EXHIBIT 4.1
LONG BEACH SECURITIES CORP.,
Depositor
LONG BEACH MORTGAGE COMPANY,
Master Servicer
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2004
------------------------------
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates, Series 2004-A
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.............................................................................................5
Section 1.01 Defined Terms................................................................................5
Section 1.02 Accounting..................................................................................51
Section 1.03 Allocation of Certain Interest Shortfalls...................................................51
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES.......................................52
Section 2.01 Conveyance of Mortgage Loans................................................................52
Section 2.02 Acceptance of REMIC 1 by the Trustee........................................................55
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..............................................................56
Section 2.04 Representations, Warranties and Covenants of the Master Servicer............................59
Section 2.05 Representations and Warranties of the Depositor.............................................62
Section 2.06 Issuance of Certificates....................................................................64
Section 2.07 Reserved....................................................................................64
Section 2.08 Conveyance of REMIC Regular Interests and Acceptance of REMIC 1 by the
Trustee; Issuance of Certificates...........................................................64
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS...................................................65
Section 3.01 Master Servicer to Act as Master Servicer...................................................65
Section 3.02 Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers......................66
Section 3.03 Successor Sub-Servicers.....................................................................68
Section 3.04 Liability of the Master Servicer............................................................68
Section 3.05 No Contractual Relationship Between Sub-Servicers and the Trustee or
Certificateholders..........................................................................68
Section 3.06 Assumption or Termination of Sub-Servicing Agreements by Trustee............................69
Section 3.07 Collection of Certain Mortgage Loan Payments................................................69
Section 3.08 Sub-Servicing Accounts......................................................................70
Section 3.09 Collection of Taxes, Assessments and Similar Items; Servicing Accounts......................70
Section 3.10 Collection Account and Distribution Account.................................................71
Section 3.11 Withdrawals from the Collection Account and Distribution Account............................73
Section 3.12 Investment of Funds in the Collection Account and the Distribution Account..................75
Section 3.13 Reserved....................................................................................77
Section 3.14 Maintenance of Hazard Insurance and Errors and Omissions and Fidelity
Coverage....................................................................................77
Section 3.15 Enforcement of Due-On-Sale Clauses; Assumption Agreements...................................78
Section 3.16 Realization Upon Defaulted Mortgage Loans...................................................79
Section 3.17 Trustee to Cooperate; Release of Mortgage Files.............................................82
Section 3.18 Servicing Compensation......................................................................83
Section 3.19 Reports to the Trustee; Collection Account Statements.......................................84
Section 3.20 Statement as to Compliance..................................................................84
Section 3.21 Independent Public Accountants' Servicing Report............................................84
Section 3.22 Access to Certain Documentation.............................................................85
Section 3.23 Title, Management and Disposition of REO Property...........................................85
Section 3.24 Obligations of the Master Servicer in Respect of Prepayment Interest
Shortfalls..................................................................................88
Section 3.25 [Reserved]..................................................................................89
Section 3.26 Reserve Fund................................................................................89
Section 3.27 Advance Facility............................................................................90
ARTICLE IV FLOW OF FUNDS.........................................................................................91
Section 4.01 Distributions...............................................................................91
Section 4.02 Reserved....................................................................................99
Section 4.03 Statements..................................................................................99
Section 4.04 Remittance Reports; Advances...............................................................103
Section 4.05 Distributions on the REMIC Regular Interests...............................................104
Section 4.06 Allocation of Realized Losses..............................................................106
Section 4.07 Compliance with Withholding Requirements...................................................108
Section 4.08 Commission Reporting.......................................................................108
ARTICLE V THE CERTIFICATES......................................................................................109
Section 5.01 The Certificates...........................................................................109
Section 5.02 Registration of Transfer and Exchange of Certificates......................................111
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..........................................115
Section 5.04 Persons Deemed Owners......................................................................116
ARTICLE VI THE MASTER SERVICER AND THE DEPOSITOR................................................................116
Section 6.01 Liability of the Master Servicer and the Depositor.........................................116
Section 6.02 Merger or Consolidation of the Depositor or the Master Servicer............................116
Section 6.03 Limitation on Liability of the Depositor, the Master Servicer and Others...................117
Section 6.04 Limitation on Resignation of Master Servicer...............................................118
Section 6.05 Rights of the Depositor and the Trustee in Respect of the Master Servicer..................118
ARTICLE VII DEFAULT.............................................................................................119
Section 7.01 Master Servicer Events of Default..........................................................119
Section 7.02 Trustee to Act; Appointment of Successor...................................................121
Section 7.03 Notification to Certificateholders.........................................................123
Section 7.04 Waiver of Master Servicer Events of Default................................................123
ARTICLE VIII THE TRUSTEE........................................................................................124
Section 8.01 Duties of Trustee..........................................................................124
Section 8.02 Certain Matters Affecting the Trustee......................................................125
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans......................................126
Section 8.04 Trustee May Own Certificates...............................................................127
ii
Section 8.05 Trustee's Fees and Expenses................................................................127
Section 8.06 Eligibility Requirements for Trustee.......................................................128
Section 8.07 Resignation or Removal of Trustee..........................................................128
Section 8.08 Successor Trustee..........................................................................129
Section 8.09 Merger or Consolidation of Trustee.........................................................130
Section 8.10 Appointment of Co-Trustee or Separate Trustee..............................................130
Section 8.11 Appointment of Custodians..................................................................131
Section 8.12 Appointment of Office or Agency............................................................131
Section 8.13 Representations and Warranties of the Trustee..............................................131
ARTICLE IX TERMINATION..........................................................................................132
Section 9.01 Termination Upon Purchase or Liquidation of All Mortgage Loans.............................132
Section 9.02 Additional Termination Requirements........................................................134
ARTICLE X REMIC PROVISIONS......................................................................................135
Section 10.01 REMIC Administration.......................................................................135
Section 10.02 Prohibited Transactions and Activities.....................................................138
Section 10.03 Trustee, Master Servicer and Depositor Indemnification.....................................138
ARTICLE XI MISCELLANEOUS PROVISIONS.............................................................................138
Section 11.01 Amendment..................................................................................138
Section 11.02 Recordation of Agreement; Counterparts.....................................................140
Section 11.03 Limitation on Rights of Certificateholders.................................................140
Section 11.04 Governing Law; Jurisdiction................................................................141
Section 11.05 Notices....................................................................................141
Section 11.06 Severability of Provisions.................................................................142
Section 11.07 Notice to the Rating Agencies..............................................................142
Section 11.08 Article and Section References.............................................................143
Section 11.09 Grant of Security Interest.................................................................143
iii
Exhibits
Exhibit A-1 Form of Class A Certificates
Exhibit A-2 Form of Class S Certificates
Exhibit A-3 Form of Class M-1 Certificates
Exhibit A-4 Form of Class M-2 Certificates
Exhibit A-5 Form of Class M-3 Certificates
Exhibit A-6 Form of Class M-4 Certificates
Exhibit A-7 Form of Class M-5 Certificates
Exhibit A-8 Form of Class M-6 Certificates
Exhibit A-9 Form of Class M-7 Certificates
Exhibit A-10 Form of Class M-8 Certificates
Exhibit A-11 Form of Class B Certificates
Exhibit A-12 Form of Class C Certificates
Exhibit A-13 Form of Class P Certificates
Exhibit A-14 Form of Class R Certificates
Exhibit B Reserved
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 Reserved
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 Transfer Affidavit
Exhibit L Form of Transferor Certificate
Schedules
Schedule I Prepayment Charge Schedule
iv
This POOLING AND SERVICING AGREEMENT is dated as of March 1, 2004 (the
"Agreement"), among LONG BEACH SECURITIES CORP., as depositor (the "Depositor"),
LONG BEACH MORTGAGE COMPANY, as master servicer (the "Master Servicer") and
DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee (the "Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates (collectively,
the "Certificates"), to be issued hereunder in multiple classes, which in the
aggregate will evidence the entire beneficial ownership interest in the Trust
Fund created hereunder. The Certificates will consist of fourteen classes of
certificates, designated as (i) the Class A Certificates, (ii) the Class S
Certificates, (iii) the Class M-1 Certificates, (iv) the Class M-2 Certificates,
(v) the Class M-3 Certificates, (vi) the Class M-4 Certificates, (vii) the Class
M-5 Certificates, (viii) the Class M-6 Certificates, (ix) the Class M-7
Certificates, (x) the Class M-8 Certificates, (xi) the Class B Certificates,
(xii) the Class C Certificates, (xiii) the Class P Certificates and (xiv) the
Class R Certificates.
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 Fund 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
REMIC 1
Initial Uncertificated Pass-Through Assumed Final
Designation Principal Balance Rate Maturity Date(1)
----------- ---------------------- ------------- ----------------
LT1-A $220,000,788.89 Variable(2) February 2024
LT1-S1 $130,000,000.00 Variable(2) February 2024
LT1-S2 $45,000,000.00 Variable(2) February 2024
LT1-S3 $10,000,000.00 Variable(2) February 2024
LT1-S4 $75,000,000.00 Variable(2) February 2024
LT1-P $10.00 Variable(2) February 2024
------------------------
1 Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the month of 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.
2
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
Initial REMIC 2
Uncertificated Pass-Through Assumed Final Maturity
Designation Principal Balance Rate Date(1)
----------- ---------------------- ------------- ----------------------
LT2-AA $470,400,773.11 Variable(2) February 2024
LT2-A $3,408,000.00 Variable(2) February 2024
LT2-M1 $456,000.00 Variable(2) February 2024
LT2-M2 $120,000.00 Variable(2) February 2024
LT2-M3 $108,000.00 Variable(2) February 2024
LT2-M4 $108,000.00 Variable(2) February 2024
LT2-M5 $108,000.00 Variable(2) February 2024
LT2-M6 $108,000.00 Variable(2) February 2024
LT2-M7 $108,000.00 Variable(2) February 2024
LT2-M8 $108,000.00 Variable(2) February 2024
LT2-B $168,000.00 Variable(2) February 2024
LT2-ZZ $4,800,015.78 Variable(2) February 2024
LT2-S1 N/A (3) Variable(2) February 2024
LT2-S2 N/A (3) Variable(2) February 2024
LT2-S3 N/A (3) Variable(2) February 2024
LT2-S4 N/A (3) Variable(2) February 2024
LT2-P $10.00 Variable(2) February 2024
-------------------
1 Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the month of 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 REMIC 2 Regular Interests LT2-S1 through LT2-S4 will not have an
Uncertificated Principal Balance, but will accrue interest on each such REMIC 2
Regular Interests' Uncertificated Notional Amount, as defined herein.
3
REMIC 3
As provided herein, the Trustee will 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 will represent the sole class of
"residual interests" in REMIC 3 for purposes of the REMIC Provisions (as defined
herein) under federal income tax law. The following table irrevocably sets forth
the designation, Original Class Certificate Principal Balance, the Pass-Through
Rate, and solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each Class of
Certificates:
Original Class
Certificate Principal Pass-Through Assumed Final
Class Designation Balance Rate Maturity Date(1)
----------------- --------------------- ------------ ----------------
A $340,800,000.00 Variable(2) February 2024
M-1 45,600,000.00 Variable(2) February 2024
M-2 12,000,000.00 Variable(2) February 2024
M-3 10,800,000.00 Variable(2) February 2024
M-4 10,800,000.00 Variable(2) February 2024
M-5 10,800,000.00 Variable(2) February 2024
M-6 10,800,000.00 Variable(2) February 2024
M-7 10,800,000.00 Variable(2) February 2024
M-8 10,800,000.00 Variable(2) February 2024
B 16,800,000.00 Variable(2) February 2024
S N/A N/A(3) February 2024
C $788.89(4) Variable(2) February 2024
P $10.00 N/A9(5) February 2024
-------------------
1 Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the month of 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
that represents one or more of the "regular interests" in REMIC 3.
2 Calculated in accordance with the definition of "Pass-Through Rate"
herein.
3 The Class S Certificates will receive all amounts distributed on
REMIC 2 Regular Interests LT2-S1 through LT2-S4.
4 The Class C Certificates will accrue interest at their variable
Pass-Through Rate on their Notional Amount outstanding from time to time, which
shall equal the aggregate of the Uncertificated Principal Balances of the REMIC
2 Regular Interests. The Class C Certificates will not accrue interest on their
Uncertificated Principal Balance.
5 The Class P Certificates will not accrue interest.
4
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, the Mezzanine
Certificates and the Class B 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 Class R 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, the Class C
Certificates, the REMIC 1 Regular Interests, the REMIC 2 Regular Interests and
the Class C Certificates, and each Distribution Date, the calendar month prior
to the month of such Distribution Date. With respect to the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates, 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.
"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 and (ii) the Trustee Fee Rate.
"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.
5
"Aggregate Class B/M-8 Early Distribution Amount": With respect to any
Distribution Date, the aggregate of all amounts paid to the Class B Certificates
and the Class M-8 Certificates on all prior Distribution Dates pursuant to
Sections 4.01(d)(i)(v) and (w).
"Agreement": This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
"Allocated Realized Loss Amount": With respect to any Distribution Date
and any Class of the Mezzanine Certificates and the Class B Certificates, an
amount equal to (a) the sum of (i) any Realized Losses allocated to such Class
of Certificates on such Distribution Date and (ii) the amount of any Allocated
Realized Loss Amount for such Class of Certificates remaining unpaid from the
previous Distribution Date less (b) any Allocated Realized Loss Amounts that
have been reinstated with respect to such Class of Certificates on prior
Distribution Dates due to Subsequent Recoveries.
"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.
"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 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, Gross Subsequent Recoveries and other unscheduled
recoveries of principal and interest in respect of the 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
Mortgage Loans and any Master Servicer Prepayment Charge Payment Amount in
connection with Mortgage Loans), (c) the aggregate of any amounts received in
respect of an REO Property acquired in respect of a 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
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 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
Mortgage Loans pursuant to Section 7.02(b) and (g) the aggregate of any amounts
constituting proceeds of repurchases or substitutions of the 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 or any Sub-Servicer pursuant to Section 3.11
or Section 3.12 in respect of the Mortgage Loans or otherwise payable in respect
of Extraordinary Trust Fund Expenses, (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 error, (c) Stayed Funds, (d) any Trustee Fee
pursuant to Section 8.05 and any indemnification payments or expense
reimbursements made by the Trust Fund pursuant to Section 8.05 and (e) amounts
reimbursable to the Trustee for an advance made pursuant to Section 7.02(b)
which advance the Trustee has determined to be nonrecoverable from the Stayed
Funds in respect of which it was made.
6
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"Bankruptcy Loss": With respect to any Mortgage Loan, a Realized Loss
resulting from a Deficient Valuation or Debt Service Reduction.
"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, the Class S Certificates, the Mezzanine
Certificates and the Class B 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 banking or savings institutions in the State of California, the State of
Delaware, 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.
"Certificate": Any Regular Certificate or Class R Certificate.
"Certificate Margin": With respect to the Class A Certificates on each
Distribution Date (A) on or prior to the Optional Termination Date, 0.15% per
annum and (B) after the Optional Termination Date, 0.30% per annum. With respect
to the Class M-1 Certificates on each Distribution Date (A) on or prior to the
Optional Termination Date, 0.50% per annum and (B) after the Optional
Termination Date, 0.75% per annum. With respect to the Class M-2 Certificates on
each Distribution Date (A) on or prior to the Optional Termination Date, 0.60%
per annum and (B) after the Optional Termination Date, 0.90% per annum. With
respect to the Class M-3 Certificates on each Distribution Date (A) on or prior
to the Optional Termination Date, 0.95% per annum and (B) after the Optional
Termination Date, 1.425% per annum. With respect to the Class M-4 Certificates
on each Distribution Date (A) on or prior to the Optional Termination Date,
1.10% per annum and (B) after the Optional Termination Date, 1.65% per annum.
With respect to the Class M-5 Certificates on each Distribution Date (A) on or
prior to the Optional Termination Date, 1.35% per annum and (B) after the
Optional Termination Date, 2.025% per annum. With respect to the Class M-6
Certificates on each Distribution Date (A) on or prior to the Optional
Termination Date, 1.60% per annum and (B) after the Optional Termination Date,
2.40% per annum. With respect to the Class M-7 Certificates on each Distribution
Date (A) on or prior to the Optional Termination Date, 1.70% per annum and (B)
after the Optional Termination Date, 2.55% per annum. With respect to the Class
M-8 Certificates on each Distribution Date (A) on or prior to the Optional
Termination Date, 2.50% per annum and (B) after the Optional Termination Date,
3.75% per annum. With respect to the Class B Certificates on each Distribution
Date (A) on or prior to the Optional Termination Date, 4.50% per annum and (B)
after the Optional Termination Date, 6.75% per annum.
"Certificate Owner": With respect to each Book-Entry Certificate, any
beneficial owner thereof.
7
"Certificate Principal Balance": With respect to any Class A
Certificates, Mezzanine Certificates, Class B 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 and, in the case of a
Mezzanine Certificate or a Class B Certificate, Realized Losses allocated
thereto on all prior Distribution Dates and, in the case of a Mezzanine
Certificate or a Class B Certificate, increased by the Allocated Realized Loss
Amounts reinstated thereto on all prior Distribution Dates due to Subsequent
Recoveries. With respect to any Class C Certificates as of any date of
determination, an amount equal to the excess, if any, of (A) the then aggregate
Uncertificated Principal Balances of the REMIC 2 Regular Interests over (B) the
sum of (i) the aggregate Certificate Principal Balances of the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates and the Class
P Certificates and (ii) any amount paid to the Class A Certificates as Extra
Principal Distribution Amount on the first Distribution Date. The Class S
Certificates and the Class R 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 Class R
Certificate for any purposes hereof and, solely for the purposes 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 such
consent, direction or other action has been obtained, except as otherwise
provided in Section 11.01. The Trustee 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 shall be required to recognize as a "Holder" or "Certificateholder" only
the Person in whose name a Certificate is registered in the Certificate
Register.
"Class": Collectively, Certificates which have the same priority of
payment and bear the same class designation and the form of which is identical
except for variation in the Percentage Interest evidenced thereby.
"Class A Certificate": Any one of the Class 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 3.
"Class A Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the amount equal to the lesser of (I) the aggregate Certificate
Principal Balance of the Class A Certificates immediately prior to such
Distribution Date and (II) the excess of (x) the aggregate Certificate Principal
Balance of the Class A Certificates immediately prior to such Distribution Date
over (y) the lesser of (A) the product of (i) 32.00% and (ii) the aggregate
8
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) minus the Overcollateralization Floor.
"Class B Certificate": Any one of the Class B Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-11 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 3.
"Class B Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the amount equal to the lesser of (I) the aggregate Certificate
Principal Balance of the Class B Certificates immediately prior to such
Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the aggregate Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the payment of the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the aggregate
Certificate Principal Balance of the Class M-2 Certificates (after taking into
account the payment of the Class M-2 Principal Distribution Amount on such
Distribution Date), (iv) the aggregate Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the payment of the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the aggregate
Certificate Principal Balance of the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on such
Distribution Date), (vi) the aggregate Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the aggregate
Certificate Principal Balance of the Class M-6 Certificates (after taking into
account the payment of the Class M-6 Principal Distribution Amount on such
Distribution Date), (viii) the aggregate Certificate Principal Balance of the
Class M-7 Certificates (after taking into account the payment of the Class M-7
Principal Distribution Amount on such Distribution Date), (ix) the aggregate
Certificate Principal Balance of the Class M-8 Certificates (after taking into
account the payment of the Class M-8 Principal Distribution Amount on such
Distribution Date) and (x) the aggregate Certificate Principal Balance of the
Class B Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 90.00% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the Overcollateralization Floor.
9
"Class B/M-8 Early Distribution Amount": With respect to any
Distribution Date, the aggregate of all amounts paid to the Class B Certificates
and the Class M-8 Certificates on such Distribution Date pursuant to Sections
4.01(d)(i)(v) and (w).
"Class C Certificate": Any one of the Class C Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-12, 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 3.
"Class M-1 Certificate": Any one of the Class M-1 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 3.
"Class M-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, an amount equal to the lesser of (I) the aggregate Certificate
Principal Balance of the Class M-1 Certificates immediately prior to such
Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date) and (ii) the aggregate Certificate Principal Balance of the
Class M-1 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 51.00% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the Overcollateralization Floor.
"Class M-2 Certificate": Any one of the Class M-2 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 3.
"Class M-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the amount equal to the lesser of (I) the aggregate Certificate
Principal Balance of the Class M-2 Certificates immediately prior to such
Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the aggregate Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the payment of the Class M-1
Principal Distribution Amount on such Distribution Date) and (iii) the aggregate
Certificate Principal Balance of the Class M-2 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 56.00% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
10
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the Overcollateralization Floor.
"Class M-3 Certificate": Any one of the Class M-3 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 3.
"Class M-3 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the amount equal to the lesser of (I) the aggregate Certificate
Principal Balance of the Class M-3 Certificates immediately prior to such
Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the aggregate Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the payment of the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the aggregate
Certificate Principal Balance of the Class M-2 Certificates (after taking into
account the payment of the Class M-2 Principal Distribution Amount on such
Distribution Date) and (iv) the aggregate Certificate Principal Balance of the
Class M-3 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 60.50% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the Overcollateralization Floor.
"Class M-4 Certificate": Any one of the Class M-4 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 3.
