submit to the Guarantor with its request for consent, such information
related to the proposed substitution, assumption or modification agreement as
can be expected to be needed by the Guarantor to evaluate the Master Servicer's
request, including the terms of the proposed substitution, assumption or
modification and the reasons for the Master Servicer's decision that such
substitution, assumption or modification agreement should be taken or entered
into with respect to such Group I Mortgage Loan. The Guarantor shall be deemed
to have consented to the Master Servicer's request in the event that the
Guarantor does not either provide the Master Servicer with its written consent
to such requested substitution, assumption or modification agreement or written
notice of its objection to such substitution, assumption or modification
agreement within five Business Days of its receipt of the Master Servicer's
request. Such requests shall be sent to the Guarantor at: Xxxxxx Xxx, 0000
Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, Attn: Vice President-Loss
Mitigation. With respect to each substitution, assumption or modification
agreement which is entered into with the consent of the Guarantor, the Master
Servicer shall give written notice to the NIMS Insurer and the Certificate
Insurer to the addresses set forth in Section 11.05, to the Guarantor to the
following address: Xxxxxx Xxx, 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000, Attn: Bond Administration. Such notice shall be delivered within thirty
Business Days following the date of such substitution, assumption or
modification agreement.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master 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 Master Servicer may be restricted by law from preventing,
for any reason whatever. For purposes of this Section 3.15, the term
"assumption" is deemed to also include a sale of the Mortgaged Property subject
to the Mortgage that is not accompanied by an assumption or substitution of
liability agreement.
Section 3.16 Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall use reasonable efforts consistent with the
servicing standard 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 Master Servicer shall be responsible for all costs and
expenses incurred by it in any such proceedings; provided, however, that such
costs and expenses will constitute and be recoverable as Servicing Advances by
the Master Servicer as contemplated in Section 3.11 and Section 3.23. The
foregoing is subject to the provision that, in any case in which Mortgaged
Property shall have suffered damage from an Uninsured Cause, the Master Servicer
shall not be required to expend its own funds toward the restoration of such
property unless it shall determine in its sole and absolute discretion that such
restoration will increase the proceeds of liquidation of the related Mortgage
Loan after reimbursement to itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section 3.16 or any
other provision of this Agreement, with respect to any Mortgage Loan as to which
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the Master 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 Master 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, the Certificateholders or the Certificate Insurer
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 Master
Servicer has also previously determined, based on its reasonable judgment and a
report prepared by an Independent 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.
Notwithstanding the foregoing, if such environmental audit reveals, or if
the Master Servicer has knowledge or notice, that the Mortgaged Property
securing such Mortgage Loan contains such wastes or substances or is within one
mile of the site of such wastes or substances, the Master Servicer shall not
foreclose or accept a deed in lieu of foreclosure without the prior written
consent of the Guarantor (with respect to the Group I Mortgage Loans) and the
Certificate Insurer.
The cost of the environmental audit report contemplated by this Section
3.16 shall be advanced by the Master Servicer, subject to the Master Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.11(a)(ix), such right of reimbursement being prior to the rights of
Certificateholders, the Certificate Insurer or the Guarantor to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans. It is understood by the parties hereto that any
such advance will constitute a Servicing Advance.
If the Master 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 Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
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containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(ix), such right of
reimbursement being prior to the rights of Certificateholders, the Certificate
Insurer or the Guarantor to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans. It is
understood by the parties hereto that any such advance will constitute a
Servicing Advance.
(c) The Master Servicer may at its option purchase from REMIC 1, as
applicable, any Mortgage Loan or related REO Property that is 90 days or more
delinquent or that has been otherwise in default for 90 days or more, which the
Master Servicer determines in good faith will otherwise become subject to
foreclosure proceedings (evidence of such determination to be delivered in
writing to the Trustee prior to purchase), at a price equal to the Purchase
Price; provided, however, that the Master Servicer shall purchase any such
Mortgage Loans or related REO Properties on the basis of delinquency or default,
purchasing first the Mortgage Loans or related REO Properties that became
delinquent or otherwise in default on an earlier date; and provided, further,
that such option shall expire as of the last day of the calendar quarter during
which such Mortgage Loan or related REO Property became 90 days delinquent or
otherwise in default for 90 days or more. In the event the Master Servicer does
not exercise its option to purchase from REMIC 1 any such Mortgage Loan or
related REO Property prior to the expiration of such option, the NIMS Insurer
shall be entitled to purchase such Mortgage Loan or related REO Property at any
time thereafter. In the event neither the Master Servicer nor the NIMS Insurer
exercises its option to purchase from REMIC 1 any such Mortgage Loan or related
REO Property prior to the expiration of such option, the Certificate Insurer
shall be entitled to purchase such Mortgage Loan or related REO Property at any
time thereafter. In the event none of the Master Servicer, the NIMS Insurer or
the Controlling Insurer exercises its option to purchase from REMIC 1 any such
Group I Mortgage Loan or related REO Property prior to the expiration of such
option, the Guarantor shall be entitled to purchase such Group I Mortgage Loan
or related REO Property at any time thereafter. The Purchase Price for any
Mortgage Loan or related REO Property purchased hereunder shall be deposited in
the Collection Account, and the Trustee, upon receipt of written certification
from the Master Servicer of such deposit, shall release or cause to be released
to the Master Servicer, the Controlling Insurer or the Guarantor, as applicable,
the related Mortgage File and the Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Master Servicer, the Controlling Insurer or the Guarantor, as applicable, shall
furnish and as shall be necessary to vest in the Master Servicer, the
Controlling Insurer or the Guarantor, as applicable, title to any Mortgage Loan
or related REO Property released pursuant hereto.
(d) Proceeds received (other than any Prepayment Charges received) in
connection with any Final Recovery Determination, as well as any recovery
resulting from a partial collection of Insurance Proceeds or Liquidation
Proceeds, in respect of any Mortgage Loan, will be applied in the following
order of priority: first, to reimburse the Master Servicer or any Sub-Servicer
for any related unreimbursed Servicing Advances and Advances, pursuant to
Section 3.11(a)(ii) or (a)(iii); second, to accrued and unpaid interest on the
Mortgage Loan, to the date of the Final Recovery Determination, or to the Due
Date prior to the Distribution Date on which such amounts are to be distributed
if not in connection with a Final Recovery Determination; and third, as a
recovery of principal of the Mortgage Loan. If the amount of the recovery so
allocated to interest is less than the full amount of accrued and unpaid
interest due on such Mortgage Loan, the amount of such recovery will be
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allocated by the Master 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
Master 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
Master Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Master Servicer will promptly notify the
Trustee and the applicable Custodian holding the related Mortgage File by a
certification in the form of Exhibit E-2 (which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.10 have been or will be so deposited)
of a Servicing Representative and shall request delivery to it of the related
Mortgage File. Upon receipt of such certification and request, the Trustee or
such Custodian, as applicable, shall promptly release the related Mortgage File
to the Master Servicer. No expenses incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Collection
Account or the Distribution Account.
(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 or the applicable
Custodian shall, upon request of the Master Servicer and delivery to the Trustee
or the applicable Custodian of a Request for Release in the form of Exhibit E-l,
release the related Mortgage File to the Master Servicer, and the Trustee or the
applicable Custodian, on behalf of the Trustee, shall, at the direction of the
Master Servicer, execute such documents as shall be necessary to the prosecution
of any such proceedings and the Master Servicer shall retain such Mortgage File
in trust for the benefit of the Certificateholders and the Certificate Insurer.
Such Request for Release shall obligate the Master Servicer to return each and
every document previously requested from the Mortgage File to the Trustee or the
applicable Custodian when the need therefor by the Master 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 Master
Servicer has delivered to the Trustee or the applicable Custodian a certificate
of a Servicing Representative certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Representative stating that such Mortgage Loan was liquidated and that
all amounts received or to be received in connection with such liquidation that
are required to be deposited into the Collection Account have been so deposited,
or that such Mortgage Loan has become an REO Property, a copy of the Request for
Release shall be released by the Trustee or the applicable Custodian to the
Master Servicer or its designee.
(c) At the direction of the Master Servicer and upon written certification
of a Servicing Representative, each of the Trustee or the applicable Custodian
shall execute and deliver to the Master Servicer any court pleadings, requests
for trustee's sale or other documents reasonably necessary to the foreclosure or
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trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity, or shall execute and deliver to the Master Servicer a power of attorney
sufficient to authorize the Master Servicer or the Sub-Servicer to execute such
documents on its behalf, provided that each of the Trustee or the applicable
Custodian shall be obligated to execute the documents identified above if
necessary to enable the Master Servicer or the Sub-Servicer to perform their
respective duties hereunder or under the Sub-Servicing Agreement. Each such
certification shall include a request that such pleadings or documents be
executed by the Trustee or the applicable Custodian and a statement as to the
reason such documents or pleadings are required.
Section 3.18 Servicing Compensation.
As compensation for the activities of the Master Servicer hereunder, the
Master 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 Master Servicer shall
be entitled to recover unpaid Servicing Fees out of Late Collections, Insurance
Proceeds or Liquidation Proceeds to the extent permitted by Section 3.11(a)(iii)
and out of amounts derived from the operation and sale of an REO Property to the
extent permitted by Section 3.23. 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 Master Servicer's responsibilities and obligations under this Agreement;
provided, however, that the Master 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 or modification
fees, late payment charges, NSF fees, reconveyance fees and other similar fees
and charges (other than Prepayment Charges) shall be retained by the Master
Servicer (subject to Section 3.24) only to the extent such fees or charges are
received by the Master Servicer. The Master Servicer shall also be entitled
pursuant to Section 3.11(a)(iv) to withdraw from the Collection Account, and
pursuant to Section 3.23(b) to withdraw from any REO Account, as additional
servicing compensation, interest or other income earned on deposits therein,
subject to Section 3.12. The Master 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, it
being understood however, that payment of such premiums by the Master Servicer
shall constitute Servicing Advances and servicing compensation of each
Sub-Servicer, and to the extent provided herein and in Section 8.05, the fees
and expenses of the Trustee) 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 fifteen days after each Distribution Date, the Master
Servicer shall forward to the Trustee, the NIMS Insurer, the Certificate Insurer
and the Depositor (and, upon request, the Guarantor) a statement prepared by the
Master Servicer setting forth the status of the Collection Account as of the
close of business on such Distribution Date and showing, for the period covered
by such statement, the aggregate amount of deposits into and withdrawals from
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the Collection Account of each category of deposit specified in Section 3.10(a)
and each category of withdrawal specified in Section 3.11. Such statement may be
in the form of the then current Xxxxxx Xxx Monthly Accounting Report for its
Guaranteed Mortgage Pass-Through Program with appropriate additions and changes,
and shall also include information as to the aggregate of the outstanding
principal balances of all of the Mortgage Loans as of the last day of the
calendar month immediately preceding such Distribution Date. Copies of such
statement shall be provided by the Trustee to any Certificateholder and to any
Person identified to the Trustee as a prospective transferee of a Certificate,
upon request at the expense of the requesting party, provided such statement is
delivered by the Master Servicer to the Trustee.
Section 3.20 Statement as to Compliance.
The Master Servicer shall deliver to the Trustee, the Depositor, the NIMS
Insurer, the Guarantor, the Certificate Insurer and each Rating Agency on or
before April 15 of each calendar year commencing in 2004, an Officers'
Certificate stating, as to each signatory thereof, that (i) a review of the
activities of the Master 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 Master 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 the request and at the expense of the
requesting party, provided that such statement is delivered by the Master
Servicer to the Trustee.
Section 3.21 Independent Public Accountants' Servicing Report.
Not later than April 15 of each calendar year commencing in 2004, the
Master Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Master Servicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer which includes an
assertion that the Master 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 Master
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Servicer shall furnish a copy of such report to the Trustee, the NIMS Insurer,
the Certificate Insurer, the Guarantor and each Rating Agency. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon request
at the Master Servicer's expense, provided that such statement is delivered by
the Master Servicer to the Trustee. In the event such firm of independent
certified public accountants requires the Trustee to agree to the procedures
performed by such firm, the Master Servicer shall direct the Trustee in writing
to so agree; it being understood and agreed that the Trustee will deliver such
letter of agreement in conclusive reliance upon the direction of the Master
Servicer, and the Trustee has not made any independent inquiry or investigation
as to, and shall have no obligation or liability in respect of, the sufficiency,
validity or correctness of such procedures.
Section 3.22 Access to Certain Documentation.
(a) The Master 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 or the
Certificate Insurer access to the documentation regarding the Mortgage Loans
serviced by the Master Servicer under this Agreement, as may be 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 Master Servicer designated by it. In addition, access to the
documentation regarding the Mortgage Loans serviced by the Master Servicer under
this Agreement will be provided to any Certificateholder, the Guarantor (with
respect to Group I Mortgage Loans only), the NIMS Insurer, the Certificate
Insurer, the Trustee and to any Person identified to the Master Servicer as a
prospective transferee of a Certificate, upon reasonable request during normal
business hours at the offices of the Master Servicer designated by it at the
expense of the Person requesting such access.
(b) For a period of two years from the Closing Date, the Guarantor may
contact the Seller to confirm that the Seller continues to actively engage in a
program to originate mortgage loans to low-income families and to obtain other
non-proprietary information about the Seller's activities that may assist the
Guarantor in completing its own regulatory requirements during normal business
hours and subject to reimbursement for expenses. The Seller shall use reasonable
efforts to provide such information to the Guarantor.
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 and the Certificate Insurer. The Master Servicer, on behalf
of REMIC 1 (and on behalf of the Trustee for the benefit of the
Certificateholders and the Certificate Insurer), shall sell any REO Property as
soon as practicable and, in any event, shall either sell any REO Property before
the close of the third taxable year after the year REMIC 1 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 the three-year
grace period, unless the Master Servicer shall have delivered to the Trustee,
the NIMS Insurer, the Certificate Insurer, the Guarantor and the Depositor an
Opinion of Counsel, addressed to the Trustee, the NIMS Insurer, the Certificate
Insurer, the Guarantor and the Depositor, to the effect that the holding by
REMIC 1 of such REO Property subsequent to three years after its acquisition
will not result in the imposition on any Trust REMIC of taxes on "prohibited
transactions" thereof, as defined in Section 860F of the Code, or cause any
Trust REMIC to fail to qualify as a REMIC under Federal law at any time that any
Certificates are outstanding. If an extension of the three-year period is
granted, the Master Servicer shall sell the related REO Property no later than
60 days prior to the expiration of such extension period. The Master Servicer
shall manage, conserve, protect and operate each REO Property for the
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Certificateholders and the Certificate Insurer solely for the purpose of its
prompt disposition and sale in a manner which does not cause such REO Property
to fail to qualify as "foreclosure property" within the meaning of Section
860G(a)(8) of the Code or result in the receipt by any Trust REMIC 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 Master Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall establish and maintain, 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 and the
Certificate Insurer (the "REO Account"), which shall be an Eligible Account. The
Master Servicer may allow the Collection Account to serve as the REO Account,
subject to separate ledgers for each REO Property. The Master Servicer may
retain or withdraw any interest income paid on funds deposited in the REO
Account.
(c) The Master 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 Master Servicer manages and operates similar property owned by the
Master Servicer or any of its Affiliates, all on such terms and for such period
as the Master Servicer deems to be in the best interests of Certificateholders
and the Certificate Insurer. In connection therewith, the Master Servicer shall
deposit, or cause to be deposited in the clearing account (which account must be
an Eligible Account) in which it customarily deposits payments and collections
on mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof and shall thereafter deposit in the REO Account, in
no event more than two Business Days after the deposit of such funds into the
clearing account, all revenues received by it with respect to an REO Property
and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of such REO Property including, without limitation:
(i) all insurance premiums due and payable in respect of such REO Property;
(ii) all real estate taxes and assessments in respect of such REO Property
that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO Property.
To the extent that amounts on deposit in the 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 Master Servicer shall advance
from its own funds as Servicing Advances such amount as is necessary for such
purposes if, but only if, the Master Servicer would make such advances if the
Master Servicer owned the REO Property and if such Servicing Advance would not
constitute a Nonrecoverable Advance.
Notwithstanding the foregoing, neither the Master Servicer nor the Trustee
shall:
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(i) 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;
(ii) authorize any amount to be received or accrued under any New Lease
other than amounts that will constitute Rents from Real Property;
(iii) authorize any construction on any REO Property, other than
construction permitted under Section 856(e)(4)(B) of the Code; or
(iv) 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 Master Servicer has obtained an Opinion of Counsel
(the cost of which shall constitute a Servicing Advance), a copy of which shall
be provided to the NIMS Insurer, the Certificate Insurer and the Trustee, to the
effect that such action will not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code at
any time that it is held by REMIC 1, in which case the Master Servicer may take
such actions as are specified in such Opinion of Counsel.
The Master Servicer may contract with any Independent Contractor for the
operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be inconsistent
herewith;
(ii) any such contract shall require, or shall be administered to require,
that the Independent Contractor pay all costs and expenses incurred in
connection with the operation and management of such REO Property, including
those listed above, and remit all related revenues (net of such costs and
expenses) to the Master Servicer as soon as practicable, but in no event later
than thirty days following the receipt thereof by such Independent Contractor;
(iii) none of the provisions of this Section 3.23(c) relating to any such
contract or to actions taken through any such Independent Contractor shall be
deemed to relieve the Master Servicer of any of its duties and obligations to
the Trustee on behalf of the Certificateholders and the Certificate Insurer with
respect to the operation and management of any such REO Property; and
(iv) the Master 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 Master 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 Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of whether
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the Master 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 Master
Servicer, such amounts shall be reimbursable as Servicing Advances made by the
Master Servicer.
(d) In addition to the withdrawals permitted under Section 3.23(c), the
Master 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 Master Servicer
Remittance Date, the Master Servicer shall withdraw from each REO Account
maintained by it and deposit into the Distribution Account in accordance with
Section 3.10(d)(ii), for distribution on the related Distribution Date in
accordance with Section 4.01, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to Section
3.23(c) or this Section 3.23(d).
(e) Subject to the time constraints set forth in Section 3.23(a), each REO
Disposition shall be carried out by the Master Servicer at such price and upon
such terms and conditions as the Master Servicer shall deem necessary or
advisable, as shall be normal and usual in its general servicing activities for
similar properties.
(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 Master 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 Master 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.
(g) The Master 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 Master Servicer in Respect of Prepayment
Interest Shortfalls.
The Master Servicer shall deliver to the Trustee for deposit into the
Distribution Account on or before 3:00 p.m. New York time on the Master Servicer
Remittance Date from its own funds an amount ("Compensating Interest") equal to
the lesser of (i) the aggregate of the Prepayment Interest Shortfalls for the
related Distribution Date resulting solely from Principal Prepayments during the
related Prepayment Period and (ii) the amount of its aggregate Servicing Fee for
the most recently ended calendar month.
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Section 3.25 Obligations of the Master Servicer in Respect of Mortgage
Rates and Monthly Payments.
In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Rates, Monthly Payments or Stated Principal Balances that were made by
the Master Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, the Master Servicer, upon discovery or receipt
of notice thereof, immediately shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any such shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor,
the Certificate Insurer, the Guarantor and any successor master servicer in
respect of any such liability; provided, that in the case of the Guarantor such
indemnity shall only apply with respect to Group I Mortgage Loans. Such
indemnities shall survive the termination or discharge of this Agreement.
Notwithstanding the foregoing, this Section 3.25 shall not limit the ability of
the Master Servicer to seek recovery of any such amounts from the related
Mortgagor under the terms of the related Mortgage Note, as permitted by law and
shall not be an expense of the Trust.
Section 3.26 Reserve Funds.
(a) No later than the Closing Date, the Trustee, on behalf of the
Certificateholders and the Certificate Insurer, shall establish and maintain
with itself two separate, segregated trust accounts titled, "Group I Reserve
Fund, Deutsche Bank National Trust Company, as Trustee, in trust for registered
Holders of Long Beach Mortgage Loan Trust 2002-4, Asset-Backed Certificates,
Series 2002-4" and "Group II Reserve Fund, Deutsche Bank National Trust Company,
as Trustee, in trust for registered Holders of Long Beach Mortgage Loan Trust
2002-4, Asset-Backed Certificates, Series 2002-4," respectively. The Trustee
shall account for the right to receive payments from the Reserve Funds as
property that the Trustee holds separate and apart from the REMIC Regular
Interests.
(b) The Trustee shall deposit into the Reserve Funds the following amounts:
(i) On each Distribution Date, the Trustee shall deposit all amounts
received with respect to the Group I Cap Agreement in the Group I Reserve Fund
and all amounts received with respect to the Group II Cap Agreement in the Group
II Reserve Fund;
(ii) On the Closing Date, the Depositor shall deposit, or cause to be
deposited, into each of the Reserve Funds $1,000;
(iii) On each Distribution Date as to which there is a Net WAC Rate
Carryover Amount payable to the Class I-A Certificates, the Trustee has been
directed by the Class I-C Certificateholders to, and therefore shall, deposit
into the Group I Reserve Fund the amounts described in Section 4.01(d)(i)(i). On
each Distribution Date as to which there is a Net WAC Rate Carryover Amount
payable to the Class II-A Certificates, the Trustee has been directed by the
Class II-C Certificateholders to, and therefore shall, deposit into the Group II
Reserve Fund the amounts described in Section 4.01(d)(ii)(g); and
(iv) On each Distribution Date as to which there are no Net WAC Rate
Carryover Amounts, the Trustee shall deposit into each Reserve Fund on behalf of
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the related Class C Certificateholders, from amounts otherwise distributable to
such Class C Certificateholders, an amount such that when added to other amounts
already on deposit in such Reserve Fund, the aggregate amount on deposit therein
is equal to $1,000.
(c) Each Reserve Fund shall be segregated into two separate portions, for
which the Trustee shall keep separate accounts. "Portion 1" of each Reserve Fund
will consist of amounts deposited pursuant to Section 3.26(b)(i), above, plus
any amounts earned on any such funds while on deposit in the Reserve Fund.
"Portion 2" of each Reserve Fund will consist of amounts deposited pursuant to
Sections 3.26(b)(ii), (b)(iii), and (b)(iv), above, plus any amounts earned on
any such funds while on deposit in the Reserve Fund. Amounts distributed from
the Reserve Funds under Sections 4.01(d) and 3.26(c) shall be deemed to be
distributed first from Portion 1 of such Reserve Fund to the extent thereof and
then from Portion 2.
(d) Each Portion of each Reserve Fund shall be treated as an "outside
reserve fund" under applicable Treasury regulations and will not be part of any
REMIC created hereunder. For federal and state income tax purposes, the Trustee
shall be deemed to be the owner of Portion 1 of each Reserve Fund and no amount
will be transferred by any REMIC to Portion 1 of either Reserve Fund. For
federal and state income tax purposes, the Class I-C Certificateholders shall be
deemed to be the owners of Portion 2 of the Group I Reserve Fund and all amounts
deposited into such Portion 2 of the Group I Reserve Fund (other than the
initial deposit therein of $1,000) shall be treated as amounts distributed by
REMIC 4 to REMIC CX in respect of the REMIC 4 Regular Interest LT4-IC, and then
distributed by REMIC CX to the Holders of the Class I-C Certificates. For
federal and state income tax purposes, the Class II-C Certificateholders shall
be deemed to be the owners of Portion 2 of the Group II Reserve Fund and all
amounts deposited into such Portion 2 of the Group 2 Reserve Fund (other than
the initial deposit therein of $1,000) shall be treated as amounts distributed
by REMIC 4 to REMIC CX in respect of REMIC 4 Regular Interest LT4-IIC and then
distributed by REMIC CX to the Holders of the Class II-C Certificates. For
federal and state income tax purposes, payments in respect of the Class A
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
860G(a)(1).
(e) By accepting a Class C Certificate, each Class C Certificateholder
shall be deemed to have directed the Trustee to, and the Trustee shall pursuant
to such direction, deposit into the Reserve Funds the amounts described in
Section 3.26(b)(iii) and (b)(iv) above on each Distribution Date. 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.
(f) 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 Portion 2 of the Group I Reserve Fund or Portion 2 of the Group II
Reserve Fund, as applicable, 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
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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 Portion 2 of the Reserve Fund is
received by the Trustee, the Trustee shall invest the funds in such Portion in
Permitted Investments managed by the Trustee or an Affiliate of the kind
described in clause (vi) of the definition of Permitted Investments.
Notwithstanding the foregoing, any funds in Portion 2 of each Reserve Funds
shall be invested in Bankers Trust's Institutional Cash Management Fund 541 for
so long as such investment complies with clause (vi) of the definition of
Permitted Investments. All income and gain earned upon such investment shall be
deposited into Portion 2 of the related Reserve Fund.
The Trustee shall hold the funds in Portion 1 of each Reserve Fund
uninvested in an Eligible Account.
(g) For federal tax return and information reporting, the right of the
Certificateholders to receive payment on account of the Class A Certificates
from the related Reserve Fund in respect of any Net WAC Rate Carryover Amount
shall be assigned a value of zero.
Section 3.27 Advance Facility.
(a) The Trustee and the Trust Fund, at the direction of the Master Servicer
and with the consent of the Controlling Insurer, after consultation with the
Guarantor (or, if there is no Controlling Insurer, with the consent of the
Guarantor), 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,
although no such facility shall reduce or otherwise affect the Master 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 Master 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 3.27(b). Such notice from the Advancing
Person shall specify the amount of the reimbursement and shall specify which
Section of this Agreement permits the applicable Advance or Servicing Advance to
be reimbursed. The Trustee shall be entitled to rely without independent
investigation on the Advancing Person's statement with respect to the amount of
any reimbursement pursuant to this Section 3.27 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 Master
Servicer or a Sub-Servicer pursuant to Article VI hereof and will not be deemed
to be a Sub-Servicer under this Agreement. If the terms of a facility proposed
to be entered into with an Advancing Person by the Trust Fund would not
materially and adversely affect the interests of any Certificateholder, then the
Controlling Insurer or the Guarantor, if applicable, shall not withhold its
consent, after consultation with the Guarantor, if applicable, to the Trust
Fund's entering into such facility.
(b) If an advancing facility is entered into, then the Master Servicer
shall not be permitted to reimburse itself under any Section specified or for
any amount specified by the Advancing Person in the notice described under
Section 3.27(a) above and acknowledged by the Master Servicer prior to the
remittance to the Trust Fund, but instead the Master Servicer shall include such
amounts in the applicable remittance to the Trustee made pursuant to Section
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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 Master Servicer would have been permitted to reimburse
itself for such Advances and/or Servicing Advances in accordance with the
specified Sections had the Master Servicer itself made 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 may agree.
(c) All Advances and Servicing Advances made pursuant to the terms of this
Agreement shall be deemed made and shall be reimbursed on a "first in-first out"
(FIFO) basis.
Section 3.28 Policy; Claims Under the PMI Policy
Notwithstanding anything to the contrary elsewhere in this Article III, the
Master Servicer shall not agree to any modification or assumption of a PMI
Mortgage Loan or take any other action with respect to a PMI Mortgage Loan that
could result in denial of coverage under the PMI Policy. The Master Servicer
shall notify the PMI Insurer that the Trustee, as Trustee on behalf of the
Certificateholders and the Certificate Insurer, is the insured, as that term is
defined in the PMI Policy, of each PMI Mortgage Loan. The Master Servicer shall,
on behalf of the Trustee, prepare and file on a timely basis with the PMI
Insurer, with a copy to the Trustee, all claims which may be made under the PMI
Policy with respect to the PMI Mortgage Loans. The Master Servicer shall take
all actions required under the PMI Policy as a condition to the payment of any
such claim. Any amount received from the PMI Insurer with respect to any such
PMI Mortgage Loan shall be deposited by the Master Servicer, no later than two
Business Days following receipt thereof, into the Collection Account.
Section 3.29 Group I Mortgage Loans Subject to Relief Act.
If any of the Group I Mortgage Loans becomes subject to the Relief Act, the
Master Servicer shall, with respect to such Group I Mortgage Loan, complete
Xxxxxx Xxx Special Information Worksheet (for Military Indulgence) substantially
in the form set forth on Exhibit G-1 hereto and shall require the related
Mortgagor to complete Xxxxxx Mae Form 180 Request For Military Indulgence
substantially in the form set forth as Exhibit G-2 hereto. The Master Servicer
shall retain the executed originals of such forms in its servicing files related
to such Group I Mortgage Loan and, upon the Guarantor's request, shall promptly
deliver such forms to the Guarantor at the address specified by the Guarantor,
or if no such address is specified, to Xxxxxx Xxx, Management Portfolio
Processing Unit, 00000 Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Mail Stop:
5H-1W-06. Each Remittance Report delivered by the Master Servicer to the
Guarantor pursuant to Section 4.04 in connection with a Distribution Date shall
include a schedule of the Group I Mortgage Loans subject to the Relief Act on
such Distribution Date and shall set forth the amount of Relief Act Interest
Shortfalls for such Distribution Date in connection with each such Group I
Mortgage Loan.
Section 3.30 Cap Agreements.
(a) The Depositor hereby directs the Trustee to execute and deliver on
behalf of the Trust each of the Cap Contracts and authorizes the Trustee to
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perform its obligations thereunder on behalf of the Trust in accordance with the
respective terms of each Cap Agreement.
(b) If the Cap Provider no longer has a short-term certificates of deposit
rating of at least "A-1" from S&P or "P-1" from Xxxxx'x (or their equivalent)
(the "Approved Rating Thresholds"), the Trustee shall, promptly after a
Responsible Officer of the Trustee has received actual knowledge or written
notice of the reduction or withdrawal of the rating (it being understood that
the Trustee has no duty to monitor the ratings of the Cap Provider), request the
Cap Provider to (i) obtain replacement Cap Agreements with a counterparty that
is a bank or other financial institution with the Approved Rating Thresholds or
(ii) post collateral with the Trustee in an amount sufficient to restore the
immediately prior ratings of the Certificates.
(c) In the event that either of the Cap Agreements is canceled or otherwise
terminated for any reason (other than the exhaustion of the interest rate
protection provided thereby or replacement of the applicable Cap Agreement by
the Cap Provider in accordance with Section 3.30(b)), the Depositor shall, to
the extent a replacement contract is available, direct the Trustee to obtain
from a counterparty designated by the Depositor a replacement contract
comparable to the related Cap Agreement (which both such counterparty and such
replacement contract shall be acceptable to the Trustee and the Holders of the
Certificates entitled to at least 50% of the Voting Rights) providing interest
rate protection which is equal to the then-existing protection provided by the
related Cap Agreement, provided, however, that if the cost of any such
replacement contract providing the same interest rate protection would be
greater than the amount of any early termination payment received by the Trustee
under such Cap Agreement, the amount of interest rate protection provided by
such replacement contract may be reduced to a level such that the cost of such
replacement contract shall not exceed the amount of such early termination
payment.
Section 3.31 Payments on the Certificate Insurance Policy.
(a) On behalf of the Trust Fund the Trustee shall establish and maintain,
or cause to be established and maintained, one or more accounts (such account or
accounts, the "Policy Payments Account"), held in trust for the benefit of the
Trustee, the Certificateholders, the Guarantor and the Certificate Insurer. On
behalf of the Trust Fund, the Trustee shall deposit or cause to be deposited any
Insured Payments paid under the Certificate Insurance Policy and received by the
Trustee in the Policy Payments Account and distribute such amounts only for the
purpose of payment to the Holders of the related Insured Certificates of the
related Insured Payments and such amounts may not be used to satisfy any costs,
expenses or liabilities of the Master Servicer, the Trustee, the Guarantor, the
NIMS Insurer or the Trust. Insured Payments deposited in the Policy Payments
Account shall not be invested in Permitted Investments or otherwise, and shall
be disbursed by the Trustee to the Holders of the related Insured Certificates
in accordance with Section 4.01(c).
As soon as possible, and in no event later than 9:00 a.m. (Santa Ana,
California time) on the fourth Business Day (as defined in the Insurance
Agreement) immediately preceding the related Distribution Date, the Trustee
shall determine whether a Certificate Insurer Deficiency Amount is required to
be paid under the Certificate Insurance Policy with respect to such Distribution
Date and, if so, shall immediately notify the Master Servicer by telephone,
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which notice shall be confirmed in writing by facsimile transmission, of the
Trustee's intention so to file the applicable Notice of Claim. If by the close
of business in Santa Ana, California on such date a Certificate Insurer
Deficiency Amount is still required to be paid under the Certificate Insurance
Policy with respect to such Distribution Date, the Trustee shall furnish the
Certificate Insurer (or an agent of the Certificate Insurer designated to the
Trustee in writing) with a completed Notice of Claim in respect of such
Certificate Insurer Deficiency Amount by 12:00 noon New York City time on the
next succeeding Business Day (as defined in the Insurance Agreement) and shall
provide a copy thereof to the Master Servicer at or prior to the time such
Notice of Claim is received by the Certificate Insurer. The Notice of Claim
shall constitute a claim therefor pursuant to the Certificate Insurance Policy.
In the event any funds are received by the Trustee from the Master Servicer
prior to the close of business in Santa Ana, California on the Business Day (as
defined in the Insurance Agreement) following the transmission of a Notice of
Claim to the Certificate Insurer (or an agent of the Certificate Insurer
designated to the Trustee in writing), and such funds reduce the amount of the
Certificate Insurer Deficiency Amount to which such Notice of Claim relates, the
Certificate Insurer Deficiency Amount to which such Notice of Claim relates
shall be reduced by a corresponding amount, and the Notice of Claim shall be
deemed to have been rescinded to the extent of the reduction of the Certificate
Insurer Deficiency Amount. Notification of any such reduction in the Insured
Payment shall be given to the Certificate Insurer (or an agent of the
Certificate Insurer designated to the Trustee in writing) by the Trustee by no
later than 12:00 p.m., New York time, on the related Distribution Date.
(b) If the Trustee receives a certified copy of an order of the appropriate
court (an "Order") that any prior distribution made on the Insured Certificates
constitutes a Preference Amount, the Trustee shall so notify the Certificate
Insurer, shall comply with the provisions of the Certificate Insurance Policy to
obtain payment by the Certificate Insurer of such Preference Amount and shall,
at the time it provides notice to the Certificate Insurer, notify each Holder of
the affected Insured Certificates by mail that (i) subject to the terms of the
Certificate Insurance Policy, the Certificate Insurer will disburse the
Preference Amount directly to the receiver, conservator, debtor-in-possession or
trustee in bankruptcy named in the Order on the fourth Business Day following
such Certificateholder's making timely delivery to the Trustee of (a) a
certificate of such Certificateholder that such Order has been entered and is
not subject to any stay, (b) an opinion of counsel satisfactory to the
Certificate Insurer that such Order is final and is not subject to appeal and
(c) an assignment duly executed and delivered by such Certificateholder, in such
form as is reasonably required by the Certificate Insurer and provided to such
Certificateholder by the Certificate Insurer, irrevocably assigning to the
Certificate Insurer all rights and claims of such Certificateholder relating to
or arising under the affected Insured Certificates against the debtor that made
a payment of such Preference Amount, or otherwise with respect to such payment,
provided that if such documents are received after 10:00 a.m., New York time, on
such Business Day, they will be deemed to be received on the following Business
Day, and (ii) if any such Preference Amount payment is recovered from such
Certificateholder pursuant to such Order, such Certificateholder will be
entitled to payment pursuant to the Certificate Insurance Policy. A copy of the
Certificate Insurance Policy shall be made available to each affected
Certificateholder through the Trustee, and the Trustee shall furnish to the
Certificate Insurer or its fiscal agent, if any, its records evidencing the
payments that have been made by the Trustee and subsequently recovered from
Certificateholders and the dates on which such payments were made.
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(c) The Trustee shall receive, as attorney-in-fact for each Holder of the
Insured Certificates, any Insured Payment allocable to such Insured
Certificates, from the Certificate Insurer and disburse the same in accordance
with the provisions of Section 4.01(c). Any portion of the distributions made by
the Trustee in respect of any Insured Payment, from proceeds of the Certificate
Insurance Policy shall not be considered payment by the Trust, nor shall such
payments discharge the obligation of the Trust with respect to such Insured
Certificates, and the Certificate Insurer shall become the owner of such unpaid
amounts in respect of such Insured Certificates. The Trustee hereby agrees and
each Holder of an Insured Certificate for the benefit of the Certificate Insurer
that it recognizes that: to the extent the Certificate Insurer pays any Insured
Payments in respect of the Insured Certificates, either directly or indirectly
(as by paying through the Trustee), to the Holders of the Insured Certificates,
the Certificate Insurer will be subrogated to the rights of such Holders of
Insured Certificates with respect to such Insured Payments paid in respect of
such Insured Certificates, shall be deemed to the extent of the Insured Payments
so paid in respect of such Insured Certificates, to be a Certificate Owner of
such Insured Certificates and shall be entitled to receive all future
distributions on such Insured Certificates until all such Insured Payments
(together with interest thereon at the related Late Payment Rate from the date
paid until the date of reimbursement thereof) have been fully reimbursed, in
each case subject to the following paragraph. Except as otherwise described
herein, the Certificate Insurer shall not acquire any Voting Rights hereunder as
a result of such subrogation.
(d) The Trustee shall be entitled to enforce on behalf of the Holders of
the Insured Certificates the obligations of the Certificate Insurer under the
Certificate Insurance Policy. The Holders of the Insured Certificates are not
entitled to institute proceedings directly against the Certificate Insurer. Each
Holder of the Insured Certificates, by its purchase of Insured Certificates, the
Master Servicer, the Trustee and the Guarantor hereby agree that the Certificate
Insurer may at any time during the continuation of any proceeding relating to a
preference claim direct all matters relating to such preference claim,
including, without limitation, the direction of any appeal of any order relating
to such preference claim and the posting of any surety, supersedeas or
performance bond pending any such appeal. In addition and without limitation of
the foregoing, the Certificate Insurer shall be subrogated to the rights of the
Master Servicer, the Trustee and the Guarantor and each Holder of the Insured
Certificates in the conduct of any such preference claim, including, without
limitation, all rights of any party to an adversary proceeding action with
respect to any court order issued in connection with any such preference claim.
(e) The Trustee shall keep a complete and accurate record of the amount of
interest and principal paid in respect of any Insured Certificate from monies
received under the Certificate Insurance Policy. The Certificate Insurer shall
have the right to inspect such records at reasonable times during normal
business hours upon one Business Day's notice to the Trustee.
(f) If on any Distribution Date, the Certificate Insurer has failed to make
a required Insured Payment, the Certificate Insurer Premiums shall be set off
against such Insured Payment. If the Insured Payment is less than the sum of the
Certificate Insurer Premiums for such Distribution Date, the Group I Certificate
Insurer Premium shall be set-off against the portion of such Insured Payment
attributable to the Class I-A Certificates or the Class I-S1 Certificates and
the Group II Certificate Insurer Premium shall be set-off against the portion of
the Insured Payment attributable to the Class II-A Certificates or the Class
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II-S1 Certificates. Notwithstanding anything to the contrary in this Agreement,
each of the Group I Certificate Insurer Premium, the Group II Certificate
Insurer Premium and the Insured Payment shall be reduced by the amount of such
set-off.
(g) Any payments to the Certificate Insurer shall be made by wire transfer
of immediately available funds to the following Federal Reserve Account:
XL Capital Assurance, Inc.
Account Number: 000-000-0000
ABA Number: 000-000-000
Reference: Long Beach 2002-4, Policy No. CA00345A
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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 the Group I Available Funds equal to 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:
first, to the Certificate Insurer, the Group I Certificate Insurer Premium;
second, to the Guarantor, the Guaranty Fee;
third, concurrently, to the Class I-A Certificates and the Class I-S1
Certificates, the Monthly Interest Distributable Amount and any Unpaid Interest
Shortfall Amount for such Classes, allocated between the Class I-A Certificates
and the Class I-S1 Certificates, pro rata, based on their respective
entitlements;
fourth, to the Guarantor, any Guarantor Reimbursement Amount then due other
than the portion thereof attributable to the Guaranteed Interest Distribution
Amount with respect to any Prepayment Interest Shortfalls and Relief Act
Interest Shortfalls;
fifth, to the Certificate Insurer, any Group I Certificate Insurer
Reimbursement Amount then due;
sixth, to the Guarantor, that portion of any Guarantor Reimbursement Amount
then due, which is attributable to the Guaranteed Interest Distribution Amount
with respect to any Prepayment Interest Shortfalls and Relief Act Interest
Shortfalls;
seventh, to the Certificate Insurer, any Group II Certificate Insurer
Reimbursement Amount then due to the extent remaining unpaid after distributions
of the Group II Interest Remittance Amount and the Group II Net Monthly Excess
Cashflow on such Distribution Date; and
eighth, to the Class I-S2 Certificates, the Monthly Interest Distributable
Amount for such Class.
(ii) Any Group I Interest Remittance Amount remaining undistributed
pursuant to clause (i) above shall be used in determining the amount of Group I
Net Monthly Excess Cashflow, if any, for such Distribution Date.
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(iii) On each Distribution Date the Trustee shall withdraw from the
Distribution Account that portion of Group II Available Funds equal to 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:
first, to the Certificate Insurer, the Group II Certificate Insurer
Premium;
second, concurrently, to the Class II-A Certificates and the Class II-S1
Certificates, the Monthly Interest Distributable Amount and any Unpaid Interest
Shortfall Amount for such Classes, allocated among the Class II-A Certificates
and the Class II-S1 Certificates, pro rata, based on their respective
entitlements;
third, to the Certificate Insurer, any Group II Certificate Insurer
Reimbursement Amount then due;
fourth, to the Certificate Insurer, any Group I Certificate Insurer
Reimbursement Amount then due to the extent remaining unpaid after distributions
of the Group I Interest Remittance Amount and the Group I Net Monthly Excess
Cashflow on such Distribution Date; and
fifth, to the Class II-S2 Certificates, the Monthly Interest Distributable
Amount for such Class.
(iv) Any Group II Interest Remittance Amount remaining undistributed
pursuant to clause (iii) above shall be used in determining the amount of Group
II Net Monthly Excess Cashflow, if any, for such Distribution Date.
(b) (i) On each Distribution Date, the Trustee shall withdraw from the
Distribution Account that portion of the Group I Available Funds equal to the
Group I Principal Distribution Amount for such Distribution Date, and distribute
it to the Class I-A Certificates, until the Certificate Principal Balance
thereof has been reduced to zero, to the extent of the Group I Principal
Distribution Amount remaining for such Distribution Date. Any principal
remaining undistributed following this distribution will be used in determining
the amount of Group I Net Monthly Excess Cashflow, if any, for such Distribution
Date.
(ii) On each Distribution Date, the Trustee shall withdraw from the
Distribution Account that portion of the Group II Available Funds equal to the
Group II Principal Distribution Amount for such Distribution Date, and
distribute it to the Class II-A Certificates until the Certificate Principal
Balance thereof has been reduced to zero, to the extent of the Group II
Principal Distribution Amount remaining for such Distribution Date. Any
principal remaining undistributed following this distribution will be used in
determining the amount of Group II Net Monthly Excess Cashflow, if any, for such
Distribution Date.
