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FINANCIAL ASSET SECURITIES CORP.,
Depositor
XXXXXX LOAN SERVICING LP,
Servicer
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2003
___________________________
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates, Series 2003-3
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms...................................................................................6
SECTION 1.02. Accounting.....................................................................................48
SECTION 1.03. Allocation of Certain Interest Shortfalls......................................................48
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans...................................................................49
SECTION 2.02. Acceptance by Trustee..........................................................................52
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by the Originator.................................53
SECTION 2.04. Intentionally Omitted..........................................................................56
SECTION 2.05. Representations, Warranties and Covenants of the Servicer......................................56
SECTION 2.06. Representations and Warranties of the Depositor................................................58
SECTION 2.07. Issuance of Certificates.......................................................................60
SECTION 2.08. [Reserved].....................................................................................60
SECTION 2.09. Acceptance of REMIC 1 and REMIC 2 by the Trustee; Conveyance
of REMIC I Regular Interests and Class M-2 Interest, Class M-4
Interest, and Class M-5 Interest; Issuance of Certificates.....................................60
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Servicer to Act as Servicer....................................................................63
SECTION 3.02. Sub-Servicing Agreements Between Servicer and Sub-Servicers....................................65
SECTION 3.03. Successor Sub-Servicers........................................................................66
SECTION 3.04. Liability of the Servicer......................................................................66
SECTION 3.05. No Contractual Relationship Between Sub-Servicers and the Trustee
or Certificateholders..........................................................................67
SECTION 3.06. Assumption or Termination of Sub-Servicing
Agreements by Trustee.................................................................67
SECTION 3.07. Collection of Certain Mortgage Loan Payments...................................................68
SECTION 3.08. Sub-Servicing Accounts.........................................................................68
SECTION 3.09. Collection of Taxes, Assessments and Similar Items; Servicing
Accounts.......................................................................................69
SECTION 3.10. Collection Account and Distribution Account....................................................69
i
SECTION 3.11. Withdrawals from the Collection Account and Distribution Account ..............................72
SECTION 3.12. Investment of Funds in the Collection Account and the Distribution
Account........................................................................................74
SECTION 3.13. [Reserved].....................................................................................75
SECTION 3.14. Maintenance of Hazard Insurance and Errors and Omissions and
Fidelity Coverage..............................................................................75
SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption Agreements......................................77
SECTION 3.16. Realization Upon Defaulted Mortgage Loans......................................................77
SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files................................................80
SECTION 3.18. Servicing Compensation.........................................................................81
SECTION 3.19. Reports to the Trustee; Collection Account Statements..........................................81
SECTION 3.20. Statement as to Compliance.....................................................................81
SECTION 3.21. Independent Public Accountants' Servicing Report...............................................82
SECTION 3.22. Access to Certain Documentation; Filing of Reports by Trustee..................................82
SECTION 3.23. Title, Management and Disposition of REO Property..............................................84
SECTION 3.24. Obligations of the Servicer in Respect of Prepayment Interest
Shortfalls.....................................................................................88
SECTION 3.25. [Reserved].....................................................................................88
SECTION 3.26. Obligations of the Servicer in Respect of Mortgage Rates and
Monthly Payments...............................................................................88
SECTION 3.27. Solicitations..................................................................................88
SECTION 3.28. Net WAC Rate Carryover Reserve Account.........................................................89
SECTION 3.29. Advance Facility...............................................................................90
ARTICLE IV
FLOW OF FUNDS
SECTION 4.01. Distributions..................................................................................94
SECTION 4.02. Reserved......................................................................................100
SECTION 4.03. Statements....................................................................................100
SECTION 4.04. Remittance Reports; Advances..................................................................103
SECTION 4.05. [Reserved]....................................................................................104
SECTION 4.06. [Reserved]....................................................................................104
SECTION 4.07. Distributions on the REMIC Regular Interests..................................................104
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates..............................................................................107
SECTION 5.02. Registration of Transfer and Exchange of Certificates.........................................107
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.............................................112
SECTION 5.04. Persons Deemed Owners.........................................................................113
SECTION 5.05. Appointment of Paying Agent...................................................................113
ii
ARTICLE VI
THE SERVICER AND THE DEPOSITOR
SECTION 6.01. Liability of the Servicer and the Depositor...................................................114
SECTION 6.02. Merger or Consolidation of, or Assumption of the Obligations of, the
Servicer or the Depositor.....................................................................114
SECTION 6.03. Limitation on Liability of the Servicer and Others............................................114
SECTION 6.04. Servicer Not to Resign........................................................................115
SECTION 6.05. Delegation of Duties..........................................................................116
SECTION 6.06. Reserved......................................................................................116
SECTION 6.07. Inspection....................................................................................116
ARTICLE VII
DEFAULT
SECTION 7.01. Servicer Events of Termination................................................................117
SECTION 7.02. Trustee to Act; Appointment of Successor......................................................118
SECTION 7.03. Waiver of Defaults............................................................................120
SECTION 7.04. Notification to Certificateholders............................................................120
SECTION 7.05. Survivability of Servicer Liabilities.........................................................121
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Duties of Trustee.............................................................................122
SECTION 8.02. Certain Matters Affecting the Trustee.........................................................123
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.........................................124
SECTION 8.04. Trustee May Own Certificates..................................................................125
SECTION 8.05. Trustee Fee and Expenses......................................................................125
SECTION 8.06. Eligibility Requirements for Trustee..........................................................126
SECTION 8.07. Resignation or Removal of Trustee.............................................................126
SECTION 8.08. Successor Trustee.............................................................................127
SECTION 8.09. Merger or Consolidation of Trustee............................................................128
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.................................................128
SECTION 8.11. Limitation of Liability.......................................................................129
SECTION 8.12. Trustee May Enforce Claims Without Possession of Certificates.................................129
SECTION 8.13. Suits for Enforcement.........................................................................130
SECTION 8.14. Waiver of Bond Requirement....................................................................130
SECTION 8.15. Waiver of Inventory, Accounting and Appraisal Requirement.....................................130
ARTICLE IX
REMIC ADMINISTRATION
SECTION 9.01. REMIC Administration..........................................................................131
SECTION 9.02. Prohibited Transactions and Activities........................................................133
iii
SECTION 9.03. Indemnification with Respect to Certain Taxes and Loss of REMIC
Status...............................................................................133
ARTICLE X
TERMINATION
SECTION 10.01. Termination..........................................................................135
SECTION 10.02. Additional Termination Requirements..................................................137
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment............................................................................138
SECTION 11.02. Recordation of Agreement; Counterparts...............................................139
SECTION 11.03. Limitation on Rights of Certificateholders...........................................139
SECTION 11.04. Governing Law; Jurisdiction..........................................................140
SECTION 11.05. Notices..............................................................................140
SECTION 11.06. Severability of Provisions...........................................................141
SECTION 11.07. Article and Section References.......................................................141
SECTION 11.08. Notice to the Rating Agencies........................................................141
SECTION 11.09. Further Assurances...................................................................142
SECTION 11.10. Benefits of Agreement................................................................142
SECTION 11.11 Acts of Certificateholders...........................................................142
iv
Exhibits:
--------
Exhibit A-1 Form of Class A-1 Certificates
Exhibit A-2 Form of Class A-2 Certificates
Exhibit A-3 Form of Class M-1 Certificates
Exhibit A-4 Form of Class M-2 Certificates
Exhibit A-5 Form of Class M-3 Certificates
Exhibit A-6 Form of Class M-4 Certificates
Exhibit A-7 Form of Class M-5 Certificates
Exhibit A-8 Form of Class C Certificates
Exhibit A-9 Form of Class P Certificates
Exhibit A-10 Form of Class R Certificates
Exhibit A-11 Form of Class R-X Certificates
Exhibit B [Reserved]
Exhibit C Form of Mortgage Loan Purchase Agreement
Exhibit D Mortgage Loan Schedule
Exhibit E Request for Release
Exhibit F-1 Form of Trustee's Initial Certification
Exhibit F-2 Form of Trustee's Final Certification
Exhibit F-3 Form of Receipt of Mortgage Note
Exhibit G [Reserved]
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of Limited Power of Attorney
Exhibit J Form of Investment Letter
Exhibit K Form of Transfer Affidavit for Residual Certificates
Exhibit L Form of Transferor Certificate
Exhibit M Form of ERISA Representation Letter
Exhibit N-1 Form of Depositor's Certification
Exhibit N-2 Form of Trustee's Certification
Exhibit N-3 Form of Servicer's Certification
Exhibit O [Reserved]
Exhibit P Form of Annual Statement as to Compliance
Schedule I Prepayment Charge Schedule
v
This Pooling and Servicing Agreement is dated as of September
1, 2003 (the "Agreement"), among FINANCIAL ASSET SECURITIES CORP., as depositor
(the "Depositor"), XXXXXX LOAN SERVICING LP, as servicer (the "Servicer") and
DEUTSCHE BANK NATIONAL TRUST COMPANY, as trustee (the "Trustee").
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 eleven
classes of certificates, designated as (i) the Class A-1 Certificates, (ii) the
Class A-2 Certificates, (iii) the Class M-1 Certificates, (iv) the Class M-2
Certificates (v) the Class M-3 Certificates, (vi) the Class M-4 Certificates,
(vii) the Class M-5 Certificates, (viii) the Class C Certificates, (ix) the
Class P Certificates, (x) the Class R Certificates and (xi) the Class R-X
Certificates.
REMIC 1
-------
As provided herein, the Trustee will make an election to treat
the segregated pool of assets consisting of the Group I Mortgage Loans, the
Group II Mortgage Loans and certain other related assets subject to this
Agreement (exclusive of the Net WAC Rate Carryover Reserve Account and any
Servicer Prepayment Charge Payment Amounts) as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes, and such segregated pool of
assets will be designated as "REMIC 1." The Class R-1 Interest will represent
the sole class of "residual interests" in REMIC 1 for purposes of the REMIC
Provisions (as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, the Uncertificated REMIC 1 Pass-Through
Rate, the initial Uncertificated Principal Balance, and solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each of the REMIC 1 Regular Interests. None of the REMIC 1
Regular Interests will be certificated.
Uncertificated REMIC 1 Initial Uncertificated Assumed Final
Designation Pass-Through Rate Principal Balance Maturity Date(1)
----------- ----------------- ----------------- ----------------
LTAA Variable(2) $436,402,025.13 June 2033
LTA1 Variable(2) $ 2,706,140.00 June 2033
LTA2 Variable(2) $ 856,330.00 June 2033
LTM1 Variable(2) $ 311,720.00 June 2033
LTM2 Variable(2) $ 267,180.00 June 2033
LTM3 Variable(2) $ 55,660.00 June 2033
LTM4 Variable(2) $ 77,930.00 June 2033
LTM5 Variable(2) $ 89,060.00 June 2033
LTZZ Variable(2) $ 4,542,143.78 June 2033
LTP Variable(2) $ 100.00 June 2033
________________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the thirteenth Distribution Date immediately following the
maturity date for the Mortgage Loan with the latest possible maturity date
has been designated as the "latest possible maturity date" for each REMIC 1
Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC 1
Pass-Through Rate" herein.
REMIC 2
-------
As provided herein, the Trustee shall make an election to
treat the segregated pool of assets consisting of the REMIC 1 Regular Interests
as a REMIC for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC 2." The Class R-2 Interest represents the sole
class of "residual interests" in REMIC 2 for purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for each Class of Certificates and REMIC 2 Regular Interest that represents one
or more of the "regular interests" in REMIC 2 created hereunder:
Original Class Certificate Assumed Final
Class Designation Principal Balance Pass-Through Rate Maturity Date(1)
----------------- ----------------- ----------------- ----------------
Class A-1.................. $270,614,000.00 Variable(2) June 2033
Class A-2.................. $ 85,633,000.00 Variable(2) June 2033
Class M-1.................. $ 31,172,000.00 Variable(2) June 2033
Class M-2 Interest......... $ 26,718,000.00 Variable(2) June 2033
Class M-3.................. $ 5,566,000.00 Variable(2) June 2033
Class M-4 Interest......... $ 7,793,000.00 Variable(2) June 2033
Class M-5 Interest......... $ 8,906,000.00 Variable(2) June 2033
Class C.................... $ 8,906,188.91(3) Variable(2) June 2033
Class P.................... $ 100.00 N/A(4) June 2033
________________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the thirteenth Distribution Date immediately following the
maturity date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each REMIC 2 Regular
Interest.
(2) Calculated in accordance with the definition of "Pass-Through Rate" herein.
(3) The Class C Certificates will accrue interest at their variable
Pass-Through Rate on the Notional Amount of the Class C Certificates
outstanding from time to time which shall equal the aggregate of the
Uncertificated Principal Balances of the REMIC 1 Regular Interests. The
Class C Certificates will not accrue interest on its Class Certificate
Principal Balance.
(4) The Class P Certificates will not accrue interest.
2
REMIC 3
-------
As provided herein, the Trustee shall make an election to
treat the Class M-2 Interest as a REMIC for federal income tax purposes, and
such segregated pool of assets will be designated as "REMIC 3." The Class R-3
Interest represents the sole class of "residual interests" in REMIC 3 for
purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for the Class M-2 Certificates.
Original Class Certificate Assumed Final
Class Designation Principal Balance Pass-Through Rate Maturity Date(1)
----------------- ----------------- ----------------- ----------------
Class M-2 $26,718,000.00 Variable(2) June 2033
________________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the thirteenth Distribution Date immediately following the
maturity date for the Mortgage Loan with the latest possible maturity date
has been designated as the "latest possible maturity date" for the Class
M-3 Certificates.
(2) The Class M-2 Certificates will receive 100% of amounts received in respect
of the Class M-2 Interest.
3
REMIC 4
As provided herein, the Trustee shall make an election to
treat the Class M-4 Interest as a REMIC for federal income tax purposes, and
such segregated pool of assets will be designated as "REMIC 4." The Class R-4
Interest represents the sole class of "residual interests" in REMIC 4 for
purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for the Class M-4 Certificates.
Original Class Certificate Assumed Final
Class Designation Principal Balance Pass-Through Rate Maturity Date(1)
----------------- ----------------- ----------------- ----------------
Class M-4 $7,793,000.00 Variable(2) June 2033
________________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the thirteenth Distribution Date immediately following the
maturity date for the Mortgage Loan with the latest possible maturity date
has been designated as the "latest possible maturity date" for the Class
M-4A Certificates.
(2) The Class M-4 Certificates will receive 100% of amounts received in respect
of the Class M-4 Interest.
4
REMIC 5
As provided herein, the Trustee shall make an election to
treat the Class M-5 Interest as a REMIC for federal income tax purposes, and
such segregated pool of assets will be designated as "REMIC 5." The Class R-5
Interest represents the sole class of "residual interests" in REMIC 5 for
purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for the Class M-5 Certificates.
Original Class Certificate Assumed Final
Class Designation Principal Balance Pass-Through Rate Maturity Date(1)
----------------- ----------------- ----------------- ----------------
Class M-5 $8,906,000.00 Variable(2) June 2033
________________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the thirteenth Distribution Date immediately following the
maturity date for the Mortgage Loan with the latest possible maturity date
has been designated as the "latest possible maturity date" for the Class
M-5A Certificates.
(2) The Class M-5 Certificates will receive 100% of amounts received in respect
of the Class M-5 Interest.
5
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 Floating Rate
Certificates shall be made on the basis of the actual number of days elapsed and
a 360-day year and all calculations in respect of interest on the Hybrid
Certificates and the Class C Certificates and all other calculations of interest
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months. The Class P Certificates and the Residual Certificates are
not entitled to distributions in respect of interest and, accordingly, will not
accrue interest.
"1933 Act": The Securities Act of 1933, as amended.
"Account": Either of the Collection Account and Distribution
Account.
"Accrual Period": With respect to the Class A-1 Certificates,
the Class A-2 Certificates and the Class C Certificates and each Distribution
Date, the calendar month prior to the month of such Distribution Date. With
respect to the Mezzanine Certificates and each Distribution Date, the period
commencing on the preceding Distribution Date (or in the case of the first such
Accrual Period, commencing on the Closing Date) and ending on the day preceding
such Distribution Date.
"Adjustable-Rate Mortgage Loan": A first lien Mortgage Loan
which provides at any period during the life of such loan for the adjustment of
the Mortgage Rate payable in respect thereto. The Adjustable Rate Mortgage Loans
are identified as such on the Mortgage Loan Schedule.
"Adjusted Net Maximum Mortgage Rate": With respect to any
Mortgage Loan (or the related REO Property), as of any date of determination, a
per annum rate of interest equal to the applicable Maximum Mortgage Rate for
such Mortgage Loan (or the Mortgage Rate in the case of any Fixed-Rate Mortgage
Loan) as of the first day of the month preceding the month in which the related
Distribution Date occurs minus the sum of (i) the Trustee Fee Rate and (ii) the
Servicing Fee Rate.
"Adjusted Net Mortgage Rate": With respect to any Mortgage
Loan (or the related REO Property), as of any date of determination, a per annum
rate of interest equal to the applicable Mortgage Rate for such Mortgage Loan as
of the first day of the month preceding the month in which the related
Distribution Date occurs minus the sum of (i) the Trustee Fee Rate and (ii) the
Servicing Fee Rate.
"Adjustment Date": With respect to each Adjustable-Rate
Mortgage Loan, each adjustment date, on which the Mortgage Rate of such Mortgage
Loan changes pursuant to the related
6
Mortgage Note. The first Adjustment Date following the Cut-off Date as to each
Adjustable-Rate Mortgage Loan is set forth in the Mortgage Loan Schedule.
"Advance": As to any Mortgage Loan or REO Property, any
advance made by the Servicer in respect of any Distribution Date pursuant to
Section 4.04.
"Advance Facility": As defined in Section 3.29 hereof.
"Advance Facility Notice": As defined in Section 3.29 hereof.
"Advance Financing Person": As defined in Section 3.29 hereof.
"Advance Reimbursement Amounts": As defined in Section 3.29
hereof.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise and "controlling" and "controlled"
shall have meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
"Allocated Realized Loss Amount": With respect to any
Distribution Date and any Class of Mezzanine Certificates, the sum of (i) any
Realized Losses allocated to such Class of Certificates on such Distribution
Date and (ii) the amount of any Allocated Realized Loss Amount for such Class of
Certificates remaining unpaid from the previous Distribution Date.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect or
record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of
Certificates, the date set forth as such in the Preliminary Statement.
"Available Funds": With respect to any Distribution Date, an
amount equal to the excess of (i) the sum of (a) the aggregate of the related
Monthly Payments received on the Mortgage Loans on or prior to the related
Determination Date, (b) Net Liquidation Proceeds, Insurance Proceeds, Principal
Prepayments, proceeds from repurchases of and substitutions for such Mortgage
Loans and other unscheduled recoveries of principal and interest in respect of
the Mortgage Loans received during the related Prepayment Period, (c) the
aggregate of any amounts received in respect of a related REO Property withdrawn
from any REO Account and deposited in the Collection Account for such
Distribution Date, (d) the aggregate of any amounts deposited in the Collection
Account by the Servicer in respect of related Prepayment Interest Shortfalls for
such Distribution
7
Date, (e) the aggregate of any Advances made by the Servicer for such
Distribution Date in respect of the Mortgage Loans, (f) the aggregate of any
related advances made by the Trustee in respect of the Mortgage Loans for such
Distribution Date pursuant to Section 7.02 and (g) the amount of any Prepayment
Charges collected by the Servicer in connection with the full or partial
prepayment of any of the Mortgage Loans and any Servicer Prepayment Charge
Payment Amount over (ii) the sum of (a) amounts reimbursable or payable to the
Servicer pursuant to Section 3.11(a) or the Trustee pursuant to Section 3.11(b),
(b) amounts deposited in the Collection Account or the Distribution Account
pursuant to clauses (a) through (g) above, as the case may be, in error, (c) the
amount of any Prepayment Charges collected by the Servicer in connection with
the full or partial prepayment of any of the Mortgage Loans and any Servicer
Prepayment Charge Payment Amount, (d) the Trustee Fee payable from the
Distribution Account pursuant to Section 8.05, (e) [reserved] and (f) any
indemnification payments or expense reimbursements made by the Trust Fund
pursuant to Section 8.05.
"Balloon Mortgage Loan": A Mortgage Loan that provides for the
payment of the unamortized principal balance of such Mortgage Loan in a single
payment at the maturity of such Mortgage Loan that is substantially greater than
the preceding monthly payment.
"Balloon Payment": A payment of the unamortized principal
balance of a Mortgage Loan in a single payment at the maturity of such Mortgage
Loan that is substantially greater than the preceding Monthly Payment.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.
"Base Rate": For the first 24 Distribution Dates and the Class
A-1 Certificates, 2.520% per annum and for each Distribution Date thereafter,
the sum of (i) LIBOR plus (ii) the related Certificate Margin. For the first 24
Distribution Dates and the Class A-2 Certificates, 2.430% per annum and for each
Distribution Date thereafter, the sum of (i) LIBOR plus (ii) the related
Certificate Margin.
"Book-Entry Certificates": Any of the Certificates that shall
be registered in the name of the Depository or its nominee, the ownership of
which is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Class A Certificates and the Mezzanine Certificates shall be
Book-Entry Certificates.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings institutions in the State of Delaware, the State
of New York, the State of Texas, the State of California or in the city in which
the Corporate Trust Office of the Trustee is located are authorized or obligated
by law or executive order to be closed.
"Certificate": Any Regular Certificate or Residual
Certificate.
8
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or non-U.S. Person shall not be a Holder of a Residual
Certificate for any purpose hereof and, solely for the purposes of giving any
consent pursuant to this Agreement, any Certificate registered in the name of
the Depositor or the Servicer or any Affiliate thereof shall be deemed not to be
outstanding and the Voting Rights to which it is entitled shall not be taken
into account in determining whether the requisite percentage of Voting Rights
necessary to effect any such consent has been obtained, except as otherwise
provided in Section 11.01. The Trustee may conclusively rely upon a certificate
of the Depositor or the Servicer in determining whether a Certificate is held by
an Affiliate thereof. All references herein to "Holders" or "Certificateholders"
shall reflect the rights of Certificate Owners as they may indirectly exercise
such rights through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Trustee shall be
required to recognize as a "Holder" or "Certificateholder" only the Person in
whose name a Certificate is registered in the Certificate Register.
"Certificate Margin": With respect to the Class A-1
Certificates on each Distribution Date (following the 24th Distribution Date),
(A) on or prior to the Optional Termination Date, 0.7500% per annum and (B)
after the Optional Termination Date, 1.1250% per annum. With respect to the
Class A-2 Certificates on each Distribution Date (following the 24th
Distribution Date), (A) on or prior to the Optional Termination Date, 0.7500%
per annum and (B) after the Optional Termination Date, 1.1250% per annum. With
respect to the Class M-1 Certificates on each Distribution Date (A) on or prior
to the Optional Termination Date, 0.7250% per annum and (B) after the Optional
Termination Date, 1.0875% per annum. With respect to the Class M-2 Certificates
on each Distribution Date (A) on or prior to the Optional Termination Date,
1.7500% per annum and (B) after the Optional Termination Date, 2.6250% per
annum. With respect to the Class M-3 Certificates on each Distribution Date (A)
on or prior to the Optional Termination Date, 2.0500% per annum and (B) after
the Optional Termination Date, 3.0750% per annum. With respect to the Class M-4
Certificates on each Distribution Date (A) on or prior to the Optional
Termination Date, 3.2500% per annum and (B) after the Optional Termination Date,
4.8750% per annum. With respect to the Class M-5 Certificates on each
Distribution Date (A) on or prior to the Optional Termination Date, 4.0000% per
annum and (B) after the Optional Termination Date, 6.0000% per annum.
"Certificate Owner": With respect to each Book-Entry
Certificate, any beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of
Regular Certificates (other than the Class C Certificates) immediately prior to
any Distribution Date, will be equal to the Initial Certificate Principal
Balance thereof reduced by the sum of all amounts actually distributed in
respect of principal of such Class and, in the case of a Mezzanine Certificate,
Realized Losses allocated thereto on all prior Distribution Dates. With respect
to the Class C Certificates as of any date of determination, an amount equal to
the excess, if any, of (A) the then aggregate Uncertificated Principal Balances
of the REMIC 1 Regular Interests over (B) the then aggregate Certificate
Principal Balances of the Class A Certificates, the Mezzanine Certificates and
the Class P Certificates then outstanding.
9
"Certificate Register" and "Certificate Registrar": The
register maintained and registrar appointed pursuant to Section 5.02 hereof.
"Class": Collectively, Certificates which have the same
priority of payment and bear the same class designation and the form of which is
identical except for variation in the Percentage Interest evidenced thereby.
"Class A Certificates": Any Class A-1 Certificate or Class A-2
Certificate.
"Class A Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Class A-1 Principal Distribution Amount
and (ii) the Class A-2 Principal Distribution Amount.
"Class A-1 Certificate": Any one of the Class A-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-1, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 2.
"Class A-1 Principal Distribution Amount": The excess of (x)
the Certificate Principal Balance of the Class A-1 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
60.00% and (ii) the aggregate Stated Principal Balance of the Group I Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) and (B) the aggregate Stated Principal Balance of
the Group I Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the related
Overcollateralization Floor.
"Class A-2 Certificate": Any one of the Class A-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-2, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 2.
"Class A-2 Principal Distribution Amount": The excess of (x)
the Certificate Principal Balance of the Class A-2 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
60.00% and (ii) the aggregate Stated Principal Balance of the Group II Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) and (B) the aggregate Stated Principal Balance of
the Group II Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the related
Overcollateralization Floor.
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"Class C Certificates": Any one of the Class C Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-8, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 2.
"Class M-1 Certificate": Any one of the Class M-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-3, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 2.
"Class M-1 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount on such Distribution Date) and (ii) the Certificate
Principal Balance of the Class M-1 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 74.00% and (ii)
the Stated Principal Balance of the Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the related Overcollateralization Floor.
"Class M-2 Certificate": Any one of the Class M-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-4, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"Class M-2 Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the Holders of the Class M-2 Certificates,
evidencing a Regular Interest in REMIC 2 for purposes of the REMIC Provisions.
"Class M-2 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date) and (iii)
the 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) 86.00% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the related
Overcollateralization Floor.
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"Class M-3 Certificate": Any one of the Class M-3 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-5, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 2.
"Class M-3 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the 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 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) 88.50% 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 related Overcollateralization Floor.
"Class M-4 Certificate": Any one of the Class M-4 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-6, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 4.
"Class M-4 Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the Holders of the Class M-4 Certificates,
evidencing a Regular Interest in REMIC 2 for purposes of the REMIC Provisions.
"Class M-4 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the 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 (iv) the
Certificate Principal Balance of the Class M-4 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 92.00% 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
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effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) minus the related
Overcollateralization Floor.
"Class M-5 Certificate": Any one of the Class M-5 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-7, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 5.
"Class M-5 Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the Holders of the Class M-5A
Certificates, evidencing a Regular Interest in REMIC 2 for purposes of the REMIC
Provisions.
"Class M-5 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the 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 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) 96.00% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the related Overcollateralization Floor.
"Class P Certificate": Any one of the Class P Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-9, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 2.
"Class R Certificate": The Class R Certificate executed by the
Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-10 and evidencing the
ownership of the Class R-1 Interest and the Class R-2 Interest.
"Class R-1 Interest": The uncertificated Residual Interest in
REMIC 1.
"Class R-2 Interest": The uncertificated Residual Interest in
REMIC 2.
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"Class R-3 Interest": The uncertificated Residual Interest in
REMIC 3.
"Class R-4 Interest": The uncertificated Residual Interest in
REMIC 4
"Class R-5 Interest": The uncertificated Residual Interest in
REMIC 5.
"Class R-X Certificate": The Class R-X Certificate executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-11 and evidencing the
ownership of the Class R-3, Class R-4, and Class R-5 Interest.
"Close of Business": As used herein, with respect to any
Business Day, 5:00 p.m. (New York time).
"Closing Date": September 25, 2003.
"Code": The Internal Revenue Code of 1986.
"Collection Account": The account or accounts created and
maintained by the Servicer pursuant to Section 3.10(a), which shall be entitled
"Deutsche Bank National Trust Company, as Trustee, in trust for registered
Holders of Fremont Home Loan Trust 2003-3, Asset- Backed Certificates, Series
2003-3," which must be an Eligible Account.
"Compensating Interest": As defined in Section 3.24 hereof.
"Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at 0000 Xxxx Xx. Xxxxxx Xxxxx,
Xxxxx Xxx, XX 00000-0000, or at such other address as the Trustee may designate
from time to time by notice to the Certificateholders, the Depositor, the
Servicer, the Originator and the Seller.
"Corresponding Certificate": With respect to
REMIC 1 Regular Interest LTA1 Class A-1 Certificates
REMIC 1 Regular Interest LTA2 Class A-2 Certificates
REMIC 1 Regular Interest LTM1 Class M-1 Certificates
REMIC 1 Regular Interest LTM2 and Class M-2 Certificates
Class M-2 Interest
REMIC 1 Regular Interest LTM3 Class M-3 Certificates
REMIC 1 Regular Interest LTM4 Class M-4 Certificates
REMIC 1 Regular Interest LTM5 and Class M-5 Certificates
the Class M-5 Interest
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REMIC 1 Regular Interest LTP Class P Certificates
"Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the sum of
the aggregate Certificate Principal Balances of the Mezzanine Certificates and
the Class C Certificates, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans, calculated prior to taking into account
payments of principal on the Mortgage Loans and distribution of the Group I
Principal Distribution Amount and the Group II Principal Distribution Amount to
the Holders of the Certificates then entitled to distributions of principal on
such Distribution Date.
"Cumulative Loss Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Realized Losses incurred from the Cut-off Date to the last
day of the preceding calendar month and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.
"Custodian": Deutsche Bank National Trust Company, as
custodian of the Mortgage Files, or any successor thereto.
"Cut-off Date": With respect to each Mortgage Loan, the later
of (i) the date of origination of such Mortgage Loan or (ii) September 1, 2003.
"Cut-off Date Principal Balance": With respect to any Mortgage
Loan, the unpaid principal balance thereof as of the Cut-off Date of such
Mortgage Loan (or as of the applicable date of substitution with respect to a
Qualified Substitute Mortgage Loan), after giving effect to scheduled payments
due on or before the Cut-off Date, whether or not received.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.02(c)
hereof.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by one or more Qualified Substitute Mortgage Loans.
"Delinquency Percentage": For any Distribution Date, the
percentage obtained by dividing (x) the aggregate Principal Balance of Mortgage
Loans that are Delinquent 60 days or more, that are in foreclosure, that have
been converted to REO Properties or that have been discharged by
15
reason of bankruptcy by (y) the aggregate Principal Balance of the Mortgage
Loans, in each case, as of the last day of the previous calendar month.
"Delinquent": With respect to any Mortgage Loan and related
Monthly Payment, the Monthly Payment due on a Due Date which is not made by the
Close of Business on the next scheduled Due Date for such Mortgage Loan. For
example, a Mortgage Loan is 60 or more days Delinquent if the Monthly Payment
due on a Due Date is not made by the Close of Business on the second scheduled
Due Date after such Due Date.
"Depositor": Financial Asset Securities Corp., a Delaware
corporation, or any successor in interest.
"Depository": The initial Depository shall be The Depository
Trust Company, whose nominee is Cede & Co., or any other organization registered
as a "clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York. Upon request, the Depository may also be Clearstream
Banking Luxembourg and the Euroclear System.
"Depository Participant": A broker, dealer, bank or other
financial institution or other person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to any Distribution Date,
the 15th day of the calendar month in which such Distribution Date occurs or, if
such 15th day is not a Business Day, the Business Day immediately preceding such
15th day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by the REMIC other than
through an Independent Contractor; provided, however, that the Trustee (or the
Servicer on behalf of the Trustee) shall not be considered to Directly Operate
an REO Property solely because the Trustee (or the Servicer on behalf of the
Trustee) establishes rental terms, chooses tenants, enters into or renews
leases, deals with taxes and insurance, or makes decisions as to repairs or
capital expenditures with respect to such REO Property.
"Disqualified Organization": A "disqualified organization"
under Section 860E of the Code, which as of the Closing Date is any of: (i) the
United States, any state or political subdivision thereof, any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (ii) any organization (other than a cooperative described
in Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of
the Code unless such organization is subject to the tax imposed by Section 511
of the Code, (iii) any organization described in Section 1381(a)(2)(C) of the
Code or (iv) an "electing large partnership" within the meaning of Section 775
of the Code. A corporation will not be treated as an instrumentality of the
16
United States or of any state or political subdivision thereof, if all of its
activities are subject to tax and, a majority of its board of directors is not
selected by a governmental unit. The term "United States", "state" and
"international organizations" shall have the meanings set forth in Section 7701
of the Code.
"Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.10(b) which shall be
entitled "Distribution Account, Deutsche Bank National Trust Company, as
Trustee, in trust for the registered Certificateholders of Fremont Home Loan
Trust 2003-3, Asset-Backed Certificates, Series 2003-3" and which must be an
Eligible Account.
"Distribution Date": The 25th day of any calendar month, or if
such 25th day is not a Business Day, the Business Day immediately following such
25th day, commencing in October 2003.
"Due Date": With respect to each Mortgage Loan and any
Distribution Date, the first day of the calendar month in which such
Distribution Date occurs on which the Monthly Payment for such Mortgage Loan was
due (or, in the case of any Mortgage Loan under the terms of which the Monthly
Payment for such Mortgage Loan was due on a day other than the first day of the
calendar month in which such Distribution Date occurs, the day during the
related Due Period on which such Monthly Payment was due), exclusive of any days
of grace.
"Due Period": With respect to any Distribution Date, the
period commencing on the second day of the month preceding the month in which
such Distribution Date occurs and ending on the first day of the month in which
such Distribution Date occurs.
"Eligible Account": Any of (i) an account or accounts
maintained with a federal or state chartered depository institution or trust
company the short-term unsecured debt obligations of which (or, in the case of a
depository institution or trust company that is the principal subsidiary of a
holding company, the short-term unsecured debt obligations of such holding
company) are rated A-1 by S&P, F-1 by Fitch and P-1 by Moody's (or comparable
ratings if S&P, Fitch and Xxxxx'x are not the Rating Agencies) at the time any
amounts are held on deposit therein, (ii) an account or accounts the deposits in
which are fully insured by the FDIC up to the insured amount, (iii) a trust
account or accounts maintained with the trust department of a federal or state
chartered depository institution, national banking association or trust company
acting in its fiduciary capacity or (iv) an account otherwise acceptable to each
Rating Agency without reduction or withdrawal of their then current ratings of
the Certificates as evidenced by a letter from each Rating Agency to the
Trustee. Eligible Accounts may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"Escrow Payments": The amounts constituting ground rents,
taxes, assessments, water rates, fire and hazard insurance premiums and other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant to
any Mortgage Loan.
"Excess Overcollateralized Amount": With respect to the Class
A Certificates and the Mezzanine Certificates and any Distribution Date, the
excess, if any, of (i) the Overcollateralized
17
Amount for such Distribution Date, assuming that 100% of the Principal
Remittance Amount is applied as a principal payment on such Distribution Date
over (ii) the Overcollateralization Target Amount for such Distribution Date.
"Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (x) the Monthly Interest Distributable Amount
payable on the Class C Certificates on such Distribution Date as reduced by
Realized Losses allocated thereto with respect to such Distribution Date
pursuant to Section 4.08 and (y) the Overcollateralization Deficiency Amount for
such Distribution Date.
"Xxxxxx Mae": Federal National Mortgage Association or any
successor thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Originator or the Servicer pursuant to or as contemplated by
Section 2.03 or 10.01), a determination made by the Servicer that all Insurance
Proceeds, Liquidation Proceeds and other payments or recoveries which the
Servicer, in its reasonable good faith judgment, expects to be finally
recoverable in respect thereof have been so recovered. The Servicer shall
maintain records, prepared by a Servicing Officer, of each Final Recovery
Determination made thereby.
"Fitch": Fitch Ratings, or its successor in interest.
"Fixed-Rate Mortgage Loan": A first lien Mortgage Loan which
provides for a fixed Mortgage Rate payable with respect thereto. The Fixed-Rate
Mortgage Loans are identified as such on the Mortgage Loan Schedule.
"Floating Rate Certificate": Any Mezzanine Certificate.
"Formula Rate": For any Distribution Date and the Class A
Certificates and the Mezzanine Certificates, the lesser of (i) the Base Rate and
(ii) the related Maximum Cap Rate.
"Xxxxxxx Mac": The Federal Home Loan Mortgage Corporation, or
any successor thereto.
"Gross Margin": With respect to each Adjustable-Rate Mortgage
Loan, the fixed percentage set forth in the related Mortgage Note that is added
to the Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Mortgage Loan.
"Group I Allocation Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (i) the Group I Principal Remittance Amount for such Distribution Date,
and the denominator of which is (ii) the Principal Remittance Amount for such
Distribution Date.
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"Group I Basic Principal Distribution Amount": With respect to
any Distribution Date, the excess of (i) the Group I Principal Remittance Amount
for such Distribution Date over (ii)(a) the Overcollateralization Release
Amount, if any, for such Distribution Date multiplied by (b) the Group I
Allocation Percentage.
"Group I Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Funds for such Distribution
Date attributable to interest received or advanced with respect to the Group I
Mortgage Loans.
"Group I Mortgage Loan": A Mortgage Loan assigned to Loan
Group I with a principal balance that conforms to Xxxxxx Xxx and Xxxxxxx Mac
guidelines.
"Group I Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group I Basic Principal Distribution
Amount for such Distribution Date and (ii)(a) the Extra Principal Distribution
Amount for such Distribution Date multiplied by (b) the Group I Allocation
Percentage.
"Group I Principal Remittance Amount": With respect to any
Distribution Date, the sum of (i) each scheduled payment of principal collected
or advanced on the Group I Mortgage Loans by the Servicer that were due during
the related Due Period, (ii) the principal portion of all partial and full
principal prepayments of the Group I Mortgage Loans applied by the Servicer
during the related Prepayment Period, (iii) the principal portion of all related
Net Liquidation Proceeds and Insurance Proceeds received during such Prepayment
Period with respect to the Group I Mortgage Loans, (iv) that portion of the
Purchase Price, representing principal of any repurchased Group I Mortgage Loan,
deposited to the Collection Account during such Prepayment Period, (v) the
principal portion of any related Substitution Adjustments deposited in the
Collection Account during such Prepayment Period with respect to the Group I
Mortgage Loans and (vi) on the Distribution Date on which the Trust Fund is to
be terminated pursuant to Section 10.01, that portion of the Termination Price,
in respect of principal on the Group I Mortgage Loans.
"Group II Allocation Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (i) the Group II Principal Remittance Amount for such Distribution
Date, and the denominator of which is (ii) the Principal Remittance Amount for
such Distribution Date.
"Group II Basic Principal Distribution Amount": With respect
to any Distribution Date, the excess of (i) the Group II Principal Remittance
Amount for such Distribution Date over (ii)(a) the Overcollateralization Release
Amount, if any, for such Distribution Date multiplied by (b) the Group II
Allocation Percentage.
"Group II Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Funds for such Distribution
Date attributable to interest received or advanced with respect to the Group II
Mortgage Loans.
"Group II Mortgage Loan": A Mortgage Loan assigned to Loan
Group II with a principal balance that may or may not conform to Xxxxxx Mae and
Xxxxxxx Mac guidelines.
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"Group II Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group II Basic Principal Distribution
Amount for such Distribution Date and (ii)(a) the Extra Principal Distribution
Amount for such Distribution Date multiplied by (b) the Group II Allocation
Percentage.
"Group II Principal Remittance Amount": With respect to any
Distribution Date, the sum of (i) each scheduled payment of principal collected
or advanced on the Group II Mortgage Loans by the Servicer that were due during
the related Due Period, (ii) the principal portion of all partial and full
principal prepayments of the Group II Mortgage Loans applied by the Servicer
during the related Prepayment Period, (iii) the principal portion of all related
Net Liquidation Proceeds and Insurance Proceeds received during such Prepayment
Period with respect to the Group II Mortgage Loans, (iv) that portion of the
Purchase Price, representing principal of any repurchased Group II Mortgage
Loan, deposited to the Collection Account during such Prepayment Period, (v) the
principal portion of any related Substitution Adjustments deposited in the
Collection Account during such Prepayment Period with respect to the Group II
Mortgage Loans and (vi) on the Distribution Date on which the Trust Fund is to
be terminated pursuant to Section 10.01, that portion of the Termination Price,
in respect of principal on the Group II Mortgage Loans.
"Hybrid Certificate": Any Class A-1 Certificates and Class A-2
Certificates.
"Indenture": An indenture relating to the issuance of notes
secured by the Class C Certificates, the Class P Certificates and/or the Class R
Certificates (or any portion thereof) which may or may not be guaranteed by the
NIMS Insurer.
"Independent": When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Depositor, the Servicer
and their respective Affiliates, (b) does not have any direct financial interest
in or any material indirect financial interest in the Depositor or the Servicer
or any Affiliate thereof, and (c) is not connected with the Depositor or the
Servicer or any Affiliate thereof as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar functions;
provided, however, that a Person shall not fail to be Independent of the
Depositor or the Servicer or any Affiliate thereof merely because such Person is
the beneficial owner of 1% or less of any class of securities issued by the
Depositor or the Servicer or any Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than
the Servicer) that would be an "independent contractor" with respect to any of
the REMICs created hereunder within the meaning of Section 856(d)(3) of the Code
if such REMIC were a real estate investment trust (except that the ownership
tests set forth in that section shall be considered to be met by any Person that
owns, directly or indirectly, 35% or more of any Class of Certificates), so long
as each such REMIC does not receive or derive any income from such Person and
provided that the relationship between such Person and such REMIC is at arm's
length, all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or
(ii) any other Person (including the Servicer) if the Trustee has received an
Opinion of Counsel to the effect that the taking of any action in respect of any
REO Property by such Person, subject to any conditions therein specified, that
is otherwise herein contemplated to be taken by an Independent Contractor will
not cause such REO Property to cease to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code (determined without
20
regard to the exception applicable for purposes of Section 860D(a) of the Code),
or cause any income realized in respect of such REO Property to fail to qualify
as Rents from Real Property.
"Index": With respect to each Adjustable-Rate Mortgage Loan
and with respect to each related Adjustment Date, the index as specified in the
related Mortgage Note.
"Initial Certificate Principal Balance": With respect to any
Regular Certificate, the amount designated "Initial Certificate Principal
Balance" on the face thereof.
"Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan, to the extent such
proceeds are received by the Servicer and are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with the procedures that the Servicer would follow in servicing
mortgage loans held for its own account, subject to the terms and conditions of
the related Mortgage Note and Mortgage.
"Interest Determination Date": With respect to the Floating
Rate Certificates (and the Hybrid Certificates following the Distribution Date
in September 2005) and each Accrual Period, the second LIBOR Business Day
preceding the commencement of such Accrual Period.
"Late Collections": With respect to any Mortgage Loan, all
amounts received subsequent to the Determination Date immediately following any
related Due Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late payments or
collections of principal and/or interest due (without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but delinquent on a
contractual basis for such Due Period and not previously recovered.
"LIBOR": With respect to each Accrual Period, the rate
determined by the Trustee on the related Interest Determination Date on the
basis of the London interbank offered rate for one- month United States dollar
deposits, as such rate appears on the Telerate Page 3750, as of 11:00 a.m.
(London time) on such Interest Determination Date. If such rate does not appear
on Telerate Page 3750, the rate for such Interest Determination Date will be
determined on the basis of the offered rates of the Reference Banks for
one-month United States dollar deposits, as of 11:00 a.m. (London time) on such
Interest Determination Date. The Trustee will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. On
such Interest Determination Date, LIBOR for the related Accrual Period will be
established by the Trustee as follows:
(i) If on such Interest Determination Date two or more
Reference Banks provide such offered quotations, LIBOR for the related
Accrual Period shall be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole multiple of 1/16 of
1%); and
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, LIBOR for the related
Accrual Period shall be the higher of (i) LIBOR as determined on the
previous Interest Determination Date and (ii) the Reserve Interest
Rate.
21
"LIBOR Business Day": Any day on which banks in London,
England and The City of New York are open and conducting transactions in foreign
currency and exchange.
"Liquidated Mortgage Loan": As to any Distribution Date, any
Mortgage Loan in respect of which the Servicer has determined, in accordance
with the servicing procedures specified herein, as of the end of the related
Prepayment Period, that all Liquidation Proceeds which it expects to recover
with respect to the liquidation of the Mortgage Loan or disposition of the
related REO Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full, (ii) a Final
Recovery Determination is made as to such Mortgage Loan or (iii) such Mortgage
Loan is removed from the Trust Fund by reason of its being purchased, sold or
replaced pursuant to or as contemplated by Section 2.03 or Section 10.01. With
respect to any REO Property, either of the following events: (i) a Final
Recovery Determination is made as to such REO Property or (ii) such REO Property
is removed from the Trust Fund by reason of its being sold or purchased pursuant
to Section 3.23 or Section 10.01.
"Liquidation Proceeds": The amount (other than amounts
received in respect of the rental of any REO Property prior to REO Disposition)
received by the Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or condemnation,
(ii) the liquidation of a defaulted Mortgage Loan by means of a trustee's sale,
foreclosure sale or otherwise or (iii) the repurchase, substitution or sale of a
Mortgage Loan or an REO Property pursuant to or as contemplated by Section 2.03,
Section 3.23 or Section 10.01.
"Loan-to-Value Ratio": As of any date and as to any Mortgage
Loan, the fraction, expressed as a percentage, the numerator of which is the
Principal Balance of the Mortgage Loan and the denominator of which is the Value
of the related Mortgaged Property.
"Loan Group": Either Loan Group I or Loan Group II, as the
context requires.
"Loan Group I": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Loan Group I.
"Loan Group II": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Loan Group II.
"Losses": As defined in Section 9.03.
"Lost Note Affidavit": With respect to any Mortgage Loan as to
which the original Mortgage Note has been permanently lost, misplaced or
destroyed and has not been replaced, an affidavit from the Originator certifying
that the original Mortgage Note has been lost, misplaced or destroyed (together
with a copy of the related Mortgage Note) and indemnifying the Trust against any
loss, cost or liability resulting from the failure to deliver the original
Mortgage Note in the form of Exhibit H hereto.
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"Majority Certificateholders": The Holders of Certificates
evidencing at least 51% of the Voting Rights.
"Marker Rate": With respect to the Class C Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the Uncertificated REMIC 1 Pass-Through Rates for REMIC 1 Regular
Interest LTA1, REMIC 1 Regular Interest LTA2, REMIC 1 Regular Interest LTM1,
REMIC 1 Regular Interest LTM2, REMIC 1 Regular Interest LTM3, REMIC 1 Regular
Interest LTM4 , REMIC 1 Regular Interest LTM5 and REMIC 1 Regular Interest LTZZ,
with the rate on REMIC 1 Regular Interest LTA1: (A) in the case of each
Distribution Date through the Distribution Date in September 2005 the lesser of
(i) 2.520% per annum and (ii) the Maximum Cap Rate and (B) in the case of each
Distribution Date thereafter, to the lesser of (i) LIBOR plus the Certificate
Margin of the Class A-1 Certificates and (ii) the Maximum Cap Rate for the
purpose of this calculation; with the rate on REMIC 1 Regular Interest LTA2: (A)
in the case of each Distribution Date through the Distribution Date in September
2005 the lesser of (i) 2.430% per annum and (ii) the Maximum Cap Rate and (B) in
the case of each Distribution Date thereafter, to the lesser of (i) LIBOR plus
the Certificate Margin of the Class A-2 Certificates and (ii) the Maximum Cap
Rate for the purpose of this calculation; and (ii) the Maximum Cap Rate for the
purpose of this calculation; with the rate on REMIC 1 Regular Interest LTM1
subject to a cap equal to the lesser of (i) LIBOR plus the Certificate Margin of
the Class M-1 Certificates and (ii) the Maximum Cap Rate for the purpose of this
calculation; with the rate on REMIC 1 Regular Interest LTM2 subject to a cap
equal to the lesser of (i) LIBOR plus the Certificate Margin of the Class M-2
Certificates and (ii) the Maximum Cap Rate for the purpose of this calculation;
with the rate on REMIC 1 Regular Interest LTM3 subject to a cap equal to the
lesser of (i) LIBOR plus the Certificate Margin of the Class M3 Certificates and
(ii) the Maximum Cap Rate for the purpose of this calculation; with the rate on
REMIC 1 Regular Interest LTM4 subject to a cap equal to the lesser of (i) LIBOR
plus the Certificate Margin of the Class M-4 Certificates and (ii) the Maximum
Cap Rate for the purpose of this calculation; with the rate on REMIC 1 Regular
Interest LTM5 subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the Class M-5 Certificates and (ii) the Maximum Cap Rate
for the purpose of this calculation and with the rate on REMIC 1 Regular
Interest LTZZ subject to a cap of zero for the purpose of this calculation;
provided, however, that for this purpose, calculations of the Uncertificated
REMIC 1 Pass-Through Rate and the related caps with respect to REMIC 1 Regular
Interest LTM1, REMIC 1 Regular Interest LTM2, REMIC 1 Regular Interest LTM3,
REMIC 1 Regular Interest LTM4 and REMIC 1 Regular Interest LTM5 shall be
multiplied by a fraction, the numerator of which is the actual number of days in
the Accrual Period and the denominator of which is 30.
"Maximum Cap Rate": For any Distribution Date and the Class A
Certificates, the weighted average of the Adjusted Net Maximum Mortgage Rates of
the Mortgage Loans, weighted on the basis of the outstanding Principal Balances
of the Mortgage Loans as of the first day of the month preceding the month of
such Distribution Date. For any Distribution Date and the Mezzanine
Certificates, a per annum rate equal to the product of (x) the weighted average
of the Adjusted Net Maximum Mortgage Rates of the Mortgage Loans, weighted on
the basis of the outstanding Principal Balances of the Mortgage Loans as of the
first day of the month preceding the month of such Distribution Date and (y) a
fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Accrual Period.
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"Maximum Uncertificated Accrued Interest Deferral Amount":
With respect to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 1 Pass-Through Rate applicable to REMIC 1 Regular Interest
LTZZ for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LTZZ minus the REMIC 1
Overcollateralization Amount, in each case for such Distribution Date, over (b)
Uncertificated Accrued Interest on REMIC 1 Regular Interest LTA1 with the rate
on REMIC 1 Regular Interest LTA1 subject to a cap equal to (A) in the case of
each Distribution Date through the Distribution Date in September 2005, the
lesser of (i) 2.520% per annum and (ii) the Maximum Cap Rate and (B) in the case
of each Distribution Date thereafter, the lesser of (i) LIBOR plus the
Certificate Margin of the Class A-1 Certificates and (ii) the Maximum Cap Rate
for the purpose of this calculation; Uncertificated Accrued Interest on REMIC 1
Regular Interest LTA2 with the rate on REMIC 1 Regular Interest LTA2 subject to
a cap equal to (A) in the case of each Distribution Date through the
Distribution Date in September 2005, the lesser of (i) 2.430% per annum and (ii)
the Maximum Cap Rate and (B) in the case of each Distribution Date thereafter,
the lesser of (i) LIBOR plus the Certificate Margin of the Class A-2
Certificates and (ii) the Maximum Cap Rate for the purpose of this calculation;
Uncertificated Accrued Interest on REMIC 1 Regular Interest LTM1 with the rate
on REMIC 1 Regular Interest LTM1 subject to a cap equal to the lesser of (i)
LIBOR plus the Certificate Margin of the Class M-1 Certificates and (ii) the
related Maximum Cap Rate for the purpose of this calculation; Uncertificated
Accrued Interest on REMIC 1 Regular Interest LTM2 with the rate on REMIC 1
Regular Interest LTM2 subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the Class M-2 Certificates and (ii) the related Maximum
Cap Rate for the purpose of this calculation; Uncertificated Accrued Interest on
REMIC 1 Regular Interest LTM3 with the rate on REMIC 1 Regular Interest LTM3
subject to a cap equal to the lesser of (i) LIBOR plus the Certificate Margin of
the Class M-3 Certificates and (ii) the related Maximum Cap Rate for the purpose
of this calculation; Uncertificated Accrued Interest on REMIC 1 Regular Interest
LTM4 with the rate on REMIC 1 Regular Interest LTM4 subject to a cap equal to
the lesser of (i) LIBOR plus the Certificate Margin of the Class M-4
Certificates and (ii) the related Maximum Cap Rate for the purpose of this
calculation for such Distribution Date; and Uncertificated Accrued Interest on
REMIC 1 Regular Interest LTM5 with the rate on REMIC 1 Regular Interest LTM5
subject to a cap equal to the lesser of (i) LIBOR plus the Certificate Margin of
the Class M-5 Certificates and (ii) the related Maximum Cap Rate for the purpose
of this calculation for such Distribution Date provided, however, that for this
purpose, calculations of the Uncertificated REMIC 1 Pass-Through Rate and the
related caps with respect to REMIC 1 Regular Interest LTM1, REMIC 1 Regular
Interest LTM2, REMIC 1 Regular Interest LTM3, REMIC 1 Regular Interest LTM4 and
REMIC 1 Regular Interest LTM5 shall be multiplied by a fraction, the numerator
of which is the actual number of days in the Accrual Period and the denominator
of which is 30.