"Class M-4 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the amount equal to the lesser of (I) the aggregate Certificate
Principal Balance of the Class M-4 Certificates immediately prior to such
Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the aggregate Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the payment of the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the aggregate
Certificate Principal Balance of the Class M-2 Certificates (after taking into
account the payment of the Class M-2 Principal Distribution Amount on such
Distribution Date), (iv) the aggregate Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the payment of the Class M-3
Principal Distribution Amount on such Distribution Date), and (v) the aggregate
Certificate Principal Balance of the Class M-4 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 65.00% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
11
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the Overcollateralization Floor.
"Class M-5 Certificate": Any one of the Class M-5 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 3.
"Class M-5 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the amount equal to the lesser of (I) the aggregate Certificate
Principal Balance of the Class M-5 Certificates immediately prior to such
Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the aggregate Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the payment of the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the aggregate
Certificate Principal Balance of the Class M-2 Certificates (after taking into
account the payment of the Class M-2 Principal Distribution Amount on such
Distribution Date), (iv) the aggregate Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the payment of the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the aggregate
Certificate Principal Balance of the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on such
Distribution Date) and (vi) the aggregate Certificate Principal Balance of the
Class M-5 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 69.50% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the Overcollateralization Floor.
"Class M-6 Certificate": Any one of the Class M-6 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 3.
"Class M-6 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the amount equal to the lesser of (I) the aggregate Certificate
Principal Balance of the Class M-6 Certificates immediately prior to such
Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the aggregate Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the payment of the Class M-1
12
Principal Distribution Amount on such Distribution Date), (iii) the aggregate
Certificate Principal Balance of the Class M-2 Certificates (after taking into
account the payment of the Class M-2 Principal Distribution Amount on such
Distribution Date), (iv) the aggregate Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the payment of the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the aggregate
Certificate Principal Balance of the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on such
Distribution Date), (vi) the aggregate Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date) and (vii) the aggregate
Certificate Principal Balance of the Class M-6 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 74.00% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the Overcollateralization Floor.
"Class M-7 Certificate": Any one of the Class M-7 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 3.
"Class M-7 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the amount equal to the lesser of (I) the aggregate Certificate
Principal Balance of the Class M-7 Certificates immediately prior to such
Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the aggregate Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the payment of the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the aggregate
Certificate Principal Balance of the Class M-2 Certificates (after taking into
account the payment of the Class M-2 Principal Distribution Amount on such
Distribution Date), (iv) the aggregate Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the payment of the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the aggregate
Certificate Principal Balance of the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on such
Distribution Date), (vi) the aggregate Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
13
Principal Distribution Amount on such Distribution Date), (vii) the aggregate
Certificate Principal Balance of the Class M-6 Certificates (after taking into
account the payment of the Class M-6 Principal Distribution Amount on such
Distribution Date) and (viii) the aggregate Certificate Principal Balance of the
Class M-7 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 78.50% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the Overcollateralization Floor.
"Class M-8 Certificate": Any one of the Class M-8 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 3.
"Class M-8 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the amount equal to the lesser of (I) the aggregate Certificate
Principal Balance of the Class M-8 Certificates immediately prior to such
Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the aggregate Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the payment of the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the aggregate
Certificate Principal Balance of the Class M-2 Certificates (after taking into
account the payment of the Class M-2 Principal Distribution Amount on such
Distribution Date), (iv) the aggregate Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the payment of the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the aggregate
Certificate Principal Balance of the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on such
Distribution Date), (vi) the aggregate Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the aggregate
Certificate Principal Balance of the Class M-6 Certificates (after taking into
account the payment of the Class M-6 Principal Distribution Amount on such
Distribution Date), (viii) the aggregate Certificate Principal Balance of the
Class M-7 Certificates (after taking into account the payment of the Class M-7
Principal Distribution Amount on such Distribution Date and (ix) the aggregate
Certificate Principal Balance of the Class M-8 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 83.00% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the Overcollateralization Floor.
"Class P Certificate": Any one of the Class P Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-13, 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 3.
14
"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-14, executed, authenticated and delivered by the Trustee, evidencing
the ownership of the Class R-1 Interest, the Class R-2 Interest and the Class
R-3 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 S Certificates": Any one of the Class S 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 3.
"Close of Business": As used herein, with respect to any Business Day,
5:00 p.m. (New York time).
"Closing Date": March 4, 2004.
"Closing Date Mortgage Loans": Any of the Mortgage Loans included in
the Trust Fund on the Closing Date. The aggregate Cut-off Date Principal Balance
of the Closing Date Mortgage Loans is equal to $480,000,798.89.
"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, as Trustee, in trust for registered
Holders of Long Beach Mortgage Loan Trust 2004-A, Asset-Backed Certificates,
Series 2004-A" and which must be an Eligible Account.
"Commission": The Securities and Exchange Commission.
"Compensating Interest": As defined in Section 3.24.
"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 2 Regular
Interest LT2-A, (ii) REMIC 2 Regular Interest LT2-M1, (iii) REMIC 2 Regular
Interest LT2-M2, (iv) REMIC 2 Regular Interest LT2-M3, (v) REMIC 2 Regular
Interest LT2-M4, (vi) REMIC 2 Regular Interest LT2-M5, (vii) REMIC 2 Regular
Interest LT2-M6, (viii) REMIC 2 Regular Interest LT2-M7, (ix) REMIC 2 Regular
Interest LT2-M8, (x) REMIC 2 Regular Interest LT2-B, and (xi) REMIC 2 Regular
Interest LT2-P, (i) the Class A Certificates, (ii) the Class M-1 Certificates,
15
(iii) the Class M-2 Certificates, (iv) the Class M-3 Certificates, (v) the Class
M-4 Certificates, (vi) the Class M-5 Certificates, (vii) the Class M-6
Certificates, (viii) the Class M-7 Certificates, (ix) the Class M-8
Certificates, (x) the Class B Certificates, and (xi) the Class P Certificates,
respectively.
"Credit Enhancement Percentage": With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is (x) the
aggregate Certificate Principal Balance of the Mezzanine Certificates, the Class
B Certificates and the Class C Certificates, calculated prior to distribution of
the Principal Distribution Amount in respect of the Certificates then entitled
to distributions of principal on such Distribution Date, and the denominator of
which is (y) the aggregate Stated Principal Balance of the Mortgage Loans,
calculated prior to taking into account payments of principal on the Mortgage
Loans due on the related Due Date or received during the related Prepayment
Period.
"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 (less any Subsequent Recoveries allocated to
the Certificate Principal Balance of any Certificate) 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.
"Cumulative Loss Trigger Event": A Cumulative Loss Trigger Event has
occurred with respect to any Distribution Date in or after April, 2007, if the
percentage obtained by dividing (x) the aggregate amount of Realized Losses
incurred (less any Subsequent Recoveries) with respect to the 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 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
------------------------------ --------------------------
April 2007 through March 2008 6.00%
April 2008 through March 2009 9.00%
April 2009 through March 2010 11.50%
April 2010 and thereafter 12.00%
"Custodial Agreement": Any agreement that may be entered into by the
Trustee and any Custodian or any agreement assigned to the Trustee providing for
holding and safekeeping of Mortgage Files on behalf of the Trust.
"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, March
1, 2004; and with respect to each Qualified Substitute Mortgage Loan, its date
of substitution, as applicable.
16
"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.
"Delinquency Percentage": With respect to any Distribution Date, the
percentage obtained by dividing (x) the aggregate Stated Principal Balance of
(i) Mortgage Loans Delinquent 60 days or more, (ii) REO Properties related to
the Mortgage Loans and (iii) Mortgage Loans in foreclosure and in bankruptcy
(excluding any such Mortgage Loans which are less than 60 days Delinquent under
the bankruptcy plan) by (y) the aggregate Stated Principal Balance of the
Mortgage Loans, in each case, calculated prior to taking into account payments
of principal on the Mortgage Loans due on the related Due Date or received
during the related Prepayment Period.
"Delinquency Trigger Event": A Delinquency Trigger Event has occurred
with respect to a Distribution Date if the Delinquency Percentage exceeds 14.00%
of the Credit Enhancement Percentage.
"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
17
"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.
"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 Class R 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 Class R 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
2004-A, Asset-Backed Certificates, Series 2004-A" and which must be an Eligible
Account.
18
"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 April 2004.
"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 "A-" by S&P 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 long-term unsecured debt obligations of Washington Mutual
Bank, FA are downgraded by S&P to a rating lower than "A-" or 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 each Rating Agency without reduction or
withdrawal of their then current ratings of the Certificates as evidenced by a
letter from each Rating Agency to the Trustee. Eligible Accounts may bear
interest.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Payments": As defined in Section 3.09 hereof.
19
"Excess Overcollateralized Amount": With respect to any Distribution
Date, the excess, if any, of (i) the Overcollateralized Amount for such
Distribution Date (assuming that 100% of the Principal Remittance Amount is
applied as a principal payment on such Distribution Date and assuming that the
Class B/M-8 Early Distribution Amount is zero on such Distribution Date) over
(ii) the Overcollateralization Target Amount for such Distribution Date.
"Extra Principal Distribution Amount": With respect to any Distribution
Date, the lesser of (x) the Net Monthly Excess Cashflow for such Distribution
Date and (y) the Overcollateralization Deficiency Amount for such Distribution
Date.
"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.
"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, 3.16(c) 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.
"First Mortgage Loan": A Mortgage Loan that is secured by a first lien
on the Mortgaged Property securing the related Mortgage Note.
"Fitch": Fitch Ratings, Inc., or its successor in interest.
"Formula Rate": For any Distribution Date and the Class A Certificates,
the Mezzanine Certificates and the Class B Certificates, LIBOR plus the related
Certificate Margin.
"Xxxxxxx Mac": The Federal Home Loan Mortgage Corporation, or any
successor thereto.
"Gross Subsequent Recoveries": Any unexpected recoveries related to a
Liquidated Mortgage Loan received by the Master Servicer, which were allocated
as a Realized Loss, in reducing a Certificate Principal Balance of a Class of
the Mezzanine Certificates or the Class B Certificates, on a Distribution Date
prior to the Prepayment Period in which such funds were received. Gross
Subsequent Recoveries may include but are not limited to unanticipated insurance
settlements, tax refunds, or mortgage bankruptcy distributions.
20
"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 1% 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.
"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 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 (i) to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with the procedures that the Master Servicer would follow in
servicing similar mortgage loans held for its own account giving due
consideration to the related First Mortgage Loan, subject to the terms and
conditions of the related Mortgage Note and Mortgage, (ii) Gross Subsequent
Recoveries with respect to such Mortgage Loan or (iii) required to be paid to
any holder of the related First Mortgage Loan.
"Interest Determination Date": With respect to the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates and each
Accrual Period, the second LIBOR Business Day preceding the commencement of such
Accrual Period.
21
"Interest Remittance Amount": With respect to any Distribution Date,
that portion of the Available Funds for such Distribution Date attributable to
interest received or advanced with respect to the Mortgage Loans or to
Compensating Interest paid by the Master Servicer.
"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, Gross Subsequent Recoveries or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent on a contractual basis for such Due Period and not
previously recovered.
"LIBOR": With respect to each Accrual Period, the rate determined by
the Trustee on the related Interest Determination Date on the basis of the
"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 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 The City of London,
England and New York City are open for conducting transactions in foreign
currency and exchange.
"Liquidated Mortgage Loan": As to any Distribution Date, (i) 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 and (ii) any Mortgage Loan or REO
Property that has been charged off as contemplated in Section 3.16(a)(ii).
22
"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, (iii) such Mortgage Loan is
charged off as contemplated in Section 3.16(a)(ii) or (iv) 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, Section 3.16(c) or Section 9.01.
With respect to any REO Property, either of the following events: (i) a Final
Recovery Determination is made as to such REO Property, (ii) such REO Property
is charged off as contemplated in Section 3.16(a)(ii) or (iii) 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 3.16(c), Section 3.23 or Section 9.01, in each case, which is
remaining after, or not otherwise required to be applied to, the satisfaction of
any related First Mortgage Loan.
"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 sum of the
Principal Balance of the Mortgage Loan and any other mortgage loan secured by a
senior 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": With respect to the Class C Certificates and any
Distribution Date other than the first Distribution Date, a per annum rate equal
to two (2) multiplied by the weighted average of the Pass-Through Rates for
REMIC 2 Regular Interests LT2-A, LT2-M1, LT2-M2, LT2-M3, LT2-M4, LT2-M5, LT2-M6,
LT2-M7, LT2-M8, LT2-B and LT2-ZZ, with the rates on each such REMIC 2 Regular
Interest (other than REMIC 2 Regular Interest LT2-ZZ) subject to a cap equal to
the lesser of (i) LIBOR plus the Certificate Margin for the Corresponding
Certificate for such REMIC 2 Regular Interest, and (ii) the Net WAC Rate, and
the rate on REMIC 2 Regular Interest LT2-ZZ subject to a cap of zero for
purposes of this calculation and with the rates on all of the REMIC 2 Regular
Interests multiplied by a fraction the numerator of which is the actual number
of days elapsed in the Accrual Period for each such REMIC 1 Regular Interest and
the denominator of which is 30. With respect to the Class C Certificates and the
first Distribution Date, a per annum rate equal to the weighted average of the
Pass-Through Rates for REMIC 2 Regular Interests LT2-AA, LT2-A, LT2-M1, LT2-M2,
LT2-M3, LT2-M4, LT2-M5, LT2-M6, LT2-M7, LT2-M8, LT2-B, and LT2-ZZ, weighted on
the basis of the of the initial Uncertificated Principal Balances of each such
REMIC 2 Regular Interest.
23
"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.
"Maximum LT2-ZZ Uncertificated Accrued Interest Deferral Amount": With
respect to any Distribution Date, the excess of (i) Uncertificated Accrued
Interest calculated with the Uncertificated Pass-Through Rate for REMIC 2
Regular Interest LT2-ZZ and an Uncertificated Principal Balance equal to the
excess of (x) the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-ZZ over (y) the REMIC 2 Overcollateralized Amount, in each case for such
Distribution Date, over (ii) Uncertificated Accrued Interest on REMIC 2 Regular
Interests LT2-A, LT2-M1, LT2-M2, LT2-M3, LT2-M4, LT2-M5, LT2-M6, LT2-M7, LT2-M8,
and LT2-B, with the rate on each such REMIC 2 Regular Interest subject to a cap
equal to the lesser of (i) LIBOR plus the Certificate Margin for the
Corresponding Certificate for such REMIC 2 Regular Interest, and (ii) the Net
WAC Rate; provided, however, that for this purpose, calculations of the
Uncertificated REMIC 2 Pass-Through Rate and the related caps with respect to
all of the REMIC 2 Regular Interests 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.
"Mezzanine Certificates": The Class M-1 Certificates, the Class M-2
Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the Class
M-5 Certificates, the Class M-6 Certificates, the Class M-7 Certificates and the
Class M-8 Certificates.
"Monthly Interest Distributable Amount": With respect to any
Distribution Date and the Class A Certificates, the Mezzanine Certificates and
the Class B Certificates, the amount of interest accrued during the related
Accrual Period at the related Pass-Through Rate on the Certificate Principal
Balance of such Class immediately prior to such Distribution Date. With respect
to the Class C Certificates and the Class S Certificates and any Distribution
Date, the amount of interest accrued during the related Accrual Period at the
related Pass-Through Rate on the Notional Amount of such Class immediately prior
to such Distribution Date.
In all cases, the Monthly Interest Distributable Amount for any Class
of Certificates shall be reduced by any Net Prepayment Interest Shortfalls and
Relief Act Interest Shortfalls allocated to such Class under Section 1.03.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related Mortgagor from time to time under the related Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any reduction in
24
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
second lien on, 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 another 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.
"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 at origination;
(vii) the Mortgage Rate in effect immediately
following the Cut-off Date;
25
(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) reserved;
(xv) a code indicating the purpose of the Mortgage
Loan (i.e., purchase financing, rate/term refinancing,
cash-out refinancing);
(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) reserved;
(xxvii) reserved;
(xxviii) reserved; and
26
(xxix) the number of years the prepayment penalty is
in effect.
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.
"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": The annual rate set forth in the related Mortgage
Note, as amended, modified or supplemented from time to time.
"Mortgaged Property": The underlying property securing a Mortgage Loan,
including any REO Property, consisting of a fee simple or leasehold 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 and expenses incurred by or on
behalf of the Master Servicer (including, without limitation, amounts advanced
to cure defaults on any related First Mortgage Loan and amounts advanced to keep
current or pay off any related First Mortgage Loan) 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 sum of (a) any Overcollateralization Release Amount for such Distribution
Date, (b) any Remaining Principal Distribution Amount for such Distribution Date
and (c) the positive excess of (x) Available Funds for such Distribution Date
over (y) the sum for such Distribution Date of (A) the Monthly Interest
Distributable Amounts for the Class A Certificates, the Class S Certificates,
the Mezzanine Certificates and the Class B Certificates, (B) the Unpaid Interest
Shortfall Amounts for the Class A Certificates and the Class S Certificates and
(C) the Principal Remittance Amount.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the related
REO Property), as of any date of determination, a per annum rate of interest
equal to the then applicable Mortgage Rate for such Mortgage Loan minus the
Servicing Fee Rate.
27
"Net Prepayment Interest Shortfall": With respect to any Distribution
Date, the excess, if any, of any Prepayment Interest Shortfalls for such date
over the related Compensating Interest.
"Net WAC Rate":
For any Distribution Date and the Class A Certificates, the Mezzanine
Certificates and the Class B Certificates, a per annum rate equal to (a) the
excess, if any, of (i) the weighted average of the Adjusted Net Mortgage Rates
of the 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 product of (I) the Pass-Through rate for the Class S Certificates
for such Distribution Date and (II) the Notional Amount with respect to the
Class S Certificates immediately prior to such Distribution Date and (2) the
denominator of which is the aggregate Stated Principal Balance of the 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 federal income tax purposes, the Net WAC Rate shall be expressed as
a rate equal to the Uncertificated REMIC 2 Pass-Through Rates for REMIC 2
Regular Interests LT2-AA, LT2-A, LT2-M1, LT2-M2, LT2-M3, LT2-M4, LT2-M5, LT2-M6,
LT2-M7, LT2-M8, LT2-B, and LT2-ZZ, weighted on the basis of the Uncertificated
Principal Balance of each such REMIC 2 Regular Interest.
"Net WAC Rate Carryover Amount": With respect to the Class A
Certificates, the Mezzanine Certificates, the Class B 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.
"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. Any Advances
or Servicing Advances relating to Mortgage Loans or REO Properties charged off
pursuant to Section 3.16(a)(ii) shall be deemed to be Nonrecoverable Advances.
"Notional Amount": With respect to the Class S Certificates and any
Distribution Date, the lesser of (i) the following amounts:
28
Class S
Distribution Date Notional Amount
----------------------------- ----------------
April 2004................... $130,000,000
May 2004..................... $130,000,000
June 2004.................... $130,000,000
July 2004.................... $130,000,000
August 2004.................. $130,000,000
September 2004............... $130,000,000
October 2004................. $130,000,000
November 2004................ $130,000,000
December 2004................ $130,000,000
January 2005................. $130,000,000
February 2005................ $55,000,000
March 2005................... $55,000,000
April 2005................... $55,000,000
May 2005..................... $55,000,000
June 2005.................... $55,000,000
July 2005.................... $55,000,000
August 2005.................. $55,000,000
September 2005............... $55,000,000
October 2005................. $55,000,000
November 2005................ $55,000,000
December 2005................ $45,000,000
January 2006................. $45,000,000
February 2006................ $45,000,000
March 2006................... $45,000,000
April 2006................... $45,000,000
May 2006..................... $45,000,000
June 2006.................... $45,000,000
July 2006.................... $45,000,000
August 2006.................. $45,000,000
September 2006............... $45,000,000
October 2006................. $0
and (ii) the aggregate Uncertificated Principal Balances of the REMIC 2 Regular
Interests immediately prior to such Distribution Date.
For federal income tax purposes, the Class S Certificates will not
accrue interest on a Notional Amount, but will be entitled to 100% of the
interest distributed on REMIC 2 Regular Interest LT2-S1, LT2-S2, LT2-S3 and
LT2-S4.
With respect to the Class C Certificates, immediately prior to any
Distribution Date, an amount equal to the aggregate of the Uncertificated
Principal Balances of the REMIC 2 Regular Interests.
29
"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.
"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
Master Servicer may elect to terminate the Trust Fund pursuant to Section 9.01.
"Original Class Certificate Principal Balance": With respect to the
Class A Certificates, the Mezzanine Certificates, the Class B Certificates and
the Class P Certificate, the corresponding Certificate Principal Balance on the
Closing Date.
"Original Class Notional Amount": With respect to the Class S
Certificates, $130,000,000. With respect to the Class C Certificates,
$480,000,798.89.
"Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount on such Distribution Date (assuming
that 100% of the aggregate Principal Remittance Amount is applied as a principal
payment on such Distribution Date and assuming that the Class B/M-8 Early
Distribution Amount is zero on such Distribution Date).
"Overcollateralization Floor": $2,400,000.31.
"Overcollateralization Release Amount": With respect to any
Distribution Date, the lesser of (x) the Principal Remittance Amount for such
Distribution Date and (y) the Excess Overcollateralized Amount.