(c) (i) On any Distribution Date, in the event of an Insured Payment, the
Trustee shall make such payment from the amount drawn under the Certificate
Insurance Policy for such Distribution Date pursuant to Section 3.31. Any
portion of the Insured Payment not required to be distributed pursuant to this
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Section 4.01 shall be returned to the Certificate Insurer. The Trustee shall
allocate any Insured Payment (after giving effect to all distributions pursuant
to Sections 4.01(a), 4.01(b) and 4.01(d) on such Distribution Date) as follows:
first, concurrently, to the Class I-A Certificates, the Class II-A
Certificates, the Class I-S1 Certificates and the Class II-S1 Certificates in
the amount equal to the sum of the Monthly Interest Distributable Amount and the
Unpaid Interest Shortfall Amount, if any, for such classes, allocated among the
Class I-A Certificates, the Class II-A Certificates, the Class I-S1 Certificates
and the Class II-S1 Certificates, pro rata, based on their respective
entitlements; and
second, concurrently, to the Class I-A Certificates and the Class II-A
Certificates, in reduction of the Certificate Principal Balances thereof
allocated, between the Class I-A Certificates and the Class II-A Certificates,
pro rata, based on the Group I Insured Principal Amount and the Group II Insured
Principal Amount, respectively.
(ii) On the next Business Day after the Trustee's receipt of any payment
disbursed to it by the Certificate Insurer in respect of any Preference Amount
recovered from the Holders of the Insured Certificates, the Trustee shall
distribute such payment to such Certificateholders. If any such distribution is
to be made on a Distribution Date, it shall be so made before giving effect to
any distribution to be made on such date pursuant to Sections 4.01(a), 4.01(b)
and 4.01(d). The Trustee shall distribute to the respective Holders of the
Insured Certificates any payment disbursed to it by the Certificate Insurer in
respect of any Preference Amount and that such Certificateholder has previously
repaid to the receiver, conservator, debtor-in-possession or trustee in
bankruptcy, as the case may be.
(d) (i) On each Distribution Date, any Group I Net Monthly Excess Cashflow
shall be paid in the following order or priority, in each case to the extent of
the Group I Net Monthly Excess Cashflow remaining undistributed:
(a) to the Class I-A Certificates, in an amount equal to any Group I Extra
Principal Distribution Amount, payable to such Class of Certificates as part of
the Group I Principal Distribution Amount pursuant to Section 4.01(b)(i);
(b) concurrently, to the Class I-A Certificates and the Class I-S1
Certificates, in an amount equal to the Unpaid Interest Shortfall Amount, if
any, for such Classes for such Distribution Date to the extent remaining unpaid
after distribution of the Group I Interest Remittance Amount on such
Distribution Date, allocated between the Class I-A Certificates and the Class
I-S1 Certificates, pro rata, based on their respective entitlements;
(c) to the Guarantor, any Guarantor Reimbursement Amount, other than the
portion thereof attributable to the Guaranteed Interest Distribution Amount with
respect to any Prepayment Interest Shortfalls and Relief Act Interest Shortfalls
to the extent remaining unpaid after distribution of the Group I Interest
Remittance Amount on such Distribution Date;
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(d) to the Certificate Insurer, any Group I Certificate Insurer
Reimbursement Amount to the extent remaining unpaid after distribution of the
Group I Interest Remittance Amount on such Distribution Date;
(e) to the Guarantor, that portion of any Guarantor Reimbursement Amount
which is attributable to the Guaranteed Interest Distribution Amount with
respect to any Prepayment Interest Shortfalls and Relief Act Interest Shortfalls
to the extent remaining unpaid after distribution of the Group I Interest
Remittance Amount on such Distribution Date;
(f) to the Class II-A Certificates, in an amount equal to any positive
excess of the Group II Overcollateralization Deficiency Amount over the Group II
Net Monthly Excess Cashflow for such Distribution Date (after giving effect to
the distribution of the Group II Principal Distribution Amount to be made on
such Distribution Date), payable to the Class II-A Certificates in reduction of
the Certificate Principal Balances thereof;
(g) to the Certificate Insurer, any Group II Certificate Insurer
Reimbursement Amount to the extent remaining unpaid after distributions of the
Group II Interest Remittance Amount, the Group II Net Monthly Excess Cashflow
and the Group I Interest Remittance Amount on such Distribution Date;
(h) to the Class I-S2 Certificates, in an amount equal to the Unpaid
Interest Shortfall Amount, if any, for such class for such Distribution Date;
(i) to the Group I Reserve Fund, the amount by which any Net WAC Rate
Carryover Amounts with respect to the Class I-A Certificates for such
Distribution Date exceed the sum of any amounts received by the Trustee with
respect to the Group I Cap Agreement plus any amounts paid from the Group II
Reserve Fund with respect to the Class I-A Certificates for such Distribution
Date (or, if no Net WAC Rate Carryover Amounts are payable to such Class of
Certificates on such Distribution Date, to the Group I Reserve Fund, an amount
such that when added to other amounts already on deposit in the Group I Reserve
Fund, the aggregate amount on deposit therein is equal to $1,000);
(j) 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 Group I Mortgage Loans, to REMIC PX, as holder of REMIC 4
Regular Interest LT4-IP, in reduction of the Uncertificated Principal Balance
thereof, until the Uncertificated Principal Balance thereof is reduced to zero;
(k) to REMIC CX, as holder of REMIC 4 Regular Interest LT4-IC, the Monthly
Interest Distributable Amount for REMIC 4 Regular Interest LT4-IC plus, until
the Uncertificated Principal Balance of REMIC 4 Regular Interest LT4-IC is
reduced to zero, any Group I Overcollateralization Release Amount for such
Distribution Date (in both cases, net of such portion of amounts payable
pursuant to this clause (k) that were paid pursuant to clause (i) above);
(l) to REMIC CX, as holder of REMIC 4 Regular Interest LT4-IIC, the Monthly
Interest Distributable Amount for REMIC 4 Regular Interest LT4-IIC for such
Distribution Date to the extent not distributed pursuant to Section
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4.01(d)(ii)(i) plus, until the Uncertificated Principal Balance of REMIC 4
Regular Interest LT4-IIC is reduced to zero, the amount, if any, equal to the
amount of any Realized Losses that reduced the Group II Overcollateralization
Release Amount, if any, on such Distribution Date;
(m) any remaining amounts to the Class R Certificates (in respect of the
appropriate Class R-4 Interest).
On each Distribution Date, after making the distributions of the Group I
Available Funds and the Group II Available Funds as provided in this Section
4.01 and after depositing in the Reserve Funds any payments received under the
related Cap Agreement, the Trustee shall withdraw from the Group I Reserve Fund
the amount on deposit therein and shall distribute such amounts in the following
order of priority to the extent of amounts remaining in the Group I Reserve
Fund:
(i) to the Class I-A Certificates, the Net WAC Rate Carryover Amount for
such Class; and
(ii) to the Class II-A Certificates, the Net WAC Rate Carryover Amount for
such Class to the extent remaining unpaid after distribution from the Group II
Reserve Fund.
On the Distribution Date in April 2005, after making all other
distributions on such Distribution Date (including to the Class A Certificates
out of the Reserve Funds), the Trustee shall distribute to itself all remaining
amounts on deposit in Portion 1 of the Group I Reserve Fund, and shall
distribute all remaining amounts in Portion 2 of the Group I Reserve Fund to the
related Class C Certificateholders.
(ii) On each Distribution Date, any Group II Net Monthly Excess Cashflow
shall be paid in the following order of priority, in each case to the extent of
the Group II Net Monthly Excess Cashflow remaining undistributed:
(a) to the Class II-A Certificates, in an amount equal to any Group II
Extra Principal Distribution Amount, payable to such Class of Certificates as
part of the Group II Principal Distribution Amount pursuant to Section
4.01(b)(ii) above;
(b) concurrently, to the Class II-A Certificates and the Class II-S1
Certificates, in an amount equal to the Unpaid Interest Shortfall Amount, if
any, for such Classes for such Distribution Date to the extent remaining unpaid
after distribution of the Group II Interest Remittance Amount on such
Distribution Date, allocated between the Class II-A Certificates and the Class
II-S1 Certificates pro rata, based on their respective entitlements;
(c) to the Certificate Insurer, any Group II Certificate Insurer
Reimbursement Amount to the extent remaining unpaid after distribution of the
Group II Interest Remittance Amount on such Distribution Date;
(d) to the Class I-A Certificates, in an amount equal to any positive
excess of the Group I Overcollateralization Deficiency Amount over the Group I
Net Monthly Excess Cashflow for such Distribution Date (after giving effect to
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the distribution of the Group I Principal Distribution Amount to be made on such
Distribution Date), payable to the Class I-A Certificates in reduction of the
Certificate Principal Balance thereof;
(e) to the Certificate Insurer, any Group I Certificate Insurer
Reimbursement Amount to the extent remaining unpaid after distributions of the
Group I Interest Remittance Amount, the Group I Net Monthly Excess Cashflow and
the Group II Interest Remittance Amount on such Distribution Date;
(f) to the Class II-S2 Certificates, in an amount equal to the Unpaid
Interest Shortfall Amount, if any, for such class for such Distribution Date;
(g) to the Group II Reserve Fund, the amount by which any Net WAC Rate
Carryover Amounts with respect to the Class II-A Certificates for such
Distribution Date exceed the sum of any amounts received by the Trustee with
respect to the Group II Cap Agreement plus any amounts paid from the Group I
Reserve Fund with respect to the Class II-A Certificates for such Distribution
Date (or, if no Net WAC Rate Carryover Amounts are payable to such Class of
Certificates on such Distribution Date, to the Group II Reserve Fund, an amount
such that when added to other amounts already on deposit in the Group II Reserve
Fund, the aggregate amount on deposit therein is equal to $1,000);
(h) 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 REMIC PX, as holder of REMIC 4 Regular
Interest LT4-IIP, in reduction of the Uncertificated Principal Balance thereof,
until the Uncertificated Principal Balance thereof is reduced to zero; and
(i) to REMIC CX, as holder of REMIC 4 Regular Interest LT4-IIC, the Monthly
Interest Distributable Amount for REMIC 4 Regular Interest LT4-IIC plus, until
the Uncertificated Principal Balance of REMIC 4 Regular Interest LT4-IIC is
reduced to zero, any Group II Overcollateralization Release Amount for such
Distribution Date (in both cases, net of such portion of amounts payable
pursuant to this clause (i) that were paid pursuant to clause (g) above);
(j) to REMIC CX, as holder of REMIC 4 Regular Interest LT4-IC, the Monthly
Interest Distributable Amount for REMIC 4 Regular Interest LT4-IC for such
Distribution Date to the extent not distributed pursuant to Section
4.01(d)(i)(k) plus, until the Uncertificated Principal Balance of REMIC 4
Regular Interest LT4-IC is reduced to zero, the amount, if any, equal to the
amount of any Realized Losses that reduced the Group I Overcollateralization
Release Amount, if any, on such Distribution Date;
(k) any remaining amounts to the Class R Certificates (in respect of the
appropriate Class R-4 Interest).
On each Distribution Date, after making the distributions of the Group I
Available Funds and the Group II Available Funds as provided in this Section
4.01 and after depositing in the Reserve Funds any payments received under the
related Cap Agreement, the Trustee shall withdraw from the Group II Reserve Fund
the amount on deposit therein and shall distribute such amounts in the following
order of priority to the extent of amounts remaining in the Group II Reserve
Fund:
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(i) to the Class II-A Certificates, the Net WAC Rate Carryover Amount for
such Class; and
(ii) to the Class I-A Certificates, the Net WAC Rate Carryover Amount for
such Class to the extent remaining unpaid after distribution from the Group I
Reserve Fund.
On the Distribution Date in April 2005, after making all other
distributions on such Distribution Date (including to the Class A Certificates
out of the Reserve Funds), the Trustee shall distribute to itself all remaining
amounts on deposit in Portion 1 of the Group II Reserve Fund, and shall
distribute all remaining amounts in Portion 2 of the Group II Reserve Funds to
the related Class C Certificateholders.
On each Distribution Date, all amounts representing Prepayment Charges in
respect of the Group I Mortgage Loans and Group II Mortgage Loans received
during the related Prepayment Period and any Master Servicer Prepayment Charge
Amounts paid by or collected by the Master Servicer during the related
Prepayment Period will be withdrawn from the Distribution Account and
distributed by the Trustee to REMIC 4 Regular Interest LT4-IP (in respect of
Group I Mortgage Loans) or REMIC 4 Regular Interest LT4-IIP (in respect of Group
II Mortgage Loans), respectively, and shall not be available for distribution to
any other Class of Certificates. The payment of the foregoing amounts in respect
of such Regular Interests shall not reduce the Uncertificated Principal Balance
thereof.
(e) Without limiting the provisions of Section 9.01(b), by acceptance of
the Class R Certificates the Holders of the Class R Certificates agree, and it
is the understanding of the parties hereto, for so long as the Cap Agreements or
any of the NIM Notes are outstanding, to assign and transfer their rights to
receive any amounts otherwise distributable to the Holders of the Class R
Certificates (and such rights are hereby assigned and transferred) to the
Holders of the Class C Certificates, to be paid to the Holders of the Class I-C
Certificates and Class II-C Certificates, respectively.
(f) All distributions made with respect to each Class of Certificates on
each Distribution Date shall be allocated pro rata among the outstanding
Certificates in such Class based on their respective Percentage Interests.
Payments in respect of each Class of Certificates on each Distribution Date will
be made to the Holders of the respective Class of record on the related Record
Date (except as otherwise provided in this Section 4.01 or Section 9.01
respecting the final distribution on such Class), based on the aggregate
Percentage Interest represented by their respective Certificates, and shall be
made by wire transfer of immediately available funds to the account of any such
Holder at a bank or other entity having appropriate facilities therefor, if such
Holder shall have so notified the Trustee in writing at least five Business Days
prior to the Record Date immediately prior to such Distribution Date and is the
registered owner of Certificates having an initial aggregate Certificate
Principal Balance or Notional Amount that is in excess of the lesser of (i)
$5,000,000 or (ii) two-thirds of the Original Class Certificate Principal
Balance or Original Class Notional Amount of such Class of Certificates, or
otherwise by check mailed by first class mail to the address of such Holder
appearing in the Certificate Register. Notwithstanding the foregoing, the
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Holders of the Class I-A Certificates and the Class I-S1 Certificates shall
receive all distributions pursuant to this Section 4.01(f) by wire transfer of
immediately available funds. 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 or such other location specified in
the notice to Certificateholders of such final distribution.
Payments to the Guarantor on each Distribution Date will be made by wire
transfer of immediately available funds to the following Federal Reserve
Account:
Telegraphic: FNMA NYC
ABA: 000-000-000
Ref: 2002-T7
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, the Master Servicer or the
Seller shall have any responsibility therefor except as otherwise provided by
applicable law.
(g) The rights of the Certificateholders to receive distributions in
respect of the Certificates, and all interests of the Certificateholders in such
distributions, shall be as set forth in this Agreement. None of the Holders of
any Class of Certificates, the Trustee or the Master Servicer shall in any way
be responsible or liable to the Holders of any other Class of Certificates in
respect of amounts properly previously distributed on the Certificates.
(h) Except as otherwise provided in Section 9.01, whenever the Trustee
expects that the final distribution with respect to any Class of Certificates
will be made on the next Distribution Date, the Trustee shall, no later than
three (3) days before the related Distribution Date, mail to the NIMS Insurer,
the Certificate Insurer, the Guarantor and each Holder on such date of such
Class of Certificates a notice to the effect that:
(i) the Trustee expects that the final distribution with respect to such
Class of Certificates will be made on such Distribution Date but only upon
presentation and surrender of such Certificates at the office of the Trustee
therein specified, and
(ii) no interest shall accrue on such Certificates from and after the end
of the related Accrual Period; provided, that such notice shall be sent to the
Guarantor only with respect to Guaranteed Certificates.
Any funds not distributed to any Holder or Holders of Certificates of such
Class on such Distribution Date because of the failure of such Holder or Holders
to tender their Certificates shall, on such date, be set aside and held in trust
by the Trustee and credited to the account of the appropriate non-tendering
Holder or Holders. If any Certificates as to which notice has been given
pursuant to this Section 4.01(h) shall not have been surrendered for
cancellation within six months after the time specified in such notice, the
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Trustee shall mail a second notice to the remaining non-tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within one year after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Trustee shall, directly or through an agent, mail a final
notice to the remaining non-tendering Certificateholders concerning surrender of
their Certificates but shall continue to hold any remaining funds for the
benefit of non-tendering Certificateholders. The costs and expenses of
maintaining the funds in trust and of contacting such Certificateholders shall
be paid out of the assets remaining in such trust fund. If within one year after
the final notice any such Certificates shall not have been surrendered for
cancellation, the Trustee shall pay to Xxxxxx Xxxxxxx & Co. Incorporated and
Banc of America Securities LLC, pro rata, all such amounts, and all rights of
non-tendering Certificateholders in or to such amounts shall thereupon cease. No
interest shall accrue or be payable to any Certificateholder on any amount held
in trust by the Trustee as a result of such Certificateholder's failure to
surrender its Certificate(s) for final payment thereof in accordance with this
Section 4.01(h).
(i) [Reserved].
(j) Any amounts distributed to REMIC CX on any Distribution Date under
Section 4.01(d) shall, on such Distribution Date, be distributed by REMIC CX as
follows: (i) amounts received in respect of REMIC 4 Regular Interest LT4-IC
shall be distributed pro rata to the Holders of the Class I-C Certificates; and
(ii) amounts received in respect of REMIC 4 Regular Interest LT4-IIC shall be
distributed pro rata to the Holders of the Class II-C Certificates. Any amounts
remaining in REMIC CX shall be distributed to the Holders of the Class R-CX
Certificates in respect of the Class R-CX Interest. Any amounts distributed to
REMIC PX on any Distribution Date under Section 4.01(d)(i)(j) shall, on such
Distribution Date, be distributed by REMIC PX as follows: (i) amounts received
in respect of REMIC 4 Regular Interest LT4-IP shall be distributed pro rata to
the Holders of the Class I-P Certificates; and (ii) amounts received in respect
of REMIC 4 Regular Interest LT4-IIP shall be distributed pro rata to the Holders
of the Class II-P Certificates. Any amounts remaining in REMIC PX shall be
distributed to the Holders of the Class R-PX Certificates in respect of the
Class R-PX Interest. For the avoidance of doubt, the provisions of Sections
4.01(f), 4.01(g) and 4.01(h) shall apply to the Class C Certificates and the
Class P Certificates.
Section 4.02 Preference Claims.
The Trustee shall promptly notify the NIMS Insurer of any proceeding or the
institution of any action, of which a Responsible Officer of the Trustee has
actual knowledge, seeking the avoidance as a preferential transfer under
applicable bankruptcy, insolvency, receivership or similar law (a "Preference
Claim") of any distribution made with respect to the Class S2 Certificates, the
Class C Certificates or the Class P Certificates. Each Holder of the Class S2
Certificates, the Class C Certificates or the Class P Certificates, by its
purchase of such Certificates, the Master Servicer and the Trustee hereby agree
that the NIMS Insurer may at any time during the continuation of any proceeding
relating to a Preference Claim direct all matters relating to such Preference
Claim, including, without limitation, (i) the direction of any appeal of any
order relating to such Preference Claim and (ii) the posting of any surety,
supersedes or performance bond pending any such appeal. In addition and without
limitation of the foregoing, the NIMS Insurer shall be subrogated to the rights
of the Master Servicer, the Trustee and each Holder of the Class S2
Certificates, the Class C Certificates and the Class P Certificates in the
conduct of any such Preference Claim, including, without limitation, all rights
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of any party to an adversary proceeding action with respect to any court order
issued in connection with any such Preference Claim; provided, however, that the
NIMS Insurer will not have any rights with respect to any Preference Claim set
forth in this paragraph unless the Trustee, as indenture trustee with respect to
the Insured NIM Notes or the holder of any Insured NIM Notes has been required
to relinquish a distribution made on the Class S2 Certificates, the Class C
Certificates, the Class P Certificates or the Insured NIM Notes, as applicable,
and the NIMS Insurer made a payment in respect of such relinquished amount.
Section 4.03 Statements.
(a) On each Distribution Date, based, as applicable, on information
provided to it by the Master Servicer, the Trustee shall prepare and make
available by electronic medium (as set forth in the penultimate paragraph of
this Section 4.03(a)) to each Holder of the Regular Certificates, the Master
Servicer, the NIMS Insurer, the Certificate Insurer, the Guarantor 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 (other than the Class S
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 Master 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 Group I Overcollateralized Amount, the Group II
Overcollateralized Amount, the Group I Overcollateralization Release Amount, the
Group II Overcollateralization Release Amount, the Group I Overcollateralization
Deficiency Amount, the Group II Overcollateralization Deficiency Amount, the
Group I Overcollateralization Target Amount and the Group II
Overcollateralization Target Amount as of such Distribution Date and the Group I
Excess Overcollateralized Amount and the Group II Excess Overcollateralized
Amount, for such Distribution Date;
(iv) the aggregate amount of servicing compensation received by the Master
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;
(v) the Guarantor Deficiency Amount, the Guarantor Payments and the
Guarantor Reimbursement Amount for such Distribution Date;
(vi) the aggregate amount of Advances for the related Due Period;
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(vii) the aggregate Stated Principal Balance of the Mortgage Loans at the
Close of Business at the end of the related Due Period;
(viii) 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;
(ix) the number and aggregate unpaid principal balance of Mortgage Loans
(a) delinquent 30-59 days, (b) delinquent 60-89 days, (c) delinquent 90 or more
days in each case, as of the last day of the preceding calendar month provided,
however that any aggregate unpaid principal balance of Mortgage Loans shall be
reported as of the last day of the related Due Period, (d) as to which
foreclosure proceedings have been commenced and (e) with respect to which the
related Mortgagor has filed for protection under applicable bankruptcy laws,
with respect to whom bankruptcy proceedings are pending or with respect to whom
bankruptcy protection is in force;
(x) with respect to any Mortgage Loan that became an REO Property during
the preceding Prepayment Period, the unpaid principal balance and the Principal
Balance of such Mortgage Loan as of the date it became an REO Property;
(xi) 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;
(xii) the aggregate amount of Principal Prepayments made during the related
Prepayment Period;
(xiii) the aggregate amount of Realized Losses incurred during the related
Prepayment Period and the cumulative amount of Realized Losses;
(xiv) the aggregate amount of Extraordinary Trust Fund expenses withdrawn
from the Collection Account or the Distribution Account for such Distribution
Date;
(xv) the Certificate Principal Balance of the Class A Certificates and the
Class C Certificates, after giving effect to the distributions made on such
Distribution Date, the Notional Amount of the Class S Certificates and the Class
C Certificates, after giving effect to the distributions made on such
Distribution Date;
(xvi) the Monthly Interest Distributable Amount in respect of the Class A
Certificates, the Class S 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 and the Class S Certificates for such Distribution
Date;
(xvii) the aggregate amount of any Prepayment Interest Shortfalls for such
Distribution Date, to the extent not covered by payments by the Master Servicer
pursuant to Section 3.24, and the aggregate amount of any Relief Act Interest
Shortfalls for such Distribution Date;
(xviii) [reserved];
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(xix) the Net WAC Rate Carryover Amount for the Class A Certificates, if
any, for such Distribution Date and the amount remaining unpaid after
reimbursements therefor on such Distribution Date;
(xx) the Group I Trustee Fee and the Group II Trustee Fee on such
Distribution Date;
(xxi) whether a Stepdown Date or a Trigger Event has occurred;
(xxii) the Group I Available Funds and Group II Available Funds;
(xxiii) the respective Pass-Through Rates applicable to the Class A
Certificates, the Class S Certificates and the Class C Certificates for such
Distribution Date and the Pass-Through Rate applicable to the Class A
Certificates for the immediately succeeding Distribution Date;
(xxiv) the Guaranty Fee to be paid to the Guarantor with respect to the
Guaranteed Certificates for such Distribution Date;
(xxv) such other information as the Guarantor or the Certificate Insurer
may reasonably request in such format as reasonably required by the Guarantor or
the Certificate Insurer and any other information that is required by the Code
and regulations thereunder to be made available to Certificateholders;
(xxvi) the amount on deposit in each of the Reserve Funds;
(xxvii) (A) the dollar amount of payments received related to claims under
the PMI Policy during the related Prepayment Period (and the number of Mortgage
Loans to which such payments related) and (B) the aggregate dollar amount of
payments received related to claims under the PMI Policy since the Cut-off Date
(and the number of Mortgage Loans to which such payments related);
(xxviii) (A) the dollar amount of claims made under the PMI Policy that
were denied during the related Prepayment Period (and the number of Mortgage
Loans to which such denials related) and (B) the aggregate dollar amount of
claims made under the PMI Policy that were denied since the Cut-off Date (and
the number of Mortgage Loans to which such denials related);
(xxix) for such Distribution Date, the amount of any payment made by the
Cap Provider under each Cap Agreement;
(xxx) the amount, if any, of Insured Payments distributable to each Class
of Insured Certificates on such Distribution Date, the Certificate Insurer
Premiums and the Certificate Insurer Reimbursement Amounts paid on such
Distribution Date, and the aggregate amount of Insured Payments, interest
thereon and previously unpaid Certificate Insurer Premiums and the Certificate
Insurer Reimbursement Amounts paid on such Distribution Date and remaining to be
paid on such Distribution Date or any future Distribution Date;
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(xxxi) the Group I Delinquency Percentage, the Group II Delinquency
Percentage and the actual numbers used to calculate such percentages, as
calculated pursuant to (x) and (y) of the definitions of Group I Delinquency
Percentage and Group II Delinquency Percentage;
(xxxii) each of the percentages calculated pursuant to the definitions of
Group I Cumulative Loss Trigger Event and Group II Cumulative Loss Trigger Event
and the actual numbers used to calculate such percentages, as calculated
pursuant to (x) and (y) of the definitions of Group I Cumulative Loss Trigger
Event and the Group II Cumulative Loss Trigger Event; and
(xxxiii) the LIBOR rate for the related Accrual Period.
Subject to Section 4.03(f) below, 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, the Master
Servicer, the NIMS Insurer, the Certificate Insurer, the Guarantor and the
Rating Agencies via the Trustee's internet website. The Trustee's internet
website shall initially be located at "http:\\xxx.xxxxxxxxxxxxxx.xx.xxx.
Assistance in using the website can be obtained by calling the Trustee's
customer service desk at 0-000-000-0000. Parties that are unable to use the
above distribution options are entitled to have a paper copy mailed to them via
first class mail by calling the customer service desk and indicating such. The
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.
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 Closing 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 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 forward to the Holders of
the Residual Certificates and the NIMS Insurer 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 Holder of a Residual Certificate, 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
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such Person was a Holder of a Residual Certificate. 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.
(e) On each Distribution Date the Trustee shall provide Bloomberg Financial
Markets, L.P. ("Bloomberg") CUSIP level factors for each Class of Certificates
as of such Distribution Date, using a format and media mutually acceptable to
the Trustee and Bloomberg.
(f) On the fourth Business Day preceding each Distribution Date, the
Trustee shall deliver to the Guarantor (by electronic medium as specified in the
next sentence) a statement identifying the Class Factor for each Class of
Certificates. The Trustee shall deliver such statement on or before 12:00 noon
(New York time) on such day via the internet using the following domain name:
xxxx_xxxxx@xxxxxxxxx.xxx. If a Guarantor Payment will be payable on a
Distribution Date, all information required under Section 4.03(a) must also be
similarly delivered to Guarantor on such third Business Day proceeding such
Distribution Date. The second consecutive failure by the Trustee to deliver the
Class Factor (or to deliver an accurate Class Factor) to the Guarantor shall
constitute an event of default and permit the Guarantor to remove the Trustee
for cause; provided that the Master Servicer had delivered the Remittance Report
for the related Distribution Date to the Trustee pursuant to Section 4.04.
Section 4.04 Remittance Reports; Advances.
(a) Within one Business Day after each Determination Date, but in no event
later than such date which would allow the Trustee to submit a claim to the NIMS
Insurer, under the Indenture, or to the Certificate Insurer under the
Certificate Insurance Policy, the Master Servicer shall deliver to the NIMS
Insurer, the Certificate Insurer, the Guarantor and the Trustee by telecopy or
electronic mail (or by such other means as the Master Servicer, the NIMS
Insurer, the Certificate Insurer, the Guarantor and the Trustee, as the case may
be, may agree from time to time) a Remittance Report with respect to the related
Distribution Date. All such reports shall be delivered to the Guarantor at
xxxxxx_xxxxxxxxxxxxxx@xxxxxxxxx.xxx. Not later than each Master Servicer
Remittance Date (or, in the case of certain information, as agreed between the
Trustee and the Master Servicer, not later than four Business Days after the end
of each Due Period), the Master 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 Master Servicer.
(b) The amount of Advances to be made by the Master Servicer for any
Distribution Date shall equal, subject to Section 4.04(d), the sum of (i) the
aggregate amount of Monthly Payments (with each interest portion thereof net of
the related Servicing Fee), due on the related Due Date in respect of the
Mortgage Loans (other than with respect to any Balloon Loan with a delinquent
Balloon Payment as described in clause (iii) below), which Monthly Payments were
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delinquent as of the close of business on the related Determination Date, plus
(ii) with respect to each REO Property (other than with respect to any REO
Property relating to a Balloon Loan with a delinquent Balloon Payment as
described in clause (iv) below), which REO Property was acquired during or prior
to the related Prepayment Period and as to which such REO Property an REO
Disposition did not occur during the related Prepayment Period, an amount equal
to the excess, if any, of the Monthly Payments (with each interest portion
thereof net of the related Servicing Fee) that would have been due on the
related Due Date in respect of the related Mortgage Loans, over the net income
from such REO Property transferred to the Distribution Account pursuant to
Section 3.23 for distribution on such Distribution Date, plus (iii) with respect
to each Balloon Loan with a delinquent Balloon Payment, an amount equal to the
assumed monthly principal and interest payment (with each interest portion
thereof net of the related Servicing Fee) that would have been due on the
related Due Date based on the original principal amortization schedule for such
Balloon Loan assuming such Mortgage Loan was not a Balloon Loan, plus (iv) with
respect to each REO Property relating to a Balloon Loan with a delinquent
Balloon Payment, which REO Property was acquired during or prior to the related
Prepayment Period and as to which REO Property an REO Disposition did not occur
during the related Prepayment Period, an amount equal to the excess, if any, of
the assumed monthly principal and interest payment (with each interest portion
thereof net of the related Servicing Fee) that would have been due on the
related Due Date based on the original principal amortization schedule for the
related Balloon Loan assuming such Mortgage Loan was not a Balloon Loan, over
the net income from such REO Property transferred to the Distribution Account
pursuant to Section 3.23 for distribution on such Distribution Date.
On or before 3:00 p.m. New York time on the Master Servicer Remittance
Date, the Master Servicer shall remit in immediately available funds to the
Trustee for deposit in the Distribution Account an amount equal to the 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 Master 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 Master
Servicer with respect to the Mortgage Loans and REO Properties. Any amounts held
for future distribution and so used shall be appropriately reflected in the
Master Servicer's records and replaced by the Master Servicer by deposit in the
Collection Account on or before any future Master 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 Master 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 NIMS Insurer, the
Certificate Insurer, the Guarantor and the Master Servicer by telecopy by the
close of business on any Master Servicer Remittance Date in the event that the
amount remitted by the Master Servicer to the Trustee on such date is less than
the Advances required to be made by the Master Servicer for the related
Distribution Date.
(c) The obligation of the Master 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 the recovery of all Liquidation Proceeds
thereon.
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(d) Notwithstanding anything herein to the contrary, no Advance or
Servicing Advance shall be required to be made hereunder by the Master Servicer
if such Advance or Servicing Advance would, if made, constitute a Nonrecoverable
Advance. The determination by the Master 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 Master Servicer delivered to the NIMS Insurer, the
Certificate Insurer, the Guarantor, the Depositor and the Trustee.
Section 4.05 Distributions on the REMIC Regular Interests.
(a) On each Distribution Date, the Trustee shall cause the Group I
Available Funds, in the following order of priority, 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, with respect to the Group I Mortgage Loans with Adjusted Net
Minimum Mortgage Rates of less than 5.25%, to the Holders of REMIC 1 Regular
Interest LT1A-B in an amount equal to (A) the Uncertificated Accrued Interest
for such REMIC 1 Regular Interest for such Distribution Date, plus (B) any
amounts in respect thereof remaining unpaid from previous Distribution Dates,
and with respect to the Group I Mortgage Loans with Adjusted Net Minimum
Mortgage Rates of 5.25% or greater, in the following order: first to the Holders
of each REMIC 1 IS1 Interest in ascending numerical order, then to the Holders
of REMIC 1 Regular Interest LT1A-A and REMIC 1 Regular Interest LT1A-P, in each
case, in an amount equal to (A) the Uncertificated Accrued Interest for such
REMIC 1 Regular Interest for such Distribution Date, plus (B) any amounts in
respect thereof remaining unpaid from previous Distribution Dates;
(ii) second, to the Holders of REMIC 1 Regular Interest LT1A-P, on the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter until $100 has been distributed pursuant to this clause;
(iii) third, the remainder of the Group I Available Funds for such
Distribution Date with respect to those Group I Mortgage Loans with Adjusted Net
Minimum Mortgage Rates of less than 5.25%, to the Holders of REMIC 1 Regular
Interest LT1A-B until the Uncertificated Principal Balance of such REMIC 1
Regular Interest is reduced to zero and with respect to those Group I Mortgage
Loans with Adjusted Net Minimum Mortgage Rates of 5.25% or greater, in the
following order, first to the Holders of REMIC 1 Regular Interest LT1A-A, then
to the Holders of each REMIC 1 IS1 Interest, in descending numerical order until
the Uncertificated Principal Balance of each such REMIC 1 Regular Interest is
reduced to zero; and
(iv) fourth, any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-1 Interest).
On each Distribution Date, all amounts representing Prepayment Charges in
respect of the Group I Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC 1 to the Holders of REMIC 1 Regular Interest
LT1A-P. The payment of the foregoing amounts to the Holders of REMIC 1 Regular
Interest LT1A-P shall not reduce the Uncertificated Principal Balance thereof.
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(b) On each Distribution Date, the Trustee shall cause the Group II
Available Funds, in the following order of priority, 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-1B Interest), as the case may be:
(1) first, with respect to the Group II Mortgage Loans with Adjusted Net
Minimum Mortgage Rates of less than 5.25%, to the Holders of REMIC 1 Regular
Interest LT1B-B in an amount equal to (A) the Uncertificated Accrued Interest
for such REMIC 1 Regular Interest for such Distribution Date, plus (B) any
amounts in respect thereof remaining unpaid from previous Distribution Dates,
and with respect to the Group II Mortgage Loans with Adjusted Net Minimum
Mortgage Rates of 5.25% or greater, in the following order: first to the Holders
of each REMIC 1 IIS1 Interest in ascending numerical order, then to the Holders
of REMIC 1 Regular Interest LT1B-A and REMIC 1 Regular Interest LT1B-P, in each
case, in an amount equal to (A) the Uncertificated Accrued Interest for such
REMIC 1 Regular Interest for such Distribution Date, plus (B) any amounts in
respect thereof remaining unpaid from previous Distribution Dates;
(2) second, to the Holders of REMIC 1 Regular Interest LT1B-P, on the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter until $100 has been distributed pursuant to this clause;
(3) third, the remainder of the Group II Available Funds for such
Distribution Date with respect to those Group II Mortgage Loans with Adjusted
Net Minimum Mortgage Rates of less than 5.25%, to the Holders of REMIC 1 Regular
Interest LT1B-B until the Uncertificated Principal Balance of such REMIC 1
Regular Interest is reduced to zero and with respect to those Group II Mortgage
Loans with Adjusted Net Minimum Mortgage Rates of 5.25% or greater, in the
following order, first to the Holders of REMIC 1 Regular Interest LT1B-A, then
to the Holders of each REMIC 1 IIS1 Interest, in descending numerical order
until the Uncertificated Principal Balance of each such REMIC 1 Regular Interest
is reduced to zero; and
(4) fourth, any remaining amount to the Holders of the Class R Certificates
(in respect of the Class R-1 Interest).
On each Distribution Date, all amounts representing Prepayment Charges in
respect of the Group II Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC 1 to the Holders of REMIC 1 Regular Interest
LT1B-P. The payment of the foregoing amounts to the Holders of REMIC 1 Regular
Interest LT1B-P shall not reduce the Uncertificated Principal Balance thereof.
(c) On each Distribution Date, the Trustee shall cause the Group I
Available Funds, in the following order of priority, to be distributed by REMIC
2 to REMIC 3 on account of the REMIC 2 Regular Interests or withdrawn from the
Distribution Account and distributed to the holders of the Class R Certificates
(in respect of the Class R-2 Interest), as the case may be:
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(1) first, to the Holders of each REMIC 2 IS1 Interest in ascending
numerical order, then to the Holders of each REMIC 2 IS2 Interest in ascending
numerical order, in each case in an amount equal to (A) the Uncertificated
Accrued Interest for each such REMIC 2 Regular Interest for such Distribution
Date, plus (B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates, and then, pro rata, to the Holders of REMIC 2 Regular
Interest LT2A-A and REMIC 2 Regular Interest LT2A-P in an amount equal to (A)
the Uncertificated Accrued Interest for such REMIC 1 Regular Interest for such
Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from
previous Distribution Dates;
(2) second, to the Holders of REMIC 2 Regular Interest LT2A-P, on the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter until $100 has been distributed pursuant to this clause;
(3) third, to the Holders of REMIC 2 Regular Interest LT2A-A, then to the
Holders of each REMIC 2 IS2 Interest in descending numerical order, until the
Uncertificated Principal Balance of each such REMIC 2 Regular Interest is
reduced to zero; and
(4) fourth, any remaining amount to the Holders of the Class R Certificates
(in respect of the Class R-2 Interest).
On each Distribution Date, all amounts representing Prepayment Charges in
respect of the Group I Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC 2 to the Holders of REMIC 2 Regular Interest
LT2A-P. The payment of the foregoing amounts to the Holders of REMIC 2 Regular
Interest LT2A-P shall not reduce the Uncertificated Principal Balance thereof.
(d) On each Distribution Date, the Trustee shall cause the Group II
Available Funds, in the following order of priority, to be distributed by REMIC
2 to REMIC 3 on account of the REMIC 2 Regular Interests or withdrawn from the
Distribution Account and distributed to the Holders of the Class R Certificates
(in respect of the Class R-2 Interest), as the case may be:
(1) first, to the Holders of each REMIC 2 IIS1 Interest in ascending
numerical order, then to the Holders of each REMIC 2 IIS2 Interest in ascending
numerical order, and then, pro rata, to the Holders of REMIC 2 Regular Interest
LT2B-A and REMIC 1 Regular Interest LT1B-P, in each case in an amount equal to
(A) the Uncertificated Accrued Interest for such REMIC 2 Regular Interest for
such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid
from previous Distribution Dates;
(2) second, to the Holders of REMIC 2 Regular Interest LT2B-P, on the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter until $100 has been distributed pursuant to this clause;
(3) third, to the Holders of REMIC 2 Regular Interest LT2B-A, and then to
the Holders of each REMIC 2 IIS2 Interest in descending numerical order, until
the Uncertificated Principal Balance of each such REMIC 2 Regular Interest is
reduced to zero; and
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(4) fourth, any remaining amount to the Holders of the Class R Certificates
(in respect of the Class R-2 Interest).
On each Distribution Date, all amounts representing Prepayment Charges in
respect of the Group II Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC 2 to the Holders of REMIC 2 Regular Interest
LT2B-P. The payment of the foregoing amounts to the Holders of REMIC 2 Regular
Interest LT2B-P shall not reduce the Uncertificated Principal Balance thereof.
(e) On each Distribution Date, the Trustee shall cause in the following
order of priority, the following amounts to be distributed by REMIC 3 to REMIC 4
on account of the REMIC 4 Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class R Certificates (in respect
of the Class R-4 Interest), as the case may be:
(1) first, Group I Available Funds equal to the Group I Interest Remittance
Amount shall be distributed (i) first, pro rata to the Holders of REMIC 3
Regular Interest LT3IS-1, (ii) second, pro rata to the Holders of each REMIC 3
IS2 Interest, and (iii) third, pro rata to the Holders of REMIC 3 Regular
Interest LT3A-1, REMIC 3 Regular Interest LT3B-1, REMIC 3 Regular Interest
LT3C-1, and REMIC 3 Regular Interest LT3P-1, in each case 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;
provided, however, that amounts payable as Uncertificated Accrued Interest in
respect of REMIC 3 Regular Interest LT3C-1 shall be reduced, when the REMIC 3
Overcollateralized Amount 2 is less than the REMIC 3 Overcollateralization
Target Amount 2, by the lesser of (x) the amount of such difference and (y) the
Maximum LT3C-1 Uncertificated Accrued Interest Deferral Amount;
(2) second, Group II Available Funds equal to the Group II Interest
Remittance Amount shall be distributed (i) first, pro rata to the Holders of
REMIC 3 Regular Interest LT3IIS-1 Interest, (ii) second, pro rata to the Holders
of each REMIC 3 IIS2 Interest, and (iii) third, pro rata to Holders of REMIC 3
Regular Interest LT3A-2, REMIC 3 Regular Interest LT3B-2, REMIC 3 Regular
Interest LT3C-2, and REMIC 3 Regular Interest LT3P-2, in each case 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; provided, however, that amounts payable as Uncertificated
Accrued Interest in respect of REMIC 3 Regular Interest LT3C-2 shall be reduced,
when the REMIC 3 Overcollateralized Amount 2 is less than the REMIC 3
Overcollateralization Target Amount 2, by the lesser of (x) the amount of such
difference and (y) the Maximum LT3C-2 Uncertificated Accrued Interest Deferral
Amount;
(3) third, to the Holders of REMIC 4 Regular Interests, in an amount equal
to the remainder of the Group I Available Funds for such Distribution Date after
the distributions made pursuant to clause (1) above, allocated as follows:
(A) (i) 98% to the Holders of REMIC 4 Regular Interest LT4A-1, (ii) 1.00%
to the Holders of REMIC 4 Regular Interest LT4B-1 and (iii) 1.00% to the Holders
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of REMIC 4 Regular Interest LT4C-1, until the Uncertificated Principal Balance
of all such Uncertificated REMIC 4 Regular Interests is reduced to zero;
(B) then, to the Holders of REMIC 4 Regular Interest LT4P-1, on the
Distribution Date immediately following the expiration of the latest Prepayment
Charge with respect to Group I Mortgage Loans as identified on the Prepayment
Charge Schedule or any Distribution Date thereafter until $100 has been
distributed pursuant to this clause; and
(C) then, any remaining amount to the Holders of the Class R Certificates
(in respect of the Class R-3 Interest);
(4) fourth, to the Holders of REMIC 3 Regular Interests, in an amount equal
to the remainder of the Group II Available Funds for such Distribution Date
after the distributions made pursuant to clause (2) above, allocated as follows:
(A) (i) 98% to the Holders of REMIC 3 Regular Interest LT3A-2, (ii) 1.00%
to the Holders of REMIC 3 Regular Interest LT3B-2, and (iii) 1.00% to the
Holders of REMIC 3 Regular Interest LT3C-2, until the Uncertificated Principal
Balance of all such Uncertificated REMIC 3 Regular Interests is reduced to zero;
(B) then, to the Holders of REMIC 3 Regular Interest LT3P-2, on the
Distribution Date immediately following the expiration of the latest Prepayment
Charge with respect to Group II Mortgage Loans as identified on the Prepayment
Charge Schedule or any Distribution Date thereafter until $100 has been
distributed pursuant to this clause;
(C) then, any remaining amount to the Holders of the Class R Certificates
(in respect of the Class R-3 Interest); and
(5) fifth, to REMIC 3 Regular Interest LT3P-1, 100% of the amount of
Prepayment Charges paid in respect of REMIC 2 Regular Interest LT2A-P, and to
REMIC 3 Regular Interest LT3P-2, 100% of the amount of Prepayment Charges paid
in respect of REMIC 2 Regular Interest LT2B-P
provided, however, that 98% and 2% of any principal payments that are
attributable to Group I Overcollateralization Release Amount shall be allocated
to Holders of REMIC 3 Regular Interest LT3A-1 and REMIC 3 Regular Interest
LT3C-1, respectively, and 98% and 2% of any principal payments that are
attributable to Group II Overcollateralization Release Amount shall be allocated
to Holders of REMIC 3 Regular Interest LT3A-2 and REMIC 4 Regular Interest
LT3C-2, respectively.