"Maximum Mortgage Rate": With respect to each Adjustable-Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
maximum Mortgage Rate thereunder.
"MERS": Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
"MERS(R) System": The system of recording transfers of
Mortgages electronically maintained by MERS.
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"MIN": The Mortgage Identification Number of Mortgage Loans
registered with MERS on the MERS(R)System.
"MOM Loan": With respect to any Household Mortgage Loan, MERS
acting as the mortgagee of such Mortgage Loan, solely as nominee for the
originator of such Mortgage Loan and its successors and assigns, at the
origination thereof.
"Mezzanine Certificate": Any Class M-1 Certificate, Class M-2
Certificate, Class M- 3 Certificate, Class M-4 Certificate or Class M-5
Certificate.
"Minimum Mortgage Rate": With respect to each Adjustable-Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
minimum Mortgage Rate thereunder.
"Monthly Interest Distributable Amount": With respect to the
Class A Certificates, Mezzanine Certificates and the Class C Certificates and
any Distribution Date, the amount of interest accrued during the related Accrual
Period at the related Pass-Through Rate on the Certificate Principal Balance (or
Notional Amount in the case of the Class C Certificates) of such Class
immediately prior to such Distribution Date, in each case, reduced by any Net
Prepayment Interest Shortfalls, Relief Act Interest Shortfalls or other
shortfalls allocated to such Certificate as provided in Section 1.03.
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Servicer pursuant to Section 3.07; and (c) on the assumption that all other
amounts, if any, due under such Mortgage Loan are paid when due.
"Moody's": Xxxxx'x Investors Service, Inc., or its successor
in interest.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first lien on, or first priority security interest in, a Mortgaged
Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to time
held as a part of the Trust Fund, the Mortgage Loans so held being identified in
the Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The agreement among the
Originator, the Seller and the Depositor, regarding the transfer of the Mortgage
Loans by the Seller to or at the direction of the Depositor, substantially in
the form attached hereto as Exhibit C.
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"Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in REMIC 1 on such date, separately identifying the Group I
Mortgage Loans and the Group II Mortgage Loans, attached hereto as Exhibit D.
The Mortgage Loan Schedule shall be prepared by the Seller and shall set forth
the following information with respect to each Mortgage Loan, as applicable:
(1) the Mortgage Loan identifying number;
(2) [reserved];
(3) the state and zip code of the Mortgaged Property;
(4) a code indicating whether the Mortgaged Property was
represented by the borrower, at the time of origination, as being
owner-occupied;
(5) the type of Residential Dwelling constituting the
Mortgaged Property;
(6) the original months to maturity;
(7) the stated remaining months to maturity from the Cut-off
Date based on the original amortization schedule;
(8) the Loan-to-Value Ratio at origination;
(9) the Mortgage Rate in effect immediately following the
Cut-off Date;
(10) the date on which the first Monthly Payment was due on
the Mortgage Loan;
(11) the stated maturity date;
(12) the amount of the Monthly Payment at origination;
(13) the amount of the Monthly Payment due on the first Due
Date after the Cut- off Date;
(14) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance;
(15) the original principal amount of the Mortgage Loan;
(16) the Stated Principal Balance of the Mortgage Loan as of
the Close of Business on the Cut-off Date;
(17) a code indicating the purpose of the Mortgage Loan (i.e.,
purchase financing, rate/term refinancing, cash-out refinancing);
26
(18) the Mortgage Rate at origination;
(19) a code indicating the documentation program (i.e., full
documentation, limited income verification, no income verification,
alternative income verification);
(20) the risk grade;
(21) the Value of the Mortgaged Property;
(22) the sale price of the Mortgaged Property, if applicable;
(23) the actual unpaid principal balance of the Mortgage Loan
as of the Cut-off Date;
(24) the type and term of the related Prepayment Charge;
(25) with respect to any Adjustable-Rate Mortgage Loan, the
rounding code, the minimum Mortgage Rate, the maximum Mortgage Rate,
the Gross Margin, the next Adjustment Date and the Periodic Rate Cap;
(26) the program code; and
(27) [reserved].
The Mortgage Loan Schedule shall set forth the following
information, with respect to the Mortgage Loans in the aggregate and for each
Loan Group as of the Cut-off Date: (1) the number of Mortgage Loans (separately
identifying the number of Fixed-Rate Mortgage Loans and the number of
Adjustable-Rate Mortgage Loans); (2) the current Principal Balance of the
Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans and
(4) the weighted average remaining term to maturity of the Mortgage Loans. The
Mortgage Loan Schedule shall be amended from time to time by the Servicer in
accordance with the provisions of this Agreement. With respect to any Qualified
Substitute Mortgage Loan, Cut-off Date shall refer to the related Cut-off Date
for such Mortgage Loan, determined in accordance with the definition of Cut-off
Date herein. On the Closing Date, the Depositor will deliver to the Servicer, as
of the Cut-off Date, an electronic copy of the Mortgage Loan Schedule
"Mortgage Note": The original executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on
Exhibit D from time to time, and any REO Properties acquired in respect thereof.
"Mortgage Rate": With respect to each Fixed-Rate Mortgage
Loan, the rate set forth in the related Mortgage Note. With respect to each
Adjustable-Rate Mortgage Loan, the annual rate at which interest accrues on such
Mortgage Loan from time to time in accordance with the provisions of the related
Mortgage Note, which rate (A) as of any date of determination until the first
27
Adjustment Date following the Cut-off Date shall be the rate set forth in the
Mortgage Loan Schedule as the Mortgage Rate in effect immediately following the
Cut-off Date and (B) as of any date of determination thereafter shall be the
rate as adjusted on the most recent Adjustment Date, to equal the sum, rounded
to the next highest or nearest 0.125% (as provided in the Mortgage Note), of the
Index, determined as set forth in the related Mortgage Note, plus the related
Gross Margin subject to the limitations set forth in the related Mortgage Note.
With respect to each Mortgage Loan that becomes an REO Property, as of any date
of determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.
"Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of a fee simple estate in
a parcel of real property improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated
Mortgage Loan or any other disposition of related Mortgaged Property (including
REO Property) the related Liquidation Proceeds and Insurance Proceeds net of
Advances, Servicing Advances, Servicing Fees and any other accrued and unpaid
servicing fees received and retained in connection with the liquidation of such
Mortgage Loan or Mortgaged Property.
"Net Monthly Excess Cashflow": With respect to each
Distribution Date, the sum of (a) any Overcollateralization Release Amount for
such Distribution Date and (b) the excess of (x) Available Funds for such
Distribution Date over (y) the sum for such Distribution Date of (A) the Monthly
Interest Distributable Amounts for the Class A Certificates and the Mezzanine
Certificates, (B) the Unpaid Interest Shortfall Amounts for the Class A
Certificates and (C) the Principal Remittance Amount.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property), as of any date of determination, a per annum rate of
interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus
the Servicing Fee Rate.
"Net Prepayment Interest Shortfall": With respect to any
Distribution Date, the excess, if any, of any Prepayment Interest Shortfalls for
such date over the related Compensating Interest.
"Net WAC Rate": For any Distribution Date and the Offered
Certificates, a per annum rate equal to the product of (x) the weighted average
of the Adjusted Net Mortgage Rates of the Mortgage Loans, weighted on the basis
of the outstanding Principal Balances of the Mortgage Loans as of the first day
of the month preceding the month of such Distribution Date and (y) a fraction,
(i) in the case of the Mezzanine Certificates, the numerator of which is 30 and
the denominator of which is the actual number of days elapsed in the related
Accrual Period. For federal income tax purposes, the economic equivalent of such
rate shall be expressed as the Uncertificated REMIC 1 Pass-Through Rate. For any
Distribution Date and the Class A Certificates, the weighted average of the
Adjusted Net Mortgage Rates of the Mortgage Loans, weighted on the basis of the
28
outstanding Principal Balances of the Mortgage Loans as of the first day of the
month preceding the month of such Distribution Date.
"Net WAC Rate Carryover Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and any Distribution Date, the sum
of (A) the positive excess of (i) the amount of interest accrued on such Class
of Certificates on such Distribution Date calculated at the related Formula
Rate, over (ii) the amount of interest accrued on such Class of Certificates at
the Net WAC Rate for such Distribution Date and (B) the Net WAC Rate Carryover
Amount for the previous Distribution Date not previously paid, together with
interest thereon at a rate equal to the related Formula Rate for such
Distribution Date and for such Accrual Period.
"Net WAC Rate Carryover Reserve Account": The account
established and maintained pursuant to Section 3.28.
"New Lease": Any lease of REO Property entered into on behalf
of the Trust, including any lease renewed or extended on behalf of the Trust if
the Trust has the right to renegotiate the terms of such lease.
"Nonrecoverable Advance": Any Advance or Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Servicer, will not be
ultimately recoverable from Late Collections, Insurance Proceeds, Liquidation
Proceeds or condemnation proceeds on such Mortgage Loan or REO Property as
provided herein.
"Notional Amount": Immediately prior to any Distribution Date
with respect to the Class C Certificates, the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interests.
"Offered Certificates": The Class A Certificates and the
Mezzanine Certificates offered to the public pursuant to the Prospectus
Supplement.
"Officers' Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Servicer, the Seller or the
Depositor, as applicable.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be a salaried counsel for the Depositor or the Servicer,
acceptable to the Trustee, except that any opinion of counsel relating to (a)
the qualification of any REMIC as a REMIC or (b) compliance with the REMIC
Provisions must be an opinion of Independent counsel.
"Optional Termination Date": The first Distribution Date on
which the Servicer may opt to terminate the Trust Fund pursuant to Section
10.01.
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"Original Class Certificate Principal Balance": With respect
to the Class A Certificates, the Mezzanine Certificates, the Class C
Certificates and the Class P Certificates, the corresponding amounts set forth
opposite such Class above in the Preliminary Statement.
"Original Mortgage Loan": Any of the Mortgage Loans included
in the Trust Fund as of the Closing Date. The aggregate principal balance of the
Original Mortgage Loans as of the Closing Date is equal to $445,308,288.91.
"Originator": Fremont Investment & Loan, a state chartered
industrial bank headquartered in Anaheim, California, or its successor in
interest.
"Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount on such Distribution Date (after
giving effect to distributions in respect of the Group I Basic Principal
Distribution Amount and the Group II Basic Principal Distribution Amount on such
Distribution Date).
"Overcollateralization Floor": With respect to the Class A-1
Principal Distribution Amount, $1,691,334.14. With respect to the Class A-2
Principal Distribution Amount, $535,207.30. With respect to each of the Class
M-1 Principal Distribution Amount, the Class M-2 Principal Distribution Amount,
the Class M-3 Principal Distribution Amount, the Class M-4 Principal
Distribution Amount and the Class M-5 Principal Distribution Amount,
$2,226,541.44.
"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, $8,906,165.78 (ii) on or
after the Stepdown Date provided a Trigger Event is not in effect, the greater
of (A) the lesser of (x) 4.00% of the aggregate Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (y) $8,906,165.78 and (B)
$2,226,541.44 and (iii) on or after the Stepdown Date if a Trigger Event is in
effect, the Overcollateralization Target Amount for the immediately preceding
Distribution Date.
"Overcollateralized Amount": For any Distribution Date, the
amount equal to (i) the aggregate Principal Balance of the Mortgage Loans as of
the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) as of the related Determination Date minus (ii) the
sum of the aggregate Certificate Principal Balance of the Class A Certificates,
the Mezzanine Certificates and the Class P Certificates as of such Distribution
Date after giving effect to distributions to be made on such Distribution Date.
30
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
"Pass-Through Rate": With respect to the Class A-1
Certificates, the Class A-2 Certificates and the Mezzanine Certificates and any
Distribution Date, the lesser of (x) the related Formula Rate for such
Distribution Date and (y) the Net WAC Rate for such Distribution Date. With
respect to the Class C Certificates and any Distribution Date, a per annum rate
equal to the percentage equivalent of a fraction, the numerator of which is the
sum of the amounts calculated pursuant to clauses (A) through (J) below, and the
denominator of which is the aggregate of the Uncertificated Principal Balances
of the REMIC 1 Regular Interests. For purposes of calculating the Pass-Through
Rate for the Class C Certificates, the numerator is equal to the sum of the
following components:
(A) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LTAA minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTAA;
(B) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LTA1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTA1;
(C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LTA2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTA2;
(D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LTM minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTM1;
(E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LTM2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTM2;
(F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LTM3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTM3;
(G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LTM4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTM4;
(H) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LTM5 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTM5;
31
(I) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LTZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTZZ; and
(J) 100% of the interest on the REMIC 1 Regular Interest LTP.
"Paying Agent": Any paying agent appointed pursuant to Section
5.05.
"Percentage Interest": With respect to any Certificate (other
than a Residual Certificate), a fraction, expressed as a percentage, the
numerator of which is the Initial Certificate Principal Balance represented by
such Certificate and the denominator of which is the Original Class Certificate
Principal Balance of the related Class. With respect to a Residual Certificate,
the portion of the Class evidenced thereby, expressed as a percentage, as stated
on the face of such Certificate; provided, however, that the sum of all such
percentages for each such Class totals 100%.
"Periodic Rate Cap": With respect to each Adjustable-Rate
Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth
in the related Mortgage Note, which is the maximum amount by which the Mortgage
Rate for such Mortgage Loan may increase or decrease (without regard to the
Maximum Mortgage Rate or the Minimum Mortgage Rate) on such Adjustment Date from
the Mortgage Rate in effect immediately prior to such Adjustment Date.
"Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued or managed by the Depositor, the Servicer, the
Trustee or any of their respective Affiliates or for which an Affiliate of the
Trustee serves as an advisor:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit
of, bankers' acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee or its
agent acting in their respective commercial capacities) incorporated
under the laws of the United States of America or any state thereof and
subject to supervision and examination by federal and/or state
authorities, so long as, at the time of such investment or contractual
commitment providing for such investment, such depository institution
or trust company (or, if the only Rating Agency is S&P, in the case of
the principal depository institution in a depository institution
holding company, debt obligations of the depository institution holding
company) or its ultimate parent has a short-term uninsured debt rating
in one of the two highest available ratings of Fitch and Xxxxx'x and
the highest available rating category of S&P and provided that each
such investment has an original maturity of no more than 365 days; and
provided further that, if the only Rating Agency is S&P and if the
depository or trust company is a principal subsidiary of a bank holding
company and the debt obligations of such subsidiary are not separately
rated, the applicable rating shall be that of the bank holding company;
and, provided further that, if the original maturity of such short-
term obligations of a domestic branch of a foreign depository
32
institution or trust company shall exceed 30 days, the short-term
rating of such institution shall be A-1+ in the case of S&P if S&P is
the Rating Agency; and (B) any other demand or time deposit or deposit
which is fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days
with respect to any security described in clause (i) above and entered
into with a depository institution or trust company (acting as
principal) rated F1+ or higher by Fitch, P-1 by Xxxxx'x and rated A-1+
or higher by S&P, provided, however, that collateral transferred
pursuant to such repurchase obligation must be of the type described in
clause (i) above and must (A) be valued daily at current market prices
plus accrued interest, (B) pursuant to such valuation, be equal, at all
times, to 105% of the cash transferred by the Trustee in exchange for
such collateral and (C) be delivered to the Trustee or, if the Trustee
is supplying the collateral, an agent for the Trustee, in such a manner
as to accomplish perfection of a security interest in the collateral by
possession of certificated securities;
(iv) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of the United
States of America or any State thereof and that are rated by S&P (and
if rated by any other Rating Agency, also by such other 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 S&P (and if rated by any other
Rating Agency, also by such other Rating Agency) in its highest
short-term unsecured debt rating available at the time of such
investment;
(vi) units of money market funds, including those money market
funds managed or advised by the Trustee or its Affiliates, that have
been rated "AAA" by Fitch (if rated by Fitch), "Aaa" by Xxxxx'x and
"AAAm" or "AAAm-G" by S&P; and
(vii) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other obligation,
security or investment, as may be acceptable to the Rating Agencies in
writing as a permitted investment of funds backing securities having
ratings equivalent to its highest initial rating of the Class A
Certificates;
provided, that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any transferee of a Residual
Certificate other than a Disqualified Organization or a non-U.S. Person.
33
"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.
"Pool Balance": As of any date of determination, the aggregate
principal balance of the Mortgage Loans in both Loan Groups as of such date.
"Prepayment Assumption": As defined in the Prospectus
Supplement.
"Prepayment Charge": With respect to any Mortgage Loan, the
charges or premiums, if any, due in connection with a full or partial prepayment
of such Mortgage Loan in accordance with the terms thereof (other than any
Servicer Prepayment Charge Payment Amount).
"Prepayment Charge Schedule": As of any date, the list of
Prepayment Charges on the Mortgage Loans included in the Trust Fund on such
date, attached hereto as Schedule I (including the prepayment charge summary
attached thereto). The Prepayment Charge Schedule shall set forth the following
information with respect to each Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination of the related Mortgage Loan;
(iv) the date on which the first monthly payment was due on
the related Mortgage Loan;
(v) the term of the related Prepayment Charge; and
(vi) the principal balance of the related Mortgage Loan as of
the Cut-off Date.
"Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a Principal
Prepayment in full during the portion of the related Prepayment Period occurring
between the first day of the related Prepayment Period and the last day of the
calendar month preceding the month in which such Distribution Date occurs, an
amount equal to one month's interest at the Net Mortgage Rate on the Mortgage
Loan less any payments made by the Mortgagor. The obligations of the Servicer in
respect of any Prepayment Interest Shortfall are set forth in Section 3.24.
"Prepayment Period": With respect to any Distribution Date,
the calendar month preceding the calendar month in which such Distribution Date
occurs.
34
"Principal Balance": As to any Mortgage Loan other than a
Liquidated Mortgage Loan, and any day, the related Cut-off Date Principal
Balance, minus all collections credited against the Cut-off Date Principal
Balance of any such Mortgage Loan. For purposes of this definition, a Liquidated
Mortgage Loan shall be deemed to have a Principal Balance equal to the Principal
Balance of the related Mortgage Loan as of the final recovery of related
Liquidation Proceeds and a Principal Balance of zero thereafter. As to any REO
Property and any day, the Principal Balance of the related Mortgage Loan
immediately prior to such Mortgage Loan becoming REO Property minus any REO
Principal Amortization received with respect thereto on or prior to such day.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.
"Principal Remittance Amount": With respect to any
Distribution Date, the sum of the Group I Principal Remittance Amount and the
Group II Principal Remittance Amount.
"Prospectus Supplement": That certain Prospectus Supplement
dated September 23, 2003 relating to the public offering of the Class A
Certificates and the Mezzanine Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03 or
10.01, and as confirmed by an Officers' Certificate from the Servicer to the
Trustee, an amount equal to the sum of (i) 100% of the Principal Balance thereof
as of the date of purchase (or such other price as provided in Section 10.01),
(ii) in the case of (x) a Mortgage Loan, accrued interest on such Principal
Balance at the applicable Mortgage Rate in effect from time to time from the Due
Date as to which interest was last covered by a payment by the Mortgagor or an
advance by the Servicer, which payment or advance had as of the date of purchase
been distributed pursuant to Section 4.01, through the end of the calendar month
in which the purchase is to be effected, and (y) an REO Property, the sum of (1)
accrued interest on such Principal Balance at the applicable Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or an advance by the Servicer through the end of
the calendar month immediately preceding the calendar month in which such REO
Property was acquired, plus (2) REO Imputed Interest for such REO Property for
each calendar month commencing with the calendar month in which such REO
Property was acquired and ending with the calendar month in which such purchase
is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and Advances that as of the date of purchase had
been distributed as or to cover REO Imputed Interest pursuant to Section 4.04,
(iii) any unreimbursed Servicing Advances and Advances and any unpaid Servicing
Fees allocable to such Mortgage Loan or REO Property, (iv) any amounts
previously withdrawn from the Collection Account in respect of such Mortgage
Loan or REO Property pursuant to Section 3.23 and (v) in the case of a Mortgage
Loan required to be purchased pursuant to Section 2.03, expenses reasonably
incurred or to be incurred by the Servicer or the Trustee in respect of the
breach or defect giving rise to the purchase obligation including any costs and
damages incurred by the trust in connection with any violation by such loan of
any predatory or abusive lending law.
"Qualified Insurer": Any insurance company acceptable to
Xxxxxx Xxx.
35
"Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
or the Mortgage Loan Purchase Agreement which must, on the date of such
substitution, (i) have an outstanding principal balance (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), after application of all scheduled payments of
principal and interest due during or prior to the month of substitution, not in
excess of, and not more than 5% less than, the outstanding principal balance of
the Deleted Mortgage Loan as of the Due Date in the calendar month during which
the substitution occurs, (ii) have a Mortgage Rate not less than (and not more
than one percentage point in excess of) the Mortgage Rate of the Deleted
Mortgage Loan, (iii) if the Qualified Substitute Mortgage Loan is an
Adjustable-Rate Mortgage Loan, have a Maximum Mortgage Rate not less than the
Maximum Mortgage Rate on the Deleted Mortgage Loan, (iv) if the Qualified
Substitute Mortgage Loan is an Adjustable-Rate Mortgage Loan, have a Minimum
Mortgage Rate not less than the Minimum Mortgage Rate of the Deleted Mortgage
Loan, (v) if the Qualified Substitute Mortgage Loan is an Adjustable-Rate
Mortgage Loan, have a Gross Margin equal to or greater than the Gross Margin of
the Deleted Mortgage Loan, (vi) if the Qualified Substitute Mortgage Loan is an
Adjustable-Rate Mortgage Loan, have a next Adjustment Date not more than two
months later than the next Adjustment Date on the Deleted Mortgage Loan, (vii)
[reserved], (viii) have a remaining term to maturity not greater than (and not
more than one year less than) that of the Deleted Mortgage Loan, (ix) be current
as of the date of substitution, (x) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (xi) have a risk grading determined by the
Originator at least equal to the risk grading assigned on the Deleted Mortgage
Loan, (xii) have been underwritten or reunderwritten by the Originator in
accordance with the same underwriting criteria and guidelines as the Deleted
Mortgage Loan, (xiii) [reserved]; and (xiv) conform to each representation and
warranty set forth in Section 3.01 of the Mortgage Loan Purchase Agreement
applicable to the Deleted Mortgage Loan. In the event that one or more mortgage
loans are substituted for one or more Deleted Mortgage Loans, the amounts
described in clause (i) hereof shall be determined on the basis of aggregate
principal balances, the Mortgage Rates described in clauses (ii) through (vi)
hereof shall be satisfied for each such mortgage loan, the risk gradings
described in clause (x) hereof shall be satisfied as to each such mortgage loan,
the terms described in clause (viii) hereof shall be determined on the basis of
weighted average remaining term to maturity (provided that no such mortgage loan
may have a remaining term to maturity longer than the Deleted Mortgage Loan),
the Loan-to-Value Ratios described in clause (x) hereof shall be satisfied as to
each such mortgage loan and, except to the extent otherwise provided in this
sentence, the representations and warranties described in clause (xiv) hereof
must be satisfied as to each Qualified Substitute Mortgage Loan or in the
aggregate, as the case may be.
"Rating Agency or Rating Agencies": Fitch, Xxxxx'x and S&P or
their successors. If such agencies or their successors are no longer in
existence, "Rating Agencies" shall be such nationally recognized statistical
rating agencies, or other comparable Persons, designated by the Depositor,
notice of which designation shall be given to the Trustee and Servicer.
"Realized Loss": With respect to any Liquidated Mortgage Loan,
the amount of loss realized equal to the portion of the Principal Balance
remaining unpaid after application of all Net Liquidation Proceeds in respect of
such Mortgage Loan.
36
"Record Date": With respect to (i) the Class A-1 Certificates,
the Class A-2 Certificates, the Class P Certificates, the Class C Certificates
and the Residual Certificates, the Close of Business on the last Business Day of
the calendar month preceding the month in which the related Distribution Date
occurs and (ii) the Mezzanine 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 any of the
Mezzanine Certificates are available pursuant to Section 5.02, the Record Date
for such Certificates that are Definitive Certificates shall be the last
Business Day of the calendar month preceding the month in which the related
Distribution Date occurs.
"Reference Banks": Those banks (i) with an established place
of business in London, England, (ii) not controlling, under the control of or
under common control with the Originator or the Servicer or any affiliate
thereof and (iii) which have been designated as such by the Trustee after
consultation with the Depositor; provided, however, that if fewer than two of
such banks provide a LIBOR rate, then any leading banks selected by the Trustee
after consultation with the Depositor which are engaged in transactions in
United States dollar deposits in the international Eurocurrency market.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of
which were not used to purchase the related Mortgaged Property.
"Regular Certificate": Any of the Class A Certificates,
Mezzanine Certificates, Class C Certificates or Class P Certificates.
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
"Relief Act Interest Shortfall": With respect to any
Distribution Date, for any Mortgage Loan with respect to which there has been a
reduction in the amount of interest collectible thereon for the most recently
ended Due Period as a result of the application of the Relief Act, the amount by
which (i) interest collectible on such Mortgage Loan during such Due Period is
less than (ii) one month's interest on the Principal Balance of such Mortgage
Loan at the Mortgage Rate for such Mortgage Loan before giving effect to the
application of the Relief Act.
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"REMIC 1": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made consisting of: (i) such
Mortgage Loans as from time to time are subject to this Agreement, together with
the Mortgage Files relating thereto, and together with all collections thereon
and proceeds thereof, (ii) any REO Property, together with all collections
thereon and proceeds thereof, (iii) the Trustee's rights with respect to the
Mortgage Loans under all insurance policies, required to be maintained pursuant
to this Agreement and any proceeds thereof, (iv) the Depositor's rights under
the Mortgage Loan Purchase Agreement (including any security interest created
thereby), (v) [reserved] and (vi) the Collection Account, the Distribution
Account (subject to the last sentence of this definition) and any REO Account
and such assets that are deposited
37
therein from time to time and any investments thereof, together with any and all
income, proceeds and payments with respect thereto. Notwithstanding the
foregoing, however, a REMIC election will not be made with respect to the Net
WAC Rate Carryover Reserve Account or any Servicer Prepayment Charge Payment
Amounts.
"REMIC 1 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Principal Balance of the Mortgage Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LTAA minus the Marker Rate, divided by (b) 12.
"REMIC 1 Overcollateralization Target Amount": 1% of the
Overcollateralization Target Amount.
"REMIC 1 Overcollateralization Amount": With respect to any
date of determination, (i) 1% of the aggregate Uncertificated Principal Balances
of the REMIC 1 Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interest LTA1, REMIC 1 Regular Interest
LTA2, REMIC 1 Regular Interest LTM1, REMIC 1 Regular Interest LTM2, REMIC 1
Regular Interest LTM3, REMIC 1 Regular Interest LTM4, REMIC 1 Regular Interest
LTM5 and REMIC 1 Regular Interest LTP, in each case as of such date of
determination.
"REMIC 1 Principal Loss Allocation Amount": With respect to
any Distribution Date, an amount equal to the product of (i) the aggregate
Principal Balance of the Mortgage Loans and related REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Principal Balances of REMIC 1 Regular Interest
LTA1, REMIC 1 Regular Interest LTA2, REMIC 1 Regular Interest LTM1, REMIC 1
Regular Interest LTM2, REMIC 1 Regular Interest LTM3, REMIC 1 Regular Interest
LTM4, REMIC 1 Regular Interest LTM5 and the denominator of which is the
aggregate of the Uncertificated Principal Balances of REMIC 1 Regular Interest
LTA1, REMIC 1 Regular Interest LTA2, REMIC 1 Regular Interest LTM1, REMIC 1
Regular Interest LTM2, REMIC 1 Regular Interest LTM3, REMIC 1 Regular Interest
LTM4, REMIC 1 Regular Interest LTM5 and REMIC 1 Regular Interest LTZZ.
"REMIC 1 Regular Interest LTAA": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LTAA shall
accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LTA1": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LTA1 shall
accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate in
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.
38
"REMIC 1 Regular Interest LTA2": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LTA2 shall
accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LTM1": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LTM1A
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LTM2": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LTM2 shall
accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LTM3": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LTM3 shall
accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LTM4": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LTM4 shall
accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LTM5": 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 LTM5 shall
accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LTP": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LTP shall
accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject
39
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 LTZZ": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LTZZ shall
accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interests": REMIC 1 Regular Interest LTAA,
REMIC 1 Regular Interest LTA1, REMIC 1 Regular Interest LTA2, REMIC 1 Regular
Interest LTM1, REMIC 1 Regular Interest LTM2, REMIC 1 Regular Interest LTM3,
REMIC 1 Regular Interest LTM4, REMIC 1 Regular Interest LTM5, REMIC 1 Regular
Interest LTZZ and REMIC 1 Regular Interest LTP.
"REMIC 2": The segregated pool of assets consisting of all of
the REMIC 1 Regular Interests conveyed in trust to the Trustee, for the benefit
of the Holders of the Regular Certificates and the Class R Certificates (in
respect of the Class R-2 Interest), pursuant to Article II hereunder, and all
amounts deposited therein, with respect to which a separate REMIC election is to
be made.
"REMIC 2 Regular Interests": The Regular Certificates (other
than the Class M-2, Class M-4 and Class M-5 Certificates) and the Class M-2,
Class M-4 and Class M-5 Interests.
"REMIC 3": The segregated pool of assets consisting of the
Class M-2 Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Class M-2 Certificates and the Class R-X Certificates (in respect
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 4": The segregated pool of assets consisting of the
Class M-4 Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Class M-4 Certificates and the Class R-X Certificates (in respect
of the Class R-4 Interest), pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC 5": The segregated pool of assets consisting of the
Class M-5 Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Class M-5 Certificates and the Class R-X Certificates (in respect
of the Class R-5 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.
"Remittance Report": A report prepared by the Servicer and
delivered to the Trustee pursuant to Section 4.04.
40
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code.
"REO Account": The account or accounts maintained by the
Servicer in respect of an REO Property pursuant to Section 3.23.
"REO Disposition": The sale or other disposition of an REO
Property on behalf of the Trust Fund.
"REO Imputed Interest": As to any REO Property, for any
calendar month during which such REO Property was at any time part of the Trust
Fund, one month's interest at the applicable Net Mortgage Rate on the Principal
Balance of such REO Property (or, in the case of the first such calendar month,
of the related Mortgage Loan if appropriate) as of the Close of Business on the
Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO
Property, for any calendar month, the excess, if any, of (a) the aggregate of
all amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
10.01 that is allocable to such REO Property) or otherwise, net of any portion
of such amounts (i) payable pursuant to Section 3.23 in respect of the proper
operation, management and maintenance of such REO Property or (ii) payable or
reimbursable to the Servicer pursuant to Section 3.23 for unpaid Servicing Fees
in respect of the related Mortgage Loan and unreimbursed Servicing Advances and
Advances in respect of such REO Property or the related Mortgage Loan, over (b)
the REO Imputed Interest in respect of such REO Property for such calendar
month.
"REO Property": A Mortgaged Property acquired by the Servicer
on behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure,
as described in Section 3.23.
"Request for Release": A release signed by a Servicing
Officer, in the form of Exhibit E attached hereto.
"Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Trustee determines to be either
(i) the arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 1/16 of 1%) of the one-month United States dollar lending rates
which banks in The City of New York selected by the Depositor are quoting on the
relevant Interest Determination Date to the principal London offices of leading
banks in the London interbank market or (ii) in the event that the Trustee can
determine no such arithmetic mean, in the case of any Interest Determination
Date after the initial Interest Determination Date, the lowest one-month United
States dollar lending rate which such New York banks selected by the Depositor
are quoting on such Interest Determination Date to leading European banks.
"Residential Dwelling": Any one of the following: (i) a
detached one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a one-family dwelling unit in a Xxxxxx Xxx eligible
41
condominium project, (iv) a manufactured home, or (v) a detached one-family
dwelling in a planned unit development, none of which is a co-operative or
mobile home.
"Residual Certificate": The Class R Certificates and the Class
R-X Certificates.
"Residual Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee,
any director, any vice president, any assistant vice president, the Secretary,
any assistant secretary, the Treasurer, any assistant treasurer or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and, with respect to a
particular matter, to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"S&P": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or its successor in interest.
"Seller": Greenwich Capital Financial Products, Inc., a
Delaware corporation, in its capacity as Seller under the Mortgage Loan Purchase
Agreement.
"Servicer": Xxxxxx Loan Servicing LP, a Delaware limited
partnership, or any successor servicer appointed as herein provided, in its
capacity as Servicer hereunder.
"Servicer's Assignee": As defined in Section 3.29 hereof.
"Servicer Certification": As defined in Section 3.22(b)
hereof.
"Servicer Event of Termination": One or more of the events
described in Section 7.01.
"Servicer Prepayment Charge Payment Amount": The amounts
payable by the Servicer in respect of any waived Prepayment Charges pursuant to
Section 2.05 or Section 3.01.
"Servicer Remittance Date": With respect to any Distribution
Date, the Business Day prior to such Distribution Date.
"Servicer Termination Test": With respect to any Distribution
Date, the Servicer Termination Test will be failed if the Cumulative Loss
Percentage the applicable percentages set forth below with respect to such
Distribution Date:
Distribution Date Percentage
October 2006 through September 2007 3.50%
October 2007 through September 2008 4.75%
October 2008 through September 2009 6.25%
42
October 2009 through September 2010 6.75%
October 2010 and thereafter 7.00%
"Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09.
"Servicing Advances": All customary, reasonable and necessary
"out of pocket" costs and expenses (including reasonable attorneys' fees and
expenses) incurred by the Servicer in the performance of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration, inspection and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures related to a
Mortgage Loan and any such proceedings that result from the Mortgage Loan being
registered on the MERS(R) System, (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. The Servicer shall not be required to make any Servicing
Advance that would be a Nonrecoverable Advance.
"Servicing Rights Pledgee": One or more lenders, selected by
the Servicer, to which the Servicer will pledge and assign all of its right,
title and interest in, to and under this Agreement, including Wachovia Bank,
National Association, as the representative of certain lenders.
"Servicing Fee": With respect to each Mortgage Loan and for
any calendar month, an amount equal to one month's interest (or in the event of
any payment of interest which accompanies a Principal Prepayment in full made by
the Mortgagor during such calendar month, interest for the number of days
covered by such payment of interest) at the Servicing Fee Rate on the same
principal amount on which interest on such Mortgage Loan accrues for such
calendar month. A portion of such Servicing Fee may be retained by any
Sub-Servicer as its servicing compensation.
"Servicing Fee Rate": 0.50% per annum.
"Servicing Officer": Any officer of the Servicer involved in,
or responsible for, the administration and servicing of Mortgage Loans, whose
name and specimen signature appear on a list of servicing officers furnished by
the Servicer to the Trustee and the Depositor on the Closing Date, as such list
may from time to time be amended.
"Servicing Transfer Costs": Shall mean all reasonable costs
and expenses incurred by the Trustee in connection with the transfer of master
servicing from a predecessor servicer, including, without limitation, any
reasonable costs or expenses associated with the complete transfer of all master
servicing data and the completion, correction or manipulation of such master
servicing data as may be required by the Trustee to correct any errors or
insufficiencies in the master servicing data or otherwise to enable the Trustee
(or any successor servicer appointed pursuant to Section 7.02) to service the
Mortgage Loans properly and effectively and any fees associated with MERS.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a
43
Liquidation Event with respect to such Mortgage Loan would be distributed, the
outstanding principal balance of such Mortgage Loan as of the Cut-off Date as
shown in the Mortgage Loan Schedule, minus the sum of (i) the principal portion
of each Monthly Payment due on a Due Date subsequent to the Cut-off Date to the
extent received from the Mortgagor or advanced by the Servicer and distributed
pursuant to Section 4.01 on or before such date of determination, (ii) all
Principal Prepayments received after the Cut-off Date to the extent distributed
pursuant to Section 4.01 on or before such date of determination, (iii) all
Liquidation Proceeds and Insurance Proceeds to the extent distributed pursuant
to Section 4.01 on or before such date of determination, and (iv) any Realized
Loss incurred with respect thereto as a result of a Deficient Valuation made
during or prior to the Due Period for the most recent Distribution Date
coinciding with or preceding such date of determination; and (b) as of any date
of determination coinciding with or subsequent to the Distribution Date on which
the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan
would be distributed, zero. With respect to any REO Property: (a) as of any date
of determination up to but not including the Distribution Date on which the
proceeds, if any, of a Liquidation Event with respect to such REO Property would
be distributed, an amount (not less than zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of the date on which such REO Property
was acquired on behalf of the Trust Fund, minus the aggregate amount of REO
Principal Amortization in respect of such REO Property for all previously ended
calendar months, to the extent distributed pursuant to Section 4.01 on or before
such date of determination; and (b) as of any date of determination coinciding
with or subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.
"Stepdown Date": The earlier to occur of (i) the Distribution
Date on which the aggregate Certificate Principal Balance of the Class A
Certificates has been reduced to zero and (ii) the later to occur of (x) the
Distribution Date occurring in October 2006 and (y) the first Distribution Date
on which the Credit Enhancement Percentage (calculated for this purpose only
after taking into account payments of principal on the Mortgage Loans and
distribution of the Group I Principal Distribution Amount and the Group II
Principal Distribution Amount to the Certificates then entitled to distributions
of principal on such Distribution Date) is equal to or greater than 40.00%.
"Sub-Servicer": Any Person with which either Servicer has
entered into a Sub- Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
"Sub-Servicing Account": An account established by a
Sub-Servicer which meets the requirements set forth in Section 3.08 and is
otherwise acceptable to the applicable Servicer.
"Sub-Servicing Agreement": The written contract between either
Servicer and a Sub- Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.02.
"Substitution Adjustment": As defined in Section 2.03(d)
hereof.
"Tax Matters Person": The tax matters person appointed
pursuant to Section 9.01(e) hereof.
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"Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed by the Trustee on behalf of each REMIC, together with any and
all other information reports or returns that may be required to be furnished to
the Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.
"Termination Price": As defined in Section 10.01(a) hereof.
"Terminator": As defined in Section 10.01(a) hereof.
"Trigger Event": A Trigger Event is in effect with respect to
any Distribution Date on or after the Stepdown Date if:
(a) the Delinquency Percentage exceeds 38.75% of the Credit
Enhancement Percentage or
(b) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related Due Period divided by the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date exceeds
the applicable percentages set forth below with respect to such Distribution
Date:
DISTRIBUTION DATE OCCURRING IN PERCENTAGE
------------------------------ ----------
October 2006 through September 2007 2.75%
October 2007 through September 2008 4.25%
October 2008 through September 2009 5.75%
October 2009 through September 2010 6.25%
October 2010 and thereafter 6.50%
"Trust": Fremont Home Loan Trust 2003-3, 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, REMIC 4, REMIC
5 and the right to receive any amounts from the Net WAC Rate Carryover Reserve
Account and any Servicer Prepayment Charge Payment Amounts.
"Trustee": Deutsche Bank National Trust Company, a national
banking association, or any successor trustee appointed as herein provided.
"Trustee Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it in the execution of the trust hereby created and in the exercise
and performance of any of the powers and duties of the Trustee hereunder, which
amount shall equal one twelfth of the product of (i) the Trustee Fee Rate
(without
45
regard to the words "per annum"), multiplied by (ii) the aggregate Principal
Balance of the Mortgage Loans and any REO Properties (after giving effect to
scheduled payments of principal due during the Due Period relating to the
previous Distribution Date, to the extent received or advanced and prepayments
collected during the Prepayment Period relating to the previous Distribution
Date).
"Trustee Fee Rate": 0.0057% per annum.
"Unadjusted Net WAC 30/360 Rate": For any Distribution Date, a
per annum rate equal to the weighted average of the Adjusted Net Mortgage Rates
of the Mortgage Loans for such Distribution Date.
"Uncertificated Accrued Interest": With respect to each REMIC
1 Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated REMIC 1 Pass-Through Rate on the
Uncertificated Principal Balance of such REMIC 1 Regular Interest. In each case,
Uncertificated Accrued Interest will be reduced by any Net Prepayment Interest
Shortfalls, Relief Act Interest Shortfalls or other shortfalls allocated to such
Certificate as provided in Section 1.03.
"Uncertificated Principal Balance": With respect to each REMIC
1 Regular Interest, the amount of such REMIC 1 Regular Interest outstanding as
of any date of determination. As of the Closing Date, the Uncertificated
Principal Balance of each REMIC 1 Regular Interest shall equal the amount set
forth in the Preliminary Statement hereto as its initial Uncertificated
Principal Balance. On each Distribution Date, the Uncertificated Principal
Balance of each REMIC 1 Regular Interest shall be reduced by all distributions
of principal made on such REMIC 1 Regular Interest on such Distribution Date
pursuant to Section 4.07 and, if and to the extent necessary and appropriate,
shall be further reduced on such Distribution Date by Realized Losses as
provided in Section 4.08, and the Uncertificated Principal Balances of REMIC 1
Regular Interest LTZZ shall be increased by interest deferrals as provided in
Section 4.07.
"Uncertificated REMIC 1 Pass-Through Rate": For any
Distribution Date and each REMIC 1 Regular Interest, the Unadjusted Net WAC
30/360 Rate of the Mortgage Loans for such Distribution Date.
"Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.14.
"United States Person" or "U.S. Person": A citizen or resident
of the United States, a corporation, partnership (or other entity treated as a
corporation or partnership for United States federal income tax purposes)
created or organized in, or under the laws of, the United States, any state
thereof, or the District of Columbia (except in the case of a partnership, to
the extent provided in Treasury regulations) provided that, for purposes solely
of the restrictions on the transfer of Residual Certificates, no partnership or
other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are required by
the applicable operative agreement to be United States
46
Persons, or an estate the income of which from sources without the United States
is includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have authority to control all substantial decisions
of the trust. The term "United States" shall have the meaning set forth in
Section 7701 of the Code or successor provisions.
"Unpaid Interest Shortfall Amount": With respect to the Class
A Certificates and the Mezzanine Certificates and (i) the first Distribution
Date, zero, and (ii) any Distribution Date after the first Distribution Date,
the amount, if any, by which (a) the sum of (1) the Monthly Interest
Distributable Amount for such Class for the immediately preceding Distribution
Date and (2) the outstanding Unpaid Interest Shortfall Amount, if any, for such
Class for such preceding Distribution Date exceeds (b) the aggregate amount
distributed on such Class in respect of interest pursuant to clause (a) of this
definition on such preceding Distribution Date, plus interest on the amount of
interest due but not paid on the Certificates of such Class on such preceding
Distribution Date, to the extent permitted by law, at the Pass-Through Rate for
such Class for the related Accrual Period.
"Value": With respect to any Mortgaged Property, the lesser of
(i) the lesser of (a) the value thereof as determined by an appraisal made for
the originator of the Mortgage Loan at the time of origination of the Mortgage
Loan by an appraiser who met the minimum requirements of Xxxxxx Xxx and Xxxxxxx
Mac, and (b) the value thereof as determined by a review appraisal conducted by
the Originator in the event any such review appraisal determines an appraised
value ten percent or more lower than the value thereof as determined by the
appraisal referred to in clause (i)(a) above and (ii) the purchase price paid
for the related Mortgaged Property by the Mortgagor with the proceeds of the
Mortgage Loan, provided, however, in the case of a Refinanced Mortgage Loan,
such value of the Mortgaged Property is based solely upon the lesser of (1) the
value determined by an appraisal made for the Originator of such Refinanced
Mortgage Loan at the time of origination of such Refinanced Mortgage Loan by an
appraiser who met the minimum requirements of Xxxxxx Mae and Xxxxxxx Mac and (2)
the value thereof as determined by a review appraisal conducted by the
Originator in the event any such review appraisal determines an appraised value
ten percent or more lower than the value thereof as determined by the appraisal
referred to in clause (ii)(1) above.
"Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. At all times the Class A
Certificates, the Mezzanine Certificates and the Class C Certificates shall have
98% of the Voting Rights (allocated among the Holders of the Class A
Certificates, the Mezzanine Certificates and the Class C Certificates in
proportion to the then outstanding Certificate Principal Balances of their
respective Certificates), the Class P Certificates shall have 1% of the Voting
Rights and the Residual Certificates shall have 1% of the Voting Rights. The
Voting Rights allocated to any Class of Certificates (other than the Class P
Certificates and the Residual Certificates) shall be allocated among all Holders
of each such Class in proportion to the outstanding Certificate Principal
Balance of such Certificates, and the Voting Rights allocated to the Class P
Certificates and the Residual Certificates shall be allocated among all Holders
of each such Class in proportion to such Holders' respective Percentage
Interest; provided, however that when none of the Regular Certificates are
outstanding, 100% of the Voting Rights shall be allocated among
47
Holders of the Residual Certificates in accordance with such Holders' respective
Percentage Interests in the Certificates of such Class.
SECTION 1.02. Accounting.
Unless otherwise specified herein, for the purpose of any
definition or calculation, whenever amounts are required to be netted,
subtracted or added or any distributions are taken into account such definition
or calculation and any related definitions or calculations shall be determined
without duplication of such functions.
SECTION 1.03. Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class A Certificates, the Mezzanine Certificates
and the Class C Certificates for any Distribution Date, (1) the aggregate amount
of any Net Prepayment Interest Shortfalls and any Relief Act Interest Shortfalls
incurred in respect of the Mortgage Loans for any Distribution Date shall be
allocated first, among the Class C Certificates on a PRO RATA basis based on,
and to the extent of, one month's interest at the then applicable Pass-Through
Rate on the Notional Amount of each such Certificate and, thereafter, among the
Class A Certificates and the Mezzanine Certificates on a PRO RATA basis based
on, and to the extent of, one month's interest at the then applicable respective
Pass- Through Rate on the respective Certificate Principal Balance of each such
Certificate and (2) the aggregate amount of any Realized Losses and Net WAC Rate
Carryover Amounts shall be allocated among the Class C Certificates on a PRO
RATA basis based on, and to the extent of, one month's interest at the then
applicable Pass-Through Rate on the Notional Amount of each such Certificate.
For purposes of calculating the amount of Uncertificated
Accrued Interest for the REMIC 1 Regular Interests for any Distribution Date,
the aggregate amount of any Net Prepayment Interest Shortfalls and any Relief
Act Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Accrued Interest
payable to REMIC 1 Regular Interest LTAA and REMIC 1 Regular Interest LTZZ up to
an aggregate amount equal to the REMIC 1 Interest Loss Allocation Amount, 98%
and 2%, respectively, and thereafter among REMIC 1 Regular Interest LTAA, REMIC
1 Regular Interest LTA1, REMIC 1 Regular Interest LTA2, REMIC 1 Regular Interest
LTM1, REMIC 1 Regular Interest LTM2, REMIC 1 Regular Interest LTM3, REMIC 1
Regular Interest LTM4, REMIC 1 Regular Interest LTM5, and REMIC 1 Regular
Interest LTZZ pro rata based on, and to the extent of, one month's interest at
the then applicable respective Uncertificated REMIC 1 Pass-Through Rate on the
respective Uncertificated Principal Balance of each such REMIC 1 Regular
Interest.
48
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to (i) each Mortgage Loan
identified on the Mortgage Loan Schedule, including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest in
any insurance policies in respect of the Mortgage Loans; (iv) the rights of the
Depositor under the Mortgage Loan Purchase Agreement, (v) [reserved], (vi) all
other assets included or to be included in the Trust Fund and (vii) all proceeds
of any of the foregoing. Such assignment includes all interest and principal due
and collected by the Depositor or the Servicer after the Cut-off Date with
respect to the Mortgage Loans.
In connection with such transfer and assignment, the
Depositor, does hereby deliver to, and deposit with the Trustee, or its
designated agent (the "Custodian"), the following documents or instruments with
respect to each Original Mortgage Loan so transferred and assigned, the
following documents or instruments (with respect to each Mortgage Loan, a
"Mortgage File") :
(i) the original Mortgage Note, endorsed either (A) in blank,
in which case the Trustee shall cause the endorsement to be completed
or (B) in the following form: "Pay to the order of Deutsche Bank
National Trust Company, as Trustee, without recourse" or with respect
to any lost Mortgage Note, an original Lost Note Affidavit stating that
the original mortgage note was lost, misplaced or destroyed, together
with a copy of the related mortgage note; provided, however, that such
substitutions of Lost Note Affidavits for original Mortgage Notes may
occur only with respect to Mortgage Loans, the aggregate Cut-off Date
Principal Balance of which is less than or equal to 1.00% of the Pool
Balance as of the Cut- off Date;
(ii) the original Mortgage (noting the presence of the MIN of
the Mortgage Loan and language indicating that the Mortgage Loan is a
MOM Loan if the Mortgage Loan is a MOM Loan), with evidence of
recording thereon, and the original recorded power of attorney, if the
Mortgage was executed pursuant to a power of attorney, with evidence of
recording thereon or, if such Mortgage or power of attorney has been
submitted for recording but has not been returned from the applicable
public recording office, has been lost or is not otherwise available, a
copy of such Mortgage or power of attorney, as the case may be,
certified to be a true and complete copy of the original submitted for
recording;
49
(iii) unless the Mortgage Loan is registered on the MERS(R)
System, an original Assignment, in form and substance acceptable for
recording. The Mortgage shall be assigned either (A) in blank or (B) to
"Deutsche Bank National Trust Company, as Trustee, without recourse";
(iv) an original copy of any intervening assignment of
Mortgage showing a complete chain of assignments (or to MERS if the
Mortgage Loan is registered on the MERS(R) System and noting the
presence of MIN);
(v) the original or a certified copy of lender's title
insurance policy; and
(vi) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any.
The Depositor herewith also delivers to the Trustee an
executed copy of the Mortgage Loan Purchase Agreement.
If any of the documents referred to in Section 2.01(ii), (iii)
or (iv) above has as of the Closing Date been submitted for recording but either
(x) has not been returned from the applicable public recording office or (y) has
been lost or such public recording office has retained the original of such
document, the obligations of the Depositor to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the Trustee or the Custodian no
later than the Closing Date, of a copy of each such document certified by the
Originator in the case of (x) above or the applicable public recording office in
the case of (y) above to be a true and complete copy of the original that was
submitted for recording and (2) if such copy is certified by the Originator,
delivery to the Trustee or the Custodian, promptly upon receipt thereof of
either the original or a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original. If the
original lender's title insurance policy, or a certified copy thereof, was not
delivered pursuant to Section 2.01(v) above, the Depositor shall deliver or
cause to be delivered to the Trustee or the Custodian, the original or a copy of
a written commitment or interim binder or preliminary report of title issued by
the title insurance or escrow company, with the original or a certified copy
thereof to be delivered to the Trustee or the Custodian, promptly upon receipt
thereof. The Servicer or the Depositor shall deliver or cause to be delivered to
the Trustee or the Custodian promptly upon receipt thereof any other documents
constituting a part of a Mortgage File received with respect to any Mortgage
Loan, including, but not limited to, any original documents evidencing an
assumption or modification of any Mortgage Loan.
Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File, the
Trustee shall notify the Servicer and the Servicer (or, to the extent provided
in Section 3.02, the Trustee) shall enforce the obligations of the Originator
under the Mortgage Loan Purchase Agreement to cure such defect or deliver such
missing document to the Trustee or the Custodian within 90 days. If the
Originator does not cure such defect or deliver such missing document within
such time period, the Servicer (or, to the extent provided in Section 3.02, the
Trustee) shall enforce the obligations of the Originator to either repurchase or
substitute for such Mortgage Loan in accordance with Section 2.03. In connection
with the foregoing, it is
50
understood that the Trustee shall have no duty to discover any such defects
except in the course of performing its review of the Mortgage Files to the
extent set forth herein.