"Overcollateralization Target Amount": With respect to any Distribution
Date (i) prior to the Stepdown Date, the sum of (a) 5.00% of the aggregate
Cut-off Date Principal Balance of the Closing Date Mortgage Loans and (b) the
Aggregate Class B/M-8 Early Distribution Amount for such Distribution Date, (ii)
on or after the Stepdown Date provided a Trigger Event is not in effect, the
greater of (x) the lesser of (I) the sum of (a) 5.00% of the aggregate Cut-off
Date Principal Balance of the Closing Date Mortgage Loans and (b) the Aggregate
Class B/M-8 Early Distribution Amount for such Distribution Date and (II) the
sum of (a) 10.00% of the aggregate Stated Principal Balance of the 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) the Aggregate Class B/M-8 Early
30
Distribution Amount for such Distribution Date and (y) the sum of (a) the
Overcollateralization Floor and (b) the Aggregate Class B/M-8 Early Distribution
Amount for such Distribution Date, and (iii) on or after the Stepdown Date if a
Trigger Event is in effect, the sum of (a) the Overcollateralization Target
Amount for the immediately preceding Distribution Date and (b) the Class B/M-8
Early Distribution Amount for such immediately preceding Distribution Date.
"Overcollateralized Amount": With respect to any Distribution Date, the
amount, if any, by which (i) the aggregate Stated Principal Balance of the
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 aggregate Certificate Principal
Balances of the Class A Certificates, the Mezzanine Certificates, the Class B
Certificates and the Class P Certificates as of such Distribution Date (after
giving effect to distributions to be made on such Distribution Date, other than
distributions of the Extra Principal Distribution Amount, if any, but without
giving effect to distributions of any Class B/M-8 Early Distribution Amount to
be made on such Distribution Date).
"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, the Mezzanine Certificates
and the Class B Certificates for any Distribution Date (other than the first
Distribution Date), the lesser of (x) the related Formula Rate for such
Distribution Date and (y) the related Net WAC Rate for such Distribution Date.
With respect to the Class A Certificates, the Mezzanine Certificates
and the Class B Certificates and the first Distribution Date, the related
Formula Rate for such Distribution Date.
With respect to the Class S Certificates and any Distribution Date for
the Distribution Date in April 2004 through and including the Distribution Date
in January 2005, 5.00% per annum; for the Distribution Date in February 2005
through and including the Distribution Date in September 2006, 2.50% per annum;
and for any Distribution Date after the Distribution Date in September 2006,
0.00%.
However, for federal income tax purposes and under the REMIC
Provisions, the Class S Certificates will not have a Pass-Through Rate, but will
be entitled to 100% of the interest distributed on REMIC 2 Regular Interests
LT2-S1, LT2-S2, LT2-S3 and LT2-S4.
With respect to the Class C Certificates and any Distribution Date, a
per annum rate equal to the percentage equivalent of a fraction, the numerator
of which is the sum of the amounts calculated pursuant to clauses (A) through
(M) below, and the denominator of which is the aggregate of the Uncertificated
Principal Balances of REMIC 2 Regular Interests LT2-AA, LT2-A, LT2-M1, LT2-M2,
LT2-M3, LT2-M4, LT2-M5, LT2-M6, LT2-M7, LT2-M8, LT2-B, LT2-ZZ and LT2-P. For
purposes of calculating the Pass-Through Rate for the Class C Certificates, the
numerator is equal to the sum of the following components:
31
(A) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest LT2-AA minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-AA;
(B) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest LT2-A minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT2-A;
(C) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest LT2-M1 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-M1;
(D) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest LT2-M2 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-M2;
(E) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest LT2-M3 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-M3;
(F) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest LT2-M4 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-M4;
(G) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest LT2-M5 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-M5;
(H) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest LT2-M6 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-M6;
(I) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest LT2-M7 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-M7;
(J) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest LT2-M8 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-M8;
(K) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest LT2-B minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT2-B;
(L) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest LT2-ZZ minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-ZZ; and
32
(M) 100% of the interest on REMIC 2 Regular Interest LT2-P.
"Percentage Interest": With respect to any Certificate (other than the
Class R Certificates), 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 the Class R Certificates, 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%.
"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 Trustee
or any of their respective Affiliates or for which an Affiliate of the Trustee
serves as an advisor:
(i) direct obligations of, or obligations fully
guaranteed as to timely payment of principal and interest by,
the United States or any agency or instrumentality thereof,
provided such obligations are backed by the full faith and
credit of the United States;
(ii) (A) demand and time deposits in, certificates of
deposit of, bankers' acceptances issued by or federal funds
sold by any depository institution or trust company (including
the Trustee or its 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 Moody's 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 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+ by S&P and rated A2 or higher
by Moody's;
33
(iv) securities bearing interest or sold at a
discount that are issued by any corporation incorporated under
the laws of the United States of America or any State thereof
and that are rated by each Rating Agency 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 each 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 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.
The Trustee or its Affiliates are permitted to receive additional
compensation (such compensation shall not be an expense of the Trust or
constitute an Extraordinary Trust Fund Expense) that could be deemed to be in
the Trustee's economic self-interest for (i) serving as investment adviser,
administrator, shareholder servicing agent, custodian or sub-custodian with
respect to certain of the Permitted Investments, (ii) using Affiliates to effect
transactions in certain Permitted Investments and (iii) effecting transactions
in certain Permitted Investments.
"Permitted Transferee": Any transferee of the Class R Certificates
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.
"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.
34
"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).
"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
Trustee.
"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 any Distribution Date, 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.
35
"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.
"Principal Distribution Amount": The sum of (i) (x) the Principal
Remittance Amount minus (y) the amount of any Overcollateralization Release
Amount for such Distribution Date, and (ii) the Extra Principal Distribution
Amount for such Distribution Date.
"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 (i) all scheduled payments of principal collected or advanced on the
Mortgage Loans by the Master Servicer that were due during the related Due
Period, (ii) all partial and full principal prepayments of the Mortgage Loans
applied by the Master Servicer during the related Prepayment Period, (iii) the
principal portion of all Net Liquidation Proceeds, Insurance Proceeds and Gross
Subsequent Recoveries received during the related Prepayment Period, (iv) that
portion of the Purchase Price, representing principal of any repurchased
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 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.
"Prospectus Supplement": That certain Prospectus Supplement dated March
2, 2004 relating to the public offering of the Class A Certificates, the Class S
Certificates and the Mezzanine Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO Property to
be purchased pursuant to or as contemplated by Section 2.03, 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), (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
36
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), (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 Master Servicer or the Trustee in
respect of the breach or defect giving rise to the purchase obligation and (vi)
in the case of a Mortgage Loan required to be repurchased pursuant to Section
2.03 because such Mortgage Loan is in breach of the representation in Section
6(xlvi) of the Mortgage Loan Purchase Agreement, any additional costs or damages
in excess of the amounts to be paid pursuant to clauses (i) through (v) above
(including attorney's fees) incurred by the Trust as a result of the Trust's
status as an assignee or purchaser of such Mortgage Loans.
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).
"Qualified Insurer": Any insurance company acceptable to Xxxxxx Xxx and
Xxxxxxx Mac.
"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) have a
remaining term to maturity not greater than (and not more than one year less
than) that of the Deleted Mortgage Loan, (iv) be current (with no contractual
delinquencies outstanding) as of the date of substitution, (v) 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, (vi) have a
risk grading determined by the Seller at least equal to the risk grading
assigned on the Deleted Mortgage Loan, (vii) have been underwritten or
reunderwritten by the Seller in accordance with the same or, as determined by
37
the Seller, more favorable, underwriting guidelines as the Deleted Mortgage
Loan, (viii) be secured by the same property type as the Deleted Mortgage Loan,
(ix) have a lien priority equal to or superior to that of the Deleted Mortgage
Loan and (x) conform to each representation and warranty set forth in Section 6
of the Mortgage Loan Purchase Agreement applicable to the Deleted Mortgage Loan.
In the event that one or more mortgage loans are substituted for one or more
Deleted Mortgage Loans, the amounts described in clause (i) hereof shall be
determined on the basis of aggregate principal balances, the Mortgage Rates
described in clause (ii) hereof shall be satisfied for each such mortgage loan,
the risk gradings described in clause (vi) hereof shall be satisfied as to each
such mortgage loan, the terms described in clause (iii) hereof shall be
determined on the basis of weighted average remaining term to maturity (provided
that no such mortgage loan may have a remaining term to maturity longer than the
Deleted Mortgage Loan), the Loan-to-Value Ratios described in clause (v) 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 (x) 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 (ix) 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.
"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. Any Mortgage Loan or REO Property that is
charged off pursuant to Section 3.16(a)(ii) will give rise to a Realized Loss at
the time it is charged off, as described in Section 3.16 hereof.
"Record Date": With respect to (i) the Class S Certificates, the Class
P Certificates, the Class C Certificates, the Class R 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 Mezzanine Certificates
and the Class B 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, a
Mezzanine Certificate or a Class B 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;
38
provided, however, that if fewer than two of such banks provide a LIBOR rate,
then any leading banks selected by the Trustee which are engaged in transactions
in United States dollar deposits in the international Eurocurrency market.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of which were
not used to purchase the related Mortgaged Property.
"Regular Certificates": The Class A Certificates, the Class S
Certificates, the Mezzanine Certificates, the Class B Certificates, the Class C
Certificates and the Class P Certificates.
"Relief Act": The Servicemembers' Civil Relief Act of 2003.
"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.
"Remaining Principal Distribution Amount": With respect to any
Distribution Date, an amount equal to the Principal Distribution Amount
remaining after the distributions set forth in Section 4.01(c)(i).
"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, 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) and (v) the
Collection Account, the Distribution Account (subject to the last sentence of
this definition) and any REO Account and such assets that are deposited therein
from time to time and any investments thereof, together with any and all income,
proceeds and payments with respect thereto. Notwithstanding the foregoing,
however, a REMIC election will not be made with respect to the Reserve Fund and
Master Servicer Prepayment Charge Payment Amounts.
"REMIC 1 Regular Interest LT1-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 LT1-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.
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"REMIC 1 Regular Interest LT1-S1": 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 LT1-S1 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 LT1-S2": 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 LT1-S2 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 LT1-S3": 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 LT1-S3 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 LT1-S4": 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 LT1-S4 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 LT1-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 LT1-P shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interests": REMIC 1 Regular Interest LT1-A, REMIC 1
Regular Interest LT1-S1, REMIC 1 Regular Interest LT1-S2, REMIC 1 Regular
Interest LT1-S3, REMIC 1 Regular Interest LT1-S4, and REMIC 1 Regular Interest
LT1-P.
"REMIC 2": The segregated pool of assets consisting of all of the REMIC
1 Regular Interests conveyed in trust to the Trustee, for the benefit of the
holders of the 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 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
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Principal Balance of the Mortgage Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-AA minus the Marker Rate, divided by (b) 12.
"REMIC 2 Overcollateralization Target Amount ": 1% of the
Overcollateralization Target Amount.
"REMIC 2 Overcollateralized Amount": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC 2 Regular Interest LT2-AA, REMIC 2 Regular Interest LT2-A, REMIC 2 Regular
Interest LT2-M1, REMIC 2 Regular Interest LT2-M2, REMIC 2 Regular Interest
LT2-M3, REMIC 2 Regular Interest LT2-M4, REMIC 2 Regular Interest LT2-M5, REMIC
2 Regular Interest LT2-M6, REMIC 2 Regular Interest LT2-M7, REMIC 2 Regular
Interest LT2-M8, REMIC 2 Regular Interest LT2-B, REMIC 2 Regular Interest LT2-ZZ
and REMIC 2 Regular Interest LT2-P minus (ii) the aggregate of the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2-A, REMIC 2
Regular Interest LT2-M1, REMIC 2 Regular Interest LT2-M2, REMIC 2 Regular
Interest LT2-M3, REMIC 2 Regular Interest LT2-M4, REMIC 2 Regular Interest
LT2-M5, REMIC 2 Regular Interest LT2-M6, REMIC 2 Regular Interest LT2-M7, REMIC
2 Regular Interest LT2-M8 and REMIC 2 Regular Interest LT2-P, in each case as of
such date of determination.
"REMIC 2 Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Principal
Balance of the Mortgage Loans and REO Properties then outstanding and (ii) 1
minus a fraction, the numerator of which is 2 times the aggregate of the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2-A, LT2-M1,
LT2-M2, LT2-M3, LT2-M4, LT2-M5, LT2-M6, LT2-M7 and LT2-M8 and the denominator of
which is the aggregate of the Uncertificated Principal Balances of REMIC 2
Regular Interests LT2-A, LT2-M1, LT2-M2, LT2-M3, LT2-M4, LT2-M5, LT2-M6, LT2-M7,
LT2-M8 and LT2-ZZ.
"REMIC 2 Regular Interest LT2-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 LT2-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 LT2-AA": 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 LT2-AA 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 LT2-B": 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 LT2-B 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.
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"REMIC 2 Regular Interest LT2-M1": 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 LT2-M1 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 LT2-M2": 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 LT2-M2 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 LT2-M3": 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 LT2-M3 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 LT2-M4": 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 LT2-M4 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 LT2-M5": 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 LT2-M5 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 LT2-M6": 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 LT2-M6 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 LT2-M7": 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 LT2-M7 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.
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"REMIC 2 Regular Interest LT2-M8": 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 LT2-M8 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 LT2-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 LT2-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 Prepayment Charges relating to the
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 2 Regular Interest LT2-ZZ": 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 LT2-ZZ 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 Interests": REMIC 2 Regular Interest LT2-AA, REMIC 2
Regular Interest LT2-A, REMIC 2 Regular Interest LT2-M1, REMIC 2 Regular
Interest LT2-M2, REMIC 2 Regular Interest LT2-M3, REMIC 2 Regular Interest
LT2-M4, REMIC 2 Regular Interest LT2-M5, REMIC 2 Regular Interest LT2-M6, REMIC
2 Regular Interest LT2-M7, REMIC 2 Regular Interest LT2-M8, REMIC 2 Regular
Interest LT2-B, REMIC 2 Regular Interest LT2-ZZ and REMIC 2 Regular Interest
LT2-P.
"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 the
Holders of the Regular Certificates 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 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 and the REMIC
2 Regular Interests.
"Remittance": As defined in Section 7.02(b) hereof.
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"Remittance Report": A report prepared by the Master Servicer and
delivered to the Trustee pursuant to Section 4.04.
"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.
"REO Account": The account or accounts maintained by the 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.
"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 Fund": The reserve fund established pursuant to Section 3.26.
"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 New
York City selected by the Trustee 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 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
44
one-family dwelling unit in a Xxxxxx Xxx eligible condominium project or a
Xxxxxxx Mac 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 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, any
managing director, director, associate, principal, vice president, assistant
vice president, assistant secretary, assistant treasurer, trust officer 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, 3.14, 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.
45
"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 earlier of (a) the later of (i) the Distribution
Date in April 2007 and (ii) the first Distribution Date on which the Credit
Enhancement Percentage (calculated for this purpose only after taking into
account payments of principal on the Mortgage Loans due on the related Due Date
or received during the related Prepayment Period but prior to distribution of
the Principal Distribution Amount in respect of the Certificates then entitled
to distributions of principal on such Distribution Date) is greater than or
equal to 68.00% and (b) the date on which the aggregate Certificate Principal
Balance of the Class A Certificates has been reduced to zero.
"Sub-Servicer": Any Person with which the 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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"Subsequent Recoveries": The Gross Subsequent Recoveries net of amounts
payable or reimbursable to the Master Servicer for related (i) costs and
expenses incurred with respect to the Mortgage Loan after it has been charged
off, (ii) Advances, (iii) Servicing Advances and (iv) Servicing Fees.
"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 Adjustments": 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 the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed by the Trustee on behalf of each REMIC, together with any and
all other information reports or returns that may be required to be furnished to
the Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.
"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.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
"Trigger Event": A Trigger Event has occurred with respect to a
Distribution Date if either a Cumulative Loss Trigger Event or a Delinquency
Trigger Event has occurred with respect to such Distribution Date.
"Trust": Long Beach Mortgage Loan Trust 2004-A, the trust created
hereunder.
"Trust Fund": All of the assets of the Trust, which is the trust
created hereunder consisting of REMIC 1, REMIC 2, REMIC 3, the Reserve Fund and
any Master Servicer Prepayment Charge Payment Amounts.
"Trust REMIC": Any of REMIC 1, REMIC 2, and REMIC 3.
"Trustee": Deutsche Bank National Trust Company, a national banking
association, or its successor in interest, or any successor trustee appointed as
herein provided.
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"Trustee Fee": With respect to each Distribution Date, one-twelfth of
the Trustee Fee Rate multiplied by the aggregate Stated Principal Balance of the
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).
"Trustee Fee Rate": 0.0056% 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 2 Regular Interests LT2-S1 and
any Distribution Date, the Uncertificated Principal Balance of the REMIC 1
Regular Interest LT1S1 for such Distribution Date;
(b) With respect to REMIC 2 Regular Interests LT2-S2 and
any Distribution Date, the Uncertificated Principal Balance of the REMIC 1
Regular Interest LT1S2 for such Distribution Date;
(c) With respect to REMIC 2 Regular Interests LT2-S3 and
any Distribution Date, the Uncertificated Principal Balance of the REMIC 1
Regular Interest LT1S3 for such Distribution Date;
(d) With respect to REMIC 2 Regular Interests LT2-S4 and
any Distribution Date, the Uncertificated Principal Balance of the REMIC 1
Regular Interest LT1S4 for such Distribution Date;
"Uncertificated Pass-Through Rate": The Uncertificated REMIC 1
Pass-Through Rate or the Uncertificated REMIC 2 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
48
further reduced on such Distribution Date by Realized Losses and increased by
Subsequent Recoveries as provided in Section 4.06, and the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2-ZZ 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.
"Uncertificated REMIC 1 Pass-Through Rate": With respect to any
Distribution Date and REMIC 1 Regular Interest LT1-A, REMIC 1 Regular Interest
LT1-S1, REMIC 1 Regular Interest LT1-S2, REMIC 1 Regular Interest LT1-S3, REMIC
1 Regular Interest LT1-S4, and REMIC 1 Regular Interest LT1-P, a per annum rate
equal to the weighted average of the Adjusted Net Mortgage Rates of the Mortgage
Loans, weighted on the basis of the Stated Principal Balances of such Mortgage
Loans as of the Due Date in the month preceding the month of such Distribution
Date.
"Uncertificated REMIC 2 Pass-Through Rate": With respect to any
Distribution Date and REMIC 2 Regular Interest LT2-AA, REMIC 2 Regular Interest
LT2-A, REMIC 2 Regular Interest LT2-M1, REMIC 2 Regular Interest LT2-M2, REMIC 2
Regular Interest LT2-M3, REMIC 2 Regular Interest LT2-M4, REMIC 2 Regular
Interest LT2-M5, REMIC 2 Regular Interest LT2-M6, REMIC 2 Regular Interest
LT2-M7, REMIC 2 Regular Interest LT2-M8, REMIC 2 Regular Interest LT2-B, REMIC 2
Regular Interest LT2-ZZ and REMIC 2 Regular Interest LT2-P, a per annum rate
equal to the weighted average of (i) the Uncertificated REMIC 1 Pass-Through
Rates for REMIC 1 Regular Interests LT1-A and LT1-P, (ii) the excess, if any of
the Uncertificated REMIC 1 Pass-Through Rates for REMIC 1 Regular Interest
LT1-S2 over (x) 2.5% for the first 30 Distribution Dates and (y) 0.00%
thereafter, (iii) the excess, if any of the Uncertificated REMIC 1 Pass-Through
Rates for REMIC 1 Regular Interest LT1-S3 over (x) 2.5% for the first 20
Distribution Dates and (y) 0.00% thereafter, and (iv) the excess, if any of the
Uncertificated REMIC 1 Pass-Through Rates for REMIC 1 Regular Interests LT1-S1
and LT1-S4 over (x) 2.5% for the first 10 Distribution Dates and (y) 0.00%
thereafter, in each case, weighted on the basis of the Uncertificated Principal
Balances of respective REMIC 1 Regular Interests.
With respect to REMIC 2 Regular Interest LT2-S1 and REMIC 2 Regular
Interest LT2-S4, 2.5% for the first 10 Distribution Dates and 0.0% thereafter.
With respect to REMIC 2 Regular Interest LT2-S3, 2.5% for the first 20
Distribution Dates and 0.0% thereafter. With respect to REMIC 2 Regular Interest
LT2-S4, 2.5% for the first 20 Distribution Dates and 0.0% thereafter.
"Undercollateralized Amount": With respect to any Distribution Date,
the amount, if any, by which (i) the aggregate Certificate Principal Balances of
the Class A Certificates, the Mezzanine Certificates, the Class B Certificates
and the Class P Certificates as of such Distribution Date (after giving effect
to distributions to be made on such Distribution Date) exceeds (ii) the
aggregate Stated Principal Balance of the 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).
"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.
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"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 United States federal income 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 Class R
Certificates, no partnership or other entity 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, the Class S Certificates, the Mezzanine Certificates and the Class
B 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 Mae, 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 Xxx.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. At all times the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates and the Class
C Certificates shall have 97% of the Voting Rights (allocated among the Holders
of the Class A Certificates, the Mezzanine Certificates, the Class B
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. The Voting Rights allocated to any Class 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
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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.
