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FINANCIAL ASSET SECURITIES CORP.,
Depositor
OPTION ONE MORTGAGE CORPORATION,
Master Servicer
and
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A.,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 2001
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First Franklin Mortgage Loan Trust 2001-FF2
Asset-Backed Certificates, Series 2001-FF2
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms...................................................................................3
SECTION 1.02. Accounting.....................................................................................44
SECTION 1.03. Allocation of Certain Interest Shortfalls......................................................44
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans...................................................................46
SECTION 2.02. Acceptance by Trustee..........................................................................48
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by Option One.....................................49
SECTION 2.04. Intentionally Omitted..........................................................................52
SECTION 2.05. Representations, Warranties and Covenants of the Master Servicer...............................52
SECTION 2.06. Representations and Warranties of the Depositor................................................54
SECTION 2.07. Issuance of Certificates.......................................................................56
SECTION 2.08. [Reserved].....................................................................................56
SECTION 2.09. Conveyance of REMIC Regular Interests and Acceptance of REMIC
1 by the Trustee; Issuance of Certificates.....................................................56
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Master Servicer to Act as Master Servicer......................................................57
SECTION 3.02. Sub-Servicing Agreements Between Master Servicer and Sub-
Servicers......................................................................................59
SECTION 3.03. Successor Sub-Servicers........................................................................60
SECTION 3.04. Liability of the Master Servicer...............................................................60
SECTION 3.05. No Contractual Relationship Between Sub-Servicers and the Trustee
or Certificateholders..........................................................................61
SECTION 3.06. Assumption or Termination of Sub-Servicing Agreements by
Trustee61........................................................................................
SECTION 3.07. Collection of Certain Mortgage Loan Payments...................................................61
SECTION 3.08. Sub-Servicing Accounts.........................................................................62
SECTION 3.09. Collection of Taxes, Assessments and Similar Items; Servicing
Accounts.......................................................................................62
SECTION 3.10. Collection Account and Distribution Account....................................................63
SECTION 3.11. Withdrawals from the Collection Account and Distribution
i
Account........................................................................................66
SECTION 3.12. Investment of Funds in the Collection Account, the Distribution
Account and the Dividend Account...............................................................68
SECTION 3.13. [Reserved].....................................................................................69
SECTION 3.14. Maintenance of Hazard Insurance and Errors and Omissions and
Fidelity Coverage..............................................................................69
SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption Agreements......................................70
SECTION 3.16. Realization Upon Defaulted Mortgage Loans......................................................71
SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files................................................74
SECTION 3.18. Servicing Compensation.........................................................................75
SECTION 3.19. Reports to the Trustee; Collection Account Statements..........................................76
SECTION 3.20. Statement as to Compliance.....................................................................76
SECTION 3.21. Independent Public Accountants' Servicing Report...............................................76
SECTION 3.22. Access to Certain Documentation; Filing of Reports by Trustee..................................77
SECTION 3.23. Title, Management and Disposition of REO Property..............................................77
SECTION 3.24. Obligations of the Master Servicer in Respect of Prepayment Interest
Shortfalls.....................................................................................81
SECTION 3.25. [Reserved].....................................................................................81
SECTION 3.26. Obligations of the Master Servicer in Respect of Mortgage Rates and
Monthly Payments...............................................................................81
SECTION 3.27. Solicitations..................................................................................81
SECTION 3.28. Reserve Fund...................................................................................82
SECTION 3.29. Advance Facility...............................................................................83
SECTION 3.30. PMI Policy; Claims Under the PMI Policy........................................................84
SECTION 3.31. Dividend Account...............................................................................84
ARTICLE IV
FLOW OF FUNDS
SECTION 4.01. Distributions..................................................................................86
SECTION 4.02. Reserved.......................................................................................91
SECTION 4.03. Statements.....................................................................................91
SECTION 4.04. Remittance Reports; Advances...................................................................94
SECTION 4.05. [Reserved].....................................................................................96
SECTION 4.06. [Reserved].....................................................................................96
SECTION 4.07. Distributions on the REMIC Regular Interests...................................................96
SECTION 4.08. Allocation of Realized Losses..................................................................97
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates...............................................................................99
SECTION 5.02. Registration of Transfer and Exchange of Certificates..........................................99
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.............................................104
SECTION 5.04. Persons Deemed Owners.........................................................................104
SECTION 5.05. Appointment of Paying Agent...................................................................104
ii
ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
SECTION 6.01. Liability of the Master Servicer and the Depositor............................................106
SECTION 6.02. Merger or Consolidation of, or Assumption of the Obligations of, the
Master Servicer or the Depositor..............................................................106
SECTION 6.03. Limitation on Liability of the Master Servicer and Others.....................................106
SECTION 6.04. Master Servicer Not to Resign.................................................................107
SECTION 6.05. Delegation of Duties..........................................................................107
SECTION 6.06. Reserved......................................................................................108
SECTION 6.07. Inspection....................................................................................108
ARTICLE VII
DEFAULT
SECTION 7.01. Master Servicer Events of Termination.........................................................109
SECTION 7.02. Trustee to Act; Appointment of Successor......................................................110
SECTION 7.03. Waiver of Defaults............................................................................111
SECTION 7.04. Notification to Certificateholders............................................................112
SECTION 7.05. Survivability of Master Servicer Liabilities..................................................112
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Duties of Trustee.............................................................................113
SECTION 8.02. Certain Matters Affecting the Trustee.........................................................114
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.........................................115
SECTION 8.04. Trustee May Own Certificates..................................................................116
SECTION 8.05. Trustee Fee and Expenses......................................................................116
SECTION 8.06. Eligibility Requirements for Trustee..........................................................117
SECTION 8.07. Resignation or Removal of Trustee.............................................................117
SECTION 8.08. Successor Trustee.............................................................................118
SECTION 8.09. Merger or Consolidation of Trustee............................................................118
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.................................................119
SECTION 8.11. Limitation of Liability.......................................................................120
SECTION 8.12. Trustee May Enforce Claims Without Possession of Certificates.................................120
SECTION 8.13. Suits for Enforcement.........................................................................121
SECTION 8.14. Waiver of Bond Requirement....................................................................121
SECTION 8.15. Waiver of Inventory, Accounting and Appraisal Requirement.....................................121
ARTICLE IX
REMIC ADMINISTRATION
SECTION 9.01. REMIC Administration..........................................................................122
SECTION 9.02. Prohibited Transactions and Activities........................................................123
iii
SECTION 9.03. Indemnification with Respect to Certain Taxes and Loss of REMIC
Status........................................................................................124
ARTICLE X
TERMINATION
SECTION 10.01. Termination..........................................................................126
SECTION 10.02. Additional Termination Requirements..................................................127
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment............................................................................129
SECTION 11.02. Recordation of Agreement; Counterparts...............................................130
SECTION 11.03. Limitation on Rights of Certificateholders...........................................130
SECTION 11.04. Governing Law; Jurisdiction..........................................................131
SECTION 11.05. Notices..............................................................................131
SECTION 11.06. Severability of Provisions...........................................................132
SECTION 11.07. Article and Section References.......................................................132
SECTION 11.08. Notice to the Rating Agencies........................................................132
SECTION 11.09. Further Assurances...................................................................133
SECTION 11.10. Benefits of Agreement................................................................133
SECTION 11.11 Acts of Certificateholders....................................................................133
iv
Exhibits:
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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 C Certificates
Exhibit A-7 Form of Class P Certificates
Exhibit A-8 Form of Class R Certificates
Exhibit A-9 Form of Dividend Account Certificate
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 Loss Mitigation Procedures
Exhibit H Form of Lost Note Affidavit
Exhibit I [Reserved]
Exhibit J Form of Investment Letter
Exhibit K Form of Class R Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M Form of Liquidation Report
Schedule I Prepayment Charge Schedule
Schedule II PMI Mortgage Loans
v
This Pooling and Servicing Agreement is dated as of November
1, 2001 (the "Agreement"), among FINANCIAL ASSET SECURITIES CORP., as depositor
(the "Depositor"), OPTION ONE MORTGAGE CORPORATION, as master servicer (the
"Master Servicer") and ▇▇▇▇▇ FARGO BANK MINNESOTA, N.A., 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 eight 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 P Certificates,
(vii) the Class C Certificates and (viii) the Class R Certificates.