The Trustee shall enforce the obligations of the Seller under
the Mortgage Loan Purchase Agreement to cause the Assignments which were
delivered in blank to be completed and to record all Assignments referred to in
Section 2.01(iii) hereof and, to the extent necessary, in Section 2.01(iv)
hereof. The Trustee shall enforce the obligations of the Seller under the
Mortgage Loan Purchase Agreement to deliver such assignments for recording
within 180 days of the Closing Date. In the event that any such Assignment is
lost or returned unrecorded because of a defect therein, the Trustee shall
enforce the obligations of the Seller under the Mortgage Loan Purchase Agreement
to promptly have a substitute Assignment prepared or have such defect cured, as
the case may be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, the Assignments of Mortgage
shall not be required to be submitted for recording with respect to any Mortgage
Loan in any jurisdiction where the Rating Agencies do not require recordation in
order to receive the ratings on the Certificates at the time of their initial
issuance (which jurisdictions, as of such time of their initial issuance, are
Maryland and Florida); provided, however, each Assignment, except with respect
to any Mortgage Loan for which MERS is identified on the Mortgage, shall be
submitted for recording in the manner described above, at no expense to the
Trust Fund or Trustee, upon the earliest to occur of: (i) reasonable direction
by the Holders of Certificates entitled to at least 25% of the Voting Rights,
(ii) the occurrence of a Servicer Event of Termination, (iii) the occurrence of
a bankruptcy, insolvency or foreclosure relating to the Seller, (iv) the
occurrence of a servicing transfer as described in Section 7.02 hereof, (v) upon
receipt of notice from the Servicer, the occurrence of a bankruptcy, insolvency
or foreclosure relating to the Mortgagor under the related Mortgage and (vi)
upon receipt of notice from the Servicer, any Mortgage Loan that is 90 days or
more Delinquent. In the event of (i) through (vi) set forth in the immediately
preceding sentence, the Trustee shall enforce the obligations of the Seller to
deliver such Assignments for recording as provided above, promptly and in any
event within 30 days following receipt of notice by the Seller. Notwithstanding
the foregoing, if the Seller fails to pay the cost of recording the Assignments,
such expense will be paid by the Trustee and the Trustee shall be reimbursed for
such expenses by the Trust. In the event an Assignment is not recorded, the
Servicer will not have any liability for its failure to act on notices that were
not received and would have been had such Assignment been recorded, except with
respect to Mortgage Loans that are subject to provisions (i) through (vi) set
forth in this paragraph, if the Servicer shall have failed to timely request the
Seller to cause such Assignments to be recorded.
In the event that any Mortgage Note is endorsed in blank as of
the Closing Date, promptly following the Closing Date, the Trustee shall cause
(at the Seller's expense) to be completed such endorsements "Pay to the order of
Deutsche Bank National Trust Company, as Trustee, without recourse."
The Servicer shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within two weeks of
their execution; provided, however, that the Servicer shall provide the
Custodian with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall provide the original of
any document
51
submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within 365 days of its submission for recordation. In the event that
the Servicer cannot provide a copy of such document certified by the public
recording office within such 365 day period, the Servicer shall deliver to the
Custodian, within such 365 day period, an Officers' Certificate of the Servicer
which shall (A) identify the recorded document, (B) state that the recorded
document has not been delivered to the Custodian due solely to a delay caused by
the public recording office, (C) state the amount of time generally required by
the applicable recording office to record and return a document submitted for
recordation, if known and (D) specify the date the applicable recorded document
is expected to be delivered to the Custodian, and, upon receipt of a copy of
such document certified by the public recording office, the Servicer shall
immediately deliver such document to the Custodian. In the event the appropriate
public recording office will not certify as to the accuracy of such document,
the Servicer shall deliver a copy of such document certified by an officer of
the Servicer to be a true and complete copy of the original to the Custodian.
SECTION 2.02. Acceptance by Trustee.
Subject to the provisions of Section 2.01 and subject to the
review described below and any exceptions noted on the exception report
described in the next paragraph below, the Trustee acknowledges receipt of the
documents referred to in Section 2.01 above and all other assets included in the
definition of "Trust Fund" and declares that it holds and will hold such
documents and the other documents delivered to it constituting a Mortgage File,
and that it holds or will hold all such assets and such other assets included in
the definition of "Trust Fund" in trust for the exclusive use and benefit of all
present and future Certificateholders.
The Trustee agrees to execute and deliver (or cause the
Custodian to execute and deliver) to the Depositor and the Servicer on or prior
to the Closing Date an acknowledgment of receipt of the related original
Mortgage Note for each Mortgage Loan (with any exceptions noted), substantially
in the form attached as Exhibit F-3 hereto.
The Trustee agrees, for the benefit of the Certificateholders,
to review, or that it has reviewed pursuant to Section 2.01 (or to cause the
Custodian to review or that it has caused the Custodian to have reviewed) each
Mortgage File on or prior to the Closing Date, with respect to each Original
Mortgage Loan (or, with respect to any document delivered after the Startup Day,
within 45 days of receipt and with respect to any Qualified Substitute Mortgage,
within 45 days after the assignment thereof). The Trustee further agrees, for
the benefit of the Certificateholders, to certify to the Depositor and the
Servicer in substantially the form attached hereto as Exhibit F-1, within 45
days after the Closing Date, with respect to each Original Mortgage Loan (or,
with respect to any document delivered after the Startup Day, within 45 days of
receipt and with respect to any Qualified Substitute Mortgage, within 45 days
after the assignment thereof) that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in the exception report annexed thereto as
not being covered by such certification), (i) all documents required to be
delivered to it pursuant to Section 2.01 of this Agreement are in its
possession, (ii) such documents have been reviewed by it and have not been
mutilated, damaged or torn and appear on their face to relate to such Mortgage
Loan and (iii) based on its examination and only as to the foregoing, the
information set forth in the Mortgage Loan
52
Schedule that corresponds to items (1) and (2) of the Mortgage Loan Schedule
accurately reflects information set forth in the Mortgage File. It is herein
acknowledged that, in conducting such review, the Trustee (or the Custodian, as
applicable) is under no duty or obligation to inspect, review or examine any
such documents, instruments, certificates or other papers to determine that they
are genuine, legally enforceable, valid or binding or appropriate for the
represented purpose or that they have actually been recorded or that they are
other than what they purport to be on their face.
Prior to the first anniversary date of this Agreement the
Trustee shall deliver (or cause the Custodian to deliver) to the Depositor and
the Servicer a final certification in the form annexed hereto as Exhibit F-2,
with any applicable exceptions noted thereon.
If in the process of reviewing the Mortgage Files and making
or preparing, as the case may be, the certifications referred to above, the
Trustee (or the Custodian, as applicable) finds any document or documents
constituting a part of a Mortgage File to be missing or not to conform with
respect to any characteristics which are within the scope of the Trustee's (or
the Custodian's, as applicable) review as provided herein, at the conclusion of
its review, the Trustee shall so notify the Seller, the Depositor, the
Originator and the Servicer. In addition, upon the discovery by the Depositor or
the Servicer (or upon receipt by the Trustee of written notification of such
breach) of a breach of any of the representations and warranties made by the
Originator in the Mortgage Loan Purchase Agreement in respect of any Mortgage
Loan which materially adversely affects such Mortgage Loan or the interests of
the related Certificateholders in such Mortgage Loan, the party discovering such
breach shall give prompt written notice to the other parties to this Agreement.
The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a sale of the Mortgage Loans, the
related Mortgage Notes and the related documents, conveying good title thereto
free and clear of any liens and encumbrances, from the Depositor to the Trustee
in trust for the benefit of the Certificateholders and that such property not be
part of the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee a first
priority perfected security interest in all of the Depositor's right, title and
interest in and to the Mortgage Loans, the related Mortgage Notes and the
related documents, and that this Agreement shall constitute a security agreement
under applicable law.
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by
the Originator.
(a) Upon discovery or receipt of written notice of any
materially defective document in, or that a document is missing from, a Mortgage
File or of the breach by the Originator of any representation, warranty or
covenant under the Mortgage Loan Purchase Agreement in respect of any Mortgage
Loan which materially adversely affects the value of such Mortgage Loan or the
interest therein of the Certificateholders, the Trustee shall promptly notify
the Servicer of such defect, missing document or breach and the Servicer shall
request that the Originator deliver such missing document or that the Originator
cure such defect or breach within 90 days from the date the Originator was
notified of such missing document, defect or breach, and if the Originator does
not deliver such missing document or if the Originator does not cure such defect
or breach in all material
53
respects during such period, the Servicer (or, to the extent provided in Section
3.02, the Trustee) shall enforce the Originator's obligation under the Mortgage
Loan Purchase Agreement and cause the Originator to repurchase such Mortgage
Loan from the Trust Fund at the Purchase Price on or prior to the Determination
Date following the expiration of such 90 day period (subject to Section
2.03(e)). The Purchase Price for the repurchased Mortgage Loan shall be remitted
to the Servicer for deposit in the Collection Account, and the Trustee, upon
receipt of written certification from the Servicer of such deposit, shall
release to the Originator the related Mortgage File and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as the Originator shall furnish to it and as shall be necessary to
vest in the Originator any Mortgage Loan released pursuant hereto and the
Trustee shall have no further responsibility with regard to such Mortgage File
(it being understood that the Trustee shall have no responsibility for
determining the sufficiency of such assignment for its intended purpose). In
lieu of repurchasing any such Mortgage Loan as provided above, the Originator
may cause such Mortgage Loan to be removed from the Trust Fund (in which case it
shall become a Deleted Mortgage Loan) and substitute one or more Qualified
Substitute Mortgage Loans in the manner and subject to the limitations set forth
in Section 2.03(d). In furtherance of the foregoing, if the Originator is not a
member of MERS and repurchases a Mortgage Loan which is registered on the
MERS(R) System, the Originator at its own expense and without any right of
reimbursement, shall cause MERS to execute and deliver an assignment of the
Mortgage in recordable form to transfer the Mortgage from MERS to the Seller and
shall cause such Mortgage to be removed from registration on the MERS(R) System
in accordance with MERS' rules and regulations. It is understood and agreed that
the obligation of the Originator to cure or to repurchase (or to substitute for)
any Mortgage Loan as to which a document is missing, a material defect in a
constituent document exists or as to which such a breach has occurred and is
continuing shall constitute the sole remedy against the Originator respecting
such omission, defect or breach available to the Trustee on behalf of the
Certificateholders.
(b) Within 90 days of the earlier of discovery by the
Depositor or receipt of notice by the Depositor of the breach of any
representation, warranty or covenant of the Depositor set forth in Section 2.06,
which materially and adversely affects the interests of the Certificateholders
in any Mortgage Loan, the Depositor shall cure such breach in all material
respects.
(c) Within 90 days of the earlier of discovery by the Servicer
or receipt of notice by the Servicer of the breach of any representation,
warranty or covenant of the Servicer set forth in Section 2.05 which materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan, the Servicer shall cure such breach in all material respects.
(d) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to Section 2.03(a) must be effected
prior to the last Business Day that is within two years after the Closing Date.
As to any Deleted Mortgage Loan for which the Originator substitutes a Qualified
Substitute Mortgage Loan or Loans, such substitution shall be effected by the
Originator delivering to the Trustee, for such Qualified Substitute Mortgage
Loan or Loans, the Mortgage Note, the Mortgage and the Assignment to the
Trustee, and such other documents and agreements, with all necessary
endorsements thereon, as are required by Section 2.01, together with an
Officers' Certificate providing that each such Qualified Substitute Mortgage
Loan satisfies the definition thereof and specifying the Substitution Adjustment
(as described below), if any, in connection with such substitution. The Trustee
shall acknowledge receipt for such Qualified
54
Substitute Mortgage Loan or Loans and, within 45 days thereafter, shall review
such documents as specified in Section 2.02 and deliver to the Servicer, with
respect to such Qualified Substitute Mortgage Loan or Loans, a certification
substantially in the form attached hereto as Exhibit F-1, with any applicable
exceptions noted thereon. Within one year of the date of substitution, the
Trustee shall deliver to the Servicer a certification substantially in the form
of Exhibit F-2 hereto with respect to such Qualified Substitute Mortgage Loan or
Loans, with any applicable exceptions noted thereon. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution are
not part of the Trust Fund and will be retained by the Originator. For the month
of substitution, distributions to Certificateholders will reflect the
collections and recoveries in respect of such Deleted Mortgage Loan in the Due
Period preceding the month of substitution and the Originator shall thereafter
be entitled to retain all amounts subsequently received in respect of such
Deleted Mortgage Loan. The Servicer shall give or cause to be given written
notice to the Trustee, who shall forward such notice to the Certificateholders,
that such substitution has taken place, shall amend the Mortgage Loan Schedule
to reflect the removal of such Deleted Mortgage Loan from the terms of this
Agreement and the substitution of the Qualified Substitute Mortgage Loan or
Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the
Trustee. Upon such substitution by the Originator, such Qualified Substitute
Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be
subject in all respects to the terms of this Agreement and the Mortgage Loan
Purchase Agreement, including all applicable representations and warranties
thereof included in the Mortgage Loan Purchase Agreement as of the date of
substitution.
For any month in which the Originator substitutes one or more
Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Servicer will determine the amount (the "Substitution Adjustment"), if any, by
which the aggregate Purchase Price of all such Deleted Mortgage Loans exceeds
the aggregate, as to each such Qualified Substitute Mortgage Loan, of the
principal balance thereof as of the date of substitution, together with one
month's interest on such principal balance at the applicable Mortgage Rate. On
the date of such substitution, the Originator will deliver or cause to be
delivered to the Servicer for deposit in the Collection Account an amount equal
to the Substitution Adjustment, if any, and the Trustee, upon receipt of the
related Qualified Substitute Mortgage Loan or Loans and certification by the
Servicer of such deposit, shall release to the Originator the related Mortgage
File or Files and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as the Originator shall deliver to it
and as shall be necessary to vest therein any Deleted Mortgage Loan released
pursuant hereto.
In addition, the Originator shall obtain at its own expense
and deliver to the Trustee an Opinion of Counsel to the effect that such
substitution will not cause (a) any federal tax to be imposed on the Trust Fund,
including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(I) of the Code or on "contributions after
the startup date" under Section 860G(d)(I) of the Code or (b) any REMIC to fail
to qualify as a REMIC at any time that any Certificate is outstanding. If such
Opinion of Counsel can not be delivered, then such substitution may only be
effected at such time as the required Opinion of Counsel can be given.
(e) Upon discovery by the Depositor, the Servicer or the
Trustee that any Mortgage Loan does not constitute a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code, the party discovering such fact
shall within two Business Days give written notice thereof to the other parties
hereto. In connection therewith, the Originator or the Depositor, as the
55
case may be, shall repurchase or, subject to the limitations set forth in
Section 2.03(d), substitute one or more Qualified Substitute Mortgage Loans for
the affected Mortgage Loan within 90 days of the earlier of discovery or receipt
of such notice with respect to such affected Mortgage Loan. Such repurchase or
substitution shall be made (i) by the Originator if the affected Mortgage Loan's
status as a non-qualified mortgage is or results from a breach of any
representation, warranty or covenant made by the Originator under the Mortgage
Loan Purchase Agreement or (ii) the Depositor, if the affected Mortgage Loan's
status as a non-qualified mortgage is a breach of any representation or warranty
of the Depositor set forth in Section 2.06, or if its status as a non-qualified
mortgage is a breach of no representation or warranty. Any such repurchase or
substitution shall be made in the same manner as set forth in Section 2.03(a) or
2.03(d), if made by the Originator, or Section 2.03(b), if made by the
Depositor. The Trustee shall reconvey to the Depositor or the Originator, as the
case may be, the Mortgage Loan to be released pursuant hereto in the same
manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty.
(f) Upon discovery or receipt of written notice of a breach by
the Seller of any representation, warranty or covenant made by the Seller under
Section 3.04 of the Mortgage Loan Purchase Agreement in respect of any Mortgage
Loan which materially adversely affects the value of such Mortgage Loan or the
interest therein of the Certificateholders, and if either (i) such Mortgage Loan
is not in breach of any representation, warranty or covenant of the Originator
or (ii) the Originator has failed to remedy such representation, warranty or
covenant with respect to such Mortgage Loan, then the Trustee shall promptly
notify the Servicer of such breach and the Servicer shall request that the
Seller remedy such breach by the Seller, to the extent provided in the Mortgage
Loan Purchase Agreement, in the manner and within the time periods set forth in
the Mortgage Loan Purchase Agreement.
SECTION 2.04. Intentionally Omitted.
SECTION 2.05. Representations, Warranties and Covenants of the
Servicer.
The Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee and the Certificateholders and
to the Depositor that as of the Closing Date or as of such date specifically
provided herein:
(i) The Servicer is a limited partnership duly formed, validly
existing and in good standing as a limited partnership under the laws
of the State of Delaware and is duly authorized and qualified to
transact any and all business contemplated by this Agreement to be
conducted by the Servicer in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing
business laws of any such State, to the extent necessary to ensure its
ability to enforce each Mortgage Loan and to service the Mortgage Loans
in accordance with the terms of this Agreement;
(ii) The Servicer has the full power and authority to conduct
its business as presently conducted by it and to execute, deliver and
perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Servicer has duly
56
authorized the execution, delivery and performance of this Agreement,
has duly executed and delivered this Agreement, and this Agreement,
assuming due authorization, execution and delivery by the Depositor and
the Trustee, constitutes a legal, valid and binding obligation of the
Servicer, enforceable against it in accordance with its terms except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity;
(iii) The execution and delivery of this Agreement by the
Servicer, the servicing of the Mortgage Loans by the Servicer
hereunder, the consummation by the Servicer of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of the
Servicer and will not (A) result in a breach of any term or provision
of the limited partnership agreement of the Servicer or (B) conflict
with, result in a breach, violation or acceleration of, or result in a
default under, the terms of any other material agreement or instrument
to which the Servicer is a party or by which it may be bound, or any
statute, order or regulation applicable to the Servicer of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Servicer; and the Servicer is not a party to,
bound by, or in breach or violation of any indenture or other agreement
or instrument, or subject to or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it, which materially and
adversely affects or, to the Servicer's knowledge, would in the future
materially and adversely affect, (x) the ability of the Servicer to
perform its obligations under this Agreement, (y) the business,
operations, financial condition, properties or assets of the Servicer
taken as a whole or (z) the legality, validity or enforceability of
this Agreement;
(iv) The Servicer is a HUD approved mortgagee pursuant to
Section 203 and Section 211 of the National Housing Act. No event has
occurred, including but not limited to a change in insurance coverage,
that would make the Servicer unable to comply with HUD eligibility
requirements or that would require notification to HUD;
(v) The Servicer does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant
made by it and contained in this Agreement;
(vi) No litigation is pending against the Servicer that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Servicer to
service the Mortgage Loans or to perform any of its other obligations
hereunder in accordance with the terms hereof;
(vii) There are no actions or proceedings against, or
investigations known to it of, the Servicer before any court,
administrative or other tribunal (A) that might prohibit its entering
into this Agreement, (B) seeking to prevent the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit
or materially and adversely affect the performance by the Servicer of
its obligations under, or the validity or enforceability of, this
Agreement;
57
(viii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Servicer of, or compliance by the
Servicer with, this Agreement or the consummation by it of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained
prior to the Closing Date;
(ix) [reserved];
(x) Neither this Agreement nor any information, certificate of
an officer, statement furnished in writing or report delivered to the
Trustee by the Servicer in connection with the transactions
contemplated hereby contains or will contain any untrue statement of a
material fact;
(xi) The Servicer will not waive any Prepayment Charge unless
it is waived in accordance with the standard set forth in Section 3.01;
and
(xii) The Servicer has fully furnished and will continue to
fully furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian and Trans Union Credit Information Company or their successors
(the "Credit Repositories") in a timely manner.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive delivery
of the Mortgage Files to the Trustee and shall inure to the benefit of the
Trustee, the Depositor and the Certificateholders. Upon discovery by any of the
Depositor, the Servicer or the Trustee of a breach of any of the foregoing
representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan, Prepayment Charge or the interests therein of
the Certificateholders, the party discovering such breach shall give prompt
written notice (but in no event later than two Business Days following such
discovery) to the Servicer and the Trustee. Notwithstanding the foregoing,
within 90 days of the earlier of discovery by the Servicer or receipt of notice
by the Servicer of the breach of the representation or covenant of the Servicer
set forth in Section 2.05(xi) above which materially and adversely affects the
interests of the Holders of the Class P Certificates in any Prepayment Charge,
the Servicer must pay the amount of such waived Prepayment Charge, for the
benefit of the holders of the Class P Certificates, by depositing such amount
into the Collection Account. The foregoing shall not, however, limit any
remedies available to the Certificateholders, the Depositor or the Trustee on
behalf of the Certificateholders, pursuant to the Mortgage Loan Purchase
Agreement respecting a breach of the representations, warranties and covenants
of the Originator made in its capacity as a party to the Mortgage Loan Purchase
Agreement.
SECTION 2.06. Representations and Warranties of the Depositor.
The Depositor represents and warrants to the Trust and the
Trustee on behalf of the Certificateholders as follows:
58
(i) This agreement constitutes a legal, valid and binding
obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a
proceeding at law or in equity);
(ii) Immediately prior to the sale and assignment by the
Depositor to the Trustee on behalf of the Trust of each Mortgage Loan,
the Depositor had good and marketable title to each Mortgage Loan
(insofar as such title was conveyed to it by the Seller) subject to no
prior lien, claim, participation interest, mortgage, security interest,
pledge, charge or other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred
all right, title and interest in the Mortgage Loans to the Trustee on
behalf of the Trust;
(iv) The Depositor has not transferred the Mortgage Loans to
the Trustee on behalf of the Trust with any intent to hinder, delay or
defraud any of its creditors;
(v) The Depositor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
with full corporate power and authority to own its assets and conduct
its business as presently being conducted;
(vi) The Depositor is not in violation of its articles of
incorporation or by-laws or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Depositor is a party or by which it or
its properties may be bound, which default might result in any material
adverse changes in the financial condition, earnings, affairs or
business of the Depositor or which might materially and adversely
affect the properties or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this
Agreement by the Depositor, and the consummation of the transactions
contemplated thereby, do not and will not result in a material breach
or violation of any of the terms or provisions of, or, to the knowledge
of the Depositor, constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Depositor is a party or by which the Depositor is bound or to which
any of the property or assets of the Depositor is subject, nor will
such actions result in any violation of the provisions of the articles
of incorporation or by-laws of the Depositor or, to the best of the
Depositor's knowledge without independent investigation, any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Depositor or any of its properties or
assets (except for such conflicts, breaches, violations and defaults as
would not have a material adverse effect on the ability of the
Depositor to perform its obligations under this Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or
59
with any court or governmental agency or body of the United States or
any other jurisdiction is required for the issuance of the
Certificates, or the consummation by the Depositor of the other
transactions contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as (a) may
be required under State securities or Blue Sky laws, (b) have been
previously obtained or (c) the failure of which to obtain would not
have a material adverse effect on the performance by the Depositor of
its obligations under, or the validity or enforceability of, this
Agreement; and
(ix) There are no actions, proceedings or investigations
pending before or, to the Depositor's knowledge, threatened by any
court, administrative agency or other tribunal to which the Depositor
is a party or of which any of its properties is the subject: (a) which
if determined adversely to the Depositor would have a material adverse
effect on the business, results of operations or financial condition of
the Depositor; (b) asserting the invalidity of this Agreement or the
Certificates; (c) seeking to prevent the issuance of the Certificates
or the consummation by the Depositor of any of the transactions
contemplated by this Agreement, as the case may be; or (d) which might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this
Agreement.
SECTION 2.07. Issuance of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it of the Mortgage Files, subject to the provisions of
Sections 2.01 and 2.02, together with the assignment to it of all other assets
included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such assignment and delivery and in exchange therefor, the
Trustee, pursuant to the written request of the Depositor executed by an officer
of the Depositor, has executed, authenticated and delivered to or upon the order
of the Depositor, the Certificates in authorized denominations. The interests
evidenced by the Certificates constitute the entire beneficial ownership
interest in the Trust Fund.
SECTION 2.08. [Reserved].
SECTION 2.09. Acceptance of REMIC 1 and REMIC 2 by the
Trustee; Conveyance of REMIC I Regular Interests and Class M-2 Interest, Class
M-4 Interest, and Class M-5 Interest; 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 assets described in the definition of REMIC 1 for the
benefit of the holders of the REMIC 1 Regular Interests (which are
uncertificated) and the Class R Certificates (in respect of the Class R-1
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 1 Regular
Interests and the Class R Certificates (in respect of the Class R-1 Interest).
The interests evidenced by the Class
60
R-1 Interest, together with the REMIC 1 Regular Interests, constitute the entire
beneficial ownership interest in REMIC 1.
(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 1 Regular Interests (which are uncertificated) for the
benefit of the Holders of the Regular Certificates (other than the Class M-2,
Class M-4, and Class M-5 Certificates), the Class M-2, Class M-4, and Class M-5
Interest (which are uncertificated) and the Class R Certificates (in respect of
the Class R-2 Interest). The interests evidenced by the Class R-2 Interest,
together with the Regular Certificates (other than the Class M-2, Class M-4, and
Class M-5 Certificates), constitute the entire beneficial ownership interest in
REMIC 2.
(c) The Depositor concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse all the right, title and interest of the Depositor
in and to the Class M-2 Interest (which is uncertificated) for the benefit of
the Holders of the Class M-2 Certificates and the Class R-X Certificates (in
respect of the Class R-3 Interest). The interests evidenced by the Class R-3
Interest, together with the Class M-2 Certificates, constitute the entire
beneficial ownership interest in REMIC 3.
(d) The Depositor concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse all the right, title and interest of the Depositor
in and to the Class M-4 Interest (which is uncertificated) for the benefit of
the Holders of the Class M-4 Certificates and the Class R-X Certificates (in
respect of the Class R-4 Interest). The interests evidenced by the Class R-4
Interest, together with the Class M-4 Certificates, constitute the entire
beneficial ownership interest in REMIC 4.
(e) The Depositor concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse all the right, title and interest of the Depositor
in and to the Class M-5 Interest (which is uncertificated) for the benefit of
the Holders of the Class M-5 Certificates and the Class R-X Certificates (in
respect of the Class R-5 Interest). The interests evidenced by the Class R-5
Interest, together with the Class M-5 Certificates, constitute the entire
beneficial ownership interest in REMIC 5.
(f) In exchange for the REMIC 1 Regular Interests and,
concurrently with the assignment to the Trustee thereof, pursuant to the written
request of the Depositor executed by an officer of the Depositor, the Trustee
has executed, authenticated and delivered to or upon the order of the Depositor,
the Regular Certificates (other than the Class M-2, Class M-4 and M-5
Certificates) in authorized denominations, which Certificates, together with the
Class M-2, Class M-4 and M-5 Interests and the Class R Certificates (in respect
of the Class R-2 Interest), evidence the entire beneficial ownership interest in
REMIC 2.
(g) In exchange for the Class M-2 Interest and, concurrently
with the assignment to the Trustee thereof, pursuant to the written request of
the Depositor executed by an officer of the Depositor, the Trustee has executed,
authenticated and delivered to or upon the order of the Depositor, the Class M-2
Certificates in authorized denominations, which Certificates, together with
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the Class R-X Certificates (in respect of the Class R-3 Interest), evidence the
entire beneficial ownership interest in REMIC 3.
(h) In exchange for the Class M-4 Interest and, concurrently
with the assignment to the Trustee thereof, pursuant to the written request of
the Depositor executed by an officer of the Depositor, the Trustee has executed,
authenticated and delivered to or upon the order of the Depositor, the Class M-4
Certificates in authorized denominations, which Certificates, together with the
Class R-X Certificates (in respect of the Class R-4 Interest), evidence the
entire beneficial ownership interest in REMIC 4.
(i) In exchange for the Class M-5 Interest and, concurrently
with the assignment to the Trustee thereof, pursuant to the written request of
the Depositor executed by an officer of the Depositor, the Trustee has executed,
authenticated and delivered to or upon the order of the Depositor, the Class M-5
Certificates in authorized denominations, which Certificates, together with the
Class R-X Certificates (in respect of the Class R-5 Interest), evidence the
entire beneficial ownership interest in REMIC 5.
(j) Concurrently with (i) the assignment and delivery to the
Trustee of REMIC 1 (including the Residual Interest therein represented by the
Class R-1 Interest) and the acceptance by the Trustee thereof, pursuant to
Section 2.01, Section 2.02 and Section 2.09(a), (ii) the assignment and delivery
to the Trustee of REMIC 2 (including the Residual Interest therein represented
by the Class R-2 Interest) and the acceptance by the Trustee thereof, pursuant
to Section 2.09(b), (iii) the assignment and delivery to the Trustee of REMIC 3
(including the Residual Interest therein represented by the Class R-3 Interest)
and the acceptance by the Trustee thereof, pursuant to Section 2.09(c), (iv) the
assignment and delivery to the Trustee of REMIC 4 (including the Residual
Interest therein represented by the Class R-4 Interest) and the acceptance by
the Trustee thereof, pursuant to Section 2.09(d) and (v) the assignment and
delivery to the Trustee of REMIC 5 (including the Residual Interest therein
represented by the Class R-5 Interest) and the acceptance by the Trustee
thereof, pursuant to Section 2.09(e), the Trustee, pursuant to the written
request of the Depositor executed by an officer of the Depositor, has executed,
authenticated and delivered to or upon the order of the Depositor, the Class R
Certificates (evidencing the Class R-1 Interest and the Class R-2 Interest) and
the Class R-X Certificates (evidencing the Class R-3, Class R-4 and Class R-5
Interest) in authorized denominations.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Servicer to Act as Servicer.
The Servicer shall service and administer the Mortgage Loans
on behalf of the Trust and in the best interests of and for the benefit of the
Certificateholders (as determined by the Servicer in its reasonable judgment) in
accordance with the terms of this Agreement and the Mortgage Loans and, to the
extent consistent with such terms, in the same manner in which it services and
administers similar mortgage loans for its own portfolio, giving due
consideration to customary and usual standards of practice of mortgage lenders
and loan servicers administering similar mortgage loans but without regard to:
(i) any relationship that the Servicer, any Sub-Servicer or
any Affiliate of the Servicer or any Sub-Servicer may have with the
related Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make Advances or Servicing
Advances; or
(iv) the Servicer's or any Sub-Servicer's right to receive
compensation for its services hereunder or with respect to any
particular transaction.
To the extent consistent with the foregoing, the Servicer (a)
shall seek the timely and complete recovery of principal and interest on the
Mortgage Notes and (b) shall waive (or permit a Sub-Servicer to waive) a
Prepayment Charge only under the following circumstances: (i) such waiver is
standard and customary in servicing similar Mortgage Loans and (ii) either (A)
such waiver relates to a default or a reasonably foreseeable default and would,
in the reasonable judgment of the Servicer, maximize recovery of total proceeds
taking into account the value of such Prepayment Charge and the related Mortgage
Loan or (B) the collection of such Prepayment Charge is prohibited by applicable
law. If a Prepayment Charge is waived other than as permitted by meeting the
standards described in clauses (i) and (ii) above, then as a remedy for the
breach of such covenant, the Servicer shall to pay the amount of such waived
Prepayment Charge, for the benefit of the Holders of the Class P Certificates,
by depositing such amount into the Collection Account together with and at the
time that the amount prepaid on the related Mortgage Loan is required to be
deposited into the Collection Account. Notwithstanding any other provisions of
this Agreement, any payments made by the Servicer in respect of any Prepayment
Charges waived other than as permitted above shall be deemed to be paid outside
of the Trust Fund.
Subject only to the above-described servicing standards and
the terms of this Agreement and of the Mortgage Loans, the Servicer shall have
full power and authority, acting alone or through Sub-Servicers as provided in
Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
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Without limiting the generality of the foregoing, the Servicer in its own name
or in the name of a Sub-Servicer is hereby authorized and empowered by the
Trustee when the Servicer believes it appropriate in its best judgment in
accordance with the servicing standards set forth above, to execute and deliver,
on behalf of the Certificateholders and the Trustee, and upon notice to the
Trustee, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, and all other comparable instruments, with respect
to the Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee and Certificateholders. The Servicer shall
service and administer the Mortgage Loans in accordance with applicable state
and federal law and shall provide to the Mortgagors any reports required to be
provided to them thereby. The Servicer shall also comply in the performance of
this Agreement with all reasonable rules and requirements of each insurer under
any standard hazard insurance policy. Subject to Section 3.17, within 15 days of
the Closing Date, the Trustee shall execute, at the written request of the
Servicer, and furnish to the Servicer and any Sub-Servicer a limited power of
attorney in the form of Exhibit I, executed by each payee or last endorsee, as
applicable, of each of the Mortgage Notes and each mortgagee or last assignee,
as applicable, of each of the Mortgages and other documents necessary or
appropriate to enable the Servicer or any Sub-Servicer to carry out their
servicing and administrative duties hereunder; provided, such limited powers of
attorney or other documents shall be prepared by the Servicer and submitted to
the Trustee for execution. The Trustee shall not be liable for the actions of
the Servicer or any Sub-Servicers under such powers of attorney.
The Servicer further is authorized and empowered by the
Trustee, on behalf of the Certificateholders and the Trustee, in its own name,
when the Servicer believes it is appropriate in its best judgment to register
any Mortgage Loan on the MERS(R) System, or cause the removal from the
registration of any Mortgage Loan on the MERS(R) System, to execute and deliver,
on behalf of the Trustee and the Certificateholders or any of them, any and all
instruments of assignment and other comparable instruments with respect to such
assignment or re-recording of a Mortgage in the name of MERS, solely as nominee
for the Trustee and its successors and assigns. Any reasonable expenses incurred
in connection with the actions described in the preceding sentence or as a
result of MERS discontinuing or becoming unable to continue operations in
connection with the MERS(R) System, shall be subject to withdrawal by the
Servicer from the Collection Account.
Subject to Section 3.09 hereof, in accordance with the
standards of the preceding paragraph, the Servicer, on escrowed accounts, shall
advance or cause to be advanced funds as necessary for the purpose of effecting
the payment of taxes and assessments on the Mortgaged Properties, which advances
shall be Servicing Advances reimbursable in the first instance from related
collections from the Mortgagors pursuant to Section 3.09, and further as
provided in Section 3.11. Any cost incurred by the Servicer or by Sub-Servicers
in effecting the payment of taxes and assessments on a Mortgaged Property shall
not, for the purpose of calculating distributions to Certificateholders, be
added to the unpaid Principal Balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit.
Notwithstanding anything in this Agreement to the contrary,
the Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.04) and the Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would
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change the Mortgage Rate, reduce or increase the Principal Balance (except for
reductions resulting from actual payments of principal) or change the final
maturity date on such Mortgage Loan (unless, as provided in Section 3.07, the
Mortgagor is in default with respect to the Mortgage Loan or such default is, in
the judgment of the Servicer, reasonably foreseeable) or (ii) permit any
modification, waiver or amendment of any term of any Mortgage Loan that would
both (A) effect an exchange or reissuance of such Mortgage Loan under Section
1001 of the Code (or Treasury regulations promulgated thereunder) and (B) cause
any REMIC created hereunder to fail to qualify as a REMIC under the Code or the
imposition of any tax on "prohibited transactions" or "contributions after the
startup date" under the REMIC Provisions.
SECTION 3.02. Sub-Servicing Agreements Between Servicer and
Sub- Servicers.
(a) The Servicer may enter into Sub-Servicing Agreements with
Sub-Servicers for the servicing and administration of the Mortgage Loans;
provided, however, that such agreements would not result in a withdrawal or a
downgrading by any Rating Agency of the rating on any Class of Certificates. The
Trustee is hereby authorized to acknowledge, at the request of the Servicer, any
Sub-Servicing Agreement that meets the requirements applicable to Sub-Servicing
Agreements set forth in this Agreement and that is otherwise permitted under
this Agreement. No such acknowledgment shall be deemed to imply that the Trustee
has consented to any such Sub-Servicing Agreement, has passed upon whether such
Sub-Servicing Agreement meets the requirements applicable to Sub-Servicing
Agreements set forth in this Agreement or has passed upon whether such
Sub-Servicing Agreement is otherwise permitted under this Agreement.
Each Sub-Servicer shall be (i) authorized to transact business
in the state or states where the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub- Servicing
Agreement and (ii) a Xxxxxxx Mac or Xxxxxx Mae approved mortgage servicer. Each
Sub- Servicing Agreement must impose on the Sub-Servicer requirements conforming
to the provisions set forth in Section 3.08 and provide for servicing of the
Mortgage Loans consistent with the terms of this Agreement. The Servicer will
examine each Sub-Servicing Agreement and will be familiar with the terms
thereof. The terms of any Sub-Servicing Agreement will not be inconsistent with
any of the provisions of this Agreement. The Servicer and the Sub-Servicers may
enter into and make amendments to the Sub-Servicing Agreements or enter into
different forms of Sub-Servicing Agreements; provided, however, that any such
amendments or different forms shall be consistent with and not violate the
provisions of this Agreement, and that no such amendment or different form shall
be made or entered into which could be reasonably expected to be materially
adverse to the interests of the Certificateholders without the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights; provided,
further, that the consent of the Holders of Certificates entitled to at least
66% of the Voting Rights shall not be required (i) to cure any ambiguity or
defect in a Sub-Servicing Agreement, (ii) to correct, modify or supplement any
provisions of a Sub- Servicing Agreement, or (iii) to make any other provisions
with respect to matters or questions arising under a Sub-Servicing Agreement,
which, in each case, shall not be inconsistent with the provisions of this
Agreement. Any variation without the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights from the provisions set forth in
Section 3.08 relating to insurance or priority requirements of Sub-Servicing
Accounts, or credits and charges to the Sub-
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Servicing Accounts or the timing and amount of remittances by the Sub-Servicers
to the Servicer, are conclusively deemed to be inconsistent with this Agreement
and therefore prohibited. The Servicer shall deliver to the Trustee copies of
all Sub-Servicing Agreements, and any amendments or modifications thereof,
promptly upon the Servicer's execution and delivery of such instruments.
(b) As part of its servicing activities hereunder, the
Servicer, for the benefit of the Trustee and the Certificateholders, shall
enforce the obligations of each Sub-Servicer under the related Sub-Servicing
Agreement and (except as otherwise provided in Section 2.01) of the Originator
and the Seller under the Mortgage Loan Purchase Agreement, including, without
limitation, any obligation to make advances in respect of delinquent payments as
required by a Sub- Servicing Agreement, or to purchase a Mortgage Loan on
account of missing or defective documentation or on account of a breach of a
representation, warranty or covenant, as described in Section 2.03(a). Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements, and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Servicer, in its good faith business judgment, would require were it
the owner of the related Mortgage Loans. The Servicer shall pay the costs of
such enforcement at its own expense, and shall be reimbursed therefor only (i)
from a general recovery resulting from such enforcement, to the extent, if any,
that such recovery exceeds all amounts due in respect of the related Mortgage
Loans, or (ii) from a specific recovery of costs, expenses or attorneys' fees
against the party against whom such enforcement is directed. Except as otherwise
provided in Section 2.01, enforcement of the Mortgage Loan Purchase Agreement
against the Originator and the Seller shall be effected by the Servicer to the
extent it is not the Originator or the Seller and otherwise by the Trustee in
accordance with the foregoing provisions of this paragraph.
SECTION 3.03. Successor Sub-Servicers.
The Servicer shall be entitled to terminate any Sub-Servicing
Agreement and the rights and obligations of any Sub-Servicer pursuant to any
Sub-Servicing Agreement in accordance with the terms and conditions of such
Sub-Servicing Agreement. In the event of termination of any Sub-Servicer, all
servicing obligations of such Sub-Servicer shall be assumed simultaneously by
the Servicer without any act or deed on the part of such Sub-Servicer or the
Servicer, and the Servicer either shall service directly the related Mortgage
Loans or shall enter into a Sub- Servicing Agreement with a successor
Sub-Servicer which qualifies under Section 3.02.
Any Sub-Servicing Agreement shall include the provision that
such agreement may be immediately terminated by the Servicer or the Trustee (if
the Trustee is acting as Servicer) without fee, in accordance with the terms of
this Agreement, in the event that the Servicer (or the Trustee, if such party is
then acting as Servicer) shall, for any reason, no longer be the Servicer
(including termination due to a Servicer Event of Termination).
SECTION 3.04. Liability of the Servicer.
Notwithstanding any Sub-Servicing Agreement or the provisions
of this Agreement relating to agreements or arrangements between the Servicer
and a Sub-Servicer or reference to actions taken through a Sub-Servicer or
otherwise, the Servicer shall remain obligated and primarily
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liable to the Trustee and the Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Servicer alone were servicing and administering the Mortgage Loans.
The Servicer shall be entitled to enter into any agreement with a Sub-Servicer
for indemnification of the Servicer by such Sub- Servicer and nothing contained
in this Agreement shall be deemed to limit or modify such indemnification.
SECTION 3.05. No Contractual Relationship Between
Sub-Servicers and the Trustee or Certificateholders.
Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Servicer alone, and the Trustee or Certificateholders shall not be deemed
parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section
3.06. The Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Servicer's compensation pursuant to
this Agreement is sufficient to pay such fees.
SECTION 3.06. Assumption or Termination of Sub-Servicing
Agreements by Trustee.
In the event the Servicer shall for any reason no longer be
the servicer (including by reason of the occurrence of a Servicer Event of
Termination), the Trustee shall thereupon assume all of the rights and
obligations of the Servicer under each Sub-Servicing Agreement that the Servicer
may have entered into, unless the Trustee elects to terminate any Sub-Servicing
Agreement in accordance with its terms as provided in Section 3.03. Upon such
assumption, the Trustee (or the successor servicer appointed pursuant to Section
7.02) shall be deemed, subject to Section 3.03, to have assumed all of the
departing Servicer's interest therein and to have replaced the departing
Servicer as a party to each Sub-Servicing Agreement to the same extent as if
each Sub-Servicing Agreement had been assigned to the assuming party, except
that (i) the departing Servicer shall not thereby be relieved of any liability
or obligations under any Sub-Servicing Agreement that arose before it ceased to
be the Servicer and (ii) neither the Trustee nor any successor Servicer shall be
deemed to have assumed any liability or obligation of the Servicer that arose
before it ceased to be the Servicer.
The Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records relating to
each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the
Sub-Servicing Agreements to the assuming party. All Servicing Transfer Costs
shall be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs, and if such predecessor Servicer defaults in its
obligation to pay such costs, such costs shall be paid by the successor Servicer
or the Trustee (in which case the successor Servicer or the Trustee, as
applicable, shall be entitled to reimbursement therefor from the assets of the
Trust).
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SECTION 3.07. Collection of Certain Mortgage Loan Payments.
The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Servicer may in its discretion (i) waive any late payment
charge or, if applicable, any penalty interest, or (ii) extend the due dates for
the Monthly Payments due on a Mortgage Note for a period of not greater than 180
days; provided, however, that any extension pursuant to clause (ii) above shall
not affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, the Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to Section 4.04
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangement. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Servicer, such default is reasonably foreseeable, the Servicer,
consistent with the standards set forth in Section 3.01, may also waive, modify
or vary any term of such Mortgage Loan (including modifications that would
change the Mortgage Rate, forgive the payment of principal or interest or extend
the final maturity date of such Mortgage Loan), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan, or consent to the postponement of strict
compliance with any such term or otherwise grant indulgence to any Mortgagor
(any and all such waivers, modifications, variances, forgiveness of principal or
interest, postponements, or indulgences collectively referred to herein as
"forbearance"). The Servicer's analysis supporting any forbearance and the
conclusion that any forbearance meets the standards of Section 3.01 shall be
reflected in writing in the Mortgage File.
SECTION 3.08. Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required
to establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
comply with all requirements of this Agreement relating to the Collection
Account. The Sub-Servicer shall deposit in the clearing account in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Sub-Servicer's receipt thereof, all
proceeds of Mortgage Loans received by the Sub-Servicer less its servicing
compensation to the extent permitted by the Sub-Servicing Agreement, and shall
thereafter deposit such amounts in the Sub-Servicing Account, in no event more
than two Business Days after the receipt of such amounts. The Sub-Servicer shall
thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Servicer for deposit in the Collection Account not later than
two Business Days after the deposit of such amounts in the Sub-Servicing
Account. For purposes of this Agreement, the Servicer shall be deemed to have
received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.
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SECTION 3.09. Collection of Taxes, Assessments and Similar
Items; Servicing Accounts.
The Servicer shall establish and maintain, or cause to be
established and maintained, one or more accounts (the "Servicing Accounts"),
into which all Escrow Payments shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The Servicer shall deposit in the clearing
account in which it customarily deposits payments and collections on mortgage
loans in connection with its mortgage loan servicing activities on a daily
basis, and in no event more than one Business Day after the Servicer's receipt
thereof, all Escrow Payments collected on account of the Mortgage Loans and
shall thereafter deposit such Escrow Payments in the Servicing Accounts, in no
event more than two Business Days after the receipt of such Escrow Payments, all
Escrow Payments collected on account of the Mortgage Loans for the purpose of
effecting the payment of any such items as required under the terms of this
Agreement. Withdrawals of amounts from a Servicing Account may be made only to
(i) effect payment of taxes, assessments, hazard insurance premiums, and
comparable items in a manner and at a time that assures that the lien priority
of the Mortgage is not jeopardized (or, with respect to the payment of taxes, in
a manner and at a time that avoids the loss of the Mortgaged Property due to a
tax sale or the foreclosure as a result of a tax lien); (ii) reimburse the
Servicer (or a Sub-Servicer to the extent provided in the related Sub- Servicing
Agreement) out of related collections for any Servicing Advances made pursuant
to Section 3.01 (with respect to taxes and assessments) and Section 3.14 (with
respect to hazard insurance); (iii) refund to Mortgagors any sums as may be
determined to be overages; (iv) pay interest, if required and as described
below, to Mortgagors on balances in the Servicing Account; or (v) clear and
terminate the Servicing Account at the termination of the Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article X. In the event the Servicer shall deposit in a
Servicing Account any amount not required to be deposited therein, it may at any
time withdraw such amount from such Servicing Account, any provision herein to
the contrary notwithstanding. The Servicer will be responsible for the
administration of the Servicing Accounts and will be obligated to make Servicing
Advances to such accounts when and as necessary to avoid the lapse of insurance
coverage on the Mortgaged Property, or which the Servicer knows, or in the
exercise of the required standard of care of the Servicer hereunder should know,
is necessary to avoid the loss of the Mortgaged Property due to a tax sale or
the foreclosure as a result of a tax lien. If any such payment has not been made
and the Servicer receives notice of a tax lien with respect to the Mortgage
being imposed, the Servicer will, promptly and to the extent required to avoid
loss of the Mortgaged Property, advance or cause to be advanced funds necessary
to discharge such lien on the Mortgaged Property. As part of its servicing
duties, the Servicer or Sub-Servicers shall pay to the Mortgagors interest on
funds in the Servicing Accounts, to the extent required by law and, to the
extent that interest earned on funds in the Servicing Accounts is insufficient,
to pay such interest from its or their own funds, without any reimbursement
therefor. The Servicer may pay to itself any excess interest on funds in the
Servicing Accounts, to the extent such action is in conformity with the
servicing standard set forth in Section 3.01, is permitted by law and such
amounts are not required to be paid to Mortgagors or used for any of the other
purposes set forth above.
SECTION 3.10. Collection Account and Distribution Account.
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(a) On behalf of the Trust Fund, the Servicer shall establish
and maintain, or cause to be established and maintained, one or more
accounts (such account or accounts, the "Collection Account"), held in
trust for the benefit of the Trustee and the Certificateholders. On
behalf of the Trust Fund, the Servicer shall deposit or cause to be
deposited in the clearing account in which it customarily deposits
payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Servicer's receipt thereof, and
shall thereafter deposit in the Collection Account, in no event more
than two Business Days after the Servicer's receipt thereof, as and
when received or as otherwise required hereunder, the following
payments and collections received or made by it subsequent to the
Cut-off Date (other than in respect of principal or interest on the
Mortgage Loans due on or before the Cut-off Date) or payments (other
than Principal Prepayments) received by it on or prior to the Cut-off
Date but allocable to a Due Period subsequent thereto:
(i) all payments on account of principal, including Principal
Prepayments (but not Prepayment Charges), on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds and
condemnation proceeds (other than proceeds collected in respect of any
particular REO Property and amounts paid in connection with a purchase
of Mortgage Loans and REO Properties pursuant to Section 10.01);
(iv) any amounts required to be deposited pursuant to Section
3.12 in connection with any losses realized on Permitted Investments
with respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer
pursuant to the second paragraph of Section 3.14(a) in respect of any
blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or
purchased in accordance with Section 2.03 or Section 10.01;
(vii) all amounts required to be deposited in connection with
Substitution Adjustments pursuant to Section 2.03;
(viii) all Prepayment Charges collected by the Servicer and
any Servicer Prepayment Charge Payment Amounts in connection with the
Principal Prepayment of any of the Mortgage Loans; and
(ix) [reserved].
The foregoing requirements for deposit in the Collection
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of Servicing
Fees, late payment charges, assumption fees, insufficient funds charges and
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ancillary income (other than Prepayment Charges) need not be deposited by the
Servicer in the Collection Account and may be retained by the Servicer as
additional compensation. In the event the Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision herein
to the contrary notwithstanding.
(b) On behalf of the Trust Fund, the Trustee shall establish
and maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Servicer shall deliver to
the Trustee in immediately available funds for deposit in the Distribution
Account on or before 3:00 p.m. New York time (i) on the Servicer Remittance
Date, that portion of the Available Funds (calculated without regard to the
references in the definition thereof to amounts that may be withdrawn from the
Distribution Account) for the related Distribution Date then on deposit in the
Collection Account, the amount of all Prepayment Charges collected during the
applicable Prepayment Period by the Servicer and Servicer Prepayment Charge
Payment Amounts in connection with the Principal Prepayment of any of the
Mortgage Loans then on deposit in the Collection Account and (ii) on each
Business Day as of the commencement of which the balance on deposit in the
Collection Account exceeds $75,000 following any withdrawals pursuant to the
next succeeding sentence, the amount of such excess, but only if the Collection
Account constitutes an Eligible Account solely pursuant to clause (ii) of the
definition of "Eligible Account." If the balance on deposit in the Collection
Account exceeds $75,000 as of the commencement of business on any Business Day
and the Collection Account constitutes an Eligible Account solely pursuant to
clause (ii) of the definition of "Eligible Account," the Servicer shall, on or
before 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 Servicer,
the Trustee or any Sub-Servicer pursuant to Section 3.11 and shall pay such
amounts to the Persons entitled thereto.
(c) Funds in the Collection Account and the Distribution
Account may be invested in Permitted Investments in accordance with the
provisions set forth in Section 3.12. The Servicer shall give written notice to
the Trustee of the location of the Collection Account maintained by it when
established and prior to any change thereof. The Trustee shall give notice to
the Servicer and the Depositor of the location of the Distribution Account when
established and prior to any change thereof.
(d) Funds held in the Collection Account at any time may be
delivered by the Servicer to the Trustee for deposit in an account (which may be
the Distribution Account and must satisfy the standards for the Distribution
Account as set forth in the definition thereof) and for all purposes of this
Agreement shall be deemed to be a part of the Collection Account; provided,
however, that the Trustee shall have the sole authority to withdraw any funds
held pursuant to this subsection (d). In the event the Servicer shall deliver to
the Trustee for deposit in the Distribution Account any amount not required to
be deposited therein, it may at any time request that the Trustee withdraw such
amount from the Distribution Account and remit to it any such amount, any
provision herein to the contrary notwithstanding. In addition, the Servicer,
with respect to items (i) through (iv) below, shall deliver to the Trustee from
time to time for deposit, and the Trustee, with respect to items (i) through
(iv) below, shall so deposit, in the Distribution Account:
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(i) any Advances, as required pursuant to Section 4.04;
(ii) any amounts required to be deposited pursuant to Section
3.23(d) or (f) in connection with any REO Property;
(iii) any amounts to be paid in connection with a purchase of
Mortgage Loans and REO Properties pursuant to Section 10.01;
(iv) any Compensating Interest to be deposited pursuant to
Section 3.24 in connection with any Prepayment Interest Shortfall; and
(v) any amounts required to be paid to the Trustee pursuant to
the Agreement, including, but not limited to Section 3.06 and Section
7.02.