"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, 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 A Certificates, the Class S Certificates, the
Mezzanine Certificates, the Class B Certificates and the Class C Certificates
for any Distribution Date, the aggregate amount of any Net Prepayment Interest
Shortfalls and any Relief Act Interest Shortfalls incurred in respect of the
Mortgage Loans for any Distribution Date shall be allocated first to the Class C
Certificates 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 A Certificates, the Class S Certificates, the Mezzanine
Certificates and the Class B 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 Uncertificated Accrued
Interest for the REMIC 1 Regular Interests for any Distribution Date, any Net
Prepayment Interest and Relief Act Interest Shortfalls incurred in respect of
the Mortgage Loans for any Distribution Date shall be allocated to REMIC 1
Regular Interest LT1-A.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC 2 Regular Interests for any Distribution Date: 100% of
any Net Prepayment Interest and Relief Act Interest Shortfalls incurred in
respect of the Mortgage Loans for any Distribution Date shall be allocated to
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REMIC 2 Regular Interest LT2-AA and REMIC 2 Regular Interest LT2-ZZ up to an
aggregate amount equal to the REMIC 2 Interest Loss Allocation Amount, 98% and
2%, respectively, and thereafter among REMIC 2 Regular Interest LT2-AA, REMIC 2
Regular Interest LT2-A, REMIC 2 Regular Interest LT2-M1, REMIC 2 Regular
Interest LT2-M2, REMIC 2 Regular Interest LT2-M3, REMIC 2 Regular Interest
LT2-M4, REMIC 2 Regular Interest LT2-M5, REMIC 2 Regular Interest LT2-M6, REMIC
2 Regular Interest LT2-M7, REMIC 2 Regular Interest LT2-M8, REMIC 2 Regular
Interest LT2-B, REMIC 2 Regular Interest LT2-ZZ and REMIC 2 Regular Interest
LT2-P, pro rata based on, and to the extent of, one month's interest at the then
applicable respective Pass-Through Rate on the respective Uncertificated
Principal Balance of each such REMIC 2 Regular Interest.
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 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
the Cut-off Date (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.
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.
In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with, 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 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
52
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 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 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 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 A Certificates,
the Class S Certificates, the Mezzanine Certificates and the Class B
Certificates; provided, 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,
53
insolvency or foreclosure relating to the Mortgagor under the related Mortgage.
Notwithstanding the foregoing, if the Master Servicer is unable 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 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.
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
54
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.
The Mortgage Loans permitted by the terms of this Agreement to be
included in the Trust are limited to (i) the Mortgage Loans (which the Depositor
acquired pursuant to the Mortgage Loan Purchase Agreement, which contains, among
other representations and warranties, a representation and warranty of the
Seller that no Mortgage Loan is a "high cost" or "predatory" loan under any
state or local law or regulation applicable to the originator, and (ii)
Qualified Substitute Mortgage Loans (which, by definition as set forth herein
and referred to in the Mortgage Loan Purchase Agreement, are required to conform
to, among other representations and warranties, the representation and warranty
of the Seller that no Qualified Substitute Mortgage Loan is a "high cost" or
"predatory" loan under any state or local law or regulation applicable to the
originator. It is agreed and understood by the parties hereto that it is not
intended that any mortgage loan be included in the Trust that is a "High-Cost
Home Loan" as defined in the New Jersey Home Ownership Act effective November
27, 2003 or a "High Cost Home Loan" as defined in the New Mexico Home Loan
Protection Act effective January 1, 2004.
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 a Custodian on behalf of the Trustee, as applicable, 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 (vi) (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.
The Trustee or the Custodian, as applicable, agrees, for the benefit of
the Certificateholders, to review each Mortgage File on or before the Closing
Date, with respect to each Mortgage Loan and to certify to the Trustee, 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) 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 necessary
55
endorsements, (b) insures the priority of the Mortgage as a second 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 and the Master Servicer 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 and the Master Servicer. In addition, upon the discovery by the
Depositor, the Master Servicer or the Trustee 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 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 (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 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
56
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. 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 a Custodian on behalf of the Trustee,
as applicable, 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
and the Trustee on behalf of the Certificateholders.
(b) Within 90 days of the earlier of discovery by the
Depositor or receipt of notice by the Depositor of the breach of any
representation or warranty of the Depositor set forth in Section 2.05 with
respect to any Mortgage Loan, which materially adversely affects the value of
such Mortgage Loan or the interest therein of the Certificateholders, 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 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.
(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
57
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
Adjustments (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 and the Master Servicer, with respect to such Qualified Substitute
Mortgage Loan or Loans, a certification substantially in the form attached
hereto as Exhibit F-1, with any applicable exceptions noted thereon. Within one
year of the date of substitution, the Trustee shall deliver or with respect to
the Mortgage Loans held by another Custodian, such other Custodian shall deliver
to the Depositor, the Seller 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 shall give or cause to be given written notice to the
Certificateholders that such substitution has taken place, and the Master
Servicer shall amend or cause to be amended the Mortgage Loan Schedule and, if
applicable, the Prepayment Charge 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 and, if applicable, the Prepayment Charge
Schedule to 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 Adjustments"), if any, by
which the aggregate Purchase Price of all such Deleted Mortgage Loans exceeds
the aggregate of the Stated Principal Balance of the Qualified Substitute
Mortgage Loans as of the date of substitution, together with one month's
interest on such Stated Principal 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 Adjustments, 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
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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 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 day 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) and Section 2.03(d). 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 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
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
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delivery thereof by the Depositor 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;
(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
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permissible and enforceable in accordance with its terms under
applicable law upon the Mortgagor's 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; and
(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).
(ix) With respect to each Mortgage Loan, the Master
Servicer will furnish, or cause to be furnished, information
regarding the borrower credit file related to such Mortgage
Loan to credit reporting agencies in compliance with the
provisions of the Fair Credit Reporting Act and the applicable
implementing regulations. The Master Servicer will transmit
full-file credit reporting data for each Mortgage Loan
pursuant to Xxxxxx Xxx Guide Announcement 95-19 and that for
each Mortgage Loan, the Master Servicer agrees it shall report
one of the following statuses each month as follows: new
origination, current, delinquent (30-, 60-, 90-days, etc.),
foreclosed, or charged-off.
(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 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, 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
or the Trustee on behalf of the Certificateholders 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 Depositor 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 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 of its right, title and 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
62
provisions of, or, to the knowledge of the Depositor,
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to
which the Depositor is a party or by which the Depositor is
bound or to which any of the property or assets of the
Depositor is subject, nor will such actions result in any
violation of the provisions of the articles of incorporation
or by-laws of the Depositor or, to the best of the Depositor's
knowledge without independent investigation, any statute or
any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Depositor or any
of its properties or assets (except for such conflicts,
breaches, violations and defaults as would not have a material
adverse effect on the ability of the Depositor to perform its
obligations under this Agreement 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
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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.
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 Certificates and the Class R 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 Certificates and the Class R Interest. The interests evidenced by
the Class R-3 Interest and the Regular Certificates constitute the entire
beneficial ownership interest in REMIC 3.
(c) In exchange for the REMIC 2 Regular Interests and,
concurrently with the assignment to the Trustee thereof, pursuant to the written
request of the Depositor executed by an officer of the Depositor, the Trustee
has executed, authenticated and delivered to or upon the order of the Depositor,
the Regular Certificates in authorized denominations evidencing (together with
the Class R-3 Interest) the entire beneficial ownership interest in REMIC 3.
(d) Concurrently with (i) the assignment and delivery to
the Trustee of REMIC 1 and the acceptance by the Trustee thereof, pursuant to
Section 2.01, Section 2.02 and Section 2.08(a), and (ii) the assignment and
delivery to the Trustee of REMIC 2 and the acceptance by the Trustee thereof,
pursuant to Section 2.08(b), the Trustee, pursuant to the written request of the
Depositor executed by an officer of the Depositor, has executed, authenticated
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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, and the Class R-3 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 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 and giving due
consideration to the related First Mortgage Loan. 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 and the
Trustee, and upon notice to the Trustee, any and all instruments of satisfaction
or cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties and to institute foreclosure proceedings or obtain a deed-in-lieu of
foreclosure so as to convert the ownership of such properties, and to hold or
cause to be held title to such properties, on behalf of the Trustee and
Certificateholders. The 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 performance of this Agreement with
all reasonable rules and requirements of each insurer under any applicable
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 and the Certificateholders. 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.
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Subject to Section 3.09 hereof, in accordance with the standards of the
preceding paragraph, the Master Servicer on escrowed accounts 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 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 day 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.
If the Mortgage relating to a Mortgage Loan had a First Mortgage Loan
on the related Mortgaged Property as of the Cut-off Date, then the Master
Servicer, in such capacity, may consent to the refinancing of the First Mortgage
Loan, provided, that such refinancing conforms to the Master Servicer's standard
subordination underwriting guidelines which shall at all times conform with the
servicing standard set forth in this Section 3.01 of this Agreement.
With respect to each Mortgage Loan, the Master Servicer will furnish,
or cause to be furnished, information regarding the borrower credit file related
to such Mortgage Loan to credit reporting agencies in compliance with the
provisions of the Fair Credit Reporting Act and the applicable implementing
regulations.
Section 3.02 Sub-Servicing Agreements Between the Master Servicer and
Sub-Servicers.
(a) The Master Servicer may enter into Sub-Servicing
Agreements, provided that such agreements would not result in a withdrawal or a
downgrading by any Rating Agency of the ratings on any Class of Certificates, as
evidenced by a letter to that effect delivered by each Rating Agency to the
Depositor, 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.
66
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, 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 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.
(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 and the Certificateholders, 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
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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 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 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 and the Certificateholders for the servicing and administering of
the Mortgage Loans in accordance with the provisions of Section 3.01 without
diminution of such obligation or liability by virtue of such Sub-Servicing
Agreements or arrangements or by virtue of indemnification from the Sub-Servicer
and to the same extent and under the same terms and conditions as if the 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 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 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.
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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 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 giving due
consideration to the related First Mortgage Loan. 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, 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
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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.
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 2004-A, Asset-Backed
Certificates, Series 2004-A. 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.
If required by the related Mortgage Loan, 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
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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.
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 and the Certificateholders. 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) and all Gross Subsequent
Recoveries;
(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(b) 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;
(vii) all Substitution Adjustments; and
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(viii) all Prepayment Charges collected by the Master
Servicer.
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 and the
Certificateholders. 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 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. In
order to comply with its duties under the U.S. Patriot Act, the Trustee shall
obtain and verify certain information and documentation from the owners of the
account that it establishes pursuant to this Agreement, including, but not
limited to, each account owner's name, address, and other identifying
information.
(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 Depositor and the Rating Agencies 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 Depositor and
the Rating Agencies of the location of the Distribution Account when established
and prior to any change thereof.
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(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);
(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;
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(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, Gross Subsequent
Recoveries 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 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;
(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);
(x) to pay, or to reimburse the Master Servicer for
costs and expenses incurred with respect to any Mortgage Loan
or REO Property after it has been charged off as contemplated
in Section 3.16(a)(ii), but only to the extent of Gross
Subsequent Recoveries received with respect to such Mortgage
Loan or REO Property; and
(xi) 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, on or prior to the next
succeeding Master Servicer Remittance Date, upon making any withdrawals from the
Collection Account pursuant to subclause (vii) above.
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(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 in
accordance with Section 4.01;
(ii) to pay to itself 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 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; and
(ix) to pay itself the Trustee Fees.
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 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
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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, from its own funds, 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, from its own
funds, 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.
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Section 3.13 Reserved.
Section 3.14 Maintenance of Hazard Insurance and Errors and Omissions and
Fidelity Coverage.
(a) With respect to each Mortgage Loan, the Master
Servicer shall maintain accurate records reflecting the fire and casualty
insurance coverage maintained by the related Mortgagors with respect to the
Mortgaged Properties in accordance with its normal servicing practices. The
Master Servicer shall, if it has received notice of a default or deficiency in
respect of the payment of any ground rents, taxes, assessments, water rates or
casualty insurance premiums or other charges that are or may become a lien upon
the related Mortgaged Property, notify the related Mortgagor and the holder of
the related First Mortgage Loan.
(b) To the extent permitted under the related Mortgage
Loan, and to the extent the Master Servicer receives notice that a fire
insurance policy has been cancelled, the Master Servicer shall, to the extent
consistent with its normal servicing practices, cause to be maintained for each
Mortgage Loan fire insurance 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 in an amount not less than such amount as is necessary to
avoid the application of any coinsurance clause contained in the related hazard
insurance policy and (iii) the maximum insurable value of the improvements which
are a part of such Mortgaged Property. The 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 Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage, 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 and amounts required to be
paid to the holder of the related First Mortgage Loan) 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 the time of origination of the related Mortgage
Loan 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, to the extent
required by the related Mortgage Loan, a flood insurance policy in respect
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thereof. Such flood insurance shall be in an amount equal to the lesser of (i)
the unpaid principal balance of the related Mortgage Loan, (ii) the full
insurable value of the related Mortgaged Property and (iii) 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 and Certificateholders,
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy.
(c) 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 or Xxxxxxx Mac if it were the
purchaser of the Mortgage Loans, unless the Master Servicer or any of its
Affiliates has obtained a waiver of such Xxxxxx Mae or Xxxxxxx Mac requirements
from either Xxxxxx Mae or Xxxxxxx Mac. The Master Servicer shall also maintain a
fidelity bond in the form and amount that would meet the requirements of Xxxxxx
Mae or Xxxxxxx Mac, unless the Master Servicer or any of its Affiliates has
obtained a waiver of such Xxxxxx Mae or Xxxxxxx Mac requirements from either
Xxxxxx Mae or Xxxxxxx Mac. The Master Servicer shall provide the Trustee (upon
the Trustee'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
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
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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 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 that any such substitution, modification or assumption agreement has
been completed by forwarding to the Trustee the executed original of such
substitution, modification or assumption agreement, which document shall be
added to the related Mortgage File and shall, for all purposes, be considered a
part of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the 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) (i) 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
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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.
(ii) No later than the day on which a Mortgage Loan
becomes 180 days Delinquent, the Master Servicer shall
determine whether a significant net recovery is possible
through foreclosure proceedings or other liquidation of the
related Mortgaged Property. If the Master Servicer determines
that no such recovery is possible, it shall charge off such
Mortgage Loan no later than the date it becomes 180 days
Delinquent, and it may charge off such Mortgage Loan prior to
that date. Once a Mortgage Loan has been charged off, the
Master Servicer shall discontinue making Advances, the Master
Servicer shall not be entitled to any additional Servicing Fee
for such Mortgage Loan, and the Mortgage Loan shall be treated
as a Liquidated Mortgage Loan giving rise to a Realized Loss.
(iii) Once a Mortgage Loan is charged off pursuant to
Section 3.16(a)(ii), the Master Servicer shall not be
obligated to service such Mortgage Loan. The Master Servicer
may cease any collection efforts with respect to such Mortgage
Loan, and statements of account may no longer be sent to such
Mortgagor. The Master Servicer shall write off each charged
off Mortgage Loan as bad debt.
(b) Notwithstanding the foregoing provisions of this
Section 3.16 or any other provision of this Agreement, with respect to any
Mortgage Loan as to which the 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 or the Certificateholders would
be considered to hold title to, to be a "mortgagee-in-possession" of, or to be
an "owner" or "operator" of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless the 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
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regulation, or that if any such materials are present for
which such action could be required, that it would be in the
best economic interest of the Trust Fund to take such actions
with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this Section
3.16 shall be advanced by the 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 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,
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 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 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. 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 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 shall furnish and as shall be necessary to vest
in the Master Servicer 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, Liquidation
Proceeds or Gross Subsequent Recoveries, in respect of any Mortgage Loan, will
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be applied in the following order of priority: first, to reimburse the Master
Servicer or any Sub-Servicer for (A) any related unreimbursed Servicing Advances
and Advances pursuant to Section 3.11(a)(ii) or (a)(iii), and (B) any related
costs and expenses incurred with respect to a charged off Mortgage Loan pursuant
to Section 3.11(a)(x) from Gross Subsequent Recoveries; second, to accrued and
unpaid interest on the Mortgage Loan, to the date of the Final Recovery
Determination, or to the Due Date prior to the Distribution Date on which such
amounts are to be distributed if not in connection with a Final Recovery
Determination; and third, as a recovery of principal of the Mortgage Loan. If
the amount of the recovery so allocated to interest is less than the full amount
of accrued and unpaid interest due on such Mortgage Loan, the amount of such
recovery will be allocated by the 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. 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
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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 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, Liquidation Proceeds or Gross Subsequent Recoveries 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 Master
Servicer shall also be entitled to recover from the related Gross Subsequent
Recoveries to the extent permitted by Section 3.11(a)(x) costs and expenses
incurred after a Mortgage Loan has been charged off. 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
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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 and the Depositor 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
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 and
each Rating Agency on or before March 10 of each calendar year commencing in the
year following execution of this Agreement, 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 March 10 of each calendar year commencing in the year
following execution of this Agreement, 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
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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 Servicer
shall furnish a copy of such report to the Trustee and each Rating Agency.
Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the 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.
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
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 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.
Section 3.23 Title, Management and Disposition of REO Property.
(a) The deed or certificate of sale of any REO Property
shall be taken in the name of the Trustee, or its nominee, in trust for the
benefit of the Certificateholders. The Master Servicer, on behalf of REMIC 1
(and on behalf of the Trustee for the benefit of the Certificateholders), 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 Trustee and the Depositor an Opinion of Counsel,
addressed to the Trustee 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
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shall manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any Trust REMIC 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 (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 to the extent consistent with the interests of
the holder of the related First Mortgage Loan. 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.
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Notwithstanding the foregoing, neither the Master Servicer nor the
Trustee shall:
(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 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 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
the Master Servicer's compensation pursuant to Section 3.18 is sufficient to pay
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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 to the holder of the related
First Mortgage Loan the amounts to which such holder is entitled by the terms of
such First Mortgage Loan; (ii) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (iii) 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, net of any amounts required to be remitted to the holder of the
related First 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 (unless changes in the REMIC
Provisions made subsequent to the Startup Day allow a sale for other
consideration).
(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
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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.
Section 3.25 [Reserved].
Section 3.26 Reserve Fund.
No later than the Closing Date, the Trustee, on behalf of the
Certificateholders, shall establish and maintain with itself a separate,
segregated trust account titled, "Reserve Fund, Deutsche Bank National Trust
Company, as Trustee, in trust for registered Holders of Long Beach Mortgage Loan
Trust 2004-A, Asset-Backed Certificates, Series 2004-A." The Trustee shall
account for the right to receive payments from the Reserve Fund as property that
the Trustee holds separate and apart from the REMIC Regular Interests.
(a) The following amounts shall be deposited into the Reserve
Fund:
(i) On the Closing Date, the Depositor shall deposit,
or cause to be deposited, into the Reserve Fund $1,000;
(ii) On each Distribution Date as to which there is a
Net WAC Rate Carryover Amount payable to any of the Class A
Certificates, the Mezzanine Certificates or the Class B
Certificates, the Trustee has been directed by the Holders of
the Class C Certificates to, and therefore shall, deposit into
the Reserve Fund the amounts described in Section
4.01(d)(i)(u); and
(iii) On each Distribution Date as to which there are
no Net WAC Rate Carryover Amounts, the Trustee shall deposit
into the Reserve Fund on behalf of the Holders of the Class C
Certificates, from amounts otherwise distributable to such
Class C Certificates, an amount such that when added to other
amounts already on deposit in the Reserve Fund, the aggregate
amount on deposit therein is equal to $1,000.
(b) Reserved.
(c) The 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 Holders
of the Class C Certificates shall be deemed to be the owners of the Reserve Fund
and all amounts deposited into the Reserve Fund (other than the initial deposit
therein of $1,000) shall be treated as amounts distributed by REMIC 3 to the
Holders of the Class C Certificates. For federal and state income tax purposes,
payments in respect of the Class A Certificates, the Mezzanine Certificates and
the Class B 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).
(d) By accepting a Class C Certificate, each Holder of a
Class C Certificate shall be deemed to have directed the Trustee to, and the
Trustee shall pursuant to such direction, deposit into the Reserve Fund the
amounts described in Section 3.26(a)(ii) and (a)(iii) above on each Distribution
Date. By accepting a Class C Certificate, each Holder of a Class C Certificate
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further agrees that such direction is given for good and valuable consideration,
the receipt and sufficiency of which is acknowledged by such acceptance.
(e) At the direction of the Holders of a majority in
Percentage Interest in the Class C Certificates, the Trustee shall direct any
depository institution maintaining the Reserve Fund to invest the funds in such
account in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, (i) no later than the Business
Day immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if a Person other than
the Trustee or an Affiliate manages or advises such investment, and (ii) no
later than the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if the Trustee or an Affiliate manages or
advises such investment. If no investment direction of the Holders of a majority
in Percentage Interest in the Class C Certificates with respect to the 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 the Reserve Fund shall be invested
in Deutsche Bank 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 the Reserve Fund.
(f) For federal tax return and information reporting, the
right of the Certificateholders to receive payment on account of the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates from the
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, on behalf of the Trust Fund, at the
direction of the Master Servicer, is hereby authorized to enter into a facility
with any Person which provides that such Person (an "Advancing Person") may make
all or a portion of the Advances and/or Servicing Advances to the Trust Fund
under this Agreement, 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.
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(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 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.
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Distributions.
(a) On each Distribution Date, the Trustee shall withdraw
from the Distribution Account that portion of the Available Funds for such
Distribution Date consisting of the 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 Interest
Remittance Amount remaining for such Distribution Date:
(i) first, concurrently, to the Class A Certificates and the Class S
Certificates, the Monthly Interest Distributable Amount and any Unpaid Interest
Shortfall Amount for such Classes, in each case allocated between the Class A
Certificates and the Class S Certificates, pro rata, based on their respective
entitlements;
second, to the Class M-1 Certificates, the related Monthly Interest
Distributable Amount;
third, to the Class M-2 Certificates, the related Monthly Interest
Distributable Amount;
fourth, to the Class M-3 Certificates, the related Monthly Interest
Distributable Amount;
fifth, to the Class M-4 Certificates, the related Monthly Interest
Distributable Amount;
sixth, to the Class M-5 Certificates, the related Monthly Interest
Distributable Amount;
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seventh, to the Class M-6 Certificates, the related Monthly Interest
Distributable Amount;
eighth, to the Class M-7 Certificates, the related Monthly Interest
Distributable Amount;
ninth, to the Class M-8 Certificates, the related Monthly Interest
Distributable Amount; and
tenth, to the Class B Certificates, the related Monthly Interest
Distributable Amount.