REMIC 1
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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 Reserve Fund and the Dividend Account) 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)
----------- ----------------- ----------------- ----------------
LT1AA Variable(2) $207,127,760.84 November 25, 2031
LT1A1 Variable(2) $ 1,902,190.00 November 25, 2031
LT1M1 Variable(2) $ 89,824.74 November 25, 2031
LT1M2 Variable(2) $ 68,689.80 November 25, 2031
LT1M3 Variable(2) $ 47,554.86 November 25, 2031
LT1ZZ Variable(2) $ 2,118,837.76 November 25, 2031
LT1P Variable(2) $ 50.00 November 25, 2031
LT2AA Variable(2) $207,127,882.36 November 25, 2031
LT2A2 Variable(2) $ 1,902,190.00 November 25, 2031
LT2M1 Variable(2) $ 89,825.26 November 25, 2031
LT2M2 Variable(2) $ 68,690.20 November 25, 2031
LT2M3 Variable(2) $ 47,555.14 November 25, 2031
LT2ZZ Variable(2) $ 2,118,839.04 November 25, 2031
LT2P Variable(2) $ 50.00 November 25, 2031
-------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each REMIC 1
Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC 1
Pass-Through Rate" herein.
REMIC 2
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As provided herein, the Trustee shall make an election to
treat the segregated pool of assets consisting of the REMIC 1 Regular Interests
as a REMIC for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC 2." The Class R-2 Interest represents the sole
class of "residual interests" in REMIC 2 for purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for each Class of Certificates that represents one or more of the "regular
interests" in REMIC 2 created hereunder:
Original Class Certificate Assumed Final
Class Designation Principal Balance Pass-Through Rate Maturity Date(1)
----------------- ----------------- ----------------- ----------------
Class A-1.................. $190,219,000.00 Variable(2) November 25, 2031
Class A-2.................. $190,219,000.00 Variable(2) November 25, 2031
Class M-1.................. $ 17,965,000.00 Variable(2) November 25, 2031
Class M-2.................. $ 13,738,000.00 Variable(2) November 25, 2031
Class M-3.................. $ 9,511,000.00 Variable(2) November 25, 2031
Class C.................... $ 1,057,840.31(3) Variable(2) November 25, 2031
Class P.................... $ 100.00 N/A(4) November 25, 2031
---------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each Class of
Certificates that represents one or more of the "regular interests" in
REMIC 2.
(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 their Class
Certificate Principal Balance.
(4) The Class P Certificates will not accrue interest.
2
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement or in the Preliminary
Statement, the following words and phrases, unless the context otherwise
requires, shall have the meanings specified in this Article. Unless otherwise
specified, all calculations in respect of interest on the Class A Certificates
and the Mezzanine Certificates shall be made on the basis of the actual number
of days elapsed and a 360- day year and all other calculations of interest
described herein shall be made on the basis of a 360- day year consisting of
twelve 30-day months. The Class P Certificates and the Class R Certificates are
not entitled to distributions in respect of interest and, accordingly, will not
accrue interest.
"1933 Act": The Securities Act of 1933, as amended.
"Account": Either of the Collection Account and Distribution
Account.
"Accrual Period": With respect to the Class A Certificates and
the Mezzanine Certificates and each Distribution Date, the period commencing on
the preceding Distribution Date (or in the case of the first such Accrual
Period, commencing on the Closing Date) and ending on the day preceding the
current Distribution Date. With respect to the Class C Certificates and each
Distribution Date, the calendar month prior to the month of such Distribution
Date.
"Adjustable-Rate Mortgage Loan": A 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, (ii) the
Servicing Fee Rate, (iii) the PMI Insurer Fee Rate, if applicable and (iv) the
Dividend Rate, if applicable.
"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, (ii) the
Servicing Fee Rate, (iii) the PMI Insurer Fee Rate, if applicable and (iv) the
Dividend Rate, if applicable.
"Adjustment Date": With respect to each Adjustable-Rate
Mortgage Loan, each adjustment date, on which the Mortgage Rate of such Mortgage
Loan changes pursuant to the related Mortgage Note. The first Adjustment Date
following the Cut-off Date as to each Adjustable-Rate Mortgage Loan is set forth
in the Mortgage Loan Schedule.
3
"Advance": As to any Mortgage Loan or REO Property, any
advance made by the Master Servicer in respect of any Distribution Date pursuant
to Section 4.04.
"Advancing Person": As defined in Section 3.29 hereof.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise and "controlling" and "controlled"
shall have meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
"Allocated Realized Loss Amount": With respect to any
Distribution Date and any Class of Mezzanine Certificates, the sum of (i) any
Realized Losses allocated to such Class of Certificates on such Distribution
Date and (ii) the amount of any Allocated Realized Loss Amount for such Class of
Certificates remaining unpaid from the previous Distribution Date.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect or
record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of
Certificates, the date set forth as such in the Preliminary Statement.