Section 4.06 Allocation of Realized Losses.
(a) Prior to each Determination Date, the Master Servicer shall determine
as to each Mortgage Loan and REO Property: (i) the total amount of Realized
Losses, if any, incurred in connection with any Final Recovery Determinations
made during the related Prepayment Period; (ii) whether and the extent to which
such Realized Losses constituted Bankruptcy Losses; and (iii) the respective
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portions of such Realized Losses allocable to interest and allocable to
principal. Prior to each Determination Date, the Master Servicer shall also
determine as to each Mortgage Loan: (i) the total amount of Realized Losses, if
any, incurred in connection with any Deficient Valuations made during the
related Prepayment Period; and (ii) the total amount of Realized Losses, if any,
incurred in connection with Debt Service Reductions in respect of Monthly
Payments due during the related Due Period. The information described in the two
preceding sentences that is to be supplied by the Master Servicer shall be
evidenced by an Officers' Certificate delivered to the NIMS Insurer, the
Certificate Insurer and the Trustee (and upon request, to the Guarantor) by the
Master Servicer prior to the Determination Date immediately following the end of
(i) in the case of Bankruptcy Losses allocable to interest, the Due Period
during which any such Realized Loss was incurred, and (ii) in the case of all
other Realized Losses, the Prepayment Period during which any such Realized Loss
was incurred.
(b) No allocations of any Realized Losses shall be made to the Class A
Certificates, the Class S Certificates or the Class P Certificates. Any Realized
Losses that reduce the distributions in respect of and/or the Uncertificated
Principal Balance of REMIC 4 Regular Interest LT4-IC or REMIC 4 Regular Interest
LT4-IIC, shall be allocated by the Trustee to reduce the distributions in
respect of and/or the Certificate Principal Balance of the Class I-C
Certificates and the Class II-C Certificates, respectively.
(c) All Realized Losses on the Group I Mortgage Loans shall be allocated by
the Trustee on each Distribution Date as follows: with respect to those Group I
Mortgage Loans with Adjusted Net Minimum Mortgage Rates of less than 5.25%, to
REMIC 1 Regular Interest LT1A-B until the Uncertificated Principal Balance
thereof has been reduced to zero, and with respect to those Group I Mortgage
Loans with Adjusted Net Minimum Mortgage Rates of 5.25% or greater, first to
REMIC 1 Regular Interest LT1A-A until the Uncertificated Principal Balance
thereof has been reduced to zero, then to each REMIC 1 IS1 Interest in
descending numerical order until the Uncertificated Principal Balance of each
has been reduced to zero. All Realized Losses on the Group II Mortgage Loans
shall be allocated by the Trustee on each Distribution Date as follows: with
respect to those Group II Mortgage Loans with Adjusted Net Minimum Mortgage
Rates of less than 5.25%, to REMIC 1 Regular Interest LT1B-B until the
Uncertificated Principal Balance thereof has been reduced to zero, and with
respect to those Group II Mortgage Loans with Adjusted Net Minimum Mortgage
Rates of 5.25% or greater, first to REMIC 1 Regular Interest LT1B-A until the
Uncertificated Principal Balance thereof has been reduced to zero, then to each
REMIC 1 IIS1 Interest in descending numerical order until the Uncertificated
Principal Balance thereof has been reduced to zero.
(d) All Realized Losses on the Group I Mortgage Loans shall be allocated by
the Trustee on each Distribution Date as follows: first to REMIC 2 Regular
Interest LT2A-A until the Uncertificated Principal Balance thereof has been
reduced to zero, then to each REMIC 2 IS2 Interest in descending numerical order
until the Uncertificated Principal Balance of each has been reduced to zero. All
Realized Losses on the Group II Mortgage Loans shall be allocated by the Trustee
on each Distribution Date as follows: first to REMIC 2 Regular Interest LT2B
until the Uncertificated Principal Balance thereof has been reduced to zero,
then to each REMIC 2 IIS2 Interest in descending numerical order until the
Uncertificated Principal Balance of each has been reduced to zero.
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(e) All Realized Losses on the Group I Mortgage Loans shall be deemed to
have been allocated in the specified percentages, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC 3 Regular Interest LT3A-1
and REMIC 3 Regular Interest LT3C-1 up to an aggregate amount equal to the REMIC
3 Group I Interest Loss Allocation Amount, 98% and 2%, respectively; and second,
to the Uncertificated Principal Balances of REMIC 3 Regular Interest LT3A-1 and
REMIC 3 Regular Interest LT3C-1 up to an aggregate amount equal to the REMIC 3
Principal Loss Allocation Amount 1, 98% and 2%, respectively.
(f) All Realized Losses on the Group II Mortgage Loans shall be deemed to
have been allocated in the specified percentages, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC 3 Regular Interest LT3A-2
and REMIC 3 Regular Interest LT3C-2 up to an aggregate amount equal to the REMIC
3 Group II Interest Loss Allocation Amount, 98% and 2%, respectively; and
second, to the Uncertificated Principal Balances of REMIC 3 Regular Interest
LT3A-2 and REMIC 3 Regular Interest LT3C-2 up to an aggregate amount equal to
the REMIC 3 Principal Loss Allocation Amount 2, 98% and 2%, respectively.
Section 4.07 Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the Trustee shall
comply with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount that the Trustee
reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to such
Certificateholders.
Section 4.08 Commission Reporting.
Within 15 days after each Distribution Date, the Trustee shall, in
accordance with industry standards and applicable regulations, file with the
Commission via the Electronic Data Gathering Analysis and Retrieval system, a
Form 8-K with a copy of the statement to Certificateholders for such
Distribution Date as an Exhibit thereto. Prior to April 30, in the year
following the year of execution of this Agreement, the Trustee shall in
accordance with industry standards file a Form 15 Suspension Notification with
respect to the Trust Fund, if applicable. Prior to March 31, in the year
following the year of execution of this Agreement, the Depositor shall execute
and the Trustee shall file a Form 10-K, in substance conforming to industry
standards and applicable regulations, with respect to the Trust Fund together
with the accompanying certification described below. The Trustee shall provide
the Form 10-K to the Depositor by March 20 (or the preceding Business Day if
such day is not a Business Day) of the year that such Form 10-K is required to
be filed. The Depositor shall execute such Form 10-K and return the original to
the Trustee by March 25 (or the preceding Business Day if such day is not a
Business Day). The Trustee shall prepare, execute, file and deliver on behalf of
the Depositor Form 8-Ks required to be filed under the Exchange Act so long as
no certification in respect of such Form 8-K is required by the Commission. The
Depositor shall prepare and the appropriate person shall execute, in accordance
with the Exchange Act or any other applicable law, any certification required
under the Exchange Act or any other applicable law to accompany the Form 10-K or
any other periodic report. The Depositor hereby grants to the Trustee a limited
power of attorney to execute and file each such document on behalf of the
Depositor, provided, however, that the Trustee shall not execute the Form 10-K
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
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of such power of attorney and (ii) the termination of the Trust Fund. The
Depositor agrees to promptly furnish to the Trustee, from time to time upon
request, such further information, reports and financial statements within its
control related to this Agreement and the Mortgage Loans as the Trustee
reasonably deems appropriate to prepare and file all necessary reports with the
Commission. The Trustee shall have no responsibility to file any items other
than those specified in this Section.
Section 4.09 The Guaranty.
On each Distribution Date following receipt of a statement (as set forth in
Section 4.03) that indicates a Guarantor Deficiency Amount for such Distribution
Date, the Guarantor shall distribute to the Trustee a Guarantor Payment, in an
aggregate amount equal to the Guarantor Deficiency Amount for such Distribution
Date directly to the Holders of the Guaranteed Certificates, without first
depositing such amount in the Distribution Account, as follows: (i) the
Guaranteed Interest Distribution Amount shall be distributed as interest with
respect to the Class I-A Certificates and Class I-S1 Certificates as provided in
Section 4.01(a)(i); and (ii) the Guaranteed Principal Distribution Amount shall
be distributed as principal with respect to the Class I-A Certificates as
provided in Section 4.01(b)(i).
Section 4.10 Replacement Credit Enhancement
If the Certificate Insurer's failure to make a payment required under the
Certificate Insurance Policy continues for a period of 60 days or if the
financial strength of the Certificate Insurer is downgraded to or below the
levels specified in the Insurance Agreement, the Depositor may, but shall not be
obligated to substitute a new credit enhancement for the existing Certificate
Insurance Policy, provided, that in the event of the Certificate Insurer's
failure to make a required payment under the Certificate Insurance Policy, the
Depositor shall use its commercially reasonable efforts to substitute such new
credit enhancement, but the Depositor shall not be liable hereunder if it is
unable to substitute a new credit enhancement using its commercially reasonable
efforts. Any cancellation or substitution of the Certificate Insurance Policy
pursuant to this Section 4.10 shall be in accordance with and upon satisfaction
of the conditions set forth in the Certificate Insurance Policy, including,
without limitation, payment in full by the provider of such new credit
enhancement of all amounts owed to the Certificate Insurer hereunder and under
the Insurance Agreement. It shall be a condition to any substitution of any new
credit enhancement that (i) after such substitution the Insured Certificates
shall be rated no lower than the rating assigned by each Rating Agency to such
Certificates immediately prior to such Certificate Insurer Default or downgrade
(without regard to the Guaranty with respect to the Guaranteed Certificates),
(ii) there be delivered to the Trustee, the NIMS Insurer, the Master Servicer,
the Depositor and the Guarantor an Opinion of Counsel, acceptable in form and
substance to the Trustee, the NIMS Insurer, the Master Servicer, the Depositor
and the Guarantor from counsel to the provider of such new credit enhancement
with respect to the enforceability thereof and such other matters as the
Trustee, the NIMS Insurer, the Master Servicer, the Depositor or the Guarantor
may require including, that such credit enhancement will qualify as a "similar
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commercially available credit enhancement contract" within the meaning of Treas.
Reg. ss. 1.1001-3(e)(4)(iv)(B), that such substitution will not be treated as a
significant modification within the meaning of Treas. Reg. ss. 1.1001-3 and that
the substitution does not cause any REMIC created by this Agreement to fail to
qualify as a REMIC or to be subject to the prohibited transactions tax of Code
Section 860F(a), (iii) the provider of the new credit enhancement be reasonably
acceptable to the Guarantor as evidenced by its written consent and (iv) the
cost of such new credit enhancement for the Class I-A Certificates and the Class
I-S1 Certificates shall not exceed the Group I Certificate Insurer Premium and
for the Class II-A Certificates and the Class II-S1 Certificates shall not
exceed the Group II Certificate Insurer Premium. Upon receipt of the items
referred to above and the taking of physical possession of the new credit
enhancement, the Trustee shall, within five Business Days following receipt of
such items and such taking of physical possession, deliver the replaced
Certificate Insurance Policy to the Certificate Insurer. Upon substitution of
such new credit enhancement, the provider of such new credit enhancement shall
have all the rights and obligations of the Certificate Insurer hereunder,
including the right to receive the Certificate Insurer Premiums and any
Certificate Insurer Reimbursement Amounts.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
(a) The Certificates in the aggregate will represent the entire beneficial
ownership interest in the Mortgage Loans and all other assets included in REMIC
1.
The Certificates will be substantially in the forms annexed hereto as
Exhibits A-1 through A-13. The Certificates of each Class will be issuable in
registered form only, in denominations of authorized Percentage Interests as
described in the definition thereof. Each Certificate will share ratably in all
rights of the related Class.
Upon original issue, the Certificates shall be executed by the Trustee and
authenticated and delivered by the Trustee, to or upon the order of the
Depositor. The Certificates shall be executed and attested by manual or
facsimile signature on behalf of the Trustee by an authorized signatory.
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates. No Certificate shall be
entitled to any benefit under this Agreement or be valid for any purpose, unless
there appears on such Certificate a certificate of authentication substantially
in the form provided herein executed by the Trustee by manual signature, and
such certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
(b) The Book Entry Certificates shall initially be issued as one or more
Certificates held by the Book-Entry Custodian or, if appointed to hold such
Certificates as provided below, the Depository and registered in the name of the
Depository or its nominee and, except as provided below, registration of the
Book-Entry Certificates may not be transferred by the Trustee except to another
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Depository that agrees to hold the Book-Entry Certificates for the respective
Certificate Owners with Ownership Interests therein. The Certificate Owners
shall hold their respective Ownership Interests in and to the Book-Entry
Certificates through the book-entry facilities of the Depository and, except as
provided below, shall not be entitled to definitive, fully registered
Certificates ("Definitive Certificates") in respect of such Ownership Interests.
All transfers by Certificate Owners of their respective Ownership Interests in
the Book-Entry Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm representing such
Certificate Owner. Each Depository Participant shall only transfer the Ownership
Interests in the Book-Entry Certificates of Certificate Owners it represents or
of brokerage firms for which it acts as agent in accordance with the
Depository's normal procedures. The Trustee is hereby initially appointed as the
Book-Entry Custodian and hereby agrees to act as such in accordance herewith and
in accordance with the agreement that it has with the Depository authorizing it
to act as such. The Book-Entry Custodian may, and if it is no longer qualified
to act as such, the Book-Entry Custodian shall, appoint, by a written instrument
delivered to the Depositor, the Master Servicer and if the Trustee is not the
Book-Entry Custodian, the Trustee and any other transfer agent (including the
Depository or any successor Depository) to act as Book-Entry Custodian under
such conditions as the predecessor Book-Entry Custodian and the Depository or
any successor Depository may prescribe, provided that the predecessor Book-Entry
Custodian shall not be relieved of any of its duties or responsibilities by
reason of any such appointment of other than the Depository. If the Trustee
resigns or is removed in accordance with the terms hereof, the Trustee,
successor Trustee or, if it so elects, the Depository shall immediately succeed
to its predecessor's duties as Book-Entry Custodian. The Depositor shall have
the right to inspect, and to obtain copies of, any Certificates held as
Book-Entry Certificates by the Book-Entry Custodian.
The Trustee, the Master Servicer, the Certificate Insurer, the NIMS Insurer
and the Depositor may for all purposes (including the making of payments due on
the Book-Entry Certificates) deal with the Depository as the authorized
representative of the Certificate Owners with respect to the Book-Entry
Certificates for the purposes of the exercise by Certificateholders of the
rights of Certificateholders hereunder. The rights of Certificate Owners with
respect to the Book-Entry Certificates shall be limited to those established by
law and agreements between such Certificate Owners and the Depository
Participants and brokerage firms representing such Certificate Owners. Multiple
requests and directions from, and votes of, the Depository as Holder of the
Book-Entry Certificates with respect to any particular matter shall not be
deemed inconsistent if they are made with respect to different Certificate
Owners. The Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Certificateholders and shall give
notice to the Depository of such record date.
If (i)(A) the Depositor advises the Trustee in writing that the Depository
is no longer willing or able to properly discharge its responsibilities as
Depository, and (B) the Depositor is unable to locate a qualified successor,
(ii) the Depositor at its option advises the Trustee in writing that it elects
to terminate the book-entry system through the Depository or (iii) after the
occurrence of a Master Servicer Event of Default, Certificate Owners
representing in the aggregate not less than 51% of the Ownership Interests of
the Book-Entry Certificates advise the Trustee through the Depository, in
writing, that the continuation of a book-entry system through the Depository is
no longer in the best interests of the Certificate Owners, the Trustee shall
notify all Certificate Owners, through the Depository, of the occurrence of any
such event and of the availability of Definitive Certificates to Certificate
Owners requesting the same. Upon surrender to the Trustee of the Book-Entry
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Certificates by the Book-Entry Custodian or the Depository, as applicable,
accompanied by registration instructions from the Depository for registration of
transfer, the Trustee shall issue the Definitive Certificates. Such Definitive
Certificates will be issued in minimum denominations of $100,000, except that
any beneficial ownership that was represented by a Book-Entry Certificate in an
amount less than $100,000 immediately prior to the issuance of a Definitive
Certificate shall be issued in a minimum denomination equal to the amount
represented by such Book-Entry Certificate. None of the Depositor, the Master
Servicer or the Trustee shall be liable for any delay in the delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates all references
herein to obligations imposed upon or to be performed by the Depository shall be
deemed to be imposed upon and performed by the Trustee, to the extent applicable
with respect to such Definitive Certificates, and the Trustee shall recognize
the Holders of the Definitive Certificates as Certificateholders hereunder.
Section 5.02 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at one of the offices or agencies to
be appointed by the Trustee in accordance with the provisions of Section 8.12 a
Certificate Register for the Certificates in which, subject to such reasonable
regulations as it may prescribe, the Trustee shall provide for the registration
of Certificates and of transfers and exchanges of Certificates as herein
provided.
(b) No transfer, sale, pledge or other disposition of any Class S2
Certificate, 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 (other than in connection with the
initial transfer of any Class S2 Certificate, Class C Certificate, Class P
Certificate or Residual Certificates by the Depositor to the Seller or the
transfer of any Class S2 Certificate, Class C Certificate, Class P Certificate
or Residual Certificates by the Seller to an Affiliate of the Seller or to a
trust, the depositor of which is an Affiliate of the Seller or the transfer of
any Class S2 Certificate, Class C Certificate, Class P Certificate or Residual
Certificates by an Affiliate of the Seller to one or more entities sponsored by
such Affiliate or to a trust the depositor of which is one or more entities
sponsored by such Affiliate) (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, the Depositor
and the Trust Fund 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.
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(c) No transfer of a Class S2 Certificate, 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")
unless the Depositor, the Trustee and the Master Servicer are provided with an
Opinion of Counsel which establishes to the satisfaction of the Depositor, the
Trustee and the Master 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 Master 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 Master
Servicer, the Trustee or the Trust Fund. Neither an Opinion of Counsel nor any
certification will be required in connection with the initial transfer of any
Class S2 Certificate, Class C Certificate, Class P Certificate or Residual
Certificates by the Depositor to the Seller or the transfer of any Class S2
Certificate, Class C Certificate, Class P Certificate or Residual Certificates
by the Seller to an Affiliate of the Seller or to a trust, the depositor of
which is an Affiliate of the Seller or the transfer of any Class S2 Certificate,
Class C Certificates, Class P Certificates or Residual Certificates by an
Affiliate of the Seller to one or more entities sponsored by such Affiliate or
to a trust the depositor of which is one or more entities sponsored by such
Affiliate (in which case, the Depositor, the Seller, any such Affiliate and such
entities sponsored by such Affiliate shall have deemed to have represented that
the applicable transferee 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 each transferee the Seller or such an Affiliate. Each
transferee of a Class S2 Certificate, Class C Certificate, Class P Certificate
or Residual Certificate shall sign a letter substantially in the form of Exhibit
I to demonstrate its compliance with this Section 5.02(c) (other than in
connection with the initial transfer of any Class C Certificate, Class P
Certificate or Residual Certificates by the Depositor to the Seller or the
transfer of any Class S2 Certificate, Class C Certificate, Class P Certificate
or Residual Certificates by the Seller to an Affiliate of the Seller or to a
trust, the depositor of which is an Affiliate of the Seller or the transfer of
any Class C Certificates, Class P Certificates or Residual Certificates by an
Affiliate of the Seller to one or more entities sponsored by such Affiliate or
to a trust the depositor of which is one or more entities sponsored by such
Affiliate).
If any Class S2 Certificate, Class C Certificate, Class P Certificate or
Residual Certificate or any interest therein is acquired or held in violation of
the provisions of the preceding paragraphs, 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 Master Servicer,
the Trustee and the Trust Fund from and against any and all liabilities, claims,
costs or expenses incurred by those parties as a result of that acquisition or
holding.
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(d) 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
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 not be under any 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
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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
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 will provide to the Internal Revenue Service, and to
the persons designated in Section 860E(e)(3) of the Code, information needed to
compute the tax imposed under Section 860E(e)(1) of the Code on such transfer.
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 any of the NIM Notes or 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) Subject to the preceding subsections, upon surrender for registration
of transfer of any Certificate at any office or agency of the Trustee designated
from time to time for such purpose pursuant to Section 8.12, the Trustee, shall
execute and authenticate and deliver, in the name of the designated Transferee
or Transferees, one or more new Certificates of the same Class of a like
aggregate Percentage Interest.
(f) At the option of the Holder thereof, any Certificate may be exchanged
for other Certificates of the same Class with authorized denominations and a
like aggregate Percentage Interest, upon surrender of such Certificate to be
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exchanged at any office or agency of the Trustee maintained for such purpose
pursuant to Section 8.12. Whenever any Certificates are so surrendered for
exchange the Trustee, shall execute, authenticate and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer or exchange shall (if so
required by the Trustee) be duly endorsed by, or be accompanied by a written
instrument of transfer in the form satisfactory to the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing.
(g) No service charge shall be made for any registration of transfer or
exchange of Certificates of any Class, but the Trustee 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 Trustee 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 Trustee or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and (ii) there is delivered to the Trustee, the Depositor (in
the case of an Insured Certificate), the Certificate Insurer and (in the case of
a Class S2 Certificate, Class C Certificate or Class P Certificate) the NIMS
Insurer such security or indemnity as may be required by them to save each of
them, and the Trust Fund, harmless, then, in the absence of notice to the
Trustee that such Certificate has been acquired by a bona fide purchaser, the
Trustee, shall execute, 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 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)
in connection therewith. Any duplicate Certificate issued pursuant to this
Section, shall constitute 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 Master Servicer, the Depositor, the Trustee, the NIMS Insurer, the
Certificate Insurer, the Guarantor and any agent of the Master Servicer, the
Depositor, the Trustee, the NIMS Insurer or the Guarantor 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 Master
Servicer, the Depositor, the Trustee, the NIMS Insurer, the Certificate Insurer,
the Guarantor nor any agent of any of them shall be affected by notice to the
contrary.
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ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Master Servicer and the Depositor.
The Depositor and the Master Servicer each shall be liable in accordance
herewith only to the extent of the obligations specifically imposed by this
Agreement and undertaken hereunder by the Depositor and the Master Servicer
herein.
Section 6.02 Merger or Consolidation of the Depositor or the Master
Servicer.
Subject to the following paragraph, the Depositor will keep in full effect
its existence, rights and franchises as a corporation under the laws of the
jurisdiction of its incorporation. Subject to the following paragraph, the
Master Servicer will keep in full effect its existence, rights and franchises as
a corporation under the laws of the jurisdiction of its incorporation and its
qualification as an approved conventional seller/servicer for Xxxxxx Xxx or
Xxxxxxx Mac in good standing. The Depositor and the Master Servicer each will
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Certificates or
any of the Mortgage Loans and to perform its respective duties under this
Agreement.
The Depositor or the Master Servicer may be merged or consolidated with or
into any Person, or transfer all or substantially all of its assets to any
Person, in which case any Person resulting from any merger or consolidation to
which the Depositor or the Master Servicer shall be a party, or any Person
succeeding to the business of the Depositor or the Master Servicer, shall be the
successor of the Depositor or the Master Servicer, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to service mortgage loans on behalf of
Xxxxxx Mae; and provided further that the Rating Agencies' ratings of the NIM
Notes and the Class II-A Certificates (without regard to the Certificate
Insurance Policy) in effect immediately prior to such merger or consolidation
will not be qualified, reduced or withdrawn as a result thereof (as evidenced by
a letter to such effect from the Rating Agencies to the Trustee).
Section 6.03 Limitation on Liability of the Depositor, the Master Servicer
and Others.
None of the Depositor, the Guarantor, the Master Servicer or any of the
directors, officers, employees or agents of the Depositor, the Guarantor or the
Master Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Guarantor, the Master Servicer or any such person against any breach of
warranties, representations or covenants made herein, or against any specific
liability imposed on the Master Servicer, the Depositor, or the Guarantor, as
applicable, pursuant hereto, or against any liability which would otherwise be
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imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor, the Guarantor, the Master Servicer and any
director, officer, employee or agent of the Depositor, the Guarantor or the
Master Servicer may rely in good faith on any document of any kind which, prima
facie, is properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor, the Guarantor, the Master Servicer, the
Certificate Insurer and any director, officer, employee or agent of the
Depositor, the Guarantor or the Master Servicer shall be indemnified and held
harmless by the Trust Fund against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense relating to any specific Mortgage Loan
or Mortgage Loans (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) or any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. None of the Depositor, the Guarantor or the
Master Servicer shall be under any obligation to appear in, prosecute or defend
any legal action unless such action is related to its respective duties under
this Agreement and, in its opinion, does not involve it in any expense or
liability; provided, however, that each of the Depositor, the Guarantor and the
Master Servicer may in its discretion undertake any such action which it may
deem necessary or desirable with respect to this Agreement and the rights and
duties of the parties hereto and the interests of the Certificateholders
hereunder. In such event, unless the Depositor, the Guarantor or the Master
Servicer acts without the consent of Holders of Certificates entitled to at
least 51% of the Voting Rights (which consent shall not be necessary in the case
of litigation or other legal action by either to enforce their respective rights
or defend themselves hereunder), the legal expenses and costs of such action and
any liability resulting therefrom (except any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder) shall be expenses, costs and liabilities of
the Trust Fund, and the Depositor, the Guarantor and the Master 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 Master Servicer (except the Trustee to the extent it has succeeded the
Master Servicer as required hereunder) indemnifies and holds the Trustee, the
Depositor, the Guarantor and the Trust Fund harmless against any and all claims,
losses, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any other costs, fees and expenses that the Trustee, the
Depositor, the Guarantor, the Certificate Insurer or the Trust Fund may sustain
in any way related to the failure of the Master Servicer to perform its duties
and service the Mortgage Loans in compliance with the terms of this Agreement.
The Master Servicer shall immediately notify the Trustee, the NIMS Insurer, the
Certificate Insurer, the Guarantor and the Depositor if a claim is made that may
result in such claims, losses, penalties, fines, forfeitures, legal fees or
related costs, judgments, or any other costs, fees and expenses, and the Master
Servicer shall assume (with the consent of the Trustee) 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 Master Servicer, the Trustee, the Depositor, the
Guarantor and/or the Trust Fund in respect of such claim. The provisions of this
paragraph shall survive the termination of this Agreement and the payment of the
outstanding Certificates.
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Section 6.04 Limitation on Resignation of Master Servicer.
The Master Servicer shall not resign from the obligations and duties hereby
imposed on it except (i) upon determination that its duties hereunder are no
longer permissible under applicable law or (ii) with the written consent of the
Trustee and the NIMS Insurer or the Certificates Controlling Person (as provided
in Section 1.04) and written confirmation from each Rating Agency (which
confirmation shall be furnished to the Depositor and the Trustee) that such
resignation will not cause such Rating Agency to reduce the then current rating
of any of the NIM Notes or the Class II-A Certificates (without regard to the
Certificate Insurance Policy). Any such determination pursuant to clause (i) of
the preceding sentence permitting the resignation of the Master Servicer shall
be evidenced by an Opinion of Counsel to such effect obtained at the expense of
the Master Servicer and delivered to the Trustee. No resignation of the Master
Servicer shall become effective until the Trustee or a successor servicer
reasonably acceptable to the NIMS Insurer or the Certificates Controlling Person
(as provided in Section 1.04) shall have assumed the Master 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 Master Servicer shall not assign
or transfer any of its rights, benefits or privileges hereunder to any other
Person, nor delegate to or subcontract with, nor authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed by
the Master Servicer hereunder. The foregoing prohibition on assignment shall not
prohibit the Master Servicer from designating a Sub-Servicer as payee of any
indemnification amount payable to the Master Servicer hereunder; provided,
however, that as provided in Section 3.06 hereof, no Sub-Servicer shall be a
third-party beneficiary hereunder and the parties hereto shall not be required
to recognize any Sub-Servicer as an indemnitee under this Agreement. If,
pursuant to any provision hereof, the duties of the Master Servicer are
transferred to a successor master servicer, the entire amount of the Servicing
Fee and other compensation payable to the Master Servicer pursuant hereto shall
thereafter be payable to such successor master servicer.
Section 6.05 Rights of the Depositor, the NIMS Insurer, the
Certificate Insurer, the Guarantor and the Trustee in
Respect of the Master Servicer.
The Master Servicer shall afford (and any Sub-Servicing Agreement shall
provide that each Sub-Servicer shall afford) the Depositor, the NIMS Insurer,
the Certificate Insurer, the Guarantor and the Trustee, upon reasonable notice,
during normal business hours, access to all records maintained by the Master
Servicer (and any such Sub-Servicer) in respect of the Master Servicer's rights
and obligations hereunder and access to officers of the Master Servicer (and
those of any such Sub-Servicer) responsible for such obligations; provided, that
access to records for the Guarantor shall be limited to those related to Group I
Mortgage Loans. Upon request, the Master Servicer shall furnish to the
Depositor, the NIMS Insurer, the Certificate Insurer, the Guarantor and the
Trustee its (and any such Sub-Servicer's) most recent financial statements and
such other information relating to the Master Servicer's or any Sub-Servicer's
capacity to perform its obligations under this Agreement that it possesses;
provided, that any such information furnished to the Guarantor shall be limited
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to that which is related to Group I Mortgage Loans. To the extent such
information is not otherwise available to the public, the Depositor, the NIMS
Insurer, the Certificate Insurer, the Guarantor and the Trustee shall not
disseminate any information obtained pursuant to the preceding two sentences
without the Master Servicer's (or any such Sub-Servicer's) written consent,
except as required pursuant to this Agreement or to the extent that it is
necessary to do so (i) in working with legal counsel, auditors, taxing
authorities or other governmental agencies, rating agencies or reinsurers or
(ii) pursuant to any law, rule, regulation, order, judgment, writ, injunction or
decree of any court or governmental authority having jurisdiction over the
Depositor, the NIMS Insurer, the Certificate Insurer, the Guarantor, the Trustee
or the Trust Fund, and in either case, the Depositor, the Guarantor or the
Trustee, as the case may be, shall use, and each of the Certificate Insurer and
the NIMS Insurer shall be deemed to have agreed with the parties hereto to use,
its best efforts to assure the confidentiality of any such disseminated
non-public information. The Depositor may, but is not obligated to, enforce the
obligations of the Master Servicer under this Agreement and may, but is not
obligated to, perform, or cause a designee to perform, any defaulted obligation
of the Master Servicer under this Agreement or exercise the rights of the Master
Servicer under this Agreement; provided that the Master Servicer shall not be
relieved of any of its obligations under this Agreement by virtue of such
performance by the Depositor or its designee. The Depositor shall not have any
responsibility or liability for any action or failure to act by the Master
Servicer and is not obligated to supervise the performance of the Master
Servicer under this Agreement or otherwise.
ARTICLE VII
DEFAULT
Section 7.01 Master Servicer Events of Default.
"Master Servicer Event of Default," wherever used herein, means any one of
the following events:
(i) any failure by the Master Servicer to remit to the Trustee for
distribution to the Certificateholders, the Certificate Insurer or the Guarantor
any payment (other than an Advance required to be made from its own funds on any
Master Servicer Remittance Date pursuant to Section 4.04) required to be made
under the terms of the Certificates and this Agreement which continues
unremedied for a period of one Business Day after the date upon which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Depositor, the Trustee (in which case notice shall
be provided by telecopy), or to the Master Servicer, the Depositor and the
Trustee by the NIMS Insurer, the Certificate Insurer, the Guarantor or the
Holders of Certificates entitled to at least 25% of the Voting Rights; or
(ii) any failure on the part of the Master Servicer duly to observe or
perform in any material respect any of the covenants or agreements on the part
of the Master Servicer contained in this Agreement which continues unremedied
for a period of 45 days (30 days in the case of any failure to maintain a
Sub-Servicing Agreement with an eligible Sub-Servicer to the extent required in
accordance with Section 3.02(c)) after the earlier of (i) the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Master Servicer by the Depositor or the Trustee, or to the
Master Servicer, the Depositor and the Trustee by the NIMS Insurer, the
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Certificate Insurer, the Guarantor or the Holders of Certificates entitled to at
least 25% of the Voting Rights and (ii) actual knowledge of such failure by a
Servicing Representative of the Master Servicer; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any present or
future federal or state bankruptcy, insolvency or similar law or the appointment
of a conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshaling of assets and liabilities or similar proceeding, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Master Servicer and if such proceeding is being contested by the Master Servicer
in good faith, such decree or order shall have remained in force undischarged or
unstayed for a period of 60 days or results in the entry of an order for relief
or any such adjudication or appointment; or
(iv) the Master Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to it or of or
relating to all or substantially all of its property; or
(v) the Master 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
(vi) any failure by the Master Servicer of the Master Servicer Termination
Test; or
(vii) any failure of the Master Servicer to make, or cause an Advancing
Person to make, any Advance on any Master Servicer Remittance Date required to
be made from its own funds pursuant to Section 4.04 which continues unremedied
until 3:00 p.m. New York time on the Business Day immediately following the
Master Servicer Remittance Date; or
(viii) the Master Servicer ceases to be an approved seller or servicer of
Xxxxxx Xxx.
If a Master Servicer Event of Default described in clauses (i) through (vi)
of this Section shall occur, then, and in each and every such case, so long as
such Master Servicer Event of Default shall not have been remedied, the
Depositor or the Trustee may, and at the written direction of the NIMS Insurer,
the Certificates Controlling Person (as provided in Section 1.04) or the Holders
of Certificates entitled to at least 51% of Voting Rights, the Trustee shall, by
notice in writing to the NIMS Insurer, the Certificate Insurer, the Guarantor
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and the Master Servicer (and to the Depositor if given by the Trustee or to the
Trustee if given by the Depositor), terminate all of the rights and obligations
of the Master Servicer in its capacity as Master Servicer under this Agreement,
to the extent permitted by law, and in and to the Mortgage Loans and the
proceeds thereof. If a Master Servicer Event of Default described in clauses
(vii) or (viii) hereof shall occur, the Trustee shall, by notice in writing to
the Master Servicer, the NIMS Insurer, the Certificate Insurer, the Guarantor
and the Depositor, terminate all of the rights and obligations of the Master
Servicer in its capacity as Master Servicer under this Agreement and in and to
the Mortgage Loans and the proceeds thereof. On or after the receipt by the
Master Servicer of such written notice, all authority and power of the Master
Servicer under this Agreement, whether with respect to the Certificates (other
than as a Holder of any Certificate) or the Mortgage Loans or otherwise, shall
pass to and be vested in the Trustee pursuant to and under this Section and,
without limitation, the Trustee is hereby authorized and empowered, as
attorney-in-fact or otherwise, to execute and deliver on behalf of and at the
expense of the Master Servicer, any and all documents and other instruments and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees, at its sole cost and expense, promptly
(and in any event no later than ten Business Days subsequent to such notice) to
provide the Trustee with all documents and records requested by it to enable it
to assume the Master Servicer's functions under this Agreement, and to cooperate
with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights under this Agreement, including, without limitation,
the transfer within one Business Day to the Trustee for administration by it of
all cash amounts which at the time shall be or should have been credited by the
Master Servicer to the Collection Account held by or on behalf of the Master
Servicer, or any REO Account or Servicing Account held by or on behalf of the
Master Servicer or thereafter be received with respect to the Mortgage Loans or
any REO Property (provided, however, that the Master Servicer shall continue to
be entitled to receive all amounts accrued or owing to it under this Agreement
on or prior to the date of such termination, whether in respect of Advances or
otherwise, and shall continue to be entitled to the benefits of Section 6.03,
notwithstanding any such termination, with respect to events occurring prior to
such termination). For purposes of this Section 7.01, the Trustee shall not be
deemed to have knowledge of a Master Servicer Event of Default unless a
Responsible Officer of the Trustee, assigned to and working in the Trustee's
Corporate Trust Office has actual knowledge thereof or unless written notice of
any event which is in fact such a Master Servicer Event of Default is received
by the Trustee and such notice references the Certificates, any of the Trust
REMICs or this Agreement.
The Trustee shall be entitled to be reimbursed by the Master Servicer (or
by the Trust Fund if the Master Servicer is unable to fulfill its obligations
hereunder) for all costs associated with the transfer of servicing from the
predecessor master servicer, including without limitation, any costs or expenses
associated with the complete transfer of all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Trustee to service the Mortgage Loans properly and
effectively.
Section 7.02 Trustee to Act; Appointment of Successor.
(a) On and after the time the Master Servicer receives a notice of
termination, the Trustee shall be the successor in all respects to the Master
Servicer in its capacity as Master Servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
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responsibilities, duties and liabilities relating thereto and arising
thereafter, which shall be assumed by the Trustee (except for any
representations or warranties of the Master Servicer under this Agreement, the
responsibilities, duties and liabilities contained in Section 2.03(c) and its
obligation to deposit amounts in respect of losses pursuant to Section 3.12) by
the terms and provisions hereof including, without limitation, the Master
Servicer's obligations to make Advances pursuant to Section 4.04; provided,
however, that if the Trustee is prohibited by law or regulation from obligating
itself to make advances regarding delinquent Mortgage Loans, then the Trustee
shall not be obligated to make Advances pursuant to Section 4.04; and provided
further, that any failure to perform such duties or responsibilities caused by
the Master Servicer's failure to provide information required by Section 7.01
shall not be considered a default by the Trustee as successor to the Master
Servicer hereunder; provided, however, it is understood and acknowledged by the
parties that there will be a period of transition (not to exceed 90 days) before
the servicing transfer is fully effected. As compensation therefor, the Trustee
shall be entitled to the Servicing Fee and all funds relating to the Mortgage
Loans to which the Master Servicer would have been entitled if it had continued
to act hereunder (other than amounts which were due or would become due to the
Master Servicer prior to its termination or resignation). Notwithstanding
anything herein to the contrary, in no event shall the Trustee be liable for any
Servicing Fee or for any differential in the amount of the Servicing Fee paid
hereunder and the amount necessary to induce any successor Master Servicer to
act as successor Master Servicer under this Agreement and the transactions set
forth or provided for herein. After the Master Servicer receives a notice of
termination, notwithstanding the above and subject to the next paragraph, the
Trustee may, if it shall be unwilling to so act, or shall, if it is unable to so
act or if it is prohibited by law from making advances regarding delinquent
Mortgage Loans, or if the NIMS Insurer, the Certificates Controlling Person or
the Holders of Certificates entitled to at least 51% of the Voting Rights so
request in writing to the Trustee, promptly appoint, or petition a court of
competent jurisdiction to appoint, an established mortgage loan servicing
institution acceptable to each Rating Agency, having a net worth of not less
than $15,000,000 and reasonably acceptable to the NIMS Insurer or the
Certificates Controlling Person, as provided in Section 1.04, as the successor
to the Master Servicer under this Agreement in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer under this
Agreement.
No appointment of a successor to the Master Servicer under this Agreement
shall be effective until the assumption by the successor of all of the Master
Servicer's responsibilities, duties and liabilities hereunder. In connection
with such appointment and assumption described herein, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Master Servicer as such
hereunder. The Depositor, the Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Pending appointment of a successor to the Master Servicer under this
Agreement, the Trustee shall act in such capacity as hereinabove provided.
Upon removal or resignation of the Master Servicer, the Trustee, with the
cooperation of the Depositor, (x) shall (unless otherwise directed by
Certificates Controlling Person or the Controlling Insurer) solicit bids for a
successor Master Servicer as described below and (y) pending the appointment of
a successor Master Servicer as a result of soliciting such bids, shall serve as
Master Servicer of the Mortgage Loans serviced by such predecessor Master
Servicer. The Trustee shall solicit, by public announcement, bids from housing
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and home finance institutions, banks and mortgage servicing institutions meeting
the qualifications set forth in the first paragraph of this Section 7.02
(including the Trustee or any affiliate thereof). Such public announcement shall
specify that the successor Master Servicer shall be entitled to the servicing
compensation agreed upon between the Trustee, the successor Master Servicer and
the Depositor; provided, however, that no such fee shall exceed the Servicing
Fee. Within thirty days after any such public announcement, the Trustee with the
cooperation of the Depositor, shall negotiate in good faith and effect the sale,
transfer and assignment of the servicing rights and responsibilities hereunder
to the qualified party submitting the highest satisfactory bid as to the price
they will pay to obtain such servicing. The Trustee, upon receipt of the
purchase price shall pay such purchase price to the Master Servicer being so
removed, after deducting from any sum received by the Trustee from the successor
to the Master Servicer in respect of such sale, transfer and assignment all
costs and expenses of any public announcement and of any sale, transfer and
assignment of the servicing rights and responsibilities reasonably incurred
hereunder. After such deductions, the remainder of such sum shall be paid by the
Trustee to the Master Servicer at the time of such sale.
(b) If the Master Servicer fails to remit to the Trustee for distribution
to the Certificateholders, the Certificate Insurer or the Guarantor any payment
required to be made under the terms of this Agreement (for purposes of this
Section 7.02(b), a "Remittance") because the Master Servicer is the subject of a
proceeding under the Bankruptcy Code and the making of such Remittance is
prohibited by Section 362 of the Bankruptcy Code, the Trustee shall upon written
notice of such prohibition, regardless of whether it has received a notice of
termination under Section 7.01, shall be treated as though it had succeeded to
the Master Servicer and shall advance the amount of such Remittance by
depositing such amount in the Distribution Account on the related Distribution
Date. The Trustee shall be obligated to make such advance only if (i) such
advance, in the good faith judgment of the Trustee can reasonably be expected to
be ultimately recoverable from Stayed Funds and (ii) the Trustee is not
prohibited by law from making such advance or obligating itself to do so. Upon
remittance of the Stayed Funds to the Trustee or the deposit thereof in the
Distribution Account by the Master Servicer, a trustee in bankruptcy or a
federal bankruptcy court, the Trustee may recover the amount so advanced,
without interest, by withdrawing such amount from the Distribution Account;
however, nothing in this Agreement shall be deemed to affect the Trustee's
rights to recover from the Master Servicer's own funds interest on the amount of
any such advance. If the Trustee at any time makes an advance under this
Subsection which it later determines in its good faith judgment will not be
ultimately recoverable from the Stayed Funds with respect to which such advance
was made, the Trustee shall be entitled to reimburse itself for such advance,
without interest, by withdrawing from the Distribution Account, out of amounts
on deposit therein, an amount equal to the portion of such advance attributable
to the Stayed Funds.