(ii) Any Interest Remittance Amount remaining
undistributed following distributions pursuant to clause (i)
above shall be used in determining the amount of Net Monthly
Excess Cashflow, if any, for such Distribution Date.
(b) On each Distribution Date (a) prior to the Stepdown
Date or (b) on which a Trigger Event is in effect, the Class A Certificates, the
Mezzanine Certificates and the Class B Certificates shall be entitled to receive
distributions in respect of principal to the extent of the Principal
Distribution Amount in the following amounts and order of priority:
(i) first, to the Class A Certificates, until the
Certificate Principal Balance thereof has been
reduced to zero;
second, to the Class M-1 Certificates, until
the Certificate Principal Balance thereof has been
reduced to zero;
third, to the Class M-2 Certificates, until
the Certificate Principal Balance thereof has been
reduced to zero;
fourth, to the Class M-3 Certificates, until
the Certificate Principal Balance thereof has been
reduced to zero;
fifth, to the Class M-4 Certificates, until
the Certificate Principal Balance thereof has been
reduced to zero;
sixth, to the Class M-5 Certificates, until
the Certificate Principal Balance thereof has been
reduced to zero;
seventh, to the Class M-6 Certificates,
until the Certificate Principal Balance thereof has
been reduced to zero;
eighth, to the Class M-7 Certificates, until
the Certificate Principal Balance thereof has been
reduced to zero;
ninth, to the Class M-8 Certificates, until
the Certificate Principal Balance thereof has been
reduced to zero; and
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tenth, to the Class B Certificates, until
the Certificate Principal Balance thereof has been
reduced to zero.
(ii) Any principal remaining undistributed pursuant
to Section 4.01(b)(i) above shall be used in determining the
amount of Net Monthly Excess Cashflow, if any, for such
Distribution Date.
(c) On each Distribution Date (a) on or after the
Stepdown Date and (b) on which a Trigger Event is not in effect, the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates shall be
entitled to receive distributions in respect of principal to the extent of the
Principal Distribution Amount in the following amounts and order of priority:
(i) first, to the Class A Certificates, the Class A
Principal Distribution Amount, until the Certificate
Principal Balance thereof has been reduced to zero;
second, to the Class M-1 Certificates, the
Class M-1 Principal Distribution Amount, until the
Certificate Principal Balance thereof has been
reduced to zero;
third, to the Class M-2 Certificates, the
Class M-2 Principal Distribution Amount, until the
Certificate Principal Balance thereof has been
reduced to zero;
fourth, to the Class M-3 Certificates, the
Class M-3 Principal Distribution Amount, until the
Certificate Principal Balance thereof has been
reduced to zero;
fifth, to the Class M-4 Certificates, the
Class M-4 Principal Distribution Amount, until the
Certificate Principal Balance thereof has been
reduced to zero;
sixth, to the Class M-5 Certificates, the
Class M-5 Principal Distribution Amount, until the
Certificate Principal Balance thereof has been
reduced to zero;
seventh, to the Class M-6 Certificates, the
Class M-6 Principal Distribution Amount, until the
Certificate Principal Balance thereof has been
reduced to zero;
eighth, to the Class M-7 Certificates, the
Class M-7 Principal Distribution Amount, until the
Certificate Principal Balance thereof has been
reduced to zero;
ninth, to the Class M-8 Certificates, the
Class M-8 Principal Distribution Amount, until the
Certificate Principal Balance thereof has been
reduced to zero; and
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tenth, to the Class B Certificates, the
Class B Principal Distribution Amount, until the
Certificate Principal Balance thereof has been
reduced to zero.
(ii) Any principal remaining undistributed following
distributions pursuant to Section 4.01(c)(i) shall be used in
determining the amount of Net Monthly Excess Cashflow, if any,
for such Distribution Date.
(d) (i) On each Distribution Date, any Net Monthly Excess
Cashflow shall be paid in the following order of priority, in
each case to the extent of the Net Monthly Excess Cashflow
remaining undistributed:
(a) to the Class or Classes of Certificates
then entitled to receive distributions in respect of
principal, in an amount equal to any Extra Principal
Distribution Amount for such Distribution Date,
payable to such Class or Classes of Certificates as
part of the Principal Distribution Amount, as
applicable, pursuant to Section 4.01(b) or Section
4.01(c) above, as applicable;
(b) concurrently, to the Class A
Certificates and the Class S 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 Interest Remittance Amount on such Distribution
Date, allocated between such classes, pro rata, based
on their respective entitlements;
(c) to the Class M-1 Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount,
if any, for such Class for such Distribution Date;
(d) to the Class M-1 Certificates, in an
amount equal to the Allocated Realized Loss Amount,
if any, for such Class for such Distribution Date;
(e) to the Class M-2 Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount,
if any, for such Class for such Distribution Date;
(f) to the Class M-2 Certificates, in an
amount equal to the Allocated Realized Loss Amount,
if any, for such Class for such Distribution Date;
(g) to the Class M-3 Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount,
if any, for such Class for such Distribution Date;
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(h) to the Class M-3 Certificates, in an
amount equal to the Allocated Realized Loss Amount,
if any, for such Class for such Distribution Date;
(i) to the Class M-4 Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount,
if any, for such Class for such Distribution Date;
(j) to the Class M-4 Certificates, in an
amount equal to the Allocated Realized Loss Amount,
if any, for such Class for such Distribution Date;
(k) to the Class M-5 Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount,
if any, for such Class for such Distribution Date;
(l) to the Class M-5 Certificates, in an
amount equal to the Allocated Realized Loss Amount,
if any, for such Class for such Distribution Date;
(m) to the Class M-6 Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount,
if any, for such Class for such Distribution Date;
(n) to the Class M-6 Certificates, in an
amount equal to the Allocated Realized Loss Amount,
if any, for such Class for such Distribution Date;
(o) to the Class M-7 Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount,
if any, for such Class for such Distribution Date;
(p) to the Class M-7 Certificates, in an
amount equal to the Allocated Realized Loss Amount,
if any, for such Class for such Distribution Date;
(q) to the Class M-8 Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount,
if any, for such Class for such Distribution Date;
(r) to the Class M-8 Certificates, in an
amount equal to the Allocated Realized Loss Amount,
if any, for such Class for such Distribution Date;
(s) to the Class B Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount,
if any, for such Class for such Distribution Date;
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(t) to the Class B Certificates, in an
amount equal to the Allocated Realized Loss Amount,
if any, for such Class for such Distribution Date;
(u) to the Reserve Fund, the amount by which
the sum of the related Net WAC Rate Carryover
Amounts, if any, with respect to the Class A
Certificates, the Mezzanine Certificates and the
Class B Certificates for such Distribution Date
exceeds the amount on deposit in the Reserve Fund
immediately prior to such Distribution Date (or, if
no Net WAC Rate Carryover Amounts are payable to such
Classes of Certificates on such Distribution Date, to
the Reserve Fund, an amount such that when added to
other amounts already on deposit in the Reserve Fund,
the aggregate amount on deposit therein is equal to
$1,000);
(v) to the Class B Certificates, until the
Certificate Principal Balance thereof has been
reduced to zero;
(w) to the Class M-8 Certificates, until the
Certificate Principal Balance thereof has been
reduced to zero;
(x) if such Distribution Date follows the
Prepayment Period during which occurs the latest date
on which a Prepayment Charge may be required to be
paid in respect of any Mortgage Loans, to the Class P
Certificates, in reduction of the Certificate
Principal Balance thereof, until the Certificate
Principal Balance thereof is reduced to zero;
(y) to the Class C Certificates, the Monthly
Interest Distributable Amount for the Class C
Certificates plus, until the Certificate Principal
Balance of the Class C Certificates is reduced to
zero, any Overcollateralization Release Amount for
such Distribution Date (in both cases, net of such
portion of amounts payable pursuant to this clause
(y) that were paid pursuant to clause (u) above); and
(z) any remaining amounts to the Class R
Certificates (in respect of the appropriate Class R-3
Interest).
(ii) On each Distribution Date, after making the
distributions of the Available Funds as provided in this
Section 4.01, the Trustee shall withdraw from the Reserve Fund
the amounts on deposit therein and shall distribute such
amounts in the following order of priority:
first, to the Class A Certificates, the related Net WAC Rate Carryover
Amount;
second, to the Class M-l Certificates, the related Net WAC Rate
Carryover Amount;
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third, to the Class M-2 Certificates, the related Net WAC Rate
Carryover Amount;
fourth, to the Class M-3 Certificates, the related Net WAC Rate
Carryover Amount;
fifth, to the Class M-4 Certificates, the related Net WAC Rate
Carryover Amount;
sixth, to the Class M-5 Certificates, the related Net WAC Rate
Carryover Amount;
seventh, to the Class M-6 Certificates, the related Net WAC Rate
Carryover Amount;
eighth, to the Class M-7 Certificates, the related Net WAC Rate
Carryover Amount;
ninth, to the Class M-8 Certificates, the related Net WAC Rate
Carryover Amount; and
tenth, to the Class B Certificates, the related Net WAC Rate Carryover
Amount.
On the Distribution Date on which the Certificate Principal Balance of
the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates has been reduced to zero, after making all other distributions on
such Distribution Date (including to the Class A Certificates, the Mezzanine
Certificates and the Class B Certificates out of the Reserve Fund), the Trustee
shall distribute all amounts remaining in the Reserve Fund to the Class C
Certificates.
(iii) On each Distribution Date, all amounts
representing Prepayment Charges in respect of the Mortgage
Loans received during the related Prepayment Period will be
withdrawn from the Distribution Account and distributed by the
Trustee to the Class P Certificates, and shall not be
available for distribution to any other Class of Certificates.
On each Distribution Date, all amounts representing any Master
Servicer Prepayment Charge Payment 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 the Class P Certificates, and
shall not be available for distribution to any other Class of
Certificates. The payment of the foregoing amounts in respect
of the Class P Certificates shall not reduce the Certificate
Principal Balance thereof.
(e) Reserved.
(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
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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. 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.
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 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.
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
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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
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 Greenwich Capital Markets, Inc., 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) Notwithstanding anything to the contrary herein, (i)
in no event shall the Certificate Principal Balance of a Mezzanine Certificate
or a Class B Certificate be reduced more than once in respect of any particular
amount both (a) allocated to such Certificate in respect of Realized Losses
pursuant to Section 4.06 and (b) distributed to such Certificate in reduction of
the Certificate Principal Balance thereof pursuant to this Section 4.01, and
(ii) in no event shall the Uncertificated Principal Balance of a REMIC Regular
Interest be reduced more than once in respect of any particular amount both (a)
allocated to such REMIC Regular Interest in respect of Realized Losses pursuant
to Section 4.06 and (b) distributed on such REMIC Regular Interest in reduction
of the Uncertificated Principal Balance thereof pursuant to Section 4.05.
Section 4.02 Reserved.
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
Trustee, the Master Servicer and the Rating Agencies, a statement as to the
distributions made on such Distribution Date:
(i) the amount of the distribution made on such
Distribution Date to the Holders of each Class of Regular
Certificates (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;
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(iii) the Overcollateralized Amount, the
Overcollateralization Release Amount, the
Overcollateralization Deficiency Amount and the
Overcollateralization Target Amount as of such Distribution
Date and the Excess Overcollateralized Amount for the Mortgage
Pool, for such Distribution Date;
(iv) the aggregate amount of servicing compensation
received by the 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 Class B/M-8 Early Distribution Amount for
such Distribution Date;
(vi) the aggregate amount of Advances for the related
Due Period;
(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;
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(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, the Mezzanine Certificates, the Class B
Certificates and the Class C Certificates, after giving effect
to the distributions made on such Distribution Date, and 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,
the Mezzanine Certificates, the Class B Certificates and the
Class C Certificates for such Distribution Date and the Unpaid
Interest Shortfall Amount, if any, with respect to the Class A
Certificates, the Class S Certificates, the Mezzanine
Certificates and the Class B 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) the Credit Enhancement Percentage for such
Distribution Date;
(xix) the related Net WAC Rate Carryover Amount for
the Class A Certificates, the Mezzanine Certificates and the
Class B Certificates, if any, for such Distribution Date and
the amount remaining unpaid after reimbursements therefor on
such Distribution Date;
(xx) the Trustee Fee on such Distribution Date;
(xxi) whether a Stepdown Date or a Trigger Event has
occurred;
(xxii) the Available Funds;
(xxiii) the respective Pass-Through Rates applicable
to the Class A Certificates, the Class S Certificates, the
Mezzanine Certificates, the Class B Certificates and the Class
C Certificates for such Distribution Date and the Pass-Through
Rate applicable to the Class A Certificates, the Class S
Certificates, the Mezzanine Certificates and the Class B
Certificates for the immediately succeeding Distribution Date;
(xxiv) reserved;
(xxv) any other information that is required by the
Code and regulations thereunder to be made available to
Certificateholders;
(xxvi) the amount on deposit in the Reserve Fund;
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(xxvii) the amount of Subsequent Recoveries and Gross
Subsequent Recoveries for the related Prepayment Period and
the cumulative amount of Subsequent Recoveries and Gross
Subsequent Recoveries.
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 and the Rating
Agencies via the Trustee's internet website. The Trustee's internet website
shall initially be located at xxxxx://xxx.xxxxxxxxxxxxxx.xx.xxx/xxxx. 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 Class R Certificates 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 Class R 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 such Person was a Holder of a Class R 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.
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Section 4.04 Remittance Reports; Advances.
(a) Within one Business Day after each Determination
Date, the Master Servicer shall deliver to the Trustee by telecopy or electronic
mail (or by such other means as the Master Servicer and the Trustee may agree
from time to time) a Remittance Report with respect to the related Distribution
Date. 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, which Monthly Payments were delinquent as of the
close of business on the related Determination Date, plus (ii) with respect to
each REO Property, 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.
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 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.
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(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 earliest of to occur the Mortgage Loan is paid in full, charged-off,
or until the recovery of all Liquidation Proceeds thereon.
(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 Depositor and the
Trustee.
Section 4.05 Distributions on the REMIC Regular Interests.
(a) On each Distribution Date, the Trustee shall cause
the sum of the Interest Remittance Amount and the Principal Remittance Amount,
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, to the Holders of REMIC 1 Regular
Interests LT1-S1, LT1-S2, LT1-S3, and LT1-S4, pro rata, in an
amount equal to the Uncertificated Accrued Interest for each
such REMIC 1 Regular Interest for such Distribution Date plus
any amounts in respect thereof remaining unpaid from previous
Distribution Dates;
(ii) second, to the Holders of REMIC 1 Regular
Interests LT1-A and LT1-P, pro rata, in an amount equal to the
Uncertificated Accrued Interest for each such REMIC 1 Regular
Interest for such Distribution Date plus any amounts in
respect thereof remaining unpaid from previous Distribution
Dates;
(iii) third, on the Distribution Date immediately
following the expiration of the latest Prepayment Charge, to
the Holders of REMIC 1 Regular Interest LT1-P until $10 has
been paid pursuant to this clause;
(iv) fourth, to the Holders of REMIC 1 Regular
Interest LT1-A until the Uncertificated Principal Balance of
such REMIC 1 Regular Interest is reduced to zero, and then to
the Holders of REMIC 1 Regular Interests LT1-S1, LT1-S4,
LT1-S2, and LT1-S3, in that order, until the Uncertificated
Principal Balance of each such REMIC 1 Regular Interest is
reduced to zero; and
(v) fifth, to the Holders of the Class R Certificates
in respect of the Class R-1 Interest.
(b) On each Distribution Date, the Trustee shall cause
the sum of the Interest Remittance Amount and the Principal Remittance Amount,
in the following order of priority, to be distributed by REMIC 2 to REMIC 3 on
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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:
(i) first, to the Holders of REMIC 2 Regular
Interests LT2-S1, LT2-S2, LT2-S3, and LT2-S4, pro rata, in an
amount equal to the Uncertificated Accrued Interest for each
such REMIC 2 Regular Interest for such Distribution Date plus
any amounts in respect thereof remaining unpaid from previous
Distribution Dates;
(ii) second, to the Holders of REMIC 2 Regular
Interests LT2-AA, LT2-A, LT2-M1, LT2-M2, LT2-M3, LT2-M4,
LT2-M5, LT2-M6, LT2-M7, LT2-M8, LT2-B, and LT2-ZZ, pro rata,
in an amount equal to the Uncertificated Accrued Interest for
each such REMIC 2 Regular Interest for such Distribution Date
plus any amounts in respect thereof remaining unpaid from
previous Distribution Dates, provided however, that:
(A) when the REMIC 2 Overcollateralized
Amount is less than the REMIC 2 Overcollateralization
Target Amount, amounts payable as Uncertificated
Accrued Interest in respect of REMIC 2 Regular
Interest LT2-ZZ shall be reduced and deferred by the
lesser of (x) the amount of such difference and (y)
the Maximum LT2-ZZ Uncertificated Accrued Interest
Deferral Amount, and such amount will be payable to
the Holders of REMIC 2 Regular Interests LT2-A,
LT2-M1, LT2-M2, LT2-M3, LT2-M4, LT2-M5, LT2-M6,
LT2-M7, LT2-M8, and LT2-B in the same proportion as
the Extra Principal Distribution Amount is allocated
to the Corresponding Certificates; and
(B) when amounts that otherwise would be
paid to the Class C Certificates are instead paid to
the Class B Certificates and/or the Class M-8
Certificates under Sections 4.01(d)(i)(v) and (w),
then the Uncertificated Accrued Interest in respect
of REMIC 2 Regular Interest LT2-ZZ shall be reduced
and deferred by 1% of all such amounts, and such
deferred interest shall be paid instead to REMIC 2
Regular Interests LT2-B and LT2-M8, in the same
proportion as amounts were paid to the Corresponding
Certificates;
(iii) third, on the Distribution Date immediately
following the expiration of the latest Prepayment Charge, to
the Holders of REMIC 2 Regular Interest LT2-P until $10 has
been paid pursuant to this clause;
(iv) fourth, (A) 98% to the Holders of REMIC 2
Regular Interest LT2-AA, (B) 1% to the Holders of REMIC 2
Regular Interests LT2-A, LT2-M1, LT2-M2, LT2-M3, LT2-M4,
LT2-M5, LT2-M6, LT2-M7, LT2-M8, LT2-B, in the same proportions
as principal payments are to be made to the Corresponding
Certificates of each such REMIC 2 Regular Interest, and (C) 1%
to the Holders of REMIC 2 Regular Interest LT2-ZZ, until the
Uncertificated Principal Balance of each such REMIC 2 Regular
Interest is reduced to zero, and
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(v) any remaining amount to the Holders of the Class
R Certificates (in respect of the Class R-2 Interest);
provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Release Amount shall be allocated
to Holders of (i) REMIC 2 Regular Interest LT2-AA and REMIC 2 Regular Interest
LT1-P, in that order, and (ii) REMIC 2 Regular Interest LT2-ZZ, respectively, in
each case until the Uncertificated Principal Balance of each such REMIC 2
Regular Interest is reduced to zero.
(c) On each Distribution Date, all amounts representing
Prepayment Charges in respect of the Mortgage Loans received during the related
Prepayment Period will be distributed by REMIC 1 to the Holders of REMIC 1
Regular Interest LT1-P, and by REMIC 2 to the Holders of REMIC 2 Regular
Interest LT2-P. The payment of the foregoing amounts to the Holders of REMIC 1
Regular Interest LT1-P and REMIC 2 Regular Interest LT2-P shall not reduce the
Uncertificated Principal Balance of such Regular Interests.
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 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 Trustee 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) If on any Distribution Date after giving effect to
all Realized Losses incurred with respect to the Mortgage Loans during or prior
to the related Due Period and distributions of principal with respect to the
Class A Certificates, the Mezzanine Certificates and the Class B Certificates on
such Distribution Date, the Certificate Principal Balance of the Class C
Certificates is equal to zero, Realized Losses equal to the Undercollateralized
Amount shall be allocated by the Trustee on such Distribution Date as follows:
first, to the Class B Certificates, until the Certificate Principal Balance
thereof has been reduced to zero, second, to the Class M-8 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero, third, to
the Class M-7 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero, fourth, to the Class M-6 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero, fifth, to the
Class M-5 Certificates until the Certificate Principal Balance thereof has been
reduced to zero, sixth, to the Class M-4 Certificates until the Certificate
Principal Balance thereof has been reduced to zero, seventh, to the Class M-3
Certificates until the Certificate Principal Balance thereof has been reduced to
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zero, eighth, to the Class M-2 Certificates until the Certificate Principal
Balance thereof has been reduced to zero, and ninth, to the Class M-1
Certificates until the Certificate Principal Balance thereof has been reduced to
zero. All Realized Losses to be allocated to the Certificate Principal Balances
of the Mezzanine Certificates and the Class B Certificates on any Distribution
Date shall be so allocated after the actual distributions to be made on such
date as provided in Section 4.01. All references above to the Certificate
Principal Balance of the Mezzanine Certificates and the Class B Certificates
shall be to the Certificate Principal Balance of the Mezzanine Certificates and
the Class B Certificates immediately prior to the relevant Distribution Date,
before reduction thereof by any Realized Losses or increase thereof by any
Subsequent Recoveries, in each case to be allocated to such Mezzanine
Certificates and Class B Certificates on such Distribution Date.