"Available Funds": With respect to any Distribution Date, an
amount equal to the excess of (i) the sum of (a) the aggregate of the related
Monthly Payments received on the Mortgage Loans on or prior to the related
Determination Date (net of the Dividend Portion of such Monthly Payment in the
case of each Dividend Mortgage Loan), (b) Net Liquidation Proceeds, Insurance
Proceeds, Principal Prepayments 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 Master Servicer in respect of related
Prepayment Interest Shortfalls for such Distribution Date, (e) the aggregate of
any Advances made by the Master 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
Master Servicer in connection with the full or partial prepayment of any of the
Mortgage Loans and any Master Servicer Prepayment Charge Payment Amount over
(ii) the sum of (a) amounts reimbursable or payable to the Master 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
4
by the Master Servicer in connection with the full or partial prepayment of any
of the Mortgage Loans and any Master Servicer Prepayment Charge Payment Amount,
(d) the Trustee Fee payable from the Distribution Account pursuant to Section
8.05, (e) the PMI Insurer Fee payable from the Distribution Account 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.
"Basic Principal Distribution Amount": With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for both
Loan Groups for such Distribution Date over (ii) the Overcollateralization
Release Amount, if any, for such Distribution Date.
"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 Maryland, the State of California, the State of
Minnesota, the State of Pennsylvania, or in the city in which the Corporate
Trust Office of the Trustee is located are authorized or obligated by law or
executive order to be closed.
"Certificate": Any Regular Certificate or Class R Certificate.
"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 Class R
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 Master Servicer or any Affiliate thereof shall be deemed
not to be outstanding and the Voting Rights to which it is entitled shall not be
taken into account in determining whether the requisite percentage of Voting
Rights necessary to effect any such consent has been obtained, except as
otherwise provided in Section 11.01. The Trustee may conclusively rely upon a
certificate of the Depositor or the Master Servicer in determining whether a
Certificate is held by an Affiliate thereof. All references herein to "Holders"
or "Certificateholders" shall reflect the rights of Certificate Owners
5
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 (A) on or prior to the Optional
Termination Date, 0.31% per annum and (B) after the Optional Termination Date,
0.62% per annum. With respect to the Class A-2 Certificates on each Distribution
Date (A) on or prior to the Optional Termination Date, 0.31% per annum and (B)
after the Optional Termination Date, 0.62% per annum. With respect to the Class
M-1 Certificates on each Distribution Date (A) on or prior to the Optional
Termination Date, 0.80% per annum and (B) after the Optional Termination Date,
1.20% per annum. With respect to the Class M-2 Certificates on each Distribution
Date (A) on or prior to the Optional Termination Date, 1.40% per annum and (B)
after the Optional Termination Date, 2.10% per annum. With respect to the Class
M-3 Certificates on each Distribution Date (A) on or prior to the Optional
Termination Date, 1.78% per annum and (B) after the Optional Termination Date,
2.67% per annum.
"Certificate Owner": With respect to each Book-Entry
Certificate, any beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of
Regular Certificates (other than the Class C Certificates) immediately prior to
any Distribution Date, will be equal to the Initial Certificate Principal
Balance thereof reduced by the sum of all amounts actually distributed in
respect of principal of such Class and, in the case of a Mezzanine Certificate,
Realized Losses allocated thereto on all prior Distribution Dates. With respect
to the Class C Certificates as of any date of determination, an amount equal to
the excess, if any, of (A) the then aggregate Uncertificated Principal Balances
of the REMIC 1 Regular Interests over (B) the then aggregate Certificate
Principal Balances of the Class A Certificates, the Mezzanine Certificates and
the Class P Certificates then outstanding.
"Certificate Register" and "Certificate Registrar": The
register maintained and registrar appointed pursuant to Section 5.02 hereof.
"Class": Collectively, Certificates which have the same
priority of payment and bear the same class designation and the form of which is
identical except for variation in the Percentage Interest evidenced thereby.
"Class A Certificates": Any Class A-1 Certificate or Class A-2
Certificate.
"Class A-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 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
6
Amount for such Distribution Date, and the denominator of which is (ii) the
Principal Remittance Amount for such Distribution Date.
"Class A-1 Principal Distribution Amount": With respect to
any Distribution Date, an amount equal to the Class A Principal Distribution
Amount multiplied by the Class A-1 Allocation Percentage.
"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 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.
"Class A-2 Principal Distribution Amount": With respect to any
Distribution Date, an amount equal to the Class A Principal Distribution Amount
multiplied by the Class A-2 Allocation Percentage.
"Class A Certificateholder": Any Holder of a Class A
Certificate.
"Class A Principal Distribution Amount": The excess of (x) the
Certificate Principal Balance of the Class A Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 80.00% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the Overcollateralization Floor.
"Class C Certificate": 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-6, 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 Certificate Principal Balance of the Class A Certificates
(after taking into account the payment of
7
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)
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 Overcollateralization Floor.
"Class M-2 Certificate": Any one of the Class M-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-4, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 2.
"Class M-2 Principal Distribution Amount": The excess of (x)
the sum of (i) the Certificate Principal Balance of the Class A Certificates
(after taking into account the payment of the Class A Principal Distribution
Amount on such Distribution Date), (ii) the Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the payment of the Class M-1
Principal Distribution Amount on such Distribution Date) and (iii) the
Certificate Principal Balance of the Class M-2 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 95.00% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the Overcollateralization Floor.
"Class M-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 Certificate Principal Balance of the Class A Certificates
(after taking into account the payment of the Class A Principal Distribution
Amount on such Distribution Date), (ii) the Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the payment of the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2 Certificates (after taking into account the
payment of the Class M-2 Principal Distribution Amount on such Distribution
Date) and (iv) the Certificate Principal Balance of the Class M-3 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 99.50% 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
8
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the Overcollateralization Floor.
"Class P Certificate": Any one of the Class P Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-7, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 2.
"Class 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-8 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.
"Close of Business": As used herein, with respect to any
Business Day, 5:00 p.m. (New York time).
"Closing Date": November 19, 2001.
"Code": The Internal Revenue Code of 1986.
"Collection Account": The account or accounts created and
maintained by the Master Servicer pursuant to Section 3.10(a), which shall be
entitled "▇▇▇▇▇ Fargo Bank Minnesota, N.A., as Trustee, in trust for registered
Holders of First Franklin Mortgage Loan Trust 2001-FF2, Asset- Backed
Certificates, Series 2001-FF2," 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 Sixth and Marquette,
Minneapolis, Minnesota 55479-0113, Attention: First Franklin Series 2001-FF2, or
at such other address as the Trustee may designate from time to time by notice
to the Certificateholders, the Depositor, the Master Servicer and the Seller.