SECTION 3.11. Withdrawals from the Collection Account and
Distribution Account.
(a) The Servicer shall, from time to time, make withdrawals
from the Collection Account for any of the following purposes or as described in
Section 4.04:
(i) to remit to the Trustee for deposit in the Distribution
Account the amounts required to be so remitted pursuant to Section
3.10(b) or permitted to be so remitted pursuant to the first sentence
of Section 3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Servicer for
(a) any unreimbursed Advances to the extent of amounts received which
represent Late Collections (net of the related Servicing Fees),
Liquidation Proceeds and Insurance Proceeds on Mortgage Loans with
respect to which such Advances were made in accordance with the
provisions of Section 4.04; (b) any unreimbursed Advances with respect
to the final liquidation of a Mortgage Loan that are Nonrecoverable
Advances, but only to the extent that Late Collections, Liquidation
Proceeds and Insurance Proceeds received with respect to such Mortgage
Loan are insufficient to reimburse the Servicer for such unreimbursed
Advances; or (c) subject to Section 4.04(b), any unreimbursed Advances
to the extent of funds held in the Collection Account for future
distribution that were not included in Available Funds for the
preceding Distribution Date;
(iii) subject to Section 3.16(d), to pay the Servicer or any
Sub-Servicer (a) any unpaid Servicing Fees, (b) any unreimbursed
Servicing Advances with respect to each Mortgage Loan, but only to the
extent of any Late Collections, Liquidation Proceeds and Insurance
Proceeds received with respect to such Mortgage Loan, and (c) any
Servicing Advances made with respect to a Mortgage Loan that, upon a
Final Recovery Determination with respect to such Mortgage Loan are
Nonrecoverable Advances, but only to the extent that Late Collections,
Liquidation Proceeds, Insurance Proceeds and condemnation proceeds
received with respect to such Mortgage Loan are insufficient to
reimburse the Servicer or any Sub-Servicer for Servicing Advances;
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(iv) to pay to the Servicer as servicing compensation (in
addition to the Servicing Fee) on the Servicer Remittance Date any
interest or investment income earned on funds deposited in the
Collection Account;
(v) to pay the Originator with respect to each Mortgage Loan
that has previously been purchased or replaced pursuant to Section 2.03
all amounts received thereon subsequent to the date of purchase or
substitution, and to pay the Servicer with respect to each Mortgage
Loan that has previously been purchased pursuant to Section 3.16(c) all
amounts received thereon subsequent to the date of purchase;
(vi) to reimburse the Servicer for any Advance or Servicing
Advance previously made which the Servicer has determined to be a
Nonrecoverable Advance in accordance with the provisions of Section
4.04;
(vii) to pay, or to reimburse the Servicer for Servicing
Advances in respect of, expenses incurred in connection with any
Mortgage Loan pursuant to Section 3.16(b);
(viii) to reimburse the Servicer for expenses incurred by or
reimbursable to the Servicer pursuant to Section 6.03;
(ix) [reserved];
(x) [reserved];
(xi) [reserved]; and
(xii) to clear and terminate the Collection Account pursuant
to Section 10.01.
The foregoing requirements for withdrawal from the Collection
Account shall be exclusive. In the event the Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision herein
to the contrary notwithstanding.
The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (ii), (iii), (iv), (v), (vi) and (vii) above. The
Servicer shall provide written notification to the Trustee, on or prior to the
next succeeding Servicer Remittance Date, upon making any withdrawals from the
Collection Account pursuant to subclause (vi) above; provided that an Officers'
Certificate in the form described under Section 4.04(d) shall suffice for such
written notification to the Trustee in respect hereof.
(b) The Trustee shall, from time to time, make withdrawals
from the Distribution Account, for any of the following purposes, without
priority:
(i) to make distributions in accordance with Section 4.01;
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(ii) to pay itself the Trustee Fee pursuant to Section 8.05;
(iii) to pay any amounts in respect of taxes pursuant to
Section 9.01(g);
(iv) to clear and terminate the Distribution Account pursuant
to Section 10.01;
(v) to pay any amounts required to be paid to the Trustee
pursuant to this Agreement, including but not limited to funds required
to be paid pursuant to Section 3.06, Section 7.02 and Section 8.05;
(vi) to pay to the Trustee, any interest or investment income
earned on funds deposited in the Distribution Account; and
(vii) [reserved].
SECTION 3.12. Investment of Funds in the Collection Account
and the Distribution Account.
(a) The Servicer may direct any depository institution
maintaining the Collection Account to invest the funds on deposit in
such account, and the Trustee may direct any depository institution
maintaining the Distribution Account to invest the funds on deposit in
such account or to hold such funds uninvested (each such account, for
the purposes of this Section 3.12, an "Investment Account"). All
investments pursuant to this Section 3.12 shall be in one or more
Permitted Investments bearing interest or sold at a discount, and
maturing, unless payable on demand, (i) no later than the Business Day
immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if a Person
other than the Trustee is the obligor thereon or if such investment is
managed or advised by a Person other than the Trustee or an Affiliate
of the Trustee, and (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement,
if the Trustee is the obligor thereon or if such investment is managed
or advised by the Trustee or any Affiliate. All such Permitted
Investments shall be held to maturity, unless payable on demand. Any
investment of funds in an Investment Account shall be made in the name
of the Trustee (in its capacity as such), or in the name of a nominee
of the Trustee. The Trustee shall be entitled to sole possession
(except with respect to investment direction of funds held in the
Collection Account and any income and gain realized thereon) over each
such investment, and any certificate or other instrument evidencing any
such investment shall be delivered directly to the Trustee or its
agent, together with any document of transfer necessary to transfer
title to such investment to the Trustee or its nominee. In the event
amounts on deposit in an Investment Account are at any time invested in
a Permitted Investment payable on demand, the Trustee shall:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an amount equal
to the lesser of (1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
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(y) demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Trustee that such
Permitted Investment would not constitute a Permitted Investment in
respect of funds thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account and any REO Account held by or on
behalf of the Servicer shall be for the benefit of the Servicer and
shall be subject to its withdrawal in accordance with Section 3.11,
Section 3.31 or Section 3.23, as applicable. The Servicer shall deposit
in the Collection Account or any REO Account, as applicable, the amount
of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such Account immediately upon realization
of such loss.
(c) All income and gain realized from the investment of funds
deposited in the Distribution Account shall be for the benefit of the
Trustee. The Trustee shall deposit in the Distribution Account the
amount of any loss of principal incurred in respect of any such
Permitted Investment made with funds in such Account immediately upon
realization of such loss. Notwithstanding the foregoing, the Trustee
may at its discretion, and without liability, hold the funds in the
Distribution Account uninvested.
(d) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any
Permitted Investment, or if a default occurs in any other performance
required under any Permitted Investment, the Trustee may and, subject
to Section 8.01 and Section 8.02(a)(v), upon the request of the Holders
of Certificates representing more than 50% of the Voting Rights
allocated to any Class of Certificates, shall take such action as may
be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings.
SECTION 3.13. [Reserved].
SECTION 3.14. Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage.
(a) The Servicer shall cause to be maintained for each
Mortgage Loan hazard insurance with extended coverage on the Mortgaged Property
in an amount which is at least equal to the least of (i) the current Principal
Balance of such Mortgage Loan, (ii) the amount necessary to fully compensate for
any damage or loss to the improvements that are a part of such property on a
replacement cost basis, in each case in an amount not less than such amount as
is necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy and (iii) the maximum insurable value of the
improvements which are a part of such Mortgaged Property. The Servicer shall
also cause to be maintained hazard insurance with extended coverage on each REO
Property in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and (ii)
the outstanding Principal Balance of the related Mortgage Loan at the time it
became an REO Property. The Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by the Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Servicer would
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follow in servicing loans held for its own account, subject to the terms and
conditions of the related Mortgage and Mortgage Note) shall be deposited in the
Collection Account, subject to withdrawal pursuant to Section 3.11, if received
in respect of a Mortgage Loan, or in the REO Account, subject to withdrawal
pursuant to Section 3.23, if received in respect of an REO Property. Any cost
incurred by the Servicer in maintaining any such insurance shall not, for the
purpose of calculating distributions to Certificateholders, be added to the
unpaid Principal Balance of the related Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit. It is understood and agreed that no
earthquake or other additional insurance is to be required of any Mortgagor
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require any Mortgagor to obtain such additional
insurance. If the Mortgaged Property or REO Property is at any time in an area
identified in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards and flood insurance has been made available, the
Servicer will cause to be maintained a flood insurance policy in respect
thereof. Such flood insurance shall be in an amount equal to the lesser of (i)
the unpaid Principal Balance of the related Mortgage Loan and (ii) the maximum
amount of such insurance available for the related Mortgaged Property under the
national flood insurance program (assuming that the area in which such Mortgaged
Property is located is participating in such program).
In the event that the Servicer shall obtain and maintain a
blanket policy with an insurer having a General Policy Rating of B:VI or better
in Best's Key Rating Guide (or such other rating that is comparable to such
rating) insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first two sentences of this Section 3.14, it being understood and agreed that
such policy may contain a deductible clause, in which case the Servicer shall,
in the event that there shall not have been maintained on the related Mortgaged
Property or REO Property a policy complying with the first two sentences of this
Section 3.14, and there shall have been one or more losses which would have been
covered by such policy, deposit to the Collection Account from its own funds the
amount not otherwise payable under the blanket policy because of such deductible
clause. In connection with its activities as administrator and servicer of the
Mortgage Loans, the Servicer agrees to prepare and present, on behalf of itself,
the Trustee and Certificateholders, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy.
(b) The Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Xxx or Xxxxxxx Mac if it were the purchaser of the
Mortgage Loans, unless the Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. The Servicer shall also maintain a fidelity bond
in the form and amount that would meet the requirements of Xxxxxx Mae or Xxxxxxx
Mac, unless the Servicer has obtained a waiver of such requirements from Xxxxxx
Mae or Xxxxxxx Mac. The Servicer shall be deemed to have complied with this
provision if an Affiliate of the Servicer has such errors and omissions and
fidelity bond coverage and, by the terms of such insurance policy or fidelity
bond, the coverage afforded thereunder extends to the Servicer. Any such errors
and omissions policy and fidelity bond shall by its terms not be cancelable
without thirty days' prior written notice to the Trustee. The Servicer shall
also cause each Sub-Servicer to maintain a policy of insurance covering errors
and omissions and a fidelity bond which would meet such requirements.
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SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
The Servicer will, to the extent it has actual knowledge of
any conveyance or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains or is to remain liable under the Mortgage Note and/or
the Mortgage), exercise its rights to accelerate the maturity of such Mortgage
Loan under the "due-on-sale" clause, if any, applicable thereto; provided,
however, that the Servicer shall not be required to take such action if in its
sole business judgment the Servicer believes it is not in the best interests of
the Trust Fund and shall not exercise any such rights if prohibited by law from
doing so. If the Servicer reasonably believes it is unable under applicable law
to enforce such "due-on-sale" clause, or if any of the other conditions set
forth in the proviso to the preceding sentence apply, the Servicer will enter
into an assumption and modification agreement from or with the person to whom
such property has been conveyed or is proposed to be conveyed, pursuant to which
such person becomes liable under the Mortgage Note and, to the extent permitted
by applicable state law, the Mortgagor remains liable thereon. The Servicer is
also authorized to enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note, provided that no such substitution shall be effective unless such
person satisfies the underwriting criteria of the Servicer and has a credit risk
rating at least equal to that of the original Mortgagor. In connection with any
assumption or substitution, the Servicer shall apply such underwriting standards
and follow such practices and procedures as shall be normal and usual in its
general mortgage servicing activities and as it applies to other mortgage loans
owned solely by it. The Servicer shall not take or enter into any assumption and
modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable hazard insurance policy. Any fee collected by
the Servicer in respect of an assumption, modification or substitution of
liability agreement shall be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the related Mortgage Rate and the
amount of the Monthly Payment) may be amended or modified, except as otherwise
required pursuant to the terms thereof. The Servicer shall notify the Trustee
that any such substitution, modification or assumption agreement has been
completed by forwarding to the Trustee the executed original of such
substitution, modification or assumption agreement, which document shall be
added to the related Mortgage File and shall, for all purposes, be considered a
part of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.15, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
SECTION 3.16. Realization Upon Defaulted Mortgage Loans.
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(a) The Servicer shall use its best efforts, consistent with
the servicing standards set forth in Section 3.01, to foreclose upon or
otherwise comparably convert the ownership of properties securing such
of the Mortgage Loans as come into and continue in default and as to
which no satisfactory arrangements can be made for collection of
delinquent payments pursuant to Section 3.07. The Servicer shall be
responsible for all costs and expenses incurred by it in any such
proceedings; provided, however, that such costs and expenses will be
recoverable as Servicing Advances by the Servicer as contemplated in
Section 3.11(a) and Section 3.23. The foregoing is subject to the
provision that, in any case in which a Mortgaged Property shall have
suffered damage from an Uninsured Cause, the Servicer shall not be
required to expend its own funds toward the restoration of such
property unless it shall determine in its discretion that such
restoration will increase the proceeds of liquidation of the related
Mortgage Loan after reimbursement to itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section
3.16 or any other provision of this Agreement, with respect to any
Mortgage Loan as to which the Servicer has received actual notice of,
or has actual knowledge of, the presence of any toxic or hazardous
substance on the related Mortgaged Property, the Servicer shall not, on
behalf of the Trustee, either (i) obtain title to such Mortgaged
Property as a result of or in lieu of foreclosure or otherwise, or (ii)
otherwise acquire possession of, or take any other action with respect
to, such Mortgaged Property, if, as a result of any such action, the
Trustee, the Trust Fund or the Certificateholders would be considered
to hold title to, to be a "mortgagee-in-possession" of, or to be an
"owner" or "operator" of such Mortgaged Property within the meaning of
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended from time to time, or any comparable law,
unless the Servicer has also previously determined, based on its
reasonable judgment and a report prepared by a Person who regularly
conducts environmental audits using customary industry standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Trust Fund to take such actions as are necessary to
bring the Mortgaged Property into compliance therewith; and
(2) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based
materials for which investigation, testing, monitoring, containment,
clean-up or remediation could be required under any federal, state or
local law or regulation, or that if any such materials are present for
which such action could be required, that it would be in the best
economic interest of the Trust Fund to take such actions with respect
to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by
this Section 3.16 shall be advanced by the Servicer, subject to the Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.11(a)(vii), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received in
respect of the affected Mortgage Loan or other Mortgage Loans.
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For the purposes of this Section 3.16(b), actual notice and
actual knowledge of the Servicer means actual notice to or actual knowledge of a
Responsible Officer of the Servicer involved in the servicing of the relevant
Mortgage Loan. Actual knowledge of the Servicer does not include knowledge
imputable by virtue of the availability of or accessibility to information
relating to environmental or hazardous waste sites or the locations thereof.
If the Servicer determines, as described above, that it is in
the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Servicer shall take such action as it deems to be in the best economic
interest of the Trust Fund; provided that any amounts disbursed by the Servicer
pursuant to this Section 3.16(b) shall constitute Servicing Advances, subject to
Section 4.04(d). The cost of any such compliance, containment, clean-up or
remediation shall be advanced by the Servicer, subject to the Servicer's right
to be reimbursed therefor from the Collection Account as provided in Section
3.11(a)(vii), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received in
respect of the affected Mortgage Loan or other Mortgage Loans.
(c) The Servicer may, at its option, purchase a Mortgage Loan
which has become 90 or more days delinquent or for which the Servicer has
accepted a deed in lieu of foreclosure. Prior to purchase pursuant to this
Section 3.16(c), the Servicer shall be required to continue to make Advances
pursuant to Section 4.04. The Servicer shall not use any procedure in selecting
Mortgage Loans to be repurchased which is materially adverse to the interests of
the Certificateholders. The Servicer shall purchase such delinquent Mortgage
Loan at a price equal to the Purchase Price of such Mortgage Loan. Any such
purchase of a Mortgage Loan pursuant to this Section 3.16(c) shall be
accomplished by deposit in the Collection Account of the amount of the Purchase
Price. Upon the satisfaction of the requirements set forth in Section 3.17(a),
the Trustee shall immediately deliver the Mortgage File and any related
documentation to the Servicer and will execute such documents provided to it as
are necessary to convey the Mortgage Loan to the Servicer.
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds, Liquidation Proceeds or condemnation proceeds, in respect of
any Mortgage Loan, will be applied in the following order of priority: first, to
unpaid Servicing Fees; second, to reimburse the Servicer or any Sub-Servicer for
any related unreimbursed Servicing Advances pursuant to Section 3.11(a)(iii) and
Advances pursuant to Section 3.11(a)(ii); third, to accrued and unpaid interest
on the Mortgage Loan, to the date of the Final Recovery Determination, or to the
Due Date prior to the Distribution Date on which such amounts are to be
distributed if not in connection with a Final Recovery Determination; and
fourth, as a recovery of principal of the Mortgage Loan. If the amount of the
recovery so allocated to interest is less than the full amount of accrued and
unpaid interest due on such Mortgage Loan, the amount of such recovery will be
allocated by the Servicer as follows: first, to unpaid Servicing Fees; and
second, to the balance of the interest then due and owing. The portion of the
recovery so allocated to unpaid Servicing Fees shall be reimbursed to the
Servicer or any Sub-Servicer pursuant to Section 3.11(a)(iii).
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SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Servicer of a notification that payment in full shall be escrowed
in a manner customary for such purposes, the Servicer shall deliver to the
Trustee, in written (with two executed copies) or electronic format, a Request
for Release in the form of Exhibit E hereto (which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.10 have been or will be so deposited)
signed by a Servicing Officer (or in a mutually agreeable electronic format that
will, in lieu of a signature on its face, originate from a Servicing Officer)
and shall request delivery to it of the Mortgage File. Upon receipt of such
certification and request, the Trustee shall, within three Business Days,
release and send by overnight mail, at the expense of the Servicer, the related
Mortgage File to the Servicer. No expenses incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
Collection Account or the Distribution Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee shall, upon any
request made by or on behalf of the Servicer and delivery to the Trustee, in
written (with two executed copies) or electronic format, of a Request for
Release in the form of Exhibit E hereto signed by a Servicing Officer (or in a
mutually agreeable electronic format that will, in lieu of a signature on its
face, originate from a Servicing Officer), release the related Mortgage File to
the Servicer within three Business Days, and the Trustee shall, at the written
direction of the Servicer, execute such documents as shall be necessary to the
prosecution of any such proceedings. Such Request for Release shall obligate the
Servicer to return each and every document previously requested from the
Mortgage File to the Trustee when the need therefor by the Servicer no longer
exists, unless the Mortgage Loan has been liquidated and the Liquidation
Proceeds relating to the Mortgage Loan have been deposited in the Collection
Account or the Mortgage File or such document has been delivered to an attorney,
or to a public trustee or other public official as required by law, for purposes
of initiating or pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property either judicially or non-judicially, and the Servicer
has delivered, or caused to be delivered, to the Trustee an additional Request
for Release certifying as to such liquidation or action or proceedings. Upon the
request of the Trustee, the Servicer shall provide notice to the Trustee of the
name and address of the Person to which such Mortgage File or such document was
delivered and the purpose or purposes of such delivery. Upon receipt of a
Request for Release, in written (with two executed copies) or electronic format,
from a Servicing Officer stating that such Mortgage Loan was liquidated and that
all amounts received or to be received in connection with such liquidation that
are required to be deposited into the Collection Account have been so deposited,
or that such Mortgage Loan has become an REO Property, such Mortgage Loan shall
be released by the Trustee to the Servicer or its designee within three Business
Days.
(c) Upon written certification of a Servicing Officer, the
Trustee shall execute and deliver to the Servicer or the Sub-Servicer, as the
case may be, copies of, any court pleadings, requests for trustee's sale or
other documents necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Mortgagor
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on the Mortgage Note or Mortgage or to obtain a deficiency judgment, or to
enforce any other remedies or rights provided by the Mortgage Note or Mortgage
or otherwise available at law or in equity. Each such certification shall
include a request that such pleadings or documents be executed by the Trustee
and a statement as to the reason such documents or pleadings are required and
that the execution and delivery thereof by the Trustee will not invalidate or
otherwise affect the lien of the Mortgage, except for the termination of such a
lien upon completion of the foreclosure or trustee's sale.
SECTION 3.18. Servicing Compensation.
As compensation for the activities of the Servicer hereunder,
the Servicer shall be entitled to the Servicing Fee with respect to each
Mortgage Loan payable solely from payments of interest in respect of such
Mortgage Loan, subject to Section 3.24. In addition, the Servicer shall be
entitled to recover unpaid Servicing Fees out of Insurance Proceeds, Liquidation
Proceeds or condemnation proceeds to the extent permitted by Section
3.11(a)(iii) and out of amounts derived from the operation and sale of an REO
Property to the extent permitted by Section 3.23. Except as provided in Section
3.29 or Section 6.04, the right to receive the Servicing Fee may not be
transferred in whole or in part except in connection with the transfer of all of
the Servicer's responsibilities and obligations under this Agreement; provided,
however, that the Servicer may pay from the Servicing Fee any amounts due to a
Sub-Servicer pursuant to a Sub-Servicing Agreement entered into under Section
3.02.
Additional servicing compensation in the form of assumption
fees, late payment charges, insufficient funds charges, ancillary income or
otherwise (other than Prepayment Charges) shall be retained by the Servicer only
to the extent such fees or charges are received by the Servicer. The Servicer
shall also be entitled pursuant to Section 3.11(a)(iv) to withdraw from the
Collection Account and pursuant to Section 3.23(b) to withdraw from any REO
Account, as additional servicing compensation, interest or other income earned
on deposits therein, subject to Section 3.12 and Section 3.24. The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder (including premiums for the insurance required by
Section 3.14, to the extent such premiums are not paid by the related Mortgagors
or by a Sub-Servicer and servicing compensation of each Sub-Servicer) and shall
not be entitled to reimbursement therefor except as specifically provided
herein.
SECTION 3.19. Reports to the Trustee; Collection Account
Statements.
Not later than twenty days after each Distribution Date, the
Servicer shall forward, upon request, to the Trustee and the Depositor the most
current available bank statement for the Collection Account. Copies of such
statement shall be provided by the Trustee to any Certificateholder and to any
Person identified to the Trustee as a prospective transferee of a Certificate,
upon request at the expense of the requesting party, provided such statement is
delivered by the Servicer to the Trustee.
SECTION 3.20. Statement as to Compliance.
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The Servicer will deliver to the Trustee and the Depositor not
later than the 15th day of March following the end of each calendar year of the
Servicer (which, as of the Closing Date, ends on the last day of December),
commencing in 2004, an Officers' Certificate in the form attached hereto as
Exhibit P stating, as to each signatory thereof, that (i) a review of the
activities of the Servicer during the preceding year and of performance under
this Agreement has been made under such officers' supervision and (ii) to the
best of such officers' knowledge, based on such review, the Servicer has
fulfilled all of its obligations under this Agreement throughout such year, or,
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. Copies of any such statement shall be provided by the Trustee to any
Certificateholder and to any Person identified to the Trustee as a prospective
transferee of a Certificate, upon request at the expense of the requesting
party, provided such statement is delivered by the Servicer to the Trustee.
SECTION 3.21. Independent Public Accountants' Servicing
Report.
Not later than the 15th day of March following the end of
each calendar year of the Servicer (which, as of the Startup Day, ends on the
last day of December), commencing in 2004, the Servicer, at its expense, shall
cause a nationally recognized firm of independent certified public accountants
to furnish to the Servicer a report stating that (i) it has obtained a letter of
representation regarding certain matters from the management of the Servicer
which includes an assertion that the Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed calendar year and (ii) on the basis of
an examination conducted by such firm in accordance with standards established
by the American Institute of Certified Public Accountants, such representation
is fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Sub-Servicers, upon comparable reports of firms of independent
certified public accountants rendered on the basis of examinations conducted in
accordance with the same standards (rendered within one year of such report)
with respect to those Sub-Servicers. Immediately upon receipt of such report,
the Servicer shall furnish a copy of such report to the Trustee and each Rating
Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Servicer's expense, provided that such
statement is delivered by the Servicer to the Trustee.
SECTION 3.22. Access to Certain Documentation; Filing of
Reports by Trustee.
(a) The Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder,
access to the documentation regarding the Mortgage Loans required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and during normal business hours at the offices of the
Servicer designated by it. In addition, access to the documentation regarding
the Mortgage Loans will be provided to any Certificateholder, the Trustee and to
any Person identified to the Servicer as a prospective transferee
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of a Certificate, upon reasonable request during normal business hours at the
offices of the Servicer designated by it at the expense of the Person requesting
such access.
(b)(i) The Trustee and the Servicer shall reasonably cooperate
with the Depositor in connection with the Trust's satisfying the reporting
requirements under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The Trustee shall prepare on behalf of the Trust any Forms 8-K
and 10-K customary for similar securities as required by the Exchange Act and
the Rules and Regulations of the Securities and Exchange Commission thereunder,
and the Depositor shall sign (or shall cause another entity acceptable to the
Securities and Exchange Commission to sign) and the Trustee shall file (via the
Securities and Exchange Commission's Electronic Data Gathering and Retrieval
System) such forms on behalf of the Depositor (or such other entity). The
Depositor hereby grants to the Trustee a limited power of attorney to execute
any Form 8-K and file each such document on behalf of the Depositor. Such power
of attorney shall continue until the earlier of (i) receipt by the Trustee from
the Depositor of written termination of such power of attorney and (ii) the
termination of the Trust. Notwithstanding anything herein to the contrary, the
Depositor, and not the Trustee, shall be responsible for executing each Form
10-K filed on behalf of the Trust.
(ii) Each Form 8-K shall be filed by the Trustee within 15
days after each Distribution Date, with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
March 30th of each year (or such earlier date as may be required by the Exchange
Act and the Rules and Regulations of the Securities and Exchange Commission),
the Trustee shall file a Form 10-K, in substance as required by applicable law
or applicable Security and Exchange Commission staff's interpretations. The
Servicer shall provide the Servicer Certification (defined in Section
3.22(b)(iii)) to the Trustee and the Depositor on March 15th of each year (which
occurs each year fifteen days prior to March 30th of such year). The Trustee
shall prepare such Form 10-K and provide the Depositor with such Form 10-K not
later than March 20th of each year. Following its receipt thereof, the Depositor
shall execute such Form 10-K and provide the original of such Form 10-K to the
Trustee not later than March 25th (or, if the applicable March 25th is not a
Business Day, the next succeeding Business Day) of each year; provided, however,
that if the filing of such Form 10-K shall be required to occur on a date
earlier than March 30th of each year as may be required by the Exchange Act and
the Rules and Regulations of the Securities and Exchange Commission, then the
time periods for preparation and execution of such Form 10-K set forth in this
sentence shall be adjusted accordingly). Such Form 10-K when filed shall include
as exhibits the Servicer's annual statement of compliance described under
Section 3.20 and the accountant's report described under Section 3.21, in each
case to the extent they have been timely delivered to the Trustee. If they are
not so timely delivered, the Trustee shall file an amended Form 10-K including
such documents as exhibits reasonably promptly after they are delivered to the
Trustee. The Trustee shall have no liability with respect to any failure to
properly prepare or file such periodic reports resulting from or relating to the
Trustee's inability or failure to obtain any information not resulting from its
own negligence or willful misconduct. The Form 10-K shall also include a
certification in the form attached hereto as Exhibit N-1 (the "Certification"),
which shall be signed by the senior officer of the Depositor in charge of
securitization.
(iii) In addition, (x) the Trustee shall sign a certification
(in the form attached hereto as Exhibit N-2) for the benefit of the Depositor
and its officers, directors and Affiliates regarding certain aspects of items 1
through 3 of the Certification (provided, however, that the
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Trustee shall not undertake an analysis of the accountant's report attached as
an exhibit to the Form 10-K), and (y) the Servicer shall sign a certification
(in the form attached hereto as Exhibit N-3) for the benefit of the Depositor,
the Trustee and their officers, directors and Affiliates regarding certain
aspects of items 1, 2, 3, 4 and 5 of the Certification (the "Servicer
Certification").
In addition, (A) the Trustee shall indemnify and hold harmless
the Depositor and its officers, directors and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon a breach of the Trustee's obligations under this Section 3.22(b)
caused by the Trustee's negligence, bad faith or willful misconduct in
connection therewith, and (B) the Servicer shall indemnify and hold harmless the
Depositor, the Trustee and their respective officers, directors and Affiliates
from and against any actual losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other costs
and expenses arising out of or based upon (I) the failure of the Servicer to
timely deliver the Servicer Certification or (II) any material misstatement in
the Servicer Certification. If the indemnification provided for herein is
unavailable or insufficient to hold harmless the Depositor, then (i) the Trustee
agrees that it shall contribute to the amount paid or payable by the Depositor
as a result of the losses, claims, damages or liabilities of the Depositor in
such proportion as is appropriate to reflect the relative fault of the Depositor
on the one hand and the Trustee on the other in connection with a breach of the
Trustee's obligations under this Section 3.22(b) caused by the Trustee's
negligence, bad faith or willful misconduct in connection therewith and (ii) the
Servicer agrees that it shall contribute to the amount paid or payable by the
Depositor as a result of the losses, claims, damages or liabilities of the
Depositor in such proportion as is appropriate to reflect the relative fault of
the Depositor on the one hand and the Servicer on the other in connection with
the Servicer Certification and the related obligations of the Servicer under
this Section 3.22(b).
(iv) Upon any filing with the Securities and Exchange
Commission, the Trustee shall promptly deliver to the Depositor a copy of any
executed report, statement or information.
(v) Prior to January 30 of the first year in which the Trustee
is able to do so under applicable law, the Trustee shall file a Form 15D
Suspension Notification with respect to the Trust.
(vi) To the extent that, following the Closing Date, the
Depositor certifies that reports and certifications differing from those
required under this Section 3.22(b) comply with the reporting requirements under
the Exchange Act, the Trustee and the Servicer hereby agree that they will
reasonably cooperate to amend the provisions of this Section 3.22(b) in order to
comply with such amended reporting requirements and such amendment of this
Section 3.22(b); provided, however, that the Trustee shall not be responsible
for executing any Form 10-K or the Certification. Any such amendment may result
in the reduction of the reports filed by the Depositor under the Exchange Act.
SECTION 3.23. Title, Management and Disposition of REO
Property.
(a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. The Servicer, on behalf of REMIC 1, shall sell any REO
Property as soon as practicable and in any event no later than
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the end of the third full taxable year after the taxable year in which such
REMIC acquires ownership of such REO Property for purposes of Section 860G(a)(8)
of the Code or request from the Internal Revenue Service, no later than 60 days
before the day on which the three-year grace period would otherwise expire, an
extension of such three-year period, unless the Servicer shall have delivered to
the Trustee an Opinion of Counsel, addressed to the Trustee and the Depositor,
to the effect that the holding by the REMIC of such REO Property subsequent to
three years after its acquisition will not result in the imposition on the REMIC
of taxes on "prohibited transactions" thereof, as defined in Section 860F of the
Code, or cause any of the REMICs created hereunder to fail to qualify as a REMIC
under Federal law at any time that any Certificates are outstanding. The
Servicer shall manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any of the REMICs created hereunder of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code,
or any "net income from foreclosure property" which is subject to taxation under
the REMIC Provisions.
(b) The Servicer shall separately account for all funds
collected and received in connection with the operation of any REO
Property and shall establish and maintain, or cause to be established
and maintained, with respect to REO Properties an account held in trust
for the Trustee for the benefit of the Certificateholders (the "REO
Account"), which shall be an Eligible Account. The Servicer shall be
permitted to allow the Collection Account to serve as the REO Account,
subject to separate ledgers for each REO Property. The Servicer shall
be entitled to retain or withdraw any interest income paid on funds
deposited in the REO Account.
(c) The Servicer shall have full power and authority, subject
only to the specific requirements and prohibitions of this Agreement,
to do any and all things in connection with any REO Property as are
consistent with the manner in which the Servicer manages and operates
similar property owned by the Servicer or any of its Affiliates, all on
such terms and for such period (subject to the requirement of prompt
disposition set forth in Section 3.23(a))as the Servicer deems to be in
the best interests of Certificateholders. In connection therewith, the
Servicer shall deposit, or cause to be deposited in the clearing
account in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day
after the Servicer's receipt thereof, and shall thereafter deposit in
the REO Account, in no event more than two Business Days after the
Servicer's receipt thereof, all revenues received by it with respect to
an REO Property and shall withdraw therefrom funds necessary for the
proper operation, management and maintenance of such REO Property
including, without limitation:
(i) all insurance premiums due and payable in respect of such
REO Property;
(ii) all real estate taxes and assessments in respect of such
REO Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO
Property.
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To the extent that amounts on deposit in the REO Account with
respect to an REO Property are insufficient for the purposes set forth in
clauses (i) through (iii) above with respect to such REO Property, the Servicer
shall advance from its own funds such amount as is necessary for such purposes
if, but only if, the Servicer would make such advances if the Servicer owned the
REO Property and if in the Servicer's judgment, the payment of such amounts will
be recoverable from the rental or sale of the REO Property.
Notwithstanding the foregoing, neither the Servicer nor the
Trustee shall:
(A) authorize the Trust Fund to enter into, renew or extend
any New Lease with respect to any REO Property, if the New Lease by its
terms will give rise to any income that does not constitute Rents from
Real Property;
(B) authorize any amount to be received or accrued under any
New Lease other than amounts that will constitute Rents from Real
Property;
(C) authorize any construction on any REO Property, other than
the completion of a building or other improvement thereon, and then
only if more than ten percent of the construction of such building or
other improvement was completed before default on the related Mortgage
Loan became imminent, all within the meaning of Section 856(e)(4)(B) of
the Code; or
(D) authorize any Person to Directly Operate any REO Property
on any date more than 90 days after its date of acquisition by the
Trust Fund;
unless, in any such case, the Servicer has obtained an Opinion of Counsel,
provided to the Trustee, to the effect that such action will not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code at any time that it is held by the REMIC, in
which case the Servicer may take such actions as are specified in such Opinion
of Counsel.
The Servicer may contract with any Independent Contractor for
the operation and management of any REO Property, provided that:
(1) the terms and conditions of any such contract shall not be
inconsistent herewith;
(2) any such contract shall require, or shall be administered
to require, that the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed above and remit all related revenues
(net of such costs and expenses) to the Servicer as soon as
practicable, but in no event later than thirty days following the
receipt thereof by such Independent Contractor;
(3) none of the provisions of this Section 3.23(c) relating to
any such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the
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Servicer of any of its duties and obligations to the Trustee on behalf
of the Certificateholders with respect to the operation and management
of any such REO Property; and
(4) the Servicer shall be obligated with respect thereto to
the same extent as if it alone were performing all duties and
obligations in connection with the operation and management of such REO
Property.
The Servicer shall be entitled to enter into any agreement
with any Independent Contractor performing services for it related to its duties
and obligations hereunder for indemnification of the Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Servicer shall be solely liable for all fees
owed by it to any such Independent Contractor, irrespective of whether the
Servicer's compensation pursuant to Section 3.18 is sufficient to pay such fees;
provided, however, that to the extent that any payments made by such Independent
Contractor would constitute Servicing Advances if made by the Servicer, such
amounts shall be reimbursable as Servicing Advances made by the Servicer.
(d) In addition to the withdrawals permitted under Section
3.23(c), the Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and Advances made
in respect of such REO Property or the related Mortgage Loan. On the Servicer
Remittance Date, the Servicer shall withdraw from each REO Account maintained by
it and deposit into the Distribution Account in accordance with Section
3.10(d)(ii), for distribution on the related Distribution Date in accordance
with Section 4.01, the income from the related REO Property received during the
prior calendar month, net of any withdrawals made pursuant to Section 3.23(c) or
this Section 3.23(d).
(e) Subject to the time constraints set forth in Section
3.23(a), each REO Disposition shall be carried out by the Servicer in a manner,
at such price and upon such terms and conditions as shall be normal and usual in
the servicing standard set forth in Section 3.01.
(f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Servicer or any Sub-Servicer as
provided above, shall be deposited in the Distribution Account in accordance
with Section 3.10(d)(ii) on the Servicer Remittance Date in the month following
the receipt thereof for distribution on the related Distribution Date in
accordance with Section 4.01. Any REO Disposition shall be for cash only (unless
changes in the REMIC Provisions made subsequent to the Startup Day allow a sale
for other consideration).
(g) The Servicer shall file information returns with respect
to the receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of any Mortgaged Property and cancellation of
indebtedness income with respect to any Mortgaged Property as required by
Sections 6050H, 6050J and 6050P of the Code, respectively. Such reports shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 6050J and 6050P of the Code.
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SECTION 3.24. Obligations of the Servicer in Respect of
Prepayment Interest Shortfalls.
Not later than 1:00 p.m. New York time on each Servicer
Remittance Date, the Servicer shall remit to the Distribution Account an amount
("Compensating Interest") equal to the lesser of (A) the aggregate of the
Prepayment Interest Shortfalls for the related Distribution Date and (B) 50% of
its aggregate Servicing Fee received in the related Due Period. The Servicer
shall not have the right to reimbursement for any amounts remitted to the
Trustee in respect of Compensating Interest. Such amounts so remitted shall be
included in the Available Funds and distributed therewith on the next
Distribution Date. The Servicer shall not be obligated to pay Compensating
Interest with respect to Relief Act Interest Shortfalls.
SECTION 3.25. [Reserved].
SECTION 3.26. Obligations of the Servicer in Respect of
Mortgage Rates and Monthly Payments.
In the event that a shortfall in any collection on or
liability with respect to the Mortgage Loans in the aggregate results from or is
attributable to adjustments to Mortgage Rates, Monthly Payments or Stated
Principal Balances that were made by the Servicer in a manner not consistent
with the terms of the related Mortgage Note and this Agreement, the Servicer,
upon discovery or receipt of notice thereof, immediately shall deposit in the
Collection Account from its own funds the amount of any such shortfall and shall
indemnify and hold harmless the Trust Fund, the Trustee, the Depositor and any
successor servicer in respect of any such liability. Such indemnities shall
survive the termination or discharge of this Agreement. Notwithstanding the
foregoing, this Section 3.26 shall not limit the ability of the Servicer to seek
recovery of any such amounts from the related Mortgagor under the terms of the
related Mortgage Note, as permitted by law.
SECTION 3.27. Solicitations.
From and after the Closing Date, the Servicer agrees that it
will not take any action or permit or cause any action to be taken by any of its
agents and Affiliates, or by any independent contractors or independent mortgage
brokerage companies on the Servicer's behalf, to personally, by telephone or
mail, solicit the Mortgagor under any Mortgage Loan for the purpose of
refinancing such Mortgage Loan; provided, that the Servicer may solicit any
Mortgagor for whom the Servicer has received a request for verification of
mortgage, a request for demand for payoff, a mortgagor initiated written or
verbal communication indicating a desire to prepay the related Mortgage Loan,
another mortgage company has pulled a credit report on the mortgagor or the
mortgagor initiates a title search; provided further, it is understood and
agreed that promotions undertaken by the Servicer or any of its Affiliates which
(i) concern optional insurance products or other additional products or (ii) are
directed to the general public at large, including, without limitation, mass
mailings based on commercially acquired mailing lists, newspaper, radio,
telephone and television advertisements shall not constitute solicitation under
this Section, nor is the Servicer prohibited from responding to unsolicited
requests or inquiries made by a Mortgagor or an agent of a Mortgagor.
Furthermore, the Servicer shall be permitted to include in its monthly
statements to borrowers or otherwise, statements
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regarding the availability of the Servicer's counseling services with respect to
refinancing mortgage loans.
SECTION 3.28. Net WAC Rate Carryover Reserve Account.
No later than the Closing Date, the Trustee shall establish
and maintain with itself a separate, segregated trust account titled, "Net WAC
Rate Carryover Reserve Account, Deutsche Bank National Trust Company, as
Trustee, in trust for registered Holders of Fremont Home Loan Trust 2003-3,
Asset-Backed Certificates, Series 0000-0." Xx the Closing Date, the Depositor
will deposit, or cause to be deposited, into the Net WAC Rate Carryover Reserve
Account $1,000.
On each Distribution Date, the Trustee has been directed by
the Class C Certificateholders to, and therefore shall, deposit into the Net WAC
Rate Carryover Reserve Account the sum of (A) the excess, if any, of $1,000 over
the amount on deposit therein (exclusive of any amounts therein representing any
investment income on such reserve account) and (B) the aggregate of any Net WAC
Rate Carryover Amounts for the Class A Certificates and Mezzanine Certificates,
rather than distributing such amounts to the Class C Certificateholders. On each
such Distribution Date, the Trustee shall hold all such amounts for the benefit
of the Holders of the Class A Certificates and the Mezzanine Certificates, and
shall distribute the aggregate Net WAC Rate Carryover Amount, if any, for such
Distribution Date from the Net WAC Rate Carryover Reserve Account to the Holders
of the Class A Certificates and the Mezzanine Certificates in the amounts and
priorities set forth in Section 4.01(e).
On each Distribution Date, any amounts remaining in the Net
WAC Rate Reserve Account (other than $1,000 as set forth above) after the
payment of any Net WAC Rate Carryover Amounts on the Class A Certificates and
the Mezzanine Certificates for such Distribution Date, shall be retained in the
Net WAC Rate Carryover Reserve Account. On the Distribution Date on which the
Certificate Principal Balances of the Class A Certificates and Mezzanine
Certificates have been reduced to zero, after the payment of any Net WAC Rate
Carryover Amounts on the Class A Certificates and Mezzanine Certificates for
such Distribution Date, and on each Distribution Date thereafter, the Trustee
shall withdraw any amount on deposit in the Net WAC Rate Carryover Reserve
Account and shall distribute such amount to the Holders of the Class C
Certificates. In addition, upon any earlier termination of the Trust, after the
payment of any Net WAC Rate Carryover Amounts on the Class A Certificates and
the Mezzanine Certificates, the Trustee shall withdraw any amount on deposit in
the Net WAC Rate Carryover Reserve Account and shall distribute such amount to
the Holders of the Class C Certificates.
For federal and state income tax purposes, the Class C
Certificateholders will be deemed to be the owners of the Net WAC Rate Carryover
Reserve Account and all amounts deposited into the Net WAC Rate Carryover
Reserve Account (other than the initial deposit therein of $1,000) shall be
treated as amounts distributed by REMIC 2 to the Holders of the Class C
Certificates. The Net WAC Rate Carryover Reserve Account will be an "outside
reserve fund" within the meaning of Treasury regulation Section 1.860G-2(h). The
Net WAC Rate Carryover Reserve Account will be part of the Trust but not part of
any REMIC and any payments to the Holders of the Class A-1 Certificates, the
Class A-2 Certificates, the Mezzanine Certificates of Net
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WAC Rate Carryover Amounts will not be payments with respect to a "regular
interest" in a REMIC within the meaning of Code Section 860(G)(a)(1).
By accepting a Class C Certificate, each Class C
Certificateholder hereby agrees to direct the Trustee, and the Trustee hereby is
directed, to deposit into the Net WAC Rate Carryover Reserve Account the amounts
described in Section 4.01(d)(xii) on each Distribution Date as to which there is
any Net WAC Rate Carryover Amount rather than distributing such amounts to the
Class C Certificateholders. By accepting a Class C Certificate, each Class C
Certificateholder further agrees that such direction is given for good and
valuable consideration, the receipt and sufficiency of which is acknowledged by
such acceptance.
At the direction of the Holders of a majority in Percentage
Interest in the Class C Certificates, the Trustee shall direct any depository
institution maintaining the Net WAC Rate Carryover Reserve Account to invest the
funds in such account in one or more Permitted Investments bearing interest or
sold at a discount, and maturing, unless payable on demand, (i) no later than
the Business Day immediately preceding the date on which such funds are required
to be withdrawn from such account pursuant to this Agreement, if a Person other
than the Trustee or an Affiliate manages or advises such investment, and (ii) no
later than the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if the Trustee or an Affiliate manages or
advises such investment. If no investment direction of the Holders of a majority
in Percentage Interest in the Class C Certificates with respect to the Net WAC
Rate Carryover Reserve Account is received by the Trustee, the Trustee shall
invest the funds in such account in the following Permitted Investment for so
long as such Permitted Investment is managed by the Trustee or an Affiliate of
the Trustee and is of the kind described in clause (vi) of the definition of
Permitted Investments: Deutsche Bank Treasury Money Fund No. 835.
For federal tax return and information reporting, the right of
the Holders of the Class A Certificates and Mezzanine Certificates to receive
payments from the Net WAC Rate Carryover Reserve Account in respect of any Net
WAC Rate Carryover Amount shall be assigned a value of zero.
SECTION 3.29. Advance Facility.
(a) The Servicer is hereby authorized to enter into a
financing or other facility (any such arrangement, an "Advance Facility"), the
documentation for which complies with Section 3.29(e) below, under which (1) the
Servicer assigns or pledges its rights under this Agreement to be reimbursed for
any or all Advances and/or Servicing Advances to (i) a Person, which may be a
special-purpose bankruptcy-remote entity (an "SPV"), (ii) a Person, which may
simultaneously assign or pledge such rights to an SPV or (iii) a lender (a
"Lender"), which, in the case of any Person or SPV of the type described in
either of the preceding clauses (i) or (ii), may directly or through other
assignees and/or pledgees, assign or pledge such rights to a Person, which may
include a trustee acting on behalf of holders of debt instruments (any such
Person or any such Lender, an "Advance Financing Person"), and/or (2) an Advance
Financing Person agrees to fund all the Advances and/or Servicing Advances
required to be made by the Servicer pursuant to this Agreement. No consent of
the Trustee, Certificateholders or any other party shall be required before the
Servicer may enter into an Advance Facility nor shall the Trustee or the
Certificateholders be a third party beneficiary
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of any obligation of an Advance Financing Person to the Servicer.
Notwithstanding the existence of any Advance Facility under which an Advance
Financing Person agrees to fund Advances and/or Servicing Advances, (A) the
Servicer (i) shall remain obligated pursuant to this Agreement to make Advances
and/or Servicing Advances pursuant to and as required by this Agreement and (ii)
shall not be relieved of such obligations by virtue of such Advance Facility and
(B) neither the Advance Financing Person nor any Servicer's Assignee (as
hereinafter defined) shall have any right to proceed against or otherwise
contact any Mortgagor for the purpose of collecting any payment that may be due
with respect to any related Mortgage Loan or enforcing any covenant of such
Mortgagor under the related Mortgage Loan documents.
(b) If the Servicer enters into an Advance Facility, the
Servicer and the related Advance Financing Person shall deliver to the Trustee
at the address set forth in Section 11.05 hereof a written notice (an "Advance
Facility Notice"), stating (a) the identity of the Advance Financing Person and
(b) the identity of the Person (the "Servicer's Assignee") that will, subject to
Section 3.29(c) hereof, have the right to make withdrawals from the Collection
Account pursuant to Section 3.11(a) clauses (ii)(a), (ii)(b), (iii), (vi) and
(vii) hereof to reimburse previously unreimbursed Advances and/or Servicing
Advances ("Advance Reimbursement Amounts"). Advance Reimbursement Amounts (i)
shall consist solely of amounts in respect of Advances and/or Servicing Advances
for which the Servicer would be permitted to reimburse itself in accordance with
Section 3.11(a) clauses (ii)(a), (ii)(b), (iii), (vi) and (vii) hereof, assuming
the Servicer had made the related Advance(s) and/or Servicing Advance(s) and
(ii) shall not consist of amounts payable to a successor Servicer in accordance
with Section 3.11(a) clauses (ii)(a), (ii)(b), (iii), (vi) and (vii) hereof to
the extent permitted under Section 3.29(e) below.
(c) Notwithstanding the existence of an Advance Facility, the
Servicer, on behalf of the Advance Facility Person, shall be entitled to receive
reimbursements of Advances and/or Servicing Advances in accordance with Section
3.11(a) clauses (ii)(a), (ii)(b), (iii), (vi) and (vii) hereof, which
entitlement may be terminated by the Advance Financing Person pursuant to a
written notice to the Trustee in the manner set forth in Section 11.05 hereof.
Upon receipt of such written notice, the Servicer shall no longer be entitled to
receive reimbursement for any Advance Reimbursement Amounts and the Servicer's
Assignee shall immediately have the right to receive from the Collection Account
all Advance Reimbursement Amounts. Notwithstanding the foregoing, and for the
avoidance of doubt, (i) the Servicer and/or the Servicer's Assignee shall only
be entitled to reimbursement of Advance Reimbursement Amounts hereunder from
withdrawals from the Collection Account pursuant to Section 3.11(a) clauses
(ii)(a), (ii)(b), (iii), (vi) and (vii) of this Agreement and shall not
otherwise be entitled to make withdrawals or receive amounts that shall be on
deposit in the Distribution Account or that are required to be deposited in the
Distribution Account pursuant to any provision hereunder, and (ii) none of the
Trustee or the Certificateholders shall have any right to, or otherwise be
entitled to, receive any Advance Reimbursement Amounts to which the Servicer or
Servicer's Assignee, as applicable, shall be entitled pursuant to Section
3.11(a) clauses (ii)(a), (ii)(b), (iii), (vi) and (vii). An Advance Facility may
be terminated by the joint written direction of the Servicer and the related
Advance Financing Person. Written notice of such termination shall be delivered
to the Trustee in the manner set forth in Section 11.05 hereof. None of the
Depositor or the Trustee shall, as a result of the existence of any Advance
Facility, have any additional duty or liability with respect to the calculation
or payment of any Advance Reimbursement Amount, nor, as a result of the
existence of any Advance Facility, shall the Depositor or the Trustee
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have any additional responsibility to track or monitor the administration of the
Advance Facility or the payment of Advance Reimbursement Amounts to the
Servicer's Assignee. The Servicer shall indemnify the Depositor, the Trustee,
any successor Servicer and the Trust Fund resulting from any claim by the
related Advancing Financing Person. The Servicer shall maintain and provide to
any successor Servicer and, upon request, the Trustee a detailed accounting on a
loan-by-loan basis as to amounts advanced by, pledged or assigned to, and
reimbursed to any Advancing Financing Person. The successor Servicer shall be
entitled to rely on any such information provided by the predecessor Servicer,
and the successor Servicer shall not be liable for any errors in such
information.
(d) An Advance Financing Person who receives an assignment or
pledge of rights to receive Advance Reimbursement Amounts and/or whose
obligations are limited to the funding of Advances and/or Servicing Advances
pursuant to an Advance Facility shall not be required to meet the criteria for
qualification as a Sub-Servicer.
(e) As between a predecessor Servicer and its Advance
Financing Person, on the one hand, and a successor Servicer and its Advance
Financing Person, if any, on the other hand, Advance Reimbursement Amounts on a
loan-by-loan basis with respect to each Mortgage Loan as to which an Advance
and/or Servicing Advance shall have been made and be outstanding shall be
allocated on a "first-in, first out" basis. In the event the Servicer's Assignee
shall have received some or all of an Advance Reimbursement Amount related to
Advances and/or Servicing Advances that were made by a Person other than such
predecessor Servicer or its related Advance Financing Person in error, then such
Servicer's Assignee shall be required to remit any portion of such Advance
Reimbursement Amount to each Person entitled to such portion of such Advance
Reimbursement Amount. Without limiting the generality of the foregoing, the
Servicer shall remain entitled to be reimbursed by the Advance Financing Person
for all Advances and/or Servicing Advances funded by the Servicer to the extent
the related Advance Reimbursement Amounts have not been assigned or pledged to
such Advance Financing Person or Servicer's Assignee.
(f) For purposes of any Officer's Certificate of the Servicer
made pursuant to Section 4.04(d), any Nonrecoverable Advance referred to therein
may have been made by such Servicer or any predecessor Servicer. In making its
determination that any Advance or Servicing Advance theretofore made has become
a Nonrecoverable Advance, the Servicer shall apply the same criteria in making
such determination regardless of whether such Advance or Servicing Advance shall
have been made by the Servicer or any predecessor Servicer.