Section 7.03 Notification to Certificateholders.
(a) Upon any termination of the Master Servicer pursuant to Section 7.01
above or any appointment of a successor to the Master Servicer pursuant to
Section 7.02 above, the Trustee shall give prompt written notice thereof to
Certificateholders at their respective addresses appearing in the Certificate
Register, to the NIMS Insurer, to the Certificate Insurer and to the Guarantor.
(b) Not later than the later of 60 days after the occurrence of any event,
which constitutes or which, with notice or lapse of time or both, would
constitute a Master Servicer Event of Default or five 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 Holders of Certificates, to the NIMS
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Insurer, to the Certificate Insurer and to the Guarantor notice of each such
occurrence, unless such default or Master Servicer Event of Default shall have
been cured or waived.
Section 7.04 Waiver of Master Servicer Events of Default.
The Holders representing at least 66% of the Voting Rights evidenced by all
Classes of Certificates affected by any default or Master Servicer Event of
Default hereunder may, with the consent of the NIMS Insurer or the Certificates
Controlling Person, as provided in Section 1.04, waive such default or Master
Servicer Event of Default; provided, however, that a default or Master Servicer
Event of Default under clause (i) or (vii) of Section 7.01 may be waived only by
all of the Holders of the Regular Certificates and the NIMS Insurer or the
Certificates Controlling Person, as provided in Section 1.04 (as evidenced by
the written consent of the NIMS Insurer or the Certificates Controlling Person,
as the case may be). Upon any such waiver of a default or Master Servicer Event
of Default, such default or Master Servicer Event of Default shall cease to
exist and shall be deemed to have been remedied for every purpose hereunder. No
such waiver shall extend to any subsequent or other default or Master Servicer
Event of Default or impair any right consequent thereon except to the extent
expressly so waived.
ARTICLE VIII
THE TRUSTEE
Section 8.01 Duties of Trustee.
The Trustee, prior to the occurrence of a Master Servicer Event of Default
and after the curing of all Master Servicer Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. During a Master Servicer Event of
Default, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs. Any permissive right of the Trustee enumerated in
this Agreement shall not be construed as a duty.
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. 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:
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(i) Prior to the occurrence of a Master Servicer Event of Default, and
after the curing of all such Master Servicer Events of Default 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 that conform 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 or Responsible Officers of the
Trustee unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(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 NIMS Insurer, the Certificate Insurer, the Guarantor or the
Holders of Certificates entitled to at least 25% of the Voting Rights relating
to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under 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 conclusively upon and shall be fully
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 evidencing the authorization of the execution thereof 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
trusts or powers vested in it by this Agreement or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request, order or
direction of any of the NIMS Insurer, the Certificate Insurer, the Guarantor or
the Certificateholders, pursuant to the provisions of this Agreement, unless the
NIMS Insurer, the Certificate Insurer, the Guarantor or such Certificateholders
shall have offered to the Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities which may be incurred therein or
thereby; nothing contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of a Master Servicer Event of Default (which has
not been cured or waived), to exercise such of the rights and powers vested in
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it by this Agreement, and to use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs;
(iv) 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 Master Servicer Event of Default hereunder
and after the curing of all Master Servicer Events of Default 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 document, unless requested in writing to do so by the NIMS Insurer, the
Certificate Insurer, the Guarantor or the Holders of Certificates entitled to at
least 25% of the Voting Rights; provided, however, that if the payment within a
reasonable time to the Trustee 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 NIMS Insurer, the
Certificate Insurer, the Guarantor or such Certificateholders, the Trustee may
require reasonable indemnity against such expense, or liability from the NIMS
Insurer, the Guarantor or such Certificateholders as a condition to taking any
such action;
(vi) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents custodians,
nominees or attorneys and shall not be responsible for any willful misconduct or
negligence of such agents, custodians, nominees or attorneys (as long as such
agents, custodians, nominees or attorneys are appointed with due and proper
care);
(vii) The Trustee shall not be personally liable for any loss resulting
from the investment of funds held in the Collection Account at the direction of
the Master Servicer pursuant to Section 3.12; and
(viii) Except as otherwise expressly provided herein, none of the
provisions of this Agreement shall require the Trustee to expend or risk its own
funds or otherwise to incur any liability, financial or otherwise, in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers (not including expenses, disbursements and advances 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) if it shall
have reasonable grounds for believing that repayment of such funds or indemnity
satisfactory to it against such risk or liability is not assured to it.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
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Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
signature of the Trustee, the execution and authentication of the Trustee on the
Certificates, the acknowledgments of the Trustee contained in Article II and the
representations and warranties of the Trustee in Section 8.13) shall be taken as
the statements of the Depositor, and the Trustee shall not assume any
responsibility for their correctness. The Trustee makes no representations or
warranties as to the validity or sufficiency of this Agreement (other than as
specifically set forth in Section 8.13) or of the Certificates (other than
execution 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 Depositor of any of the Certificates or of the
proceeds of the Certificates, or for the use or application of any funds paid to
the Depositor or the Master Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from the Collection Account by the Master Servicer,
other than any funds held by or on behalf of the Trustee in accordance with
Section 3.10.
Section 8.04 Trustee May Own Certificates.
The Trustee in its individual capacity or any other capacity may become the
owner or pledgee of Certificates with the same rights it would have if it were
not Trustee and may transact banking and/or trust business with the Seller, the
Depositor, the Master Servicer, the Guarantor or their Affiliates.
Section 8.05 Trustee's Fees and Expenses.
(a) On the Closing Date, the Depositor shall pay to the Trustee as
specified in a separate agreement between the Depositor and the Trustee. The
Trustee shall withdraw from the Distribution Account on each Distribution Date
and pay to itself the Trustee Fee for such Distribution Date and one day's
interest earnings (net of losses) on amounts on deposit in the Distribution
Account. The Group I Trustee Fee shall be payable solely from the Group I
Interest Remittance Amount and the Group II Trustee Fee shall be payable solely
from the Group II Interest Remittance Amount. The right to receive the Trustee
Fee may not be transferred in whole or in part except in connection with the
transfer of all of the Trustee's responsibilities and obligations under this
Agreement.
The Trustee and any director, officer, employee or agent of the Trustee
shall be indemnified by the Trust Fund and held harmless against any loss,
liability or expense (not including expenses, disbursements and advances
incurred or made by the Trustee, 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) in any way relating to the failure of the Master Servicer to
perform the duties and service the Mortgage Loans in compliance with the terms
of this Agreement, (ii) that constitutes a specific liability of the Trustee
pursuant to Section 10.01(c) or (iii) any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder, including, 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,
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employee or agent of the Trustee in respect of the indemnification provided by
this paragraph (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. Such indemnity shall survive
the termination of this Agreement and the resignation of the Trustee.
As a limitation on the foregoing with respect to certain expenses of the
Trustee, the Trustee shall receive from the Trust Fund amounts with respect to
indemnification for counsel fees and expenses (collectively, "Legal Fees") in
connection with any third-party litigation or other claims alleging violations
of laws or regulations relating to consumer lending and/or servicing of the
Trust Fund (collectively, "Third Party Claims") in an amount not greater than
$25,000 per month, and $600,000 in the aggregate (with amounts in excess of
$25,000 for any month carried-forward to subsequent months, until the $600,000
aggregate maximum is reached). The Trustee shall have no obligation to incur
additional expenses for which reimbursement is limited pursuant to this
paragraph in excess of the aggregate limit set forth above unless it has
received reasonable security or indemnity for such additional expenses. The
Certificateholders shall hold the Trustee harmless for any consequences to such
Certificateholders resulting from any failure of the Trustee to incur any such
additional expenses in excess of the aforementioned aggregate limit.
(b) Without limiting the Master Servicer's indemnification obligations
under Section 6.03, the Master Servicer agrees to indemnify, the Trustee from,
and hold it harmless against, any loss, liability or expense resulting from a
breach of the Master 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. Any payment under this Section
8.05(b) made by the Master Servicer to the Trustee shall be from the Master
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 a corporation or an association
(other than the Depositor, the Seller, the Master Servicer or any Affiliate of
the foregoing) organized and doing business under the laws of any state or the
United States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authority. If such
corporation or association publishes reports of conditions at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such corporation or association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of conditions so
published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, 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 trust hereby
created by giving written notice thereof to the NIMS Insurer, the Certificate
Insurer, the Guarantor, the Depositor, the Master Servicer and the
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Certificateholders. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor Trustee by written instrument, in duplicate,
which instrument shall be delivered to the resigning Trustee and to the
successor Trustee acceptable to the NIMS Insurer or the Certificates Controlling
Person, as provided in Section 1.04, and to the Holders of Certificates entitled
to at least 51% of the Voting Rights. A copy of such instrument shall be
delivered to the Certificateholders, the Trustee and the Master Servicer by the
Depositor. If no successor Trustee shall have been so appointed and have
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.
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 the NIMS Insurer or the Certificates Controlling
Person, as provided in Section 1.04, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged 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 NIMS Insurer or the Certificates Controlling Person, as provided in
Section 1.04, may remove the Trustee and the Depositor may appoint a successor
Trustee, acceptable to the NIMS Insurer or the Certificates Controlling Person,
as provided in Section 1.04, and to the Holders of Certificates entitled to at
least 51% of the Voting Rights, by written instrument, in duplicate, which
instrument shall be delivered to the Trustee so removed and to the successor
Trustee. A copy of such instrument shall be delivered to the Certificateholders
and the Master Servicer by the Depositor.
The Holders of Certificates entitled to at least 51% of the Voting Rights,
with the consent of the NIMS Insurer or the Certificates Controlling Person, as
provided in Section 1.04, may at any time remove the Trustee and appoint a
successor Trustee by written instrument or instruments, in triplicate, signed by
the NIMS Insurer, the Certificates Controlling Person or such Holders, as
applicable, or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered to the Depositor, one complete set to the
Trustee so removed and one complete set to the successor so appointed. A copy of
such instrument shall be delivered to the NIMS Insurer, the Guarantor, the
Certificate Insurer, the Certificateholders and the Master Servicer by the
Depositor.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 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, 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 the like effect as if originally named as Trustee herein. The
predecessor Trustee shall deliver to the successor Trustee all Mortgage Files
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and related documents and statements, as well as all moneys, held by it
hereunder (other than any Mortgage Files at the time held by a Custodian, which
Custodian shall become the agent of any successor Trustee hereunder), and the
Depositor and the predecessor Trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor Trustee all such rights,
powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this Section
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 any of the NIM Notes or any Class
of Certificates by either Rating Agency, as evidenced by a letter from each
Rating Agency.
Upon acceptance of appointment by a successor Trustee as provided in this
Section, the Depositor shall mail notice of the succession of such Trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register. If the Depositor fails to mail such notice within 10 days
after acceptance of appointment by the successor Trustee, the successor Trustee
shall cause such notice to be mailed at the expense of the Depositor.
Section 8.09 Merger or Consolidation of Trustee.
Any corporation or association into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation or association
resulting from any merger, conversion or consolidation to which the Trustee,
shall be a party, or any corporation or association succeeding to the business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation or association shall be eligible under the provisions of Section
8.06, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the purpose
of meeting any legal requirements of any jurisdiction in which any part of REMIC
1, or property securing the same may at the time be located, the Master Servicer
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
and the NIMS Insurer or the Certificates Controlling Person (as provided in
Section 1.04), to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of REMIC 1, and to
vest in such Person or Persons, in such capacity, such title to REMIC 1, or any
part thereof and, subject to the other provisions of this Section 8.10, such
powers, duties, obligations, rights and trusts as the Master Servicer and the
Trustee may consider necessary or desirable. If the Master Servicer shall not
have joined in such appointment or the NIMS Insurer or the Certificates
Controlling Person shall (as provided in Section 1.04) not have approved such
appointment within 15 days after the receipt by it of a request so to do, or in
case a Master Servicer Event of Default shall have occurred and be continuing,
the Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee hereunder shall be required to meet the terms of eligibility
as a successor Trustee under Section 8.06 hereunder and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 8.08 hereof. If such appointment is at the request of the
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Master Servicer then any expense of the Trustee shall be deemed a Servicing
Advance for all purpose of this Agreement, otherwise it will be an expense of
the Trustee and will be payable out of the Trustee's funds.
In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 8.10 all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly, except
to the extent that under any law of any jurisdiction in which any particular act
or acts are to be performed by the Trustee (whether as Trustee hereunder or as
successor to the Master Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to REMIC 1, or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trust conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
Section 8.11 Appointment of Custodians.
The Trustee may, with the consent of the Depositor, the Master Servicer,
and the Certificate Controlling Person, appoint one or more Custodians to hold
all or a portion of the Mortgage Files as agent for the Trustee, by entering
into a Custodial Agreement. Except with respect to the Washington Mutual
Mortgage Loans, the Trustee shall initially serve as the Custodian and this
Agreement shall serve as the Custodial Agreement. Washington Mutual Bank fsb is
hereby appointed to serve as the Custodian with respect to the Washington Mutual
Mortgage Loans pursuant to the related Custodial Agreement, and the Master
Servicer and the Depositor hereby consents to such appointment. The appointment
of any Custodian may at any time be terminated and a substitute Custodian
appointed therefor upon the reasonable request of the Master Servicer to the
Trustee and the consent of the Controlling Insurer, after consultation with the
Guarantor, the consent to which shall not be unreasonably withheld. The Trustee
shall pay any and all fees and expenses of any Custodian in accordance with each
Custodial Agreement. Subject to Article VIII hereof, the Trustee agrees to
comply with the terms of each Custodial Agreement and to enforce the terms and
provisions thereof against the Custodian for the benefit of the
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Certificateholders and the Certificate Insurer having an interest in any
Mortgage File held by such Custodian. Each Custodian shall be a depository
institution or trust company subject to supervision by federal or state
authority, shall have combined capital and surplus of at least $10,000,000 and
shall be qualified to do business in the jurisdiction in which it holds any
Mortgage File. Each Custodial Agreement may be amended only as provided in
Section 11.01. In no event shall the appointment of any Custodian pursuant to a
Custodial Agreement diminish the obligations of the Trustee hereunder. The
Trustee shall at all times remain responsible under the terms of this Agreement
only to the extent the Trustee is responsible for its own acts hereunder. The
Trustee shall not be responsible for the acts or omissions of another Custodian.
Any documents delivered by the Depositor or the Master Servicer to a Custodian
other than the Trustee, if any, shall be deemed to have been delivered to the
Trustee for all purposes hereunder; and any documents held by such a Custodian,
if any, shall be deemed to be held by the Trustee for all purposes hereunder.
Section 8.12 Appointment of Office or Agency.
The Trustee will appoint an office or agency in the City of New York where
the Certificates may be surrendered for registration of transfer or exchange,
and presented for final distribution, and where notices and demands to or upon
the Trustee in respect of the Certificates and this Agreement may be served. As
of the Closing Date, the Trustee designates its offices located at the office of
Trustee's agent, located at DTC transfer agent services, 00 Xxxxx Xxxxxx,
Xxxxxxxx Xxxx Entrance, Xxx Xxxx, XX 00000 for such purpose.
Section 8.13 Representations and Warranties of the Trustee.
The Trustee hereby represents and warrants to the Master Servicer, the NIMS
Insurer, the Certificate Insurer, the Guarantor and the Depositor, as of the
Closing Date, that:
(i) it is a national banking association duly organized, validly existing
and in good standing under the laws of the United States.
(ii) the execution and delivery of this Agreement, and the performance and
compliance with the terms of this Agreement, will not violate its charter or
bylaws or constitute a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which is
applicable to it or any of its assets.
(iii) it has the full power and authority to enter into and consummate all
transactions contemplated by this Agreement, has duly authorized the execution,
delivery and performance of this Agreement, and has duly executed and delivered
this Agreement.
(iv) this Agreement, assuming due authorization, execution and delivery by
the Master Servicer and the Depositor, constitutes its valid, legal and binding
obligation, enforceable against it in accordance with the terms hereof, subject
to (A) applicable bankruptcy, insolvency, receivership, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
generally, and (B) general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
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Section 8.14 Cap Agreement.
The Trustee shall not designate a Group I Early Termination Date under the
Group I Cap Agreement without the consent of the Group I Cap Controlling Person.
The Trustee shall not designate a Group II Early Termination Date under the
Group II Cap Agreement without the consent of the Group II Cap Controlling
Person.
ARTICLE IX
TERMINATION
Section 9.01 Termination Upon Purchase or Liquidation of All Mortgage
Loans.
(a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer, the
Guarantor and the Trustee (other than the obligations of the Master Servicer to
the Trustee pursuant to Section 8.05 and of the Master Servicer to provide for
and the Trustee to make payments in respect of the REMIC 1 Regular Interests,
REMIC 2 Regular Interests, REMIC 3 Regular Interests, REMIC 4 Regular Interests,
and the Classes of Certificates as hereinafter set forth) shall terminate upon
the latest of (A) the payment in full of all amounts owing to the Guarantor
hereunder unless the Guarantor shall otherwise consent, (B) the payment in full
of all amounts owing to the Certificate Insurer hereunder and under the
Insurance Agreement unless the Certificate Insurer shall otherwise consent and
(C) payment to the Certificateholders and the deposit of all amounts held by or
on behalf of the Trustee and required hereunder to be so paid or deposited on
the Distribution Date coinciding with or following the earlier to occur of (i)
the purchase by the Terminator (as defined below) of all Mortgage Loans and each
REO Property remaining in REMIC 1 pursuant to (b) below and (ii) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or REO Property remaining in REMIC 1; provided, however, that in
no event shall the trust created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late ambassador of the United States to the Court of St. Xxxxx,
living on the date hereof. The purchase by the Terminator of all Mortgage Loans
and each REO Property remaining in REMIC 1 shall be at a price (the "Termination
Price") equal to (a) if the Terminator is the Master Servicer, 100% of the
aggregate Stated Principal Balance of all the Mortgage Loans included in REMIC 1
and accrued interest on the Stated Principal Balance of each such Mortgage Loan
at the applicable Net Mortgage Rate in effect from time to time from the Due
Date as to which interest was last paid by the related Mortgagor or by an
advance by the Master Servicer to but not including the first day of the month
in which such purchase is to be effected, plus the appraised value of each REO
Property, if any, included in REMIC 1, such appraisal to be conducted by an
appraiser selected by the Terminator in its reasonable discretion and (b) if the
Terminator is the Controlling Insurer, the greater of (A) the aggregate Purchase
Price of all the Mortgage Loans included in REMIC 1, plus the appraised value of
each REO Property, if any, included in REMIC 1, such appraisal to be conducted
by an appraiser selected by the Terminator in its reasonable discretion and (B)
the aggregate fair market value of all of the assets of REMIC 1 (as determined
by the Terminator, as of the close of business on the third Business Day next
preceding the date upon which notice of any such termination is furnished to
Certificateholders pursuant to the third paragraph of this Section 9.01), and in
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the case of both clauses (b)(A) and (b)(B) of this sentence, any unpaid
Guarantor Reimbursement Amount, Guaranty Fees, Certificate Insurer Premiums and
Certificate Insurer Reimbursement Amounts and any additional amounts necessary
to pay all interest accrued on, as well as amounts necessary to pay in full the
principal balance of, the NIM Notes and any amounts necessary to reimburse the
NIMS Insurer for all amounts paid under the NIMs insurance policy and any other
amounts reimbursable or otherwise payable to the NIMS Insurer, in each case,
with interest thereon at the applicable rate set forth in the Indenture and to
the extent not previously reimbursed or paid.
(b) The Master Servicer shall have the right and, if the Master Servicer
does not exercise such right, the Controlling Insurer, shall have the right (the
party exercising such right, the "Terminator") to purchase all of the Mortgage
Loans and each REO Property in both Loan Groups remaining in REMIC 1 pursuant to
clause (i) of the preceding paragraph no later than the Determination Date in
the month immediately preceding the Distribution Date on which the Certificates
will be retired; provided, however, that the Terminator may elect to purchase
all of the Mortgage Loans and each REO Property remaining in REMIC 1 pursuant to
clause (i) of the preceding paragraph only if (A) the aggregate Stated Principal
Balance of the Mortgage Loans and each REO Property remaining in the Trust Fund
at the time of such election is equal to or less than 10% of the Cut-off Date
Principal Balance of the Closing Date Mortgage Loans. Additionally, if the
Terminator is the Master Servicer, the Terminator may elect to purchase all of
the Mortgage Loans and each REO Property in REMIC 1 pursuant to clause (i) of
the preceding paragraph only if the Termination Price (A) is equal to or less
than the aggregate fair market value of all of the assets of REMIC 1 (as
determined by the Terminator, as of the close of business on the third Business
Day next preceding the date upon which notice of any such termination is
furnished to Certificateholders pursuant to Section 9.01(c)) and (B) will result
in distributions on the Certificates sufficient to pay (a) all unpaid Guarantor
Reimbursement Amounts and unpaid Guaranty Fees to the Guarantor (unless the
Guarantor consents to the purchase), (b) all unpaid Certificate Insurer Premiums
and Certificate Insurer Reimbursement Amounts to the Certificate Insurer (unless
the Certificate Insurer consents to the purchase), and (c) all interest accrued
on, as well as amounts necessary to pay in full the principal balance of, the
NIM Notes and any amounts necessary to reimburse the NIMS Insurer for all
amounts paid under the NIMs insurance policy and any other amounts reimbursable
or otherwise payable to the NIMS Insurer, in each case, with interest thereon at
the applicable rate set forth in the Indenture and to the extent not previously
reimbursed or paid (unless the NIMS Insurer consents to the purchase). The
Terminator shall not be entitled to exercise a purchase right under this Section
9.01, without the Certificate Insurer's or the Guarantor's consent, if the
distribution of the Termination Price according to such priorities would result
in the Certificate Insurer being required to make an Insured Payment or the
Guarantor being required to make a Guarantor Payment, respectively, on the
applicable 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 par, and to the
extent received in respect of such termination, to pay any such amounts to the
Holders of the Class C Certificates.
(c) Notice of the liquidation of the REMIC 1 Regular Interests shall be
given promptly by the Trustee by letter to Certificateholders mailed (a) in the
event such notice is given in connection with the purchase of the Mortgage Loans
and each REO Property by the Terminator, not earlier than the 15th day and not
later than the 25th day of the month next preceding the month of the final
distribution on the Certificates or (b) otherwise during the month of such final
distribution on or before the Determination Date in such month, in each case
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specifying (i) the Distribution Date upon which the Trust Fund will terminate
and final payment in respect of the REMIC 1 Regular Interests and the related
Certificates will be made upon presentation and surrender of the related
Certificates at the office of the Trustee therein designated, (ii) the amount of
any such final payment, (iii) that no interest shall accrue in respect of the
REMIC 1 Regular Interests or the related Certificates from and after the Accrual
Period relating to the final Distribution Date therefor and (iv) that the Record
Date otherwise applicable to such Distribution Date is not applicable, payments
being made only upon presentation and surrender of the Certificates at the
office of the Trustee designated in such notice for purposes of such surrender.
The Trustee shall remit to the Master Servicer from such funds deposited in the
Distribution Account (i) any amounts which the Master Servicer would be
permitted to withdraw and retain from the Collection Account pursuant to Section
3.11 and (ii) any other amounts otherwise payable by the Trustee to the Master
Servicer from amounts on deposit in the Distribution Account pursuant to the
terms of this Agreement, in each case prior to making any final distributions
pursuant to Section 9.01(d) below. Upon certification to the Trustee by a
Servicing Representative of the making of such final deposit, the Trustee shall
promptly release or cause to be released to the Terminator the Mortgage Files
for the remaining Mortgage Loans, and the Trustee shall execute all assignments,
endorsements and other instruments necessary to effectuate such transfer.
(d) Upon presentation of the Certificates by the Certificateholders on the
final Distribution Date, the Trustee shall distribute to each Certificateholder
so presenting and surrendering its Certificates the amount otherwise
distributable on such Distribution Date in accordance with Section 4.01 in
respect of the Certificates so presented and surrendered. On the final
Distribution Date, the Trustee will withdraw from the Distribution Account and
remit to the Certificate Insurer and the Guarantor the respective amounts
otherwise payable to the Certificate Insurer and the Guarantor on such
Distribution Date in accordance with Section 4.01. Any funds not distributed to
any Holder or Holders of Certificates being retired on such Distribution Date
because of the failure of such Holder or Holders to tender their Certificates
shall, on such date, be set aside and held in trust by the Trustee and credited
to the account of the appropriate non-tendering Holder or Holders. If any
Certificates as to which notice has been given pursuant to this Section 9.01
shall not have been surrendered for cancellation within six months after the
time specified in such notice, the Trustee shall mail a second notice to the
remaining non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto. If
within one year after the second notice all such Certificates shall not have
been surrendered for cancellation, the Trustee shall, directly or through an
agent, mail a final notice to remaining related non-tendering Certificateholders
concerning surrender of their Certificates. The costs and expenses of
maintaining the funds in trust and of contacting such Certificateholders shall
be paid out of the assets remaining in the trust funds. If within one year after
the final notice any such Certificates shall not have been surrendered for
cancellation, the Trustee shall pay to Xxxxxx Xxxxxxx & Co. Incorporated and
Banc of America Securities LLC all such amounts, and all rights of non-tendering
Certificateholders in or to such amounts shall thereupon cease. No interest
shall accrue or be payable to any Certificateholder on any amount held in trust
by the Trustee as a result of such Certificateholder's failure to surrender its
Certificate(s) for final payment thereof in accordance with this Section 9.01.
Immediately following the deposit of funds in trust hereunder in respect of
the Certificates, the Trust Fund shall terminate.
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Section 9.02 Additional Termination Requirements.
(a) In the event that the Terminator purchases all the Mortgage Loans and
each REO Property or the final payment on or other liquidation of the last
Mortgage Loan or REO Property remaining in REMIC 1 pursuant to Section 9.01, the
Trust Fund shall be terminated in accordance with the following additional
requirements:
(i) The Trustee shall specify the first day in the 90-day liquidation
period in a statement attached to each Trust REMIC's final Tax Return pursuant
to Treasury regulation Section 1.860F-l and shall satisfy all requirements of a
qualified liquidation under Section 860F of the Code and any regulations
thereunder, as evidenced by an Opinion of Counsel delivered to the Guarantor,
the Trustee and the Depositor obtained at the expense of the Terminator;
(ii) During such 90-day liquidation period, and at or prior to the time of
making of the final payment on the Certificates, the Trustee shall sell all of
the assets of REMIC 1 to the Terminator for cash; and
(iii) At the time of the making of the final payment on the Certificates,
the Trustee shall distribute or credit, or cause to be distributed or credited,
to the Holders of the Residual Certificates all cash on hand in the Trust Fund
(other than cash retained to meet claims), and the Trust Fund shall terminate at
that time.
(b) At the expense of the Terminator, the Trustee shall prepare or cause to
be prepared the documentation required in connection with the adoption of a plan
of liquidation of each Trust REMIC pursuant to the Section 9.02(a).
(c) By their acceptance of Certificates, the Holders thereof hereby agree
to authorize the Trustee to specify the 90-day liquidation period for each Trust
REMIC, which authorization shall be binding upon all successor
Certificateholders.
ARTICLE X
REMIC PROVISIONS
Section 10.01 REMIC Administration.
(a) The Trustee shall elect to treat each Trust REMIC as a REMIC under the
Code and, if necessary, under applicable state law. Each such election will be
made on Form 1066 or other appropriate federal tax or information return
(including Form 8811) or any appropriate state return for the taxable year
ending on the last day of the calendar year in which the Certificates are
issued, copies of which forms and returns shall promptly be furnished by the
Trustee to the NIMS Insurer and the Certificate Insurer. For the purposes of the
REMIC election in respect of REMIC 1, the REMIC 1 Regular Interests shall be
designated as the Regular Interests in REMIC 1 and the Class R-1 Interest shall
be designated as the Residual Interest in REMIC 1. For the purposes of the REMIC
election in respect of REMIC 2, the REMIC 2 Regular Interests shall be
designated as the Regular Interests in REMIC 2 and the Class R-2 Interest shall
be designated as the Residual Interest in REMIC 2. For the purposes of the REMIC
election in respect of REMIC 3, the REMIC 3 Regular Interests shall be
designated as the Regular Interests in REMIC 3 and the Class R-3 Interest shall
be designated as the Residual Interest in REMIC 3. For the purposes of the REMIC
election in respect of REMIC 4, (i) the Regular Certificates (other than the
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Class C Certificates and the Class P Certificates) and the REMIC 4 Regular
Interests shall be designated as the Regular Interests in REMIC 4 and (ii) the
Class R-4 Interest shall be designated as the Residual Interest in REMIC 4. For
the purposes of the REMIC election in respect of REMIC CX, the Class C
Certificates shall be designated as the Regular Interests in REMIC CX and the
Class R-CX Interest shall be designated as the Residual Interest in REMIC CX.
For purposes of the REMIC election in respect of REMIC PX, the Class P
Certificates shall be designated as the Regular Interests in REMIC PX and the
Class R-PX Interest shall be designated as the Residual Interest in REMIC PX.
The Trustee shall not permit the creation of any "interests" in REMIC 1, REMIC
2, REMIC 3, REMIC 4, REMIC CX or REMIC PX (within the meaning of Section 860G of
the Code) other than the REMIC 1 Regular Interests, the REMIC 2 Regular
Interests, the REMIC 3 Regular Interests, the REMIC 4 Group I Regular Interests,
the REMIC 4 Group II Regular Interests, the REMIC 4 Regular Interests and the
interests represented by the Certificates.
(b) The Closing Date is hereby designated as the "Startup Day" of each
Trust REMIC within the meaning of Section 860G(a)(9) of the Code.
(c) The Trustee shall pay, out of funds on deposit in the Distribution
Account, any and all expenses relating to any tax audit of the Trust Fund
(including, but not limited to, any professional fees or any administrative or
judicial proceedings with respect to any Trust REMIC that involve the Internal
Revenue Service or state tax authorities) unless such expenses, professional
fees or any administrative or judicial proceedings are incurred by reason of the
Trustee's willful misfeasance, bad faith or negligence. The Trustee, as agent
for each Trust REMIC's tax matters person, shall (i) act on behalf of the Trust
Fund in relation to any tax matter or controversy involving any Trust REMIC and
(ii) represent, after consultation with the Guarantor and upon accommodation of
the Guarantor's reasonable requests, the Trust Fund in any administrative or
judicial proceeding relating to an examination or audit by any governmental
taxing authority with respect thereto and will be entitled to reimbursement from
the Trust Fund for any expenses incurred by the Trustee in connection therewith
unless such administrative or judicial proceeding relating to an examination or
audit by any governmental taxing authority is incurred by reason of the
Trustee's willful misfeasance, bad faith or negligence. The holder of the
largest Percentage Interest of the Class R Certificates shall be designated, in
the manner provided under Treasury regulations Section 1.860F-4(d) and Treasury
regulations Section 301.6231(a)(7)-1, as the tax matters person of each Trust
REMIC created hereunder other than REMIC CX and REMIC PX. The holder of the
largest Percentage Interest of the Class R-CX Certificates shall be designated,
in the manner provided under Treasury regulations Section 1.860F-4(d) and
Treasury regulations Section 301.6231(a)(7)-1, as the tax matters person of
REMIC CX. The holder of the largest Percentage Interest of the Class R-PX
Certificates shall be designated, in the manner provided under Treasury
regulations Section 1.860F-4(d) and Treasury regulations Section
301.6231(a)(7)-1, as the tax matters person of REMIC PX. By its acceptance
thereof, each such holder hereby agrees to irrevocably appoint the Trustee or an
Affiliate as its agent to perform all of the duties of the tax matters person of
each respective REMIC.
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(d) The Trustee shall prepare, sign and file in a timely manner, all of the
Tax Returns in respect of each REMIC created hereunder, copies of which Tax
Returns shall be promptly furnished to the NIMS Insurer and the Certificate
Insurer. The expenses of preparing and filing such returns shall be borne by the
Trustee without any right of reimbursement therefor. The Master Servicer shall
provide on a timely basis to the Trustee or its designee such information with
respect to the assets of the Trust Fund as is in its possession and reasonably
required by the Trustee to enable it to perform its respective obligations under
this Article.
(e) The Trustee shall perform on behalf of each Trust REMIC all reporting
and other tax compliance duties that are the responsibility of such REMIC under
the Code, the REMIC Provisions or other compliance guidance issued by the
Internal Revenue Service or any state or local taxing authority. Among its other
duties, as required by the Code, the REMIC Provisions or such other compliance
guidance, the Trustee shall provide (i) to any Transferor of a Residual
Certificate (or other person designated in Section 860E(e)(3) of the Code) and
to the Internal Revenue Service such information as is necessary for the
computation of any tax relating to the transfer of a Residual Certificate to any
Person who is not a Permitted Transferee, (ii) to the Certificateholders such
information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required) and (iii) to
the Internal Revenue Service the name, title, address and telephone number of
the person who will serve as the representative of each Trust REMIC. The Master
Servicer shall provide on a timely basis to the Trustee such information with
respect to the assets of the Trust Fund, including, without limitation, the
Mortgage Loans, as is in its possession and reasonably required by the Trustee
to enable it to perform its obligations under this subsection. In addition, the
Depositor shall provide or cause to be provided to the Trustee, within ten (10)
days after the Closing Date, all information or data that the Trustee reasonably
determines to be relevant for tax purposes as to the valuations and issue prices
of the Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates. The Depositor shall also
provide such information or data to the NIMS Insurer and the Certificate
Insurer.
(f) The Trustee shall take such action and shall cause each Trust REMIC
created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions (and the
Master Servicer shall assist the Trustee, to the extent reasonably requested by
the Trustee to do specific actions in order to assist in the maintenance of such
status). The Trustee shall not take any action, cause the Trust Fund to take any
action or fail to take (or fail to cause to be taken) any action that, under the
REMIC Provisions, if taken or not taken, as the case may be, could (i) endanger
the status of any Trust REMIC as a REMIC or (ii) result in the imposition of a
tax upon the Trust Fund (including but not limited to the tax on prohibited
transactions set forth in Section 860F(a) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) (either such
event, an "Adverse REMIC Event") unless the Trustee, the NIMS Insurer, the
Certificate Insurer and the Guarantor have received an Opinion of Counsel,
addressed to the Trustee, the NIMS Insurer, the Certificate Insurer and the
Guarantor (at the expense of the party seeking to take such action but in no
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event at the expense of the Trustee) to the effect that the contemplated action
will not, with respect to any Trust REMIC, endanger such status or result in the
imposition of such a tax, nor shall the Master Servicer take or fail to take any
action (whether or not authorized hereunder) as to which the Trustee has advised
it in writing that it has received an Opinion of Counsel to the effect that an
Adverse REMIC Event could occur with respect to such action; provided that the
Master Servicer may conclusively rely on such Opinion of Counsel and shall incur
no liability for its action or failure to act in accordance with such Opinion of
Counsel. The Trustee shall deliver to the NIMS Insurer, the Certificate Insurer
and the Guarantor a copy of any such advice or opinion. In addition, prior to
taking any action with respect to any Trust REMIC or the assets thereof, or
causing any Trust REMIC to take any action, which is not contemplated under the
terms of this Agreement, the Master Servicer will consult with the Trustee or
its designee, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to a Trust REMIC, and the Master
Servicer shall not take any such action or cause any Trust REMIC to take any
such action as to which the Trustee has advised it in writing that an Adverse
REMIC Event could occur; provided that the Master Servicer may conclusively rely
on such writing and shall incur no liability for its action or failure to act in
accordance with such writing. The Trustee may consult with counsel to make such
written advice, and the cost of same shall be borne by the party seeking to take
the action not permitted by this Agreement, but in no event shall such cost be
an expense of the Trustee. At all times as may be required by the Code, the
Trustee will ensure that substantially all of the assets of REMIC 1 will consist
of "qualified mortgages" as defined in Section 860G(a)(3) of the Code and
"permitted investments" as defined in Section 860G(a)(5) of the Code.
(g) If any tax is imposed on prohibited transactions of any Trust REMIC
created hereunder pursuant to Section 860F(a) of the Code, on the net income
from foreclosure property of any such REMIC pursuant to Section 860G(c) of the
Code, or on any contributions to any such REMIC after the Startup Day therefor
pursuant to Section 860G(d) of the Code, or if any other tax is imposed by the
Code or any applicable provisions of state or local tax laws, such tax shall be
charged (i) to the Trustee pursuant to Section 10.03 hereof, if such tax arises
out of or results from a breach by the Trustee of any of its obligations under
this Article X, (ii) to the Master Servicer pursuant to Section 10.03 hereof, if
such tax arises out of or results from a breach by the Master Servicer of any of
its obligations under Article III or this Article X, or (iii) otherwise against
amounts on deposit in the Distribution Account and shall be paid by withdrawal
therefrom.
(h) On or before April 15 of each calendar year commencing after the date
of this Agreement, the Trustee shall deliver to the Master Servicer, the NIMS
Insurer, the Certificate Insurer, the Guarantor and each Rating Agency a
Certificate from a Responsible Officer of the Trustee stating the Trustee's
compliance with this Article X.
(i) The Trustee shall, for federal income tax purposes, maintain books and
records with respect to each Trust REMIC on a calendar year and on an accrual
basis.
(j) Following the Startup Day, the Trustee shall not accept any
contributions of assets to any Trust REMIC other than in connection with any
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.03
unless it shall have received an Opinion of Counsel to the effect that the
inclusion of such assets in the Trust Fund will not cause any Trust REMIC to
fail to qualify as a REMIC at any time that any Certificates are outstanding or
subject any Trust REMIC to any tax under the REMIC Provisions or other
applicable provisions of federal, state and local law or ordinances.
(k) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which any Trust REMIC will receive a fee or other compensation
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for services or permit any Trust REMIC to receive any income from assets other
than "qualified mortgages" as defined in Section 860G(a)(3) of the Code or
"permitted investments" as defined in Section 860G(a)(5) of the Code.
Section 10.02 Prohibited Transactions and Activities.
None of the Depositor, the Master Servicer or the Trustee shall sell,
dispose of or substitute for any of the Mortgage Loans (except in connection
with (i) the foreclosure of a Mortgage Loan, including but not limited to, the
acquisition or sale of a Mortgaged Property acquired by deed in lieu of
foreclosure, (ii) the bankruptcy of REMIC 1, (iii) the termination of REMIC 1
pursuant to Article IX of this Agreement, (iv) a substitution pursuant to
Article II of this Agreement or (v) a purchase of Mortgage Loans pursuant to
Article II or III of this Agreement), nor acquire any assets for any Trust REMIC
(other than REO Property acquired in respect of a defaulted Mortgage Loan), nor
sell or dispose of any investments in the Collection Account or the Distribution
Account for gain, nor accept any contributions to any Trust REMIC after the
Closing Date (other than a Qualified Substitute Mortgage Loan delivered in
accordance with Section 2.03), unless it, the NIMS Insurer, the Certificate
Insurer and the Guarantor have received an Opinion of Counsel, addressed to the
Trustee, the NIMS Insurer, the Certificate Insurer and the Guarantor (at the
expense of the party seeking to cause such sale, disposition, substitution,
acquisition or contribution but in no event at the expense of the Trustee) that
such sale, disposition, substitution, acquisition or contribution will not (a)
affect adversely the status of any Trust REMIC as a REMIC or (b) cause any Trust
REMIC to be subject to a tax on "prohibited transactions" or "contributions"
pursuant to the REMIC Provisions.
Section 10.03 Trustee, Master Servicer and Depositor Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the Depositor and the
Master Servicer for any taxes and costs including, without limitation, any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the
Depositor or the Master Servicer as a result of a breach of the Trustee's
covenants set forth in this Article X or any state, local or franchise taxes
imposed upon the Trust as a result of the location of the Trustee.
(b) The Master Servicer agrees to indemnify the Certificate Insurer, the
Trust Fund, the Depositor and the Trustee for any taxes and costs including,
without limitation, any reasonable attorneys' fees imposed on or incurred by the
Trust Fund, the Depositor or the Trustee as a result of a breach of the Master
Servicer's covenants set forth in Article III or this Article X or any state,
local or franchise taxes imposed upon the Trust as a result of the location of
the Master Servicer or any subservicer.
(c) The Depositor agrees to indemnify the Trust Fund, the Master Servicer
and the Trustee for any taxes and costs including, without limitation, any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the Master
Servicer or the Trustee as a result of a breach of the Depositor's covenants set
forth in this Article X.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
This Agreement or any Custodial Agreement may be amended from time to time
by the Depositor, the Master Servicer, the Trustee, the Guarantor and, if
applicable, the Custodian, with the consent of the NIMS Insurer and the
Certificate Insurer, and without the consent of any of the Certificateholders,
(i) to cure any ambiguity or defect, (ii) to correct, modify or supplement any
provisions herein (including to give effect to the expectations of
Certificateholders), or in any Custodial Agreement, (iii) to modify, eliminate
or add to any of its provisions to such extent as shall be necessary or
desirable to maintain the qualification of the Trust Fund as a REMIC at all
times that any Certificate is outstanding or to avoid or minimize the risk of
the imposition of any tax on the Trust Fund pursuant to the Code that would be a
claim against the Trust Fund, provided that the Trustee, the NIMS Insurer, the
Certificate Insurer, the Guarantor, the Depositor and the Master Servicer have
received an Opinion of Counsel to the effect that (A) such action is necessary
or desirable to maintain such qualification or to avoid or minimize the risk of
the imposition of any such tax and (B) such action will not adversely affect the
status of the Trust Fund as a REMIC or adversely affect in any material respect
the interest of any Certificateholder or (iv) to make any other provisions with
respect to matters or questions arising under this Agreement or in any Custodial
Agreement which shall not be inconsistent with the provisions of this Agreement
or such Custodial Agreement, provided that, in each case, such action shall not,
as evidenced by an Opinion of Counsel delivered to the parties hereto, the
Certificate Insurer and the NIMS Insurer, adversely affect in any material
respect the interests of any Certificateholder or the Certificate Insurer and,
provided, further, that (A) such action will not affect in any material respect
the permitted activities of the Trust and (B) such action will not increase in
any material respect the degree of discretion which the Master Servicer is
allowed to exercise in servicing the Mortgage Loans. No amendment shall be
deemed to adversely affect in any material respect the interests of any
Certificateholder who shall have consented thereto, and no Opinion of Counsel
shall be required to address the effect of any such amendment on any such
consenting Certificateholder.
This Agreement or any Custodial Agreement may also be amended from time to
time by the Depositor, the Master Servicer, the Trustee, the Guarantor and, if
applicable, the Custodian, with the consent of the NIMS Insurer, if any, and the
Certificate Insurer, and with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or any Custodial Agreement or of modifying in any manner the
rights of the Holders of Certificates; provided, however, that no such amendment
shall (i) reduce in any manner the amount of, or delay the timing of, payments
received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates in a manner, other than as described in (i), without the
consent of the Holders of Certificates of such Class evidencing at least 66% of
the Voting Rights allocated to such Class, or (iii) modify the consents required
by the immediately preceding clauses (i) and (ii) without the consent of the
Holders of all Certificates then outstanding. Notwithstanding any other
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provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 11.01, Certificates registered in the name of
the Depositor or the Master Servicer or any Affiliate thereof shall be entitled
to Voting Rights with respect to matters affecting such Certificates.