"Corresponding Certificate": With respect to (i) REMIC 1
Regular Interest LT1A1, (ii) REMIC 1 Regular Interest LT2A2, (iii) REMIC 1
Regular Interest LT1M1 and REMIC 1 Regular Interest LT2M1, (iv) REMIC 1 Regular
Interest LT1M2 and REMIC 1 Regular Interest LT2M2, (v) REMIC 1 Regular Interest
LT1M3 and REMIC 1 Regular Interest LT2M3 and (vi) REMIC 1 Regular Interest LT1P
and REMIC ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, (▇) the Class A-1 Certificates, (ii) Class
9
A-2 Certificates, (iii) Class M-1 Certificates, (iv) Class M-2 Certificates, (v)
Class M-3 Certificates and (vi) Class P Certificates, respectively.
"Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the sum of
the aggregate Certificate Principal Balances of the Mezzanine Certificates and
the Class C Certificates, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans, calculated prior to taking into account
payments of principal on the Mortgage Loans and distribution of the Group I
Principal Distribution Amount and the Group II Principal Distribution Amount to
the Holders of the Certificates then entitled to distributions of principal on
such Distribution Date.
"Custodian": ▇▇▇▇▇ Fargo Bank Minnesota, N.A., 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) November 1, 2001.
"Cut-off Date Aggregate Principal Balance": With respect to
each Loan Group, the aggregate of the Cut-off Date Principal Balances of the
Mortgage Loans in such Loan Group.
"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 Delinquent 60 days or more by (y) the aggregate Principal Balance of the
Mortgage Loans, in each case, as of the last day of the previous calendar month.
10
"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.
"Depository Participant": A broker, dealer, bank or other
financial institution or other person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to any Distribution Date,
the 15th day of the calendar month in which such Distribution Date occurs or, if
such 15th day is not a Business Day, the Business Day immediately preceding such
15th day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by the REMIC other than
through an Independent Contractor; provided, however, that the Trustee (or the
Master Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because the Trustee (or the Master Servicer on
behalf of the Trustee) establishes rental terms, chooses tenants, enters into or
renews leases, deals with taxes and insurance, or makes decisions as to repairs
or capital expenditures with respect to such REO Property.
"Disqualified Organization": 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, (iv) an "electing large partnership" within the meaning of Section 775 of
the Code or (v) any other Person so designated by the Trustee based upon an
Opinion of Counsel provided by nationally recognized counsel to the Trustee that
the holding of an ownership interest in a Class R Certificate by such Person may
cause the Trust Fund or any Person having an ownership interest in any Class of
Certificates (other than such Person) to incur liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the
11
transfer of an ownership interest in the Class R Certificate to such Person. A
corporation will not be treated as an instrumentality of the United States or of
any state or political subdivision thereof, if all of its activities are subject
to 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, ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as Trustee, in
trust for the registered Certificateholders of First Franklin Mortgage Loan
Trust 2001-FF2, Asset-Backed Certificates, Series 2001-FF2" 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 December 2001.
"Dividend Account": The trust account or accounts created and
maintained by the Master Servicer pursuant to Section 3.31 which shall be
entitled "Dividend Account, ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as Trustee, in
trust for the registered holder of the First Franklin Mortgage Loan Trust
2001-FF2, Dividend Account Certificate" and which must be an Eligible Account.
"Dividend Account Certificate": A definitive physical
certificate issued pursuant to Section 3.31 and evidencing all of the right,
title and interest in and to any amounts that may be released from the Dividend
Account pursuant to Section 3.31, other than any amounts released from the
Dividend Account for payment to Mortgagors under Dividend Mortgage Loans.
"Dividend Mortgage Loan": Each Mortgage Loan identified as
such on the Mortgage Loan Schedule and which contains a provision entitling the
Mortgagor thereunder to annual refunds, at the end of each of the first four
years of the life of such Mortgage Loan, of a portion of the interest paid by
such mortgagor during the preceding twelve months, if the conditions precedent
to the entitlement to such refund as specified in the related Mortgage Note have
been met.
"Dividend Portion": With respect to each Dividend Mortgage
Loan and each Monthly Payment due thereunder during the first four years of the
life of such Mortgage Loan, an amount equal to interest at the Dividend Rate on
the same principal balance and for the same accrual period as is applicable to
the calculation of the interest portion of such Monthly Payment.
"Dividend Rate": With respect to each Dividend Mortgage Loan
and each Monthly Payment due thereunder during the first four years of the life
of such Mortgage Loan, the dividend rate specified in the related Mortgage Note
applicable to the calculation of the Dividend Portion of such Monthly Payment to
be refunded to the related Mortgagor if the conditions precedent to the
entitlement to such refund as specified in the related Mortgage Note have been
met.
"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
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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 ▇▇▇▇▇'▇ (or comparable
ratings if S&P, Fitch and ▇▇▇▇▇'▇ are not the Rating Agencies) at the time any
amounts are held on deposit therein, (ii) an account or accounts the deposits in
which are fully insured by the FDIC (to the limits established by such
corporation), the uninsured deposits in which account are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the Trustee and to each
Rating Agency, the Certificateholders will have a claim with respect to the
funds in such account or a perfected first priority security interest against
such collateral (which shall be limited to Permitted Investments) securing such
funds that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, (iii) a trust
account or accounts maintained with the trust department of a federal or state
chartered depository institution, national banking association or trust company
acting in its fiduciary capacity or (iv) an account otherwise acceptable to each
Rating Agency without reduction or withdrawal of their then current ratings of
the Certificates as evidenced by a letter from each Rating Agency to the
Trustee. Eligible Accounts may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"Escrow Payments": The amounts constituting ground rents,
taxes, assessments, water rates, fire and hazard insurance premiums and other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant to
any Mortgage Loan.
"Excess Overcollateralized Amount": With respect to the Class
A Certificates and the Mezzanine Certificates and any Distribution Date, the
excess, if any, of (i) the Overcollateralized Amount for such Distribution Date,
assuming that 100% of the Principal Remittance Amount is applied as a principal
payment on such Distribution Date over (ii) the Overcollateralization Target
Amount for such Distribution Date.
"Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (x) the Monthly Interest Distributable Amount
payable on the Class C Certificates on such Distribution Date as 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.
"▇▇▇▇▇▇ Mae": Federal National Mortgage Association or any
successor thereto.
13
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Seller or the Master Servicer pursuant to or as contemplated by
Section 2.03 or 10.01), a determination made by the Master Servicer that all
Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which
the Master Servicer, in its reasonable good faith judgment, expects to be
finally recoverable in respect thereof have been so recovered. The Master
Servicer shall maintain records, prepared by a Servicing Officer, of each Final
Recovery Determination made thereby.
"Fitch": Fitch, Inc., or its successor in interest.