(g) Any amendment to this Section 3.29 or to any other
provision of this Agreement that may be necessary or appropriate to effect the
terms of an Advance Facility as described generally in this Section 3.29,
including amendments to add provisions relating to a successor Servicer, may be
entered into by the Trustee, the Depositor and the Servicer without the consent
of any Certificateholder, provided such amendment complies with Section 11.01
hereof. All reasonable costs and expenses (including attorneys' fees) of each
party hereto of any such amendment shall be borne solely by the Servicer. The
parties hereto hereby acknowledge and agree that: (a) the Advances and/or
Servicing Advances financed by and/or pledged to an Advance Financing Person
under any Advance Facility are obligations owed to the Servicer payable only
from the cash flows and proceeds received under this Agreement for reimbursement
of Advances and/or
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Servicing Advances only to the extent provided herein, and the Trustee and the
Trust are not, as a result of the existence of any Advance Facility, obligated
or liable to repay any Advances and/or Servicing Advances financed by the
Advance Financing Person; (b) the Servicer will be responsible for remitting to
the Advance Financing Person the applicable amounts collected by it as
reimbursement for Advances and/or Servicing Advances funded by the Advance
Financing Person, subject to the provisions of this Agreement; and (c) the
Trustee shall not have any responsibility to track or monitor the administration
of the financing arrangement between the Servicer and any Advance Financing
Person.
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ARTICLE IV
FLOW OF FUNDS
SECTION 4.01. Distributions.
(a)(I) On each Distribution Date, the Trustee shall withdraw
from the Distribution Account that portion of Available Funds for such
Distribution Date consisting of the Group I Interest Remittance Amount
for such Distribution Date, and make the following disbursements and
transfers in the order of priority described below, in each case to the
extent of the Group I Interest Remittance Amount remaining for such
Distribution Date:
(i) to the Holders of the Class A-1 Certificates, the Monthly
Interest Distributable Amount and the Unpaid Interest Shortfall Amount,
if any, for such Certificates; and
(ii) to the Holders of the Class A-2 Certificates, an amount
equal to the excess, if any, of (x) the amount required to be
distributed pursuant to Section 4.01(a)(II)(i) below for such
Distribution Date over (y) the amount actually distributed pursuant to
such clause from the Group II Interest Remittance Amount.
(II) On each Distribution Date the Trustee shall withdraw from
the Distribution Account that portion of Available Funds for such
Distribution Date consisting of the Group II Interest Remittance Amount
for such Distribution Date, and make the following disbursements and
transfers in the order of priority described below, in each case to the
extent of the Group II Interest Remittance Amount remaining for such
Distribution Date.
(i) to the Holders of the Class A-2 Certificates, the Monthly
Interest Distributable Amount and the Unpaid Interest Shortfall Amount,
if any, for such Certificates; and
(ii) to the Holders of the Class A-1 Certificates, an amount
equal to the excess, if any, of (x) the amount required to be
distributed pursuant to Section 4.01(a)(I)(i) above for such
Distribution Date over (y) the amount actually distributed pursuant to
such clause from the Group I Interest Remittance Amount.
(III) On each Distribution Date, following the distributions
made pursuant to Section 4.01(a)(I) and (II) above, the Trustee shall
make the following disbursements and transfers in the order of priority
described below, in each case to the extent of the sum of the Group I
Interest Remittance Amount and the Group II Interest Remittance Amount
remaining undistributed for such Distribution Date.
(i) to the Holders of the Class M-1 Certificates, the Monthly
Interest Distributable Amount allocable to such Certificates;
(ii) to the Holders of the Class M-2 Certificates, the Monthly
Interest Distributable Amount allocable to such Certificates;
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(iii) to the Holders of the Class M-3 Certificates, the
Monthly Interest Distributable Amount allocable to such Certificates;
(iv) to the Holders of the Class M-4 Certificates, the Monthly
Interest Distributable Amount allocable to such Certificates; and
(v) to the Holders of the Class M-5 Certificates, the Monthly
Interest Distributable Amount allocable to such Certificates;
(b)(I) On each Distribution Date (a) prior to the Stepdown
Date or (b) on which a Trigger Event is in effect, distributions in
respect of principal to the extent of the Group I Principal
Distribution Amount shall be made in the following amounts and order of
priority:
(i) first, to the Holders of the Class A-1 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero; and
(ii) second, after taking into account the amount distributed
to the Holders of the Class A-2 Certificates pursuant to clause
(b)(II)(i) below on such Distribution Date, to the Holders of the Class
A-2 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero.
(II) On each Distribution Date (a) prior to the Stepdown Date
or (b) on which a Trigger Event is in effect, distributions in respect
of principal to the extent of the Group II Principal Distribution
Amount shall be made in the following amounts and order of priority:
(i) first, to the Holders of the Class A-2 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero; and
(ii) second, after taking into account the amount distributed
to the Holders of the Class A-1 Certificates pursuant to clause
(b)(I)(i) above on such Distribution Date, to the Holders of the Class
A-1 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero.
(III) On each Distribution Date (a) prior to the Stepdown Date
or (b) on which a Trigger Event is in effect, distributions in respect
of principal to the extent of the sum of the Group I Principal
Distribution Amount and the Group II Principal Distribution Amount
remaining undistributed for such Distribution Date shall be made in the
following amounts and order of priority:
(i) first, to the Holders of the Class M-1 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero;
(ii) second, to the Holders of the Class M-2 Certificates,
until the Certificate Principal Balance thereof has been reduced to
zero;
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(iii) third, to the Holders of the Class M-3 Certificates,
until the Certificate Principal Balance thereof has been reduced to
zero;
(iv) fourth, to the Holders of the Class M-4 Certificates,
until the Certificate Principal Balance thereof has been reduced to
zero; and
(v) fifth, to the Holders of the Class M-5 Certificates, until
the Certificate Principal Balance of each such class, thereof has been
reduced to zero.
(c)(I) On each Distribution Date (a) on or after the Stepdown
Date and (b) on which a Trigger Event is not in effect, distributions
in respect of principal to the extent of the Group I Principal
Distribution Amount shall be made in the following amounts and order of
priority:
(i) first, to the Holders of the Class A-1 Certificates, the
Class A-1 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero; and
(ii) second, to the extent of the portion, if any, of the
Class A-1 Principal Distribution Amount remaining undistributed
pursuant to clause (c)(I)(i) above on such Distribution Date, and after
taking into account the amount distributed to the Holders of the Class
A-2 Certificates pursuant to clause (c)(II)(i) below on such
Distribution Date, to the Holders of the Class A-2 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero; and
(iii) third, to the holders of the Class A-2 Certificates, an
amount equal to the excess, if any, of (x) the amount required to be
distributed pursuant to clause (c)(II)(i) below for such Distribution
Date over (y) the sum of (A) the amount actually distributed pursuant
to clause (c)(II)(i) below from the Group II Principal Distribution
Amount on such Distribution Date and (B) the amount, if any,
distributed to the Holders of the Class A-2 Certificates pursuant to
clause (c)(I)(ii) above on such Distribution Date.
(II) On each Distribution Date (a) on or after the Stepdown
Date and (b) on which a Trigger Event is not in effect, distributions
in respect of principal to the extent of the Group II Principal
Distribution Amount shall be made in the following amounts and order of
priority:
(i) first, to the Holders of the Class A-2 Certificates, the
Class A-2 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
(ii) second, to the extent of the portion, if any, of the
Class A-2 Principal Distribution Amount remaining undistributed
pursuant to clause (c)(II)(i) above on such Distribution Date, and
after taking into account the amount distributed to the holders of the
Class A-1 Certificates pursuant to clause (c)(I)(i) above on such
Distribution Date, to the holders of the Class A-1 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero; and
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(iii) third, to the holders of the Class A-1 Certificates, an
amount equal to the excess, if any, of (x) the amount required to be
distributed pursuant to clause (c)(I)(i) above for such Distribution
Date over (y) the sum of (A) the amount actually distributed pursuant
to clause (c)(I)(i) above from the Group I Principal Distribution
Amount on such Distribution Date and (B) the amount, if any,
distributed to the holders of the Class A-1 Certificates pursuant to
clause (c)(II)(ii) above on such Distribution Date.
(III) On each Distribution Date (a) on or after the Stepdown
Date and (b) on which a Trigger Event is not in effect, distributions
in respect of principal to the extent of the sum of the Group I
Principal Distribution Amount and the Group II Principal Distribution
Amount remaining undistributed for such Distribution Date shall be made
in the following amounts and order of priority:
(i) first, to the Holders of the Class M-1 Certificates, the
Class M-1 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
(ii) second, to the Holders of the Class M-2 Certificates, the
Class M-2 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
(iii) third, to the Holders of the Class M-3 Certificates, the
Class M-3 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
(iv) fourth, to the Holders of the Class M-4 Certificates, the
Class M-4 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero; and
(v) fifth, to the Holders of the Class M-5 Certificates, the
Class M-5 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero.
(d) On each Distribution Date, the Net Monthly Excess Cashflow
shall be distributed as follows:
(i) to the Holders of the Class or Classes of Certificates
then entitled to receive distributions in respect of principal, in an
amount equal to any Extra Principal Distribution Amount, distributable
to such Holders as part of the Group I Principal Distribution Amount
and/or the Group II Principal Distribution Amount as described under
Section 4.01(b) and Section 4.01(c) above;
(ii) to the Holders of the Class M-1 Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
(iii) to the Holders of the Class M-1 Certificates, in an
amount equal to the Allocated Realized Loss Amounts allocable to such
Certificates;
(iv) to the Holders of the Class M-2 Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
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(v) to the Holders of the Class M-2 Certificates, in an amount
equal to the Allocated Realized Loss Amounts allocable to such
Certificates;
(vi) to the Holders of the Class M-3 Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
(vii) to the Holders of the Class M-3 Certificates, in an
amount equal to the Allocated Realized Loss Amount allocable to such
Certificates;
(viii) to the Holders of the Class M-4 Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
(ix) to the Holders of the Class M-4 Certificates, in an
amount equal to the Allocated Realized Loss Amount allocable to such
Certificates;
(x) to the Holders of the Class M-5 Certificates, in an amount
equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
(xi) to the Holders of the Class M-5 Certificates, in an
amount equal to the Allocated Realized Loss Amount allocable to such
Certificates;
(xii) to the Net WAC Rate Carryover Reserve Account, the sum
of (A) the excess, if any, of $1,000 over the amount on deposit therein
(exclusive of any amounts therein representing any investment income on
such account) and (B) the aggregate of any Net WAC Rate Carryover
Amounts for the Offered Certificates;
(xiii) [reserved];
(xiv) to the Holders of the Class C Certificates, the Monthly
Interest Distributable Amount for such Class and any remaining
Overcollateralization Release Amount for such Distribution Date;
(xv) if such Distribution Date follows the Prepayment Period
during which occurs the latest date on which a Prepayment Charge may be
required to be paid in respect of any Mortgage Loans, to the Holders of
the Class P Certificates, in reduction of the Certificate Principal
Balance thereof, until the Certificate Principal Balance thereof is
reduced to zero; and
(xvi) any remaining amounts to the Holders of the Residual
Certificates (in respect of the Class R-1 Interest, Class R-2 Interest
or the Class R-3 Interest, as appropriate).
(e) On each Distribution Date, after making the distributions
of the Available Funds as set forth in Section 4.01(a) through (d)
above, the Trustee will, first, withdraw from the Net WAC Rate
Carryover Reserve Account all income from the investment of funds in
the Net WAC Rate Carryover Reserve Account and distribute such amount
to the Holders of the Class C Certificates, and second, withdraw from
the Net WAC Rate Carryover Reserve Account, to the
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extent of amounts remaining on deposit therein, the aggregate of any Net WAC
Rate Carryover Amounts for such Distribution Date and distribute such amount in
the following order of priority:
(A) to the Offered Certificates, any related unpaid Net WAC Rate
Carryover Amount (after taking into account distributions pursuant to (A)
above), distributed in the following order of priority:
(i) to the Class A Certificates, on a PRO RATA basis based on
the related unpaid Net WAC Rate Carryover Amount for each such Class;
(ii) to the Class M-1 Certificates,;
(iii) to the Class M-2 Certificates;
(iv) to the Class M-3 Certificates;
(v) to the Class M-4 Certificates; and
(vi) to the Class M-5 Certificates.
(f) On each Distribution Date, all amounts representing
Prepayment Charges in respect of the Mortgage Loans received during the related
Prepayment Period and any Servicer Prepayment Charge Amounts paid by the
Servicer during the related Prepayment Period will be withdrawn from the
Distribution Account and distributed by the Trustee to the Holders of the Class
P Certificates and shall not be available for distribution to the Holders of any
other Class of Certificates. The payment of the foregoing amounts to the Holders
of the Class P Certificates shall not reduce the Certificate Principal Balances
thereof.
(g) The Trustee shall make distributions in respect of a
Distribution Date to each Certificateholder of record on the related Record Date
(other than as provided in Section 10.01 respecting the final distribution), in
the case of Certificateholders of the Regular Certificates, by check or money
order mailed to such Certificateholder at the address appearing in the
Certificate Register, or by wire transfer. Distributions among
Certificateholders shall be made in proportion to the Percentage Interests
evidenced by the Certificates held by such Certificateholders.
(h) Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, which shall credit the amount of such
distribution to the accounts of its Depository Participants in accordance with
its normal procedures. Each Depository Participant shall be responsible for
disbursing such distribution to the Certificate Owners that it represents and to
each indirect participating brokerage firm (a "brokerage firm" or "indirect
participating firm") for which it acts as agent. Each brokerage firm shall be
responsible for disbursing funds to the Certificate Owners that it represents.
All such credits and disbursements with respect to a Book-Entry Certificate are
to be made by the Depository and the Depository Participants in accordance with
the provisions of the Certificates. None of the Trustee, the Depositor or the
Servicer shall have any responsibility therefor except as otherwise provided by
applicable law.
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SECTION 4.02. Reserved.
SECTION 4.03. Statements.
(a) On each Distribution Date, based, as applicable, on
information provided to it by the Servicer, the Trustee shall prepare
and make available to each Holder of the Regular Certificates, the
Servicer and the Rating Agencies, a statement as to the distributions
made on such Distribution Date:
(i) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Regular Certificates, separately
identified, allocable to principal and the amount of the distribution
made to the Holders of the Class P Certificates allocable to Prepayment
Charges and Servicer Prepayment Charge Payment Amounts;
(ii) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Regular Certificates (other than
the Class P Certificates) allocable to interest, separately identified;
(iii) the Overcollateralized Amount, the Overcollateralization
Release Amount, the Overcollateralization Deficiency Amount and the
Overcollateralization Target Amount as of such Distribution Date and
the Excess Overcollateralized Amount for the Mortgage Pool for such
Distribution Date;
(iv) the aggregate amount of servicing compensation received
by the Servicer with respect to the related Due Period and such other
customary information as the Trustee deems necessary or desirable, or
which a Certificateholder reasonably requests, to enable
Certificateholders to prepare their tax returns;
(v) the aggregate amount of Advances for the related Due
Period;
(vi) the Pool Balance at the Close of Business at the end of
the related Due Period;
(vii) the number, aggregate principal balance, weighted
average remaining term to maturity and weighted average Mortgage Rate
of the Mortgage Loans as of the related Determination Date;
(viii) the number and aggregate unpaid principal balance of
Mortgage Loans that were (A) Delinquent (exclusive of Mortgage Loans in
bankruptcy or foreclosure and REO Properties) (1) 30 to 59 days, (2) 60
to 89 days and (3) 90 or more days, (B) as to which foreclosure
proceedings have been commenced and Delinquent (1) 30 to 59 days, (2)
60 to 89 days and (3) 90 or more days, (C) in bankruptcy and Delinquent
(1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more days, in each
case as of the Close of Business on the last day of the calendar month
preceding such Distribution Date and (D) REO Properties;
(ix) [reserved]
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(x) the total number and cumulative principal balance of all
REO Properties as of the Close of Business of the last day of the
preceding Prepayment Period;
(xi) the aggregate amount of Principal Prepayments made during
the related Prepayment Period;
(xii) the aggregate amount of Realized Losses incurred during
the related Prepayment Period and the cumulative amount of Realized
Losses;
(xiii) the aggregate amount of extraordinary Trust Fund
expenses withdrawn from the Collection Account for such Distribution
Date;
(xiv) the Certificate Principal Balance of the Class A
Certificates, the Mezzanine Certificates and the Class C Certificates,
after giving effect to the distributions made on such Distribution
Date;
(xv) the Monthly Interest Distributable Amount in respect of
each Class of Class A Certificates, each Class of Mezzanine
Certificates and the Class C Certificates for such Distribution Date
and the Unpaid Interest Shortfall Amount, if any, with respect to the
Class A Certificates, the Mezzanine Certificates and the Class C
Certificates for such Distribution Date;
(xvi) the aggregate amount of any Prepayment Interest
Shortfalls for such Distribution Date, to the extent not covered by
payments by the Servicer pursuant to Section 3.26;
(xvii) the Credit Enhancement Percentage for such Distribution
Date;
(xviii) the Net WAC Rate Carryover Amount for the Class A
Certificates and the Mezzanine Certificates, if any, for such
Distribution Date and the amount remaining unpaid after reimbursements
therefor on such Distribution Date;
(xix) any Overcollateralization Target Amount,
Overcollateralized Amount and Overcollateralization Deficiency Amount
after giving effect to the distribution of principal on such
Distribution Date;
(xx) when the Stepdown Date or a Trigger Event has occurred;
(xxi) the Available Funds;
(xxii) the respective Pass-Through Rates applicable to each
Class of Class A Certificates, each Class of Mezzanine Certificates and
the Class C Certificates for such Distribution Date and the
Pass-Through Rate applicable to each Class of Class A Certificates and
each Class of Mezzanine Certificates for the immediately succeeding
Distribution Date; and
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(xxiii) [reserved]
The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders and the Rating Agencies via the
Trustee's internet website. The Trustee's internet website shall initially be
located at "xxxxx://xxx.xxxxxxxxxxxxxx.xx.xxx/xxxx". Assistance in using the
website can be obtained by calling the Trustee's customer service desk at (800)
735-7777. Parties that are unable to use the above distribution option are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Trustee shall have the right to
change the way such statements are distributed in order to make such
distribution more convenient and/or more accessible to the above parties and the
Trustee shall provide timely and adequate notification to all above parties
regarding any such changes. As a condition to access to the Trustee's internet
website, the Trustee may require registration and the acceptance of a
disclaimer. The Trustee will not be liable for the dissemination of information
in accordance with this Agreement. The Trustee shall also be entitled to rely on
but shall not be responsible for the content or accuracy of any information
provided by third parties for purposes of preparing the Distribution Date
statement and may affix thereto any disclaimer it deems appropriate in its
reasonable discretion (without suggesting liability on the part of any other
party thereto).
In the case of information furnished pursuant to subclauses
(i) through (iii) above, the amounts shall be expressed in a separate section of
the report as a dollar amount for each Class for each $1,000 original dollar
amount as of the Cut-off Date.
(b) Within a reasonable period of time after the end of each
calendar year, the Trustee shall, upon written request, furnish to each Person
who at any time during the calendar year was a Certificateholder of a Regular
Certificate, if requested in writing by such Person, such information as is
reasonably necessary to provide to such Person a statement containing the
information set forth in subclauses (i) through (iii) above, aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
prepared and furnished by the Trustee to Certificateholders pursuant to any
requirements of the Code as are in force from time to time.
(c) On each Distribution Date, the Trustee shall make
available to the Residual Certificateholders a copy of the reports forwarded to
the Regular Certificateholders in respect of such Distribution Date with such
other information as the Trustee deems necessary or appropriate.
(d) Within a reasonable period of time after the end of each
calendar year, the Trustee shall deliver to each Person who at any time during
the calendar year was a Residual Certificateholder, if requested in writing by
such Person, such information as is reasonably necessary to provide to such
Person a statement containing the information provided pursuant to the previous
paragraph aggregated for such calendar year or applicable portion thereof during
which such Person was a Residual Certificateholder. Such obligation of the
Trustee shall be deemed to have been satisfied to the extent that substantially
comparable information shall be prepared and furnished to Certificateholders by
the Trustee pursuant to any requirements of the Code as from time to time in
force.
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SECTION 4.04. Remittance Reports; Advances.
(a) On the second Business Day following each Determination
Date, the Servicer shall deliver to the Trustee by telecopy or electronic mail
(or by such other means as the Servicer and the Trustee may agree from time to
time) a Remittance Report with respect to the related Distribution Date. Not
later than the second Business Day following each Determination Date, the
Servicer shall deliver or cause to be delivered to the Trustee in addition to
the information provided on the Remittance Report, such other information
reasonably available to it with respect to the Mortgage Loans as the Trustee may
reasonably require to perform the calculations necessary to make the
distributions contemplated by Section 4.01 and to prepare the statements to
Certificateholders contemplated by Section 4.03. The Trustee shall not be
responsible to recompute, recalculate or verify any information provided to it
by the Servicer.
(b) The amount of Advances to be made by the Servicer for any
Distribution Date shall equal, subject to Section 4.04(d), the sum of (i) the
aggregate amount of Monthly Payments (net of the related Servicing Fee), due
during the related Due Period in respect of the Mortgage Loans, which Monthly
Payments were delinquent on a contractual basis as of the Close of Business on
the related Determination Date and (ii) with respect to each REO Property, which
REO Property was acquired during or prior to the related Due Period and as to
which REO Property an REO Disposition did not occur during the related Due
Period, an amount equal to the excess, if any, of the REO Imputed Interest on
such REO Property for the most recently ended calendar month, over the net
income from such REO Property transferred to the Distribution Account pursuant
to Section 3.23 for distribution on such Distribution Date. For purposes of the
preceding sentence, the Monthly Payment on each Balloon Mortgage Loan with a
delinquent Balloon Payment is equal to the assumed monthly payment that would
have been due on the related Due Date based on the original principal
amortization schedule for such Balloon Mortgage Loan.
On or before 3:00 p.m. New York time on the Servicer
Remittance Date, the Servicer shall remit in immediately available funds to the
Trustee for deposit in the Distribution Account an amount equal to the aggregate
amount of Advances, if any, to be made in respect of the Mortgage Loans and REO
Properties for the related Distribution Date either (i) from its own funds or
(ii) from the Collection Account, to the extent of funds held therein for future
distribution (in which case it will cause to be made an appropriate entry in the
records of Collection Account that amounts held for future distribution have
been, as permitted by this Section 4.04, used by the Servicer in discharge of
any such Advance) or (iii) in the form of any combination of (i) and (ii)
aggregating the total amount of Advances to be made by the Servicer with respect
to the Mortgage Loans and REO Properties. Any amounts held for future
distribution used by the Servicer to make an Advance as permitted in the
preceding sentence shall be appropriately reflected in the Servicer's records
and replaced by the Servicer by deposit in the Collection Account on or before
any future Servicer Remittance Date to the extent that the Available Funds for
the related Distribution Date (determined without regard to Advances to be made
on the Servicer Remittance Date) shall be less than the total amount that would
be distributed to the Classes of Certificateholders pursuant to Section 4.01 on
such Distribution Date if such amounts held for future distributions had not
been so used to make Advances. The Trustee will provide notice to the Servicer
by telecopy by the Close of Business on any Servicer Remittance Date in the
event that the amount remitted by the Servicer to the Trustee
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on such date is less than the Advances required to be made by the Servicer for
the related Distribution Date, as set forth in the related Remittance Report.
(c) The obligation of the Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan, shall continue until the
Mortgage Loan is paid in full or until all Liquidation Proceeds thereon have
been recovered, or a Final Recovery Determination has been made thereon.
(d) Notwithstanding anything herein to the contrary, no
Advance or Servicing Advance shall be required to be made hereunder by the
Servicer if such Advance or Servicing Advance would, if made, constitute a
Nonrecoverable Advance. The determination by the Servicer that it has made a
Nonrecoverable Advance or that any proposed Advance or Servicing Advance, if
made, would constitute a Nonrecoverable Advance, shall be evidenced by an
Officers' Certificate of the Servicer delivered to the Depositor and the
Trustee.
SECTION 4.05. [Reserved]
SECTION 4.06. [Reserved]
SECTION 4.07. Distributions on the REMIC Regular Interests.
(a) On each Distribution Date, the Trustee shall cause in the
following order of priority, the following amounts to be distributed by REMIC 1
to REMIC 2 on account of the REMIC 1 Regular Interests or withdrawn from the
Distribution Account and distributed to the holders of the Class R Certificates
(in respect of the Class R-1 Interest), as the case may be:
(i) first, to the extent of Available Funds, to Holders of REMIC 1
Regular Interest LTAA, REMIC 1 Regular Interest LTA1, REMIC 1 Regular Interest
LTA2, REMIC 1 Regular Interest LTM1, REMIC 1 Regular Interest LTM2, REMIC 1
Regular Interest LTM3, REMIC 1 Regular Interest LTM4, REMIC 1 Regular Interest
LTM5, REMIC 1 Regular Interest LTZZ and REMIC 1 Regular Interest LTP, pro rata,
in an amount equal to (A) the Uncertificated Accrued Interest for such
Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from
previous Distribution Dates. Amounts payable as Uncertificated Accrued Interest
in respect of REMIC 1 Regular Interest LTZZ shall be reduced and deferred when
the REMIC 1 Overcollateralization Amount is less than the REMIC 1
Overcollateralization Target Amount, by the lesser of (x) the amount of such
difference and (y) the Maximum Uncertificated Accrued Interest Deferral Amount;
and
(ii) second, to the Holders of REMIC 1 Regular Interests, in an amount
equal to the remainder of the Available Funds for such Distribution Date
after the distributions made pursuant to clause (i) above, allocated as
follows:
(a) to the Holders of REMIC 1 Regular Interest LTAA and REMIC
1 Regular Interest LTP, 98.00% of such remainder, until the Uncertificated
Principal Balance of such Uncertificated REMIC 1 Regular Interest is reduced to
zero; provided, however, that REMIC 1 Regular Interest LTP shall not be reduced
until the Distribution Date immediately following the
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expiration of the latest Prepayment Charge as identified on the Prepayment
Charge Schedule or any Distribution Date thereafter, at which point such amount
shall be distributed to REMIC 1 Regular Interest LTP, until $100 has been
distributed pursuant to this clause;
(b) to the Holders of REMIC 1 Regular Interest LTA1, REMIC 1
Regular Interest LTA2, REMIC 1 Regular Interest LTM1, REMIC 1 Regular Interest
LTM2, REMIC 1 Regular Interest LTM3, REMIC 1 Regular Interest LTM4 and REMIC 1
Regular Interest LTM5, 1.00% of such remainder, in the same proportion as
principal payments are allocated to the Corresponding Certificates, until the
Uncertificated Principal Balances of such REMIC 1 Regular Interests are reduced
to zero;
(c) to the Holders of REMIC 1 Regular Interest LTZZ, 1.00% of
such remainder, until the Uncertificated Principal Balance of such REMIC 1
Regular Interest is reduced to zero; and
(d) any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-1 Interest);
provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Release Amount shall be allocated
to Holders of (i) REMIC 1 Regular Interest LTAA and REMIC 1 Regular Interest
LTP, in that order and (ii) REMIC 1 Regular Interest LTZZ, respectively;
provided that REMIC 1 Regular Interest LTP shall not be reduced until the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter, at which point such amount shall be distributed to REMIC 1 Regular
Interest LT1P, until $100 has been distributed pursuant to this clause.
(a) All Realized Losses on the Mortgage Loans allocated to any Regular
Certificate shall be allocated by the Trustee on each Distribution Date as
follows: first, to Net Monthly Excess Cashflow; second, to the Class C
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; third, to the Class M-5 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; fourth, to the Class M-4 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; fifth,
to the Class M-3 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero; sixth, to the Class M-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and seventh, to
the Class M-1 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero. All Realized Losses to be allocated to the Certificate
Principal Balances of all Classes on any Distribution Date shall be so allocated
after the actual distributions to be made on such date as provided above. All
references above to the Certificate Principal Balance of any Class of
Certificates shall be to the Certificate Principal Balance of such Class
immediately prior to the relevant Distribution Date, before reduction thereof by
any Realized Losses, in each case to be allocated to such Class of Certificates,
on such Distribution Date.
Any allocation of Realized Losses to a Mezzanine Certificate on any
Distribution Date shall be made by reducing the Certificate Principal Balance
thereof by the amount so allocated; any allocation of Realized Losses to a Class
C Certificates shall be made first by reducing the amount otherwise payable in
respect thereof pursuant to Section 4.01(d)(xiv). No allocations of any Realized
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Losses shall be made to the Certificate Principal Balances of the Class A
Certificates or the Class P Certificates.
(b) All Realized Losses on the Mortgage Loans shall be deemed to have
been allocated in the specified percentages, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC 1 Regular Interest LTAA and
REMIC 1 Regular Interest LTZZ up to an aggregate amount equal to the REMIC 1
Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LTAA and REMIC 1
Regular Interest LTZZ up to an aggregate amount equal to the REMIC 1 Principal
Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Principal Balances of REMIC 1 Regular Interest LTAA, REMIC 1 Regular Interest
LTM5 and REMIC 1 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTM5 has been
reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC 1
Regular Interest LTAA, REMIC 1 Regular Interest LTM4 and REMIC 1 Regular
Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LTM4 has been reduced to zero; fifth, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LTAA, REMIC 1
Regular Interest LTM3 and REMIC 1 Regular Interest LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LTM3 has been reduced to zero; sixth, to the Uncertificated Principal
Balances of REMIC 1 Regular Interest LTAA, REMIC 1 Regular Interest LTM2 and
REMIC 1 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTM2 has been
reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC 1
Regular Interest LTAA, REMIC 1 Regular Interest LTM1 and REMIC 1 Regular
Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LTM1 has been reduced to zero; eighth, to
the Uncertificated Principal Balances of REMIC 1 Regular Interest LTAA, REMIC 1
Regular Interest LTA2 and REMIC 1 Regular Interest LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LTA2 has been reduced to zero and ninth, to the Uncertificated
Principal Balances of REMIC 1 Regular Interest LTAA, REMIC 1 Regular Interest
LTA1 and REMIC 1 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LTA1 has been
reduced to zero.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
Each of the Class A Certificates, the Mezzanine Certificates, the Class
P Certificates, the Class C Certificates and the Residual Certificates shall be
substantially in the forms annexed hereto as exhibits, and shall, on original
issue, be executed, authenticated and delivered by the Trustee to or upon the
order of the Depositor concurrently with the sale and assignment to the Trustee
of the Trust Fund. The Class A Certificates and the Mezzanine Certificates shall
be initially evidenced by one or more Certificates representing a Percentage
Interest with a minimum dollar denomination of $50,000 and integral dollar
multiples of $1.00 in excess thereof, except that one Certificate of each such
Class of Certificates may be in a different denomination so that the sum of the
denominations of all outstanding Certificates of such Class shall equal the
Certificate Principal Balance of such Class on the Closing Date. The Class P
Certificates, the Class C Certificates and the Residual Certificates are
issuable in any Percentage Interests; provided, however, that the sum of all
such percentages for each such Class totals 100% and no more than ten
Certificates of each Class may be issued and outstanding at any one time.
The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless such Certificate shall have been
manually authenticated by the Trustee substantially in the form provided for
herein, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Subject to Section 5.02(c), the Class A Certificates
and the Mezzanine Certificates shall be Book-Entry Certificates. The other
Classes of Certificates shall not be Book-Entry Certificates.
SECTION 5.02. Registration of Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall cause to be kept at the Corporate
Trust Office a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. The Trustee shall initially serve as Certificate Registrar for
the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate at any
office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph which office shall initially be the offices
of the Trustee's agent located at c/o DTC Transfer Agent Services, 00 Xxxxx
Xxxxxx, Xxxxxxxx Xxxx Entrance, New York, New York 10041 and, in the case of a
Residual
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Certificate, upon satisfaction of the conditions set forth below, the Trustee on
behalf of the Trust shall execute, authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
aggregate Percentage Interest.
At the option of the Certificateholders, Certificates may be exchanged
for other Certificates in authorized denominations and the same aggregate
Percentage Interests, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for
exchange, the Trustee shall execute on behalf of the Trust and authenticate and
deliver the Certificates which the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for registration
of transfer or exchange shall (if so required by the Trustee or the Certificate
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer satisfactory to the Trustee and the Certificate Registrar duly executed
by, the Holder thereof or his attorney duly authorized in writing. In addition,
(i) with respect to each Class R Certificate, the holder thereof may exchange,
in the manner described above, such Class R Certificate for two separate
certificates, each representing such holder's respective Percentage Interest in
the Class R-1 Interest and the Class R-2 Interest that was evidenced by the
Class R Certificate being exchanged and (ii) with respect to each Class R-X
Certificate, the holder thereof may exchange, in the manner described above,
such Class R-X Certificate for two separate certificates, each representing such
holder's respective Percentage Interest in the Class R-3 Interest that was
evidenced by the Class R-X Certificate being exchanged.
(b) Except as provided in paragraph (c) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of such Certificates may not
be transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Certificates; (iii) ownership
and transfers of registration of such Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall for all
purposes deal with the Depository as representative of the Certificate Owners of
the Certificates for purposes of exercising the rights of Holders under this
Agreement, and requests and directions for and votes of such representative
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and Persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners; and (vii)
the direct participants of the Depository shall have no rights under this
Agreement under or with respect to any of the Certificates held on their behalf
by the Depository, and the Depository may be treated by the Trustee and its
agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owners. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners
that it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The parties hereto are
hereby authorized to execute a Letter
108
of Representations with the Depository or take such other action as may be
necessary or desirable to register a Book-Entry Certificate to the Depository.
In the event of any conflict between the terms of any such Letter of
Representation and this Agreement, the terms of this Agreement shall control.
(c) If (i)(x) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to discharge properly
its responsibilities as Depository and (y) the Trustee or the Depositor is
unable to locate a qualified successor, (ii) the Depositor, at its sole option,
with the consent of the Trustee, elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of a Servicer Event of
Termination, the Certificate Owners of the Book-Entry Certificates representing
Percentage Interests of such Classes aggregating not less than 51% advise the
Trustee and Depository through the Financial Intermediaries and the Depository
Participants in writing that the continuation of a book-entry system through the
Depository to the exclusion of definitive, fully registered certificates (the
"Definitive Certificates") to Certificate Owners is no longer in the best
interests of the Certificate Owners. Upon surrender to the Certificate Registrar
of the Book-Entry Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Trustee shall, at the
Depositor's expense, in the case of (ii) above, or the Servicer's expense, in
the case of (i) and (iii) above, execute on behalf of the Trust and authenticate
the Definitive Certificates. Neither the Depositor nor the Trustee shall be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Certificates, the Trustee, the Certificate Registrar, the
Servicer, any Paying Agent and the Depositor shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder.
(d) No transfer, sale, pledge or other disposition of any Class C
Certificate, Class P Certificate or Residual Certificate shall be made unless
such disposition is exempt from the registration requirements of the Securities
Act of 1933, as amended (the "1933 Act"), and any applicable state securities
laws or is made in accordance with the 1933 Act and laws. In the event of any
such transfer, except with respect to the initial transfer of any Class C
Certificate, Class P Certificate or Residual Certificates by the Depositor (i)
unless such transfer is made in reliance upon Rule 144A (as evidenced by the
investment letter delivered to the Trustee, in substantially the form attached
hereto as Exhibit J) under the 1933 Act, the Trustee and the Depositor shall
require a written Opinion of Counsel (which may be in-house counsel) acceptable
to and in form and substance reasonably satisfactory to the Trustee and the
Depositor that such transfer may be made pursuant to an exemption, describing
the applicable exemption and the basis therefor, from the 1933 Act or is being
made pursuant to the 1933 Act, which Opinion of Counsel shall not be an expense
of the Trustee or the Depositor or (ii) the Trustee shall require the transferor
to execute a transferor certificate (in substantially the form attached hereto
as Exhibit L) and the transferee to execute an investment letter (in
substantially the form attached hereto as Exhibit J) acceptable to and in form
and substance reasonably satisfactory to the Depositor and the Trustee
certifying to the Depositor and the Trustee the facts surrounding such transfer,
which investment letter shall not be an expense of the Trustee or the Depositor.
The Holder of a Class C Certificate, Class P Certificate or Residual Certificate
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
109
Notwithstanding the foregoing, no certification or Opinion of Counsel
described in this Section 5.02(d) will be required in connection with the
transfer, on the Closing Date, of any Residual Certificate by the Depositor to
an "accredited investor" within the meaning of Rule 501 of the 1933 Act.
No transfer of a Class C Certificate, Class P Certificate or Residual
Certificate or any interest therein shall be made to any Plan subject to ERISA
or Section 4975 of the Code, any Person acting, directly or indirectly, on
behalf of any such Plan or any Person acquiring such Certificates with "Plan
Assets" of a Plan within the meaning of the Department of Labor regulation
promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets"), as certified by such
transferee in the form of Exhibit M, unless the Trustee is provided with an
Opinion of Counsel for the benefit of the Depositor, the Trustee and the
Servicer and on which they may rely which establishes to the satisfaction of the
Trustee that the purchase of such Certificates is permissible under applicable
law, will not constitute or result in any prohibited transaction under ERISA or
Section 4975 of the Code and will not subject the Depositor, the Servicer, the
Trustee or the Trust Fund to any obligation or liability (including obligations
or liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Depositor, the Servicer, the Trustee or the Trust Fund. Neither a
certification nor an Opinion of Counsel will be required in connection with the
initial transfer of any such Certificate by the Depositor to an affiliate of the
Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets) and the Trustee shall be entitled to conclusively rely
upon a representation (which, upon the request of the Trustee, shall be a
written representation) from the Depositor of the status of such transferee as
an affiliate of the Depositor.
Each Transferee of a Mezzanine Certificate will be deemed to have
represented by virtue of its purchase or holding of such Certificate (or
interest therein) that either (a) such Transferee is not a Plan or purchasing
such Certificate with Plan Assets, (b) it has acquired and is holding such
Certificate in reliance on Prohibited Transaction Exemption ("PTE") 90-59, 55
Fed. Reg. 36724 (September 6, 1990), as amended by PTE 97-34, 62 Fed. Reg. 39021
(July 21, 1997), PTE 2000-58, 65 Fed. Reg. 67765 (November 13, 2000) and PTE
2002-41 67 Fed. Reg. 54487 (August 22, 2002) (the "Exemption"), and that it
understands that there are certain conditions to the availability of the
Exemption including that such Certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by a Rating Agency or (c)
the following conditions are satisfied: (i) such Transferee is an insurance
company, (ii) the source of funds used to purchase or hold such Certificate (or
interest therein) is an "insurance company general account" (as defined in U.S.
Department of Labor Prohibited Transaction Class Exemption ("PTCE") 95-60, and
(iii) the conditions set forth in Sections I and III of PTCE 95-60 have been
satisfied.
If any Mezzanine Certificate, Class C Certificate, Class P Certificate
or Residual Certificate or any interest therein is acquired or held in violation
of the provisions of the two 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 two
preceding paragraphs shall indemnify and hold harmless the
110
Depositor, the Servicer, the Trustee and the Trust from and against any and all
liabilities, claims, costs or expenses incurred by those parties as a result of
that acquisition or holding.
Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Depositor or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (v) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in a Residual Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change
in its status as a Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in a Residual
Certificate unless such Ownership Interest is a PRO RATA
undivided interest.
(iii) In connection with any proposed transfer of any Ownership
Interest in a Residual Certificate, the Trustee shall as a
condition to registration of the transfer, require delivery to
it, in form and substance satisfactory to it, of each of the
following:
(A) an affidavit in the form of Exhibit K hereto from the proposed
transferee to the effect that such transferee is a Permitted
Transferee and that it is not acquiring its Ownership Interest
in the Residual Certificate that is the subject of the
proposed transfer as a nominee, trustee or agent for any
Person who is not a Permitted Transferee; and
(B) a covenant of the proposed transferee to the effect that the
proposed transferee agrees to be bound by and to abide by the
transfer restrictions applicable to the Residual Certificates.
(iv) Any attempted or purported transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of
this Section shall be absolutely null and void and shall vest
no rights in the purported transferee. If any purported
transferee shall, in violation of the provisions of this
Section, become a Holder of a Residual Certificate, then the
prior Holder of such Residual Certificate that is a Permitted
Transferee shall, upon discovery that the registration of
transfer of such Residual Certificate was not in fact
permitted by this Section, be restored to all rights as Holder
thereof retroactive to the date of registration of transfer of
such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of transfer of a
Residual Certificate that is in fact not permitted by this
Section or for making any distributions due on such Residual
Certificate to the Holder thereof or taking any other action
with respect to such Holder under the provisions of this
Agreement so long as the Trustee received the documents
specified in clause (iii). The Trustee shall be entitled to
recover from any Holder of a Residual Certificate that was in
fact not a Permitted Transferee at the time such distributions
were made all distributions made on such Residual Certificate.
Any such distributions so recovered by the Trustee shall be
distributed
111
and delivered by the Trustee to the prior Holder of such Residual Certificate
that is a Permitted Transferee.
(v) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Residual Certificate in violation of the restrictions in
this Section, then the Trustee shall have the right but not the obligation,
without notice to the Holder of such Residual Certificate or any other Person
having an Ownership Interest therein, to notify the Depositor to arrange for the
sale of such Residual Certificate. The proceeds of such sale, net of commissions
(which may include commissions payable to the Depositor or its affiliates in
connection with such sale), expenses and taxes due, if any, will be remitted by
the Trustee to the previous Holder of such Residual Certificate that is a
Permitted Transferee, except that in the event that the Trustee determines that
the Holder of such Residual Certificate may be liable for any amount due under
this Section or any other provisions of this Agreement, the Trustee may withhold
a corresponding amount from such remittance as security for such claim. The
terms and conditions of any sale under this clause (v) shall be determined in
the sole discretion of the Trustee and it shall not be liable to any Person
having an Ownership Interest in a Residual Certificate as a result of its
exercise of such discretion.
(vi) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Residual Certificate in violation of the restrictions in
this Section, then the Trustee upon receipt of reasonable compensation will
provide to the Internal Revenue Service, and to the persons specified in
Sections 860E(e)(3) and (6) of the Code, information needed to compute the tax
imposed under Section 860E(e)(5) of the Code on transfers of residual interests
to disqualified organizations.
The foregoing provisions of this Section shall cease to apply to
transfers occurring on or after the date on which there shall have been
delivered to the Trustee, in form and substance satisfactory to the Trustee, (i)
written notification from each Rating Agency that the removal of the
restrictions on transfer set forth in this Section will not cause such Rating
Agency to downgrade its rating of the Certificates and (ii) an Opinion of
Counsel to the effect that such removal will not cause any REMIC created
hereunder to fail to qualify as a REMIC.
(e) No service charge shall be made for any registration of transfer or
exchange of Certificates of any Class, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer or exchange
shall be canceled by the Certificate Registrar and disposed of pursuant to its
standard procedures.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (ii) there is delivered to
the Trustee, the Depositor and the Certificate Registrar such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Trustee or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute on behalf of the Trust, authenticate and deliver, in exchange for
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or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Trustee or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee and the Certificate Registrar) in
connection therewith. Any duplicate Certificate issued pursuant to this Section,
shall constitute complete and indefeasible evidence of ownership in the Trust,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
SECTION 5.04. Persons Deemed Owners.
The Servicer, the Depositor, the Trustee, the Certificate Registrar,
any Paying Agent and any agent of the Servicer, the Depositor, the Trustee, the
Certificate Registrar or any Paying Agent may treat the Person, including a
Depository, in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 4.01
and for all other purposes whatsoever, and none of the Servicer, the Trust, the
Trustee nor any agent of any of them shall be affected by notice to the
contrary.
SECTION 5.05. Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to Certificateholders
from the Distribution Account pursuant to Section 4.01 and shall report the
amounts of such distributions to the Trustee. The duties of the Paying Agent may
include the obligation (i) to withdraw funds from the Collection Account
pursuant to Section 3.11(a) and for the purpose of making the distributions
referred to above and (ii) to distribute statements and provide information to
Certificateholders as required hereunder. The Paying Agent hereunder shall at
all times be an entity duly organized and validly existing under the laws of the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
federal or state authorities. The Paying Agent shall initially be the Trustee.
The Trustee may appoint a successor to act as Paying Agent, which appointment
shall be reasonably satisfactory to the Depositor.
(b) The Trustee shall cause the Paying Agent (if other than the
Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent shall hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to such Certificateholders and shall agree that it shall comply with all
requirements of the Code regarding the withholding of payments in respect of
Federal income taxes due from Certificate Owners and otherwise comply with the
provisions of this Agreement applicable to it.
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ARTICLE VI
THE SERVICER AND THE DEPOSITOR
SECTION 6.01. Liability of the Servicer and the Depositor.
The Servicer shall be liable in accordance herewith only to the extent
of the obligations specifically imposed upon and undertaken by Servicer herein.
The Depositor shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by the Depositor.
SECTION 6.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer or the Depositor.
Any entity into which the Servicer or Depositor may be merged or
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Servicer or the Depositor shall be a party, or any
corporation succeeding to the business of the Servicer or the Depositor, shall
be the successor of the Servicer or the Depositor, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor Servicer shall satisfy
all the requirements of Section 7.02 with respect to the qualifications of a
successor Servicer.
SECTION 6.03. Limitation on Liability of the Servicer and Others.
Neither the Servicer or the Depositor nor any of the directors or
officers or employees or agents of the Servicer or the Depositor shall be under
any liability to the Trust or the Certificateholders for any action taken or for
refraining from the taking of any action by the Servicer or the Depositor in
good faith pursuant to this Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Servicer, the Depositor or
any such Person against any liability which would otherwise be imposed by reason
of its willful misfeasance, bad faith or negligence in the performance of duties
of the Servicer or the Depositor, as the case may be, or by reason of its
reckless disregard of its obligations and duties of the Servicer or the
Depositor, as the case may be, hereunder; provided, further, that this provision
shall not be construed to entitle the Servicer to indemnity in the event that
amounts advanced by the Servicer to retire any senior lien exceed Liquidation
Proceeds (in excess of related liquidation expenses) realized with respect to
the related Mortgage Loan. The Servicer and any director or officer or employee
or agent of the Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Servicer and the Depositor, and any director or officer
or employee or agent of the Servicer or the Depositor, shall be indemnified by
the Trust and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense related to any specific Mortgage Loan
or Mortgage Loans (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) and any loss, liability or
expense incurred by reason of its willful misfeasance, bad faith or negligence
in the performance of duties hereunder or by reason of its reckless disregard of
obligations and duties hereunder. The Servicer or the Depositor may undertake
any such action which it may deem necessary or desirable in respect of this
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Agreement, and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder. In such event, unless the Depositor or the
Servicer acts without the consent of the Holders of Certificates entitled to at
least 51% of the Voting Rights, the reasonable legal expenses and costs of such
action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust and the Servicer shall be entitled to be reimbursed
therefor from the Collection Account as and to the extent provided in Section
3.11, any such right of reimbursement being prior to the rights of the
Certificateholders to receive any amount in the Collection Account. The
Servicer's right to indemnity or reimbursement pursuant to this Section shall
survive any resignation or termination of the Servicer pursuant to Section 6.04
or 7.01 with respect to any losses, expenses, costs or liabilities arising prior
to such resignation or termination (or arising from events that occurred prior
to such resignation or termination). This paragraph shall apply to the Servicer
solely in its capacity as Servicer hereunder and in no other capacities.
SECTION 6.04. Servicer Not to Resign.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination pursuant to the
preceding sentence permitting the resignation of the Servicer shall be evidenced
by an Opinion of Counsel to such effect obtained at the expense of the Servicer
and delivered to the Trustee. No resignation of the Servicer shall become
effective until the Trustee or a successor servicer shall have assumed the
Servicer's responsibilities, duties, liabilities (other than those liabilities
arising prior to the appointment of such successor) and obligations under this
Agreement.
Except as expressly provided herein, the Servicer shall not assign or
transfer any of its rights, benefits or privileges hereunder to any other
Person, or delegate to or subcontract with, or authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed by
the Servicer hereunder. The foregoing prohibition on assignment shall not
prohibit the Servicer from designating a Sub-Servicer as payee of any
indemnification amount payable to the Servicer hereunder; provided, however, no
Sub-Servicer shall be a third-party beneficiary hereunder and the parties hereto
shall not be required to recognize any Subservicer as an indemnitee under this
Agreement.
The Trustee and the Depositor hereby specifically (i) consent to the
pledge and assignment by the Servicer of all of the Servicer's right, title and
interest in, to and under this Agreement to the Servicing Rights Pledgee, for
the benefit of certain lenders and (ii) provided that no Servicer Event of
Termination exists, agree that upon delivery to the Trustee by the Servicing
Rights Pledgee of a letter signed by the Servicer whereunder the Servicer shall
resign as Servicer under this Agreement, the Trustee shall, in accordance with
Section 7.02, appoint the Servicing Rights Pledgee or its designee as successor
Servicer, provided that at the time of such appointment, the Servicing Rights
Pledgee or such designee meets the requirements of a successor Servicer pursuant
to Section 7.02(a) hereof and agrees to be subject to the terms of this
Agreement. If, pursuant to any provision hereof, the duties of the Servicer are
transferred to a successor servicer, the entire amount of the Servicing Fee and
other compensation payable to the Servicer pursuant hereto shall thereafter be
payable to such successor servicer.
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SECTION 6.05. Delegation of Duties.
In the ordinary course of business, the Servicer at any time may
delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01. Such delegation shall not relieve
the Servicer of its liabilities and responsibilities with respect to such duties
and shall not constitute a resignation within the meaning of Section 6.04.
Except as provided in Section 3.02, no such delegation is permitted that results
in the delegee subservicing any Mortgage Loans. The Servicer shall provide the
Trustee with 60 days prior written notice prior to the delegation of any of its
duties to any Person other than any of the Servicer's Affiliates or their
respective successors and assigns.
SECTION 6.06. Reserved.
SECTION 6.07. Inspection.
The Servicer, in its capacity as Servicer, shall afford the Trustee,
upon reasonable notice, during normal business hours, access to all records
maintained by the Servicer in respect of its rights and obligations hereunder
and access to officers of the Servicer responsible for such obligations. Upon
request, the Servicer shall furnish to the Trustee its most recent publicly
available financial statements and such other information relating to its
capacity to perform its obligations under this Agreement.
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ARTICLE VII
DEFAULT
SECTION 7.01. Servicer Events of Termination.