Notwithstanding any contrary provision of this Agreement, the Trustee, the
NIMS Insurer, the Certificate Insurer and the Guarantor shall be entitled to
receive an Opinion of Counsel to the effect that such amendment will not result
in the imposition of any tax on any Trust REMIC pursuant to the REMIC Provisions
or cause any Trust REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment to each Certificateholder, the Certificate
Insurer and the NIMS Insurer.
It shall not be necessary for the consent of Certificateholders under this
Section 11.01 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
The cost of any Opinion of Counsel to be delivered pursuant to this Section
11.01 shall be borne by the Person seeking the related amendment, but in no
event shall such Opinion of Counsel be an expense of the Trustee.
The Trustee may, but shall not be obligated to enter into any amendment
pursuant to this Section that affects its rights, duties and immunities under
this Agreement or otherwise.
Section 11.02 Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master 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.
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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 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.
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 Master Servicer, Long Beach Mortgage Company, 0000 Xxxx &
Xxxxxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000, Attention: General Counsel
(telecopy number: (000) 000-0000), or such other address or telecopy number as
may hereafter be furnished to the other parties hereto in writing by the Master
Servicer, (b) in the case of the Trustee, Deutsche Bank National Trust Company,
0000 Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000-0000, Attention: Trust
Administration Services LB0204 (telecopy number (000) 000-0000) or such other
address or telecopy number as may hereafter be furnished to the other parties
hereto in writing by the Trustee, (c) in the case of the Depositor, Long Beach
Securities Corp., 0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000, Xxxxxx Xxxxxxxxxx 00000,
Attention: General Counsel (telecopy number: (000) 000-0000), or such other
address or telecopy number as may be furnished to the other parties hereto in
writing by the Depositor, (d) in the case of Guarantor, Xxxxxx Mae, 3900
000
Xxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, X.X. 00000, Attention: Vice President-Capital
Markets (telecopy number (000) 000-0000), or such other addresses or telecopy
number as may be furnished to the other parties thereto in writing by the
Guarantor, (e) in the case of the NIMS Insurer, Radian Insurance Inc., 0000
Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Controller,
(telecopy: (000) 000-0000), or such other addresses or telecopy number as may be
furnished to the other parties thereto in writing by the NIMS Insurer, and (f)
in the case of the Certificate Insurer, XL Capital Assurance, Inc., 000 Xxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel
(telecopy number: (000) 000-0000), or such other addresses or telecopy number as
may be furnished to the other parties hereto in writing by the Certificate
Insurer. 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 Master Servicer
default 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 Notice to the Rating Agencies, the NIMS Insurer, the
Certificate Insurer and the Guarantor.
The Trustee shall use its best efforts promptly to provide notice to the
Rating Agencies, the NIMS Insurer, the Certificate Insurer and the Guarantor
with respect to each of the following of which it has actual knowledge:
1. Any amendment to this Agreement;
2. The occurrence of any Master Servicer Event of Default that has not been
cured or waived;
3. The resignation or termination of the Master Servicer or the Trustee;
4. The repurchase or substitution of Mortgage Loans pursuant to or as
contemplated by Section 2.03;
5. The final payment to the Holders of any Class of Certificates;
6. Any change in the location of the Collection Account or the Distribution
Account;
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7. The Trustee, were it to succeed as Master Servicer, is unable to make
advances regarding delinquent Mortgage Loans; and
8. The filing of any claim under the Master Servicer's blanket bond and
errors and omissions insurance policy required by Section 3.14 or the
cancellation or material modification of coverage under any such instrument.
In addition, the Trustee shall promptly make available to each Rating
Agency copies of each Statement to Certificateholders described in Section 4.03
hereof and the Master Servicer shall promptly furnish to each Rating Agency
copies of the following:
1. each annual statement as to compliance described in Section 3.20 hereof;
2. each annual independent public accountants' servicing report described
in Section 3.21 hereof.
Any such notice pursuant to this Section 11.07 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to Xxxxx'x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: MBS
Monitoring/Long Beach Mortgage Loan Trust 2002-4; Fitch, Inc., Xxx Xxxxx Xxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Standard & Poor's Rating Services, Inc., 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and the NIMS Insurer, the Certificate
Insurer and the Guarantor at the address provided in Section 11.05.
In addition, each party hereto agrees that it will furnish or make
available to the NIMS Insurer and the Certificate Insurer a copy of any
opinions, notices, reports, schedules, certificates, statements, rating
confirmation letters or other information that are furnished hereunder to the
Trustee, the Rating Agencies or the Certificateholders.
Section 11.08 Article and Section References.
All Article and Section references used in this Agreement, unless otherwise
provided, are to articles and sections in this Agreement.
Section 11.09 Third-Party Beneficiaries.
Subject to Section 1.04, each of the NIMS Insurer and the Certificate
Insurer shall be deemed a third-party beneficiary of this Agreement, and shall
be entitled to enforce such rights, in each case, as if it were a party hereto.
Section 11.10 Grant of Security Interest.
It is the express intent of the parties hereto that the conveyance of the
Mortgage Loans by the Depositor to the Trustee be, and be construed as, a sale
of the Mortgage Loans by the Depositor and not a pledge of the Mortgage Loans by
the Depositor to secure a debt or other obligation of the Depositor. However, in
187
the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Depositor, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Depositor to the Trustee to secure a debt or other
obligation of the Depositor and (b)(1) this Agreement shall also be deemed to be
a security agreement within the meaning of Articles 8 and 9 of the Uniform
Commercial Code as in effect from time to time in the State of New York; (2) the
conveyance provided for in Section 2.01 hereof shall be deemed to be a grant by
the Depositor to the Trustee of a security interest in all of the Depositor's
right, title and interest in and to the Mortgage Loans and all amounts payable
to the holders of the Mortgage Loans in accordance with the terms thereof and
all proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the Collection Account, the Distribution Account and Policy Payments Account,
whether in the form of cash, instruments, securities or other property; (3) the
obligations secured by such security agreement shall be deemed to be all of the
Depositor's obligations under this Agreement, including the obligation to
provide to the Certificateholders the benefits of this Agreement relating to the
Mortgage Loans and the Trust Fund; and (4) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Trustee for the purpose of perfecting such security interest under
applicable law. Accordingly, the Depositor hereby grants to the Trustee a
security interest in the Mortgage Loans and all other property described in
clause (2) of the preceding sentence, for the purpose of securing to the Trustee
the performance by the Depositor of the obligations described in clause (3) of
the preceding sentence. Notwithstanding the foregoing, the parties hereto intend
the conveyance pursuant to Section 2.01 to be a true, absolute and unconditional
sale of the Mortgage Loans and assets constituting the Trust Fund by the
Depositor to the Trustee.
Section 11.11 Non-Petition.
Each of the parties hereto hereby covenants and agrees that, prior to the
date which is one year and one day after the date on which the last Certificate
ceases to be outstanding, it will not institute against, cooperate with,
encourage or join with any other Person in instituting against the Depositor or
Long Beach Asset Holdings Corp. in any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other proceedings under any Federal or
state bankruptcy or similar law; provided, however, that nothing in this section
shall constitute a waiver of any right to indemnification, reimbursement or
other payment under this Agreement.
188
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Guarantor 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.
LONG BEACH SECURITIES CORP.,
as Depositor
By:__________________________________
Name: Xxxxxxx X Xxxxxxxx
Title: Vice President
LONG BEACH MORTGAGE COMPANY,
as Master Servicer
By:__________________________________
Name: Xxxxxxx X Xxxxxxxx
Title: First Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:__________________________________
Name: Xxxxxxx Xxxxx
Title: Associate
By:__________________________________
Name:________________________________
Title:_______________________________
FEDERAL NATIONAL MORTGAGE
ASSOCIATION,
as Guarantor (with respect to the Class I-A
Certificates and the Class I-S1 Certificates)
By:__________________________________
Name:________________________________
Title:_______________________________
STATE OF WASHINGTON )
) ss.:
COUNTY OF KING )
On the ___th day of October, 2002 before me, a notary public in and for
said State, personally appeared Xxxxxxx X Xxxxxxxx known to me to be a Vice
President of Long Beach 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 WASHINGTON )
) ss.:
COUNTY OF KING )
On the ___th day of October, 2002 before me, a notary public in and for
said State, personally appeared Xxxxxxx X Xxxxxxxx known to me to be a First
Vice President of Long Beach Mortgage Company, 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 October, 2002 before me, a notary public in and for
said State, personally appeared Xxxxxxx Xxxxx, known to me to be an Associate of
Deutsche Bank National Trust Company, a national banking association 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
association 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 October, 2002 before me, a notary public in and for
said State, personally appeared ______________, known to me to be an Associate
of Deutsche Bank National Trust Company, a national banking association 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
association 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 October, 2002 before me, a notary public in and for
said State, personally appeared ____________, known to me to be a ____________
of Federal National Mortgage Association, a corporation organized and existing
under the laws of the United States, 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 association 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
EXHIBIT A-1
CLASS I-A CERTIFICATES
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.
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 : With respect to any Mortgage Loan, October 1, 2002
First Distribution Date : November 25, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : [ ]
Pass-Through Rate : Variable
CUSIP : [____]
Class : I-A
Assumed Maturity Date : November, 2032
I-A-1
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
Class I-A
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 and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH 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 I-A
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class I-A
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master 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 I-A Certificate (obtained by dividing the
Denomination of this Class I-A 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 Long Beach Securities
Corp. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of October __, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates and Deutsche Bank
National Trust Company, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class I-A Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class I-A 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 Master 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.
I-A-2
Reference is hereby made to the further provisions of this Class I-A
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 I-A 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.
I-A-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: October___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-4
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as Trustee
By _____________________________________________________
This is one of the Class I-A Certificates
referenced in the within-mentioned Agreement
By_____________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
I-A-4
[Reverse of Class I-A Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-4
Asset-Backed Certificates,
Series 2002-4
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-4, Asset-Backed Certificates,
Series 2002-4 (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 first
Business Day 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
office or agency 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 Master Servicer, the Trustee, the Guarantor 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.
I-A-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 Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee 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 denomi-nations 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 Master Servicer, the Trustee, the Guarantor, the NIMS
Insurer, if any, and the Certificate Insurer and any agent of the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, or the
Certificate Insurer may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, the
Certificate Insurer nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date following the date at which the remaining Stated
Principal Balance of the Mortgage Loans is less than 10% of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, the Master Servicer or the
NIMS Insurer, if any, or the Certificate Insurer may purchase, in whole, from
the Trust the Mortgage Loans in the manner and 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 for the
Certificates other than the Class S Certificates in November, 2032.
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.
I-A-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
I-A-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.
I-A-8
CLASS I-A CERTIFICATES
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.
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. : 2
Cut-off Date : With respect to any Mortgage Loan, October 1, 2002
First Distribution Date : November 25, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : [ ]
Pass-Through Rate : Variable
CUSIP : [____]
Class : I-A
Assumed Maturity Date : November, 2032
I-A-1
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
Class I-A
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 and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH 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 I-A
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class I-A
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master 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 I-A Certificate (obtained by dividing the
Denomination of this Class I-A 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 Long Beach Securities
Corp. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of October __, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates and Deutsche Bank
National Trust Company, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class I-A Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class I-A 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 Master 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.
I-A-2
Reference is hereby made to the further provisions of this Class I-A
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 I-A 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.
I-A-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: October___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-4
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as Trustee
By _____________________________________________________
This is one of the Class I-A Certificates
referenced in the within-mentioned Agreement
By____________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
I-A-4
[Reverse of Class I-A Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-4
Asset-Backed Certificates,
Series 2002-4
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-4, Asset-Backed Certificates,
Series 2002-4 (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 first
Business Day 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
office or agency 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 Master Servicer, the Trustee, the Guarantor 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.
I-A-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 Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee 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 denomi-nations 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 Master Servicer, the Trustee, the Guarantor, the NIMS
Insurer, if any, and the Certificate Insurer and any agent of the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, or the
Certificate Insurer may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, the
Certificate Insurer nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date following the date at which the remaining Stated
Principal Balance of the Mortgage Loans is less than 10% of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, the Master Servicer or the
NIMS Insurer, if any, or the Certificate Insurer may purchase, in whole, from
the Trust the Mortgage Loans in the manner and 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 for the
Certificates other than the Class S Certificates in November, 2032.
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.
I-A-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
I-A-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.
I-A-8
EXHIBIT A-2
CLASS II-A 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 : With respect to any Mortgage Loan, October 1, 2002
First Distribution Date : November 25, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : [____]
Pass-Through Rate : Variable
CUSIP : [____]
Class : II-A
Assumed Maturity Date : November, 2032
II-A-1
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
Class II-A
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 and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH 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 II-A
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class II-A
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master 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 II-A Certificate (obtained by dividing the
Denomination of this Class II-A 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 Long Beach Securities
Corp. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of October __, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates and Deutsche Bank
National Trust Company, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class II-A Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class II-A 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 II-A
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 II-A 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.
II-A-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: October___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-4
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as Trustee
By _____________________________________________________
This is one of the Class II-A Certificates
referenced in the within-mentioned Agreement
By____________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
II-A-3
[Reverse of Class II-A Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-4
Asset-Backed Certificates,
Series 2002-4
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-4, Asset-Backed Certificates,
Series 2002-4 (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 first
Business Day 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
office or agency 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 Master Servicer, the Trustee, the Guarantor 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.
II-A-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 Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee 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 denomi-nations 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 Master Servicer, the Trustee, the Guarantor, the NIMS
Insurer, if any, and the Certificate Insurer and any agent of the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, or the
Certificate Insurer may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, the
Certificate Insurer nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date following the date at which the remaining Stated
Principal Balance of the Mortgage Loans is less than 10% of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, the Master Servicer or the
NIMS Insurer, if any, or the Certificate Insurer may purchase, in whole, from
the Trust the Mortgage Loans in the manner and 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 for the
Certificates other than the Class S Certificates in November, 2032.
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.
II-A-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
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
II-A-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
II-A-7
CLASS II-A 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 : With respect to any Mortgage Loan, October 1, 2002
First Distribution Date : November 25, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : [____]
Pass-Through Rate : Variable
CUSIP : [____]
Class : II-A
Assumed Maturity Date : November, 2032
II-A-1
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
Class II-A
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 and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH 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 II-A
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class II-A
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master 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 II-A Certificate (obtained by dividing the
Denomination of this Class II-A 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 Long Beach Securities
Corp. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of October __, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates and Deutsche Bank
National Trust Company, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class II-A Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class II-A 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 II-A
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 II-A 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.
II-A-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: October___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-4
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as Trustee
By _____________________________________________________
This is one of the Class II-A Certificates
referenced in the within-mentioned Agreement
By_____________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
II-A-3
[Reverse of Class II-A Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-4
Asset-Backed Certificates,
Series 2002-4
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-4, Asset-Backed Certificates,
Series 2002-4 (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 first
Business Day 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
office or agency 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 Master Servicer, the Trustee, the Guarantor 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.
II-A-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 Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee 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 denomi-nations 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 Master Servicer, the Trustee, the Guarantor, the NIMS
Insurer, if any, and the Certificate Insurer and any agent of the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, or the
Certificate Insurer may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, the
Certificate Insurer nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date following the date at which the remaining Stated
Principal Balance of the Mortgage Loans is less than 10% of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, the Master Servicer or the
NIMS Insurer, if any, or the Certificate Insurer may purchase, in whole, from
the Trust the Mortgage Loans in the manner and 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 for the
Certificates other than the Class S Certificates in November, 2032.
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.
II-A-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
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
II-A-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
II-A-7
EXHIBIT A-3
CLASS I-S1 CERTIFICATES
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.
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 : With respect to any Mortgage Loan, October 1, 2002
First Distribution Date : November 25, 2002
Initial Certificate Notional Amount of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Notional
Amount of this Class : $[_______]
Percentage Interest : 100.00%
CUSIP : [____]
Pass-Through Rate : 5.25%
Class : I-S1
Assumed Maturity Date : April, 2005
I-S1-1
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
Class I-S1
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 and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Class I-S1 Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Master 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 I-S1 Certificate (obtained by dividing the
Denomination of this Class I-S1 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 Long Beach Securities
Corp. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of October __, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates and Deutsche Bank
National Trust Company, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class I-S1 Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class I-S1 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 Master 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.
I-S1-2
Reference is hereby made to the further provisions of this Class I-S1
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 I-S1 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.
I-S1-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: October___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-4
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as Trustee
By _____________________________________________________
This is one of the Class I-S1 Certificates
referenced in the within-mentioned Agreement
By_____________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
I-S1-4
[Reverse of Class I-S1 Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-4
Asset-Backed Certificates,
Series 2002-4
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-4, Asset-Backed Certificates,
Series 2002-4 (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 first
Business Day 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
office or agency 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 Master Servicer, the Trustee, the Guarantor 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.
I-S1-5
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 Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee 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 Master Servicer, the Trustee, the Guarantor, the NIMS
Insurer, if any, and the Certificate Insurer and any agent of the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, or the
Certificate Insurer may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, the
Certificate Insurer nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date following the date at which the remaining Stated
Principal Balance of the Mortgage Loans is less than 10% of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, the Master Servicer or the
NIMS Insurer, if any, or the Certificate Insurer may purchase, in whole, from
the Trust the Mortgage Loans in the manner and 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 for the
Certificates other than the Class S Certificates in November, 2032.
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.
I-S1-6
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
I-S1-7
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.
I-S1-8
EXHIBIT A-4
CLASS I-S2 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 I-A CERTIFICATES AND THE CLASS I-S1
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 : With respect to any Mortgage Loan, October 1, 2002
First Distribution Date : November 25, 2002
Initial Certificate Notional Amount of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Notional
Amount of this Class : $[_______]
Percentage Interest : 100.00%
Pass-Through Rate : 4.25%
Class : I-S2
Assumed Maturity Date : April, 2005
I-S2-1
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
Class I-S2
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 and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Class I-S2 Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Master Servicer or the
Trustee referred to below or any of their respective affiliates.
This certifies that Long Beach Asset Holdings Corp. is the registered owner
of the Percentage Interest evidenced by this Class I-S2 Certificate (obtained by
dividing the Denomination of this Class I-S2 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 Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of October __, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates and Deutsche Bank
National Trust Company, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class I-S2 Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class I-S2 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 Master 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.
No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any person using Plan Assets to acquire this Certificate shall be made
except in accordance with Section 5.02(c) of the Agreement.
I-S2-2
Reference is hereby made to the further provisions of this Class I-S2
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 I-S2 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.
I-S2-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: October___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-4
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as Trustee
By _____________________________________________________
This is one of the Class I-S2 Certificates
referenced in the within-mentioned Agreement
By_____________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
I-S2-4
[Reverse of Class I-S2 Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-4
Asset-Backed Certificates,
Series 2002-4
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-4, Asset-Backed Certificates,
Series 2002-4 (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 first
Business Day 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
office or agency 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 Master Servicer, the Trustee, the Guarantor 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.
I-S2-5
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 Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee 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 Master Servicer, the Trustee, the Guarantor, the NIMS
Insurer, if any, and the Certificate Insurer and any agent of the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, or the
Certificate Insurer may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, the
Certificate Insurer nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date following the date at which the remaining Stated
Principal Balance of the Mortgage Loans is less than 10% of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, the Master Servicer or the
NIMS Insurer, if any, or the Certificate Insurer may purchase, in whole, from
the Trust the Mortgage Loans in the manner and 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 for the
Certificates other than the Class S Certificates in November, 2032.
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.
I-S2-6
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
I-S2-7
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.
I-S2-8
EXHIBIT A-5
CLASS II-S1 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 : With respect to any Mortgage Loan, October 1, 2002
First Distribution Date : November 25, 2002
Initial Certificate Notional Amount of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Notional
Amount of this Class : $[_______]
Percentage Interest : 100.00%
Pass-Through Rate : 5.25%
CUSIP : [____]
Class : II-S1
Assumed Maturity Date : April, 2005
II-S1-1
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
Class II-S1
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 and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Class II-S1 Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Master 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 II-S1 Certificate (obtained by dividing the
Denomination of this Class II-S1 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 Long Beach Securities
Corp. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of October __, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates and Deutsche Bank
National Trust Company, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class II-S1 Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class II-S1 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 II-S1
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 II-S1 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.
II-S1-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: October___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-4
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as Trustee
By _____________________________________________________
This is one of the Class II-S1 Certificates
referenced in the within-mentioned Agreement
By_____________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
II-S1-3
[Reverse of Class II-S1 Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-4
Asset-Backed Certificates,
Series 2002-4
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-4, Asset-Backed Certificates,
Series 2002-4 (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 first
Business Day 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
office or agency 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 Master Servicer, the Trustee, the Guarantor 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.
II-S1-4
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 Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee 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 Master Servicer, the Trustee, the Guarantor, the NIMS
Insurer, if any, and the Certificate Insurer and any agent of the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, or the
Certificate Insurer may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, the
Certificate Insurer nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date following the date at which the remaining Stated
Principal Balance of the Mortgage Loans is less than 10% of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, the Master Servicer or the
NIMS Insurer, if any, or the Certificate Insurer may purchase, in whole, from
the Trust the Mortgage Loans in the manner and 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 for the
Certificates other than the Class S Certificates in November, 2032.
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.
II-S1-5
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
II-S1-6
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.
II-S1-7
EXHIBIT A-6
CLASS II-S2 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 II-A CERTIFICATES AND THE CLASS
II-S1 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 : With respect to any Mortgage Loan, October 1, 2002
First Distribution Date : November 25, 2002
Initial Certificate Notional Amount of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Notional
Amount of this Class : $[_______]
Percentage Interest : 100.00%
Pass-Through Rate : 4.25%
Class : II-S2
Assumed Maturity Date : April, 2005
II-S2-1
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
Class II-S2
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 and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Class II-S2 Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Master Servicer or the
Trustee referred to below or any of their respective affiliates.
This certifies that Long Beach Asset Holdings Corp. is the registered owner
of the Percentage Interest evidenced by this Class II-S2 Certificate (obtained
by dividing the Denomination of this Class II-S2 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 Long
Beach Securities Corp. (the "Depositor"). The Trust was created pursuant to a
Pooling and Servicing Agreement dated as of October __, 2002 (the "Agreement")
among the Depositor, Long Beach Mortgage Company, as master servicer (the
"Master Servicer"), Federal National Mortgage Association, as guarantor with
respect to the Class I-A Certificates and the Class I-S1 Certificates and
Deutsche Bank National Trust Company, as trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Class II-S2 Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Class II-S2 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 Master 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.
II-S2-2
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(c) of the Agreement.
Reference is hereby made to the further provisions of this Class II-S2
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 II-S2 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.
II-S2-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: October___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-4
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as Trustee
By _____________________________________________________
This is one of the Class II-S2 Certificates
referenced in the within-mentioned Agreement
By_____________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
II-S2-4
[Reverse of Class II-S2 Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-4
Asset-Backed Certificates,
Series 2002-4
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-4, Asset-Backed Certificates,
Series 2002-4 (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 first
Business Day 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
office or agency 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 Master Servicer, the Trustee, the Guarantor 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.
II-S2-5
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 Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee 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 Master Servicer, the Trustee, the Guarantor, the NIMS
Insurer, if any, and the Certificate Insurer and any agent of the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, or the
Certificate Insurer may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, the
Certificate Insurer nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date following the date at which the remaining Stated
Principal Balance of the Mortgage Loans is less than 10% of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, the Master Servicer or the
NIMS Insurer, if any, or the Certificate Insurer may purchase, in whole, from
the Trust the Mortgage Loans in the manner and 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 for the
Certificates other than the Class S Certificates in November, 2032.
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.
II-S2-6
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
II-S2-7
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.
II-S2-8
EXHIBIT A-7
CLASS I-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 I-A CERTIFICATES, THE CLASS II-A
CERTIFICATES, THE CLASS I-S1 CERTIFICATES, THE CLASS II-S1 CERTIFICATES, THE
CLASS I-S2 CERTIFICATES AND THE CLASS II-S2 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 : With respect to any Mortgage Loan, October 1, 2002
First Distribution Date : November 25, 2002
Original Certificate Principal Balance : $[_______]
Initial Notional Amount of this
Certificate ("Denomination") : $[_______]
Original Notional Amount of this Class : $[_______]
Percentage : 100.00%
Pass-Through Rate : Variable
Class : I-C
I-C-1
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
Class I-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 and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH 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 I-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 I-C
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that Long Beach Asset Holdings Corp. is the registered owner
of the Percentage Interest evidenced by this Class I-C Certificate (obtained by
dividing the Denomination of this Class I-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 Long Beach Securities
Corp. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of October __, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates and Deutsche Bank
National Trust Company, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class I-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 I-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 Master 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.
I-C-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(c) of the Agreement.
Reference is hereby made to the further provisions of this Class I-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 I-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.
I-C-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: October___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-4
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as Trustee
By _____________________________________________________
This is one of the Class I-C Certificates
referenced in the within-mentioned Agreement
By_____________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
I-C-4
[Reverse of Class I-C Certificate]
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-4, Asset-Backed Certificates,
Series 2002-4 (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 first
Business Day 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
office or agency 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 Master Servicer, the Trustee, the Guarantor 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.
I-C-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 Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee 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 Master Servicer, the Trustee, the Guarantor, the NIMS
Insurer, if any, and the Certificate Insurer and any agent of the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, or the
Certificate Insurer may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, the
Certificate Insurer nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date following the date at which the remaining Stated
Principal Balance of the Mortgage Loans is less than 10% of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, the Master Servicer or the
NIMS Insurer, if any, or the Certificate Insurer may purchase, in whole, from
the Trust the Mortgage Loans in the manner and 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 for the
Certificates other than the Class S Certificates in November, 2032.
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.
I-C-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
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
I-C-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
I-C-8
EXHIBIT A-8
CLASS II-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 I-A CERTIFICATES, THE CLASS II-A
CERTIFICATES, THE CLASS I-S1 CERTIFICATES, THE CLASS II-S1 CERTIFICATES, THE
CLASS I-S2 CERTIFICATES AND THE CLASS II-S2 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 : With respect to any Mortgage Loan, October 1, 2002
First Distribution Date : November 25, 2002
Original Certificate Principal Balance : $[_______]
Initial Notional Amount of this
Certificate ("Denomination") : $[_______]
Original Notional Amount of this Class : $[_______]
Percentage : 100.00%
Pass-Through Rate : Variable
Class : II-C
II-C-1
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
Class II-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 and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH 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 II-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 II-C
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that Long Beach Asset Holdings Corp. is the registered owner
of the Percentage Interest evidenced by this Class II-C Certificate (obtained by
dividing the Denomination of this Class II-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 Long Beach Securities
Corp. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of October __, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates and Deutsche Bank
National Trust Company, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class II-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 II-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 Master 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.
II-C-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(c) of the Agreement.
Reference is hereby made to the further provisions of this Class II-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 II-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.
II-C-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: October___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-4
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as Trustee
By _____________________________________________________
This is one of the Class II-C Certificates
referenced in the within-mentioned Agreement
By_____________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
II-C-4
[Reverse of Class II-C Certificate]
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-4, Asset-Backed Certificates,
Series 2002-4 (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 first
Business Day 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
office or agency 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 Master Servicer, the Trustee, the Guarantor 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.
II-C-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 Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee 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 Master Servicer, the Trustee, the Guarantor, the NIMS
Insurer, if any, and the Certificate Insurer and any agent of the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, or the
Certificate Insurer may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if any, the
Certificate Insurer nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date following the date at which the remaining Stated
Principal Balance of the Mortgage Loans is less than 10% of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, the Master Servicer or the
NIMS Insurer, if any, or the Certificate Insurer may purchase, in whole, from
the Trust the Mortgage Loans in the manner and 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 for the
Certificates other than the Class S Certificates in November, 2032.
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.
II-C-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
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
II-C-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
II-C-8
EXHIBIT A-9
CLASS I-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 : With respect to any Mortgage Loan, October 1, 2002
First Distribution Date : November 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 : X-X
X-X-0
Xxxx Xxxxx Xxxxxxxx Xxxx Xxxxx 0000-0
Asset-Backed Certificates,
Series 2002-4
Class I-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 and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH 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 I-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 I-P
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that Long Beach Asset Holdings Corp. is the registered owner
of the Percentage Interest evidenced by this Class I-P Certificate (obtained by
dividing the Denomination of this Class I-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 Long Beach Securities
Corp. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of October __, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates and Deutsche Bank
National Trust Company, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class I-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 I-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 Master 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.
I-P-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(c) of the Agreement.
Reference is hereby made to the further provisions of this Class I-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 I-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.
I-P-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: October___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-4
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as Trustee
By _____________________________________________________
This is one of the Class I-P Certificates
referenced in the within-mentioned Agreement
By_____________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
I-P-4
[Reverse of Class I-P Certificate]
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-4, Asset-Backed Certificates,
Series 2002-4 (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 first
Business Day 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
office or agency 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 Master Servicer, the Trustee, the Guarantor 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.
I-P-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 Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee 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 Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if
any, or the Certificate Insurer may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Depositor, the Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if
any, the Certificate Insurer nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date following the date at which the remaining Stated
Principal Balance of the Mortgage Loans is less than 10% of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, the Master Servicer or the
NIMS Insurer, if any, or the Certificate Insurer may purchase, in whole, from
the Trust the Mortgage Loans in the manner and 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 for the
Certificates other than the Class S Certificates in November, 2032.
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.
I-P-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
I-P-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.
I-P-8
EXHIBIT A-10
CLASS II-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 : With respect to any Mortgage Loan, October 1, 2002
First Distribution Date : November 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 : II-P
II-P-1
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
Class II-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 and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH 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 II-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 II-P
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that Long Beach Asset Holdings Corp. is the registered owner
of the Percentage Interest evidenced by this Class II-P Certificate (obtained by
dividing the Denomination of this Class II-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 Long Beach Securities
Corp. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of October __, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates and Deutsche Bank
National Trust Company, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class II-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 II-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 Master 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.
II-P-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(c) of the Agreement.
Reference is hereby made to the further provisions of this Class II-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 II-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.
II-P-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: October___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-4
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as Trustee
By _____________________________________________________
This is one of the Class II-P Certificates
referenced in the within-mentioned Agreement
By_____________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
II-P-4
[Reverse of Class II-P Certificate]
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-4, Asset-Backed Certificates,
Series 2002-4 (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 first
Business Day 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
office or agency 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 Master Servicer, the Trustee, the Guarantor 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.
II-P-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 Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee 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 Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if
any, or the Certificate Insurer may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Depositor, the Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if
any, the Certificate Insurer nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date following the date at which the remaining Stated
Principal Balance of the Mortgage Loans is less than 10% of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, the Master Servicer or the
NIMS Insurer, if any, or the Certificate Insurer may purchase, in whole, from
the Trust the Mortgage Loans in the manner and 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 for the
Certificates other than the Class S Certificates in November, 2032.
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.
II-P-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
II-P-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.
II-P-8
EXHIBIT A-11
CLASS R CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
"RESIDUAL INTERESTS" IN FOUR SEPARATE "REAL ESTATE MORTGAGE INVESTMENT
CONDUITS," 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.
NO TRANSFER OF THIS CERTIFICATE TO A "DISQUALIFIED ORGANIZATION", AS SUCH TERM
IS DEFINED IN SECTION 860E OF THE CODE, SHALL BE MADE.
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 : With respect to any Mortgage Loan, October 1, 2002
First Distribution Date : November 25, 2002
Percentage Interest : 100.00%
Class : R
X-0
Xxxx Xxxxx Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
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 and second lien,
fixed rate and adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Certificate does not evidence an obligation of, or an interest in, and
is not guaranteed by the Depositor, the Master Servicer or the Trustee referred
to below or any of their respective affiliates.
This certifies that Long Beach Asset Holdings Corp. 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 Long
Beach Securities Corp. (the "Depositor"). The Trust was created pursuant to a
Pooling and Servicing Agreement dated as of October __, 2002 (the "Agreement")
among the Depositor, Long Beach Mortgage Company, as master servicer (the
"Master Servicer"), Federal National Mortgage Association, as guarantor with
respect to the Class I-A Certificates and the Class I-S1 Certificates and
Deutsche Bank National Trust Company, 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
Santa Ana, California.
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 Master 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.
R-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(c) 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
Disqualified Organization 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.
R-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: October___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-4
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
R-4
[Reverse of Class R Certificate]
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-4, Asset-Backed Certificates,
Series 2002-4 (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 first
Business Day 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
office or agency 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 Master Servicer, the Trustee, the Guarantor 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.
R-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 Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee 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 Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if
any, or the Certificate Insurer may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Depositor, the Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if
any, the Certificate Insurer nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date following the date at which the remaining Stated
Principal Balance of the Mortgage Loans is less than 10% of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, the Master Servicer or the
NIMS Insurer, if any, or the Certificate Insurer may purchase, in whole, from
the Trust the Mortgage Loans in the manner and 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 for the
Certificates other than the Class S Certificates in November, 2032.
By acceptance of the Class R Certificates the Holders of the Class R
Certificates agree that for so long as any of the NIM Notes are outstanding or
any amounts are reimbursable or payable to the NIMS Insurer, if any, in
accordance with the terms of the Indenture, in connection with any amounts
distributable to the Holders of the Class R Certificates pursuant to clauses
(i)(l) and (ii)(p) of Section 4.01(d) of the Agreement, their rights to receive
the amounts so distributable are assigned and transferred and any such amounts
shall be paid by the Trustee, and to the extent received by the Holders of the
Class R Certificates they shall pay any such amounts, to the Holders of the
Class I-C Certificates and Class II-C Certificates, respectively.
R-6
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.
R-7
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
R-8
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.
R-9
EXHIBIT A-12
CLASS R-CX CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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-CX CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO A "DISQUALIFIED ORGANIZATION", AS SUCH TERM
IS DEFINED IN SECTION 860E OF THE CODE, SHALL BE MADE.
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 : With respect to any Mortgage Loan, October 1, 2002
First Distribution Date : November 25, 2002
Percentage Interest : 100.00%
Class : R-CX
R-CX-1
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
Class R-CX
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 and second lien,
fixed rate and adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Certificate does not evidence an obligation of, or an interest in, and
is not guaranteed by the Depositor, the Master Servicer or the Trustee referred
to below or any of their respective affiliates.
This certifies that Long Beach Asset Holdings Corp. 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 Long
Beach Securities Corp. (the "Depositor"). The Trust was created pursuant to a
Pooling and Servicing Agreement dated as of October __, 2002 (the "Agreement")
among the Depositor, Long Beach Mortgage Company, as master servicer (the
"Master Servicer"), Federal National Mortgage Association, as guarantor with
respect to the Class I-A Certificates and the Class I-S1 Certificates and
Deutsche Bank National Trust Company, 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
Santa Ana, California.
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 Master 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.
R-CX-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(c) 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
Disqualified Organization acquires an Ownership Interest on a Class R-CX
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.
R-CX-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: October___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-4
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as Trustee
By _____________________________________________________
This is one of the Class R-CX Certificates
referenced in the within-mentioned Agreement
By_____________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
R-CX-4
[Reverse of Class R-CX Certificate]
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-4, Asset-Backed Certificates,
Series 2002-4 (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 first
Business Day 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
office or agency 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 Master Servicer, the Trustee, the Guarantor 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.
R-CX-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 Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee 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 Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if
any, or the Certificate Insurer may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Depositor, the Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if
any, the Certificate Insurer nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date following the date at which the remaining Stated
Principal Balance of the Mortgage Loans is less than 10% of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, the Master Servicer or the
NIMS Insurer, if any, or the Certificate Insurer may purchase, in whole, from
the Trust the Mortgage Loans in the manner and 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 for the
Certificates other than the Class S Certificates in November, 2032.
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.
R-CX-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
R-CX-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.
R-CX-8
EXHIBIT A-13
CLASS R-PX CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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-PX CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO A "DISQUALIFIED ORGANIZATION", AS SUCH TERM
IS DEFINED IN SECTION 860E OF THE CODE, SHALL BE MADE.
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 : With respect to any Mortgage Loan, October 1, 2002
First Distribution Date : November 25, 2002
Percentage Interest : 100.00%
Class : R-PX
R-PX-1
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
Class R-PX
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 and second lien,
fixed rate and adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Certificate does not evidence an obligation of, or an interest in, and
is not guaranteed by the Depositor, the Master Servicer or the Trustee referred
to below or any of their respective affiliates.
This certifies that Long Beach Asset Holdings Corp. 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 Long
Beach Securities Corp. (the "Depositor"). The Trust was created pursuant to a
Pooling and Servicing Agreement dated as of October __, 2002 (the "Agreement")
among the Depositor, Long Beach Mortgage Company, as master servicer (the
"Master Servicer"), Federal National Mortgage Association, as guarantor with
respect to the Class I-A Certificates and the Class I-S1 Certificates and
Deutsche Bank National Trust Company, 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
Santa Ana, California.
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 Master 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.
R-PX-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(c) 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
Disqualified Organization acquires an Ownership Interest on a Class R-PX
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.
R-PX-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: October___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-4
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as Trustee
By _____________________________________________________
This is one of the Class R-PX Certificates
referenced in the within-mentioned Agreement
By_____________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
R-PX-4
[Reverse of Class R-PX Certificate]
Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates,
Series 2002-4
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-4, Asset-Backed Certificates,
Series 2002-4 (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 first
Business Day 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
office or agency 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 Master Servicer, the Trustee, the Guarantor 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.
R-PX-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 Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee 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 Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if
any, or the Certificate Insurer may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Depositor, the Master Servicer, the Trustee, the Guarantor, the NIMS Insurer, if
any, the Certificate Insurer nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date following the date at which the remaining Stated
Principal Balance of the Mortgage Loans is less than 10% of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, the Master Servicer or the
NIMS Insurer, if any, or the Certificate Insurer may purchase, in whole, from
the Trust the Mortgage Loans in the manner and 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 for the
Certificates other than the Class S Certificates in November, 2032.
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.
R-PX-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
R-PX-7
EXHIBIT B-1
FORM OF GROUP I CAP AGREEMENT
BankofAmerica
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Tel 000-000-0000
Fax 000-000-0000
Bank of America N.A.
TO: Long Beach Mortgage Loan Trust 2002-4
ATTN: Xxxxxxx Xxxxxxx
TEL: (000) 000-0000
FAX: (000) 000-0000
FROM: Bank of America, N.A.
000 Xxxxx Xxxxxx Xxxxx - Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Xxxx Xxxxxxxx / Xxxxx Xxxxxxxx
Date: 04OCT02
Our Reference No. 48844 48845
Internal Tracking Nos. 455176 455175
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between Bank of America, N.A and Long Beach
Mortgage Loan Trust 2002-4 (each a `party" and together "the parties") on the
Trade Date specified below (the "Transaction").
This letter agreement constitutes a "Confirmation" and the definitions and
provisions contained in the 2000 ISDA Definitions, as published by the
International Swaps and Derivatives Association, Inc. (the "Definitions') are
incorporated into this Confirmation. In the event of any inconsistency between
the Definitions and this Confirmation, this Confirmation will govern.
1 This Confirmation evidences a complete binding agreement between the
parties as to the terms of the Transaction to which this Confirmation
relates. In addition, the parties agree that for the purposes of this
Transaction, this Confirmation will supplement, form a part of, and be
subject to an agreement in the form of the 1992 ISDA Master Agreement
(Multicurrency-Cross Border) as if the patties had executed an agreement
(the "Agreement") in such form (but without any Schedule except for the
election of (i) the laws of the State of New York (without reference to
choice of law doctrine) as the governing law and (ii) USD as the
Termination Currency) on the Trade Date of the Transaction, In the event of
any inconsistency between the provisions of that
B-1-1
agreement and this Confirmation, this Confirmation will prevail for the purpose
of this Transaction.
Each party represents to the other party and will be deemed to represent to the
other party on the date on which it enters into a Transaction that (absent a
written agreement between the parties that expressly imposes affirmative
obligations to the contrary for that Transaction):
(i) Non-Reliance. It is acting for its own account, and it has made its own
independent decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisors as it has deemed necessary, except as specifically set
forth in paragraph 8 of this Confirmation as to Party B. It is not relying on
any communication (written or oral) of the other party as investment advice or
as a recommendation to enter into that Transaction; it being understood that
information and explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a recommendation to
enter into that Transaction. Further, such party has not received from the other
party any assurance or guarantee as to the expected results of that Transaction.
(ii) Evaluation and Understanding. It is capable of evaluation and
understanding (on its own behalf or Through independent professional advice),
and understands and accepts, the terms, conditions and risks of that
Transaction. It is also capable of assuming, and assumes, the financial and
other risks of that Transaction.
(iii) Status of Parties. The other party is not acting as an agent,
fiduciary or advisor for it in respect of that Transaction.
In this Confirmation "Party A" means Bank of America, N.A., a national
banking association and `Party B' means Long Beach Mortgage Loan Trust
2002-4.
2 The particular Transaction to which this Confirmation relates is an
Interest Rate Corridor and the terms of the Transaction to which this
Confirmation relates are as follows:
Notional Amount: USD 583,882,945.42
Trade Date: 01OCT02
Effective Date: 25NOV02
Termination Date: 25APR05, subject to adjustment in accordance with the
Modified Following Business Day Convention
Amortization: APPLICABLE (See Schedule A attached hereto)
Fixed Rate Amounts:
Fixed Rate Payer Party B
Fixed Rate Payer
Payment Dates: 04OCT02, subject to adjustment in accordance with the
Modified Following Business Day Convention.
Fixed Amount: USD 255,000.00
Floating Amounts I:
B-1-2
Floating Rate
Payer: Party A
Cap Rate: 6.900000%
Floating Rate Payer
Payment Dates: Two Business Days prior to the 25th of each Month,
commencing 23DEC02 and ending 21APR05, subject to
adjustment in accordance with the Preceeding Business Day Convention.
Floating Rate for the
Initial Calculation Period: TO BE SET
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 Month
Spread: None
Floating Rate Day Count
Fraction: Actual/360
Reset Dates: The first day of each Calculation Period
Floating Amounts II:
Floating Rate
Payer: Party B
Cap Rate: 8.15000%
Floating Rate Payer: Two business days prior to the 25th of each Month,
commencing 23DEC02 and ending 21APR05, subject to
adjustment in accordance with the Preceeding Business Day Convention.
Floating Rate for the
Initial Calculation Period: TO BE SET
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 Month
Spread: None
Floating Rate Day
Count Fraction: Actual/36O
B-1-3
Reset Dates: The first day of each Calculation Period
Business Days: New York, London
Calculation Agent: Party A
3 Recording of Conversations:
Each party to this Transaction acknowledges and agrees to the tape
recording of conversations between the parties to this Transaction whether
by one or other or both of the parties or their agents, and that any such
tape recordings may be submitted in evidence in any Proceedings relating to
the Agreement and/or this Transaction.