Any allocation of Realized Losses to a Mezzanine Certificate or a Class
B Certificate on any Distribution Date shall be made by reducing the Certificate
Principal Balance thereof by the amount so allocated. No allocations of any
Realized Losses shall be made to the Class A Certificates, the Class S
Certificates or the Class P Certificates.
(c) On each Distribution Date, the Trustee shall allocate
Realized Losses among the REMIC 1 Regular Interests as follows: first to REMIC 1
Regular Interest LT1-A, then to REMIC 1 Regular Interest LT1-P, then pro rata
among REMIC 1 Regular Interests LT1-S1, LT1-S2, LT2-S3, and LT2-S3.
(d) On each Distribution Date, the Trustee shall allocate
Realized Losses among the REMIC 2 Regular Interests (other than REMIC 2 Regular
Interests LT2-S1. LT2-S2, LT2-S3, and LT2-S4) such that after all distributions
and allocations have been made for such Distribution Date: (i) the
Uncertificated Principal Balances of REMIC 2 Regular Interests LT2-A, LT2-M1,
LT2-M2, LT2-M3, LT2-M4, LT2-M5, LT2-M6, LT2-M7, LT2-M8, and LT2-B equals 1% of
the Certificate Principal Balance of the respective Corresponding Certificates
after such Distribution Date, and (ii) the Uncertificated Principal Balance of
REMIC 2 Regular Interest LT2-ZZ equals 1% of the aggregate Certificate Principal
Balance of all the Certificates after such Distribution Date plus 1% of the
Overcollateralized Amount.
(e) If on any Distribution Date Allocated Realized Loss
Amounts are to be reinstated due to Subsequent Recoveries, the Allocated
Realized Loss Amounts shall be reinstated by the Trustee on such Distribution
Date to increase the Certificate Principal Balances of the Mezzanine
Certificates and the Class B Certificates in the following order of priority, in
each case until the related Allocated Realized Loss Amount has been reduced to
zero: first to the Class M-1 Certificates, second to the Class M-2 Certificates,
third to the Class M-3 Certificates, fourth to the Class M-4 Certificates, fifth
to the Class M-5 Certificates, sixth to the Class M-6 Certificates, seventh to
the Class M-7 Certificates, eighth to the Class M-8 Certificates and ninth to
the Class B Certificates. All Subsequent Recoveries to be allocated to the
Certificate Principal Balances of the Mezzanine Certificates or the Class B
Certificates on any Distribution Date shall be so allocated after the actual
distributions to be made on such date as provided in Section 4.01. All
references above to the Certificate Principal Balance of the Mezzanine
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Certificates and the Class B Certificates shall be to the Certificate Principal
Balance of the Mezzanine Certificates and the Class B Certificates immediately
prior to the relevant Distribution Date, before reduction thereof by any
Realized Losses or increase thereof by any Subsequent Recoveries, in each case
to be allocated to the Mezzanine Certificates and the Class B Certificates on
such Distribution Date.
Any Allocated Realized Loss Amounts to be reinstated to a Certificate
on any Distribution Date due to Subsequent Recoveries shall be made by
increasing the Certificate Principal Balance thereof by the amount so
reinstated. No allocations of any Subsequent Recoveries shall be made to the
Class A Certificates, the Class S Certificates or the Class P Certificates.
(f) (i) If on any Distribution Date Subsequent Recoveries
occurred in the related Prepayment Period, the amount of such
Subsequent Recoveries shall be allocated among the REMIC 1
Regular Interests in the same amounts, but in the reverse
order, as Realized Losses were allocated under Section
4.06(c).
(ii) If on any Distribution Date Subsequent
Recoveries occurred in the related Prepayment Period, the
amount of such Subsequent Recoveries shall be allocated among
the REMIC 2 Regular Interests (other than REMIC 2 Regular
Interests LT2-S1. LT2-S2, LT2-S3, and LT2-S4) such that after
all distributions and allocations have been made for such
Distribution Date: (i) the Uncertificated Principal Balances
of REMIC 2 Regular Interests LT2-A, LT2-M1, LT2-M2, LT2-M3,
LT2-M4, LT2-M5, LT2-M6, LT2-M7, LT2-M8, and LT2-B equals 1% of
the Certificate Principal Balance of the respective
Corresponding Certificates after such Distribution Date, and
(ii) the Uncertificated Principal Balance of REMIC 2 Regular
Interest LT2-ZZ equals 1% of the aggregate Certificate
Principal Balance of all the Certificates after such
Distribution Date plus 1% of the Overcollateralized Amount,
provided that the amount of Subsequent Recoveries allocated to
any REMIC 2 Regular Interest shall never exceed the amount of
Realized Losses allocated to such REMIC 2 Regular Interest.
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.
(a) 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 each
year following the year of execution of this Agreement, the Trustee may file a
Form 15 with respect to the Trust Fund, if applicable, if notified by the
Depositor by April 25 of such year to do so. Prior to March 30, 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
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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
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.
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-14. 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.
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(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 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, 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 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. The Depositor is hereby authorized to execute and deliver on behalf of
the Trust the Letter of Representations to be submitted on behalf of the Trust
to the Depository and to perform the obligations of the Issuer (as defined in
the Letter of Representations) thereunder. The Trustee is hereby authorized to
execute and deliver as agent of the Trust the Letter of Representations to be
110
submitted on behalf of the Trust to the Depository and to perform the
obligations of the Agent (as defined in the Letter of Representations)
thereunder. 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 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 $25,000,
except that any beneficial ownership that was represented by a Book-Entry
Certificate in an amount less than $25,000 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 B Certificate, Class C Certificate, Class P Certificate or Class R
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 of any Class B
Certificate to be made without registration under the Securities Act (other than
in connection with the initial sale of the Class B Certificates to the initial
purchasers or the initial issuance thereof), then the Trustee shall refuse to
register such transfer unless it receives (and upon receipt, may conclusively
rely upon) a certificate from the Class B Certificateholder desiring to effect
such transfer substantially in the form attached as Exhibit J-1A hereto and a
certificate from such Class B Certificateholder's prospective transferee
substantially in the form attached as Exhibit J-1B hereto (which in the case of
the Book-Entry Certificates, the Class B Certificateholder and the Class B
Certificateholder's prospective transferee will be deemed to have represented
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such certification). In the event of any such transfer of a Class C Certificate,
Class P Certificate or a Class R Certificate (other than in connection with (i)
the initial transfer of any Class C Certificate, Class P Certificate or Class R
Certificates by the Depositor to the Seller or (ii) the transfer of any Class C
Certificate, Class P Certificate or Class R Certificates by the Seller to an
Affiliate of the Seller) (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 B
Certificate, Class C Certificate, Class P Certificate or Class R 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.
(c) Each Transferee of a Class A Certificate, Class S
Certificate or Mezzanine Certificate will be deemed to have represented by
virtue of its purchase or holding of such Certificate (or interest therein) that
either (a) such Transferee is not a Plan or purchasing such Certificate with
Plan Assets as defined below, (b) it has acquired and is holding such
Certificate in reliance on Prohibited Transaction Exemption ("PTE") 90-59 at 55
F.R. 36724 (1990), as such PTE is further amended by XXX 0000-00, 00 X. X. 00000
(November 13, 2000) and PTE 2002-41, 67 F.R. 163 (August 22, 2002) (the
"Exemption"), and that it understands that there are certain conditions to the
availability of the Exemption and that such Certificate must be rated, at the
time of purchase, not lower than "BBB-" (or its equivalent) by a Rating Agency,
or (c) the following conditions are satisfied: (i) such Transferee is an
insurance company, (ii) the source of funds used to purchase or hold such
Certificate (or interest therein) is an "insurance company general account" (as
defined in U.S. Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60, and (iii) the conditions set forth in Sections I and III of PTCE
95-60 have been satisfied. Each transferee of a Class B Certificate shall be
deemed to have represented by its purchase or holding of such Certificate (or
interest therein) that the conditions in clause (a) or clause (c)(i), (ii) and
(iii) have been satisfied.
No transfer of a Class C Certificate, Class P Certificate or Class R
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
112
(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 (i) initial transfer of any Class C Certificate,
Class P Certificate or Class R Certificate by the Depositor to the Seller or
(ii) the transfer of any Class C Certificate, Class P Certificate or Class R
Certificate by the Seller to an Affiliate of the Seller (in which case, the
Depositor, the Seller and any 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 C Certificate, Class P
Certificate or Class R 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 (i) initial transfer of any Class C Certificate, Class P
Certificate or Class R Certificate by the Depositor to the Seller or (ii) the
transfer of any Class C Certificate, Class P Certificate or Class R Certificate
by the Seller to an Affiliate of the Seller.
If any 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.
(d) Each Person who has or who acquires any Ownership
Interest in a Class R 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 Class R Certificate are expressly
subject to the following provisions:
(i) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall be a Permitted
Transferee and shall promptly notify the Trustee of any change
or impending change in its status as a Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in
a Class R Certificate unless such Ownership Interest is a pro
rata undivided interest.
(iii) In connection with any proposed transfer of any
Ownership Interest in a Class R 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:
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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 Class R 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 Class R Certificates.
(iv) Any attempted or purported transfer of any
Ownership Interest in a Class R 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 Class R Certificate,
then the prior Holder of such Class R Certificate that is a
Permitted Transferee shall, upon discovery that the
registration of transfer of such Class R 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 Class R Certificate. The Trustee shall not be
under any liability to any Person for any registration of
transfer of a Class R Certificate that is in fact not
permitted by this Section or for making any distributions due
on such Class R 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 Class R Certificate
that was in fact not a Permitted Transferee at the time such
distributions were made all distributions made on such Class R
Certificate. Any such distributions so recovered by the
Trustee shall be distributed and delivered by the Trustee to
the prior Holder of such Class R Certificate that is a
Permitted Transferee.
(v) If any Person other than a Permitted Transferee
acquires any Ownership Interest in a Class R 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 Class R Certificate or any other
Person having an Ownership Interest therein, to notify the
Depositor to arrange for the sale of such Class R 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
Class R Certificate that is a Permitted Transferee, except
that in the event that the Trustee determines that the Holder
of such Class R 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
Class R Certificate as a result of its exercise of such
discretion.
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(vi) If any Person other than a Permitted Transferee
acquires any Ownership Interest in a Class R 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 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 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 and the Depositor
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
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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 and any agent of the
Master Servicer, the Depositor or the Trustee 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 nor any agent of any of them shall be affected by notice
to the contrary.
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 or Xxxxxxx Mac; and provided further that the Rating Agencies'
ratings of the Class A Certificates, the Mezzanine Certificates and the Class B
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Certificates in effect immediately prior to such merger or consolidation will
not be qualified, reduced or withdrawn as a result thereof (as evidenced by a
letter to such effect from the Rating Agencies to the Trustee).
Section 6.03 Limitation on Liability of the Depositor, the Master Servicer
and Others.
None of the Depositor, the Master Servicer or any of the directors,
officers, employees or agents of the Depositor 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 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 or the
Depositor, as applicable, pursuant hereto, or against any liability which would
otherwise be 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 Master Servicer and any director,
officer, employee or agent of the Depositor 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 Master Servicer and any director, officer, employee or agent of
the Depositor 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. Neither the Depositor nor 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 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 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 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 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 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 and the Depositor if a claim is made that may
result in such claims, losses, penalties, fines, forfeitures, legal fees or
117
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 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.
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 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
Class A Certificates, the Mezzanine Certificates or the Class B Certificates.
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 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 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 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. Upon request, the Master Servicer shall furnish to the Depositor
and the Trustee its (and any such Sub-Servicer's) most recent financial
statements and such other information relating to the Master Servicer's capacity
to perform its obligations under this Agreement that it possesses. To the extent
such information is not otherwise available to the public, the Depositor 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
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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 Trustee or the Trust Fund, and in either case, the Depositor or
the Trustee, as the case may be, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. The Depositor
may, but is not obligated to, enforce the obligations of the 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 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 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 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
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(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) reserved; 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
(v) 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 Holders of
Certificates entitled to at least 51% of Voting Rights, the Trustee shall, by
notice in writing to 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 (delivered immediately by facsimile and effective
on the date of acknowledgement of receipt in the case of a Master Servicer Event
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of Default described in clause (vii)) 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
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
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
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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 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, 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 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 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
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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 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.
(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
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 waive such default or Master Servicer Event of Default;
provided, however, that a default or Master Servicer Event of Default under
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clause (i) or (vii) of Section 7.01 may be waived only by all of the Holders of
the Regular Certificates. Upon any such waiver of a default or 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:
(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
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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
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 Certificateholders, pursuant to the
provisions of this Agreement, unless 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 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
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facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document,
unless requested in writing to do so by the Holders of
Certificates entitled to at least 25% of the Voting Rights;
provided, however, that if the payment within a reasonable
time to the Trustee 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 such Certificateholders, the Trustee
may require reasonable indemnity against such expense, or
liability from 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.
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
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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 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 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 its 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,
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
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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 Depositor, the Master
Servicer and the 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 Holders of Certificates entitled to
at least 51% of the Voting Rights. A copy of such instrument shall be delivered
to the Certificateholders 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 if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
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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,
may remove the Trustee and the Depositor may appoint a successor Trustee,
acceptable 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 may at any time remove the Trustee and appoint a successor Trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which 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 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 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 the ratings of any Class
of Certificates by any 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.
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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 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 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 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
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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 and the Master
Servicer, 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.
The Trustee shall initially serve as the Custodian and this Agreement shall
serve as the Custodial Agreement. 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. The Trustee shall pay
any and all fees and expenses of any Custodian (other than the Washington Mutual
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 Certificateholders 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 notwithstanding the
fact that certain duties have been assigned to the Custodian (other than the
Washington Mutual Custodian), but only to the extent the Trustee is responsible
for its own acts hereunder. 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 and
the Depositor, as of the Closing Date, that:
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(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.
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
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 and the Classes of Certificates as hereinafter set forth)
shall terminate upon the 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 Master Servicer of all Mortgage
Loans and each REO Property remaining in REMIC 1 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 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
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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 Master Servicer in its reasonable
discretion.
(b) The Master Servicer shall have the right to purchase
all of the Mortgage Loans and each REO Property 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 Master Servicer may elect to
purchase all of the Mortgage Loans and each REO Property remaining in REMIC 1
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, the Master Servicer may elect to purchase all
of the Mortgage Loans and each REO Property in REMIC 1 only if the Termination
Price is equal to or less than the aggregate fair market value of all of the
assets of REMIC 1 (as determined by the Master Servicer, 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)).
(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 Master Servicer, not earlier
than the 15th day and not later than the 25th day of the month next preceding
the month of the final distribution on the Certificates or (b) otherwise during
the month of such final distribution on or before the Determination Date in such
month, in each case specifying (i) the Distribution Date upon which the Trust
Fund will terminate and 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 Master Servicer 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. 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
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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 Greenwich Capital
Markets, Inc. 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.
Section 9.02 Additional Termination Requirements.
(a) In the event that the Master Servicer 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 with respect to each Trust REMIC, as
evidenced by an Opinion of Counsel delivered to 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
Class R 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).
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(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. 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 Regular Certificates 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. The Trustee shall not permit the creation of any
"interests" in REMIC 1, REMIC 2 or REMIC 3 (within the meaning of Section 860G
of the Code) other than the REMIC 1 Regular Interests, the REMIC 2 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 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. 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. 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
Class R 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 Class R 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.
(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 has received an Opinion of
Counsel, addressed to the Trustee (at the expense of the party seeking to take
such action but in no 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
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in accordance with such Opinion of Counsel. 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 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 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.
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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 has received an Opinion of Counsel,
addressed to the Trustee (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 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.
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 and, if applicable, the
Custodian, and without the consent of any of the Certificateholders, (i) to cure
138
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 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, adversely
affect in any material respect the interests of any Certificateholder 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 and, if applicable,
the Custodian, 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 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
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.
139
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.
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
140
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
Xxxxx Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, XX 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 LB040A (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, and (c) in the case of the Depositor, Long
Beach Securities Corp., 0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, XX 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. 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.
141
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 Trustee shall use its best efforts promptly to provide notice to
the Rating Agencies with respect to each of the following of which it has actual
knowledge:
1. Any 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;
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
142
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: MBS
Monitoring/Long Beach Mortgage Loan Trust 2004-A; Fitch, Inc., Xxx Xxxxx Xxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; and Standard & Poor's Rating Services, Inc., 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Section 11.08 Article and Section References.
All Article and Section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
Section 11.09 Grant of Security Interest.
It is the express intent of the parties hereto that the conveyance of
the Mortgage Loans by the Depositor to the Trustee 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 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 and the Distribution Account, whether in the form of
cash, instruments, securities or other property; (3) the obligations secured by
such security agreement shall be deemed to be all of the Depositor's obligations
under this Agreement, including the obligation to provide to the
Certificateholders the benefits of this Agreement relating to the Mortgage Loans
and the Trust Fund; and (4) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law.
Accordingly, the Depositor hereby grants to the Trustee 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.
143
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized, all as of the day and year first above written.
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: Assistant Vice President
By:
------------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Associate
STATE OF WASHINGTON )
) ss.:
COUNTY OF KING )
On the _____ day of _________, 2004 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 _____ day of _________, 2004 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 CALIFORNIA )
) ss.:
COUNTY OF )
On the _____ day of _________, 2004 before me, a notary public in and
for said State, personally appeared Xxxxxxx Xxxxx, known to me to be an
Assistant Vice President 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 _____ day of _________, 2004 before me, a notary public in and
for said State, personally appeared Xxxxxxx Xxxxxxx, 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
EXHIBIT A-1
CLASS 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, March 1, 2004
First Distribution Date : April 26, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [____]
Class : A-1
Assumed Maturity Date : July, 2033
A-1
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
Class A
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of second lien, fixed 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 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 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 A Certificate (obtained by dividing
the Denomination of this Class 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 March 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") 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 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 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 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 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.
A-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-A
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trustee
By ______________________________________________
This is one of the Class A Certificates referenced in the
within-mentioned Agreement
By_______________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-3
[Reverse of Class A Certificate]
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-A, Asset-Backed Certificates,
Series 2004-A (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 and of Holders of the
requisite percentage of the Percentage Interests of each Class of Certificates
affected by such amendment, as specified in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-4
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 and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee, or 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 and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer 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 and (iii) the Distribution Date for the Certificates other than the
Class S Certificates in July, 2033.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:_______________________
_____________________________________
Signature by or on behalf of assignor
A-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
X-0
XXXXXXX X-0
CLASS S 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, March 1, 2004
First Distribution Date : April 26, 2004
Initial Certificate Notional Amount of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Notional
Amount of this Class : $[_______]
Percentage Interest : 100%
Pass-Through Rate : Scheduled
CUSIP : [____]
Class : S
Assumed Maturity Date : September, 2006
S-1
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
Class S
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of second lien, fixed rate mortgage loans (the
"Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Class S 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 S Certificate (obtained by dividing
the Denomination of this Class S 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 March 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") 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 S Certificate is issued under and
is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Class S 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 S
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 S 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.
S-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-A
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trustee
By ______________________________________________
This is one of the Class S Certificates referenced in the
within-mentioned Agreement
By_______________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
S-3
[Reverse of Class S Certificate]
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-A, Asset-Backed Certificates,
Series 2004-A (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 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.
S-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 and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee, or 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 and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer 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 and (iii) the Distribution Date for the Certificates other than the
Class S Certificates in March, 2033.
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.
S-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
S-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.
S-7
EXHIBIT A-3
CLASS M-1 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE CLASS S
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, March 1, 2004
First Distribution Date : April 26, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [____]
Class : M-1
Assumed Maturity Date : July, 0000
X-0-0
Xxxx Xxxxx Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
Class M-1
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of second lien, fixed 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
M-1 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the 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 M-1 Certificate (obtained by
dividing the Denomination of this Class M-1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of March 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") 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 M-1 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-1 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-1 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
M-1-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-A
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trustee
By ______________________________________________
This is one of the Class M-1 Certificates referenced in the
within-mentioned Agreement
By_______________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
M-1-3
[Reverse of Class M-1 Certificate]
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-A, Asset-Backed Certificates,
Series 2004-A (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 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.
M-1-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the 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 or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee, or 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 and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer 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 and (iii) the Distribution Date for the Certificates other than the
Class S Certificates in July, 2033.
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.
M-1-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:_______________________
_____________________________________
Signature by or on behalf of assignor
M-1-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
M-1-7
EXHIBIT A-4
CLASS M-2 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS S
CERTIFICATES AND THE CLASS M-1 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, March 1, 2004
First Distribution Date : April 26, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [____]
Class : M-2
Assumed Maturity Date : July, 0000
X-0-0
Xxxx Xxxxx Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
Class M-2
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of second lien, fixed 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
M-2 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the 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 M-2 Certificate (obtained by
dividing the Denomination of this Class M-2 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of March 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") 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 M-2 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-2 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-2 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
M-2-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-A
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trustee
By ______________________________________________
This is one of the Class M-2 Certificates referenced in the
within-mentioned Agreement
By_______________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
M-2-3
[Reverse of Class M-2 Certificate]
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-A, Asset-Backed Certificates,
Series 2004-A (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 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.
M-2-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the 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 or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee, or 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 and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer 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 and (iii) the Distribution Date for the Certificates other than the
Class S Certificates in July, 2033.
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.