(a) If any one of the following events ("Servicer Events of
Termination") shall occur and be continuing:
(i) (A) The failure by the Servicer to make any Advance; or (B) any
other failure by the Servicer to deposit in the Collection Account or
Distribution Account any deposit required to be made under the terms of
this Agreement which continues unremedied for a period of one Business Day
after the date upon which written notice of such failure shall have been
given to the Servicer by the Trustee or to the Servicer and the Trustee by
any Holders of a Regular Certificate evidencing at least 25% of the Voting
Rights; or
(ii) The failure by the Servicer to make any required Servicing Advance
which failure continues unremedied for a period of 30 days, or the failure
by the Servicer duly to observe or perform, in any material respect, any
other covenants, obligations or agreements of the Servicer as set forth in
this Agreement, which failure continues unremedied for a period of 30
days, after the date (A) on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer
by the Trustee or to the Trustee by any Holders of a Regular Certificate
evidencing at least 25% of the Voting Rights or (B) of actual knowledge of
such failure by a Servicing Officer of the Servicer; or
(iii) The entry against the Servicer of a decree or order by a court or
agency or supervisory authority having jurisdiction in the premises for
the appointment of a trustee, conservator, receiver or liquidator in any
insolvency, conservatorship, receivership, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 days; or
(iv) The Servicer shall voluntarily go into liquidation, consent to the
appointment of a conservator or receiver or liquidator or similar person
in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Servicer or of or
relating to all or substantially all of its property; or a decree or order
of a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver, liquidator or
similar person in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer
and such decree or order shall have remained in force undischarged,
unbonded or unstayed for a period of 60 days; or the Servicer shall admit
in writing its inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations; or
(v) Any failure by the Servicer of the Servicer Termination Test;
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(b) then, and in each and every such case, so long as a Servicer Event
of Termination shall not have been remedied within the applicable grace period,
(x) with respect solely to clause (i)(A) above, if such Advance is not made by
11:00 A.M., New York time, on the Business Day immediately following the
Servicer Remittance Date (provided the Trustee shall give the Servicer notice of
such failure to advance by 5:00 P.M. New York time on the Servicer Remittance
Date), the Trustee shall terminate all of the rights and obligations of the
Servicer under this Agreement, to the extent permitted by law, and in and to the
Mortgage Loans and the proceeds thereof and the Trustee, or a successor servicer
appointed in accordance with Section 7.02, shall immediately make such Advance
and assume, pursuant to Section 7.02, the duties of a successor Servicer and (y)
in the case of (i)(B), (ii), (iii), (iv) and (v) above, the Trustee shall, at
the direction of the Holders of each Class of Regular Certificates evidencing
Percentage Interests aggregating not less than 51%, by notice then given in
writing to the Servicer (and to the Trustee if given by Holders of
Certificates), terminate all of the rights and obligations of the Servicer as
servicer under this Agreement. Any such notice to the Servicer shall also be
given to each Rating Agency, the Depositor and the Servicer. On or after the
receipt by the Servicer (and by the Trustee if such notice is given by the
Holders) of such written notice, all authority and power of the Servicer under
this Agreement, whether with respect to the Certificates or the Mortgage Loans
or otherwise, shall pass to and be vested in the Trustee pursuant to and under
this Section; and, without limitation, and the Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of each Mortgage Loan and related documents or otherwise. The
Servicer agrees to cooperate with the Trustee (or the applicable successor
Servicer) in effecting the termination of the responsibilities and rights of the
Servicer hereunder, including, without limitation, the delivery to the Trustee
of all documents and records requested by it to enable it to assume the
Servicer's functions under this Agreement within ten Business Days subsequent to
such notice, the transfer within one Business Day subsequent to such notice to
the Trustee (or the applicable successor Servicer) for the administration by it
of all cash amounts that shall at the time be held by the Servicer and to be
deposited by it in the Collection Account, the Distribution Account, any REO
Account or any Servicing Account or that have been deposited by the Servicer in
such accounts or thereafter received by the Servicer with respect to the
Mortgage Loans or any REO Property received by the Servicer. All reasonable
costs and expenses (including attorneys' fees) incurred in connection with
transferring the Mortgage Files to the successor Servicer and amending this
Agreement to reflect such succession as Servicer pursuant to this Section shall
be paid by the predecessor Servicer (or if the predecessor Servicer is the
Trustee, the initial Servicer) upon presentation of reasonable documentation of
such costs and expenses and to the extent not paid by the Servicer, by the
Trust.
SECTION 7.02. Trustee to Act; Appointment of Successor.
(a) Within 90 days of the time the Servicer (and the Trustee, if notice
is sent by the Holders) receives a notice of termination pursuant to Section
7.01 or 6.04, the Trustee (or such other successor Servicer as is approved in
accordance with this Agreement) shall be the successor in all respects to the
Servicer in its capacity as servicer under this Agreement and the transactions
set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof arising on and after its succession.
Notwithstanding the foregoing, the parties hereto agree that the Trustee, in its
capacity as successor
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Servicer, immediately will assume all of the obligations of the Servicer to make
advances. Notwithstanding the foregoing, the Trustee, in its capacity as
successor Servicer, shall not be responsible for the lack of information and/or
documents that it cannot obtain through reasonable efforts. As compensation
therefor, the Trustee (or such other successor Servicer) shall be entitled to
such compensation as the Servicer would have been entitled to hereunder if no
such notice of termination had been given. Notwithstanding the above, (i) if the
Trustee is unwilling to act as successor Servicer or (ii) if the Trustee is
legally unable so to act, the Trustee shall appoint or petition a court of
competent jurisdiction to appoint, any established housing and home finance
institution, bank or other mortgage loan or home equity loan servicer having a
net worth of not less than $50,000,000 as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder; provided, that the appointment of any
such successor Servicer will not result in the qualification, reduction or
withdrawal of the ratings assigned to the Certificates by the Rating Agencies as
evidenced by a letter to such effect from the Rating Agencies. Pending
appointment of a successor to the Servicer hereunder, the Trustee shall act in
such capacity as hereinabove provided. In connection with such appointment and
assumption, the successor shall be entitled to receive compensation out of
payments on Mortgage Loans in an amount equal to the compensation which the
Servicer would otherwise have received pursuant to Section 3.18 (or such other
compensation as the Trustee and such successor shall agree, not to exceed the
Servicing Fee). The appointment of a successor Servicer shall not affect any
liability of the predecessor Servicer which may have arisen under this Agreement
prior to its termination as Servicer to pay any deductible under an insurance
policy pursuant to Section 3.14 or to reimburse the Trustee pursuant to Section
3.06), nor shall any successor Servicer be liable for any acts or omissions of
the predecessor Servicer or for any breach by such Servicer of any of its
representations or warranties contained herein or in any related document or
agreement. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
All Servicing Transfer Costs shall be paid by the predecessor Servicer upon
presentation of reasonable documentation of such costs, and if such predecessor
Servicer defaults in its obligation to pay such costs, such costs shall be paid
by the successor Servicer or the Trustee (in which case the successor Servicer
or the Trustee, as applicable, shall be entitled to reimbursement therefor from
the assets of the Trust).
(b) Any successor to the Servicer, including the Trustee, shall during
the term of its service as servicer continue to service and administer the
Mortgage Loans for the benefit of Certificateholders, and maintain in force a
policy or policies of insurance covering errors and omissions in the performance
of its obligations as Servicer hereunder and a fidelity bond in respect of its
officers, employees and agents to the same extent as the Servicer is so required
pursuant to Section 3.14.
(c) In the event of a Servicer Event of Termination, notwithstanding
anything to the contrary above, the Trustee and the Depositor hereby agree that
upon delivery to the Trustee by the Servicing Rights Pledgee of a letter signed
by the Servicer within ten Business Days of when notification of such event
shall have been provided to the Trustee, whereunder the Servicer shall resign as
Servicer under this Agreement, the Trustee shall, in accordance with Section
7.02, appoint the Servicing Rights Pledgee or its designee as successor
Servicer, provided that at the time of such appointment, the Servicing Rights
Pledgee or such designee meets the requirements of a successor Servicer set
forth above (including, but not limited to the requirement that the appointment
of any
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such successor Servicer will not result in the qualification, reduction or
withdrawal of the ratings assigned to the Certificates by the Rating Agencies as
evidenced by a letter to such effect from the Rating Agencies) and the Servicing
Rights Pledgee or such designee agrees to be subject to the terms of this
Agreement.
(d) In connection with the resignation, removal or expiration of the
term of the Servicer hereunder, or in connection with the resignation or removal
of any successor to the Servicer (or any other successor to the Servicer
appointed hereunder) acting as successor Servicer hereunder, either (i) the
successor Servicer, (or any other successor to the Servicer appointed hereunder)
acting as successor Servicer hereunder, shall represent and warrant that it is a
member of MERS in good standing and shall agree to comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the Mortgage Loans that are registered with MERS, in which case the
predecessor Servicer shall cooperate with the successor Servicer in causing MERS
to revise its records to reflect the transfer of servicing to the successor
Servicer as necessary under MERS' rules and regulations or (ii) the predecessor
Servicer shall cooperate with the successor Servicer in causing MERS to execute
and deliver an assignment of Mortgage in recordable form to transfer the
Mortgage from MERS to the Trustee and to execute and deliver such other notices,
documents and other instruments as may be necessary or desirable to effect a
transfer of such Mortgage Loan or servicing of such Mortgage Loan on the MERS(R)
System to the successor Servicer. The predecessor Servicer shall file or cause
to be filed any such assignment in the appropriate recording office. The
predecessor Servicer shall bear any and all fees of MERS, costs of preparing any
assignments of Mortgage, and fees and costs of filing any assignments of
Mortgage that may be required under this paragraph.
SECTION 7.03. Waiver of Defaults.
The Majority Certificateholders may, on behalf of all
Certificateholders, waive any events permitting removal of the Servicer as
servicer pursuant to this Article VII, provided, however, that the Majority
Certificateholders may not waive a default in making a required distribution on
a Certificate without the consent of the Holder of such Certificate. Upon any
waiver of a past default, such default shall cease to exist and any Servicer
Event of Termination arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereto except to the extent
expressly so waived. Notice of any such waiver shall be given by the Trustee to
the Rating Agencies.
SECTION 7.04. Notification to Certificateholders.
(a) Upon any termination or appointment of a successor to the Servicer
pursuant to this Article VII or Section 6.04, the Trustee shall give prompt
written notice thereof to the Certificateholders at their respective addresses
appearing in the Certificate Register and each Rating Agency.
(b) No later than 60 days after the occurrence of any event which
constitutes or which, with notice or a lapse of time or both, would constitute a
Servicer Event of Termination for five Business Days after a Responsible Officer
of the Trustee becomes aware of the occurrence of such
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an event, the Trustee shall transmit by mail to all Certificateholders notice of
such occurrence unless such default or Servicer Event of Termination shall have
been waived or cured.
SECTION 7.05. Survivability of Servicer Liabilities.
Notwithstanding anything herein to the contrary, upon termination of
the Servicer hereunder, any liabilities of the Servicer which accrued prior to
such termination shall survive such termination.
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ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of a Servicer Event of Termination
and after the curing of all Servicer Events of Termination which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If a Servicer Event of Termination has
occurred (which has not been cured) of which a Responsible Officer has
knowledge, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that the
Trustee will not be responsible for the accuracy or content of any such
resolutions, certificates, statements, opinions, reports, documents or other
instruments. If any such instrument is found not to conform to the requirements
of this Agreement in a material manner the Trustee shall take such action as it
deems appropriate to have the instrument corrected, and if the instrument is not
corrected to the Trustee's satisfaction, the Trustee will provide notice thereof
to the Certificateholders.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct; provided, however, that:
(i) prior to the occurrence of a Servicer Event of Termination, and
after the curing of all such Servicer Events of Termination which may have
occurred, the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not
be liable except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and, in
the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Agreement;
(ii) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts;
(iii) the Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Majority Certificateholders relating
to the time, method and place of conducting any proceeding for any
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remedy available to the Trustee, or exercising or omitting to exercise any
trust or power conferred upon the Trustee, under this Agreement; and
(iv) the Trustee shall not be charged with knowledge of any failure by
the Servicer to comply with the obligations of the Servicer referred to in
clauses (i) and (ii) of Section 7.01(a) or of the existence of any
Servicer Termination Event unless a Responsible Officer of the Trustee at
the Corporate Trust Office obtains actual knowledge of such failure or the
Trustee receives written notice of such failure from the Depositor, the
Servicer or the Majority Certificateholders.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Servicer in accordance with the
terms of this Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon, and shall be protected in
acting or refraining from acting upon, any resolution, Officers'
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document reasonably believed by it to be genuine
and to have been signed or presented by the proper party or parties, and
the manner of obtaining consents and of evidencing the authorization of
the execution thereof by Certificateholders shall be subject to such
reasonable regulations as the Trustee may prescribe;
(ii) the Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct
or defend any litigation hereunder or in relation hereto, at the request,
order or direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby; the
right of the Trustee to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and the Trustee shall not be
answerable for other than its negligence or willful misconduct in the
performance of any such act;
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(iv) the Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement;
(v) prior to the occurrence of a Servicer Event of Termination and
after the curing of all Servicer Events of Termination which may have
occurred, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or documents, unless requested in writing to do so by
the Majority Certificateholder; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Agreement,
the Trustee may require reasonable indemnity against such cost, expense or
liability as a condition to such proceeding. The reasonable expense of
every such examination shall be paid by the Servicer or, if paid by the
Trustee, shall be reimbursed by the Servicer upon demand and, if not
reimbursed by the Servicer, shall be reimbursed by the Trust. Nothing in
this clause (v) shall derogate from the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding
the Mortgagors;
(vi) the Trustee shall not be accountable, shall have no liability and
makes no representation as to any acts or omissions hereunder of the
Servicer until such time as the Trustee may be required to act as Servicer
pursuant to Section 7.02 and thereupon only for the acts or omissions of
the Trustee as successor Servicer;
(vii) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, custodians or nominees;
(viii) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act;
(ix) the Trustee shall not be personally liable for any loss resulting
from the investment of funds held in the Collection Account or the REO
Account made at the direction of the Servicer pursuant to Section 3.12;
and
(x) The Trustee or its Affiliates are permitted to receive compensation
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. Such compensation shall not be considered an amount
that is reimbursable or payable pursuant to Section 3.11.
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
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The recitals contained herein and in the Certificates (other than the
authentication of the Trustee on the Certificates) shall be taken as the
statements of the Depositor, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or related document or MERS or the MERS System other than with
respect to the Trustee's execution and authentication of the Certificates. The
Trustee shall not be accountable for the use or application by the Servicer, or
for the use or application of any funds paid to the Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account by the
Servicer. The Trustee shall at no time have any responsibility or liability for
or with respect to the legality, validity and enforceability of any Mortgage or
any Mortgage Loan, or the perfection and priority of any Mortgage or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust or its ability to generate the payments to be
distributed to Certificateholders under this Agreement, including, without
limitation: the existence, condition and ownership of any Mortgaged Property;
the existence and enforceability of any hazard insurance thereon (other than if
the Trustee shall assume the duties of the Servicer pursuant to Section 7.02);
the validity of the assignment of any Mortgage Loan to the Trustee or of any
intervening assignment; the completeness of any Mortgage Loan; the performance
or enforcement of any Mortgage Loan (other than if the Trustee shall assume the
duties of the Servicer pursuant to Section 7.02); the compliance by the
Depositor, the Originator, the Seller or the Servicer with any warranty or
representation made under this Agreement or in any related document or the
accuracy of any such warranty or representation prior to the Trustee's receipt
of notice or other discovery of any non-compliance therewith or any breach
thereof; any investment of monies by or at the direction of the Servicer or any
loss resulting therefrom, it being understood that the Trustee shall remain
responsible for any Trust property that it may hold in its individual capacity;
the acts or omissions of any of the Servicer (other than if the Trustee shall
assume the duties of the Servicer pursuant to Section 7.02), any Sub-Servicer or
any Mortgagor; any action of the Servicer (other than if the Trustee shall
assume the duties of the Servicer pursuant to Section 7.02), or any Sub-
Servicer taken in the name of the Trustee; the failure of the Servicer or any
Sub- Servicer to act or perform any duties required of it as agent of the
Trustee hereunder; or any action by the Trustee taken at the instruction of the
Servicer (other than if the Trustee shall assume the duties of the Servicer
pursuant to Section 7.02); provided, however, that the foregoing shall not
relieve the Trustee of its obligation to perform its duties under this
Agreement, including, without limitation, the Trustee's duty to review the
Mortgage Files pursuant to Section 2.01. The Trustee shall have no
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder (unless the Trustee shall have
become the successor Servicer).
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not Trustee and may transact any banking and trust business with the
Originator, the Servicer, the Depositor or their Affiliates.
SECTION 8.05. Trustee Fee and Expenses.
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(a) The Trustee shall withdraw from the Distribution Account on each
Distribution Date and pay to itself the Trustee Fee prior to making any
distributions to Certificateholders. The Trustee, or any director, officer,
employee or agent of the Trustee, shall be indemnified by the Trust Fund and
held harmless against any loss, liability or expense (not including expenses and
disbursements incurred or made by the Trustee, including the compensation and
the expenses and disbursements of its agents and counsel, in the ordinary course
of the Trustee's performance in accordance with the provisions of this
Agreement) incurred by the Trustee arising out of or in connection with the
acceptance or administration of its obligations and duties under this Agreement,
other than any loss, liability or expense (i) resulting from a breach of the
Servicer's obligations and duties under this Agreement for which the Trustee is
indemnified under Section 8.05(b) or (ii) any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence of the
Trustee in the performance of its duties hereunder or by reason of the Trustee's
reckless disregard of obligations and duties hereunder or as a result of a
breach of the Trustee's obligations under Article X hereof. Any amounts payable
to the Trustee, or any director, officer, employee or agent of the Trustee, in
respect of the indemnification provided by this Section 8.05(a), or pursuant to
any other right of reimbursement from the Trust Fund that the Trustee, or any
director, officer, employee or agent of the Trustee, may have hereunder in its
capacity as such, may be withdrawn by the Trustee from the Distribution Account
at any time. The foregoing indemnity shall survive the resignation or removal of
the Trustee.
(b) The Servicer agrees to indemnify the Trustee or any director,
officer, employee or agent of the Trustee from, and hold it harmless against,
any loss, liability or expense resulting from a breach of the Servicer's
obligations and duties under this Agreement. Such indemnity shall survive the
termination or discharge of this Agreement and the resignation or removal of the
Trustee and the Servicer for actions prior to such resignation or removal. Any
payment hereunder made by the Servicer to the Trustee shall be from the
Servicer's own funds, without reimbursement from the Trust Fund therefor.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be an entity duly organized
and validly existing under the laws of the United States of America or any state
thereof, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal or state authority. If such entity publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 8.06, the combined capital and surplus of such entity shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. The principal office of the Trustee (other than the
initial Trustee) shall be in a state with respect to which an Opinion of Counsel
has been delivered to such Trustee at the time such Trustee is appointed Trustee
to the effect that the Trust will not be a taxable entity under the laws of such
state. In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 8.06, the Trustee shall resign immediately
in the manner and with the effect specified in Section 8.07.
SECTION 8.07. Resignation or Removal of Trustee.
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The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Depositor, the Servicer
and each Rating Agency. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor Trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor Trustee. If no successor Trustee shall have been so
appointed and having accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Depositor or if at any time the Trustee shall be legally
unable to act, or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Depositor or
the Servicer may remove the Trustee. If the Depositor or the Servicer removes
the Trustee under the authority of the immediately preceding sentence, the
Depositor shall promptly appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
The Majority Certificateholders may at any time remove the Trustee by
written instrument or instruments delivered to the Servicer, the Depositor and
the Trustee; the Depositor shall thereupon use its best efforts to appoint a
successor trustee in accordance with this Section.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 8.07 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 8.08.
SECTION 8.08. Successor Trustee.
Any successor Trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor, the Servicer and to its
predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee shall become
effective, and such successor Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee. The Depositor, the Servicer and the predecessor Trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for fully and certainly vesting and confirming in the successor
Trustee all such rights, powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor Trustee shall not result in a downgrading of the Regular Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.
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Upon acceptance of appointment by a successor Trustee as provided in
this Section 8.08, the successor Trustee shall mail notice of the appointment of
a successor Trustee hereunder to all Holders of Certificates at their addresses
as shown in the Certificate Register and to each Rating Agency.
SECTION 8.09. Merger or Consolidation of Trustee.
Any entity into which the Trustee may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder, provided such entity shall be eligible under the provisions of
Section 8.06 and 8.08, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust or any Mortgaged Property may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust, or any part thereof, and, subject
to the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Servicer and the Trustee may consider necessary or
desirable. Any such co-trustee or separate trustee shall be subject to the
written approval of the Servicer. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, or in
the case a Servicer Event of Termination shall have occurred and be continuing,
the Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 8.06, and no notice to Certificateholders
of the appointment of any co-trustee or separate trustee shall be required under
Section 8.08. The Servicer shall be responsible for the fees of any co-trustee
or separate trustee appointed hereunder.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder
or as successor to the Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
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(ii) no trustee hereunder shall be held personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Servicer and the Trustee, acting jointly, may at any time
accept the resignation of or remove any separate trustee or co-trustee
except that following the occurrence of a Servicer Event of Termination,
the Trustee acting alone may accept the resignation or remove any separate
trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Depositor and the Servicer.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co- trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
SECTION 8.11. Limitation of Liability.
The Certificates are executed by the Trustee, not in its individual
capacity but solely as Trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it by the Trust Agreement. Each of the
undertakings and agreements made on the part of the Trustee in the Certificates
is made and intended not as a personal undertaking or agreement by the Trustee
but is made and intended for the purpose of binding only the Trust.
SECTION 8.12. Trustee May Enforce Claims Without Possession of
Certificates.
(a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this Agreement. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.
(b) The Trustee shall afford the Seller, the Depositor, the Servicer
and each Certificateholder upon reasonable prior notice during normal business
hours, access to all records
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maintained by the Trustee in respect of its duties hereunder and access to
officers of the Trustee responsible for performing such duties. Upon request,
the Trustee shall furnish the Depositor, the Servicer and any requesting
Certificateholder with its most recent financial statements. The Trustee shall
cooperate fully with the Seller, the Servicer, the Depositor and such
Certificateholder and shall make available to the Seller, the Servicer, the
Depositor and such Certificateholder for review and copying such books,
documents or records as may be requested with respect to the Trustee's duties
hereunder. The Seller, the Depositor, the Servicer and the Certificateholders
shall not have any responsibility or liability for any action or failure to act
by the Trustee and are not obligated to supervise the performance of the Trustee
under this Agreement or otherwise.
SECTION 8.13. Suits for Enforcement.
In case a Servicer Event of Termination or other default by the
Servicer or the Depositor hereunder shall occur and be continuing, the Trustee,
shall, at the direction of the Majority Certificateholders, or may, proceed to
protect and enforce its rights and the rights of the Certificateholders under
this Agreement by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this Agreement or in aid of the execution of any power granted in this Agreement
or for the enforcement of any other legal, equitable or other remedy, as the
Trustee, being advised by counsel, and subject to the foregoing, shall deem most
effectual to protect and enforce any of the rights of the Trustee and the
Certificateholders.
SECTION 8.14. Waiver of Bond Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.
SECTION 8.15. Waiver of Inventory, Accounting and Appraisal
Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
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ARTICLE IX
REMIC ADMINISTRATION
SECTION 9.01. REMIC Administration.
(a) REMIC elections as set forth in the Preliminary Statement shall be
made by the Trustee on Form 1066 or other appropriate federal tax or information
return for the taxable year ending on the last day of the calendar year in which
the Certificates are issued. The regular interests and residual interest in each
REMIC shall be as designated in the Preliminary Statement.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 860G(a)(9) of the Code.
(c) The Trustee shall pay any and all expenses relating to any tax
audit of any REMIC (including, but not limited to, any professional fees or any
administrative or judicial proceedings with respect to any Trust REMIC that
involve the Internal Revenue Service or state tax authorities), including the
expense of obtaining any tax related Opinion of Counsel. The Trustee shall be
entitled to reimbursement of expenses incurred pursuant to this Section 9.01(c)
to the extent provided in Section 8.05.
(d) The Trustee shall prepare, sign and file, all of the REMICs'
federal and state tax and information returns (including Form 8811) as the
direct representative each REMIC created hereunder. The expenses of preparing
and filing such returns shall be borne by the Trustee.
(e) The Holder of the Class R Certificate at any time holding the
largest Percentage Interest thereof shall be the "tax matters person" as defined
in the REMIC Provisions (the related "Tax Matters Person") with respect to REMIC
1 and REMIC 2 and shall act as Tax Matters Person for REMIC 1 and REMIC 2. The
Holder of the Class R-X Certificate at any time holding the largest Percentage
Interest thereof shall be the "tax matters person" as defined in the REMIC
Provisions (the related "Tax Matters Person") with respect to REMIC 3, REMIC 4,
and REMIC 5 and shall act as Tax Matters Person for REMIC 3, REMIC 4, and REMIC
5. The Trustee, as agent for the Tax Matters Person, shall perform on behalf of
each REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, if required by the Code, the REMIC
Provisions, or other such guidance, the Trustee, as agent for the Tax Matters
Person, shall provide (i) to the Treasury or other governmental authority such
information as is necessary for the application of any tax relating to the
transfer of a Residual Certificate to any disqualified person or organization
and (ii) to the Certificateholders such information or reports as are required
by the Code or REMIC Provisions. The Trustee, as agent for the Tax Matters
Person, shall represent each REMIC in any administrative or judicial proceedings
relating to an examination or audit by any governmental taxing authority,
request an administrative adjustment as to any taxable year of any REMIC, enter
into settlement agreements with any government taxing agency, extend any statute
of limitations relating to any item of any REMIC and otherwise act on behalf of
any REMIC in relation to any tax matter involving the Trust.
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(f) The Trustee, the Servicer and the Holders of Certificates shall
take any action or cause the REMIC to take any action necessary to create or
maintain the status of each REMIC as a REMIC under the REMIC Provisions and
shall assist each other as necessary to create or maintain such status. Neither
the Trustee, the Servicer nor the Holder of any Residual Certificate shall take
any action, cause any REMIC created hereunder to take any action or fail to take
(or fail to cause to be taken) any action that, under the REMIC Provisions, if
taken or not taken, as the case may be, could (i) endanger the status of such
REMIC as a REMIC or (ii) result in the imposition of a tax upon such REMIC
(including but not limited to the tax on prohibited transactions as defined in
Code Section 860F(a)(2) and the tax on prohibited contributions set forth on
Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless the Trustee and the Servicer have received an Opinion of Counsel (at the
expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such status or result in the imposition of
such a tax. In addition, prior to taking any action with respect to any REMIC
created hereunder or the assets therein, or causing such REMIC to take any
action, which is not expressly permitted under the terms of this Agreement, any
Holder of a Residual Certificate will consult with the Trustee and the Servicer,
or their respective designees, in writing, with respect to whether such action
could cause an Adverse REMIC Event to occur with respect to any REMIC, and no
such Person shall take any such action or cause any REMIC to take any such
action as to which the Trustee or the Servicer has advised it in writing that an
Adverse REMIC Event could occur.
(g) Each Holder of a Residual Certificate shall pay when due any and
all taxes imposed on each REMIC created hereunder by federal or state
governmental authorities. To the extent that such Trust taxes are not paid by a
Residual Certificateholder, the Trustee shall pay any remaining REMIC taxes out
of current or future amounts otherwise distributable to the Holder of the
Residual Certificate in the REMICs or, if no such amounts are available, out of
other amounts held in the Distribution Account, and shall reduce amounts
otherwise payable to Holders of regular interests in the related REMIC. Subject
to the foregoing, in the event that a REMIC incurs a state or local tax,
including franchise taxes, as a result of a determination that such REMIC is
domiciled in the State of California for state tax purposes by virtue of the
location of the Servicer, the Servicer agrees to pay on behalf of such REMIC
when due, any and all state and local taxes imposed as a result of such a
determination, in the event that the Holder of the related Residual Certificate
fails to pay such taxes, if any, when imposed.
(h) The Trustee, as agent for the Tax Matters Person, shall, for
federal income tax purposes, maintain books and records with respect to each
REMIC created hereunder on a calendar year and on an accrual basis.
(i) No additional contributions of assets shall be made to any REMIC
created hereunder, except as expressly provided in this Agreement with respect
to eligible substitute mortgage loans.
(j) Neither the Trustee nor the Servicer shall enter into any
arrangement by which any REMIC created hereunder will receive a fee or other
compensation for services.
(k) On or before April 15 of each calendar year beginning in 2004, the
Servicer shall deliver to the Trustee and each Rating Agency an Officers'
Certificate stating the Servicer's compliance with the provisions of this
Section 9.01.
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(l) The Trustee will apply for an Employee Identification Number from
the Internal Revenue Service via a Form SS-4 or other acceptable method for all
tax entities and shall complete the Form 8811.
SECTION 9.02. Prohibited Transactions and Activities.
Neither the Depositor, the Servicer nor the Trustee shall sell, dispose
of, or substitute for any of the Mortgage Loans, except in a disposition
pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the
Trust Fund, (iii) the termination of any REMIC created hereunder pursuant to
Article X of this Agreement, (iv) a substitution pursuant to Article II of this
Agreement or (v) a repurchase of Mortgage Loans pursuant to Article II of this
Agreement, nor acquire any assets for any REMIC, nor sell or dispose of any
investments in the Distribution Account for gain, nor accept any contributions
to either REMIC after the Closing Date, unless it has received an Opinion of
Counsel (at the expense of the party causing such sale, disposition, or
substitution) that such disposition, acquisition, substitution, or acceptance
will not (a) affect adversely the status of any REMIC created hereunder as a
REMIC or of the interests therein other than the Residual Certificates as the
regular interests therein, (b) affect the distribution of interest or principal
on the Certificates, (c) result in the encumbrance of the assets transferred or
assigned to the Trust Fund (except pursuant to the provisions of this Agreement)
or (d) cause any REMIC created hereunder to be subject to a tax on prohibited
transactions or prohibited contributions pursuant to the REMIC Provisions.
SECTION 9.03. Indemnification with Respect to Certain Taxes and Loss of
REMIC Status.
(a) In the event that any REMIC fails to qualify as a REMIC, loses its
status as a REMIC, or incurs federal, state or local taxes as a result of a
prohibited transaction or prohibited contribution under the REMIC Provisions due
to the negligent performance by the Servicer of its duties and obligations set
forth herein, the Servicer shall indemnify the Trustee and the Trust Fund
against any and all losses, claims, damages, liabilities or expenses ("Losses")
resulting from such negligence; provided, however, that the Servicer shall not
be liable for any such Losses attributable to the action or inaction of the
Trustee, the Depositor or the Holder of such Residual Certificate, as
applicable, nor for any such Losses resulting from misinformation provided by
the Holder of such Residual Certificate on which the Servicer has relied. The
foregoing shall not be deemed to limit or restrict the rights and remedies of
the Holder of such Residual Certificate now or hereafter existing at law or in
equity. Notwithstanding the foregoing, however, in no event shall the Servicer
have any liability (1) for any action or omission that is taken in accordance
with and in compliance with the express terms of, or which is expressly
permitted by the terms of, this Agreement, (2) for any Losses other than arising
out of a negligent performance by the Servicer of its duties and obligations set
forth herein, and (3) for any special or consequential damages to
Certificateholders (in addition to payment of principal and interest on the
Certificates).
(b) In the event that any REMIC fails to qualify as a REMIC, loses its
status as a REMIC, or incurs federal, state or local taxes as a result of a
prohibited transaction or prohibited contribution under the REMIC Provisions due
to the negligent performance by the Trustee of its duties and obligations set
forth herein, the Trustee shall indemnify the Trust Fund against any and all
Losses resulting from such negligence; provided, however, that the Trustee shall
not be liable for any such
133
Losses attributable to the action or inaction of the Servicer, the Depositor or
the Holder of such Residual Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of such Residual
Certificate on which the Trustee has relied. The foregoing shall not be deemed
to limit or restrict the rights and remedies of the Holder of such Residual
Certificate now or hereafter existing at law or in equity. Notwithstanding the
foregoing, however, in no event shall the Trustee have any liability (1) for any
action or omission that is taken in accordance with and in compliance with the
express terms of, or which is expressly permitted by the terms of, this
Agreement, (2) for any Losses other than arising out of a negligent performance
by the Trustee of its duties and obligations set forth herein, and (3) for any
special or consequential damages to Certificateholders (in addition to payment
of principal and interest on the Certificates).
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ARTICLE X
TERMINATION
SECTION 10.01. Termination.
(a) The respective obligations and responsibilities of the Servicer,
the Depositor and the Trustee created hereby (other than the obligation of the
Trustee to make certain payments to Certificateholders after the final
Distribution Date and the obligation of the Servicer to send certain notices as
hereinafter set forth) shall terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust, (iii) the
optional purchase by the Servicer of the Mortgage Loans as described below and
(iv) the Distribution Date in June 2033. Notwithstanding the foregoing, in no
event shall the trust created hereby continue beyond the expiration of 21 years
from the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the
late ambassador of the United States to the Court of St. James's, living on the
date hereof.
The Holders of a majority in Percentage Interest in the Class C
Certificates (unless any such Holder constituting such majority is the Seller,
Greenwich Capital Markets, Inc. or an Affiliate of either of them), or if such
Holders fail to exercise such option or if any such Holder constituting such
majority is the Seller, Greenwich Capital Markets, Inc. or an Affiliate of
either of them, the Servicer (with the written consent of the Depositor or an
Affiliate thereof, such consent not to be unreasonably withheld) (either such
majority Holders or the Servicer, as applicable, the "Terminator"), may, at its
option, terminate this Agreement on any date on which the aggregate of the
Principal Balances of the Mortgage Loans (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) on such date is equal to or less than 10% of the
aggregate Principal Balances of the Original Mortgage Loans on the Cut-off Date,
by purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of (i) the
Principal Balance of the Mortgage Loans (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and the appraised value of the REO Properties and
(ii) fair market value of the Mortgage Loans and REO Properties (as determined
and as agreed upon as of the close of business on the third Business Day next
preceding the date upon which notice of any such termination is furnished to the
related Certificateholders pursuant to Section 10.01(c) by (x) the Servicer, if
it is the Terminator, (y) the Holders of a majority in Percentage Interest in
the Class C Certificates and (z) if the Class A Certificates or a Class of
Mezzanine Certificates will not receive all amounts owed to it as a result of
the termination, the Trustee, provided that if this clause (z) applies to such
determination, such determination shall be based solely upon an appraisal
obtained as provided in the last sentence of this paragraph), plus accrued and
unpaid interest thereon at the weighted average of the Mortgage Rates through
the end of the Due Period preceding the final Distribution Date plus
unreimbursed Servicing Advances, Advances, any unpaid Servicing Fees allocable
to such Mortgage Loans and REO Properties and any accrued and unpaid Net WAC
Rate Carryover Amounts (the "Termination Price"); provided, however, such option
may only be exercised if the Termination
135
Price is sufficient to result in the payment of all interest accrued on, as well
as amounts necessary to retire the principal balance of, each class of notes
secured primarily by the Class C Certificates and the Class P Certificates and
issued by a Delaware statutory trust pursuant to the Indenture between such
issuer and the Trustee as indenture trustee. If the determination of the fair
market value of the Mortgage Loans and REO Properties shall be required to be
made and agreed upon by the Servicer, if it is the Terminator, the Holders of a
majority in Percentage Interest in the Class C Certificates and the Trustee as
provided in (ii) above, such determination shall be based on an appraisal of the
value of the Mortgage Loans and REO Properties conducted by an independent
appraiser mutually agreed upon by the Servicer, if it is the Terminator, the
Holders of a majority in Percentage Interest in the Class C Certificates and the
Trustee in their reasonable discretion, and (A) such appraisal shall be obtained
at no expense to the Trustee and (B) the Trustee may conclusively rely on, and
shall be protected in relying on, such appraisal.
In connection with any such purchase pursuant to the preceding
paragraph, the Terminator shall deposit in the Distribution Account all amounts
then on deposit in the Collection Account, which deposit shall be deemed to have
occurred immediately preceding such purchase.
Any such purchase shall be accomplished by deposit into the
Distribution Account on the Determination Date before such Distribution Date of
the Termination Price.
(b) Notice of any termination, specifying the Distribution Date (which
shall be a date that would otherwise be a Distribution Date) upon which the
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee upon the Trustee receiving notice of such date from the Terminator, by
letter to the Certificate Insurer and to the Certificateholders mailed not
earlier than the 15th day and not later than the 25th day of the month next
preceding the month of such final distribution specifying (1) the Distribution
Date upon which final distribution of the Certificates will be made upon
presentation and surrender of such Certificates at the office or agency of the
Trustee therein designated, (2) the amount of any such final distribution and
(3) that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office or agency of the Trustee therein specified.
(c) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Holders of the Certificates on the
Distribution Date for such final distribution, in proportion to the Percentage
Interests of their respective Class and to the extent that funds are available
for such purpose, an amount equal to the amount required to be distributed to
such Holders in accordance with the provisions of Section 4.01 for such
Distribution Date. By acceptance of the Residual Certificates, the Holders of
the Residual Certificates agree, in connection with any termination hereunder,
to assign and transfer any amounts in excess of the par value of the Mortgage
Loans, and to the extent received in respect of such termination, to pay any
such amounts to the Holders of the Class C Certificates.
(d) In the event that all Certificateholders shall not surrender their
Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by
136
depositing such funds in a separate Servicing Account for the benefit of such
Certificateholders, and the Servicer (if the Servicer has exercised its right to
purchase the Mortgage Loans) or the Trustee (in any other case) shall give a
second written notice to the remaining Certificateholders, to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within nine months after the second notice all the Certificates
shall not have been surrendered for cancellation, the Residual
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject hereto, and the Trustee upon transfer of such funds shall
be discharged of any responsibility for such funds, and the Certificateholders
shall look to the Residual Certificateholders for payment.
SECTION 10.02. Additional Termination Requirements.
(a) In the event that the Terminator exercises its purchase option as
provided in Section 10.01, each REMIC shall be terminated in accordance
with the following additional requirements, unless the Trustee shall have
been furnished with an Opinion of Counsel to the effect that the failure
of the Trust to comply with the requirements of this Section will not (i)
result in the imposition of taxes on "prohibited transactions" of the
Trust as defined in Section 860F of the Code or (ii) cause any REMIC
constituting part of the Trust Fund to fail to qualify as a REMIC at any
time that any Certificates are outstanding:
(i) Within 90 days prior to the final Distribution Date, the Terminator
shall adopt and the Trustee shall sign a plan of complete liquidation of
each REMIC created hereunder meeting the requirements of a "Qualified
Liquidation" under Section 860F of the Code and any regulations
thereunder; and
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Trustee
shall sell all of the assets of the Trust Fund to the Terminator for cash
pursuant to the terms of the plan of complete liquidation.
(b) By their acceptance of Certificates, the Holders thereof hereby
agree to appoint the Trustee as their attorney in fact to: (i) adopt such
a plan of complete liquidation (and the Certificateholders hereby appoint
the Trustee as their attorney in fact to sign such plan) as appropriate
and (ii) to take such other action in connection therewith as may be
reasonably required to carry out such plan of complete liquidation all in
accordance with the terms hereof.
137
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee; and without the consent of the Certificateholders (i)
to cure any ambiguity, (ii) to correct or supplement any provisions herein which
may be defective or inconsistent with any other provisions herein (iii) to amend
the provisions of Section 3.22(b) or (iv) to make any other provisions with
respect to matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement; provided that such action
shall not, as evidenced by either (a) an Opinion of Counsel delivered to the
Trustee or (b) written notice to the Depositor, the Servicer and the Trustee
from the Rating Agencies that such action will not result in the reduction or
withdrawal of the rating of any outstanding Class of Certificates with respect
to which it is a Rating Agency, adversely affect in any material respect the
interests of any Certificateholder. No amendment shall be deemed to adversely
affect in any material respect the interests of any Certificateholder who shall
have consented thereto, and no Opinion of Counsel or Rating Agency confirmation
shall be required to address the effect of any such amendment on any such
consenting Certificateholder. Notwithstanding the foregoing, neither an Opinion
of Counsel or written notice to the Depositor, the Servicer and the Trustee from
the Rating Agencies will be required in connection with an amendment to the
provisions of Section 3.22(b).
In addition, this Agreement may be amended from time to time by the
Depositor, the Servicer and the Trustee with the consent of the Majority
Certificateholders for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment or waiver shall (x) reduce in any manner the
amount of, or delay the timing of, payments on the Certificates or distributions
which are required to be made on any Certificate without the consent of the
Holder of such Certificate, (y) adversely affect in any material respect the
interests of the Holders of any Class of Certificates (as evidenced by either
(i) an Opinion of Counsel delivered to the Trustee or (ii) written notice to the
Depositor, the Servicer and the Trustee from the Rating Agencies that such
action will not result in the reduction or withdrawal of the rating of any
outstanding Class of Certificates with respect to which it is a Rating Agency)
in a manner other than as described in clause (x) above, without the consent of
the Holders of Certificates of such Class evidencing at least a 66% Percentage
Interest in such Class, or (z) reduce the percentage of Voting Rights required
by clause (y) above without the consent of the Holders of all Certificates of
such Class then outstanding. Upon approval of an amendment, a copy of such
amendment shall be sent to the Rating Agencies.
Notwithstanding any provision of this Agreement to the contrary, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, delivered by (and at the expense of)
the Person seeking such Amendment, to the effect that such amendment will not
result in the imposition of a tax on any REMIC created hereunder constituting
part of the Trust Fund pursuant to the REMIC Provisions or cause any REMIC
created
138
hereunder constituting part of the Trust to fail to qualify as a REMIC at any
time that any Certificates are outstanding and that the amendment is being made
in accordance with the terms hereof.
Promptly after the execution of any such amendment the Trustee shall
furnish, at the expense of the Person that requested the amendment if such
Person is the Servicer (but in no event at the expense of the Trustee),
otherwise at the expense of the Trust, a copy of such amendment and the Opinion
of Counsel referred to in the immediately preceding paragraph to the Servicer
and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment;
instead it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
The Trustee may, but shall not be obligated to, enter into any
amendment pursuant to this Section 11.01 that affects its rights, duties and
immunities under this Agreement or otherwise.
SECTION 11.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the expense of the Trust, but only upon direction of
Certificateholders accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.
SECTION 11.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not (i) operate
to terminate this Agreement or the Trust, (ii) entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, or (iii)
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
Except as expressly provided for herein, no Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an
139
association; nor shall any Certificateholder be under any liability to any third
person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.
No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 15 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action, suit or proceeding. It is understood
and intended, and expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 11.04. Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws of the
State of New York, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. With respect to any
claim arising out of this Agreement, each party irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of or
relating hereto brought in any such courts, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum and further irrevocably waives the right to object,
with respect to such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.
SECTION 11.05. Notices.
All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first class mail, postage prepaid, by facsimile or by express delivery service,
to (a) in the case of the Servicer, Xxxxxx Loan Servicing LP 0000 Xxxx Xxxxxxx
Xxxxx, Xxxxxxx, Xxxxx 00000, Attention: Xxxxxx XxXxxxx (telecopy number: (713)
960-0539), or such other address or telecopy number as may hereafter be
furnished to the Depositor and the Trustee in writing by the Servicer, (b) in
the case of the Trustee, Deutsche Bank National Trust Company, 0000 Xxxx Xx.
Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000-0000, Attention: GC03F3 (telecopy
number: (000) 000-0000), or such other address or telecopy number
140
as may hereafter be furnished to the Depositor and the Servicer in writing by
the Trustee, and (c) in the case of the Depositor, Financial Asset Securities
Corp., 000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention: Legal, or
such other address as may be furnished to the Servicer and the Trustee in
writing by the Depositor. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Notice of any
Servicer Event of Termination shall be given by telecopy and by certified mail.
Any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have duly been given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder shall also be mailed to the appropriate party in the manner
set forth above.
SECTION 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 11.07. Article and Section References.
All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
SECTION 11.08. Notice to the Rating Agencies.
(a) Each of the Trustee and the Servicer shall be obligated to use its
best reasonable efforts promptly to provide notice to the Rating Agencies
with respect to each of the following of which a Responsible Officer of
the Trustee or Servicer, as the case may be, has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Servicer Event of Termination that has not
been cured or waived;
(iii) the resignation or termination of the Servicer or the Trustee;
(iv) the final payment to Holders of the Certificates of any Class;
(v) any change in the location of any Account; and
(vi) if the Trustee is acting as successor Servicer pursuant to Section
7.02 hereof, any event that would result in the inability of the Trustee
to make Advances.
141
(b) In addition, the Trustee shall promptly make available to each
Rating Agency copies of each Statement to Certificateholders described in
Sections 4.03 and 3.19 hereof and the Servicer shall promptly furnish to
each Rating Agency copies of the following:
(i) each annual statement as to compliance described in Section 3.20
hereof;
(ii) each annual independent public accountants' servicing report
described in Section 3.21 hereof; and
(iii) each notice delivered pursuant to Section 7.01(a) hereof which
relates to the fact that the Servicer has not made an Advance.
Any such notice pursuant to this Section 11.08 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to (i) Fitch
Ratings, Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, (ii) Xxxxx'x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (iii)
Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attention: Residential Mortgage
Surveillance Group.
SECTION 11.09. Further Assurances.
Notwithstanding any other provision of this Agreement, neither the
Regular Certificateholders nor the Trustee shall have any obligation to consent
to any amendment or modification of this Agreement unless they have been
provided reasonable security or indemnity against their out-of-pocket expenses
(including reasonable attorneys' fees) to be incurred in connection therewith.
SECTION 11.10. Benefits of Agreement.
Nothing in this Agreement or in the Certificates, expressed or implied,
shall give to any Person, other than the Certificateholders and the parties
hereto and their successors hereunder, any benefit or any legal or equitable
right, remedy or claim under this Agreement.
SECTION 11.11 Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing, and such action shall become effective when
such instrument or instruments are delivered to the Trustee and the Servicer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "act" of the Certificateholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the Trust,
if made in the manner provided in this Section 11.11.
142
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by any Certificateholder shall bind every future Holder
of such Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Trustee or the
Trust in reliance thereon, whether or not notation of such action is made upon
such Certificate.
143
IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized, all as of the day and year first above written.
FINANCIAL ASSET SECURITIES CORP.,
as Depositor
By: /s/ Xxxxx X. Xxxxx
----------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
XXXXXX LOAN SERVICING LP, as Servicer
By: /s/ Xxxxxx XxXxxxx
----------------------------------
Name: Xxxxxx XxXxxxx
Title: Senior Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY, as
Trustee
By: /s/ Xxxxxxx Xxxxx
----------------------------------
Name: Xxxxxxx Xxxxx
Title: Assistant Vice President
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Assistant Vice President
STATE OF )
) ss.:
COUNTY OF )
On the ___th day of September, 2003 before me, a notary public in and
for said State, personally appeared _______________ known to me to be a
______________ of Financial Asset Securities Corp., a Delaware corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
________________________
Notary Public
STATE OF )
) ss.:
COUNTY OF )
On the ___th day of September, 2003 before me, a notary public in and
for said State, personally appeared _______________ known to me to be a
_______________ of Xxxxxx Loan Servicing LP, a corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
________________________
Notary Public
STATE OF )
) ss.:
COUNTY OF )
On the ___th day of September, 2003 before me, a notary public in and
for said State, personally appeared __________________, known to me to be an
_____________________ of Deutsche Bank National Trust Company, a
____________________ that executed the within instrument, and also known to me
to be the person who executed it on behalf of said association, and acknowledged
to me that such corporation executed the within instrument.
On the ___th day of September, 2003 before me, a notary public in and
for said State, personally appeared __________________, known to me to be an
_____________________ of Deutsche Bank National Trust Company, a
____________________ that executed the within instrument, and also known to me
to be the person who executed it on behalf of said association, and acknowledged
to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
________________________
Notary Public
EXHIBIT A-1
FORM OF CLASS A-1 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : September 1, 2003
First Distribution Date : October 27, 2003
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $_____________
Original Class Certificate
Principal Balance of this Class : $_____________
Percentage Interest : 100.00%
Pass-Through Rate : 2.520%
CUSIP : _________
Class : A-1
Assumed Maturity Date : [month/year]
A-1-1
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
Class A-1
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
A-1 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class A-1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class A-1 Certificate (obtained by
dividing the Denomination of this Class A-1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of September 1, 2003 (the "Agreement") among
the Depositor, Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), and
Deutsche Bank National Trust Company, a national banking association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class A-1 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class A-1 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class A-1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class A-1 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-1-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2003
FREMONT HOME LOAN TRUST 0000-0
XXXXXXXX BANK NATIONAL TRUST
COMPANY, not in its individual capacity, but
solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
[Reverse of Class A-1 Certificate]
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2003-3, Asset-Backed Certificates, Series
2003-3 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such [25th] day is not a Business Day, then
the Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-1-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust offices or agencies of the
Trustee as provided in the Pooling and Servicing Agreement accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-1-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:_________________
_____________________________________
Signature by or on behalf of assignor
A-1-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _____________________________________________________________
account number _______________, or, if mailed by check, to _____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS A-2 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : September 1, 2003
First Distribution Date : October 27, 2003
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $____________
Original Class Certificate
Principal Balance of this Class : $____________
Percentage Interest : 100.00%
Pass-Through Rate : 2.430%
CUSIP : ______
Class : A-2
Assumed Maturity Date : [month/year]
A-2-1
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
Class A-2
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
A-2 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class A-2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class A-2 Certificate (obtained by
dividing the Denomination of this Class A-2 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of September 1, 2003 (the "Agreement") among
the Depositor, Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), and
Deutsche Bank National Trust Company, a national banking association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class A-2 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class A-2 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class A-2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class A-2 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-2-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2003
FREMONT HOME LOAN TRUST 0000-0
XXXXXXXX BANK NATIONAL TRUST
COMPANY, not in its individual capacity, but
solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
[Reverse of Class A-2 Certificate]
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2003-3, Asset-Backed Certificates, Series
2003-3 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-2-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust offices or agencies of the
Trustee as provided in the Pooling and Servicing Agreement accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-2-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:_________________
_____________________________________
Signature by or on behalf of assignor
A-2-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _____________________________________________________________
account number _______________, or, if mailed by check, to _____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS M-1 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES AND THE CLASS A-2
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : September 1, 2003
First Distribution Date : October 27, 2003
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 : M-1
Assumed Maturity Date : [month/year]
A-3-1
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
Class M-1
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-1 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-1 Certificate (obtained by
dividing the Denomination of this Class M-1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of September 1, 2003 (the "Agreement") among
the Depositor, Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), and
Deutsche Bank National Trust Company, a national banking association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class M-1 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-1 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-1 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-3-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2003
FREMONT HOME LOAN TRUST 0000-0
XXXXXXXX BANK NATIONAL TRUST
COMPANY, not in its individual capacity, but
solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
[Reverse of Class M-1 Certificate]
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2003-3, Asset-Backed Certificates, Series
2003-3 herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-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 Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust offices or agencies of the
Trustee as provided in the Pooling and Servicing Agreement accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-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
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _____________________________________________________________
account number _______________, or, if mailed by check, to _____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT A-4
FORM OF CLASS M-2 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, AND THE CLASS M-1 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : September 1, 2003
First Distribution Date : October 27, 2003
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 : M-2
Assumed Maturity Date : [month/year]
A-4-1
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
Class M-2
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-2 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-2 Certificate (obtained by
dividing the Denomination of this Class M-2 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of September 1, 2003 (the "Agreement") among
the Depositor, Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), and
Deutsche Bank National Trust Company, a national banking association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class M-2 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-2 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-2 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-4-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2003
FREMONT HOME LOAN TRUST 0000-0
XXXXXXXX BANK NATIONAL TRUST
COMPANY, not in its individual capacity, but
solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
[Reverse of Class M-2 Certificate]
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2003-3, Asset-Backed Certificates, Series
2003-3 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-4-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust offices or agencies of the
Trustee as provided in the Pooling and Servicing Agreement accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-4-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:_________________
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _____________________________________________________________
account number _______________, or, if mailed by check, to _____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT A-5
FORM OF CLASS M-3 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS M-1 CERTIFICATES, AND THE CLASS M-2 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : September 1, 2003
First Distribution Date : October 27, 2003
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 : M-3
Assumed Maturity Date : [month/year]
A-5-1
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
Class M-3
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-3 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-3
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-3 Certificate (obtained by
dividing the Denomination of this Class M-3 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of September 1, 2003 (the "Agreement") among
the Depositor, Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), and
Deutsche Bank National Trust Company, a national banking association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class M-3 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-3 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-3
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-3 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-5-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2003
FREMONT HOME LOAN TRUST 0000-0
XXXXXXXX BANK NATIONAL TRUST
COMPANY, not in its individual capacity, but
solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
[Reverse of Class M-3 Certificate]
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2003-3, Asset-Backed Certificates, Series
2003-3 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-5-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust offices or agencies of the
Trustee as provided in the Pooling and Servicing Agreement accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-5-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:_________________
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _____________________________________________________________
account number _______________, or, if mailed by check, to _____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT A-6
FORM OF CLASS M-4 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, AND THE
CLASS M-3 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : September 1, 2003
First Distribution Date : October 27, 2003
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 : M-4
Assumed Maturity Date : [month/year]
A-6-1
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
Class M-4
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-4 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-4
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-4 Certificate (obtained by
dividing the Denomination of this Class M-4 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of September 1, 2003 (the "Agreement") among
the Depositor, Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), and
Deutsche Bank National Trust Company, a national banking association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class M-4 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-4 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-4
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-4 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-6-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2003
FREMONT HOME LOAN TRUST 0000-0
XXXXXXXX BANK NATIONAL TRUST
COMPANY, not in its individual capacity, but
solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
[Reverse of Class M-4 Certificate]
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2003-3, Asset-Backed Certificates, Series
2003-3 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-6-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust offices or agencies of the
Trustee as provided in the Pooling and Servicing Agreement accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-6-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:_________________
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _____________________________________________________________
account number _______________, or, if mailed by check, to _____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT A-7
FORM OF 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-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS
M-3 CERTIFICATES, AND THE CLASS M-4 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : September 1, 2003
First Distribution Date : October 27, 2003
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 : M-5
Assumed Maturity Date : [month/year]
A-7-1
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
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 first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-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 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 Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of September 1, 2003 (the "Agreement") among
the Depositor, Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), and
Deutsche Bank National Trust Company, a national banking association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class M-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.