"Fixed-Rate Mortgage Loan": A first lien Mortgage Loan which
provides for a fixed Mortgage Rate payable with respect thereto. The Fixed-Rate
Mortgage Loans are identified as such on the Mortgage Loan Schedule.
"Formula Rate": For any Distribution Date and the Class A
Certificates and the Mezzanine Certificates, the lesser of (i) LIBOR plus the
related Certificate Margin and (ii) the related Maximum Cap Rate.
▇▇▇▇▇▇▇ 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 Basic Principal Distribution Amount": With respect to
any Distribution Date, the Basic Principal Distribution Amount for such
Distribution Date multiplied by the Class ▇- ▇ 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 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 LT1A1, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest LT1M3 and REMIC 1 Regular Interest
LT1ZZ, with the rate on REMIC 1 Regular Interest LT1A1 subject to a cap equal to
the lesser of (i) LIBOR plus the Certificate Margin of the Class A-1
Certificates and (ii) the related Maximum Cap Rate for the purpose of this
calculation; with the rate on REMIC 1 Regular Interest LT1M1 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; with the rate on REMIC 1 Regular Interest LT1M2 subject to a cap
equal to the lesser of (i) LIBOR plus the
14
Certificate Margin of the Class M-2 Certificates and (ii) the related Maximum
Cap Rate for the purpose of this calculation; with the rate on REMIC 1 Regular
Interest LT1M3 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 and with the rate on REMIC 1
Regular Interest LT1ZZ subject to a cap of zero for the purpose of this
calculation.
"Group I Mortgage Loan": A Mortgage Loan with a principal
balance that conforms to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ 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) the Extra Principal Distribution
Amount for such Distribution Date multiplied by the Class A-1 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 Master 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 Master
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 Basic Principal Distribution Amount": With respect
to any Distribution Date, the Basic Principal Distribution Amount for such
Distribution Date multiplied by the Class ▇- ▇ 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 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 LT2A2, REMIC 1 Regular Interest LT2M1, REMIC 1 Regular
Interest LT2M2, REMIC 1 Regular Interest LT2M3 and REMIC 1 Regular Interest
LT2ZZ, with the rate on REMIC 1 Regular Interest LT2A2 subject to a cap equal to
the lesser of (i) LIBOR plus the Certificate Margin of the Class A-2
Certificates and (ii) the related Maximum Cap Rate for the purpose of this
calculation; with the rate on REMIC 1 Regular Interest LT2M1 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; with the rate on REMIC 1 Regular Interest LT2M2 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
15
purpose of this calculation; with the rate on REMIC 1 Regular Interest LT2M3
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 and with the rate on REMIC 1 Regular Interest LT2ZZ subject
to a cap of zero for the purpose of this calculation.
"Group II Mortgage Loan": A Mortgage Loan with a principal
balance that may or may not conform to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac guidelines.
"Group II Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group II Basic Principal Distribution
Amount for such Distribution Date and (ii) the Extra Principal Distribution
Amount for such Distribution Date multiplied by the Class A-2 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 Master 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 Master
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.
"Independent": When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Depositor, the Master
Servicer and their respective Affiliates, (b) does not have any direct financial
interest in or any material indirect financial interest in the Depositor or the
Master Servicer or any Affiliate thereof, and (c) is not connected with the
Depositor or the Master Servicer or any Affiliate thereof as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions; provided, however, that a Person shall not fail to be
Independent of the Depositor or the Master Servicer or any Affiliate thereof
merely because such Person is the beneficial owner of 1% or less of any class of
securities issued by the Depositor or the Master Servicer or any Affiliate
thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than
the Master Servicer) that would be an "independent contractor" with respect to
any of the REMICs created hereunder within the meaning of Section 856(d)(3) of
the Code if such REMIC were a real estate investment trust (except that the
ownership tests set forth in that section shall be considered to be met by any
Person that owns, directly or indirectly, 35% or more of any Class of
Certificates), so long as each such REMIC does not receive or derive any income
from such Person and provided that the relationship between such Person and such
REMIC is at arm's length, all within the meaning of Treasury Regulation Section
1.856-4(b)(5), or (ii) any other Person (including the Master Servicer) if the
Trustee has received an Opinion of Counsel to the effect that the taking of any
action in respect of any REO Property by such Person, subject to any conditions
therein specified, that is otherwise
16
herein contemplated to be taken by an Independent Contractor will not cause such
REO Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause any income
realized in respect of such REO Property to fail to qualify as Rents from Real
Property.
"Index": With respect to each Adjustable-Rate Mortgage Loan
and with respect to each related Adjustment Date, the index as specified in the
related Mortgage Note.
"Initial Certificate Principal Balance": With respect to any
Regular Certificate, the amount designated "Initial Certificate Principal
Balance" on the face thereof.
"Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan (including the PMI
Policy), to the extent such proceeds 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 Master Servicer would follow in servicing mortgage loans
held for its own account, subject to the terms and conditions of the related
Mortgage Note and Mortgage.
"Interest Determination Date": With respect to the Class A
Certificates and the Mezzanine Certificates and each Accrual Period, the second
LIBOR Business Day preceding the commencement of such Accrual Period.
"Late Collections": With respect to any Mortgage Loan, all
amounts received subsequent to the Determination Date immediately following any
related Due Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late payments or
collections of principal and/or interest due (without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but delinquent on a
contractual basis for such Due Period and not previously recovered.
"LIBOR": With respect to each Accrual Period, the rate
determined by the Trustee on the related Interest Determination Date on the
basis of the London interbank offered rate for one-month United States dollar
deposits, as such rate appears on the Telerate Page 3750, as of 11:00 a.m.
(London time) on such Interest Determination Date. If such rate does not appear
on Telerate Page 3750, the rate for such Interest Determination Date will be
determined on the basis of the offered rates of the Reference Banks for
one-month United States dollar deposits, as of 11:00 a.m. (London time) on such
Interest Determination Date. The Trustee will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. On
such Interest Determination Date, LIBOR for the related Accrual Period will be
established by the Trustee as follows:
(i) If on such Interest Determination Date two or more
Reference Banks provide such offered quotations, LIBOR for the related
Accrual Period shall be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole multiple of 1/16 of
1%); and
17
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, LIBOR for the related
Accrual Period shall be the higher of (i) LIBOR as determined on the
previous Interest Determination Date and (ii) the Reserve Interest
Rate.
"LIBOR Business Day": Any day on which banks in London,
England and The City of New York are open and conducting transactions in foreign
currency and exchange.