4 Account Details:
Payments to Bank of America, N.A.:
USD
NAME: BANK OF AMERICA NA
CITY: NEW YORK
ABA#: 000000000
ATTN: BOFAUS3N
NAME: BANK OF AMERICA NA
CITY: CHARLOTTE
ACCT: 6550219386
ATTN: RATE DERIVATIVE SETTLEMENTS
ATTN: XXXXXX0XXXX
Payments to Deutsche Bank National Trust Company:
USD
Bankers Trust Company
ABA# 000000000
LA Asset Backed Account
Acct# 00000000
Ref: Xxxx Xxxxx 0000-0, cap payment
5 Offices:
The Office of Party A for this
Transaction is: Charlotte, NC
Please send reset notices to fax no. (000-000-0000)
The Office of Party B for this
Transaction is: Santa Ana, California, USA
B-1-4
6 Governing Law: The Laws of the State of New York (without reference
to the conflict of laws provisions thereof other than
Section 5.1401 of the New York General Obligations
Law.)
7 Additional
Provisions: Notwithstanding the terms of Sections 5 and 6 of the
Agreement, if Party B has satisfied its payment
obligations under Section 2(a)(i) of the Agreement,
then unless Party A is required pursuant to
appropriate proceedings to return to Party B or
otherwise returns to Party B upon demand of Party B
any portion of such payment, (a) the occurrence of an
event described in Section 5(a) of the Agreement with
respect to Party B shall not constitute an Event of
Default or Potential Event of Default with respect to
Party B or Asset-Backed Certificates, Series 2002-3
as the Defaulting Party and (b) Party A shall be
entitled to designate an Early Termination Event
pursuant to Section 6 of the Agreement only as a
result of a Termination Event set forth in either
Section 5(b)(i) or Section 5(b)(ii) of the Agreement
with respect to Party A as the Affected Party or
Section S(b)(iii) of the Agreement with respect to
Party A as the Burdened Party, In addition, the grace
period set forth in Section 5(a)(i) of the Agreement
shall be one Business Day rather than three Business
Days.
8 Trust Administrator Capacity: It is expressly understood and agreed by the parties
hereto that insofar as this Confirmation is executed
by the Trustee defined herein as Deutsche Bank
National Trust Company ("Deutsche Bank"), not in its
individual capacity but solely as Trustee on behalf
of Long Beach Mortgage Loan Trust 2002-4 under the
Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated October 1, 2002 among
Long Beach Securities Corp. as depositor (the
"Depositor"), Long Beach Mortgage Company as seller,
Xxxxxx Xxx and Deutsche Bank as Trustee, (i) this
Confirmation is executed and delivered by Deutsche
Bank not in its individual capacity but solely as
Trustee under the Pooling and Servicing Agreement
referred to in this Confirmation in the exercise of
the powers and authority conferred and vested in it
thereunder and (ii) under no circumstances shall
Deutsche Bank in its individual capacity be
personally liable for the payment of any indebtedness
or expenses or be personally liable for the breach or
failure of any obligation, representation, warranty
or covenant made or undertaken under this
Confirmation.
9 Transfer, No transfer, amendment, waiver, supplement,
Amendment and assignment or other modification of this
Assignment: Transaction shall be permitted by either party
unless each of Xxxxx'x Investor Services, Inc.
("Moody's), Standard & Poors, a Division of The
B-1-5
XxXxxx-xxxx Companies, Inc. ("S & P") and Fitch,
Inc. ("Fitch") has been provided notice of the
same and confirms in writing (including by
facsimile transmission) within five Business Days
after such notice is given that it will not
downgrade, withdraw, qualify or otherwise modify
its then-current rating of the certificates
issued pursuant to the Pooling and Servicing
Agreement referenced above (the "Certificates ")
and the related net interest margin securities
(the "Notes") issued by one or more affiliates of
the Depositor or by one or more entities
sponsored by an affiliate of the Depositor
pursuant to an Indenture (the "Indenture"),
without regard to the insurance policies issued
by the Note Insurer and the Backup Note Insurer
(each, if any, as defined in the Indenture).
Furthermore, no such transfer, amendment, waiver,
supplement, assignment or other modification
shall be permitted by either party unless the
Note Insurer and the Backup Note Insurer shall
have been provided notice of the same and the
Note Insurer and the Backup Note Insurer shall
have consented thereto, which consent shall not
be unreasonably withheld. The Note Insurer shall
not have any consent rights hereunder if an
Insurer Default (if any, as defined in the
Indenture) has occurred and is continuing and the
Backup Note Insurer shall not have any consent
rights hereunder if a Backup Insurer Default (if
any, as defined in the Indenture) has occurred
and is continuing
10 Proceedings: Party A shall not institute against or cause any
other person to institute against, or join any
other person in instituting against Party B any
bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other
proceedings under any federal or state
bankruptcy, dissolution or similar law for a
period of one year and one day following
(i) payment in full of the Notes and
(ii) satisfaction and discharge of the Pooling
and Servicing Agreement; provided, however, than
nothing shall prevent Party A from joining such a
proceeding if commenced by a third party.
B-1-6
11 Set-off: The provisions for Set-offset forth in Section
6(e) of the Agreement shall not apply for
purposes of this Transaction.
12 Section 1(c): For purposes of section 1(c) of the Agreement,
this Transaction shall be the sole Transaction
under the Agreement.
13 Rating Agency If a Ratings Event (as defined below) occurs
Downgrade: with respect to Party A, then Party A shall, at
its own expense, (i) assign this Transactions
hereunder to a third party within thirty (30)
days of such Ratings Event that meets or
exceeds, or as to which any applicable credit
support provider meets or exceeds, the Approved
Ratings Thresholds (as defined below) on terms
substantially similar to this Confirmation or
(ii) deliver collateral, in an amount equal to
the Exposure (as defined below), and an executed
ISDA Credit Support Annex within thirty (30)
days of such Ratings Event and subject to S&P's
and Moody's written confirmation that delivery
of such collateral in the context of such
downgrade will not result in a withdrawal,
qualification or downgrade of the then current
ratings assigned to the Certificates and the
Notes, without regard to the Insurance Policies,
if any, issued by the Note Insurer or the Backup
Note Insurer. For avoidance of doubt, a
downgrade of the rating on the Certificates
could occur in the event that Party A does not
post sufficient collateral. For purposes of
this Transaction, a "Ratings Event" shall occur
with respect to Party A, if short-term
certificates of deposit cease to be rated at
least "A-1" by S&P, and at least "P-1" by
Moody's (including in connection with a merger,
consolidation or other similar transaction by
Party A) such ratings being referred to herein
as the "Approved Ratings Thresholds," (unless,
within 30 days after such withdrawal or
downgrade, each of Moody's and S&P has
reconfirmed the rating of the Certificates,
which was in effect immediately prior to such
withdrawal or downgrade) Only with respect to
such Ratings Event, "Exposure" shall mean the
greater of the following: (i) the
xxxx-to-market value of the Transaction as of
the Valuation Date (as such term is defined in
the ISDA Credit Support Annex); (ii) the amount
of the next payment due under the Transaction
and (iii) one percent of the Notional Amount for
the respective Calculation Period.
B-1-7
14 Additional Additional Termination Events will apply. If a
Termination Ratings Event has occurred and Party A has not,
Events: within 30 days, complied with Section 14 above, then
an Additional Termination Event shall have occurred
with respect to Party A and Party A shall be the sole
Affected Party with respect to such an Additional
Termination Event.
15 Representations: With respect in Section 3 of the Agreement, each
party represents to the other party (which
representations will be deemed to be repeated by each
party on each date on which a transaction is entered
into) that:
(i) This Confirmation constitutes a "swap agreement'
within the meaning of Commodity Futures Trading
Commission ("CFTC") Regulations (the "CFTC
Regulations") Section 35. 1(b)(l), Section 101
(53)(B) of the U.S. Bankruptcy Code and the CFTC
Policies Statement concerning Swap Transactions, 54 Fed
Reg. 30694 (July 21, 1989) (the "CFTC Swap Policies
Statement").
(ii) It is an "eligible contract participant" as
defined in Section la(12) of the Commodity Exchange
Act (7 U.S.C. la), as amended by the Commodity
Futures Modernization Act of 2000.
(iii) it has entered into this Confirmation in
conjunction with its line of business (including
financial intermediation services) or the financing
of its business, within the meaning of the CFTC Swap
Policies Statement.
16 Payer Tax With respect to Section 3(e) of the Agreement, Party
Representation: A will make the foil owing representation and Party B
will make the following representation:
It is not required by any applicable law, as modified
by the practice of any relevant governmental revenue
authority, of any Relevant Jurisdiction to make any
deduction or withholding for or on account of any Tax
from any payment (other than interest under
Section 2(e), 6(d)(ii) or 6(e) of the Agreement) to
be made by it to the other party under this
Confirmation. In making this representation, it may
rely on (I) the accuracy of any representations made
by the other party pursuant to Section 3(f) of the
Agreement, (ii) the satisfaction of the agreement
contained in Section 4(a)(i) or 4(a)(iii) of the
Agreement and the accuracy and effectiveness of any
document provided by the other party pursuant to
Section
4(a)(i) or 4(a)(iii) of the Agreement and (iii) the
satisfaction of the agreement of the other party
contained in Section 4(d) of the Agreement, provided
that it shall not be a breach of this representation
B-1-8
where reliance is placed on clause (ii) and the other
party does not deliver a form or document under
Section 4(a)(iii) by reason of material prejudice to
its legal or commercial position.
17 Document With respect to Section 4(a)(i) and 4(a)(ii) of the
Delivery: Agreement, Xxxxx A will deliver annual audited
financial statements prepared in accordance with
generally accepted accounting principles in the country
in which the party is organized promptly after
request. Party A will also deliver certified copies of
the resolution(s) of its board of directors or other
documents authorizing the execution and delivery of
this Confirmation concurrently with the execution of
this Confirmation. Party A will also deliver an
incumbency certificate or other documents evidencing
the authority of the party entering into this
Confirmation or any other document executed in
connection with this Confirmation concurrently with the
execution of this Confirmation or any other documents
executed in connection with this Confirmation.
18 Third Part Beneficiary Each of the Note Insurer and the Backup Note
Rights Insurer is a third party beneficiary of this
Agreement and is entitled to the rights and
benefits hereunder and may enforce the provisions
hereof as if it were a party hereto.
B-1-9
Please confirm that the foregoing correctly sets forth the terms and
conditions of our agreement by responding within three (3) Business Days by
returning via telecopier an executed copy of this Confirmation to the attention
of Global Derivative Operations at (fax no.(000) 000-0000).
Failure to respond within such period shall not affect the validity or
enforceability of this Transaction, and shall be deemed to be an affirmation of
the terms and conditions contained herein, absent manifest error.
Yours Sincerely,
Bank of America, N.A.
Authorized Signatory
Accepted and confirmed as of the date first written:
Long Beach Mortgage Loan Trust 2002-4
By: Deutsche Bank National Trust Company, not in its individual capacity but
solely as the Trustee
By:_________________________________
Name: ______________________________
Title: ______________________________
By:_________________________________
Name: ______________________________
Title: ______________________________
Our Reference # 48844/48845
B-1-10
SCHEDULE A TO CONFIRMATION
AMORTIZATION SCHEDULE
Beginning Date Ending Date Notional
11/25/02 12/27/02 $ (583,882,945.42)
12/27/02 1/27/03 $ (567,510,266.74)
1/27/03 2/25/03 $ (551,450,267.61)
2/25/03 3/25/03 $ (535,659,895.91)
3/25/03 4/25/03 $ (520,036,134.24)
4/25/03 5/27/03 $ (506,812,417.77)
5/27/03 6/25/03 $ (493,945,196.77)
6/25/03 7/25/03 $ (481,271,571.53)
7/25/03 8/26/03 $ (468,787,558.00)
8/26/03 9/25/03 $ (456,489,896.60)
9/25/03 10/27/03 $ (444,421,865.84)
10/27/03 11/25/03 $ (432,663,978.93)
11/25/03 12/29/03 $ (421,208,277.76)
12/29/03 1/26/04 $ (410,047,008.36)
1/26/04 2/25/04 $ (399,172,615.60)
2/25/04 3/25/04 $ (388,577,738.16)
3/25/04 4/26/04 $ (378,255,203.52)
4/26/04 5/25/04 $ (368,198,023.13)
5/25/04 6/25/04 $ (358,399,387.69)
6/25/04 7/26/04 $ (348,852,662.54)
7/26/04 8/25/04 $ (339,551,383.18)
8/25/04 9/27/04 $ (330,489,250.93)
9/27/04 10/25/04 $ (321,660,128.66)
10/25/04 11/26/04 $ (313,058,036.61)
11/26/04 12/29/04 $ (304,677,148.43)
12/29/04 1/25/05 $ (296,511,787.18)
1/25/05 2/25/05 $ (288,556,421.53)
2/25/05 3/29/05 $ (280,805,662.00)
3/29/05 4/25/05 $ (273,254,257.34)
X-0-00
XXXXXXX X-0
FORM OF GROUP II CAP AGREEMENT
BankofAmerica
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Tel 000-000-0000
Fax 000-000-0000
Bank of America N.A.
TO: Long Beach Mortgage Loan Trust 2002-4
ATTN: Xxxxxxx Xxxxxxx
TEL: (000) 000-0000
FAX: (000) 000-0000
FROM: Bank of America, N.A.
000 Xxxxx Xxxxxx Xxxxx - Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Xxxx Xxxxxxxx / Xxxxx Xxxxxxxx
Date: 04OCT02
Our Reference No. 48843 48842
Internal Tracking Nos. 455195 455200
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between Bank of America, N.A and Long Beach
Mortgage Loan Trust 2002-4 (each a `party" and together "the parties") on the
Trade Date specified below (the "Transaction").
This letter agreement constitutes a "Confirmation" and the definitions and
provisions contained in the 2000 ISDA Definitions, as published by the
International Swaps and Derivatives Association, Inc. (the "Definitions') are
incorporated into this Confirmation. In the event of any inconsistency between
the Definitions and this Confirmation, this Confirmation will govern.
B-2-1
1 This Confirmation evidences a complete binding agreement between the
parties as to the terms of the Transaction to which this Confirmation
relates. In addition, the parties agree that for the purposes of this
Transaction, this Confirmation will supplement, form a part of, and be
subject to an agreement in the form of the 1992 ISDA Master Agreement
(Multicurrency-Cross Border) as if the patties had executed an agreement
(the "Agreement") in such form (but without any Schedule except for the
election of (i) the laws of the State of New York (without reference to
choice of law doctrine) as the governing law and (ii) USD as the
Termination Currency) on the Trade Date of the Transaction, In the event of
any inconsistency between the provisions of that agreement and this
Confirmation, this Confirmation will prevail for the purpose of this
Transaction.
Each party represents to the other party and will be deemed to represent to the
other party on the date on which it enters into a Transaction that (absent a
written agreement between the parties that expressly imposes affirmative
obligations to the contrary for that Transaction):
(i) Non-Reliance. It is acting for its own account, and it has made its own
independent decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisors as it has deemed necessary, except as specifically set
forth in paragraph 8 of this Confirmation as to Party B. It is not relying on
any communication (written or oral) of the other party as investment advice or
as a recommendation to enter into that Transaction; it being understood that
information and explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a recommendation to
enter into that Transaction. Further, such party has not received from the other
party any assurance or guarantee as to the expected results of that Transaction.
(ii) Evaluation and Understanding. It is capable of evaluation and
understanding (on its own behalf or Through independent professional advice),
and understands and accepts, the terms, conditions and risks of that
Transaction. It is also capable of assuming, and assumes, the financial and
other risks of that Transaction.
(iii) Status of Parties. The other party is not acting as an agent,
fiduciary or advisor for it in respect of that Transaction.
In this Confirmation "Party A" means Bank of America, N.A., a national
banking association and `Party B' means Long Beach Mortgage Loan Trust
2002-4.
2 The particular Transaction to which this Confirmation relates is an
Interest Rate Corridor and the terms of the Transaction to which this
Confirmation relates are as follows:
Notional Amount: USD 390,540,640.53
Trade Date: 01OCT02
Effective Date: 25NOV02
Termination Date: 25APR05, subject to adjustment in accordance with the
Modified Following Business Day Convention
Amortization: APPLICABLE (See Schedule A attached hereto)
Fixed Rate Amounts:
Fixed Rate Payer Party B
B-2-2
Fixed Rate Payer
Payment Dates: 04OCT02, subject to adjustment in accordance with the
Modified Following Business Day Convention.
Fixed Amount: USD 365,000.00
Floating Amounts I:
Floating Rate
Payer: Party A
Cap Rate: 5.800000%
Floating Rate Payer
Payment Dates: Two Business Days prior to the 25th of each Month, commencing
23DEC02 and ending 21APR05, subject to adjustment in accordance
with the Preceeding Business Day Convention.
Floating Rate for the
Initial Calculation Period: TO BE SET
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 Month
Spread: None
Floating Rate Day Count
Fraction: Actual/360
Reset Dates: The first day of each Calculation Period
Floating Amounts II:
Floating Rate
Payer: Party B
Cap Rate: 7.55000%
Floating Rate Payer
Payment Dates: Two business days prior to the 25th of each Month, commencing
23DEC02 and ending 21APR05, subject to adjustment in accordance
with the Preceeding Business Day Convention.
Floating Rate for the
Initial Calculation Period: TO BE SET
Floating Rate Option: USD-LIBOR-BBA
B-2-3
Designated Maturity: 1 Month
Spread: None
Floating Rate Day
Count Fraction: Actual/36O
Reset Dates: The first day of each Calculation Period
Business Days: New York, London
Calculation Agent: Party A
3 Recording of Conversations:
Each party to this Transaction acknowledges and agrees to the tape
recording of conversations between the parties to this Transaction whether
by one or other or both of the parties or their agents, and that any such
tape recordings may be submitted in evidence in any Proceedings relating to
the Agreement and/or this Transaction.
4 Account Details:
Payments to Bank of America, N.A.:
USD
NAME: BANK OF AMERICA NA
CITY: NEW YORK
ABA#: 000000000
ATTN: BOFAUS3N
NAME: BANK OF AMERICA NA
CITY: CHARLOTTE
ACCT: 6550219386
ATTN: RATE DERIVATIVE SETTLEMENTS
ATTN: XXXXXX0XXXX
Payments to Deutsche Bank National Trust Company:
USD
Bankers Trust Company
ABA# 000000000
LA Asset Backed Account
Acct# 00000000
Ref: Xxxx Xxxxx 0000-0, cap payment
5 Offices:
The Office of Party A for this
Transaction is: Charlotte, NC
Please send reset notices to fax no. (000-000-0000)
The Office of Party B for this
Transaction is: Santa Ana, California, USA
B-2-4
6 Governing Law: The Laws of the State of New York (without reference
to the conflict of laws provisions thereof other than
Section 5.1401 of the New York General Obligations
Law.)
7 Additional
Provisions: Notwithstanding the terms of Sections 5 and 6 of the
Agreement, if Party B has satisfied its payment
obligations under Section 2(a)(i) of the Agreement,
then unless Party A is required pursuant to
appropriate proceedings to return to Party B or
otherwise returns to Party B upon demand of Party B
any portion of such payment, (a) the occurrence of an
event described in Section 5(a) of the Agreement with
respect to Party B shall not constitute an Event of
Default or Potential Event of Default with respect to
Party B or Asset-Backed Certificates, Series 2002-3
as the Defaulting Party and (b) Party A shall be
entitled to designate an Early Termination Event
pursuant to Section 6 of the Agreement only as a
result of a Termination Event set forth in either
Section 5(b)(i) or Section 5(b)(ii) of the Agreement
with respect to Party A as the Affected Party or
Section S(b)(iii) of the Agreement with respect to
Party A as the Burdened Party, In addition, the grace
period set forth in Section 5(a)(i) of the Agreement
shall be one Business Day rather than three Business
Days.
8 Trust Administrator Capacity: It is expressly understood and agreed by the parties
hereto that insofar as this Confirmation is executed
by the Trustee defined herein as Deutsche Bank
National Trust Company ("Deutsche Bank"), not in its
individual capacity but solely as Trustee on behalf
of Long Beach Mortgage Loan Trust 2002-4 under the
Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated October 1, 2002 among
Long Beach Securities Corp. as depositor (the
"Depositor"), Long Beach Mortgage Company as seller,
Xxxxxx Xxx and Deutsche Bank as Trustee, (i) this
Confirmation is executed and delivered by Deutsche
Bank not in its individual capacity but solely as
Trustee under the Pooling and Servicing Agreement
referred to in this Confirmation in the exercise of
the powers and authority conferred and vested in it
thereunder and (ii) under no circumstances shall
Deutsche Bank in its individual capacity be
personally liable for the payment of any indebtedness
or expenses or be personally liable for the breach or
failure of any obligation, representation, warranty
or covenant made or undertaken under this
Confirmation.
9 Transfer, No transfer, amendment, waiver, supplement,
Amendment and assignment or other modification of this
Assignment: Transaction shall be permitted by either party
B-2-5
unless each of Xxxxx'x Investor Services, Inc.
("Moody's), Standard & Poors, a Division of The
XxXxxx-xxxx Companies, Inc. ("S & P") and Fitch,
Inc. ("Fitch") has been provided notice of the
same and confirms in writing (including by
facsimile transmission) within five Business Days
after such notice is given that it will not
downgrade, withdraw, qualify or otherwise modify
its then-current rating of the certificates
issued pursuant to the Pooling and Servicing
Agreement referenced above (the "Certificates ")
and the related net interest margin securities
(the "Notes") issued by one or more affiliates of
the Depositor or by one or more entities
sponsored by an affiliate of the Depositor
pursuant to an Indenture (the "Indenture"),
without regard to the insurance policies issued
by the Note Insurer and the Backup Note Insurer
(each, if any, as defined in the Indenture).
Furthermore, no such transfer, amendment, waiver,
supplement, assignment or other modification
shall be permitted by either party unless the
Note Insurer and the Backup Note Insurer shall
have been provided notice of the same and the
Note Insurer and the Backup Note Insurer shall
have consented thereto, which consent shall not
be unreasonably withheld. The Note Insurer shall
not have any consent rights hereunder if an
Insurer Default (if any, as defined in the
Indenture) has occurred and is continuing and the
Backup Note Insurer shall not have any consent
rights hereunder if a Backup Insurer Default (if
any, as defined in the Indenture) has occurred
and is continuing
10 Proceedings: Party A shall not institute against or cause any
other person to institute against, or join any
other person in instituting against Party B any
bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other
proceedings under any federal or state
bankruptcy, dissolution or similar law for a
period of one year and one day following
(i) payment in full of the Notes and
(ii) satisfaction and discharge of the Pooling
and Servicing Agreement; provided, however, than
nothing shall prevent Party A from joining such a
proceeding if commenced by a third party.
B-2-6
11 Set-off: The provisions for Set-offset forth in
Section 6(e) of the Agreement shall not apply
for purposes of this Transaction.
12 Section 1(c): For purposes of section 1(c) of the
Agreement, this Transaction shall be the sole
Transaction under the Agreement.
13 Rating Agency If a Ratings Event (as defined below) occurs
Downgrade: with respect to Party A, then Party A shall,
at its own expense, (i) assign this
Transactions hereunder to a third party
within thirty (30) days of such Ratings Event
that meets or exceeds, or as to which any
applicable credit support provider meets or
exceeds, the Approved Ratings Thresholds (as
defined below) on terms substantially similar
to this Confirmation or (ii) deliver
collateral, in an amount equal to the
Exposure (as defined below), and an executed
ISDA Credit Support Annex within thirty (30)
days of such Ratings Event and subject to
S&P's and Moody's written confirmation that
delivery of such collateral in the context of
such downgrade will not result in a
withdrawal, qualification or downgrade of the
then current ratings assigned to the
Certificates and the Notes, without regard to
the Insurance Policies, if any, issued by the
Note Insurer or the Backup Note Insurer. For
avoidance of doubt, a downgrade of the rating
on the Certificates could occur in the event
that Party A does not post sufficient
collateral. For purposes of this
Transaction, a "Ratings Event" shall occur
with respect to Party A, if short-term
certificates of deposit cease to be rated at
least "A-1" by S&P, and at least "P-1" by
Moody's (including in connection with a
merger, consolidation or other similar
transaction by Party A) such ratings being
referred to herein as the "Approved Ratings
Thresholds," (unless, within 30 days after
such withdrawal or downgrade, each of Moody's
and S&P has reconfirmed the rating of the
Certificates, which was in effect immediately
prior to such withdrawal or downgrade) Only
with respect to such Ratings Event,
"Exposure" shall mean the greater of the
following: (i) the xxxx-to-market value of
the Transaction as of the Valuation Date (as
such term is defined in the ISDA Credit
Support Annex); (ii) the amount of the next
payment due under the Transaction and
(iii) one percent of the Notional Amount for
the respective Calculation Period.
B-2-7
14 Additional Additional Termination Events will apply. If a
Termination Ratings Event has occurred and Party A has not, within
Events: 30 days, complied with Section 14 above, then an
Additional Termination Event shall have occurred with
respect to Party A and Party A shall be the sole
Affected Party with respect to such an Additional
Termination Event.
15 Representations: With respect in Section 3 of the Agreement, each party
represents to the other party (which representations
will be deemed to be repeated by each party on each
date on which a transaction is entered into) that:
(i) This Confirmation constitutes a "swap agreement'
within the meaning of Commodity Futures Trading
Commission ("CFTC") Regulations (the "CFTC Regulations")
Section 35. 1(b)(l), Section 101 (53)(B) of the U.S.
Bankruptcy Code and the CFTC Policies Statement
concerning Swap Transactions, 54 Fed Reg. 30694
(July 21, 1989) (the "CFTC Swap Policies Statement").
(ii) It is an "eligible contract participant" as
defined in Section la(12) of the Commodity Exchange Act
(7 U.S.C. la), as amended by the Commodity Futures
Modernization Act of 2000.
(iii) it has entered into this Confirmation in
conjunction with its line of business (including
financial intermediation services) or the financing of
its business, within the meaning of the CFTC Swap
Policies Statement.
16 Payer Tax With respect to Section 3(e) of the Agreement,
Representation: Party A will make the foil owing representation and
Party B will make the following representation:
It is not required by any applicable law, as
modified by the practice of any relevant
governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding
for or on account of any Tax from any payment
(other than interest under Section 2(e),
6(d)(ii) or 6(e) of the Agreement) to be made by it
to the other party under this Confirmation. In
making this representation, it may rely on (I) the
accuracy of any representations made by the other
party pursuant to Section 3(f) of the Agreement,
(ii) the satisfaction of the agreement contained in
Section 4(a)(i) or 4(a)(iii) of the
B-2-8
Agreement and the accuracy and effectiveness of any
document provided by the other party pursuant to
Section 4(a)(i) or 4(a)(iii) of the Agreement and
(iii) the satisfaction of the agreement of the other
party contained in Section 4(d) of the Agreement,
provided that it shall not be a breach of this
representation where reliance is placed on clause
(ii) and the other party does not deliver a form or
document under Section 4(a)(iii) by reason of material
prejudice to its legal or commercial position.
17 Document With respect to Section 4(a)(i) and 4(a)(ii) of the
Delivery: Agreement, Xxxxx A will deliver annual audited
financial statements prepared in accordance with
generally accepted accounting principles in the country
in which the party is organized promptly after
request. Party A will also deliver certified copies of
the resolution(s) of its board of directors or other
documents authorizing the execution and delivery of
this Confirmation concurrently with the execution of
this Confirmation. Party A will also deliver an
incumbency certificate or other documents evidencing
the authority of the party entering into this
Confirmation or any other document executed in
connection with this Confirmation concurrently with the
execution of this Confirmation or any other documents
executed in connection with this Confirmation.
18 Third Part Beneficiary Each of the Note Insurer and the Backup Note
Rights Insurer is a third party beneficiary of this
Agreement and is entitled to the rights and
benefits hereunder and may enforce the provisions
hereof as if it were a party hereto.
B-2-9
Please confirm that the foregoing correctly sets forth the terms and
conditions of our agreement by responding within three (3) Business Days by
returning via telecopier an executed copy of this Confirmation to the attention
of Global Derivative Operations at (fax no.(000) 000-0000).
Failure to respond within such period shall not affect the validity or
enforceability of this Transaction, and shall be deemed to be an affirmation of
the terms and conditions contained herein, absent manifest error.
Yours Sincerely,
Bank of America, N.A.
Authorized Signatory
Accepted and confirmed as of the date first written:
Long Beach Mortgage Loan Trust 2002-4
By: Deutsche Bank National Trust Company, not in its individual capacity but
solely as the Trustee
By:_________________________________
Name: ______________________________
Title: ______________________________
By:_________________________________
Name: ______________________________
Title: ______________________________
Our Reference # 48843/48842
B-2-10
SCHEDULE A TO CONFIRMATION
AMORTIZATION SCHEDULE
Beginning Date Ending Date Notional
11/25/02 12/27/02 $ (390,540,640.53)
12/27/02 1/27/03 $ (380,425,863.03)
1/27/03 2/25/03 $ (370,448,689.36)
2/25/03 3/25/03 $ (360,581,078.60)
3/25/03 4/25/03 $ (350,752,790.69)
4/25/03 5/27/03 $ (340,371,557.19)
5/27/03 6/25/03 $ (331,940,489.87)
6/25/03 7/25/03 $ (323,583,534.65)
7/25/03 8/26/03 $ (315,300,062.76)
8/26/03 9/25/03 $ (307,090,099.44)
9/25/03 10/27/03 $ (299,024,274.01)
10/27/03 11/25/03 $ (291,163,073.33)
11/25/03 12/29/03 $ (283,502,446.46)
12/29/03 1/26/04 $ (276,037,283.82)
1/26/04 2/25/04 $ (268,762,606.02)
2/25/04 3/25/04 $ (261,673,560.53)
3/25/04 4/26/04 $ (254,765,418.44)
4/26/04 5/25/04 $ (248,033,571.32)
5/25/04 6/25/04 $ (241,473,528.13)
6/25/04 7/26/04 $ (235,080,912.24)
7/26/04 8/25/04 $ (228,851,458.53)
8/25/04 9/27/04 $ (222,781,010.49)
9/27/04 10/25/04 $ (216,865,517.54)
10/25/04 11/26/04 $ (211,101,032.22)
11/26/04 12/29/04 $ (205,483,707.67)
12/29/04 1/25/05 $ (200,009,794.97)
1/25/05 2/25/05 $ (194,675,640.73)
2/25/05 3/29/05 $ (189,477,684.57)
3/29/05 4/25/05 $ (184,412,456.83)
B-2-11
EXHIBIT C
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT
This is a Mortgage Loan Purchase Agreement (the "Agreement"), dated October
1, 2002, between Long Beach Securities Corp., a Delaware corporation (the
"Purchaser") and Long Beach Mortgage Company, a Delaware corporation (the
"Seller").
Preliminary Statement
The Seller intends to sell certain mortgage loans to the Purchaser on the
terms and subject to the conditions set forth in this Agreement. The Purchaser
intends to deposit the mortgage loans into a mortgage pool constituting the
trust fund. The trust fund will issue fixed rate and adjustable rate asset
backed certificates designated as Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates, Series 2002-4 (the "Certificates"). The Certificates
will consist of thirteen classes of certificates. The Certificates will be
issued pursuant to a Pooling and Servicing Agreement, dated as of October 1,
2002 (the "Pooling and Servicing Agreement"), among the Purchaser, as depositor,
Deutsche Bank National Trust Company, as trustee (the "the Trustee"), Xxxxxx
Xxx, as guarantor with respect to the Class I-A Certificates and the Class I-S1
Certificates (the "Guarantor"), and the Seller, as master servicer (in such
capacity, the "Master Servicer"). Pursuant to a Commitment Letter, dated as of
September 6, 2002, among the Purchaser, the Seller, Xxxxxx Xxxxxxx & Co.
Incorporated and the Guarantor, the Class I-A Certificates and the Class I-S1
Certificates will be exchanged for Class A1 and Class S1 Guaranteed Grantor
Trust Pass-Through Certificates to be issued by the Guarantor (the "Guarantor
Certificates"). Capitalized terms used but not defined herein shall have the
meanings set forth in the Pooling and Servicing Agreement.
The parties hereto agree as follows:
SECTION 1. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase, on or
before October 4, 2002 (the "Closing Date"), certain fixed-rate and
adjustable-rate conventional residential mortgage loans (the "Mortgage Loans").
SECTION 2. Mortgage Loan Schedule.
The Purchaser and the Seller have agreed upon which of the mortgage loans
owned by the Seller are to be purchased by the Purchaser pursuant to this
Agreement on the Closing Date and the Seller will prepare or cause to be
prepared on or prior to the Closing Date a final schedule (the "Closing
Schedule") that shall describe such Mortgage Loans and set forth all of the
Mortgage Loans to be purchased under this Agreement. The Closing Schedule will
conform to the requirements set forth in this Agreement and to the definition of
"Mortgage Loan Schedule" under the Pooling and Servicing Agreement. The Closing
Schedule shall be the Mortgage Loan Schedule under the Pooling and Servicing
Agreement.
C-1
SECTION 3. Consideration.
In consideration for the Mortgage Loans to be purchased hereunder, the
Purchaser shall on the Closing Date, as described in Section 8 hereof, (i) pay
to or upon the order of the Seller in immediately available funds an amount (the
"Purchase Price") equal to the net cash sale proceeds of the Class II-A
Certificates, the Class II-S1 Certificates and the Guarantor Certificates and
(ii) deliver to Long Beach Asset Holdings Corp., upon the order of the Seller,
the Class C Certificates, the Class P Certificates, the Class S2 Certificates,
the Class R Certificates, the Class R-CX Certificates and the Class R-PX
Certificates (the "Long Beach Certificates").
The Purchaser or any assignee, transferee or designee of the Purchaser
shall be entitled to (i) all scheduled payments of principal due after October
1, 2002 (the "Cut-off Date"), (ii) all unscheduled collections in respect of the
Mortgage Loans received after October 1, 2002 (other than the portion of such
collections due on or prior to the Cut-off Date), (iii) all other payments of
principal due and collected after the Cut-off Date, and (iv) all payments of
interest on the Mortgage Loans due after the Cut-off Date. All scheduled
payments of principal and interest due on or before the Cut-off Date and
collected after the Cut-off Date shall belong to the Seller.
Pursuant to the Pooling and Servicing Agreement, the Purchaser will
transfer, assign, set over and otherwise convey to the Trustee without recourse
for the benefit of the Certificateholders, all the right, title and interest of
the Purchaser in and to the Mortgage Loans, together with its rights under this
Agreement (other than Section 17 hereof).
SECTION 4. Transfer of the Mortgage Loans.
(a) Possession of Mortgage Files. The Seller does hereby sell, transfer,
assign, set over and convey to the Purchaser, without recourse, but subject to
the terms of this Agreement, all of its right, title and interest in, to and
under the Mortgage Loans. The contents of each Mortgage File related to a
Mortgage Loan not delivered to the Purchaser or to any assignee, transferee or
designee of the Purchaser on or prior to the Closing Date are and shall be held
in trust by the Seller for the benefit of the Purchaser or any assignee,
transferee or designee of the Purchaser and promptly transferred to the Trustee.
Upon the sale of the Mortgage Loans, the ownership of each related Mortgage
Note, the related Mortgage and the other contents of the related Mortgage File
shall be vested in the Purchaser and the ownership of all records and documents
with respect to the related Mortgage Loan prepared by or that come into the
possession of the Seller on or after the Closing Date shall immediately vest in
the Purchaser and shall be delivered promptly to the Purchaser or as otherwise
directed by the Purchaser.
(b) Delivery of Mortgage Loan Documents. The Seller will, on or prior to
the Closing Date deliver or cause to be delivered to the Purchaser, the Trustee
or their designee each of the following documents for each Mortgage Loan:
(i) the original Mortgage Note, endorsed in blank or in the following form:
"Pay to the order of Deutsche Bank National Trust Company, as Trustee, under the
applicable agreement, without recourse," with all prior and intervening
endorsements, showing a complete chain of endorsement from the originator to the
C-2
Person so endorsing to the Trustee or (in the case of not more than 1.00% of the
Mortgage Loans, by aggregate principal balance as of the Cut-off Date) a copy of
such original Mortgage Note with an accompanying Lost Note Affidavit executed by
the Seller;
(ii) the original Mortgage with evidence of recording thereon, and a copy,
certified by the appropriate recording office, of the recorded power of
attorney, if the Mortgage was executed pursuant to a power of attorney, with
evidence of recording thereon;
(iii) an original Assignment in blank;
(iv) the original recorded Assignment or Assignments showing a complete
chain of assignment from the originator to the Person assigning the Mortgage to
the Trustee or in blank;
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(vi) the original lender's title insurance policy, (or, in the case of any
Washington Mutual Mortgage Loan, a copy thereof) together with all endorsements
or riders issued with or subsequent to the issuance of such policy, insuring the
priority of the Mortgage as a first lien or second lien on the Mortgaged
Property represented therein as a fee interest vested in the Mortgagor, or in
the event such title policy is unavailable, a written commitment or uniform
binder or preliminary report of the title issued by the title insurance or
escrow company.
The Seller shall promptly (and in no event later than thirty (30) Business
Days, subject to extension upon a mutual agreement between the Seller and the
Purchaser) following the later of the Closing Date and the date of receipt by
the Seller of the recording information for a Mortgage, submit or cause to be
submitted for recording, at no expense to the Purchaser, in the appropriate
public office for real property records, each Assignment referred to in (iii)
and (iv) above and shall execute each original Assignment referred to in clause
(iii) above in the following form: "Deutsche Bank National Trust Company, as the
Trustee under the applicable agreement, without recourse." In the event that any
such Assignment is lost or returned unrecorded because of a defect therein, the
Seller shall promptly prepare or cause to be prepared a substitute Assignment or
cure or cause to be cured such defect, as the case may be, and thereafter cause
each such Assignment to be duly recorded. Notwithstanding the foregoing, the
Assignments referred to in (iii) and (iv) above shall not be required to be
completed and submitted for recording with respect to any Mortgage Loan if each
Rating Agency shall have determined that no recordation is required for such
Rating Agency to assign the initial ratings to Class II-A Certificates, the
Class II-S1 Certificates (without regard to the Certificate Insurance Policy)
and the NIM Notes and the Certificate Insurer does not require recordation in
order for the Certificate Insurer to issue the Certificate Insurance Policy;
provided, however, that each Assignment referred to in (iii) and (iv) above
shall be submitted for recording by the Seller, in the manner described above,
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at no expense to the Trust Fund or the Trustee, upon the earliest to occur of:
(i) reasonable direction by Holders of Certificates entitled to at least 25% of
the Voting Rights, (ii) the occurrence of a Master Servicer Event of Default,
(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
of the Pooling and Servicing Agreement and (v) if the Seller is not the Master
Servicer and with respect to any one Assignment, the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgagor under the related Mortgage.
If any document referred to in Section 4(b)(ii), Section 4(b)(iii), Section
4(b)(iv), or Section 4(b)(v) above (collectively, the "Recording Documents") 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 Recording Documents shall be deemed to
be satisfied upon (1) delivery to the Purchaser, the Trustee or their designee
of a copy of each such Recording Document certified by the Seller 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 Seller, delivery to the Purchaser, the
Trustee or their designee upon receipt thereof, and in any event no later than
one year after the Closing Date (except as provided below), of either the
original or a copy of such document certified by the applicable public recording
office to be a true and complete copy of the original. In instances where, due
to a delay on the part of the applicable recording office where any such
Recording Documents have been delivered for recordation, the Recording Documents
cannot be delivered to the Purchaser, the Trustee or their designee within one
year after the Closing Date, the Seller shall deliver to the Purchaser, the
Trustee or their designee within such time period an Officer's Certificate
stating the date by which the Seller expects to receive such Recording Documents
from the applicable recording office. If the Recording Documents have still not
been received by the Seller and delivered to the Purchaser, the Trustee or their
designee by such date, the Seller shall deliver to the Purchaser, the Trustee or
their designee by such date an additional Officer's Certificate stating a
revised date by which Seller expects to receive the applicable Recording
Documents. This procedure shall be repeated until the Recording Documents have
been received by the Seller and delivered to the Purchaser, the Trustee or their
designee. If the original or copy of the lender's title insurance policy was not
delivered pursuant to Section 4(b)(vi) above, the Seller shall deliver or cause
to be delivered to the Purchaser, the Trustee or their designee promptly after
receipt thereof, and in any event within 120 days after the Closing Date such
title insurance policy. The Seller shall deliver or cause to be delivered to the
Purchaser, the Trustee or their designee promptly upon receipt thereof any other
original documents constituting a part of a Mortgage File received with respect
to any Mortgage Loan, including, but not limited to, any original documents
evidencing an assumption or modification of any Mortgage Loan.
Each original document relating to a Mortgage Loan which is not delivered
to the Purchaser, the Trustee or their designee, if held by the Seller, shall be
so held for the benefit of the Purchaser or its assignee, transferee or
designee. In the event that any such original document is required pursuant to
the terms of this Section to be a part of a Mortgage File, such document shall
be delivered promptly to the Purchaser, the Trustee or their designee. Any such
original document that is not required pursuant to the terms of this Section to
be a part of a Mortgage File shall be held by the Seller in its capacity as
Master Servicer.
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(c) Acceptance of Mortgage Loans. The documents delivered pursuant to
Section 4(b) hereof shall be reviewed by the Purchaser or any assignee,
transferee or designee of the Purchaser at any time before, on and after the
Closing Date (and with respect to each document permitted to be delivered after
the Closing Date within seven days of its delivery) to ascertain that all
required documents have been executed and received and that such documents
relate to the Mortgage Loans identified on the Mortgage Loan Schedule.
(d) Transfer of Interest in Agreements. The Purchaser has the right to
assign its interest under this Agreement (other than Section 17 hereof), in
whole or in part, to the Trustee, as may be required to effect the purposes of
the Pooling and Servicing Agreement, without the consent of the Seller, and the
Trustee shall succeed to the rights and obligations hereunder of the Purchaser.
Any expense reasonably incurred by or on behalf of the Purchaser, the Trustee,
or the Certificate Insurer, if any, in connection with enforcing any obligations
of the Seller under this Agreement will be promptly reimbursed by the Seller.
(e) Examination of Mortgage Files. Prior to the Closing Date the Seller
shall either (i) deliver in escrow to the Purchaser or to any assignee,
transferee or designee of the Purchaser, for examination, the Mortgage File
pertaining to each Mortgage Loan, or (ii) make such Mortgage Files available to
the Purchaser or to any assignee, transferee or designee of the Purchaser for
examination. Such examination may be made by the Purchaser or the Trustee, and
their respective designees, upon reasonable notice to the Seller during normal
business hours at any time before or after the Closing Date. If any such person
makes such examination prior to the Closing Date or and identifies any Mortgage
Loans with respect to which the Seller's representations and warranties
contained in this Agreement are not correct, such Mortgage Loans shall be
deleted from the Mortgage Loan Schedule. The Purchaser may, at its option and
without notice to the Seller, purchase all or part of the Mortgage Loans without
conducting any partial or complete examination. The fact that the Purchaser or
any person has conducted or has failed to conduct any partial or complete
examination of the related Mortgage Files shall not affect the rights of the
Purchaser or any assignee, transferee or designee of the Purchaser to demand
repurchase or other relief as provided herein or under the Pooling and Servicing
Agreement.