A-7-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2003
FREMONT HOME LOAN TRUST 0000-0
XXXXXXXX BANK NATIONAL TRUST
COMPANY, not in its individual capacity, but
solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
[Reverse of Class M-5 Certificate]
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2003-3, Asset-Backed Certificates, Series
2003-3 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-7-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust offices or agencies of the
Trustee as provided in the Pooling and Servicing Agreement accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-7-5
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
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _____________________________________________________________
account number _______________, or, if mailed by check, to _____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT A-8
FORM OF CLASS C CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
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.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : September 1, 2003
First Distribution Date : October 27, 2003
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $[__] WITH PENNIES
Original Class Certificate
Principal Balance of this Class : $_____________
Percentage Interest : 100.00%
Class : C
A-8-1
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
Class C
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class C
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class C
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Greenwich Capital Financial Products, Inc. is the
registered owner of the Percentage Interest evidenced by this Class C
Certificate (obtained by dividing the Denomination of this Class C Certificate
by the Original Class Certificate Principal Balance) in certain distributions
with respect to a Trust consisting primarily of the Mortgage Loans deposited by
Financial Asset Securities Corp. (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of September 1, 2003 (the
"Agreement") among the Depositor, Xxxxxx Loan Servicing LP, as servicer (the
"Servicer"), and Deutsche Bank National Trust Company, a national banking
association, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Class C Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class C
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
A-8-2
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class C
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class C Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-8-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2003
FREMONT HOME LOAN TRUST 0000-0
XXXXXXXX BANK NATIONAL TRUST
COMPANY, not in its individual capacity, but
solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
[Reverse of Class C Certificate]
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2003-3, Asset-Backed Certificates, Series
2003-3 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-8-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust offices or agencies of the
Trustee as provided in the Pooling and Servicing Agreement accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-8-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:_________________
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _____________________________________________________________
account number _______________, or, if mailed by check, to _____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT A-9
FORM OF CLASS P CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : September 1, 2003
First Distribution Date : October 27, 2003
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $100.00
Original Class Certificate
Principal Balance of this Class : $100.00
Percentage Interest : 100.00%
Class : P
A-9-1
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
Class P
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class P
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class P
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Greenwich Capital Financial Products, Inc. is the
registered owner of the Percentage Interest evidenced by this Class P
Certificate (obtained by dividing the Denomination of this Class P Certificate
by the Original Class Certificate Principal Balance) in certain distributions
with respect to a Trust consisting primarily of the Mortgage Loans deposited by
Financial Asset Securities Corp. (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of September 1, 2003 (the
"Agreement") among the Depositor, Xxxxxx Loan Servicing LP, as servicer (the
"Servicer"), and Deutsche Bank National Trust Company, a national banking
association, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Class P Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class P
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.
This Certificate does not have a pass-through rate and will be entitled
to distributions only to the extent set forth in the Agreement.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability
A-9-2
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class P
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class P Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-9-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2003
FREMONT HOME LOAN TRUST 0000-0
XXXXXXXX BANK NATIONAL TRUST
COMPANY, not in its individual capacity, but
solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
[Reverse of Class P Certificate]
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2003-3, Asset-Backed Certificates, Series
2003-3 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-9-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust offices or agencies of the
Trustee as provided in the Pooling and Servicing Agreement accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-9-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:_________________
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _____________________________________________________________
account number _______________, or, if mailed by check, to _____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT A-10
FORM OF CLASS R CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : September 1, 2003
First Distribution Date : October 27, 2003
Percentage Interest : 50.00%
Class : R
A-10-1
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
Class R
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting primarily of a pool of first lien adjustable rate and
fixed rate mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that CMI Investors 2, L.P. is the registered owner of
the Percentage Interest evidenced by this Certificate specified above in the
interest represented by all Certificates of the Class to which this Certificate
belongs in a Trust consisting primarily of the Mortgage Loans deposited by
Financial Asset Securities Corp. (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of September 1, 2003 (the
"Agreement") among the Depositor, Xxxxxx Loan Servicing LP, as servicer (the
"Servicer"), and Deutsche Bank National Trust Company, a national banking
association, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
A-10-2
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest in
this Certificate may be transferred without delivery to the Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Agreement, (iii) each person holding or acquiring any Ownership Interest in this
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee. Pursuant to the Agreement, The Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R
Certificate in violation of the restrictions mentioned above.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trustee.
A-10-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2003
FREMONT HOME LOAN TRUST 0000-0
XXXXXXXX BANK NATIONAL TRUST
COMPANY, not in its individual capacity, but
solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
[Reverse of Class R Certificate]
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2003-3, Asset-Backed Certificates, Series
2003-3 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-10-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust offices or agencies of the
Trustee as provided in the Pooling and Servicing Agreement accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-10-6
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
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _____________________________________________________________
account number _______________, or, if mailed by check, to _____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT A-10
FORM OF CLASS R CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 2
Cut-off Date : September 1, 2003
First Distribution Date : October 27, 2003
Percentage Interest : 50.00%
Class : R
A-10-9
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
Class R
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting primarily of a pool of first lien adjustable rate and
fixed rate mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that Greenwich Capital Markets, Inc. is the registered
owner of the Percentage Interest evidenced by this Certificate specified above
in the interest represented by all Certificates of the Class to which this
Certificate belongs in a Trust consisting primarily of the Mortgage Loans
deposited by Financial Asset Securities Corp. (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of September 1,
2003 (the "Agreement") among the Depositor, Xxxxxx Loan Servicing LP, as
servicer (the "Servicer"), and Deutsche Bank National Trust Company, a national
banking association, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
A-10-10
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest in
this Certificate may be transferred without delivery to the Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Agreement, (iii) each person holding or acquiring any Ownership Interest in this
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee. Pursuant to the Agreement, The Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R
Certificate in violation of the restrictions mentioned above.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trustee.
A-10-11
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2003
FREMONT HOME LOAN TRUST 0000-0
XXXXXXXX BANK NATIONAL TRUST
COMPANY, not in its individual capacity, but
solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
[Reverse of Class R Certificate]
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2003-3, Asset-Backed Certificates, Series
2003-3 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-10-13
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust offices or agencies of the
Trustee as provided in the Pooling and Servicing Agreement accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-10-14
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
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _____________________________________________________________
account number _______________, or, if mailed by check, to _____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT A-11
FORM OF CLASS R-X CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R-X CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : September 1, 2003
First Distribution Date : October 27, 2003
Percentage Interest : 100.00%
Class : R-X
A-11-1
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
Class R-X
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting primarily of a pool of first lien adjustable rate and
fixed rate mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that Xxxxxx X. Xxxxxxxxx is the registered owner of the
Percentage Interest evidenced by this Certificate specified above in the
interest represented by all Certificates of the Class to which this Certificate
belongs in a Trust consisting primarily of the Mortgage Loans deposited by
Financial Asset Securities Corp. (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of September 1, 2003 (the
"Agreement") among the Depositor, Xxxxxx Loan Servicing LP, as servicer (the
"Servicer"), and Deutsche Bank National Trust Company, a national banking
association, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
A-11-2
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest in
this Certificate may be transferred without delivery to the Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Agreement, (iii) each person holding or acquiring any Ownership Interest in this
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee. Pursuant to the Agreement, The Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R-X
Certificate in violation of the restrictions mentioned above.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trustee.
A-11-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: September __, 2003
FREMONT HOME LOAN TRUST 0000-0
XXXXXXXX BANK NATIONAL TRUST
COMPANY, not in its individual capacity, but
solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
[Reverse of Class R-X Certificate]
Fremont Home Loan Trust 2003-3
Asset-Backed Certificates,
Series 2003-3
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2003-3, Asset-Backed Certificates, Series
2003-3 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-11-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust offices or agencies of the
Trustee as provided in the Pooling and Servicing Agreement accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-11-6
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
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _____________________________________________________________
account number _______________, or, if mailed by check, to _____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT B
[RESERVED]
B-1
EXHIBIT C
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
C-1
FREMONT INVESTMENT & LOAN,
as Originator
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
as Seller
and
FINANCIAL ASSET SECURITIES CORP.,
as Purchaser
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of September 22, 2003
Adjustable-Rate and Fixed-Rate Mortgage Loans
Fremont Home Loan Trust 2003-3
TABLE OF CONTENTS
Page
----
ARTICLE I.
DEFINITIONS
Section 1.01 DEFINITIONS............................................................................1
ARTICLE II.
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 SALE OF MORTGAGE LOANS.................................................................2
Section 2.02 OBLIGATIONS OF THE SELLER AND SELLER UPON SALE.........................................2
Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.......................................4
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE MORTGAGE LOANS...............5
Section 3.02 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE ORIGINATOR...................5
Section 3.03 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLER...........................6
Section 3.04 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE MORTGAGE LOANS...................8
Section 3.05 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES..................................9
ARTICLE IV.
ORIGINATOR'S AND SELLER'S COVENANTS
Section 4.01 COVENANTS OF THE ORIGINATOR AND THE SELLER............................................12
Section 5.01 INDEMNIFICATION.......................................................................12
ARTICLE VI.
TERMINATION
Section 6.01 TERMINATION...........................................................................15
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 AMENDMENT.............................................................................15
Section 7.02 GOVERNING LAW.........................................................................15
Section 7.03 NOTICES. .............................................................................15
Section 7.05 COUNTERPARTS..........................................................................16
Section 7.06 FURTHER AGREEMENTS....................................................................16
Section 7.07 INTENTION OF THE PARTIES..............................................................16
Section 7.08 SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT..............................16
Section 7.09 SURVIVAL..............................................................................17
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of September 22, 2003 (the
"Agreement"), among Fremont Investment & Loan (the "Originator"), Greenwich
Capital Financial Products, Inc. (the "Seller") and Financial Asset Securities
Corp. (the "Purchaser").
WITNESSETH
----------
WHEREAS, the Seller is the owner of (a) the notes or other
evidence of indebtedness (the "Mortgage Notes") so indicated on Schedule I
hereto referred to below and (b) the other documents or instruments constituting
the Mortgage File (collectively, the "Mortgage Loans"); and
WHEREAS, the Seller, as of the date hereof, owns the mortgages
(the "Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights to (a) any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise and (b) the proceeds of any insurance
policies covering the Mortgage Loans or the Mortgaged Properties or the obligors
on the Mortgage Loans; and
WHEREAS, the parties hereto desire that the Seller sell the
Mortgage Loans to the Purchaser pursuant to the terms of this Agreement; and
WHEREAS, the Originator originated the Mortgage Loans and
previously sold the Mortgage Loans; and
WHEREAS, pursuant to the terms of a Pooling and Servicing
Agreement dated as of September 1, 2003 (the "Pooling and Servicing Agreement")
among the Purchaser as depositor, Xxxxxx Loan Servicing LP as servicer and
Deutsche Bank National Trust Company as trustee (the "Trustee"), the Purchaser
will convey the Mortgage Loans to Fremont Home Loan Trust 2003-3 (the "Trust");
and
WHEREAS, the Originator is obligated, in connection with the
transactions contemplated by this Agreement, to make certain representations,
warranties and covenants with respect to itself and the Mortgage Loans.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01 DEFINITIONS. All capitalized terms used but not defined
herein and below shall have the meanings assigned thereto in the Pooling and
Servicing Agreement.
2
ARTICLE II.
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 SALE OF MORTGAGE LOANS. The Seller, concurrently with the
execution and delivery of this Agreement, does hereby sell, assign, set over,
and otherwise convey to the Purchaser, without recourse, (i) all of its right,
title and interest in and to each Mortgage Loan, including the related Cut-off
Date Principal Balance, all interest accruing thereon on or after the Cut-off
Date and all collections in respect of interest and principal due after the
Cut-off Date; (ii) property which secured such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest in
any insurance policies in respect of the Mortgage Loans and (iv) all proceeds of
any of the foregoing.
Section 2.02 OBLIGATIONS OF THE SELLER AND SELLER UPON SALE. In
connection with any transfer pursuant to Section 2.01 hereof, the Seller further
agrees, at its own expense on or prior to the Closing Date, (a) to cause its
books and records to indicate that the Mortgage Loans have been sold to the
Purchaser pursuant to this Agreement and (b) to deliver to the Purchaser and the
Trustee a computer file containing a true and complete list of all such Mortgage
Loans specifying for each such Mortgage Loan, among other items, as of the
Cut-off Date, (i) its account number and (ii) the Cut-off Date Principal
Balance. Such file, which forms a part of Exhibit C to the Pooling and Servicing
Agreement, shall also be marked as Schedule I to this Agreement and is hereby
incorporated into and made a part of this Agreement.
In connection with any conveyance by the Seller, the Seller
shall on behalf of the Purchaser deliver to, and deposit with the Trustee, as
assignee of the Purchaser, on or before the Closing Date, the following
documents or instruments with respect to each Mortgage Loan:
(i) the original Mortgage Note, endorsed either (A) in blank,
in which case the Trustee shall cause the endorsement to be completed
or (B) in the following form: "Pay to the order of Deutsche Bank
National Trust Company, as Trustee, without recourse" or with respect
to any lost Mortgage Note, an original Lost Note Affidavit stating that
the original mortgage note was lost, misplaced or destroyed, together
with a copy of the related mortgage note; provided, however, that such
substitutions of Lost Note Affidavits for original Mortgage Notes may
occur only with respect to Mortgage Loans, the aggregate Cut-off Date
Principal Balance of which is less than or equal to 1.00% of the Pool
Balance as of the Cut-off Date;
(ii) the original Mortgage, (noting, if the related Mortgage
Loan is registered on the MERS(R) System, the presence of the MIN of
the Mortgage Loan and language indicating that the Mortgage Loan is a
MOM Loan if the Mortgage Loan is a MOM Loan) with evidence of recording
thereon or, if such Mortgage or power of attorney has been submitted
for recording but has not been returned from the applicable public
recording office, has been lost or is not otherwise available, a copy
of such Mortgage or power of attorney, as the case may be, certified to
be a true and complete copy of the original submitted for recording;
3
(iii) unless the Mortgage Loan is registered on the MERS(R)
System, an original Assignment in blank;
(iv) an original Assignment, in form and substance acceptable
for recording. The Mortgage shall be assigned either (A) in blank or
(B) to "Deutsche Bank National Trust Company, as Trustee, without
recourse";
(v) an original copy of any intervening assignment of Mortgage
showing a complete chain of assignments to the Trustee (or to MERS if
the Mortgage Loan is registered on the MERS(R) System and noting the
presence of MIN);
(vi) the original or a certified copy of lender's title
insurance policy; and
(vii) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any.
The Seller hereby confirms to the Purchaser and the Trustee
that it has caused the appropriate entries to be made in its general accounting
records to indicate that such Mortgage Loans have been transferred to the
Trustee and constitute part of the Trust in accordance with the terms of the
Pooling and Servicing Agreement.
Except with respect to any Mortgage Loan for which MERS is
identified on the Mortgage, if any of the documents referred to in Section
2.02(ii), (iii) or (iv) above has as of the Closing Date been submitted for
recording but either (x) has not been returned from the applicable public
recording office or (y) has been lost or such public recording office has
retained the original of such document, the obligations of the Seller to deliver
such documents shall be deemed to be satisfied upon (1) delivery to the Trustee
or the Custodian, no later than the Closing Date, of a copy of each such
document certified by the Originator in the case of (x) above or the applicable
public recording office in the case of (y) above to be a true and complete copy
of the original that was submitted for recording and (2) if such copy is
certified by the Originator, delivery to the Trustee or the Custodian, promptly
upon receipt thereof of either the original or a copy of such document certified
by the applicable public recording office to be a true and complete copy of the
original. If the original lender's title insurance policy, or a certified copy
thereof, was not delivered pursuant to Section 2.02(v) above, the Seller shall
deliver or cause to be delivered to the Trustee or the Custodian, the original
or a copy of a written commitment or interim binder or preliminary report of
title issued by the title insurance or escrow company, with the original or a
certified copy thereof to be delivered to the Trustee or the Custodian, promptly
upon receipt thereof. The Seller shall deliver or cause to be delivered to the
Trustee or the Custodian promptly upon receipt thereof any other documents
constituting a part of a Mortgage File received with respect to any Mortgage
Loan, including, but not limited to, any original documents evidencing an
assumption or modification of any Mortgage Loan.
Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File, the
Originator shall have 90 days to cure such defect or deliver such missing
document to the Purchaser. If the Originator does not cure such defect or
deliver such missing
4
document within such time period, the Originator shall either repurchase or
substitute for such Mortgage Loan pursuant to Section 2.03 of the Pooling and
Servicing Agreement.
The Purchaser hereby acknowledges its acceptance of all right,
title and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to Section 2.01.
The parties hereto intend that the transaction set forth
herein be a sale by the Seller to the Purchaser of all the Seller's right, title
and interest in and to the Mortgage Loans and other property described above. In
the event the transaction set forth herein is deemed not to be a sale, the
Seller hereby grants to the Purchaser a security interest in all of the Seller's
right, title and interest in, to and under the Mortgage Loans and other property
described above, whether now existing or hereafter created, to secure all of the
Seller's obligations hereunder; and this Agreement shall constitute a security
agreement under applicable law.
The Seller shall cause the Assignments which were delivered in
blank to be completed and shall cause all Assignments referred to in Section
2.02(iii) hereof and, to the extent necessary, in Section 2.02(iv) hereof to be
recorded. The Seller shall be required to deliver such assignments for recording
within 180 days of the Closing Date. The Seller shall furnish the Trustee, or
its designated agent, with a copy of each Assignment submitted for recording. In
the event that any such Assignment is lost or returned unrecorded because of a
defect therein, the Trustee shall, at the expense of the Seller, promptly have a
substitute Assignment prepared or have such defect cured, as the case may be,
and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, the Assignments of Mortgage
shall not be required to be submitted for recording with respect to any Mortgage
Loan in any jurisdiction where the Rating Agencies do not require recordation in
order to receive the ratings on the Certificates at the time of their initial
issuance; provided, however, each Assignment, except with respect to any
Mortgage Loan for which MERS is identified on the Mortgage, shall be submitted
for recording in the manner described above, at no expense to the Trust Fund or
Trustee, upon the earliest to occur of: (i) reasonable direction by the Holders
of Certificates entitled to at least 25% of the Voting Rights, (ii) the
occurrence of a Servicer Event of Termination, (iii) the occurrence of a
bankruptcy, insolvency or foreclosure relating to the Seller, (iv) the
occurrence of a servicing transfer as described in Section 7.02 of the Pooling
and Servicing Agreement, (v) upon receipt of notice from the Servicer, the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor
under the related Mortgage and (vi) upon receipt of notice from the Servicer,
any Mortgage Loan that is 90 days or more Delinquent. In the event of (i)
through (vi) set forth in the immediately preceding sentence, the Trustee shall
enforce the obligations of the Seller to deliver such Assignments for recording
as provided above, promptly and in any event within 30 days following receipt of
notice by the Seller.
In the event that any Mortgage Note is endorsed in blank as of
the Closing Date, promptly following the Closing Date, the Trustee shall cause
(at the Seller's expense) to be completed such endorsements "Pay to the order of
Deutsche Bank National Trust Company, as Trustee, without recourse."
5
Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.
In consideration of the sale of the Mortgage Loans from the
Seller to the Purchaser on the Closing Date, the Purchaser agrees to pay to the
Seller on the Closing Date (the "Purchase Price") by transfer of (i) immediately
available funds in an amount equal to the net sale proceeds of the Class A-1
Certificates, the Class A-2 Certificates, the Class M-1 Certificates, the Class
M-2 Certificates, the Class M-3 Certificates, the Class M-4 Certificates and the
Class M-5 Certificates (collectively, the "Offered Certificates") and the Class
R Certificates and (ii) the Class C Certificates, the Class P Certificates and
the Class R-X Certificates (together with the Class R Certificates, the
"Non-Offered Certificates") which shall be registered in the name of Greenwich
Capital Financial Products, Inc. or its designee. The Seller shall pay, and be
billed directly for, all expenses incurred by the Purchaser in connection with
the issuance of the Certcificates, including, without limitation, printing fees
incurred in connection with the prospectus (the "Base Prospectus") and
prospectus supplement (the "Prospectus Supplement" and, together with the Base
Prospectus, the "Prospectus") relating to the Offered Certificates, blue sky
registration fees and expenses, fees and expenses of Purchaser's counsel, fees
of the rating agencies requested to rate the Certificates, accountant's fees and
expenses and the fees and expenses of the Trustee and its counsel and other
out-of- pocket costs, if any.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
MORTGAGE LOANS. The Originator hereby makes the representations and warranties
set forth in Exhibit A to the Purchaser with respect to the Mortgage Loans as of
the Closing Date or as of such other date specifically provided herein.
Section 3.02 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
ORIGINATOR. The Originator represents, warrants and covenants to the Purchaser
as of the Closing Date or as of such other date specifically provided herein:
(a) The Originator is duly organized, validly existing and in
good standing under the laws of the state of California and is and will remain
in compliance with the laws of each state in which any Mortgaged Property is
located to the extent necessary to ensure the enforceability of each Mortgage
Loan and the servicing of the Mortgage Loan in accordance with the terms of this
Agreement;
(b) The Originator has the full power and authority to hold
each Mortgage Loan, to sell each Mortgage Loan to the Seller, and to execute,
deliver and perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Originator has duly authorized the
execution, delivery and performance of this Agreement, has duly executed and
delivered this Agreement, and this Agreement, assuming due authorization,
execution and delivery by the Purchaser, constitutes a legal, valid and binding
obligation of the Originator, enforceable against it in accordance with its
terms except as the enforceability thereof may be limited by bankruptcy,
insolvency or reorganization;
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(c) The execution and delivery of this Agreement by the
Originator and the performance of and compliance with the terms of this
Agreement will not violate the Originator's articles of incorporation or by-laws
or constitute a default under or result in a breach or acceleration of, any
material contract, agreement or other instrument to which the Originator is a
party or which may be applicable to the Originator or its assets;
(d) The Originator is not in violation of, and the execution
and delivery of this Agreement by the Originator and its performance and
compliance with the terms of this Agreement will not constitute a violation with
respect to, any order or decree of any court or any order or regulation of any
federal, state, municipal or governmental agency having jurisdiction over the
Originator or its assets, which violation might have consequences that would
materially and adversely affect the condition (financial or otherwise) or the
operation of the Originator or its assets or might have consequences that would
materially and adversely affect the performance of its obligations and duties
hereunder;
(e) The Originator does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(f) Immediately prior to the transfer of the Mortgage Loans by
the Originator to the Seller, the Originator was the owner of record of the
related Mortgage and the indebtedness evidenced by the related Mortgage Note and
in the event that the Originator retains record title, the Originator shall
retain such record title to each Mortgage, each related Mortgage Note and the
related Mortgage Files with respect thereto in trust for the Seller as the owner
thereof and only for the purpose of servicing and supervising the servicing of
each Mortgage Loan;
(h) There are no actions or proceedings against, or
investigations of, the Originator before any court, administrative or other
tribunal (A) that would be likely to prohibit its entering into this Agreement,
(B) seeking to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that would be likely to
prohibit or materially and adversely affect the performance by the Originator of
its obligations under, or the validity or enforceability of, this Agreement;
(i) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Originator of, or compliance by the Originator with, this
Agreement or the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations or orders, if
any, that have been obtained prior to the Closing Date;
(j) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Originator, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Originator to the Seller are not subject to the bulk transfer or any similar
statutory provisions;
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(k) No written statement, report or other document prepared
and furnished or to be prepared and furnished by the Originator pursuant to this
Agreement or in connection with the transactions contemplated hereby contains
any untrue statement of material fact or omits to state a material fact
necessary to make the statements contained herein or therein not misleading
(except that no representation is made in this clause (k) that there is no such
omission in any such written statement, report or other document required by the
Seller or its Affiliates to be delivered by the Originator in a prescribed form
established by the Seller or its Affiliates and provided to the Originator in
such form by the Seller or its Affiliates for execution by the Originator); and
(l) [Reserved].
Section 3.03 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE
SELLER. The Seller represents, warrants and covenants to the Purchaser as of the
Closing Date or as of such other date specifically provided herein:
(a) The Seller is duly organized, validly existing and in good
standing as a corporation under the laws of the State of Delaware and is and
will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of each
Mortgage Loan in accordance with the terms of this Agreement;
(b) The Seller has the full power and authority to hold each
Mortgage Loan, to sell each Mortgage Loan, to execute, deliver and perform, and
to enter into and consummate, all transactions contemplated by this Agreement.
The Seller has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement and this Agreement,
assuming due authorization, execution and delivery by the Purchaser, constitutes
a legal, valid and binding obligation of the Seller, enforceable against it in
accordance with its terns except as the enforceability thereof may be limited by
bankruptcy, insolvency or reorganization;
(c) The execution and delivery of this Agreement by the Seller
and the performance of and compliance with the terms of this Agreement will not
violate the Seller's articles of incorporation or by-laws or constitute a
default under or result in a breach or acceleration of, any material contract,
agreement or other instrument to which the Seller is a party or which may be
applicable to the Seller or its assets;
(d) The Seller is not in violation of, and the execution and
delivery of this Agreement by the Seller and its performance and compliance with
the terms of this Agreement will not constitute a violation with respect to, any
order or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the Seller or its
assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Seller or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder;
(e) [Reserved];
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(f) Immediately prior to the payment of the Purchase Price for
each Mortgage Loan, the Seller was the owner of the related Mortgage and the
indebtedness evidenced by the related Mortgage Note and upon the payment of the
Purchase Price by the Purchaser, in the event that the Seller retains record
title, the Seller shall retain such record title to each Mortgage, each related
Mortgage Note and the related Mortgage Files with respect thereto in trust for
the Purchaser as the owner thereof,
(g) The Seller has not transferred the Mortgage Loans to the
Purchaser with any intent to hinder, delay or defraud any of its creditors;
(h) There are no actions or proceedings against, or
investigations known to it of, the Seller before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Seller of its obligations
under, or validity or enforceability of, this Agreement;
(i) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this Agreement
or the consummation of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations or orders, if any, that have been
obtained;
(j) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller. The sale of the
Mortgage Loans is in the ordinary course of business of the Seller and the
assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller
are not subject to the bulk transfer or any similar statutory provisions;
(k) Except with respect to liens released immediately prior to
the transfer herein contemplated, each Mortgage Note and related Mortgage have
not been assigned or pledged and immediately prior to the transfer and
assignment herein contemplated, the Seller held good, marketable and
indefeasible title to, and was the sole owner and holder of, each Mortgage Loan
subject to no liens, charges, mortgages, claims, participation interests,
equities, pledges or security interests of any nature, encumbrances or rights of
others (collectively, a "Lien"); the Seller has full right and authority under
all governmental and regulatory bodies having jurisdiction over the Seller,
subject to no interest or participation of, or agreement with, any party, to
sell and assign the same pursuant to this Agreement; and immediately upon the
transfers and assignments herein contemplated. the Seller shall have transferred
all of its right, title and interest in and to each Mortgage Loan and the
Trustee will hold good, marketable and indefeasible title to, and be the sole
owner of, each Mortgage Loan subject to no Liens.
(l) The Seller does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant contained in
this Agreement;
(m) [Reserved]; and
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(n) Except with respect to any statement regarding the
intentions of the Purchaser, or any other statement contained herein the truth
or falsity of which is dependant solely upon the actions of the Purchaser, this
Agreement does not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained herein not
misleading. The written statements, reports and other documents prepared and
furnished or to be prepared and furnished by the Seller pursuant to this
Agreement or in connection with the transactions contemplated hereby taken in
the aggregate do not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained therein not
misleading.
Section 3.04 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE
MORTGAGE LOANS.The Seller represents, warrants and covenants to the Purchaser
with respect to the Mortgage Loans as of the Closing Date or as of such other
date specifically provided herein:
(a) To the best knowledge of the Seller, each Mortgage Loan at
the time it was made complied in all material respects with applicable local,
state and federal laws, including, but not limited to, all applicable predatory
and abusive lending laws.
(b) None of the mortgage loans are (i) "High Cost" as such
term is defined in HOEPA or (ii) a reasonably equivalent provision as defined by
the applicable predatory and abusive lending laws.
(c) The information set forth in the Mortgage Loan Schedule
with respect to each Mortgage Loan as of the Cut-off Date is complete, true and
correct as of the Cut-off Date.
(d) As of the Cut-off Date, except as indicated on the
Mortgage Loan Schedule, there was no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event of
acceleration, and as of the Closing Date neither the Seller nor the servicer of
the Mortgage Loan on its behalf will have waived any default, breach, violation
or event of acceleration.
(e) All payments required to be made up to the close of
business on the Closing Date for such Mortgage Loan under the terms of the
Mortgage Note have been made, other than delinquencies of fewer than 30 days;
the Seller has not advanced funds, or induced, solicited or knowingly received
any advance of funds from a party other than the owner of the related Mortgaged
Property, directly or indirectly, for the payment of any amount required by the
Mortgage Note or Mortgage; and as of the Closing Date, there had been no
delinquency, 30 days or more, in any payment by the Mortgagor thereunder since
the origination of the Mortgage Loan
Section 3.05 REMEDIES FOR BREACH OF REPRESENTATIONS AND
WARRANTIES. It is understood and agreed that the representations and warranties
set forth in Sections 3.01, 3.02, 3.03 and 3.04 shall survive the sale of the
Mortgage Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment or the examination or lack of examination of any Mortgage File. With
respect to the representations and
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warranties contained herein that are made to the knowledge or the best knowledge
of the Originator or as to which the Originator has no knowledge, if it is
discovered that the substance of any such representation and warranty is
inaccurate and the inaccuracy materially and adversely affects the value of the
related Mortgage Loan or the interest therein of the Purchaser or the
Purchaser's assignee, designee or transferee (it being understood that with
respect to the representations and warranties set forth in (qq), (tt), (eee),
(fff) and (ggg) of Exhibit A hereto, a breach of any such representation or
warranty shall in and of itself be deemed to materially adversely affect the
interest therein of the Purchaser and the Purchaser's assignees, designees and
transferees), then notwithstanding the Originator's lack of knowledge with
respect to the substance of such representation and warranty being inaccurate at
the time the representation and warranty was made, such inaccuracy shall be
deemed a breach of the applicable representation and warranty and the Originator
shall take such action described in the following paragraphs of this Section
3.05 in respect of such Mortgage Loan. Upon discovery by any of the Originator,
the Seller or the Purchaser of a breach of any of the foregoing representations
and warranties that materially and adversely affects the value of a Mortgage
Loan or the interest therein of the Purchaser (it being understood that with
respect to the representations and warranties set forth in (qq), (tt), (eee),
(fff) and (ggg) of Exhibit A hereto, a breach of any such representation or
warranty shall in and of itself be deemed to materially adversely affect the
interest therein of the Purchaser and the Purchaser's assignees, designees and
transferees), the party discovering such breach shall give prompt written notice
to the others.
Within 90 days of the earlier of either discovery by or notice
to the Originator of any breach of a representation or warranty made by the
Originator that materially and adversely affects the value of a Mortgage Loan or
the Mortgage Loans or the interest therein of the Purchaser (it being understood
that with respect to the representations and warranties set forth in (qq), (tt),
(eee), (fff) and (ggg) of Exhibit A hereto, a breach of any such representation
or warranty shall in and of itself be deemed to materially adversely affect the
interest therein of the Purchaser and the Purchaser's assignees, designees and
transferees), the Originator shall use its best efforts promptly to cure such
breach in all material respects and, if such breach cannot be cured, the
Originator shall, at the Purchaser's option, repurchase such Mortgage Loan at
the Purchase Price (as defined in the Pooling and Servicing Agreement). The
Originator may, at the request of the Purchaser and assuming the Originator has
a Qualified Substitute Mortgage Loan, rather than repurchase a deficient
Mortgage Loan as provided above, remove such Mortgage Loan and substitute in its
place a Qualified Substitute Mortgage Loan or Loans. If the Originator does not
provide a Qualified Substitute Mortgage Loan or Loans, it shall repurchase the
deficient Mortgage Loan. Any repurchase of a Mortgage Loan(s) pursuant to the
foregoing provisions of this Section 3.05 shall occur on a date designated by
the Purchaser and shall be accomplished by deposit in accordance with Section
2.03 of the Pooling and Servicing Agreement. Any repurchase or substitution
required by this Section shall be made in a manner consistent with Section 2.03
of the Pooling and Servicing Agreement.
If the Originator shall fail to remedy a breach of any of the
representations and warranties made by the Originator set forth in (jjj) or
(kkk) of Exhibit A hereto that materially and adversely affects the value of a
Mortgage Loan or the interest therein of the Purchaser in the manner and within
the time periods specified herein, then upon discovery by any of the Originator,
the Seller or the Purchaser of such failure, the party discovering such failure
shall give prompt written notice to the others.
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Upon the earlier of either discovery by or notice to the
Seller of a failure of Originator to remedy a breach of any of the
representations and warranties made by the Originator set forth in (jjj) or
(kkk) of Exhibit A hereto that materially and adversely affects the value of a
Mortgage Loan or the interest therein of the Purchaser in the manner and within
the time periods specified herein, the Seller shall become obligated to remedy
the resulting breach by the Seller of the representation and warranty made by
the Seller in Section 3.04 (a) or (b), as the case may be. In connection
therewith, within 30 days of the earlier of either discovery by or notice to
Seller of a failure of Originator to remedy a breach of any of the
representations and warranties made by the Originator set forth in (jjj) or
(kkk) of Exhibit A hereto that materially and adversely affects the value of a
Mortgage Loan or the interest therein of the Purchaser in the manner and within
the time periods specified herein, the Seller shall use its best efforts
promptly to cure the resulting breach by the Seller of the representation and
warranty made by the Seller in Section 3.04 (a) or (b), as the case may be, in
all material respects and, if such breach cannot be cured, the Seller shall, at
the Purchaser's option, repurchase such Mortgage Loan at the Purchase Price (as
defined in the Pooling and Servicing Agreement). Within 90 days of the earlier
of either discovery by or notice to the Seller of any breach of a representation
or warranty made by the Seller in Section 3.04 (c), (d) or (e) that materially
and adversely affects the value of a Mortgage Loan or the Mortgage Loans or the
interest therein of the Purchaser, the Seller shall use its best efforts
promptly to cure such breach in all material respects and, if such breach cannot
be cured, the Seller shall, at the Purchaser's option, repurchase such Mortgage
Loan at the Purchase Price (as defined in the Pooling and Servicing Agreement).
The Seller may, at the request of the Purchaser and assuming the Seller has a
Qualified Substitute Mortgage Loan, rather than repurchase a deficient Mortgage
Loan as provided above, remove such Mortgage Loan and substitute in its place a
Qualified Substitute Mortgage Loan or Loans. If the Seller does not provide a
Qualified Substitute Mortgage Loan or Loans, it shall repurchase the deficient
Mortgage Loan. Notwithstanding the foregoing, with respect to any breach by the
Seller of a representation or warranty made by the Seller in Section 3.04 (c) or
(d) that materially and adversely affects the value of a Mortgage Loan or the
Mortgage Loans or the interest therein of the Purchaser, if the Seller would not
be in breach of such representation or warranty but for a breach by the
Originator of a representation and warranty made by the Originator hereunder,
then the Originator, and not the Seller, shall be required to remedy such breach
in the manner and to the extent set forth herein. Any repurchase of a Mortgage
Loan(s) pursuant to the foregoing provisions of this Section 3.05 shall occur on
a date designated by the Purchaser and shall be accomplished by deposit in
accordance with Section 2.03 of the Pooling and Servicing Agreement. Any
repurchase or substitution required by this Section shall be made in a manner
consistent with Section 2.03 of the Pooling and Servicing Agreement.
Notwithstanding the foregoing, within 90 days of the earlier
of discovery by the Originator or receipt of notice by the Originator of the
breach of the representation of the Originator of representation (aaa) of
Exhibit A, which materially and adversely affects the interests of the Holders
of the Class P Certificates in any Prepayment Charge, the Originator shall pay
the amount of the scheduled Prepayment Charge, for the benefit of the Holders of
the Class P Certificates, by depositing such amount into the Collection Account,
net of any amount previously collected by the Master Servicer and paid by the
Master Servicer, for the benefit of the Holders of the Class P Certificates, in
respect of such Prepayment Charge.
At the time of substitution or repurchase of any deficient
Mortgage Loan, the Purchaser and the Originator shall arrange for the
reassignment of the repurchased or substituted Mortgage Loan to
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the Originator and the delivery to the Originator of any documents held by the
Trustee relating to the deficient or repurchased Mortgage Loan. The Originator
shall, simultaneously with the payment of the Purchase Price (as defined in the
Pooling and Servicing Agreement) for any Mortgage Loan repurchased hereunder,
give written notice to the Purchaser that such payment has taken place. Upon
such repurchase, the Mortgage Loan Schedule shall be amended to reflect the
withdrawal of the repurchased Mortgage Loan from this Agreement.
As to any Deleted Mortgage Loan for which the Originator or
the Seller substitutes a Qualified Substitute Mortgage Loan or Loans, the
Originator or the Seller, as applicable, shall effect such substitution by
delivering to the Purchaser or its designee for such Qualified Substitute
Mortgage Loan or Loans the Mortgage Note, the Mortgage, the Assignment and such
other documents and agreements as are required by the Pooling and Servicing
Agreement, with the Mortgage Note endorsed as required therein. The Originator
or the Seller, as applicable, shall remit for deposit in the Collection Account
the Monthly Payment due on such Qualified Substitute Mortgage Loan or Loans in
the month following the date of such substitution. Monthly payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution will
be retained by the Originator or the Seller, as applicable. For the month of
substitution, distributions to the Purchaser will include the Monthly Payment
due on such Deleted Mortgage Loan in the month of substitution, and the
Originator or the Seller, as applicable, shall thereafter be entitled to retain
all amounts subsequently received by the Originator or the Seller, as
applicable, in respect of such Deleted Mortgage Loan. Upon such substitution,
the Qualified Substitute Mortgage Loans shall be subject to the terms of this
Agreement in all respects, and the Originator or the Seller, as applicable,
shall be deemed to have made with respect to such Qualified Substitute Mortgage
Loan or Loans as of the date of substitution, the covenants, representations and
warranties set forth in Subsections 3.01 and 3.02.
It is understood and agreed that the representations and
warranties set forth in Sections 3.01, 3.02, 3.03 and 3.04 shall survive
delivery of the respective Mortgage Files to the Trustee on behalf of the
Purchaser.
It is understood and agreed that the obligations of the
Originator and/or the Seller, as applicable, set forth in this Section 3.05 to
cure, repurchase and substitute for a defective Mortgage Loan and the
obligations of the Originator to indemnify the Purchaser as provided in Section
5.01 and of the Seller to indemnify the Purchaser as provided in Section 5.01(f)
constitute the sole remedies of the Purchaser respecting a missing or defective
document or a breach of the representations and warranties contained in Section
3.01, 3.02, 3.03 or 3.04; provided, however, nothing herein shall be deemed to
reduce or eliminate any obligation of the Originator to the Seller with respect
to representations and warranties of the Originator or with respect to any
repurchase or other remedies required to be provided by the Originator in each
case as provided in any agreement pursuant to which the Seller purchased the
Mortgage Loans from the Originator, it being understood that such obligations
shall survive the execution and delivery of this Agreement.
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ARTICLE IV.
ORIGINATOR'S AND SELLER'S COVENANTS
Section 4.01 COVENANTS OF THE ORIGINATOR AND THE SELLER. The Originator
and the Seller hereby covenants that except for the transfer by the Originator
to the Seller under the Master Mortgage Loan Purchase and Interim Servicing
Agreement, dated July 1, 2002, between the Originator and the Seller (and the
Confirmations relating to the Mortgage Loans) and the transfer hereunder,
neither the Originator nor the Seller will sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist any Lien on
any Mortgage Loan, or any interest therein; the Originator and the Seller will
notify the Trustee, as assignee of the Purchaser, of the existence of any Lien
on any Mortgage Loan immediately upon discovery thereof, and the Originator and
the Seller will defend the right, title and interest of the Trust, as assignee
of the Purchaser, in, to and under the Mortgage Loans, against all claims of
third parties claiming through or under the Originator or the Seller; PROVIDED,
HOWEVER, that nothing in this Section 4.01 shall prevent or be deemed to
prohibit the Originator or the Seller from suffering to exist upon any of the
Mortgage Loans any Liens for municipal or other local taxes and other
governmental charges if such taxes or governmental charges shall not at the time
be due and payable or if the Originator or the Seller shall currently be
contesting the validity thereof in good faith by appropriate proceedings and
shall have set aside on its books adequate reserves with respect thereto.
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01 INDEMNIFICATION.
(a) The Originator indemnifies and holds harmless the Seller,
the Purchaser, Greenwich Capital Markets, Inc. (the "Underwriter"), their
respective officers and directors and each person, if any, who controls the
Seller, the Purchaser and the Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, as follows:
(i) against any and all losses, claims, expenses,
damages or liabilities, joint or
several, to which the Seller, the Purchaser, the Underwriter or such officers,
directors or controlling persons may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof including, but not limited to, any loss, claim, expense, damage
or liability related to purchases and sales of the Certificates) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Prospectus Supplement, or any amendment or supplement
thereto, or arise out of, or are based upon, the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements made therein not misleading, but only to the extent that any
untrue statement or alleged untrue statement or omission or alleged omission
therein results (or is alleged to have resulted) from an error or material
omission in the (A) information under the heading "Fremont Investment & Loan" in
the Prospectus Supplement or (B) any Derived Information to the extent that such
error or material omission in any Derived Information results (or is alleged to
have resulted) from an error or material omission in the Originator Provided
Information, which error, in the case of either (A) above or (B) above, was not
superseded or corrected by the delivery to the Purchaser of corrected written or
electronic information, or for which the Originator provided written
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notice of such error to the Purchaser prior to the confirmation of the sale of
the Certificates; and will reimburse the Purchaser and each such controlling
person for any legal or other expenses reasonably incurred by the Purchaser or
such controlling person in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of the
Purchaser; and
(iii) against any and all expense whatsoever
(including the fees and disbursements of counsel chosen by the Purchaser),
reasonably incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under clause (i) or clause (ii) above.
This indemnity agreement will be in addition to any liability
which the Originator may otherwise have.
(b) The Purchaser indemnifies and holds harmless the
Originator, their respective officers and directors and each person, if any, who
controls the Originator within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, as follows:
(i) against any and all losses, claims, expenses,
damages or liabilities, joint or several, to which the Originator or such
officers, directors or controlling persons may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof including, but not limited to, any
loss, claim, expense, damage or liability related to purchases and sales of the
Certificates) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Prospectus Supplement, or
any amendment or supplement thereto, or arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made therein not misleading,
except to the extent that any untrue statement or alleged untrue statement or
omission or alleged omission therein results (or is alleged to have resulted)
from an error or material omission in (A) the information under the heading
"Fremont Investment & Loan" in the Prospectus Supplement or (B) any Derived
Information to the extent that such error or material omission in any such
Derived Information results (or is alleged to have resulted) from an error or
material omission in the Originator Provided Information, which error, in the
case of either (A) above or (B) above, was not superseded or corrected by the
delivery to the Seller, Seller's affiliate, Servicer or Purchaser of corrected
written or electronic information, or for which the Originator provided written
notice of such error to the Seller, Seller's affiliate, Servicer or Purchaser
prior to the confirmation of the sale of the Certificates; and will reimburse
the Originator and each such controlling person for any
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legal or other expenses reasonably incurred by the Originator or such
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of the
Originator; and
(iii) against any and all expense whatsoever
(including the fees and disbursements of counsel chosen by the Originator),
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 Purchaser may otherwise have.
The Seller agrees with the Originator, for the sole and
exclusive benefit of the Originator and each person who controls the Originator
within the meaning of either the 1933 Act or the Securities Exchange Act of
1934, as amended, and not for the benefit of any assignee thereof or any other
person or persons dealing with the Originator, to indemnify and hold harmless
the Originator and each person who controls the Originator within the meaning of
either the 1933 Act or the Securities Exchange Act of 1934, as amended, against
any failure by the Depositor to perform any of its obligations under this
Section 5.01(b). The Seller agrees that there are no conditions precedent to the
obligations of the Seller hereunder other than written demand to the Depositor
to perform its obligations under this Agreement.
(c) For purposes of this Agreement, (i) "Derived Information"
means the information in the Prospectus Supplement that has been derived by the
Purchaser or its Affiliates or by a servicer acting on their behalf from
Originator Provided Information and (ii) "Originator Provided Information" means
any computer tape (or other information) concerning characteristics of the
Mortgage Loans furnished to the Seller, to any of the Seller's Affiliates or to
a servicer acting on their behalf by or on behalf of the Originator on or about
the Whole Loan Transfer Date (as defined herein) in connection with the purchase
by the Seller of the Mortgage Loans from the Originator on the Whole Loan
Transfer Date.
(d) Promptly after receipt by any indemnified party under this
Article V of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Article V, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article V except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying
16
party shall not relieve it from any liability which it may have to any
indemnified party otherwise than under this Article V.
If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Article V for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Purchaser, if the indemnified parties
under this Article V consist of the Purchaser.
Each indemnified party, as a condition of the indemnity
agreement contained in Section 5.01(a) hereof or Section 5.01(b) hereof, as
applicable, shall use its best efforts to cooperate with the indemnifying party
in the defense of any such action or claim. No indemnifying party shall be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled with
its written consent or if there be a final judgment for the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to consent to a
settlement of any action, the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written consent if
such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and the indemnifying party has not
previously provided the indemnified party with written notice of its objection
to such settlement. No indemnifying party shall effect any settlement of any
pending or threatened proceeding in respect of which an indemnified party is or
could have been a party and indemnity is or could have been sought hereunder,
without the written consent of
17
such indemnified party, unless settlement includes an unconditional release of
such indemnified party from all liability and claims that are the subject matter
of such proceeding.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for Section 5.01(a)
above is unavailable or insufficient to hold harmless an indemnified party, the
Originator shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by such indemnified party in such proportion as shall be appropriate to
reflect the relative benefits received by the Originator on the one hand (from
the sale of the Mortgage Loans to the Seller) and the Seller, the Purchaser and
the Underwriter on the other (from the sale of the Mortgage Loans to the
Purchaser in the case of the Seller, from the sale of its interest in the
Mortgage Loans pursuant to the Prospectus in the case of the Purchaser or from
underwriting fees and discounts in the case of the Underwriter); PROVIDED,
HOWEVER, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11 (f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) The Originator and the Seller, severally and not jointly,
agree to indemnify and to hold each of the Purchaser, the Trustee, each of the
officers and directors of each such entity and each person or entity who
controls each such entity or person and each Certificateholder harmless against
any and all claims, losses, penalties, fines, forfeitures, legal fees and
related costs, judgments, and any other costs, fees and expenses that the
Purchaser, the Trustee, or any such person or entity and any Certificateholder
may sustain in any way (i) related to the failure of the Originator or the
Seller, as the case may be, to perform its duties in compliance with the terms
of this Agreement, (ii) with respect to the Originator, arising from a breach by
the Originator of its representations and warranties in Sections 3.01 and 3.02
of this Agreement, (iii) with respect to the Seller, arising from a breach by
the Seller of its representations and warranties in Sections 3.03 and 3.04 of
this Agreement or (iv) related to the servicing of the Mortgage Loans by reason
of any acts, omissions, or alleged acts or omissions of the Originator or the
Seller, as the case may be, or any servicer that serviced any such Mortgage Loan
during the period in which the Originator or the Seller, as the case may be,
owned such Mortgage Loan. The Originator and the Seller shall immediately notify
the Purchaser, the Trustee and each Certificateholder if a claim is made by a
third party with respect to this Agreement. The indemnifying party shall assume
the defense of any such claim and pay all expenses in connection therewith,
including reasonable counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against the Purchaser, the Trustee or
any such person or entity and/or any Certificateholder in respect of such claim.
18
ARTICLE VI.
TERMINATION
Section 6.01 TERMINATION. The respective obligations and
responsibilities of the Originator, the Seller and the Purchaser created hereby
shall terminate (except for (i) the Originator's and the Seller's indemnity
obligations as provided herein and (ii) the representations and warranties made
by the Originator and the Seller hereunder and the Originator's and the Seller's
obligations to remedy breaches thereof to the extent set forth herein) upon the
termination of the Trust as provided in Article X of the Pooling and Servicing
Agreement.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 AMENDMENT. This Agreement may be amended from time to time
by the Originator, the Seller and the Purchaser, by written agreement signed by
the Originator, the Seller and the Purchaser.
Section 7.02 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Section 7.03 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, postage prepaid, addressed as
follows: (i) if to the Originator, Fremont Investment & Loan, 000 Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxxx, or such
other address as may hereafter be furnished by the Originator, (ii) if to the
Seller, Greenwich Capital Financial Products, Inc., 000 Xxxxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention: Legal, or such other address as may
hereafter be furnished by the Seller and (iii) if to the Purchaser, Financial
Asset Securities Corp., 000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000,
Attention: Legal, or such other address as may hereafter be furnished by the
Purchaser.
Section 7.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity of
enforceability of the other provisions of this Agreement.
Section 7.05 COUNTERPARTS. This Agreement may be executed in one or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
19
Section 7.06 FURTHER AGREEMENTS. The Originator, the Purchaser and the
Seller each agree to execute and deliver to the other such additional documents,
instruments or agreements as may be necessary or reasonable and appropriate to
effectuate the purposes of this Agreement or in connection with the issuance of
any Series of Certificates representing interests in the Mortgage Loans.
Without limiting the generality of the foregoing, as a further
inducement for the Purchaser to purchase the Mortgage Loans from the Seller, the
Originator and the Seller will cooperate with the Purchaser in connection with
the sale of any of the securities representing interests in the Mortgage Loans.
In that connection, the Originator and the Seller will provide to the Purchaser
any and all information and appropriate verification of information, whether
through letters of its auditors and counsel or otherwise, as the Purchaser shall
reasonably request and will provide to the Purchaser such additional
representations and warranties, covenants, opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Originator or
the Seller as are reasonably required in connection with such transactions and
the offering of investment grade securities rated by the Rating Agencies.
The Originator shall agree to execute and deliver a certification (in
the form attached hereto as Exhibit B) for the benefit of the Servicer and its
officers, directors and affiliates regarding certain aspects of the Servicer
Certification.
Section 7.07 INTENTION OF THE PARTIES. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans rather than pledging the Mortgage Loans to secure a loan by the
Purchaser to the Seller. Accordingly, the parties hereto each intend to treat
the transaction for federal income tax purposes and all other purposes as a sale
by the Seller, and a purchase by the Purchaser, of the Mortgage Loans. The
Purchaser will have the right to review the Mortgage Loans and the related
Mortgage Files to determine the characteristics of the Mortgage Loans which will
affect the federal income tax consequences of owning the Mortgage Loans and the
Seller will cooperate with all reasonable requests made by the Purchaser in the
course of such review.
Section 7.08 SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Originator, the Seller, the Purchaser and the Trustee.
The obligations of the Originator and the Seller under this Agreement
cannot be assigned or delegated to a third party without the consent of the
Purchaser which consent shall be at the Purchaser's sole discretion, except that
the Purchaser acknowledges and agrees that the Originator and the Seller may
assign its obligations hereunder to any Person into which the Originator or the
Seller is merged or any corporation resulting from any merger, conversion or
consolidation to which the Seller or the Originator is a party or any Person
succeeding to the business of the Seller or the Originator. The parties hereto
acknowledge that the Purchaser is acquiring the Mortgage Loans for the purpose
of contributing them to a trust that will issue a series of Certificates
representing undivided interests in such Mortgage Loans. As an inducement to the
Purchaser to purchase the Mortgage Loans, the Seller acknowledges and consents
to the assignment by the Purchaser to the Trustee of all of the Purchaser's
rights against the Seller pursuant to this Agreement insofar as such rights
relate to Mortgage Loans transferred to the Trustee and to the
20
enforcement or exercise of any right or remedy against the Seller pursuant to
this Agreement by the Trustee. In addition, the Originator acknowledges and
consents to the assignment by the Purchaser to the Trustee of all of the
Purchaser's rights against the Originator pursuant to this Agreement insofar as
such rights relate to Mortgage Loans transferred to the Trustee and to the
enforcement or exercise of any right or remedy against the Originator pursuant
to this Agreement by the Trustee. Such enforcement of a right or remedy by the
Trustee shall have the same force and effect as if the right or remedy had been
enforced or exercised by the Purchaser directly.