M-2-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:_______________________
_____________________________________
Signature by or on behalf of assignor
M-2-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
M-2-7
EXHIBIT A-5
CLASS M-3 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS S
CERTIFICATES, THE CLASS M-1 CERTIFICATES AND THE CLASS M-2 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, March 1, 2004
First Distribution Date : April 26, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [____]
Class : M-3
Assumed Maturity Date : July, 0000
X-0-0
Xxxx Xxxxx Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
Class M-3
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of second lien, fixed 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
M-3 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-3
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the 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 M-3 Certificate (obtained by
dividing the Denomination of this Class M-3 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of March 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") 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 M-3 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-3 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-3
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-3 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
M-3-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-A
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trustee
By ______________________________________________
This is one of the Class M-3 Certificates referenced in the
within-mentioned Agreement
By_______________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
M-3-3
[Reverse of Class M-3 Certificate]
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-A, Asset-Backed Certificates,
Series 2004-A (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 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.
M-3-4
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 and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee, or 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 and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer 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 and (iii) the Distribution Date for the Certificates other than the
Class S Certificates in July, 2033.
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.
M-3-5
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
M-3-6
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.
M-3-7
EXHIBIT A-6
CLASS M-4 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS S
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES AND THE
CLASS M-3 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, March 1, 2004
First Distribution Date : April 26, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [____]
Class : M-4
Assumed Maturity Date : July, 0000
X-0-0
Xxxx Xxxxx Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
Class M-4
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of second lien, fixed 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
M-4 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-4
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the 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 M-4 Certificate (obtained by
dividing the Denomination of this Class M-4 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of March 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") 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 M-4 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-4 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-4
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-4 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
M-4-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-A
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trustee
By ______________________________________________
This is one of the Class M-4 Certificates referenced in the
within-mentioned Agreement
By_______________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
M-4-3
[Reverse of Class M-4 Certificate]
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-A, Asset-Backed Certificates,
Series 2004-A (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 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.
M-4-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the 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 or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee, or 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 and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer 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 and (iii) the Distribution Date for the Certificates other than the
Class S Certificates in July, 2033.
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.
M-4-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:_______________________
_____________________________________
Signature by or on behalf of assignor
M-4-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
M-4-7
EXHIBIT A-7
CLASS M-5 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS S
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS
M-3 CERTIFICATES AND THE CLASS M-4 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
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, March 1, 2004
First Distribution Date : April 26, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [____]
Class : M-5
Assumed Maturity Date : July, 0000
X-0-0
Xxxx Xxxxx Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
Class M-5
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of second lien, fixed 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
M-5 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-5
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 M-5 Certificate (obtained by
dividing the Denomination of this Class M-5 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 March 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") 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 M-5 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-5 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-5
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-5 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.
M-5-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-A
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trustee
By ______________________________________________
This is one of the Class M-5 Certificates referenced in the
within-mentioned Agreement
By_______________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
M-5-3
[Reverse of Class M-5 Certificate]
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-A, Asset-Backed Certificates,
Series 2004-A (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 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.
M-5-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the 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 or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee, or 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 and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer 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 and (iii) the Distribution Date for the Certificates other than the
Class S Certificates in July, 2033.
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.
M-5-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:_______________________
_____________________________________
Signature by or on behalf of assignor
M-5-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
M-5-7
EXHIBIT A-8
CLASS M-6 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS S
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS
M-3 CERTIFICATES, THE CLASS M-4 CERTIFICATES AND THE CLASS M-5 CERTIFICATES TO
THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, March 1, 2004
First Distribution Date : April 26, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [____]
Class : M-6
Assumed Maturity Date : July, 0000
X-0-0
Xxxx Xxxxx Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
Class M-6
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of second lien, fixed 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
M-6 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-6
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 M-6 Certificate (obtained by
dividing the Denomination of this Class M-6 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 March 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") 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 M-6 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-6 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-6
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-6 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.
M-6-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-A
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trustee
By ______________________________________________
This is one of the Class M-6 Certificates referenced in the
within-mentioned Agreement
By_______________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
M-6-3
[Reverse of Class M-6 Certificate]
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-A, Asset-Backed Certificates,
Series 2004-A (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 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.
M-6-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the 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 or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee, or 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 and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer 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 and (iii) the Distribution Date for the Certificates other than the
Class S Certificates in July, 2033.
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.
M-6-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:_______________________
_____________________________________
Signature by or on behalf of assignor
M-6-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
M-6-7
EXHIBIT A-9
CLASS M-7 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS S
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS
M-3 CERTIFICATES, THE CLASS M-4 CERTIFICATES, THE CLASS M-5 CERTIFICATES AND THE
CLASS M-6 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, March 1, 2004
First Distribution Date : April 26, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [____]
Class : M-7
Assumed Maturity Date : July, 0000
X-0-0
Xxxx Xxxxx Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
Class M-7
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of second lien, fixed 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
M-7 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-7
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 M-7 Certificate (obtained by
dividing the Denomination of this Class M-7 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 March 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") 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 M-7 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-7 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-7
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-7 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.
M-7-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-A
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trustee
By ______________________________________________
This is one of the Class M-7 Certificates referenced in the
within-mentioned Agreement
By_______________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
M-7-3
[Reverse of Class M-7 Certificate]
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-A, Asset-Backed Certificates,
Series 2004-A (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 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.
M-7-4
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 and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee, or 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 and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer 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 and (iii) the Distribution Date for the Certificates other than the
Class S Certificates in July, 2033.
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.
M-7-5
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
M-7-6
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.
M-7-7
EXHIBIT A-10
CLASS M-8 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS S
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS
M-3 CERTIFICATES, THE CLASS M-4 CERTIFICATES, THE CLASS M-5 CERTIFICATES, THE
CLASS M-6 CERTIFICATES AND THE CLASS M-7 CERTIFICATES TO THE EXTENT DESCRIBED IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, March 1, 2004
First Distribution Date : April 26, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [____]
Class : M-8
Assumed Maturity Date : July, 0000
X-0-0
Xxxx Xxxxx Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
Class M-8
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of second lien, fixed 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
M-8 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-8
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 M-8 Certificate (obtained by
dividing the Denomination of this Class M-8 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 March 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") 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 M-8 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-8 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-8
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-8 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.
M-8-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-A
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trustee
By ______________________________________________
This is one of the Class M-8 Certificates referenced in the
within-mentioned Agreement
By_______________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
M-8-3
[Reverse of Class M-8 Certificate]
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-A, Asset-Backed Certificates,
Series 2004-A (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 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.
M-8-4
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 and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee, or 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 and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer 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 and (iii) the Distribution Date for the Certificates other than the
Class S Certificates in July, 2033.
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.
M-8-5
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
M-8-6
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.
M-8-7
EXHIBIT A-11
CLASS B CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS S
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS
M-3 CERTIFICATES, THE CLASS M-4 CERTIFICATES, THE CLASS M-5 CERTIFICATES, THE
CLASS M-6 CERTIFICATES, THE CLASS M-7 CERTIFICATES AND THE CLASS M-8
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
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, March 1, 2004
First Distribution Date : April 26, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : [____]
Class : B
Assumed Maturity Date : July, 2033
B-1
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
Class B
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of second lien, fixed 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 B
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class B
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 B Certificate (obtained by dividing
the Denomination of this Class B 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 March 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") 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 B Certificate is issued under and
is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Class B 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
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.
B-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 B
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 B Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
B-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-A
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trustee
By ______________________________________________
This is one of the Class B Certificates referenced in the
within-mentioned Agreement
By_______________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
B-4
[Reverse of Class B Certificate]
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-A, Asset-Backed Certificates,
Series 2004-A (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 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.
B-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 or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee, or 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 and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer 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 and (iii) the Distribution Date for the Certificates other than the
Class S Certificates in July, 2033.
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.
B-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:_______________________
_____________________________________
Signature by or on behalf of assignor
B-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
B-8
EXHIBIT A-12
CLASS C CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS S
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS
M-3 CERTIFICATES, THE CLASS M-4 CERTIFICATES, THE CLASS M-5 CERTIFICATES, THE
CLASS M-6 CERTIFICATES, THE CLASS M-7 CERTIFICATES, THE CLASS M-8 CERTIFICATES
AND THE CLASS B 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, March 1, 2004
First Distribution Date : April 26, 2004
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 : C
C-1
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
Class C
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of second lien, fixed 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 C
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class C
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that Long Beach Mortgage Company is the registered owner
of the Percentage Interest evidenced by this Class C Certificate (obtained by
dividing the Denomination of this Class C Certificate by the Original Notional
Amount) 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
March 1, 2004 (the "Agreement") among the Depositor, Long Beach Mortgage
Company, as master servicer (the "Master Servicer") 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 C Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class C
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
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.
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 C
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class C Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
C-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-A
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trustee
By ______________________________________________
This is one of the Class C Certificates referenced in the
within-mentioned Agreement
By_______________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
C-4
[Reverse of Class C Certificate]
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-A, Asset-Backed Certificates,
Series 2004-A (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 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.
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 and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee, or 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 and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer 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 and (iii) the Distribution Date for the Certificates other than the
Class S Certificates in July, 2033.
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.
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
C-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
C-8
EXHIBIT A-13
CLASS P CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, March 1, 2004
First Distribution Date : April 26, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $10.00
Original Class Certificate Principal
Balance of this Class : $10.00
Percentage Interest : 100.00%
Class : P
P-1
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
Class P
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of second lien, fixed 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 P
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class P
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that Long Beach Mortgage Company is the registered owner
of the Percentage Interest evidenced by this Class P Certificate (obtained by
dividing the Denomination of this Class P Certificate by the Original Class
Certificate Principal Balance) in certain distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Long Beach Securities
Corp. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of March 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") 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 P Certificate is issued under and
is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Class P Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a pass-through rate and will be entitled
to distributions only to the extent set forth in the Agreement.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
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.
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 P
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class P Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
P-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-A
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trustee
By ______________________________________________
This is one of the Class P Certificates referenced in the
within-mentioned Agreement
By_______________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
P-4
[Reverse of Class P Certificate]
Long Beach Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-A, Asset-Backed Certificates,
Series 2004-A (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 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.
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 or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee, or 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 and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer 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 and (iii) the Distribution Date for the Certificates other than the
Class S Certificates in July, 2033.
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.
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
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.
P-8
EXHIBIT A-14
CLASS R CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
"RESIDUAL INTERESTS" IN THREE 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, March 1, 2004
First Distribution Date : April 26, 2004
Percentage Interest : 100.00%
Class : R
X-0
Xxxx Xxxxx Mortgage Loan Trust 2004-A
Asset-Backed Certificates,
Series 2004-A
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 second lien, fixed 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 March 1, 2004
(the "Agreement") among the Depositor, Long Beach Mortgage Company, as master
servicer (the "Master Servicer") 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 office or agency designated by the Trustee.
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
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: March __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-A
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 2004-A
Asset-Backed Certificates,
Series 2004-A
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-A, Asset-Backed Certificates,
Series 2004-A (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 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 or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee, or 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 and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer 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 and (iii) the Distribution Date for the Certificates other than the
Class S Certificates in July, 2033.
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-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-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-8
EXHIBIT B
[RESERVED]
EXHIBIT C
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT
This is a Mortgage Loan Purchase Agreement (the "Agreement"), dated March 2,
2004, 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 2004-A Asset-Backed
Certificates, Series 2004-A (the "Certificates"). The Certificates will consist
of fourteen classes of certificates. The Certificates will be issued pursuant to
a Pooling and Servicing Agreement, dated as of March 1, 2004 (the "Pooling and
Servicing Agreement"), among the Purchaser, as depositor, Deutsche Bank National
Trust Company, as trustee (the "Trustee") and the Seller, as master servicer (in
such capacity, the "Master Servicer"). Capitalized terms used but not defined
herein shall have the meanings set forth in the Pooling and Servicing Agreement.
The parties hereto agree as follows:
SECTION 1. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase, on or before
March 4, 2004 (the "Closing Date"), those certain fixed-rate conventional,
second lien, 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 shall 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 shall 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.
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 A Certificates, the
Class S Certificates, the Mezzanine Certificates and the Class B Certificates
and (ii) deliver to the Seller, the Class C Certificates and the Class P
Certificates and deliver to Long Beach Asset Holdings Corp., upon the order of
the Seller, the Class R Certificates.
C-1
The Purchaser or any assignee, transferee or designee of the Purchaser shall be
entitled to (i) all scheduled payments of principal due after Xxxxx 0, 0000 (xxx
"Xxx-xxx Xxxx"), (xx) all unscheduled collections in respect of the Mortgage
Loans received after March 1, 2004 (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
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;
C-2
(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 a copy of the above, in
the case of any Washington Mutual Mortgage Loans) together with all endorsements
or riders issued with or subsequent to the issuance of such policy, insuring the
priority of the Mortgage as a 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
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 does not require recordation for such Rating Agency to assign the
initial ratings to the Class A Certificates, the Class S Certificates, the
Mezzanine Certificates and the Class B Certificates; provided, however, each
Assignment referred to in (iii) and (iv) above shall be submitted for recording
by the Seller, in the manner described above, at no expense to the Purchaser,
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.
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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 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 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, the Trustee or their designees. 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.
(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.
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(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 or the Trustee 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 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;
(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;
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(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 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;
(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
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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 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; and
(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.
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:
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(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 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) a first lien on such Mortgaged Property. Any security
agreement, chattel mortgage or equivalent document related to and delivered in
connection with the Mortgage Loan establishes and creates a valid, existing and
enforceable second lien or a second priority security interest on the property
described therein and the Seller has full right to sell and assign the same;
(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, nor will the operation of any
of the terms of the Mortgage Note and the Mortgage, or the exercise of any right
thereunder, render the Mortgage 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;
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(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,
predatory and abusive lending, 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, or a commitment
(binder) to issue the same was effective on the date of the origination of each
Mortgage Loan and 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 Mae or Xxxxxxx Mac and in
a form acceptable to Xxxxxx Mae or Xxxxxxx Mac 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 second 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 Mortgage Loan, 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;
(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
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
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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 are no required escrow deposits and payments required 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 material 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) [reserved];
(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
area where the Mortgaged Property is located representing coverage not less than
the lesser of (A) the sum of (i) the outstanding principal balance of the
related Mortgage Loan and (ii) the outstanding principal balance of the related
first lien mortgage loan or (B) 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
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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 sum of (i) the
original outstanding principal balance of the Mortgage Loan and (ii) the
original outstanding principal balance of the related first lien 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. With respect to
each Mortgage Loan (i) the first lien mortgage loan is in full force and effect,
(ii) to the best of Seller's knowledge, there is no default, breach, violation
or event of acceleration existing under such first lien mortgage or the related
mortgage note, (iii) to the best of the Seller's knowledge, no event which, with
the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the first lien mortgage contains a provision which
allows or (B) applicable law requires, the mortgagee under the Mortgage Loan to
receive notice of, and affords such mortgagee an opportunity to cure any default
by payment in full or otherwise under the first lien mortgage;
(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;
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(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;
(xxxii) Each Mortgage Loan was underwritten in accordance with the Seller's
underwriting guidelines as described in the Prospectus Supplement as applicable
to its credit grade in all material respects;
(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
by the appraiser 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 Mortgage Loans with respect to
which the monthly payment due thereon in January, 2004 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 a provision that is, to the extent not prohibited
by federal or state law, enforceable 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;
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(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 under applicable law upon the
Mortgagor's 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). No Mortgage Loan originated
before October 1, 2002 has a Prepayment Charge for a term in excess of five
years from the date of its origination and no Mortgage Loan originated on or
after October 1, 2002 has a prepayment charge for a term in excess of three
years from the date of its origination;
(xl) The combined 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
or has not failed 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
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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) No Mortgage Loan is a "high cost" loan under the Home Ownership and
Equity Protection Act of 1994, as amended, or is a "high cost" or "predatory"
loan under any state or local law or regulation applicable to the originator;
(xlvii) No proceeds from any Mortgage Loans were used to finance single-premium
credit insurance policies. 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;
(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 filed for
any bankruptcy or similar legal protection;
(l) Either (a) no consent for the Mortgage Loan is required by the holder of the
related first lien or (b) such consent has been obtained and is contained in the
Mortgage File;
(li) With respect to any Mortgage Loan, the Seller has not received notice of
any intervening mortgage, lien, attachment, lis pendens or other encumbrance
adversely affecting the priority of the Mortgage Loan;
(lii) No Mortgage Loan is a "home equity line of credit";
(liii) No first lien mortgage loan provides for negative amortization; and
(liv) No Mortgage Loan secured by a Mortgaged Property located in the State of
Texas constitutes a "cash-out" refinance mortgage loan.
SECTION 7. Repurchase 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
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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 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 or the Purchaser's assignee, transferee or designee (it being
understood that with respect to the representation and warranty set forth in
(xlvi) of Section 6 herein, a breach of any such representation or warranty
shall in and of itself be deemed to materially and adversely affect the interest
therein of the Purchaser and 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 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
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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 and
Servicing Agreement and the consideration for the Mortgage Loans as specified in
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Section 3 of this Agreement, by delivery to the Seller of the Purchase Price in
immediately available funds, delivery to the Seller of the Class C Certificates
and the Class P Certificates and delivery to Long Beach Asset Holdings Corp. of
the Class R Certificates.
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 and Greenwich Capital Markets, Inc. (the "Representative") 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 and the Representative 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 and the
Representative;
(d) Such opinions of counsel as the Rating Agencies, the Representative or the
Trustee 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 Representative 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
(h) Such further information, certificates, opinions and documents as the
Purchaser or the Representative may reasonably request.
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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 of the Mortgage Loans
and non-consolidation of the Seller, 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, 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 pursuant to
Section 8 hereof. Any Mortgage Loan rejected by the Purchaser shall concurrently
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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
Class C Certificates and the Class P Certificates to the Seller and the Class R
Certificates to Long Beach Asset Holdings 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
Class C Certificates and the Class P Certificates to the Seller and the Class R
Certificates to Long Beach Asset Holdings 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
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order to effectuate the purpose and to carry out the terms of this Agreement and
the Pooling and Servicing Agreement.
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 A Certificates, the Class S Certificates, the Mezzanine Certificates and
the Class B 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
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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.
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.
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
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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.
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.
C-24
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, and all amounts payable to the holders of the Mortgage Loans in
accordance with the terms thereof and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account whether
in the form of cash, instruments, securities or other property; (3) the
possession by the Purchaser or its agent of 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
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.
C-25
SECTION 21. Third Party Beneficiary.
The Trustee 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 Representative, 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-26
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
EXHIBIT D
MORTGAGE LOAN SCHEDULE
Copies of the Mortgage Loan Schedule (which has been intentionally omitted from
this filing) may be obtained from Long Beach Securities Corp. by contacting:
Xxxxx Xxxxx
Long Beach Securities Corp.
0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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 2004-A.
E-1
The undersigned Master Servicer hereby acknowledges that it has
received from _______________________, as Trustee for the Holders of Long Beach
Mortgage Loan Trust 2004-A, Asset-Backed Certificates, Series 2004-A, the
documents referred to below (the "Documents"). All capitalized terms not
otherwise defined in this Request for Release shall have the meanings given them
in the Pooling and Servicing Agreement, dated as of March 1, 2004, among the
Trustee, the Depositor 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 2004-A
____________________________________________________ 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 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000 0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Re: Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of March 1, 2004 among Long Beach Securities Corp., Long Beach
Mortgage Company and Deutsche Bank National Trust Company, Long Beach
Mortgage Loan Trust 2004-A, Asset-Backed Certificates, Series 2004-A
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) 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.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
F-1
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
[Date]
Long Beach Securities Corp. Long Beach Mortgage Company
0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000 0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Re: Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of March 1, 2004 among Long Beach Securities Corp., Long Beach
Mortgage Company and Deutsche Bank National Trust Company, Long Beach
Mortgage Loan Trust 2004-A, Asset-Backed Certificates, Series 2004-A
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) 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 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.
F-2
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-3
EXHIBIT G
[RESERVED]
H-1
EXHIBIT H
FORM OF LOST NOTE AFFIDAVIT
Personally appeared before me the undersigned authority to administer
oaths, ___________who first being duly sworn deposes and says: Deponent is
_____________ of _______________, successor by merger to _____________("Seller")
and who has personal knowledge of the facts set out in this affidavit.
On __________________, did execute and deliver a promissory note in the
principal amount of $____________________.
That said note has been misplaced or lost through causes unknown and is
presently lost and unavailable after diligent search has been made. Seller's
records show that an amount of principal and interest on said note is still
presently outstanding, due, and unpaid, and Seller is still owner and holder in
due course of said lost note.
Seller executes this Affidavit for the purpose of inducing Deutsche
Bank National Trust Company, as Trustee on behalf of Long Beach Mortgage Loan
Trust 2001-A, 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 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Long Beach Mortgage Company
0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Long Beach Mortgage Loan Trust 2004-A,
Asset-Backed Certificates, Series 2004-A
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 2004-A, Asset-Backed Certificates, Series 2004-A, (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement dated as of March 1, 2004
(the "Agreement") among Long Beach Securities Corp., as depositor (the
"Depositor"), Long Beach Mortgage Company, as master servicer (the "Master
Servicer") and Deutsche Bank National Trust Company, as trustee (the "Trustee").