SECTION 5. Representations, Warranties and Covenants of the Seller.
The Seller hereby represents and warrants and covenants to the Purchaser,
as of the date hereof and as of the Closing Date:
(i) The Seller is a corporation duly organized, validly existing and in
good standing 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 Seller 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 the Pooling and
Servicing Agreement;
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(ii) The Seller had the full corporate power and authority to originate,
hold and sell each Mortgage Loan and has the full corporate power and authority
to service each Mortgage Loan, and to execute, deliver and perform, and to enter
into and consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of the Seller the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery thereof by the Purchaser,
constitutes a legal, valid and binding obligation of the Seller, enforceable
against the Seller in accordance with its terms, except to the extent that the
enforceability thereof may be limited by (a) bankruptcy, insolvency, moratorium,
receivership, conservatorship, arrangement, moratorium and other similar laws
relating to creditors' rights generally and (b) the general principles of
equity, whether such enforcement is sought in equity or at law;
(iii) The execution and delivery of this Agreement by the Seller, the
servicing of the Mortgage Loans by the Seller under the Pooling and Servicing
Agreement, the consummation 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 Seller and does not (A) result in a
breach of any term or provision of the charter or by-laws of the Seller, (B)
conflict with, result in a breach, violation or acceleration of, or result in a
default under, the terms of any other material agreement, instrument or
indenture to which the Seller is a party or by which it may be bound, or any
statute, order or regulation applicable to the Seller of any court, regulatory
body, administrative agency or governmental body having jurisdiction over the
Seller or any of its property or (C) result in the creation or imposition of any
lien, charge or encumbrance which would have a material adverse effect upon the
Mortgage Loans or any documents or instruments evidencing or securing the
Mortgage Loans; and the Seller 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 Seller's knowledge, would in the
future result in the creation or imposition of any lien, charge or encumbrance
which would have a material adverse effect upon the Mortgage Loans or any
documents or instruments evidencing or securing the Mortgage Loans or materially
and adversely affect (x) the ability of the Seller to perform its obligations
under this Agreement or the Pooling and Servicing Agreement or (y) the business,
operations, financial condition, properties or assets of the Seller taken as a
whole;
(iv) 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 hereby, or if any such
consent, approval, authorization or order is required, the Seller has obtained
the same;
(v) The Seller is an approved seller/servicer for Xxxxxx Mae or Xxxxxxx Mac
in good standing and is a HUD approved mortgagee pursuant to Section 203 and
Section 211 of the National Housing Act;
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(vi) No litigation or proceeding is pending or, to the best knowledge of
the Seller, threatened, against the Seller that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or the
Pooling and Servicing Agreement or the issuance of the Certificates or the
ability of the Seller to service the Mortgage Loans or to perform any of its
other obligations hereunder in accordance with the terms hereof and the terms of
the Pooling and Servicing Agreement or, that would result in a material adverse
change in the financial or operating conditions of the Seller;
(vii) No certificate of an officer, statement or other information
furnished in writing or report delivered by the Seller to the Purchaser, any
Affiliate of the Purchaser, the Guarantor or the Trustee for use in connection
with the purchase of the Mortgage Loans and the transactions contemplated
hereunder and under the Pooling and Servicing Agreement contains any untrue
statement of a material fact, or omits a material fact necessary to make the
information, certificate, statement or report not misleading in any material
respect;
(viii) The Seller has not dealt with any broker, investment banker, agent
or other person, except for the Purchaser or any of its affiliates, that may be
entitled to any commission or compensation in connection with the sale of the
Mortgage Loans;
(ix) Each Mortgage Note, each Mortgage, each Assignment and any other
document required to be delivered by or on behalf of the Seller under this
Agreement or the Pooling and Servicing Agreement to the Purchaser or any
assignee, transferee or designee of the Purchaser for each Mortgage Loan has
been or will be, in accordance with Section 4(b) hereof, delivered to the
Purchaser or any such assignee, transferee or designee. With respect to each
Mortgage Loan, the Seller is in possession of a complete Mortgage File in
compliance with the Pooling and Servicing Agreement, except for such documents
that have been delivered (1) to the Purchaser or any assignee, transferee or
designee of the Purchaser or (2) for recording to the appropriate public
recording office and have not yet been returned;
(x) The Seller (A) is a solvent entity and is paying its debts as they
become due, (B) immediately after giving effect to the transfer of the Mortgage
Loans, will be a solvent entity and will have sufficient resources to pay its
debts as they become due and (C) did not sell the Mortgage Loans to the
Purchaser with the intent to hinder, delay or defraud any of its creditors;
(xi) The transfer of the Mortgage Loans to the Purchaser at the Closing
Date will be treated by the Seller for financial accounting and reporting
purposes as a sale of assets; and
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(xii) Seller currently operates or actively participates in an on-going
business (A) to originate single family mortgage loans, and/or (B) to make
periodic purchases of single family mortgage loans from originators or sellers,
and/or (C) to issue and/or purchase securities or bonds supported by single
family mortgage loans, a portion of which loans are made to borrowers who are
low-income families (families with incomes of 80% or less of area median income)
living in low-income areas (a census tract or block numbering area in which the
median income does not exceed 80 percent of the area median income).
SECTION 6. Representations and Warranties of the Seller Relating to the
Individual Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser, that as of the
Closing Date with respect to each Mortgage Loan:
(i) The information set forth on the Mortgage Loan Schedule with respect to
each Mortgage Loan is complete, true and correct in all material respects as of
the Cut-off Date, unless another date is set forth on the Mortgage Loan
Schedule;
(ii) [reserved];
(iii) Each Mortgage is a valid and enforceable first lien or second lien on
the Mortgaged Property, including all improvements thereon, subject only to (a)
the lien of non-delinquent current real property taxes and assessments, (b)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection with the
origination of the related Mortgage Loan and which do not materially interfere
with the benefits of the security intended to be provided by such Mortgage, (c)
other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by such Mortgage and (d) in the case of a second lien, only to a first lien on
such Mortgaged Property;
(iv) Immediately prior to the assignment of the Mortgage Loans to the
Purchaser, the Seller had good title to, and was the sole legal and beneficial
owner of, each Mortgage Loan, free and clear of any pledge, lien, encumbrance or
security interest and has full right and authority, subject to no interest or
participation of, or agreement with, any other party to sell and assign the
same. The form of endorsement of each Mortgage Note satisfied the requirement,
if any, of endorsement in order to transfer all right, title and interest of the
party so endorsing, as noteholder or assignee thereof, in and to that Mortgage
Note; and each Assignment to be delivered hereunder is in recordable form and is
sufficient to effect the assignment of and to transfer to the assignee
thereunder the benefits of the assignor, as mortgagee or assignee thereof, under
each Mortgage to which that Assignment relates;
(v) To the best of the Seller's knowledge, there is no delinquent tax or
assessment lien against any Mortgaged Property;
(vi) There is no valid offset, defense or counterclaim to any Mortgage Note
(including any obligation of the Mortgagor to pay the unpaid principal of or
interest on such Mortgage Note) or the Mortgage, including but not limited to
claims, offsets, rights of set-off or defenses of the type asserted in Xxxxxxxx
v. Long Beach Mortgage Company (176 F.Supp.2d 714), nor will the operation of
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any of the terms of the Mortgage Note and the Mortgage, or the exercise of any
right thereunder, render the Mortgage Note or 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;
(vii) To the best of the Seller's knowledge, there are no mechanics' liens
or claims for work, labor or material affecting any Mortgaged Property which are
or may be a lien prior to, or equal with, the lien of the related Mortgage,
except those which are insured against by the title insurance policy referred to
in (xi) below;
(viii) To the best of the Seller's knowledge, each Mortgaged Property is
free of material damage and is at least in average repair;
(ix) Each Mortgage Loan at origination complied in all material respects
with applicable local, state and federal laws, including, without limitation,
usury, equal credit opportunity, real estate settlement procedures,
truth-in-lending and disclosure laws, and consummation of the transactions
contemplated hereby, including without limitation the receipt of interest does
not involve the violation of any such laws;
(x) Neither the Seller nor any prior holder of any Mortgage has modified
the Mortgage in any material respect, satisfied, canceled or subordinated such
Mortgage in whole or in part; released the related Mortgaged Property in whole
or in part from the lien of such Mortgage; or executed any instrument of
release, cancellation, modification or satisfaction with respect thereto (except
that a Mortgage Loan may have been modified by a written instrument signed by
the Seller or a prior holder of the Mortgage Loan which has been recorded, if
necessary, to protect the interests of the Seller and the Purchaser and which
has been delivered to the Purchaser or any assignee, transferee or designee of
the Purchaser as part of the Mortgage File, and the terms of which are reflected
in the Mortgage Loan Schedule);
(xi) A lender's policy of title insurance together with a condominium
endorsement and extended coverage endorsement, if applicable, and, with respect
to each Adjustable Rate Mortgage Loan, an adjustable rate mortgage endorsement
in an amount at least equal to the balance of the Mortgage Loan as of the
Cut-off Date or a commitment (binder) to issue the same was effective on the
date of the origination of each Mortgage Loan, each such policy is valid and
remains in full force and effect, the transfer of the related Mortgage Loan to
the Purchaser and the Trustee does not affect the validity or enforceability of
such policy and each such policy was issued by a title insurer qualified to do
business in the jurisdiction where the Mortgaged Property is located and
acceptable to Xxxxxx Xxx and in a form acceptable to Xxxxxx Mae on the date of
origination of such Mortgage Loan, which policy insures the Seller and successor
owners of indebtedness secured by the insured Mortgage, as to the first or
second, as the case may be, priority lien of the Mortgage; to the best of the
Seller's knowledge, no claims have been made under such mortgage title insurance
policy and no prior holder of the related Mortgage, including the Seller, has
done, by act or omission, anything which would impair the coverage of such
mortgage title insurance policy;
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(xii) Each Mortgage Loan was originated by, or generated on behalf of, the
Seller, or originated by a savings and loan association, savings bank,
commercial bank, credit union, insurance company or similar institution which is
supervised and examined by a federal or state authority, or by a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to Sections
203 and 211 of the National Housing Act;
(xiii) With respect to each Adjustable Rate Mortgage Loan, on each
Adjustment Date, the Mortgage Rate will be adjusted to equal the Index plus the
Gross Margin, rounded to the nearest 0.125%, subject to the Periodic Rate Cap,
the Maximum Mortgage Rate and the Minimum Mortgage Rate. The related Mortgage
Note is payable on the first day of each month in self-amortizing monthly
installments of principal and interest, with interest payable in arrears, and
requires a Monthly Payment which is sufficient to fully amortize the outstanding
principal balance of the Mortgage Loan over its remaining term and to pay
interest at the applicable Mortgage Rate. No Mortgage Loan is subject to
negative amortization. All rate adjustments have been performed in accordance
with the terms of the related Mortgage Note or subsequent modifications, if any;
(xiv) To the best of the Seller's knowledge, all of the improvements which
were included for the purpose of determining the Value of the Mortgaged Property
lie wholly within the boundaries and building restriction lines of such
property, and no improvements on adjoining properties encroach upon the
Mortgaged Property;
(xv) All inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of the Mortgaged Property and, with
respect to the use and occupancy of the same, including but not limited to
certificates of occupancy, have been made or obtained from the appropriate
authorities and to the best of the Seller's knowledge, the Mortgaged Property is
lawfully occupied under applicable law;
(xvi) All parties which have had any interest in the Mortgage, 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 licensing requirements of the laws of the state wherein the Mortgaged
Property is located;
(xvii) The Mortgage Note and the related Mortgage are genuine, and each is
the legal, valid and binding obligation of the Mortgagor enforceable against the
Mortgagor by the mortgagee or its representative in accordance with its terms,
except only as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by law. To the best of the Seller's knowledge,
all parties to the Mortgage Note and the Mortgage had full legal capacity to
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execute all Mortgage Loan documents and to convey the estate purported to be
conveyed by the Mortgage and each Mortgage Note and Mortgage have been duly and
validly executed by such parties;
(xviii) The proceeds of each Mortgage Loan have been fully disbursed, there
is no requirement for future advances thereunder and any and all requirements as
to completion of any on-site or off-site improvements and as to disbursements of
any escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making, closing or recording the Mortgage Loans were paid;
(xix) The related Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security,
including, (i) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial foreclosure. 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;
(xx) With respect to each Mortgage constituting 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 such 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;
(xxi) There exist no deficiencies with respect to escrow deposits and
payments, if such are required, for which customary arrangements for repayment
thereof have not been made, and no escrow deposits or payments of other charges
or payments due the Seller have been capitalized under the Mortgage or the
related Mortgage Note;
(xxii) The origination, underwriting and collection practices used by the
Seller with respect to each Mortgage Loan have been in all respects legal,
proper, prudent and customary in the subprime mortgage servicing business. Each
Mortgage Loan is currently being serviced by Washington Mutual Bank, FA;
(xxiii) There is no pledged account or other security other than real
estate securing the Mortgagor's obligations;
(xxiv) No Mortgage Loan has a shared appreciation feature, or other
contingent interest feature;
(xxv) None of the Group I Mortgage Loans provide for primary mortgage
insurance;
(xxvi) The improvements upon each Mortgaged Property are covered by a valid
and existing hazard insurance policy with a generally acceptable carrier that
provides for fire extended coverage and coverage of such other hazards as are
customarily covered by hazard insurance policies with extended coverage in the
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area where the Mortgaged Property is located representing coverage not less than
the lesser of the outstanding principal balance of the related Mortgage Loan or
the minimum amount required to compensate for damage or loss on a replacement
cost basis. All individual insurance policies and flood policies referred to in
this clause (xxvi) and in clause (xxvii) below contain a standard mortgagee
clause naming the Seller or the original mortgagee, and its successors in
interest, as mortgagee, and the Seller has received no notice that any premiums
due and payable thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance, including flood insurance, at the
Mortgagor's cost and expense, and upon the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
the Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor;
(xxvii) If the Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as subject to special flood
hazards, a flood insurance policy in a form meeting the requirements of the
current guidelines of the Flood Insurance Administration is in effect with
respect to such Mortgaged Property with a generally acceptable carrier in an
amount representing coverage not less than the least of (A) the original
outstanding principal balance of the Mortgage Loan, (B) the minimum amount
required to compensate for damage or loss on a replacement cost basis or (C) the
maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973;
(xxviii) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the related Mortgage Note; and neither the Seller
nor any other entity involved in originating or servicing the Mortgage Loan has
waived any default, breach, violation or event of acceleration;
(xxix) Each Mortgaged Property is improved by a one- to four-family
residential dwelling, including condominium units and dwelling units in planned
unit developments, which, to the best of the Seller's knowledge, does not
include cooperatives and does not constitute property other than real property
under state law. Each manufactured housing constituting any portion of any
Mortgaged Property is a "single family residence" as defined in Section
25(e)(10) of the Code;
(xxx) There is no obligation on the part of the Seller or any other party
under the terms of the Mortgage or related Mortgage Note to make payments in
addition to those made by the Mortgagor;
(xxxi) Any future advances made 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 reflected on the related Mortgage Loan Schedule. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;
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(xxxii) Each Mortgage Loan was underwritten in accordance with the Seller's
underwriting guidelines as described in the Prospectus Supplement and
Information Supplement as applicable to its credit grade;
(xxxiii) Each appraisal of a Mortgage Loan that was used to determine the
appraised value of the related Mortgaged Property was conducted generally in
accordance with the Seller's underwriting guidelines, and included an assessment
of the fair market value of the related Mortgaged Property at the time of the
appraisal. The Mortgage File contains an appraisal of the applicable Mortgaged
Property;
(xxxiv) None of the Mortgage Loans is a graduated payment Mortgage Loan,
nor is any Mortgage Loan subject to a temporary buydown or similar arrangement;
(xxxv) As of the Cut-off Date, there were no Group I Mortgage Loans or
Group II Mortgage Loans with respect to which the monthly payment due thereon in
August, 2002 had not been made, none of the Mortgage Loans has been
contractually delinquent for more than 30 days more than once during the
preceding twelve months and, no Mortgage Loan has ever experienced a delinquency
of 60 or more days since the origination thereof;
(xxxvi) Each 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;
(xxxvii) To the best of the Seller's knowledge no 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;
(xxxviii) Each Mortgage Loan constitutes a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code;
(xxxix) The information set forth in the Prepayment Charge Schedule is
complete, true and correct in all material respects at the date or dates
respecting which such information is furnished and each Prepayment Charge is
permissible and enforceable in accordance with its terms upon the Mortgagor's
full and voluntary Principal Prepayment (except to the extent that: (1) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally; (2)
the collectability thereof may be limited due to acceleration in connection with
a foreclosure or other involuntary prepayment; or (3) subsequent changes in
applicable law may limit or prohibit enforceability thereof) under applicable
law. No Mortgage Loan has a Prepayment Charge for a term in excess of five years
from the date of its origination;
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(xl) The Loan-to-Value Ratio for each Mortgage Loan was no greater than
100% at the time of origination;
(xli) The first date on which each Mortgagor must make a payment on the
related Mortgage Note is no later than 60 days from the date of this Agreement;
(xlii) With respect to each Mortgage Loan, the related Mortgagor shall not
fail to make the first Monthly Payment due under the terms of the Mortgage Loan
by the second succeeding Due Date after the Due Date on which such Monthly
Payment was due;
(xliii) The transfer, assignment and conveyance of the Mortgage Notes and
the Mortgages by the Seller pursuant to this Agreement are not subject to the
bulk transfer or any similar statutory provisions in effect in any relevant
jurisdiction, except any as may have been complied with;
(xliv) There are no defaults in complying with the terms of the Mortgage,
and either (1) any taxes, governmental assessments, insurance premiums, water,
sewer and municipal charges or ground rents which previously became due and
owing have been paid, or (2) an escrow of funds has been established in an
amount sufficient to pay for every such item which remains unpaid and which has
been assessed but is not yet due and payable. Except for payments in the nature
of escrow payments, including without limitation, taxes and insurance payments,
the Seller has not advanced funds, or induced, solicited or knowingly received
any advance of funds by a party other than the Mortgagor, directly or
indirectly, for the payment of any amount required by the Mortgage Note, except
for interest accruing from the date of the Mortgage Note or date of disbursement
of the Mortgage proceeds, whichever is greater, to the day which precedes by one
month the Due Date of the first installment of principal and interest;
(xlv) There is no proceeding pending, or to best of the Seller's knowledge
threatened, for the total or partial condemnation of the Mortgaged Property or
the taking by eminent domain of any Mortgaged Property;
(xlvi) None of the Mortgage Loans is subject to the Home Ownership and
Equity Protection Act of 1994 or any comparable state law and any breach of this
representation will be deemed to materially and adversely affect the value of
the related loan;
(xlvii) No proceeds from any Mortgage Loans were used to finance
single-premium credit insurance policies;
(xlviii) The Seller did not select the Mortgage Loans with the intent to
adversely affect the interests of the Purchaser;
(xlix) The Seller has not received any notice that any Mortgagor has field
for any bankruptcy or similar legal protection;
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(l) Each Mortgage Loan was originated in compliance with the following
anti-predatory lending guidelines:
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(i) Each Mortgage Loan satisfies the eligibility for purchase requirements
and was originated in compliance with Lender Letter # LL03-00 dated April 11,
2000 for Xxxxxx Xxx Xxxxxxx (the "Lender Letter");
(ii) No borrower was encouraged or required by the Seller to select a
Mortgage Loan product offered by the Mortgage Loan's originator which is a
higher cost product designed for less creditworthy borrowers, unless at the time
of the Mortgage Loan's origination, such borrower did not qualify taking into
account credit history and debt-to-income ratios for a lower-cost credit product
then offered by the Mortgage Loan's originator or any affiliate of the Mortgage
Loan's originator;
(iii) The methodology used in underwriting the extension of credit for each
Mortgage Loan employs objective mathematical principles which relate the
borrower's income, assets and liabilities to the proposed payment and such
underwriting methodology does not rely on the extent of the borrower's equity in
the collateral as the principal determining factor in approving such credit
extension. Such underwriting methodology provided reasonable assurance that at
the time of origination (application/approval) the borrower had a reasonable
ability to make timely payments on the Mortgage Loan;
(iv) With respect to any Mortgage Loan that contains a provision permitting
imposition of a premium upon a prepayment prior to maturity, (i) the Seller's
pricing methods include mortgage loans with and without prepayment premiums;
borrowers selecting Mortgage Loans which include such prepayment premiums
receive a monetary benefit, including but not limited to a rate or fee
reduction, in exchange for selecting a Mortgage Loan with a prepayment premium,
(ii) prior to the Mortgage Loan's origination, the borrower had the opportunity
to choose between an array of mortgage loan products which included mortgage
loan products with prepayment premiums and mortgage loan products that did not
require payment of such a premium, (iii) the prepayment premium is disclosed to
the borrower in the loan documents pursuant to applicable state and federal law,
and (iv) notwithstanding any state or federal law to the contrary, the Master
Servicer shall not impose such prepayment premium in any instance when the
mortgage debt is accelerated as the result of the borrower's default in making
the loan payments;
(v) No borrower was required to purchase any credit life, disability,
accident or health insurance product as a condition of obtaining the extension
of credit. No borrower obtained a prepaid single-premium credit life,
disability, accident or health insurance policy in connection with the
origination of the Mortgage Loan;
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(vi) No Mortgage Loan is subject to the Home Ownership and Equity
Protection Act of 1994 (15 USC ss. 1602(aa)), Regulation Z (12 CFR 226.32) or
any similar state law or regulation including those relating to "high cost
mortgages" and "high LTV mortgages";
(vii) All points and fees related to each Mortgage Loan were disclosed in
writing to the borrower in accordance with applicable state and federal law.
Except in the case of a Mortgage Loan in an original principal amount of less
than $60,000 which would have resulted in an unprofitable origination, no
borrower was charged "points and fees" (whether or not financed) in an amount
greater than 5% of the principal amount of such loan, such 5% limitation
calculated in accordance with the Lender Letter; and
(viii) All fees and charges (including finance charges) and whether or not
financed, assessed, collected or to be collected in connection with the
origination and servicing of each Mortgage Loan have been disclosed in writing
to the borrower in accordance with applicable state and federal law and
regulation.
(li) No Group I Mortgage Loan had a principal balance at origination in
excess of the Guarantor's conforming loan balance limitations for single family
loans set forth in the Xxxxxx Mae Charter Act and the Xxxxxx Xxx Selling Guide
in effect at the time of such Group I Mortgage Loan's origination.
(lii) Each Group I Mortgage Loan is secured by a first lien on the related
Mortgaged Property.
(liii) No Mortgage Loan that was originated under the Seller's stated
income documentation program has both (i) either no FICO score or a FICO score
of less than 500 and (ii) a CLTV greater than 70%; provided, that for purposes
of this representation, "CLTV" shall mean the ratio, expressed as a percentage,
of (x) the sum of (i) the original Principal Balance of the Mortgage Loan at
origination and (ii) the original principal balances of any liens on the related
Mortgaged Property that are known to the Seller to (y) the lesser of (i) the
appraisal amount of the related Mortgaged Property at origination and (ii) if
the proceeds of the Mortgage Loan were used by the Borrower to pay all or a
portion of the purchase price for the related Mortgaged Property, the purchase
price paid for such Mortgaged Property by such Borrower.
(liv) Each Mortgage Loan that was underwritten outside the Seller's
underwriting guidelines with special approval had compensating factors that
warranted an exception to the Seller's underwriting guidelines and each related
Mortgagor had acceptable credit and the ability to repay the Mortgage Loan on
the agreed terms and conditions.
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XXXXXXX 0. Xxxxxxxxxx Obligation for Defective Documentation and for
Breach of Representation and Warranty.
(a) The representations and warranties contained in Section 5 (ix) and
Section 6 shall not be impaired by any review and examination of loan files or
other documents evidencing or relating to the Mortgage Loans or any failure on
the part of the Seller or the Purchaser to review or examine such documents and
shall inure to the benefit of any assignee, transferee or designee of the
Purchaser, including the Trustee for the benefit of holders of asset-backed
certificates evidencing an interest in all or a portion of the Mortgage Loans.
With respect to the representations and warranties contained herein which are
made to the knowledge or the best of knowledge of the Seller, or as to which the
Seller has no knowledge, if it is discovered that the substance of any such
representation and warranty was inaccurate as of the date such representation
and warranty was made or deemed to be made, and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan or the interest therein
of the Purchaser or the Purchaser's assignee, transferee or designee, then
notwithstanding the lack of knowledge by the Seller with respect to the
substance of such representation and warranty being inaccurate at the time the
representation and warranty was made, the Seller shall take such action
described in the following paragraph in respect of such Mortgage Loan.
Upon discovery by the Seller, the Guarantor the Purchaser or any assignee,
transferee or designee of the Purchaser of any materially defective document in,
or that any material document was not transferred by the Seller (as listed on
the Trustee's initial certification), as part of any Mortgage File or of a
breach of any of the representations and warranties contained in Section 5 or
Section 6 that materially and adversely affects the value of any Mortgage Loan
or the interest of the Purchaser, the Guarantor or the Purchaser's assignee,
transferee or designee in any Mortgage Loan, the party discovering the breach
shall give prompt written notice to the others. Within ninety (90) days of the
earlier of the discovery or the Seller's receipt of notice of any such missing
documentation which was not transferred to the Purchaser as described above or
materially defective documentation or any such breach of a representation and
warranty, the Seller promptly shall deliver such missing document or cure such
defect or breach in all material respects, or in the event the Seller cannot
deliver such missing document or such defect or breach cannot be cured, the
Seller shall, within 90 days of its discovery or receipt of notice, either (i)
repurchase the affected Mortgage Loan at a price equal to the Purchase Price (as
defined in the Pooling and Servicing Agreement) or (ii) pursuant to the
provisions of the Pooling and Servicing Agreement, cause the removal of such
Mortgage Loan from the Trust Fund and substitute one or more Qualified
Substitute Mortgage Loans; provided, however, that in the case of a breach of
the representation and warranty concerning the Mortgage Loan Schedule contained
in Section 6(i), if such breach relates to any field on the Mortgage Loan
Schedule which identifies any Prepayment Charge and such Prepayment Charge has
been triggered pursuant to the terms of the related Mortgage Note, then in lieu
of purchasing such Mortgage Loan from the Trust Fund at the Purchase Price (as
defined in the Pooling and Servicing Agreement), the Seller shall pay the amount
of the incorrectly identified Prepayment Charge (net of any amount previously
collected by or paid to the Trust Fund in respect of such Prepayment Charge),
and the Seller shall have no obligation to repurchase or substitute for such
Mortgage Loan. In the event of a substitution permitted hereunder, the Seller
shall amend the Closing Schedule to reflect the withdrawal of each removed
Mortgage Loan from the terms of this Agreement and the Pooling and Servicing
Agreement and the addition of the Qualified Substitute Mortgage Loan(s). The
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Seller shall deliver to the Purchaser such amended Closing Schedule and shall
deliver such other documents as are required by this Agreement or the Pooling
and Servicing Agreement within five (5) days of any such amendment. Any
repurchase pursuant to this Section 7(a) shall be accomplished by deposit in the
Collection Account of the amount of the Purchase Price (as defined in the
Pooling and Servicing Agreement) 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 and any remedy by the Seller for a breach of a
representation or warranty that materially and adversely affects the value of
any Prepayment Charge shall be made in a manner consistent with Section 2.03(c)
of the Pooling and Servicing Agreement.
(b) It is understood and agreed that the obligations of the Seller set
forth in this Section 7 to cure, repurchase or substitute for a defective
Mortgage Loan constitute the sole remedies of the Purchaser against the Seller
respecting a missing or defective document or a breach of the representations
and warranties contained in Section 5 or Section 6.
SECTION 8. Closing; Payment for the Mortgage Loans.
The closing of the purchase and sale of the Mortgage Loans shall be held at
the Seattle office of Xxxxxx Xxxxxx White & XxXxxxxxx LLP at 9:30 am New York
time on the Closing Date (or such other location or time as is mutually
agreeable to the parties).
The Purchaser's obligation to close the transactions contemplated by this
Agreement shall be subject to each of the following conditions:
(a) All of the representations and warranties of the Seller under this
Agreement shall be true and correct in all material respects as of the date as
of which they are made and no event shall have occurred which, with notice or
the passage of time, would constitute a default under this Agreement;
(b) The Purchaser shall have received, or the attorneys of the Purchaser
shall have received in escrow (to be released from escrow at the time of
closing), all Closing Documents as specified in Section 9 of this Agreement, in
such forms as are agreed upon and acceptable to the Purchaser, duly executed by
all signatories other than the Purchaser as required pursuant to the respective
terms thereof;
(c) The Seller shall have delivered or caused to be delivered and released
to the Purchaser or to its designee, all documents (including without
limitation, the Mortgage Loans) required to be so delivered by the Purchaser
pursuant to Section 2.01 of the Pooling and Servicing Agreement; and
(d) All other terms and conditions of this Agreement to be complied with by
Seller, shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall deliver or cause
to be delivered to the Seller on the Closing Date, against delivery and release
by the Seller to the Trustee of all documents required pursuant to the Pooling
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and Servicing Agreement, the consideration for the Mortgage Loans as specified
in Section 3 of this Agreement, by delivery to the Seller of the Purchase Price
in immediately available funds and delivery of the Long Beach Certificates to
Long Beach Asset Holdings Corp.
SECTION 9. Closing Documents.
Without limiting the generality of Section 8 hereof, the closing shall be
subject to delivery of each of the following documents:
(a) An Officers' Certificate of the Seller, dated the Closing Date, upon
which the Purchaser, Xxxxxx Xxxxxxx & Co. Incorporated and Banc of America
Securities LLC (together, Xxxxxx Xxxxxxx & Co. Incorporated and Banc of America
Securities LLC are the "Co-Representatives"), the Certificate Insurer, if any,
and the Guarantor may rely and attached thereto copies of the certificate of
incorporation, bylaws and certificate of good standing of the Seller under the
laws of the State of Delaware;
(b) An Officers' Certificate of the Seller, dated the Closing Date, upon
which the Purchaser, the Co-Representatives, the Certificate Insurer, if any,
and the Guarantor may rely, with respect to certain facts regarding the sale of
the Mortgage Loans, by the Seller to the Purchaser;
(c) An Opinion of Counsel of the Seller (which may be in-house counsel of
the Seller), dated the Closing Date and addressed to the Purchaser, the
Co-Representatives, the Certificate Insurer, if any, and the Guarantor;
(d) Such opinions of counsel as the Rating Agencies, the
Co-Representatives, the Trustee, the Certificate Insurer, if any, or the
Guarantor may reasonably request in connection with the sale of the Mortgage
Loans by the Seller to the Purchaser or the Seller's execution and delivery of,
or performance under, this Agreement;
(e) A letter from Deloitte & Touche L.L.P., certified public accountants,
dated the date hereof and to the effect that they have performed certain
specified procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature set forth in the
Prospectus Supplement under the captions "Summary of Terms--Mortgage Loans",
"Risk Factors", "The Mortgage Pool" and "Long Beach Mortgage Company" agrees
with the records of the Seller;
(f) The Seller shall deliver to the Purchaser for inclusion in the
Prospectus Supplement under the caption "Long Beach Mortgage Company" or for
inclusion in other offering materials, such publicly available information
regarding the Seller, its financial condition and its mortgage loan delinquency,
foreclosure and loss experience, underwriting standards, lending activities and
loan sales, production, and servicing and collection practices, and any similar
nonpublic, unaudited financial information and a computer tape with respect to
the pool information, as the Co-Representatives may reasonably request;
(g) Letters from at least two nationally recognized statistical rating
agencies rating the Offered Certificates (as defined in the Prospectus
Supplement); and
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(h) Such further information, certificates, opinions and documents as the
Purchaser, the Guarantor or the Co-Representatives may reasonably request.
SECTION 10. Costs.
The Seller shall pay (or shall reimburse the Purchaser or any other Person
to the extent that the Purchaser or such other Person shall pay) all costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans, including without limitation, recording fees, fees for title policy
endorsements and continuations and the fees for recording Assignments, the fees
and expenses of the Seller's in-house accountants and in-house attorneys, the
costs and expenses incurred in connection with determining the Seller's loan
loss, foreclosure and delinquency experience, the costs and expenses incurred in
connection with obtaining the documents referred to in Sections 9(d) and 9(e),
the cost of an opinion of counsel regarding the true sale and non-consolidation
of the Mortgage Loans, the costs and expenses of printing (or otherwise
reproducing) and delivering this Agreement, the Pooling and Servicing Agreement,
the Certificates, the prospectus, the Prospectus Supplement, the Information
Supplement, any blue sky filings and private placement memorandum relating to
the Certificates and other related documents, costs and expenses of the Trustee,
the fees and expenses of the Purchaser's counsel in connection with the
preparation of all documents relating to the securitization of the Mortgage
Loans, the filing fee charged by the Securities and Exchange Commission for
registration of the Certificates, the cost of any opinions of outside special
counsel that may be required for the Seller and the fees charged by any Rating
Agency to rate the Certificates. All other costs and expenses in connection with
the transactions contemplated hereunder shall be borne by the party incurring
such expense.
SECTION 11. Servicing.
The Seller has represented to the Purchaser that the Mortgage Loans are
being serviced in accordance with the terms of the Pooling and Servicing
Agreement, and it is understood and agreed by and between the Seller and the
Purchaser that any interim servicing arrangements with the Seller will be
superseded by the servicing arrangements set forth in the Pooling and Servicing
Agreement.
SECTION 12. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the Closing Date of the Mortgage Loans in
accordance with the terms and conditions of this Agreement is mandatory. It is
specifically understood and agreed that each Mortgage Loan is unique and
identifiable on the Closing Date and that an award of money damages would be
insufficient to compensate the Purchaser for the losses and damages incurred by
the Purchaser in the event of the Seller's failure to deliver the Mortgage Loans
on or before the Closing Date.
The Seller hereby grants to the Purchaser a lien on and a continuing
security interest in the Seller's interest in each Mortgage Loan, and each
document and instrument evidencing each such Mortgage Loan to secure the
performance by the Seller of its obligation hereunder, and the Seller agrees
that it holds such Mortgage Loans in custody for the Purchaser, subject to (i)
the Purchaser's right, prior to the Closing Date, to reject any Mortgage Loan to
the extent permitted by this Agreement and (ii) the Purchaser's obligation to
deliver or cause to be delivered the consideration for the Mortgage Loans
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pursuant to Section 8 hereof. Any Mortgage Loan rejected by the Purchaser shall
concurrently therewith be automatically released from the security interest
created hereby. The Seller agrees that, upon acceptance of the Mortgage Loans by
the Purchaser or its designee and delivery of payment to the Seller, that any
security interest held by the Seller in such Mortgage Loans shall be released.
All rights and remedies of the Purchaser under this Agreement are distinct
from, and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively. Notwithstanding the foregoing, if
on the Closing Date, each of the conditions set forth in Section 8 hereof shall
have been satisfied and the Purchaser shall not have paid or caused to be paid
the Purchase Price, or shall not have delivered or caused to be delivered the
Long Beach Certificates to Long Beach Asset Holding Corp., or any such condition
shall not have been waived or satisfied and the Purchaser determines not to pay
or cause to be paid the Purchase Price or not to deliver or cause to be
delivered the Long Beach Certificates to Long Beach Asset Holding Corp, the
Purchaser shall immediately effect the re-delivery of the Mortgage Loans, if
delivery to the Purchaser has occurred and any security interest created by this
Section 12 shall be deemed to have been released.
SECTION 13. Notices.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered to or mailed by
registered mail, postage prepaid, or transmitted by telex or telegraph and
confirmed by a similar mailed writing, if to the Purchaser, addressed to the
Purchaser at 0000 Xxxxx Xxx., XXX0000, Xxxxxxx, Xxxxxxxxxx 00000, Attn: LBSC
Legal Counsel, or such other address as may hereafter be furnished to the Seller
in writing by the Purchaser; if to the Seller, addressed to the Seller at 0000
Xxxxx Xxx., XXX0000, Xxxxxxx, Xxxxxxxxxx 00000, Attn: LBMC Legal Counsel, or to
such other address as the Seller may designate in writing to the Purchaser.
SECTION 14. Severability of Provisions.
Any part, provision, representation or warranty of this Agreement which is
prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof.
SECTION 15. Agreement of Parties.
The Seller and the Purchaser each agree to execute and deliver such
instruments (including UCC financing statements and continuation statements) and
take such actions as either of the others may, from time to time, reasonably
request in order to effectuate the purpose and to carry out the terms of this
Agreement and the Pooling and Servicing Agreement.
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SECTION 16. Survival.
The Seller agrees that the representations, warranties and agreements made
by it herein and in any certificate or other instrument delivered pursuant
hereto shall be deemed to be relied upon by the Purchaser and its successors and
assigns, notwithstanding any investigation heretofore or hereafter made by the
Purchaser or on its behalf, and that the representations, warranties and
agreements made by the Seller herein or in any such certificate or other
instrument shall survive the delivery of and payment for the Mortgage Loans and
shall continue in full force and effect, notwithstanding any restrictive or
qualified endorsement on the Mortgage Notes and notwithstanding subsequent
termination of this Agreement, the Pooling and Servicing Agreement or the Trust
Fund.
SECTION 17. Indemnification, Representative.
(a) The Seller indemnifies and holds harmless the Purchaser, the
Purchaser's officers and directors and each person, if any, who controls the
Purchaser within the meaning of Section 15 of the Securities Act of 1933, as
amended (the "1933 Act") or Section 20 of the Exchange Act of 1934, as amended,
(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 1933 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
Class II-A Certificates and the Class II-S1 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; and will reimburse, as incurred, 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, defending against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Seller will be liable in any
such case only to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or omission, or alleged
untrue statement or omission, made therein in reliance upon and in conformity
with written information furnished to the Purchaser by the Seller specifically
for use in the preparation thereof (the "Seller's Prospectus Supplement
Information");
(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 Seller; and
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(iii) against any and all expense whatsoever (including the fees and
disbursements of counsel chosen by the Purchaser, subject to Section 17(c)
below), 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.
This indemnity agreement will be in addition to any liability which the
Seller may otherwise have.
(b) The Purchaser agrees to indemnify and hold harmless the Seller, each of
its directors, each of its officers and each person, if any, who controls the
Seller within the meaning of Section 15 of the 1933 Act or Section 20 of the
Exchange Act, against any and all losses, claims, expenses, damages or
liabilities to which the Seller or any such director, officer or controlling
person may become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Prospectus Supplement, other than in the Seller's
Prospectus Supplement Information, or arise out of, or are based upon, the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made therein not misleading,
and will reimburse any legal or other expenses reasonably incurred by the Seller
or any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action.
This indemnity agreement will be in addition to any liability which the
Purchaser may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 17 of
notice of the commencement of any action described therein, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 17, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
the indemnifying party from any liability that it may have to any indemnified
party under this Section 17 unless the indemnifying party is materially
prejudiced by such omission to notify and in any event the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
the indemnified party otherwise than under this Agreement. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and, to the extent that it may wish to do so,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party (such consent not to be
unreasonably withheld, conditioned or delayed), be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
under this Section 17, such indemnifying party shall not be liable for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation and
preparation for a defense.
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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 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; (iii) a
conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (iv) 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 (i) by the Seller if the indemnified parties
under this Section 17 consist of the Seller or any of its officers, directors or
controlling persons, or (ii) the Purchaser, if the indemnified party under this
Section 17 consist of the Purchaser or any of the Purchaser's directors,
officers or controlling persons.
Each indemnified party, as a condition of the indemnity agreements
contained in Section 17(a) and Section 17(b), shall use its reasonable 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, conditioned or delayed), 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 (to the extent set forth in Section
17(a) or Section 17(b) as applicable) by reason of such settlement or judgment.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party unless such
settlement (i) includes an unconditional release of such indemnified party from
all liability on any claims that are the subject of such action and (ii) does
not include a statement as to, or an admission of, fault, culpability or failure
to act by or on behalf of an indemnified party.
C-25
Notwithstanding the foregoing paragraph, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement.
(d) If the indemnification provided for in Section 17(a) or 17(b) is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Purchaser on the one hand and the Seller on the other from the offering of
the Underwritten Certificates (as defined in the Prospectus Supplement) or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Purchaser on the one hand and the Seller on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. If the
indemnification provided for in Section 17(b) is unavailable or insufficient to
hold harmless the indemnified party under Section 17(b), then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of the losses, claims, damages or liabilities referred to in Section
17(b) in such proportion as appropriate to reflect the relative fault of the
Purchaser on one hand and the Seller on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Purchaser on the one hand and the Seller on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Purchaser bear to the total
underwriting discounts and commissions received by the Underwriters (as defined
in the Prospectus Supplement). The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Purchaser or by the Seller and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to above in the first sentence of this subsection (d) shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
C-26
SECTION 18. [RESERVED]
SECTION 19. Governing Law.
THIS AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF
THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF
LAW PRINCIPLES. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.
SECTION 20. Miscellaneous.
This Agreement may be executed in two or more counterparts, each of which
when so executed and delivered shall be an original, but all of which together
shall constitute one and the same instrument. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns. This Agreement supersedes all prior agreements and
understandings relating to the subject matter hereof. Neither this Agreement nor
any term hereof may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought. The headings in this
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof.
It is the express intent of the parties hereto that the conveyance of the
Mortgage Loans by the Seller to the Purchaser as provided in Section 4 hereof
be, and be construed as, a sale of the Mortgage Loans by the Seller to the
Purchaser and not as a pledge of the Mortgage Loans by the Seller to the
Purchaser to secure a debt or other obligation of the Seller. However, in the
event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Seller, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller and (b) (1) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code; (2) the conveyance provided for in Section 4 hereof
shall be deemed to be a grant by the Seller to the Purchaser of a security
interest in all of the Seller's right, title and interest in and to the Mortgage
Loans, all amounts payable to the holders of the Mortgage Loans in accordance
with the terms thereof and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account whether
in the form of cash, instruments, securities or other property; (3) the
possession by the Purchaser or its agent of the Mortgage Notes, the related
Mortgages and such other items of property that constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession by the
secured party" for purposes of perfecting the security interest pursuant to
Section 9-305 of the New York Uniform Commercial Code; and (4) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Purchaser for the purpose of perfecting
such security interest under applicable law. Any assignment of the interest of
the Purchaser pursuant to Section 4(d) hereof shall also be deemed to be an
assignment of any security interest created hereby. The Seller and the Purchaser
C-27
shall, to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement and the Pooling and
Servicing Agreement.
SECTION 21. Third Party Beneficiary.
Each of the Trustee and the Certificate Insurer, if any, shall be a
third-party beneficiary hereof (except with respect to Section 17) and shall be
entitled to enforce the provisions hereof as if a party hereto, except the
provisions of Section 17 hereof. The Co-Representatives, on behalf of the
Underwriters (as defined in the Prospectus Supplement), shall be a third-party
beneficiary hereof solely with respect to Section 17 and shall be entitled to
enforce the provisions of Section 17 as if it were a party hereto.
C-28
IN WITNESS WHEREOF, the Purchaser and the Seller have caused their names to
be signed by their respective officers thereunto duly authorized as of the date
first above written.
LONG BEACH SECURITIES CORP.