Section 7.09 SURVIVAL. The representations and warranties set forth in
Sections 3.01, 3.02 and 3.03 and the provisions of Article V hereof shall
survive the purchase of the Mortgage Loans hereunder.
21
IN WITNESS WHEREOF, the Originator, the Seller and the
Purchaser have caused their names to be signed to this Mortgage Loan Purchase
Agreement by their respective officers thereunto duly authorized as of the day
and year fist above written.
FREMONT INVESTMENT & LOAN,
as Originator
By:_______________________________
Name:
Title:
FINANCIAL ASSET SECURITIES CORP.,
as Purchaser
By:_______________________________
Name:
Title:
GREENWICH CAPITAL FINANCIAL
PRODUCTS, INC., as Seller
By:_______________________________
Name:
Title:
SCHEDULE I
MORTGAGE LOANS
AVAILABLE UPON REQUEST
SCHEDULE II
MORTGAGE LOAN PURSUANT TO THE UNITED STATES BANKRUPTCY CODE
Loan # Original Balance Current Balance
1000107778 $117,000.00 $116,631.58
5000060838 $140,400.00 $139,862.95
6000055490 $131,000.00 $130,722.28
SCHEDULE III
MORTGAGE LOANS THAT ARE DELINQUENT
IN THEIR MONTHLY PAYMENT AS OF AUGUST 1, 2003
Loan # Original Balance Current Balance
1000105033 $ 90,000.00 $ 89,674.74
1000108352 182,400.00 181,852.33
5000057816 198,000.00 196,982.56
6000051636 116,250.00 115,998.37
EXHIBIT A
Representation and Warranties with Respect to the Mortgage Loans
The Originator hereby represents and warrants to the Purchaser that, as to each
Mortgage Loan, as of the Closing Date or as of such other date specified:
(a) The information set forth in the Mortgage Loan Schedule
with respect to each Mortgage Loan is complete, true and correct as of the
Cut-off Date, but only to the extent that such information is a restatement of,
or is correctly derived by the Seller or an affiliate or by the servicer thereof
from, information about such Mortgage Loan provided by the Originator or an
affiliate to the Seller or an affiliate or to the servicer thereof as of the
date with respect to each Mortgage Loan that the Originator sold such Mortgage
Loan to the Seller (the "Whole Loan Sale Date");
(b) [Reserved];
(c) All payments required to be made up to the close of
business on the Closing Date for such Mortgage Loan under the terms of the
Mortgage Note have been made, other than delinquencies of fewer than 30 days and
those loans listed on Schedule III; the Originator has not advanced funds, or
induced, solicited or knowingly received any advance of funds from a party other
than the owner of the related Mortgaged Property, directly or indirectly, for
the payment of any amount required by the Mortgage Note or Mortgage; and as of
the Closing Date, there had been no delinquency, 30 days or more, in any payment
by the Mortgagor thereunder since the origination of the Mortgage Loan;
(d) To the best of the Originator's knowledge, there are no
delinquent taxes, ground rents, water charges, sewer rents, assessments,
insurance premiums, leasehold payments, including assessments payable in future
installments or other outstanding charges affecting the related Mortgaged
Property;
(e) The terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by written
instruments, recorded in the applicable public recording office if necessary to
maintain the lien priority of the Mortgage, and which have been delivered to the
Custodian; the substance of any such waiver, alteration or modification has been
approved by the title insurer, to the extent required by the related policy, and
is reflected on the related Mortgage Loan Schedule. No instrument of waiver,
alteration or modification has been executed, and no Mortgagor has been
released, in whole or in part, except in connection with an assumption agreement
approved by the title insurer, to the extent required by the policy, and which
assumption agreement has been delivered to the Custodian and the terms of which
are reflected in the related Mortgage Loan Schedule;
(f) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission, set
off, counterclaim or defense,
including the defense of usury and no such right of rescission, set off,
counterclaim or defense has been asserted with respect thereto;
(g) All buildings upon the Mortgaged Property are insured by a
generally acceptable insurer in the secondary market against loss by fire,
hazards of extended coverage and such other hazards as are customary in the area
where the Mortgaged Property is located, pursuant to insurance policies
conforming to the requirements of the Servicing Addendum. All such insurance
policies contain a standard mortgagee clause naming the Originator, its
successors and assigns as mortgagee and all premiums thereon have been paid. If
the Mortgaged Property is in an area identified on a Flood Hazard Map or Flood
Insurance Rate Map issued by the Federal Emergency Management Agency as having
special flood hazards (and such flood insurance has been made available) a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect which policy conforms to the
requirements of FNMA and FHLMC. The Mortgage obligates the Mortgagor thereunder
to maintain all such insurance at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to maintain
such insurance at Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor;
(h) Any and all requirements of any federal, state or local
law including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity,
fair housing or disclosure laws applicable to the origination and servicing of
mortgage loans of a type similar to the Mortgage Loans have been complied with;
(i) The Mortgage has not been satisfied, cancelled,
subordinated or rescinded, in whole or in part, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in part, nor has
any instrument been executed that would effect any such satisfaction,
cancellation, subordination, rescission or release;
(j) The Mortgage is a valid, existing and enforceable first
lien (or if indicated on the Mortgage Loan Schedule, second lien) on the
Mortgaged Property (including all improvements on the Mortgaged Property), which
Mortgaged Property is free and clear of all encumbrances and liens (including
mechanics liens) having priority over the first lien (or if indicated on the
Mortgage Loan Schedule, second lien) of the Mortgage except for: (a) the lien of
current real property taxes and assessments not yet due and payable, (b)
covenants, conditions and restrictions, rights of way, easements and other
matters of the public record as of the date of recording being acceptable to
mortgage lending institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of the Mortgage Loan
and which do not adversely affect the Appraised Value of the Mortgaged Property,
(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 the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property and (d) the first lien on the Mortgaged Property, in the case
of the Mortgages that are second liens. Any security agreement, chattel mortgage
or equivalent document related to and delivered in connection with the Mortgage
Loan establishes and creates a valid, existing and enforceable first lien (or
second lien if such Mortgage Loan Schedule is identified on the Mortgage Loan
Schedule as a second lien Mortgage Loan) and first priority (or second priority
if such Mortgage Loan Schedule is
identified on the Mortgage Loan Schedule as a second lien Mortgage Loan)
security interest on the property described therein and the Originator has full
right to sell and assign the same to the Purchaser;
(k) The Mortgage Note and the related Mortgage are genuine and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms;
(l) All parties to the Mortgage Note and the Mortgage had
legal capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have been
duly and properly executed by such parties. The Mortgagor is a natural person
who is acting in an individual capacity or the Mortgagor is a family trust that
is guaranteed by a natural person;
(m) The proceeds of the Mortgage Loan have been fully
disbursed to or for the account of the Mortgagor and there is no obligation for
the Mortgagee to advance additional funds thereunder and any and all
requirements as to completion of any on site or off site improvement and as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage have been paid, and the Mortgagor is not entitled to
any refund of any amounts paid or due to the Mortgagee pursuant to the Mortgage
Note or Mortgage;
(n) Immediately prior to the sale of the Mortgage Loan to the
Seller on the Whole Loan Sale Date, the Originator was the sole legal,
beneficial and equitable owner of the Mortgage Note and the Mortgage and had
full right to transfer and sell the Mortgage Loan to the Seller free and clear
of any encumbrance, equity, lien, pledge, charge, claim or security interest;
(o) All parties which have had any interest in the Mortgage
Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were) in compliance
with any and all applicable "doing business" and licensing requirements of the
laws of the state wherein the Mortgaged Property is located;
(p) The Mortgage Loan is covered by an American Land Title
Association ("ALTA") ALTA lender's title insurance policy (which, in the case of
an Adjustable Rate Mortgage Loan has an adjustable rate mortgage endorsement in
the form of ALTA 6.0 or 6.1) acceptable to FNMA and FHLMC, issued by a title
insurer acceptable to FNMA and FHLMC and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject to the
exceptions contained in (j)(a) and (b) above) the Originator, its successors and
assigns as to the first lien (or second lien if such Mortgage Loan Schedule is
identified on the Mortgage Loan Schedule as a second lien Mortgage Loan) of the
Mortgage in the original principal amount of the Mortgage Loan and, with respect
to any Adjustable Rate Mortgage Loan, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions of the
Mortgage providing for adjustment in the Mortgage Interest Rate and Monthly
Payment. Additionally, such lender's title insurance policy affirmatively
insures ingress and egress to and from the Mortgaged Property, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Originator is the sole insured of such lender's title insurance policy, and such
lender's title
insurance policy is in full force and effect and will be in full force and
effect upon the consummation of the transactions contemplated by this Agreement.
No claims are pending under such lender's title insurance policy, and no prior
holder of the related Mortgage, including the Originator, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy;
(q) Other than delinquencies of fewer than 30 days and
delinquencies of 30 or more days, if any, that are disclosed in the Prospectus
Supplement, as of the Closing Date, there has been no default, breach, violation
or event of acceleration existing under the Mortgage or the Mortgage Note and no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event of
acceleration, and the Originator has not waived any default, breach, violation
or event of acceleration;
(r) As of the date of origination of the Mortgage Loan and to
the best of the Originator's knowledge as of the Closing Date, there are no
mechanics' or similar liens or claims which have been filed for work, labor or
material (and no rights are outstanding that under law could give rise to such
lien) affecting the related Mortgaged Property which are or may be liens prior
to, or equal or coordinate with, the lien of the related Mortgage that are not
insured against by the related title insurance policy;
(s) All improvements which were considered in determining the
Appraised Value of the related Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property, and no
improvements on adjoining properties encroach upon the Mortgaged Property;
(t) The Mortgage Loan was originated by the Originator or by a
savings and loan association, a savings bank, a commercial bank or similar
banking institution which is supervised and examined by a federal or state
authority, or by a mortgagee approved as such by the Secretary of HUD;
(u) Principal payments on the Mortgage Loan commenced no more
than sixty days after the proceeds of the Mortgage Loan were disbursed. The
Mortgage Loan bears interest at the Mortgage Interest Rate. With respect to each
Mortgage Loan, the Mortgage Note is payable on the first or fifteenth day of
each month in Monthly Payments, which, in the case of a Fixed Rate Mortgage
Loans, are sufficient to fully amortize the original principal balance over the
original term thereof and to pay interest at the related Mortgage Interest Rate,
and, in the case of an Adjustable Rate Mortgage Loan, are changed on each
Adjustment Date, and in any case, are sufficient to fully amortize the original
principal balance over the original term thereof and to pay interest at the
related Mortgage Interest Rate. The Index for each Adjustable Rate Mortgage Loan
is as listed on the Mortgage Loan Schedule. The Mortgage Note does not permit
negative amortization. No Mortgage Loan is a Convertible Mortgage Loan;
(v) The origination and collection practices used by the
Originator with respect to each Mortgage Note and Mortgage have been in all
respects legal, proper, prudent and customary in the mortgage origination and
servicing industry. The Mortgage Loan has been serviced by the Originator and
any predecessor servicer in accordance with the terms of the Mortgage Note. With
respect to escrow deposits and Escrow Payments, if any, all such payments are in
the possession of, or under the control of,
the Originator and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. No escrow
deposits or Escrow Payments or other charges or payments due the Originator have
been capitalized under any Mortgage or the related Mortgage Note and no such
escrow deposits or Escrow Payments are being held by the Originator for any work
on a Mortgaged Property which has not been completed;
(w) To the best of Originator's knowledge, the Mortgaged
Property is free of damage and waste and there is no proceeding pending for the
total or partial condemnation thereof;
(x) The Mortgage and related Mortgage Note contain customary
and enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged Property of
the benefits of the security provided thereby, including, (a) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (b) otherwise by
judicial foreclosure. To the best of the Originator's knowledge as of the
Closing Date [(except with respect to the Mortgage Loans listed on Schedule
II)], the Mortgaged Property is not subject to any bankruptcy proceeding or
foreclosure proceeding and the Mortgagor is not subject to protection under
applicable bankruptcy laws. There is no homestead or other exemption available
to the Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage. The
Mortgagor, as of the Closing Date, has not notified the Originator and the
Originator has no knowledge of any relief requested or allowed to the Mortgagor
under the Soldiers and Sailors Civil Relief Act of 1940;
(y) The Mortgage Loan was underwritten in accordance with the
underwriting standards of the Originator in effect at the time the Mortgage Loan
was originated; and the Mortgage Note and Mortgage are on forms acceptable to
FNMA and FHLMC;
(z) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage referred to in (j) above;
(aa) The Mortgage File contains an appraisal of the related
Mortgaged Property which satisfied the standards of FNMA and FHLMC and was made
and signed, prior to the funding of the Mortgage Loan application, by a
qualified appraiser, duly appointed by the Originator, who had no interest,
direct or indirect in the Mortgaged Property or in any loan made on the security
thereof, whose compensation is not affected by the approval or disapproval of
the Mortgage Loan and who met the minimum qualifications of FNMA and FHLMC. Each
appraisal of the Mortgage Loan was made in accordance with the relevant
provisions of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989;
(bb) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Purchaser to the trustee under the
deed of trust, except in connection with a trustee's sale after default by the
Mortgagor or the reconveyance of the deed of trust;
(cc) No Mortgage Loan contains provisions pursuant to which
Monthly Payments are (a) paid or partially paid with funds deposited in any
separate account established by the Originator, the Mortgagor, or anyone on
behalf of the Mortgagor, (b) paid by any source other than the Mortgagor or (c)
contains any other similar provisions which may constitute a "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature;
(dd) The Mortgagor has executed a statement to the effect that
the Mortgagor has received all disclosure materials required by applicable law
with respect to the making of fixed rate mortgage loans in the case of Fixed
Rate Mortgage Loans, and adjustable rate mortgage loans in the case of
Adjustable Rate Mortgage Loans and rescission materials with respect to
Refinanced Mortgage Loans, and such statement is and will remain in the Mortgage
File;
(ee) No Mortgage Loan was made in connection with (a) the
construction or rehabilitation of a Mortgaged Property or (b) facilitating the
trade in or exchange of a Mortgaged Property;
(ff) The Originator has no knowledge of any circumstances or
condition with respect to the Mortgage, the Mortgaged Property, the Mortgagor or
the Mortgagor's credit standing that can reasonably be expected to cause the
Mortgage Loan to be an unacceptable investment, cause the Mortgage Loan to
become delinquent, or adversely affect the value of the Mortgage Loan;
(gg) As of the date of origination of the Mortgage Loan and to
the best of the Originator's knowledge as of the Closing Date, the Mortgaged
Property is lawfully occupied under applicable law; all inspections, licenses
and certificates required to be made or issued with respect to all occupied
portions of the Mortgaged Property and, with respect to the use and occupancy of
the same, including but not limited to certificates of occupancy, have been made
or obtained from the appropriate authorities;
(hh) No error, omission, misrepresentation, negligence, fraud
or similar occurrence with respect to a Mortgage Loan has taken place on the
part of any person, including without limitation the Mortgagor, any appraiser,
any builder or developer, or any other party involved in the origination of the
Mortgage Loan or in the application of any insurance in relation to such
Mortgage Loan;
(ii) With respect to Mortgage Loans, other than MERS loans,
the Assignment of Mortgage is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is located;
(jj) Any principal advances made to the Mortgagor prior to the
Cut off Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term. The lien of the Mortgage
securing the consolidated principal amount is expressly insured as having first
lien (or second lien if such Mortgage Loan Schedule is identified on the
Mortgage Loan Schedule as a second lien Mortgage Loan) priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated
interest or by other title evidence acceptable to FNMA and FHLMC. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;
(kk) No Mortgage Loan has a balloon payment feature, except as
set forth in the Mortgage Loan Schedule;
(ll) The source of the down payment with respect to each
Mortgage Loan has been fully verified by the Originator pursuant to the
Originator's underwriting guidelines;
(mm) Interest on each Mortgage Loan is calculated on the basis
of a 360-day year consisting of twelve 30-day months;
(nn) The Mortgaged Property is in material compliance with all
applicable environmental laws pertaining to environmental hazards including,
without limitation, asbestos, and neither the Originator nor, to the
Originator's knowledge, the related Mortgagor, has received any notice of any
violation or potential violation of such law;
(oo) Each Mortgage Loan is covered by a fully assignable, life
of loan Tax Service Contract which is assignable to the Purchaser or its
designee without the payment of any fee by the Purchaser or its designee;
(pp) Each Mortgage Loan is covered by a Flood Zone Service
Contract which is assignable to the Purchaser or its designee or, for each
Mortgage Loan not covered by such Flood Zone Service Contract, the Originator
agrees to purchase such Flood Zone Service Contract;
(qq) No Mortgage Loan is subject to the requirements of the
Homeownership and Equity Protection Act of 1994 ("HOEPA") and no mortgage loans
is in violation of any comparable state law;
(rr) No predatory or deceptive lending practices, including
but not limited to, the extension of credit to a mortgagor without regard for
the mortgagor's ability to repay the Mortgage Loan and the extension of credit
to a mortgagor which has no apparent benefit to the mortgagor, were employed in
connection with the origination of the Mortgage Loan;
(ss) The debt-to-income ratio of the related Mortgagor was not
greater than 60% at the origination of the related Mortgage Loan;
(tt) No proceeds from the Mortgage Loans were used to finance
the purchase of single premium credit insurance policies.
(uu) No Mortgage loan is secured by property located in the
city of Oakland, California is subject to the provisions of the City of Oakland,
California Anti-Predatory Lending Ordinance No. 12361.
(vv) No Mortgage Loan had a Loan-to-Value Ratio in excess of
100% at the time of the origination of such Mortgage Loan;
(ww) The Mortgage Loans were not selected from the outstanding
fixed and adjustable rate one to four-family mortgage loans in the Originator's
portfolio at the related Closing Date as to which the representations and
warranties set forth in this Agreement could be made in a manner so as to
intentionally affect adversely the interests of the Purchaser;
(xx) The related Mortgagor under the Mortgage Loan had a FICO
Score not less than 500 at the time of the origination of the Mortgage Loan,
unless such Mortgage Loan was originated under an origination program which does
not require FICO scores to be obtained under the Originator's underwriting
guidelines;
(yy) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder;
(zz) The Mortgage Loan complies with all applicable consumer
credit statutes and regulations, including, without limitation, the respective
Uniform Consumer Credit Code laws in effect in Colorado, Idaho, Indiana, Iowa,
Kansas, Maine, Oklahoma, South Carolina, Utah and Wyoming, has been originated
by a properly licensed entity, and in all other respects, complies with all of
the material requirements of any such applicable laws;
(aaa) The information set forth in the Prepayment Charge
schedule is complete, true and correct in all material respects and each
Prepayment Charge is permissible, enforceable and collectable under applicable
federal and state law and each Prepayment Charge was originated in compliance
with all applicable federal, state and local laws;
(bbb) The Mortgage Loan was not prepaid in full prior to the
Whole Loan Sale Date, and the Originator has not received notification from a
Mortgagor that a prepayment in full shall be made after the Closing Date; and
(ccc) The Originator has no knowledge of any circumstances or
condition with respect to the Mortgage, the mortgaged property, the Mortgagor or
the Mortgagor's credit standing that can be reasonably be expected to cause the
mortgage Loan to be an unacceptable investment, cause the Mortgage Loan to
become delinquent, or adversely affect the value of the Mortgage Loan.
(ddd) With respect to any second lien Mortgage Loans, 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.
(eee) There is no Mortgage Loan originated on or after October
1, 2002 and before March 7, 2003, which is secured by a Mortgaged Property
located in the State of Georgia; there is no
Group I Mortgage Loan that was originated on or after March 7, 2003 which is a
"high cost home loan" as defined under the Georgia Fair Lending Act;.
(fff) No Group I Mortgage Loan originated on or after October
1, 2002 will impose a Prepayment Charge for a term in excess of three years. Any
Mortgage Loans originated prior to such date will not impose prepayment
penalties in excess of five years.
(ggg) There is no Mortgage Loan that (a) is secured by
property located in the State of New York; (b) had an original principal balance
of $300,000 or less, and (c) has an application date on or after April 1, 2003,
the terms of which loan equal or exceed either the APR or the points and fees
threshold for "high-cost home loans," as defined in Section 6-L of the New York
State Banking Law.
(hhh) The total combined points and fees charged in connection
with the originator of the Mortgage Loan does not exceed 8% of the original
principal balance of the Mortgage Loan.
(iii) No Mortgage Loans are subject to the Geogia Fair Lending
Act effective from October 1, 2002 to March 6, 2003.
(jjj) Each Mortgage Loan at the time it was made complied in
all material respects with applicable local, state, and federal laws, including,
but not limited to, all applicable predatory and abusive lending laws.
(kkk) None of the Mortgage Loans are High Cost as defined by
the applicable predatory and abusive lending laws.
(lll) No Group I Mortgage Loan is a "High Cost Home Loan" as
defined in the Georgia Fair Lending Act, as amended. No Mortgage Loan secured by
owner occupied real property or an owner occupied manufactured home located in
the State of Georgia was originated (or modified) on or after October 1, 2002
through and including March 6, 2003.
(mmm) No Group I Mortgage Loan is a "High Cost Home Loan" as
defined in New York Banking Law 6-1;
(nnn) No Mortgage Loan is a "High Cost Home Loan" as defined
in the Arkansas Home Loan Protection Act effective July 16, 2003(Act 1340 or
2003);
(ooo) No Mortgage Loan is a "High Cost Home Loan" as defined
in the Kentucky high-cost loan statute effective June 24, 2003 (Ky. Rev. Stat.
Section 360.100);
(ppp) Each borrower under a Group I Mortgage Loan was assigned
the highest credit grade available with respect to a mortgage loan product
offered by such Mortgage Loan's originator, taking into account the credit
history, debt to income ratio and loan requirements of such borrower;
(qqq) The methodology used in underwriting the extension of
credit for each Group I Mortgage Loan employs objective mathematical principles
which relate the borrower's income, assets and liabilities to the proposed
payment and such underwriting methodology does not rely on the extent of the
borrower's equity in the collateral as the principal determining factor in
approving such credit extension. Such underwriting methodology confirmed that,
with respect to each Group I Mortgage Loan, at the time of origination
(application/approval) the borrower had a reasonable ability to make timely
payments on such Mortgage Loan;
(rrr) With respect to any Group I Mortgage Loan that contains
a provision permitting imposition of a premium upon a prepayment prior to
maturity: (i) prior to such Mortgage Loan's origination, the borrower agreed to
such premium in exchange for a monetary benefit, including but not limited to a
rate or fee reduction, (ii) the Originator had available programs that offered
the option of obtaining a mortgage loan that did not require payment of such a
premium, and prior to the Mortgage Loan's origination the Mortgage Loan was
available to the borrower with and without the prepayment penalty, (iii) the
prepayment premium was disclosed to the borrower in the related loan documents
pursuant to applicable state and federal law and (iv) notwithstanding any state
or federal law to the contrary, Fremont Investment & Loan for so long as it
remains the Servicer shall not impose such prepayment premium in any instance
when the mortgage debt is accelerated as the result of the borrower's default in
making the loan payments on such Mortgage Loan;
(sss) No borrower under any Group I Mortgage Loan was required
to purchase any credit life, disability, accident or health insurance product as
a condition of obtaining the extension of credit; no borrower under any Group I
Mortgage Loan obtained a prepaid single premium credit life, disability,
accident or health insurance policy in connection with the origination of such
Mortgage Loan; no proceeds from any Group I Mortgage Loan were used to purchase
single premium credit insurance policies as part of the origination of, or as a
condition to closing, such Mortgage Loan;
(ttt) All points and fees related to each Group I Mortgage
Loan were disclosed in writing to the borrower in accordance with applicable
state and federal law and regulation; with respect to each Group I Mortgage
Loan, except in the case of a Group I Mortgage Loan in an original principal
amount of less than $60,000 which would have resulted in an unprofitable
origination, no borrower was charged "points and fees" (whether or not financed)
in an amount greater than 5% of the principal amount of such Mortgage Loan, such
5% limitation being calculated in accordance with Xxxxxx Mae's anti-predatory
lending requirements as set forth in the Xxxxxx Mae Selling Guide;
(uuu) With respect to each Group I Mortgage Loan, all fees and
charges (including finance charges) and whether or not financed, assessed,
collected or to be collected in connection with the origination and servicing of
each such Mortgage Loan has been disclosed in writing to the borrower in
accordance with applicable state and federal law and regulation; and
(vvv) The Originator has complied with all applicable
anti-money laundering laws and regulations, including without limitation the USA
PATRIOT Act of 2001.
EXHIBIT B
FORM CERTIFICATION TO BE
PROVIDED TO SERVICER BY FREMONT INVESTMENT & LOAN
Re: Fremont Home Loan Trust, Series 2003-3
Asset Backed Certificates, Series 2003-3
I, [identify the certifying individual], certify to Xxxxxx
Loan Servicing L.P. (the "Servicer") and their respective officers, directors
and affiliates, and with the knowledge and intent that they will rely upon this
certification, that:
1. I have reviewed the information provided to the Servicer by
Fremont Investment & Loan ("Fremont") in the Remittance Report with respect to
the period from September 1, 2003 to October 1, 2003 (the "Servicing
Information").
2. Based on my knowledge, the Servicing Information in this
report, taken as a whole, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading
as of the last day of the period covered by that remittance report;
3. I certify that Fremont's servicing obligations were
conducted in accordance with customary and usual standards of practice of
mortgage lenders and loan servicers administering similar mortgage loans. In
addition, to the extent consistent with the foregoing, Fremont timely delivered
all funds required with respect to the above referenced time period;
4. Fremont agrees to indemnify the Servicer, from, and hold
the Servicer harmless against, any loss, liability or expense (including
reasonable attorney's fees and expenses) incurred by any such Person by reason
of Fremont's willful misfeasance, bad faith or gross negligence in the
performance of its duties to interim service the Mortgage Loans from September
1, 2003 to October 1, 2003 or by reason of Fremont's reckless disregard of its
obligations and duties. Such indemnity shall survive the resignation or removal
of Fremont, the Servicer and the Trustee. Any payment hereunder made by Fremont
to any such Person shall be from Fremont's own funds, without reimbursement from
the Trust Fund therefor.
Certified this __ day of September, 2003.
FREMONT INVESTMENT & LOAN
By:________________________
Name:
Title:
Date:
EXHIBIT D
MORTGAGE LOAN SCHEDULE
[FILED BY PAPER]
[SEE SCHEDULE I OF MORTGAGE LOAN PURCHASE AGREEMENT]
D-1
EXHIBIT E
REQUEST FOR RELEASE OF DOCUMENTS
To: Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Re: Pooling and Servicing Agreement dated as of September 1, 2003,
among the Financial Asset Securities Corp. as Depositor,
Xxxxxx Loan Servicing LP, as Servicer, and Deutsche Bank
National Trust Company, a national banking association, as
Trustee
In connection with the administration of the Mortgage Loans held by you
as Trustee pursuant to the above-captioned Pooling and Servicing Agreement, we
request the release, and hereby acknowledge receipt of the Trustee's Mortgage
File Or the Mortgage Loan described below, for the reason indicated.
Mortgage Loan Number:
--------------------
Mortgagor Name, Address & Zip Code:
----------------------------------
Reason for Requesting Documents (check one):
-------------------------------------------
_________1. Mortgage Paid in Full
_________2. Foreclosure
_________3. Substitution
_________4. Other Liquidation (Repurchases, etc.)
_________5. Nonliquidation Reason:_____________________
Address to which Trustee should deliver the Trustee's Mortgage File:
________________________________________________________________________________
________________________________________________________________________________
E-1
By:_______________________________
(authorized signer)
Issuer:___________________________
Address:__________________________
__________________________
Date:_____________________________
Trustee
-------
Deutsche Bank National Trust Company
Please acknowledge the execution of the above request by your signature
and date below:
____________________________ __________________
Signature Date
Documents returned to Trustee:
______________________________ __________________
Trustee Date
E-2
EXHIBIT F-1
FORM OF TRUSTEE'S INITIAL CERTIFICATION
September __, 2003
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Re: Pooling and Servicing Agreement dated as of September 1, 2003,
among the Financial Asset Securities Corp. as Depositor,
Xxxxxx Loan Servicing LP, as Servicer, and Deutsche Bank
National Trust Company, a national banking association, as
Trustee
--------------------------------------------------------------
Ladies and Gentlemen:
Attached is the Trustee's preliminary exception report delivered in
accordance with Section 2.02 of the referenced Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in the Mortgage File pertaining to the Mortgage Loans
identified on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan or (iii) whether any
Mortgage File includes any of the documents specified in clause (v) of Section
2.01 of the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST
COMPANY
By:_________________________
Name:
Title:
F-1-1
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
________________
[Date]
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of September 1, 2003 among Financial
Asset Securities Corp., as Depositor, Xxxxxx Loan Servicing
LP, as Servicer and Deutsche Bank National Trust Company, as
Trustee with respect to Fremont Home Loan Trust 2003-3,
Asset-Backed Certificates, Series 2003-3
------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement,
the undersigned, as Trustee, hereby certifies that as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage loan paid in full
or listed on Schedule I hereto) it (or its custodian) has received the
applicable documents listed in Section 2.01 of the Pooling and Servicing
Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed on
Schedule I hereto, it has reviewed the documents listed above and has determined
that each such document appears to be complete and, based on an examination of
such documents, the information set forth in items 1, 3, 10, 11 and 15 of the
definition of Mortgage Loan Schedule in the Pooling and Servicing Agreement
accurately reflects information in the Mortgage File.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Trustee
By:_________________________
Name:
Title:
F-2-1
EXHIBIT F-3
FORM OF RECEIPT OF MORTGAGE NOTE
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Re: Fremont Home Loan Trust 2003-3,
Asset-Backed Certificates Series 2003-3
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of September 1, 2003 among
Financial Asset Securities Corp., as Depositor, Xxxxxx Loan Servicing LP, as
Servicer and Deutsche Bank National Trust Company, as Trustee, we hereby
acknowledge the receipt of the original Mortgage Notes (a copy of which is
attached hereto as Exhibit 1) with any exceptions thereto listed on Exhibit 2.
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Trustee
By:_________________________
Name:
Title:
F-3-1
EXHIBIT G
[RESERVED]
G-1
EXHIBIT H
FORM OF LOST NOTE AFFIDAVIT
Personally appeared before me the undersigned authority to administer
oaths, __________________ who first being duly sworn deposes and says: Deponent
is __________________________ of ____________________________, successor by
merger to _________________________ ("Seller") and who has personal knowledge of
the facts set out in this affidavit.
On _________________________________, _________________________________ did
execute and deliver a promissory note in the principal amount of
$____________________.
That said note has been misplaced or lost through causes unknown and is
presently lost and unavailable after diligent search has been made. Seller's
records show that an amount of principal and interest on said note is still
presently outstanding, due, and unpaid, and Seller is still owner and holder in
due course of said lost note.
Seller executes this Affidavit for the purpose of inducing Deutsche
Bank National Trust Company, as trustee on behalf of Fremont Home Loan Trust
2003-3, Asset-Backed Certificates Series 2003-3, to accept the transfer of the
above described loan from Seller.
Seller agrees to indemnify Deutsche Bank National Trust Company and
Financial Asset Securities Corp. harmless for any losses incurred by such
parties resulting from the above described promissory note has been lost or
misplaced.
By: _______________________
_______________________
STATE OF )
) SS:
COUNTY OF )
On this ______ day of ______________, 20_, before me, a Notary Public,
in and for said County and State, appeared , who acknowledged the extension of
the foregoing and who, having been duly sworn, states that any representations
therein contained are true.
Witness my hand and Notarial Seal this _________ day of 20__.
____________________________
____________________________
My commission expires __________________________.
H-1
EXHIBIT I
FORM OF LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that [NAME OF MORTGAGEE, ASSIGNEE OR LAST
ENDORSEE, AS APPLICABLE], [a ___________________ corporation][a national banking
organization], having its principal place of business at
__________________________, (the "Undersigned"), pursuant to that Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") among Financial
Asset Securities Corp. (the "Owner"), Deutsche Bank National Trust Company and
Xxxxxx Loan Servicing LP ("Xxxxxx"), hereby constitutes and appoints Xxxxxx, by
and through Litton's officers, the Undersigned's true and lawful
Attorney-in-Fact, in the Undersigned's name, place and stead, as their interests
may appear, and for the Undersigned's respective benefit, in connection with all
Mortgage Loans serviced by Xxxxxx pursuant to the Pooling and Servicing
Agreement, for the purpose of performing all acts and executing all documents in
the name of the Undersigned as may be customarily and reasonably necessary and
appropriate to effectuate the following enumerated transactions in respect of
any of the mortgages, deeds of trust or security instrument (each a "Mortgage"
or a "Deed of Trust" respectively) and promissory notes secured thereby (each a
"Mortgage Note") for which the Undersigned is acting as Servicer pursuant to the
Pooling and Servicing Agreement (whether the Undersigned is named therein as
mortgagee or beneficiary or has become mortgagee by virtue of endorsement of the
Mortgage Note secured by any such Mortgage or Deed of Trust) all subject to the
terms of the related Pooling and Servicing Agreement.
This appointment shall apply to the following enumerated transactions only:
1. The modification or re-recording of a Mortgage or Deed of Trust, where said
modification or re-recording is for the purpose of correcting the Mortgage or
Deed of Trust to conform same to the original intent of the parties thereto or
to correct title errors discovered after such title insurance was issued and
said modification or re-recording, in either instance, does not adversely affect
the lien of the Mortgage or Deed of Trust as insured.
2. The subordination of the lien of a Mortgage or Deed of Trust to an easement
in favor of a public utility company or a governmental agency or authority
thereunder with powers of eminent domain; this section shall include, without
limitation, the execution of partial satisfaction/release, partial reconveyances
or the execution of requests to trustees to accomplish same.
3. The conveyance of the properties to the mortgage insurer, or the closing of
the title to the property to be acquired as real estate owned, or conveyance of
title to real estate owned.
4. The completion of loan assumption agreements.
5. The full satisfaction/release of a Mortgage or Deed of Trust or full
reconveyance upon payment and discharge of all sums secured thereby, including,
without limitation, cancellation of the related Mortgage Note.
I-1
6. The assignment of any Mortgage or Deed of Trust and the related Mortgage
Note, in connection with the repurchase of the mortgage loan secured and
evidenced thereby.
7. The full assignment of a Mortgage or Deed of Trust upon payment and discharge
of all sums secured thereby in conjunction with the refinancing thereof,
including, without limitation, the assignment of the related Mortgage Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure, the taking of a
deed in lieu of foreclosure, or the completion of judicial or non-judicial
foreclosure or termination, cancellation or rescission of any such foreclosure,
including, without limitation, any and all of the following acts:
a) the substitution of trustee(s) serving under a Deed of Trust, in accordance
with state law and the Deed of Trust; b) the preparation and issuance of
statements of breach or non-performance; c) the preparation and filing of
notices of default and/or notices of sale; d) the cancellation/rescission of
notices of default and/or notices of sale; e) the taking of a deed in lieu of
foreclosure; and f) the preparation and execution of such other documents and
performance of such other actions as may be necessary under the terms of the
Mortgage, Deed of Trust or state law to expeditiously complete said transactions
in paragraphs 8(a) through 8(e) above.
9. The full assignment of a Mortgage or Deed of Trust upon sale of a loan
pursuant to a mortgage loan sale agreement for the sale of a loan or pool of
loans, including, without limitation, the assignment of the related Mortgage
Note.
The Undersigned gives said Attorney-in-Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney, each subject to the terms and conditions set forth in the
related Pooling and Servicing Agreement and in accordance with the standard of
care applicable to servicers in the Pooling and Servicing Agreement as fully as
the undersigned might or could do, and hereby does ratify and confirm to all
that said Attorney-in-Fact shall lawfully do or cause to be done by authority
hereof. This Limited Power of Attorney shall be effective as of [SERVICING
TRANSFER EFFECTIVE DATE].
Nothing contained herein shall (i) limit in any manner any indemnification
provided by Xxxxxx to the Owner under the Pooling and Servicing Agreement, or
(ii) be construed to xxxxx Xxxxxx the power to initiate or defend any suit,
litigation or proceeding in the name of the Undersigned except as specifically
provided for herein or under the Pooling and Servicing Agreement.
The Owner hereby agrees to indemnify and hold the Undersigned and its directors,
officers, employees and agents harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever incurred by
reason or result of or in connection with the exercise by Xxxxxx of the powers
granted to it hereunder. The foregoing indemnity shall survive the termination
of this Limited Power of Attorney and the Pooling and Servicing Agreement or the
earlier resignation or removal of the Undersigned under the Pooling and
Servicing Agreement.
I-2
Any third party without actual notice of fact to the contrary may rely upon the
exercise of the power granted under this Limited Power of Attorney; and may be
satisfied that this Limited Power of Attorney shall continue in full force and
effect and has not been revoked unless an instrument of revocation has been made
in writing by the undersigned, and such third party put on notice thereof. This
Limited Power of Attorney shall be in addition to and shall not revoke or in any
way limit the authority granted by any previous power of attorney executed by
the Undersigned.
IN WITNESS WHEREOF, ____________________ pursuant to the Pooling and Servicing
Agreement, has caused its corporate seal to be hereto affixed and these presents
to be signed and acknowledged in its name and behalf by ______________________,
its duly elected and authorized _________________________ this ___ day of
_________________, 2003.
By:_____________________________________
Name: ______________________
Title: ___________________________
Acknowledged and Agreed
Xxxxxx Loan Servicing LP
By:_________________________
Name:
Title:
I-3
EXHIBIT J
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Deutsche Bank National Trust Company
Re: Fremont Home Loan Trust 2003-3,
Asset-Backed Certificates Series 2003-3
---------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned Certificates,
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan that is subject to Section 4975 of the Internal Revenue Code of 1986, as
amended, nor are we acting on behalf of any such plan, (e) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with clause
(g) below), (f) we have not offered or sold any Certificates to, or solicited
offers to buy any Certificates from, any person, or otherwise approached or
negotiated with any person with respect thereto, or taken any other action which
would result in a violation of Section 5 of the Act, and (g) we will not sell,
transfer or otherwise dispose of any Certificates unless (1) such sale, transfer
or other disposition is made pursuant to an effective registration statement
under the Act or is exempt from such registration requirements, and if
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this Certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Certificate has executed and delivered to you a certificate
to substantially the same effect as this certificate, and (3) the purchaser or
transferee has otherwise complied with any conditions for transfer set forth in
the Pooling and Servicing Agreement.
Very truly yours,
[NAME OF TRANSFEREE]
By:_______________________________
Authorized Officer
J-1
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Re: Fremont Home Loan Trust 2003-3,
Asset-Backed Certificates Series 2003-3
---------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have had the
opportunity to ask questions of and receive answers from the Depositor
concerning the purchase of the Certificates and all matters relating thereto or
any additional information deemed necessary to our decision to purchase the
Certificates, (c) we are not an employee benefit plan that is subject to the
Employee Retirement Income Security Act of 1974, as amended, or a plan that is
subject to Section 4975 of the Internal Revenue Code of 1986, as amended, nor
are we acting on behalf of any such plan, (d) we have not, nor has anyone acting
on our behalf offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security to,
or solicited any offer to buy or accept a transfer, pledge or other disposition
of the Certificates, any interest in the Certificates or any other similar
security from, or otherwise approached or negotiated with respect to the
Certificates, any interest in the Certificates or any other similar security
with, any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Certificates under the Securities Act or
that would render the disposition of the Certificates a violation of Section 5
of the Securities Act or require registration pursuant thereto, nor will act,
nor has authorized or will authorize any person to act, in such manner with
respect to the Certificates, (e) we are a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act and have completed
either of the forms of certification to that effect attached hereto as Annex 1
or Annex 2. We are aware that the sale to us is being made in reliance on Rule
144A. We are acquiring the Certificates for our own account or for resale
pursuant to Rule 144A and further, understand that such Certificates may be
resold, pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the Securities Act.
Very truly yours,
[NAME OF TRANSFEREE]
By:________________________
Authorized Officer
J-2
ANNEX 1 TO EXHIBIT J
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $ 1 in securities (except for the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A and (ii) the
Buyer satisfies the criteria in the category marked below.
___________ CORPORATION, ETC. The Buyer is a corporation
(other than a bank, savings and loan association or similar
institution), Massachusetts or similar business trust,
partnership, or charitable organization described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended.
___________ BANK. The Buyer (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
___________ SAVINGS AND LOAN. The Buyer (a) is a savings and
loan association, building and loan association, cooperative
bank, homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
___________ BROKER-DEALER. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934.
--------
1 Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case,
Buyer must own and/or invest on a discretionary basis at least
$10,000,000 in securities.
J-3
___________ INSURANCE COMPANY. The Buyer is an insurance
company whose primary and predominant business activity is the
writing of insurance or the reinsuring of risks underwritten
by insurance companies and which is subject to supervision by
the insurance commissioner or a similar official or agency of
a State, territory or the District of Columbia.
___________ STATE OR LOCAL PLAN. The Buyer is a plan
established and maintained by a State, its political
subdivisions, or any agency or instrumentality of the State or
its political subdivisions, for the benefit of its employees.
___________ ERISA PLAN. The Buyer is an employee benefit plan
within the meaning of Title I of the Employee Retirement
Income Security Act of 1974.
___________ INVESTMENT ADVISOR. The Buyer is an investment
advisor registered under the Investment Advisors Act of 1940.
___________ SMALL BUSINESS INVESTMENT COMPANY. Buyer is a
small business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
___________ BUSINESS DEVELOPMENT COMPANY. Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
J-4
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
___________________________
Print Name of Buyer
By:________________________
Name:
Title:
Date:______________________
J-5
ANNEX 2 TO EXHIBIT J
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyers Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
___________ The Buyer owned $_________ in securities (other
than the excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
___________ The Buyer is part of a Family of Investment
Companies which owned in the aggregate $___________ in
securities (other than the excluded securities referred to
below) as of the end of the Buyer's most recent fiscal year
(such amount being calculated in accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
J-6
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
________________________________
Print Name of Buyer or Adviser
By:_____________________________
Name:
Title:
IF AN ADVISER:
________________________________
Print Name of Buyer
Date:___________________________
J-7
EXHIBIT K
AFFIDAVIT OF TRANSFER OF R CERTIFICATES
PURSUANT TO SECTION 5.02(d)
FREMONT HOME LOAN TRUST 2003-3
ASSET-BACKED CERTIFICATES, SERIES 2003-3
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of , the proposed Transferee of an
Ownership Interest in Class R[-X] Certificates (the "Certificate") issued
pursuant to the Pooling and Servicing Agreement, (the "Agreement"), relating to
the above-referenced Certificates, among Financial Asset Securities Corp., as
Depositor, Xxxxxx Loan Servicing LP, as Servicer (the "Servicer") and Deutsche
Bank National Trust Company, as Trustee (the "Trustee"). Capitalized terms used,
but not defined herein shall have the meanings ascribed to such terms in the
Agreement. The Transferee has authorized the undersigned to make this affidavit
on behalf of the Transferee.
2. The Transferee is, as of the date hereof and will be, as of the date
of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) to a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass- through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person).
K-1
5. The Transferee has reviewed the provisions of Section 5.02(d) of the
Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(d) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit K to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the
Certificate.
8. The Transferee's taxpayer identification number is _____________.
9. The Transferee is a U.S. Person as defined in Code Section
7701-(a)(30).
10. The Transferee is aware that the Certificate may be a "noneconomic
residual interest" within the meaning of proposed Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.
11. The Transferee is not an employee benefit plan that is subject to
ERISA or a plan that is subject to Section 4975 of the Code, nor is it acting on
behalf of such a plan.
K-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ___ day of __________, ___.
[NAME OF TRANSFEREE]
By:________________________
Name:
Title:
[Corporate Seal]
ATTEST:
__________________________
[Assistant] Secretary
Personally appeared before me the above-named , known or proved to me
to be the same person who executed the foregoing instrument and to be the of the
Transferee, and acknowledged that he executed the same as his free act and deed
and the free act and deed of the Transferee.
Subscribed and sworn before me this __ day of _______, ___.
________________________________________________
NOTARY PUBLIC
My Commission expires the ____ day of ____, ___.
K-3
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Re: Fremont Home Loan Trust 2003-3, Asset-Backed Certificates
Series 2003-3
---------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify
that (a) we understand that the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are being disposed by us in
a transaction that is exempt from the registration requirements of the Act, (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act, (c) to
the extent we are disposing of a Class [ ] Certificate, we have no knowledge the
Transferee is not a Permitted Transferee and (d) no purpose of the proposed
disposition of a Class [ ] Certificate is to impede the assessment or collection
of tax.
Very truly yours,
TRANSFEROR
By:________________________
Name:
Title:
L-1
EXHIBIT M
FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE
_____________, 20__
Financial Asset Securities Corp. Deutsche Bank National Trust Company
000 Xxxxxxxxx Xxxx 0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000 Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Re: Fremont Home Loan Trust 2003-3, Asset-Backed Certificates
Series 2003-3 Dear Sirs:
_______________________ (the "Transferee") intends to acquire
from _____________________ (the "Transferor") $____________ Initial Certificate
Principal Balance Fremont Home Loan Trust 2003-3, Asset-Backed Certificates
Series 2003-3, Class [C][P][R[-X]] (the "Certificates"), issued pursuant to a
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement") dated as
of September 1, 2003 among Financial Asset Securities Corp. as depositor (the
"Depositor"), Xxxxxx Loan Servicing LP as servicer (the "Servicer") and Deutsche
Bank National Trust Company as trustee (the "Trustee"). Capitalized terms used
herein and not otherwise defined shall have the meanings assigned thereto in the
Pooling and Servicing Agreement. The Transferee hereby certifies, represents and
warrants to, and covenants with the Depositor, the Trustee and the Servicer the
following:
The Certificates (i) are not being acquired by, and will not
be transferred to, any employee benefit plan within the meaning of section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
other retirement arrangement, including individual retirement accounts and
annuities, Xxxxx plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R.ss.2510.3-101,
and (iii) will not be transferred to any entity that is deemed to be investing
in plan assets within the meaning of the DOL regulation at 29 X.X.X.xx.
2510.3-101.
Very truly yours,
[Transferee]
By:_________________________
Name:
Title:
M-1
EXHIBIT N-1
FORM CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K
Re: Fremont Home Loan Trust, Series 2003-3
Asset Backed Certificates, Series 2003-3
I, [identify the certifying individual], certify that:
l. I have reviewed this annual report on Form 10-K, and all
reports on Form 8-K containing Distribution Date reports filed in respect of
periods included in the year covered by this annual report, of Financial Asset
Securities Corp. (the "Registrant");
2. Based on my knowledge, the information in these reports,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;
3. Based on my knowledge, the servicing information required
to be provided to the Trustee by the Servicer under the Pooling and Servicing
Agreement is included in these reports;
4. I am responsible for reviewing the activities performed by
the Servicer under the Pooling and Servicing Agreement and based upon the review
required under the Pooling and Servicing Agreement, and except as disclosed in
the report, the Servicer has fulfilled its obligations under the Pooling and
Servicing Agreement; and
5. I have disclosed to the Registrant's certified public
accountants all significant deficiencies relating to the Servicer's compliance
with the minimum servicing standards in accordance with a review conducted in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
similar standard as set forth in the Pooling and Servicing Agreement.
Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated
September 1, 2003 (the "Pooling and Servicing Agreement"), among the Registrant
as Depositor, Xxxxxx Loan Servicing L.P. as servicer and Deutsche Bank National
Trust Company as trustee.
FINANCIAL ASSET SECURITIES CORP.
By:_______________________________
Name:
Title:
Date:
N-1-1
EXHIBIT N-2
FORM CERTIFICATION TO BE
PROVIDED TO DEPOSITOR BY THE TRUSTEE
Re: Fremont Home Loan Trust 2003-3 (the "Trust")
Asset-Backed Certificates, Series 2003-3
I, [identify the certifying individual], a [title] of Deutsche
Bank National Trust Company, as Trustee of the Trust, hereby certify to
Financial Asset Securities Corp. (the "Depositor"), and its officers, directors
and affiliates, and with the knowledge and intent that they will rely upon this
certification, that:
1. I have reviewed the annual report on Form 10-K for the
fiscal year [___], and all reports on Form 8-K containing distribution reports
filed in respect of periods included in the year covered by that annual report,
of the Depositor relating to the above-referenced trust;
2. Based on my knowledge, the information in these
distribution reports prepared by the Trustee, taken as a whole, does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading as of the last day of the period
covered by that annual report; and
3. Based on my knowledge, the distribution information
required to be provided by the Trustee under the Pooling and Servicing Agreement
is included in these reports.
Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated
September 1, 2003 (the "Pooling and Servicing Agreement"), among the Depositor
as depositor, Xxxxxx Loan Servicing LP as servicer and Deutsche Bank National
Trust Company as trustee.
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Trustee
By:_________________________________
Name:
Title:
Date:
N-2-1
EXHIBIT N-3
FORM CERTIFICATION TO BE
PROVIDED TO DEPOSITOR BY THE SERVICER
Re: Fremont Home Loan Trust, Series 2003-3
Asset Backed Certificates, Series 2003-3
I, [identify the certifying individual], certify to Financial
Asset Securities Corp. (the "Depositor"), the Trustee and their respective
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:
1. I have reviewed the information provided to the Trustee by
the Servicer pursuant to the Pooling and Servicing Agreement and information
correctly derived by the Trustee from such information and included in the
annual report on Form 10-K for the fiscal year [___] and on all reports on Form
8-K filed in respect of periods included in the year covered by that annual
report, of the Depositor relating to the Trust Fund (the "Servicing
Information");
2. Based on my knowledge, the Servicing Information in these
reports, taken as a whole, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading
as of the last day of the period covered by that annual report;
3. Based on my knowledge, the Servicing Information is
correct;
4. I am responsible for reviewing the activities performed by
the Servicer under the Pooling and Servicing Agreement and based upon the review
required under the Pooling and Servicing Agreement, and except as disclosed to
the Depositor and the Trustee, the Servicer has fulfilled its obligations under
the Pooling and Servicing Agreement; and
5. I have disclosed to the Servicer's certified public
accountants and the Depositor all significant deficiencies relating to the
Servicer's compliance with the minimum servicing standards in accordance with a
review conducted in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or similar standard as set forth in the Pooling and Servicing
Agreement.
N-3-1
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated September 1, 2003
(the "Pooling and Servicing Agreement"), among the Depositor, Xxxxxx Loan
Servicing L.P. as servicer and Deutsche Bank National Trust Company as trustee.
XXXXXX LOAN SERVICING L.P.
By:________________________
Name:
Title:
Date:
N-3-2
EXHIBIT O
[RESERVED]
O-1
EXHIBIT P
OFFICER'S CERTIFICATE
REGARDING ANNUAL STATEMENT OF COMPLIANCE
___________________ Trust, Series 200_-___
_______________ Pass-Through Certificates
I, _____________________, hereby certify that I am a duly
appointed __________________________ of _______________________________ (the
"[Master Servicer]"), and further certify as follows:
1. This certification is being made pursuant to the terms of
the Pooling and Servicing Agreement, dated as of ____________, _____ (the
"Agreement"), among ______________________, as depositor, the [Master Servicer],
as [master servicer] and ________________, as trustee.
2. I have reviewed the activities of the [Master Servicer]
during the preceding year and the [Master Servicer's] performance under the
Agreement and to the best of my knowledge, based on such review, the [Master
Servicer] has fulfilled all of its obligations under the Agreement throughout
the year.
Capitalized terms not otherwise defined herein have the
meanings set forth in the Agreements.
Dated: _________________
P-1
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of _____________.
By: ______________________
Name:
Title:
I, _________________________, a (an) __________________ of the
[Master Servicer], hereby certify that _________________ is a duly elected,
qualified, and acting _______________________ of the [Master Servicer] and that
the signature appearing above is his/her genuine signature.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of ______________.
By: ______________________
Name:
Title:
P-2
SCHEDULE I
PREPAYMENT CHARGE SCHEDULE
Available Upon Request