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned thereto in the Pooling and Servicing Agreement. The Transferee hereby
certifies, represents and warrants to, and covenants with the Depositor, the
Trustee and the 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
_____ (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
I-1
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-1A
FORM OF TRANSFEROR CERTIFICATE
FOR TRANSFERS OF THE Class B Certificates
[Date]
[TRUSTEE]
Re: Long Beach Mortgage Loan Trust 2004-A, Asset-Backed Certificates Series
2004-A (the "Class B Certificates")
Ladies and Gentlemen:
This certificate is being delivered in connection with the sale by
[___________________] (the "Transferor") to [_______________] (the "Transferee")
of Class B Certificates having an Initial Certificate Principal Balance as of
March 4, 2004 (the "Closing Date") of [$____________] (the "Transferred
Certificates"). The Class B Certificates, including the Transferred
Certificates, were issued pursuant to the Pooling and Servicing Agreement dated
as of March 1, 2004 (the "Agreement") among Long Beach Securities Corp., as
depositor (the "Depositor"), Long Beach Mortgage Company, as master servicer
(the "Master Servicer") and Deutsche Bank National Trust Company, as trustee
(the "Trustee"). All capitalized terms used but not otherwise defined herein
shall have the respective meanings set forth in the Agreement. The Transferor
hereby certifies, represents and warrants to you, as Trustee, and for the
benefit of the Trustee, the Depositor, the Trust Fund and the Transferee, that:
1. The Transferor is the lawful owner of the Transferred
Certificates with the full right to transfer such Class B Certificates
free from any and all claims and encumbrances whatsoever.
2. Neither the Transferor nor anyone acting on its behalf has
(a) offered, transferred, pledged, sold or otherwise disposed of any
Transferred Certificate, any interest in any Transferred Certificate or
any other similar security to any person in any manner, (b) solicited
any offer to buy or accept a transfer, pledge or other disposition of
any Transferred Certificate, any interest in any Transferred
Certificate or any other similar security from any person in any
manner, (c) otherwise approached or negotiated with respect to any
Transferred Certificate, any interest in any Transferred Certificate or
any other similar security with any person in any manner, (d) made any
general solicitation by means of general advertising or in any other
manner, or (e) taken any other action, which (in the case of any of the
acts described in clauses (a) through (e) hereof) would constitute a
distribution of any Transferred Certificate under the Securities Act of
1933, as amended (the "Securities Act"), or would render the
disposition of any Transferred Certificate a violation of Section 5 of
the Securities Act or any state securities laws, or would require
registration or qualification of any Transferred Certificate pursuant
to the Securities Act or any state securities laws.
J-1A-1
3. The Transferor and any person acting on behalf of the
Transferor in this matter reasonably believe that the Transferee is a
"qualified institutional buyer" as that term is defined in Rule 144A
("Rule 144A") under the Securities Act (a "Qualified Institutional
Buyer") purchasing for its own account or for the account of a
Qualified Institutional Buyer. In determining whether the Transferee is
a Qualified Institutional Buyer, the Transferor and any person acting
on behalf of the Transferor in this matter have relied upon the
following method(s) of establishing the Transferee's ownership and
discretionary investments of securities (check one or more):
___ (a) The Transferee's most recent publicly available
financial statements, which statements present the
information as of a date within 16 months preceding
the date of sale of the Transferred Certificate in
the case of a U.S. purchaser and within 18 months
preceding such date of sale for a foreign purchaser;
or
___ (b) The most recent publicly available information
appearing in documents filed by the Transferee with
the Securities and Exchange Commission or another
United States federal, state, or local governmental
agency or self-regulatory organization, or with a
foreign governmental agency or self-regulatory
organization, which information is as of a date
within 16 months preceding the date of sale of the
Transferred Certificate in the case of a U.S.
purchaser and within 18 months preceding such date of
sale for a foreign purchaser; or
___ (c) The most recent publicly available information
appearing in a recognized securities manual, which
information is as of a date within 16 months
preceding the date of sale of the Transferred
Certificate in the case of a U.S. purchaser and
within 18 months preceding such date of sale for a
foreign purchaser; or
___ (d) A certification by the chief financial officer, a
person fulfilling an equivalent function, or other
executive officer of the Transferee, specifying the
amount of securities owned and invested on a
discretionary basis by the Transferee as of a
specific date on or since the close of the
Transferee's most recent fiscal year, or, in the case
of a Transferee that is a member of a "family of
investment companies", as that term is defined in
Rule 144A, a certification by an executive officer of
the investment adviser specifying the amount of
securities owned by the "family of investment
companies" as of a specific date on or since the
close of the Transferee's most recent fiscal year.
4. The Transferor and any person acting on behalf of the
Transferor understand that in determining the aggregate amount of
securities owned and invested on a discretionary basis by an entity for
purposes of establishing whether such entity is a Qualified
Institutional Buyer:
J-1A-2
(a) the following instruments and interests shall be
excluded: securities of issuers that are affiliated
with the Transferee; if the Transferee is a dealer
securities that are part of an unsold allotment to or
subscription by the Transferee as a participant in a
public offering; securities of issuers that are part
of the Transferee's "family of investment companies",
if the Transferee is a registered investment company;
bank deposit notes and certificates of deposit; loan
participations; repurchase agreements; securities
owned but subject to a repurchase agreement; and
currency, interest rate and commodity swaps;
(b) the aggregate value of the securities shall be
the cost of such securities, except where the entity
reports its securities holdings in its financial
statements on the basis of their market value, and no
current information with respect to the cost of those
securities has been published, in which case the
securities may be valued at market;
(c) securities owned by subsidiaries of the entity
that are consolidated with the entity in its
financial statements prepared in accordance with
generally accepted accounting principles may be
included if the investments of such subsidiaries are
managed under the direction of the entity, except
that, unless the entity is a reporting company under
Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, securities owned by such
subsidiaries may not be included if the entity itself
is a majority-owned subsidiary that would be included
in the consolidated financial statements of another
enterprise.
5. The Transferor or a person acting on its behalf has taken
reasonable steps to ensure that the Transferee is aware that the
Transferor is relying on the exemption from the provisions of Section 5
of the Securities Act provided by Rule 144A.
6. The Transferor or a person acting on its behalf has
furnished, or caused to be furnished, to the Transferee all information
requested by the Transferee regarding (a) the Transferred Certificates
and payments thereon, (b) the nature and performance of the Mortgage
Loans, (c) the Agreement, and (d) any credit enhancement mechanism
associated with the Transferred Certificates.
Very truly yours,
_____________________________
(Transferor)
By:__________________________
Name:
Title:
J-1A-3
EXHIBIT J-1B
FORM OF TRANSFEREE CERTIFICATE
FOR TRANSFERS OF THE CLASS B CERTIFICATES
[Date]
[TRUSTEE]
Re: Long Beach Mortgage Loan Trust 2004-A, Asset-Backed Certificates Series
2004-A(the "Class B Certificates")
Ladies and Gentlemen:
[___________________] (the "Transferee") intends to purchase from
___________________ (the "Transferor") Class B Certificates having an Initial
Certificate Principal Balance as of March 4, 2004 (the "Closing Date") of
[$____________] (the "Transferred Certificates"). The Class B Certificates,
including the Transferred Certificates, were issued pursuant to the Pooling and
Servicing Agreement dated as of March 1, 2004 (the "Agreement") among Long Beach
Securities Corp., as depositor (the "Depositor"), Long Beach Mortgage Company,
as master servicer (the "Master Servicer") and Deutsche Bank National Trust
Company, as trustee (the "Trustee"). All capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Agreement. The
Transferee hereby certifies, represents and warrants to you, as Trustee, and for
the benefit of the Trustee, the Depositor, the Trust Fund and the Transferor,
that:
1. The Transferee is a "qualified institutional buyer" (a "Qualified
Institutional Buyer") as that term is defined in Rule 144A ("Rule 144A") under
the Securities Act of 1933, as amended (the "Securities Act"), and has completed
one of the forms of certification to that effect attached hereto as Annex 1 and
Annex 2. The Transferee is aware that the sale to it of the Transferred
Certificates is being made in reliance on Rule 144A. The Transferee is acquiring
the Transferred Certificates for its own account or for the account of a
Qualified Institutional Buyer, and understands that such Transferred
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.
2. The Transferee has been furnished with all information requested by
it regarding (a) the Transferred Certificates and payments thereon, (b) the
nature and performance of the the Mortgage Loans, (c) the Agreement, and (d) any
credit enhancement mechanism associated with the Transferred Certificates.
3. The Transferee represents that any of (a) or (b) is satisfied, as
marked below:
____ a. it is neither: (1) an employee benefit plan, or other
retirement arrangement, including individual retirement
accounts and annuities, Xxxxx plans and collective investment
funds and separate accounts in which such plans, accounts or
arrangements are invested, including, without limitation,
insurance company general accounts, that is subject to ERISA
J-1B-1
or the Code (each, a "Plan"), nor (2) any Person who is
directly or indirectly purchasing such Transferred Certificate
or interest therein on behalf of, as named fiduciary of, as
trustee of, or with "plan assets" (as defined under the DOL
Regulation at 29 C.F.R. Section 2510.3-101) of a Plan; or
____ b. the Transferee is an insurance company and (a) the
source of funds used to purchase or hold such Transferred
Certificate (or interest therein) is an "insurance company
general account" (as defined in U.S. Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 95-60, and (c)
the conditions set forth in Sections I and III of PTCE 95-60
have been satisfied.
Very truly yours,
_____________________________
(Transferor)
By:__________________________
Name:
Title:
X-0X-0
XXXXX 0 XX XXXXXXX X-0X
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[for Transferees other than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and [name of Trustee], as Trustee, with respect
to the Class B Certificates being transferred (the "Transferred Certificates")
as described in the Transferee Certificate to which this certification relates
and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial
officer, a person fulfilling an equivalent function, or other executive officer
of the entity purchasing the Transferred Certificates (the "Transferee").
2. The Transferee 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 Transferee owned and/or invested on a discretionary
basis $______________________ in securities (other than the excluded securities
referred to below) as of the end of the Transferee's most recent fiscal year
(such amount being calculated in accordance with Rule 144A) and (ii) the
Transferee satisfies the criteria in the category marked below.
___ Corporation, etc. The Transferee is a corporation (other than
a bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or any
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended.
___ Bank. The Transferee (a) is a national bank or a banking
institution organized under the laws of any State, U.S.
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, as of a date not more than 16 months
preceding the date of sale of the Transferred Certificate in
the case of a U.S. bank or a banking institution organized
under the laws of any State, U.S. territory or the District of
Columbia, and not more than 18 months preceding such date of
sale for a foreign bank or equivalent institution.
___ Savings and Loan. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto, as of a date not more than 16 months
preceding the date of sale of the Transferred Certificate in
the case of a U.S. savings and loan association, building and
J-1B-3
loan association, cooperative bank, homestead association or
similar institution, and not more than 18 months preceding
such date of sale for a foreign savings and loan association
or equivalent institution.
___ Broker-dealer. The Transferee is a dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934,
as amended.
___ Insurance Company. The Transferee is an insurance company
whose primary and predominant business activity is the writing
of insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by the
insurance commissioner or a similar official or agency of a
State, U.S. territory or the District of Columbia.
___ State or Local Plan. The Transferee is a plan established
and maintained by a State, its political subdivisions,
or any agency or instrumentality of the State or its
political subdivisions, for the benefit of its employees.
___ ERISA Plan. The Transferee is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
___ Investment Advisor. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940,
as amended.
___ Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under
subsection (a)(1) of Rule 144A pursuant to which it qualifies.
Note that registered investment companies should complete
Annex 2 rather than this Annex 1.)
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee, (ii) if the
Transferee is a dealer, securities that are part of an unsold allotment to or
subscription by the Transferee as a participant in a public offering, (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. For purposes of
determining the aggregate amount of securities owned and/or invested on a
discretionary basis by the Transferee, the Transferee did not include any of the
securities referred to in this paragraph.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee, unless the
Transferee reports its securities holdings in its financial statements on the
basis of their market value, and no current information with respect to the cost
of those securities has been published, in which case the securities were valued
at market. Further, in determining such aggregate amount, the Transferee may
J-1B-4
have included securities owned by subsidiaries of the Transferee, but only if
such subsidiaries are consolidated with the Transferee in its financial
statements prepared in accordance with generally accepted accounting principles
and if the investments of such subsidiaries are managed under the Transferee's
direction. However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to the
Transferred Certificates are relying and will continue to rely on the statements
made herein because one or more sales to the Transferee may be in reliance on
Rule 144A.
___ ___ Will the Transferee be purchasing the Transferred Certificates
Yes No only for the Transferee's own account?
6. If the answer to the foregoing question is "no", then in
each case where the Transferee is purchasing for an account other than its own,
such account belongs to a third party that is itself a "qualified institutional
buyer" within the meaning of Rule 144A, and the "qualified institutional buyer"
status of such third party has been established by the Transferee through one or
more of the appropriate methods contemplated by Rule 144A.
7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Transferee's purchase of the Transferred
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties any updated annual financial statements that become available on or
before the date of such purchase, promptly after they become available.
Print Name of Transferee
_____________________________
By:__________________________
Name:
Title:
Date:
X-0X-0
XXXXX 0 XX XXXXXXX X-0X
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[for Transferees that are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and [name of Trustee], as Trustee, with respect
to the Class B Certificates being transferred (the "Transferred Certificates")
as described in the Transferee Certificate to which this certification relates
and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial
officer, a person fulfilling an equivalent function, or other executive officer
of the entity purchasing the Transferred Certificates (the "Transferee") or, if
the Transferee is a "qualified institutional buyer" as that term is defined in
Rule 144A under the Securities Act of 1933, as amended ("Rule 144A"), because
the Transferee is part of a Family of Investment Companies (as defined below),
is an executive officer of the investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as
defined in Rule 144A because (i) the Transferee is an investment company
registered under the Investment Company Act of 1940, as amended, and (ii) as
marked below, the Transferee alone owned and/or invested on a discretionary
basis, or the Transferee's Family of Investment Companies owned, at least
$100,000,000 in securities (other than the excluded securities referred to
below) as of the end of the Transferee's most recent fiscal year. For purposes
of determining the amount of securities owned by the Transferee or the
Transferee's Family of Investment Companies, the cost of such securities was
used, unless the Transferee or any member of the Transferee's Family of
Investment Companies, as the case may be, reports its securities holdings in its
financial statements on the basis of their market value, and no current
information with respect to the cost of those securities has been published, in
which case the securities of such entity were valued at market.
____ The Transferee owned and/or invested on a discretionary basis
[$__________________] in securities (other than the excluded
securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
____ The Transferee is part of a Family of Investment Companies
which owned in the aggregate [$_____________] in securities
(other than the excluded securities referred to below) as of
the end of the Transferee's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
J-1B-6
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase agreements,
(v) securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps. For purposes of determining the aggregate
amount of securities owned and/or invested on a discretionary basis by the
Transferee, or owned by the Transferee's Family of Investment Companies, the
securities referred to in this paragraph were excluded.
5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A.
____ ____ Will the Transferee be purchasing the Transferred
Certificates only for the Transferee's own account?
Yes No
6. If the answer to the foregoing question is "no", then in
each case where the Transferee is purchasing for an account other than its own,
such account belongs to a third party that is itself a "qualified institutional
buyer" within the meaning of Rule 144A, and the "qualified institutional buyer"
status of such third party has been established by the Transferee through one or
more of the appropriate methods contemplated by Rule 144A.
7. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Transferred Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
Print Name of Transferee or Adviser
By:
Name:
Title:
IF AN ADVISER:
Print Name of Transferee
Date:
J-1B-7
EXHIBIT J-2
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Long Beach Securities Corp.
0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Long Beach Mortgage Loan Trust 2004-A,
Asset-Backed Certificates Series 2004-A
Ladies and Gentlemen:
In connection with our acquisition of $______ Initial Certificate
Principal Balance of the Class [__] Certificate of Long Beach Mortgage Loan
Trust 2004-A Asset-Backed Certificates, Series 2004-A (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement dated as of March 1, 2004
(the "Agreement") among Long Beach Securities Corp., as depositor (the
"Depositor"), Long Beach Mortgage Company, as master servicer (the "Master
Servicer") 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 from the Act, (2) the purchaser or
transferee of such Certificate has
J-2-1
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-2-2
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
Long Beach Securities Corp.
0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Long Beach Mortgage Loan Trust 2004-A,
Asset-Backed Certificates Series 2004-A
Ladies and Gentlemen:
In connection with our acquisition of $______ Initial Certificate
Principal Balance of the Class [__] Certificate of Long Beach Mortgage Loan
Trust 2004-A Asset-Backed Certificates, Series 2004-A (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement dated as of March 1, 2004
(the "Agreement") among Long Beach Securities Corp., as depositor (the
"Depositor"), Long Beach Mortgage Company, as master servicer (the "Master
Servicer") 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 Certificates may be
resold, pledged or transferred only (i) to a person reasonably believed to be a
qualified
J-2-3
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
X-0-0
XXXXX 0 XX XXXXXXX X-0
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 chief financial officer,
a person fulfilling an equivalent function, 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 $________ 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 any 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 a banking institution
organized under the laws of any State, U.S. 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, as of a date not more than 16 months preceding the date of sale
of the Certificates in the case of a U.S. bank or a banking institution
organized under the laws of any State, U.S. territory or the District
of Columbia, and not more than 18 months preceding such date of sale
for a foreign bank or equivalent institution.
_____ 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, as of a date not more than 16
months preceding the date of sale of the Certificates in the case of a
U.S. savings and loan association, building and loan association,
cooperative bank, homestead association or similar institution, and not
more than 18 months preceding such date of sale for a foreign savings
and loan association, or equivalent institution.
J-2-5
_____ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, as amended.
_____ 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, U.S. 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 Advisers Act of 1940.
_____ Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under subsection
(a)(1) of Rule 144A pursuant to which it qualifies. Note that
registered investment companies should complete Annex 2 rather than
this Annex 1.)
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) if the Buyer is a dealer,
securities that are part of an unsold allotment to or subscription by the Buyer
as a participant in a public offering, (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. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer did not include any of the securities referred to in this paragraph.
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 , except the Buyer reports its securities
holdings in its financial statements on the basis of their market value, and no
current information with respect to the cost of those securities has been
published, in which case, the securities were 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
J-2-6
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.
____ ____ Will the Buyer be purchasing the Certificates only for the
Buyer's own account?
Yes No
6. If the answer to the foregoing question is "no", then in each case
where the Buyer is purchasing for an account other than its own, such account
belongs to a third party that is itself a "qualified institutional buyer" within
the meaning of Rule 144A, and the "qualified institutional buyer" status of such
third party has been established by the Buyer through one or more of the
appropriate methods contemplated by Rule 144A.
7. 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 as 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:
----------------------------
X-0-0
XXXXX 0 XX XXXXXXX X-0
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 chief financial officer,
a person fulfilling an equivalent function, or other executive officer of the
entity purchasing the Certificates 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 an executive officer of the
investment adviser (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 owned and/or invested on a
discretionary basis, 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 the Buyer's Family of
Investment Companies, the cost of such securities was used, except where the
Buyer or any member of the Buyer's Family of Investment Companies, as the case
may be, reports its securities holdings in its financial statements on the basis
of their market value, and no current information with respect to the cost of
those securities has been published, in which case, the securities of such
entity were valued at market.
_____ The Buyer owned and/or invested on a discretionary basis, $_________ 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) bank deposit notes and certificates of deposit,
(iii) loan participations, (iv) repurchase agreements, (v) securities owned but
subject to a repurchase agreement and (vi) currency, interest rate and commodity
swaps. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, or owned by the Buyer's
J-2-8
Family of Investment Companies, the securities referred to in this paragraph
were excluded.
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.
____ ____ Will the Buyer be purchasing the Certificates only for the
Transferee's own account?
Yes No
6. If the answer to the foregoing question is "no", then in each case
where the Buyer is purchasing for an account other than its own, such account
belongs to a third party that is itself a "qualified institutional buyer" within
the meaning of Rule 144A, and the "qualified institutional buyer" status of such
third party has been established by the Buyer through one or more of the
appropriate methods contemplated by Rule 144A.
7. 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-2-9
EXHIBIT K
TRANSFER AFFIDAVIT AND AGREEMENT
LONG BEACH MORTGAGE LOAN TRUST 2004-A,
ASSET-BACKED CERTIFICATES, SERIES 2004-A
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 R 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") 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
K-1
certain cooperatives and, except as may be provided in Treasury Regulations,
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 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.
11. The Transferee is not an employee benefit plan that is subject to
ERISA or a plan that is subject to Section 4975 of the Code, nor is it acting on
behalf of such a plan.
K-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
Vice President, attested by its Secretary, this ___ day of
[----------].
[Transferee NAME]
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
[Corporate Seal]
ATTEST:
Secretary
Personally appeared before me the above-named ____________________,
known or proved to me to be the same person who executed the foregoing
instrument and to be the ____________________ of the Transferee, and
acknowledged that he executed the same as his free act and deed and the free act
and deed of the Transferee.
Subscribed and sworn before me this ___ day of [__________].
_________________________
NOTARY PUBLIC
My Commission expires the
__ day of ____, 20__.
K-3
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Long Beach Securities Corp.
0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Long Beach Mortgage Loan Trust 2004-A,
Asset-Backed Certificates Series 2004-A
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 March 1, 2004 (the "Agreement") among Long Beach Securities Corp., as
depositor (the "Depositor"), Long Beach Mortgage Company, as master servicer
(the "Master Servicer") 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 R
Certificate, we have no knowledge that the Transferee is not a Permitted
Transferee and (d) no purpose of the proposed disposition of the Class R
Certificate is to impede the assessment or collection of tax.
Very truly yours,
TRANSFEROR
By:
--------------------------
Name:
------------------------
Title:
-----------------------
L-1
SCHEDULE I
PREPAYMENT CHARGE SCHEDULE
AVAILABLE UPON REQUEST