"Liquidated Mortgage Loan": As to any Distribution Date, any
Mortgage Loan in respect of which the Master Servicer has determined, in
accordance with the servicing procedures specified herein, as of the end of the
related Prepayment Period, that all Liquidation Proceeds which it expects to
recover with respect to the liquidation of the Mortgage Loan or disposition of
the related REO Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full, (ii) a Final
Recovery Determination is made as to such Mortgage Loan or (iii) such Mortgage
Loan is removed from the Trust Fund by reason of its being purchased, sold or
replaced pursuant to or as contemplated by Section 2.03 or Section 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 Master Servicer in connection with (i) the taking of all or a
part of a Mortgaged Property by exercise of the power of eminent domain or
condemnation, (ii) the liquidation of a defaulted Mortgage Loan by means of a
trustee's sale, foreclosure sale or otherwise or (iii) the repurchase,
substitution or sale of a Mortgage Loan or an REO Property pursuant to or as
contemplated by Section 2.03, Section 3.23 or Section 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.
"Loss Mitigation Procedures": The policies and procedures set
forth in Exhibit G hereto relating to delinquent Mortgage Loans.
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"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 Option One certifying
that the original Mortgage Note has been lost, misplaced or destroyed (together
with a copy of the related Mortgage Note) and indemnifying the Trust against any
loss, cost or liability resulting from the failure to deliver the original
Mortgage Note in the form of Exhibit H hereto.
"Majority Certificateholders": The Holders of Certificates
evidencing at least 51% of the Voting Rights.
"Master Servicer": Option One Mortgage Corporation, a
California corporation, or any successor servicer appointed as herein provided,
in its capacity as Master Servicer hereunder.
"Master Servicer Event of Termination": One or more of the
events described in Section 7.01.
"Master Servicer Optional Purchase Delinquency Trigger": A
Master Servicer Optional Purchase Delinquency Trigger has occurred with respect
to a Distribution Date if the Delinquency Percentage exceeds 60.00% of the
Credit Enhancement Percentage.
"Master Servicer Prepayment Charge Payment Amount": The
amounts payable by the Master Servicer in respect of any waived Prepayment
Charges pursuant to Section 2.05 or Section 3.01.
"Master Servicer Remittance Date": With respect to any
Distribution Date, the Business Day prior to such Distribution Date.
"Maximum Cap Rate": For any Distribution Date a per annum rate
equal to the product of (x) (i) with respect to the Class A-1 Certificates, the
weighted average of the Adjusted Net Maximum Mortgage Rates of the Group I
Mortgage Loans, weighted on the basis of the outstanding Principal Balances of
the Group I Mortgage Loans as of the first day of the month preceding the month
of such Distribution Date, (ii) with respect to the Class A-2 Certificates, the
weighted average of the Adjusted Net Maximum Mortgage Rates of the Group II
Mortgage Loans, weighted on the basis of the outstanding Principal Balances of
the Group II Mortgage Loans as of the first day of the month preceding the month
of such Distribution Date, (iii) with respect to the Mezzanine Certificates, the
lesser of (i) or (ii) above and (iv) with respect to the Class A-1 Certificates,
the Class A-2 Certificates and the Mezzanine Certificates, if the aggregate
Principal Balance of the Mortgage Loans in one Loan Group has been reduced to
zero, the weighted average of the Adjusted Net Maximum Mortgage Rates of the
Mortgage Loans in the other Loan Group, weighted on the basis of the outstanding
Principal Balances of such Mortgage Loans as of the first day of the month
preceding the month of such Distribution Date and (y) a fraction, the numerator
of which is 30 and the denominator of which is the actual number of days elapsed
in the related Accrual Period.
"Maximum Uncertificated Accrued Interest Deferral Amount":
With respect to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 1 Pass-Through
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Rate applicable to REMIC 1 Regular Interest LT1ZZ for such Distribution Date on
a balance equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1ZZ and accrued interest at the Uncertificated REMIC 1 Pass-Through
Rate applicable to REMIC 1 Regular Interest LT2ZZ for such Distribution Date on
a balance equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT2ZZ minus the REMIC 1 Overcollateralization Amount, in each case for
such Distribution Date, over (b) Uncertificated Accrued Interest on REMIC 1
Regular Interest LT1A1 with the rate on REMIC 1 Regular Interest LT1A1 subject
to a cap equal to the lesser of (i) LIBOR plus the Certificate Margin of the
Class A-1 Certificates and (ii) the related Maximum Cap Rate for the purpose of
this calculation; Uncertificated Accrued Interest on REMIC 1 Regular Interest
LT1M1 with the rate on REMIC 1 Regular Interest LT1M1 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 LT1M2
with the rate on REMIC 1 Regular Interest LT1M2 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 LT1M3 with the rate
on REMIC 1 Regular Interest LT1M3 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 LT2A2 with the rate on REMIC 1
Regular Interest LT2A2 subject to a cap equal to the lesser of (i) LIBOR plus
the Certificate Margin of the Class A-2 Certificates and (ii) the related
Maximum Cap Rate for the purpose of this calculation; Uncertificated Accrued
Interest on REMIC 1 Regular Interest LT2M1 with the rate on REMIC 1 Regular
Interest LT2M1 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 LT2M2 with the rate on REMIC 1 Regular Interest LT2M2
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; and Uncertificated Accrued Interest on REMIC 1 Regular
Interest LT2M3 with the rate on REMIC 1 Regular Interest LT2M3 subject to a cap
equal to the lesser of (i) LIBOR plus the Certificate Margin of the Class M-3
Certificates and (ii) the related Maximum Cap Rate for the purpose of this
calculation for such Distribution Date.
"Maximum Mortgage Rate": With respect to each Adjustable-Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
maximum Mortgage Rate thereunder.
"Mezzanine Certificate": Any Class M-1 Certificate, Class M-2
Certificate or Class M-3 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 and in the case
of the Class C Certificates, amounts payable
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to the PMI Insurer pursuant to Section 4.01(d)(ix) (allocated to such
Certificate based on the priorities set forth 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 Master 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": ▇▇▇▇▇'▇ 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 Option
One, the Seller and the Depositor, regarding the transfer of the Mortgage Loans
by the Seller to or at the direction of the Depositor, substantially in the form
attached hereto as Exhibit C.
"Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in REMIC 1 on such date, separately identifying the Group I
Mortgage Loans and the Group II Mortgage Loans, attached hereto as Exhibit D.
The Mortgage Loan Schedule shall be prepared by the Seller and shall set forth
the following information with respect to each Mortgage Loan, as applicable:
(1) the Mortgage Loan identifying number;
(2) the Mortgagor's name;
(3) the street address of the Mortgaged Property
including the state and zip code;
(4) a code indicating whether the Mortgaged Property was
represented by the borrower, at the time of
origination, as being owner-occupied;
(5) the type of Residential Dwelling constituting the
Mortgaged Property;
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(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);
(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;
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(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;
(27) whether such Mortgage Loan is a Dividend Mortgage
Loan; and
(28) whether such Mortgage Loan is covered under the PMI
Policy, and, if so, the PMI Insurer Fee Rate applicable for such
Mortgage Loan.