By: _________________________
Name: Xxxxxxx X Xxxxxxxx
Title: Vice President
LONG BEACH MORTGAGE COMPANY
By: _________________________
Name: Xxxxxxx X Xxxxxxxx
Title: First Vice President
C-29
EXHIBIT D
MORTGAGE LOAN SCHEDULE
[FILED BY PAPER]
D-1
EXHIBIT E-1
REQUEST FOR RELEASE
(for Trustee /Custodian)
Loan Information
Name of Mortgagor:________________________________
Master Servicer
Loan No.:_________________________________________
Trustee /Custodian
Name:_____________________________________________
Address:__________________________________________
Trustee/
Custodian
Mortgage File No.:________________________________
Depositor
Name: LONG BEACH SECURITIES CORP.
Address: ____________________________
Certificates: Long Beach Mortgage Certificates, Series 2002-4.
E-1
The undersigned Master Servicer hereby acknowledges that it has received
from _______________________, as Trustee for the Holders of Long Beach Mortgage
Loan Trust 2002-4, Asset-Backed Certificates, Series 2002-4, the documents
referred to below (the "Documents"). All capitalized terms not otherwise defined
in this Request for Release shall have the meanings given them in the Pooling
and Servicing Agreement, dated as of October __, 2002, among the Trustee, the
Depositor, Federal National Mortgage Association and the Master Servicer (the
"Pooling and Servicing Agreement").
(a) Promissory Note dated _______________, 20__, in the original principal
sum of $__________, made by ___________________, payable to, or endorsed to the
order of, the Trustee.
(b) Mortgage recorded on _____________________ as instrument no.
________________ in the County Recorder's Office of the County of
_________________, State of ____________ in book/reel/docket _________________
of official records at page/image _____________.
(c) Deed of Trust recorded on ___________________ as instrument no.
________________ in the County Recorder's Office of the County of
_________________, State of ____________________ in book/reel/docket
_________________ of official records at page/image ______________.
(d) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
___________________ as instrument no. _________ in the County Recorder's Office
of the County of _______________, State of _______________________ in
book/reel/docket ____________ of official records at page/image ____________.
(e) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
(f) _____________________________________________
(g) _____________________________________________
(h) _____________________________________________
(i) _____________________________________________
The undersigned Master Servicer hereby acknowledges and agrees as follows:
(1) The Master Servicer shall hold and retain possession of the Documents
in trust for the benefit of the Trustee, solely for the purposes provided in the
Agreement.
(2) The Master Servicer shall not cause or permit the Documents to become
subject to, or encumbered by, any claim, liens, security interest, charges,
writs of attachment or other impositions nor shall the Master Servicer assert or
seek to assert any claims or rights of setoff to or against the Documents or any
proceeds thereof.
E-2
(3) The Master Servicer shall return each and every Document previously
requested from the Mortgage File to the Trustee when the need therefor no longer
exists, unless the Mortgage Loan relating to the Documents has been liquidated
and the proceeds thereof have been remitted to the Collection Account and except
as expressly provided in the Agreement.
(4) The Documents and any proceeds thereof, including any proceeds of
proceeds, coming into the possession or control of the Master Servicer shall at
all times be ear-marked for the account of the Trustee, and the Master Servicer
shall keep the Documents and any proceeds separate and distinct from all other
property in the Master Servicer's possession, custody or control.
Dated:
LONG BEACH MORTGAGE COMPANY
By:__________________________________
Name:
Title:
E-3
EXHIBIT E-2
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full]
OFFICERS' CERTIFICATE AND TRUST RECEIPT
MORTGAGE LOAN PASS-THROUGH CERTIFICATES
SERIES 2002-4
____________________________________________________ HEREBY CERTIFIES THAT
HE/SHE IS AN OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH
BENEATH HIS/HER SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN MADE.
LOAN NUMBER:______________________ BORROWER'S NAME:______________________
COUNTY:___________________________
WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE COLLECTION ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
DATED:______________________
______________________________
/ / VICE PRESIDENT
______________________________
/ / ASSISTANT VICE PRESIDENT
E-4
EXHIBIT F-1
FORM OF TRUSTEE'S INITIAL CERTIFICATION
[Date]
Long Beach Securities Corp. Long Beach Mortgage Company
0000 Xxxx & Xxxxxxx Xxxx 0000 Xxxx & Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000 Xxxxxx, Xxxxxxxxxx 00000
Federal National Mortgage Association
0000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of October __, 2002 among Long Beach Securities
Corp., Long Beach Mortgage Company, Federal National Mortgage
Association and Deutsche Bank National Trust Company, Long Beach
Mortgage Loan Trust 2002-4, Asset-Backed Certificates, Series 2002-4
Ladies and Gentlemen:
Pursuant to Section 2.02 of the Pooling and Servicing Agreement, the
undersigned, as Trustee, hereby acknowledges receipt of each Mortgage File and
certifies that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in the exception report annexed hereto as not being covered by this
certification), (i) all documents constituting part of such Mortgage File (other
than such documents described in Section 2.01(e) of the Pooling and Servicing
Agreement) required to be delivered to it pursuant to the Pooling and Servicing
Agreement are in its possession, (ii) such documents have been reviewed by it
and are not mutilated, torn or defaced unless initialed by the related borrower
and relate to such Mortgage Loan and (iii) based on its examination and only as
to the foregoing, the information set forth in the Mortgage Loan Schedule that
corresponds to items (i), (ii), (ix), (xii), (xiv) (to the extent of the
Periodic Rate Cap for the first Adjustment Date and subsequent Adjustment Dates)
and (xvi) of the definition of "Mortgage Loan Schedule" of the Pooling and
Servicing Agreement accurately reflects information set forth in the Mortgage
File.
The Trustee has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
due authorization, recordability or genuineness of any of the documents
contained in the Mortgage File of any of the Mortgage Loans identified on the
Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness
or suitability of any such Mortgage Loan.
F-1
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:___________________________________
Name:_________________________________
Title:________________________________
F-2
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
[Date]
Long Beach Securities Corp. Long Beach Mortgage Company
0000 Xxxx & Xxxxxxx Xxxx 0000 Xxxx & Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000 Xxxxxx, Xxxxxxxxxx 00000
Federal National Mortgage Association
0000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of October __, 2002 among Long Beach Securities
Corp., Long Beach Mortgage Company, Federal National Mortgage
Association and Deutsche Bank National Trust Company, Long Beach
Mortgage Loan Trust 2002-4, Asset-Backed Certificates, Series 2002-4
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attachment hereto), it or a Custodian on its
behalf has received:
(a) the original Mortgage Note, endorsed in blank or in the following form:
"Pay to the order of Deutsche Bank National Trust Company, as Trustee under the
applicable agreement, without recourse," with all prior and intervening
endorsements showing a complete chain of endorsement from the originator to the
Person so endorsing to the Trustee or a copy of such original Mortgage Note with
an accompanying Lost Note Affidavit executed by the Seller;
(b) the original Mortgage with evidence of recording thereon, and a copy,
certified by the appropriate recording office, of the recorded power of
attorney, if the Mortgage was executed pursuant to a power of attorney, with
evidence of recording thereon;
(c) an original Assignment in blank;
(d) the original recorded Assignment or Assignments showing a complete
chain of assignment from the originator to the Person assigning the Mortgage to
the Trustee or in blank;
(e) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
F-3
(f) the original lender's title insurance policy, together with all
endorsements or riders issued with or subsequent to the issuance of such policy,
insuring the priority of the Mortgage as a first lien or second lien on the
Mortgaged Property represented therein as a fee interest vested in the
Mortgagor, or in the event such original title policy is unavailable, a written
commitment or uniform binder or preliminary report of title issued by the title
insurance or escrow company.
The Trustee has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in the Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:___________________________________
Name:_________________________________
Title:________________________________
F-4
EXHIBIT G-1
SPECIAL INFORMATION WORKSHEET
VII, Ch 3, Exhibit 1: Special Information Worksheet (for Military Indulgence)
(09/30/96)
Check One: ________ Initial Submission _______ Supplemental Submission
Servicer's Xxxxxx Xxx Identification Number (9-digits):________________________
Xxxxxx Mae Loan Number (10 digits):____________________________________________
Lender Loan Number:____________________________________________________________
Remittance Option (Check one):
_________ Actual/Actual (A/A)
_________ Scheduled/Actual (S/A)
_________ Scheduled/Scheduled (Portfolio), also called MRS or MBS-Acquired
_________ Scheduled/Scheduled (MBS), also called MBS Swaps
Amortization Method (Check one):
_________ Standard
_________ Interest Subsidy
_________ Other (Prior Approval Required)
Temporary Interest Rate: ________% Temporary P&I Installment______________
Effective Start Date (MMYY):_____ Current Pass-Through Rate: _______[____]%
LPI Date (MMYY):_________________
UPB: $___________________________
Expected End Date (MMYY):________ Actual End Date (MMYY):_______________
Next Scheduled ARM Adjustment Date, if applicable (MMYY):
Has additional forbearance been extended? _____ Yes _____ No
If so, describe the terms of the agreement, including when it begins and ends.
[Attach Request for Military Indulgence (Form 180) if one was obtained.
Servicer Name & Address
Signed: ______________________________________________________________________
G-1
Typed Name and Title:_________________________________________________________
Contact Phone No.:____________________________________________________________
G-2
EXHIBIT G-2
REQUEST FOR MILITARY INDULGENCE
Request For Military Indulgence
----------------------------------------------------------------------------------------------------------------------
This Form Does Not Affect Your Rights Under The Soldiers' and Sailors' Civil Relief Act
------------------------------------------------------------ ---------------------------------------------------------
Loan Number FHA/VA/MI Case Number
------------------------------------------------------------ ---------------------------------------------------------
Mortgagor (or Trustee)
----------------------------------------------------------------------------------------------------------------------
Address of Property
----------------------------------------------------------------------------------------------------------------------
and
-------------------------------------------------------- -------------------------------------------------------
mortgagors, trustors or present owners, hereinafter referred to as "Mortgagor," make the following statement:
1. Name of Person in Military Service _____________________________ Date of Birth ____________
2. If the person in Military Service is not the Mortgagor, what is his or her relationship to the Mortgagor?
3. Date of Induction Order or Entry into 4. Service Number 5. Approximate Years of any Previous
Military Service Military Service
From To
From To
----------------------------------------------------------------------------------------------------------------------
6. Present Military Address 7. Rank and Branch Service 8. Pay Grade
----------------------------------------------------------------------------------------------------------------------
9. Present Address of Mortgagor's Family 10. Relationship and Age of Each
Dependent
----------------------------------------------------------------------------------------------------------------------
11. Name and Address of Employer immediately prior to Military Service. 12. Total Monthly Earnings and Income of
Mortgagor immediately prior to
Military Service.
----------------------------------------------------------------------------------------------------------------------
13. Total Monthly Earnings and Income of Mortgagor (Including Spouse, Other
Members of Household, Other Persons Liable for Payment of Mortgage
Indebtedness) After Entry into Military Service:
a. Base Service Pay b. Contribution to Family Allotment c. Net Pay ("a" minus "b")
----------------------------------------------------------------------------------------------------------------------
d Family Allotment (same as "b" e. Government Allowance for Dependent f. Subtotal ("d" minus "e")
above
----------------------------------------------------------------------------------------------------------------------
g. Other Income, including Allowance for Quarters and Subsistence, and Income of Members
of Household $
h. Total Income ("c" plus "f" plus "g") $
----------------------------------------------------------------------------------------------------------------------
14. Describe other obligations and state Monthly Payments Required and what modifications will be made.
------------------------------------------------------------ ---------------------------------------------------------
15. Present Occupants of Property and Relationship to 16. If Property is Rented, Monthly Rental.
Mortgagor.
----------------------------------------------------------------------------------------------------------------------
17. Effect of Military Service on Family Income is as Follows:
----------------------------------------------------------------------------------------------------------------------
18. Present mortgage installment
$____________ Deposit, $______________ Interest, $______________ Principal, $_______________ Total
----------------------------------------------------------------------------------------------------------------------
G-3
By reason of the foregoing, the Mortgagor represents to the Federal National
Mortgage Association (hereinafter referred to as the "Mortgagee"), that he or
she is unable to meet the regular monthly installments or other obligations, if
any, now due on the mortgage to the Mortgagee, or to become due during the
period of military service (as defined by the Soldiers' and Sailors' Civil
Relief Act, as amended,) and requests indulgence to the extent of being
permitted during such period, unless previously notified to the contrary by the
Mortgagee or the servicer of the Mortgage, to make monthly payments of
$_______________ commencing on _____________________ to apply on such mortgage
indebtedness, inclusive of any sums required to be paid to the Tax and Insurance
Account.
The Mortgagor will (1) promptly notify the servicer of the Mortgage of any
increase in his or her income from the property or from any other source, or any
increase in the income of members of his or her household, or of other persons
liable for the payment of the Mortgage, and pay a commensurate portion of such
increases toward the reduction of the balance due upon the Mortgage; (2)
increase the monthly payments proposed hereby to the extent that the Mortgagee
or said servicer may hereafter determine to be necessary to cover any increase
of taxes, assessments, insurance and other similar items; and (3) promptly
notify said servicer, in writing, of the data of termination of such period of
military service.
It is clearly understood that by the submission of the "Request for Military
Indulgence", the Mortgagor does not waive any rights or benefits under the
provision of the Soldiers' & Sailors' Civil Relief Act of 1940, as amended.
______________________________________
Mortgagor
______________________________________
Mortgagor
Dated_________________________________________
Approved for Federal National Mortgage Association
By:____________________________________________
(Servicer's Authorized Representative)
____________________________________________
(Servicer's Name)
____________________________________________
(Servicer's Address)
____________________________________________
G-4
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 Long Beach Mortgage Loan Trust
2002-4, to accept the transfer of the above described loan from Seller.
Seller agrees to indemnify Deutsche Bank National Trust Company, Long Beach
Securities Corp. and Long Beach Mortgage Company 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 ERISA REPRESENTATION
[DATE]
Long Beach Securities Corp.
0000 Xxxx & Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Long Beach Mortgage Company
0000 Xxxx & Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Federal National Mortgage Association
0000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Re: Long Beach Mortgage Loan Trust 2002-4,
Asset-Backed Certificates, Series 2002-4
Ladies and Gentlemen:
___________________ (the "Transferee") intends to acquire from
__________________ (the "Transferor") $____________ Initial Certificate
Principal Balance of the Class [____] Certificate of Long Beach Mortgage Loan
Trust 2002-4, Asset-Backed Certificates, Series 2002-4, (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement dated as of October __,
2002 (the "Agreement") among Long Beach Securities Corp., as depositor (the
"Depositor"), Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates 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, Federal National
Mortgage Association and the Master Servicer that the following statements in
either (1) or (2) are accurate:
_____ (1) 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 C.F.R. ss. 2510.3-101; or
I-1
_____ (2) The Transferee will provide an Opinion of Counsel to the
Depositor, the Trustee and the Master Servicer which establishes to the
satisfaction of the Depositor, the Trustee and the Master 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 Trustee, the
Master Servicer 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.
IN WITNESS WHEREOF, the Transferee executed this certificate.
____________________________________________
[Transferee]
By:_________________________________________
Name:_______________________________________
Title:______________________________________
I-2
EXHIBIT J
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Long Beach Securities Corp.
0000 Xxxx & Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Long Beach Mortgage Loan Trust 2002-4,
Asset-Backed Certificates Series 2002-4
Ladies and Gentlemen:
In connection with our acquisition of $______ Initial Certificate Principal
Balance of the Class [__] Certificate of Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates, Series 2002-4 (the "Certificates"), issued pursuant
to a Pooling and Servicing Agreement dated as of October __, 2002 (the
"Agreement") among Long Beach Securities Corp., as depositor (the "Depositor"),
Long Beach Mortgage Company, as master servicer (the "Master Servicer"), Federal
National Mortgage Association, as guarantor with respect to the Class I-A
Certificates and the Class I-S1 Certificates and Deutsche Bank National Trust
Company, as trustee (the "Trustee"), 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
J-1
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 Agreement.
Very truly yours,
[NAME OF TRANSFEREE]
By:_______________________
Authorized Officer
J-2
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
Long Beach Securities Corp.
0000 Xxxx & Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Long Beach Mortgage Loan Trust 2002-4,
Asset-Backed Certificates Series 2002-4
Ladies and Gentlemen:
In connection with our acquisition of $______ Initial Certificate Principal
Balance of the Class [__] Certificate of Long Beach Mortgage Loan Trust 2002-4
Asset-Backed Certificates, Series 2002-4 (the "Certificates"), issued pursuant
to a Pooling and Servicing Agreement dated as of October __, 2002 (the
"Agreement") among Long Beach Securities Corp., as depositor (the "Depositor"),
Long Beach Mortgage Company, as master servicer (the "Master Servicer"), Federal
National Mortgage Association, as guarantor with respect to the Class I-A
Certificates and the Class I-S1 Certificates and Deutsche Bank National Trust
Company, as trustee (the "Trustee"), 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
J-3
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-4
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-5
_____ 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-6
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-7
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. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the 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-8
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-9
EXHIBIT K
TRANSFER AFFIDAVIT AND AGREEMENT
LONG BEACH MORTGAGE LOAN TRUST 2002-4,
ASSET-BACKED CERTIFICATES, SERIES 2002-4
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 the Class [___] Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement") among Long Beach Securities Corp., as depositor (the "Depositor"),
Long Beach Mortgage Company, as master servicer (the "Master Servicer"), Federal
National Mortgage Association, as guarantor with respect to the Class I-A
Certificates and Class I-S1 Certificates 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 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) of
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 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,
K-1
persons holding interests in pass-through entities as a nominee for another
Person.)
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 L 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 agrees that it will not cause income from the
Certificate to be attributable to a foreign permanent establishment or fixed
base (within the meaning of an applicable income tax treaty) of the Transferee
or another U.S. taxpayer.
11. The Transferee is aware that the Certificate may be "noneconomic
residual interests" within the meaning of 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, if a significant purpose of the transfer was to impede the assessment
or collection of tax. The Transferee understands that, as the holder of a
noneconomic residual interest, the Transferee may incur tax liabilities in
excess of any cash flows generated by the Certificate. The Transferee intends to
pay taxes associated with holding the Certificate as they become due.
12. 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
Vice President, attested by its Assistant Secretary, this ___ day of October,
2002.
[Transferee NAME]
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 October, 2002.
_______________________________________________
NOTARY PUBLIC
My Commission expires the __ day of ____, 20__.
K-3
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Long Beach Securities Corp.
0000 Xxxx & Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Long Beach Mortgage Loan Trust 2002-4,
Asset-Backed Certificates Series 2002-4
Ladies and Gentlemen:
In connection with our disposition of the Class [__] Certificates (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement dated as
of October __, 2002 (the "Agreement") among Long Beach Securities Corp., as
depositor (the "Depositor"), Long Beach Mortgage Company, as master servicer
(the "Master Servicer"), Federal National Mortgage Association, as guarantor
with respect to the Class I-A Certificates and the Class I-S1 Certificates and
Deutsche Bank National Trust Company, as trustee (the "Trustee") 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 the Class [__] Certificate, we have no knowledge
that the Transferee is not a Permitted Transferee and (d) no purpose of the
proposed disposition of the Class [__] Certificate is to impede the assessment
or collection of tax.
Very truly yours,
TRANSFEROR
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
L-1
EXHIBIT M
CERTIFICATE INSURANCE POLICY
[Capital Assurance Logo]
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
FINANCIAL GUARANTY
INSURANCE POLICY
Insured Obligations: Long Beach Mortgage Loan Trust 2002-4 Policy No: CA00345A
U.S. $599,765,000 Class I-A Asset-
Backed Certificates Series 2002-4 Effective Date: October 4, 2002
U.S. $400,235,000 Class II-A Asset-
Backed Certificates Series 2002-4
U.S. Notional $89,965,000 Interest Only
Class I-S1 5.25%
Asset-Backed Certificates Series 2002-4
U.S. Notional $80.047,000 Interest Only
Class II-S1 5.25%
Asset-Backed Certificates Series 2002-4
XL Capital Assurance Inc. (XLCA), a New York stock insurance company, in
consideration of the payment of the premium and subject to the terms of this
Policy (which includes the Endorsement attached hereto), hereby unconditionally
and irrevocably guarantees to the Trustee for the benefit of the Owners of the
Insured Obligations, the full and complete payment by the Obligor of that
portion of the Scheduled Payments which shall become Due for Payment but shall
be unpaid by reason of Nonpayment (the "Insured Amount").
XLCA will pay the Insured Amount to the Trustee upon the presentation of a
Payment Notice to XLCA (which Payment Notice shall include an irrevocable
assignment to XLCA of all rights and claims in respect of the relevant Insured
Obligation, including the right to receive principal, if applicable, and
interest in respect of the Insured Obligation, free of any adverse claim), on
the later of (a) one (1) Business Day following receipt by XLCA of a Payment
Notice or (b) the Business Day on which Scheduled Payments are Due for Payment.
XLCA shall be subrogated to the Owners' rights to payment on the Insured
Obligations to the extent of any payment by XLCA hereunder. The obligations of
XLCA with respect to a Scheduled Payment will be discharged to the extent funds
to pay such Scheduled Payment are legally available to the Trustee, whether such
funds are properly applied by the Trustee or claimed by an Owner.
In the event that any Scheduled Payment which has become Due for Payment
and which is made to an Owner by or on behalf of the Trustee is recovered or is
recoverable from the Owner pursuant to a final judgment by a court of competent
jurisdiction in an Insolvency Proceeding that such payment constitutes an
Avoided Payment to such Owner within the meaning of any applicable bankruptcy
law, XLCA shall pay the amount of such recovery if sufficient funds are not
otherwise available.
This Policy sets forth in full the undertaking of XLCA and shall not be
cancelled, revoked, further endorsed or modified by XLCA for any reason,
including failure to receive payment of any premium due hereunder or under the
Insurance Agreement. The premium on this Policy is not refundable for any
reason. This Policy does not insure against loss of any prepayment or other
acceleration payment which at any time may become due in respect of any Insured
Obligation, other than at the sole option of XLCA, nor against any risk other
than Nonpayment, including any shortfalls, if any, attributable to the liability
of the Obligor for withholding taxes if any, including interest and penalties in
respect of such liability.
M-1
THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND
SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.
Any capitalized terms not defined herein shall have the meaning given such
terms in the Endorsement attached hereto and forming a part hereof, or in the
Insurance Agreement referenced therein. In witness whereof, XLCA has caused this
Policy to be executed as of the Effective Date.
__________________________________ _____________________________________
Name: Xxxxx Xxxxxxx Name: Xxxx Xxxx Constant
Title: Managing Director Title: Associate General Counsel
M-2
Financial Guaranty Insurance Policy Endorsement
Effective Date October 4, 2002 attached to and forming part of
Financial Guaranty Insurance Policy No. CA00345A
Obligor: Long Beach Mortgage Loan Trust 2002-4 (the "Trust")
Insured Obligations: U.S. $599,765,000 Class I-A Asset-Backed Certificates Series 2002-4
U.S. $400,235,000 Class II-A Asset-Backed Certificates Series 2002-4
U.S. Notional $89,965,000 Interest Only Class I-S1 5.25% Asset-Backed
Certificates Series 2002-4
U.S. Notional $80,047,000 Interest Only Class II-S1 5.25%
Asset-Backed Certificates Series 2002-4
Beneficiary: Deutsche Bank National Trust Company, not in its individual capacity,
but solely as the Trustee of the Trust, for the benefit of the owners
of the Insured Obligations
Capitalized terms used herein and not otherwise defined herein or in the
Policy shall have the meanings assigned to them in the Insurance Agreement or,
if not defined therein, in the Pooling and Servicing Agreement dated as of
October 1, 2002 among Long Beach Mortgage Company, Long Beach Securities Corp.,
Federal National Mortgage Association, and Deutsche Bank National Trust Company,
as trustee, as the same may be amended from time to time (the "Pooling and
Servicing Agreement").
As used herein the term "Business Day" means any day other than a Saturday,
Sunday or a day on which XLCA or banking institutions in New York City 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 close.
As used herein the term "Deficiency Amount" means with respect to Scheduled
Payments on the Insured Obligations and any Distribution Date, the excess, if
any, of (A) the sum of (i) the Monthly Interest Distributable Amount for each
class of the Insured Obligations plus any Unpaid Interest Shortfall Amount for
each class of the Insured Obligations, (ii) the Insured Principal Amount, (iii)
the Group I Certificate Insurer Premium, (iv) the Group II Certificate Insurer
Premium and (v) the Guaranty Fee over (B) the sum of the Group I Available Funds
and the Group II Available Funds.
As used herein the term "Due for Payment" means, with respect to a
Scheduled Payment, the Distribution Date on which such Scheduled Payment is due.
M-3
As used herein the term "Group I Certificate Insurer Premium" means for any
Distribution Date and with respect to the Class I-A Certificates and the Class
I-S1 Certificates, the premium due to XLCA on such Distribution Date in
accordance with the terms of the Insurance Agreement including any Premium
Supplement.
As used herein the term "Group I Insured Principal Amount" means (a) for
any Distribution Date (other than the Distribution Date in November 2032), the
amount, if any, by which the aggregate Certificate Principal Balance of the
Class I-A Certificates (after giving effect to all other distributions is
respect of principal to be made on such Distribution Date and without regard to
any payment by XLCA) exceeds the aggregate Stated Principal Balance of the Group
I Mortgage Loans on 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) for the Distribution Date in
November 2032, an amount equal to the aggregate Certificate Principal Balance of
the Class I-A Certificates (after giving effect to distributions in respect of
principal to be made on such Distribution Date and without regard to any payment
by XLCA).
As used herein the term "Group II Certificate Insurer Premium" means for
any Distribution Date and with respect to the Class II-A Certificates and the
Class II-S1 Certificates, the premium due to XLCA on such Distribution Date in
accordance with the terms of the Insurance Agreement including any Premium
Supplement.
As used herein the term "Group II Insured Principal Amount" means (a) for
any Distribution Date (other than the Distribution Date in November 2032), the
amount, if any, by which the aggregate Certificate Principal Balance of the
Class II-A Certificates (after giving effect to all other distributions is
respect of principal to be made on such Distribution Date and without regard to
any payment by XLCA) exceeds the aggregate Stated Principal Balance of the Group
II Mortgage Loans on 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) for the Distribution Date in
November 2032, an amount equal to the aggregate Certificate Principal Balance of
the Class II-A Certificates (after giving effect to distributions in respect of
principal to be made on such Distribution Date and without regard to any payment
by XLCA).
As used herein the term "Insolvency Proceeding" means the commencement,
after the date hereof, of any bankruptcy, insolvency, receivership, readjustment
of debt, reorganization, marshalling of assets and liabilities or similar
proceedings by or against a Mortgage Loan obligor, the commencement, after the
date hereof, of any proceedings by or against a Mortgage Loan obligor for the
winding up or liquidation of its affairs, or the consent, after the date hereof,
to the appointment of a trustee, conservator, receiver or liquidator in any
bankruptcy, insolvency, receivership, readjustment of debt, reorganization,
marshalling of assets and liabilities or similar proceedings of or relating to a
Mortgage Loan obligor.
M-4
As used herein the term "Insurance Agreement" means the Insurance and
Indemnity Agreement, dated as of October 4, 2002, among XLCA, Long Beach
Securities Corp. and Long Beach Mortgage Company.
As used herein the term "Insured Principal Amount" means the sum of the
Group I Insured Principal Amount and the Group II Insured Principal Amount.
As used herein the term "Nonpayment" means, with respect to any
Distribution Date, the failure of the Obligor to make funds legally available to
the Trustee to pay all or a portion of a Scheduled Payment with respect to such
date.
As used herein the term "Owner" means the registered owner of any Insured
Obligation as indicated in the registration books maintained by or on behalf of
the Obligor for such purpose or, if the Insured Obligation is in bearer form,
the holder of the Insured Obligation.
As used herein the term "Scheduled Payment" means for any Distribution Date
with respect to the Insured Obligations during the Term of this Policy, (i) the
Monthly Interest Distributable Amount due and payable in respect of each class
of Insured Obligations on such Distribution Date and (ii) if such Distribution
Date is in November 2032, the aggregate Certificate Principal Balance of the
Class I-A Certificates and the Class II-A Certificates outstanding on such
Distribution Date, in each case, in accordance with the original terms of the
Insured Obligations when issued and without regard to any subsequent amendment
or modification of the Insured Obligations or the Pooling and Servicing
Agreement that has not been consented to in writing by XLCA. Payments which
become due on an accelerated basis as a result of an optional termination or any
other cause do not constitute "Scheduled Payments," unless XLCA elects, in its
sole discretion, to pay such amounts in whole or in part (in which event
Scheduled Payments shall include such accelerated payments as, when and to the
extent so elected by XLCA). In the event that XLCA does not so elect, XLCA shall
continue to be required under the Policy to make Scheduled Payments on the
Insured Obligations in accordance with the original scheduled terms. In
addition, "Scheduled Payments" shall not include, nor shall coverage be provided
under the Policy in respect of, (i) any amounts due in respect of the Insured
Obligations attributable to any increase in interest rate, penalty or other sum
payable by the Issuer by reason of any default or event of default in respect of
the Insured Obligations, (ii) any Relief Act Interest Shortfalls, (iii) any Net
WAC Rate Carryover Amounts, (iv) any Prepayment Interest Shortfalls or (v) any
taxes, withholding or other charge imposed by any governmental authority due in
connection with the payment of any Scheduled Payment to any Owner.
As used herein the term "Scheduled Payment Deficiency" means with respect
to any Distribution Date during the Term of this Policy the sum of (i) any
Deficiency Amount and (ii) any Avoided Payment.
As used herein the term "Term of this Policy" means the period from and
including the Effective Date to and including the first date on which (i) all
Scheduled Payments have been paid that are required to be paid under the Pooling
and Servicing Agreement; (ii) any period during which any Scheduled Payment
could have been avoided in whole or in part as a preference payment under
applicable bankruptcy, insolvency, receivership or similar law has expired, and
(iii) if any proceedings requisite to avoidance as a preference payment have
been commenced prior to the occurrence of (i) and (ii) above, a final and
nonappealable order in resolution of each such proceeding has been entered.
M-5
To make a claim under the Policy, the Trustee shall deliver to XLCA Payment
Notice in the form of Exhibit A hereto (a "Payment Notice"), appropriately
completed and executed by the Trustee. A Payment Notice under this Policy may be
presented to XLCA by (i) delivery of the original Payment Notice to XLCA at its
address set forth below, or (ii) facsimile transmission of the original Payment
Notice to XLCA at its facsimile number set forth below. If presentation is made
by facsimile transmission, the Trustee shall (x) simultaneously confirm
transmission by telephone to XLCA at its telephone number set forth below, and
(y) as soon as reasonably practicable, deliver the original Payment Notice to
XLCA at its address set forth below. Any Payment Notice received by XLCA after
10:00 a.m., New York City time, on a Business Day, or on any day that is not a
Business Day, will be deemed to be received by XLCA at 9:00 a.m., New York City
time, on the next succeeding Business Day.
Following receipt by XLCA of a Payment Notice from the Trustee, XLCA will
unconditionally and irrevocably pay any amount payable hereunder in respect of a
Scheduled Payment Deficiency (other than a Scheduled Payment Deficiency
resulting from an Avoided Payment) out of the funds of XLCA on the later to
occur of (a) 12:00 noon, New York City time, on the first Business Day following
such receipt and (b) 12:00 noon, New York City time, on the Distribution Date to
which such Scheduled Payment Deficiency relates. Payments due hereunder in
respect of a Scheduled Payment Deficiency will be disbursed by wire transfer of
immediately available funds to the Policy Payments Account established pursuant
to the Pooling and Servicing Agreement or, if no such Policy Payments Account
has been established, to the Trustee.
Subject to the foregoing, if the payment of any Scheduled Payment is voided
or recoverable (a "Preference Event") as a result of an Insolvency Proceeding
and as a result of such Preference Event, the Owner is required to return such
voided payment, or any portion of such voided payment, made in respect of the
Insured Obligation (an "Avoided Payment"), XLCA will irrevocably, absolutely and
unconditionally pay an amount equal to the full and complete amount of such
Avoided Payment following receipt by XLCA from the Trustee on behalf of such
Owner of (x) a certified copy of a final order of a court exercising
jurisdiction in such Insolvency Proceeding to the effect that the Owner or the
Trustee on behalf of the Owner is required to return any such payment or portion
thereof because such payment was voided under applicable law (the "Final
Order"), and an opinion of counsel satisfactory to XLCA that such order is final
and not subject to appeal, (y) an assignment, substantially in the form attached
hereto as Exhibit B, properly completed and executed by such Owner irrevocably
assigning to XLCA all rights and claims of such Owner relating to or arising
under such Avoided Payment and (z) a Payment Notice in the form of Exhibit A
hereto appropriately completed and executed by the Trustee.
XLCA shall make payments due in respect of Avoided Payments prior to 2:00
p.m. New York City time on the fourth Business Day following XLCA's receipt of
the documents required under clauses (x) through (z) of the preceding paragraph.
Any such documents received by XLCA after 10:00 a.m. New York City time on any
Business Day or on any day that is not a Business Day shall be deemed to have
been received by XLCA at 9:00 a.m., New York City time, on the next succeeding
Business Day. Such payments shall be disbursed to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Final Order and not
to the Trustee or any Owner directly (unless an Owner has provided evidence
satisfactory to XLCA that it has previously paid such amount to the receiver,
conservator, debtor-in-possession or trustee in bankruptcy named in the Final
Order, in which case such payment shall be disbursed to the Trustee.)
M-6
No defenses, set-offs or counterclaims of any kind available to XLCA so as
to deny payment of any amount due in respect of this Policy in accordance with
the express provisions of the Policy will be valid and XLCA hereby waives to the
fullest extent permitted by law for the benefit of each Owner and agrees not to
assert any and all such defenses (including, without limitation, defenses based
on fraud and defenses based on suretyship), set-offs and counterclaims,
including, without limitation, any such rights acquired by subrogation,
assignment or otherwise. Upon any payment hereunder, in furtherance and not in
limitation of XLCA's equitable right of subrogation and XLCA's rights under the
Insurance Agreement, XLCA will be subrogated to the rights of the Owner in
respect of which such payment was made to receive any and all amounts due in
respect of the obligations in respect of which XLCA has made a payment
hereunder. Any rights of subrogation acquired by XLCA as a result of any payment
made under this Policy shall, in all respects, be subordinate and junior in
right of payment to the prior indefeasible payment in full of any amounts due
the Owner on account of payments due under the Insured Obligation.
This Policy is neither transferable nor assignable, in whole or in part,
except to a successor trustee duly appointed and qualified under the Pooling and
Servicing Agreement. All notices, presentations, transmissions, deliveries and
communications made by the Trustee to XLCA with respect to this Policy shall
specifically refer to the number of this Policy and shall be made to XLCA at:
XL Capital Assurance Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Surveillance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or such other address, telephone number or facsimile number as XLCA may
designate to the Trustee in writing from time to time. Each such notice,
presentation, transmission, delivery and communication shall be effective only
upon actual receipt by XLCA.
The obligations of XLCA under this Policy are irrevocable, primary,
absolute and unconditional, subject to satisfaction of the terms of this Policy,
and neither the failure of the Obligor, the Trustee or any other person to
perform any covenant or obligation in favor of XLCA (or otherwise), nor the
failure of any assignment or grant of any security interest, nor the
commencement of any bankruptcy, debtor or other insolvency proceeding by or
against the Obligor or the Trustee or any other person shall in any way affect
or limit XLCA's obligations under this Policy. If a successful action or
proceeding to enforce this Policy is brought by the Trustee, the Trustee shall
be entitled to recover from XLCA costs and expenses reasonably incurred,
including, without limitation, reasonable fees and expenses of counsel.
M-7
This Policy shall be returned to XLCA by the Trustee upon the earlier of
(i) the expiration of the Term of this Policy or (ii) the date on which
replacement credit enhancement is substituted for this Policy under and in
accordance with the terms of Section 4.10 of the Pooling and Servicing
Agreement.
THIS POLICY SHALL BE CONSTRUED, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES WHICH WOULD
REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
If any term or provision of the face of this Policy is inconsistent with
the provisions of this Endorsement, the provisions of this Endorsement shall
take precedence and be binding.
[Remainder of Page Intentionally Left Blank]
M-8
IN WITNESS WHEREOF, XL Capital Assurance Inc. has caused this Endorsement
to the Policy to be executed on the 4th day of October, 2002.
______________________________ _______________________________
Name: Xxxxx Xxxxxxx Name: Xxxx Xxxx Constant
Title: Managing Director Title: Associate General Counsel
M-9
Exhibit A to Financial Guaranty Policy No. CA00345A
XL Capital Assurance Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Surveillance
PAYMENT NOTICE
UNDER FINANCIAL GUARANTY POLICY No. CA00345A
Deutsche Bank National Trust Company as Trustee (the "Trustee"), hereby
certifies to XL Capital Assurance Inc. ("XLCA") with reference to that certain
Financial Guaranty Xxxxxx, Xx. XX 00000X, dated October 4, 2002 together with
the Endorsement attached thereto, (the "Policy"), issued by XLCA in favor of the
Trustee on behalf of the Owner under the Pooling and Servicing Agreement, as
follows:
1. The Trustee is the trustee under the Pooling and Servicing Agreement and
the beneficiary on behalf of each Owner of the Policy.
2. The Trustee is entitled to make a demand under the Policy pursuant to
Section 3.31 of the Pooling and Servicing Agreement.
3. This notice relates to the [insert date] Distribution Date. The amount
demanded is to be paid in immediately available funds to the [Specify Account]
at [Identify Financial Institution Holding Account] account number[ _____].
[For a Payment Notice in respect of a Scheduled Payment Deficiency (other
than a Scheduled Payment Deficiency resulting from an Avoided Payment) use
paragraph 4.]
4. The Trustee demands payment of $________ which is an amount equal to the
amount by which the [Describe calculation of Scheduled Payment Deficiency (other
than a Scheduled Payment Deficiency resulting from an Avoided Payment) under
Policy].
[For a Payment Notice in respect of an Avoided Payment use the following
paragraphs [4] or [5].]
[4.] or [5.] The Trustee hereby represents and warrants, based upon
information available to it, that (i) the amount entitled to be drawn under the
Policy on the date hereof in respect of Avoided Payments is the amount paid or
to be paid simultaneously with such draw on the Policy, by the Owner on account
of a Preference Event [$________] (the "Avoided Payment Amount") and (ii) the
documents required by the Policy to be delivered in connection with such Avoided
Payment and Avoided Payment Amount have previously been presented to XLCA or are
attached hereto.
M-10
[6] The Trustee agrees that, following payment of funds by XLCA, it shall
use reasonable efforts to procure (a) that such amounts are applied directly to
the payment of any Insured Amount which is Due for Payment; (b) that such funds
are not applied for any other purpose; and (c) the maintenance of accurate
record of such payments in respect of each Insured Obligation and the
corresponding claim on the Policy and the proceeds thereof.
[7] The Trustee, on behalf of itself and the Owners, hereby assigns to XLCA
the rights of the Trustee and the Owners with respect to the Insured Obligation
to the extent of any payments under the Policy. The foregoing assignment is in
addition to, and not in limitation of, rights of subrogation otherwise available
to XLCA in respect of such payments. The Trustee shall take such action and
deliver such instruments as may be reasonably requested or required by XLCA to
effectuate the purpose of provisions of this clause [7].
[8] The Trustee, on behalf of itself and the Owners, hereby appoints XLCA
as agent and attorney-in-fact for the Trustee and the Owners in any legal
proceeding in respect of the Insured Obligation. The Trustee, on behalf of
itself and the Owners, thereby (and without limiting the generality of the
preceding sentence) agrees that XLCA may at any time during the continuation of
any proceeding by or against any debtor with respect to which a Preference Claim
(as defined below) or other claim with respect to the Insured Obligation is
asserted under any Insolvency Proceeding, direct all matters relating to such
Insolvency Proceeding, including, without limitation, (a) all matters relating
to any claim in connection with a Insolvency Proceeding seeking the avoidance as
a preferential transfer of any payment made with respect to the obligations (a
"Preference Claim"), (b) the direction of any appeal of any order relating to
any Preference Claim and (c) the posting of any surety, supersedes or
performance bond pending any such appeal. In addition, the Trustee, on behalf of
itself and the Owners, hereby agrees that XLCA shall be subrogated to, and the
Trustee, on behalf of itself and the Owners, hereby delegates and assigns, to
the fullest extent permitted by law, the rights of itself and the Owners in the
conduct of any Insolvency Proceeding, including, without limitation, all rights
of any party to an adversary proceeding or action with respect to any court
order issued in connection with any such Insolvency Proceeding.
M-11
Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Policy or the Pooling and Servicing
Agreement.
IN WITNESS WHEREOF, this notice has been executed this ____ day of
________, ____.
_____________________
as Trustee
By:_________________________
Authorized Officer
Any Person Who Knowingly And With Intent To Defraud Any Insurance Company
Or Other Person Files An Application For Insurance Or Statement Of Claim
Containing Any Materially False Information, Or Conceals For The Purpose Of
Misleading Information Concerning Any Fact Material Thereof, Commits A
Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A Civil
Penalty Not To Exceed Five Thousand Dollars And The Stated Value Of The Claim
For Each Such Violation
M-12
Exhibit B to Financial Guaranty Insurance Policy, No. CA00345A
Form of Assignment
Reference is made to the Financial Guaranty Insurance Policy Xx. XX00000X,
dated October 4, 2002 (together with the Endorsement attached thereto, the
"Policy") issued by XL Capital Assurance Inc. ("XLCA") relating to the Insured
Obligations. Unless otherwise defined herein, capitalized terms used in this
Assignment shall have the meanings assigned thereto in the Policy as
incorporated by reference therein. In connection with the Avoided Payment of [$
] paid by the undersigned (the "Owner") on [ ] and the payment by XLCA in
respect of such Avoided Payment pursuant to the Policy, the Owner hereby
irrevocably and unconditionally, without recourse, representation or warranty
(except as provided below), sells, assigns, transfers, conveys and delivers all
of such Owner's rights, title and interest in and to any rights or claims,
whether accrued, contingent or otherwise, which the Owner now has or may
hereafter acquire, against any person relating to, arising out of or in
connection with such Avoided Payment. The Owner represents and warrants that
such claims and rights are free and clear of any lien or encumbrance created or
incurred by such Owner.(2)
________________________
Owner
_________________________
(2) In the event that the terms of this form of assignment are reasonably
determined to be insufficient solely as a result of a change of law or
applicable rules after the date of the Policy to fully vest all of the Owner's
right, title and interest in such rights and claims, the Owner and XLCA shall
agree on such other form as is reasonably to effect such assignment, which
assignment shall be without recourse, representation or warranty except as
provided above.
M-13
SCHEDULE I
PREPAYMENT CHARGE SCHEDULE
AVAILABLE UPON REQUEST
SCHEDULE II
CAP PREMIUM SCHEDULES
NOT APPLICABLE
SCHEDULE III
[RESERVED]
SCHEDULE IV
PMI MORTGAGE LOAN SCHEDULE
NOT APPLICABLE