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 Master Servicer
in accordance with the provisions of this Agreement. With respect to any
Qualified Substitute Mortgage Loan, Cut-off Date shall refer to the related
Cut-off Date for such Mortgage Loan, determined in accordance with the
definition of Cut-off Date herein.
"Mortgage Note": The original executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on
Exhibit D from time to time, and any REO Properties acquired in respect thereof.
"Mortgage Rate": With respect to each Fixed-Rate Mortgage
Loan, the rate set forth in the related Mortgage Note. With respect to each
Adjustable-Rate Mortgage Loan, the annual rate at which interest accrues on such
Mortgage Loan from time to time in accordance with the provisions of the related
Mortgage Note, which rate (A) as of any date of determination until the first
Adjustment Date following the Cut-off Date shall be the rate set forth in the
Mortgage Loan Schedule as the Mortgage Rate in effect immediately following the
Cut-off Date and (B) as of any date of determination thereafter shall be the
rate as adjusted on the most recent Adjustment Date, to equal the sum, rounded
to the next highest or nearest 0.125% (as provided in the Mortgage Note), of the
Index, determined as set forth in the related Mortgage Note, plus the related
Gross Margin subject to the limitations set forth in the related Mortgage Note.
With respect to each Mortgage Loan that becomes an REO Property, as of any date
of determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.
"Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of a fee simple estate in
a parcel of real property improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
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"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": With respect to each Distribution Date, a per
annum rate equal to the product of (x) (i) with respect to the Class A-1
Certificates, the weighted average of the Adjusted Net Mortgage Rates of the
Group I Mortgage Loans, weighted on the basis of the outstanding Principal
Balances of the Group I Mortgage Loans as of the first day of the month
preceding the month of such Distribution Date, (ii) with respect to the Class
A-2 Certificates, the weighted average of the Adjusted Net Mortgage Rates of the
Group II Mortgage Loans, weighted on the basis of the outstanding Principal
Balances of the Group II Mortgage Loans as of the first day of the month
preceding the month of such Distribution Date, (iii) with respect to the
Mezzanine Certificates, the lesser of (i) or (ii) above and (iv) with respect to
the Class A-1 Certificates, the Class A-2 Certificates and the Mezzanine
Certificates, if the aggregate Principal Balance of the Mortgage Loans in one
Loan Group has been reduced to zero, the weighted average of the Adjusted Net
Mortgage Rates of the Mortgage Loans in the other Loan Group, weighted on the
basis of the outstanding Principal Balances of such 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.
"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 payable to such Class
of Certificates on such Distribution Date calculated at the related Formula
Rate, over (ii) the amount of interest payable on such Class of Certificates at
the related Net WAC Rate for such Distribution Date and (B) the related Net WAC
Rate Carryover Amount for the previous Distribution Date not previously paid,
together with interest thereon at a rate equal to the related Formula Rate for
such Class of Certificates for such Distribution Date and for such Accrual
Period.
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"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 in respect of a Mortgage Loan or REO Property that, in the good
faith business judgment of the Master Servicer, will not be ultimately
recoverable from Late Collections, Insurance Proceeds or Liquidation Proceeds on
such Mortgage Loan or REO Property as provided herein.
"Notional Amount": Immediately prior to any Distribution Date,
with respect to the Class C Certificates, the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interests.
"Officers' Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Master Servicer, the Seller
or the Depositor, as applicable.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be a salaried counsel for the Depositor or the Master
Servicer, 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 which must be an opinion of Independent counsel.
"Option One": Option One Mortgage Corporation, in its capacity
as a party to the Mortgage Loan Purchase Agreement.
"Optional Termination Date": The first Distribution Date on
which the Master Servicer may opt to terminate the Trust Fund pursuant to
Section 10.01.
"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 $422,709,940.31.
"Original Notional Amount": With respect to the Class C
Certificates, $422,709,940.31.
"Originator": First Franklin Financial Corporation, a Delaware
corporation, or its successor in interest.
"Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized
25
Amount on such Distribution Date (after giving effect to distributions in
respect of the Basic Principal Distribution Amount on such Distribution Date).
"Overcollateralization Floor": $1,057,840.31.
"Overcollateralization Release Amount": With respect to any
Distribution Date, the lesser of (x) the Principal Remittance Amount for such
Distribution Date and (y) the Excess Overcollateralized Amount.
"Overcollateralization Target Amount": With respect to any
Distribution Date, an amount equal to 0.25% of the aggregate Principal Balance
of the Mortgage Loans as of the Cut-off Date.
"Overcollateralized Amount": For any Distribution Date, the
amount equal to (i) the Pool Balance (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 Balances 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.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
"Pass-Through Rate": With respect to the Class A Certificates
and the Mezzanine Certificates and any Distribution Date, the lesser of (x) the
related Formula Rate for such Distribution Date and (y) the related 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 (N) 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 LT1AA minus the Group I Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1AA;
(B) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1A1 minus the Group I Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1A1;
(C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1M1 minus the Group I Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1M1;
26
(D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1M2 minus the Group I Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1M2;
(E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1M3 minus the Group I Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1M3;
(F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1ZZ minus the Group I Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1ZZ;
(G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT2AA minus the Group II Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT2AA;
(H) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT2A2 minus the Group II Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT2A2;
(I) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT2M1 minus the Group II Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT2M1;
(J) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT2M2 minus the Group II Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT2M2;
(K) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT2M3 minus the Group II Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT2M3;
(L) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT2ZZ minus the Group II Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT2ZZ;
(M) 100% of the interest on REMIC 1 Regular Interest LT1P; and
(N) 100% of the interest on REMIC 1 Regular Interest LT2P.
"Paying Agent": Any paying agent appointed pursuant to Section
5.05.
"Percentage Interest": With respect to any Certificate (other
than a Class R 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 Class R Certificate,
the portion
27
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 Master Servicer,
the Trustee or any of their respective Affiliates or for which an Affiliate of
the Trustee serves as an advisor:
(ii) 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;
(iii) (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 ▇▇▇▇▇'▇ 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
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;
(iv) 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 ▇▇▇▇▇'▇ 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
28
Trustee, in such a manner as to accomplish perfection of a security
interest in the collateral by possession of certificated securities;
(v) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United
States of America or any State thereof and that are rated by a Rating
Agency in its highest long-term unsecured rating category at the time
of such investment or contractual commitment providing for such
investment;
(vi) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than 30 days after the date of
acquisition thereof) that is rated by a Rating Agency in its highest
short-term unsecured debt rating available at the time of such
investment;
(vii) units of money market funds, including money market
funds managed or advised by the Trustee or an Affiliate thereof, that
have been rated "AAA" by Fitch (if rated by Fitch), "Aaa" by ▇▇▇▇▇'▇
and "AAA" by S&P; and
(viii) 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.
"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,
▇▇▇▇▇ plans and bank collective investment funds and insurance company general
or separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA and Section 4975 of the Code.
"PMI Insurer": PMI Mortgage Insurance Co., an Arizona
corporation, or its successors in interest.
"PMI Insurer Fee": The amount payable to the PMI Insurer on
each Distribution Date, which amount shall equal one twelfth of the product of
(i) the PMI Insurer Fee Rate, multiplied by
29
(ii) the aggregate Principal Balance of the PMI Mortgage Loans and any related
REO Properties as of the first day of the related Due Period (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).
"PMI Insurer Fee Rate": The PMI Insurer Fee Rate ranges from
approximately 0.07% to 2.52% for Loan-to-Value Ratios between 60.01% and
100.00%.
"PMI Mortgage Loans": The list of Mortgage Loans insured by
the PMI Insurer attached hereto as Schedule II.
"PMI Policy": The Primary Mortgage Insurance Policy No.
▇▇▇▇▇-▇▇▇▇-▇ with respect to the PMI Mortgage Loans and all endorsements thereto
dated the Closing Date, issued by the PMI Insurer.
"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
Master 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.
The Prepayment Charge Schedule shall be amended from time to
time by the Master Servicer in accordance with the provisions of this Agreement.
30
"Prepayment Interest Excess": 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 and the Determination Date of the calendar month in which such
Distribution Date occurs, an amount equal to interest at the applicable Net
Mortgage Rate on the amount of such Principal Prepayment for the number of days
commencing on the first day of the calendar month in which such Distribution
Date occurs and ending on the date on which such prepayment is so applied.
"Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a Principal
Prepayment in full during the portion of the related Prepayment Period occurring
between the first day of the related Prepayment Period and the last day of the
calendar month preceding the month in which such Distribution Date occurs, an
amount equal to interest at the applicable Net Mortgage Rate on the amount of
such Principal Prepayment for the number of days commencing on the date on which
the prepayment is applied and ending on the last day of the calendar month
preceding the month in which such Distribution Date occurs. The obligations of
the Master Servicer in respect of any Prepayment Interest Shortfall are set
forth in Section 3.24.
"Prepayment Period": With respect to any Distribution Date,
the period commencing on the day after the Determination Date in the calendar
month preceding the calendar month in which such Distribution Date occurs (or,
in the case of the first Distribution Date, commencing on the Cut-Off Date) and
ending on the Determination Date of the calendar month in which such
Distribution Date occurs.
"Principal Balance": As to any Mortgage Loan other than a
Liquidated Mortgage Loan, and any day, the related Cut-off Date Principal
Balance, MINUS all collections credited against the Cut-off Date Principal
Balance of any such Mortgage Loan. For purposes of this definition, a Liquidated
Mortgage Loan shall be deemed to have a Principal Balance equal to the Principal
Balance of the related Mortgage Loan as of the final recovery of related
Liquidation Proceeds and a Principal Balance of zero thereafter. As to any REO
Property and any day, the Principal Balance of the related Mortgage Loan
immediately prior to such Mortgage Loan becoming REO Property minus any REO
Principal Amortization received with respect thereto on or prior to such day.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.
"Principal Remittance Amount": With respect to any
Distribution Date, the sum of the Group I Principal Remittance Amount and the
Group II Principal Remittance Amount.
"Prospectus Supplement": That certain Prospectus Supplement
dated November 14, 2001 relating to the public offering of the Class A
Certificates and the Mezzanine Certificates.
31
"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 Master 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 Master 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 Master Servicer through the end of the calendar month immediately preceding
the calendar month in which such REO Property was acquired, plus (2) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such purchase is to be effected, net of the total of all
net rental income, Insurance Proceeds, Liquidation Proceeds and Advances that as
of the date of purchase had been distributed 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 Master Servicer or the Trustee in
respect of the breach or defect giving rise to the purchase obligation.
"Qualified Insurer": Any insurance company acceptable to
▇▇▇▇▇▇ ▇▇▇.
"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)
have a Dividend Rate, if applicable, equal to or less than that of the Deleted
Mortgage Loan, (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
32
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) be covered by the PMI Policy if the Deleted Mortgage Loan
was covered by the PMI Policy 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, ▇▇▇▇▇'▇ 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 Master Servicer.
"Realized Loss": With respect to any Liquidated Mortgage Loan,
the amount of loss realized equal to the portion of the Principal Balance
remaining unpaid after application of all Net Liquidation Proceeds in respect of
such Mortgage Loan.
"Record Date": With respect to (i) the Class A Certificates
and the Mezzanine Certificates, the Close of Business on the Business Day
immediately preceding the related Distribution Date and (ii) the Class P
Certificates, the Class C Certificates and the Class R Certificates, the Close
of Business on the last Business Day of the calendar month preceding the month
in which the related Distribution Date occurs; provided, however, that following
the date on which Definitive Certificates for a Class A Certificate or a
Mezzanine Certificate are available pursuant to Section 5.02, the Record Date
for such Certificates shall be the last Business Day of the calendar month
preceding the month in which the related Distribution Date occurs.
"Reference Banks": Those banks (i) with an established place
of business in London, England, (ii) not controlling, under the control of or
under common control with the Originator or the Master Servicer or any affiliate
thereof and (iii) which have been designated as such by the Trustee; provided,
however, that if fewer than two of such banks provide a LIBOR rate, then any
leading banks selected by 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.
33
"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 (less the
Dividend Portion of each Dividend Mortgage Loan), together with the Mortgage
Files relating thereto, and together with all collections thereon and proceeds
thereof, (ii) any REO Property, together with all collections thereon and
proceeds thereof, (iii) the Trustee's rights with respect to the Mortgage Loans
under all insurance policies, including the PMI Policy, required to be
maintained pursuant to this Agreement and any proceeds thereof, (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement (including any
security interest created thereby) and (v) the Collection Account, the
Distribution Account (subject to the last sentence of this definition) and any
REO Account and such assets that are deposited therein from time to time and any
investments thereof, together with any and all income, proceeds and payments
with respect thereto. Notwithstanding the foregoing, however, a REMIC election
will not be made with respect to the Reserve Fund or the Dividend Account.
"REMIC 1 Group I Interest Loss Allocation Amount": With
respect to any Distribution Date, an amount equal to (a) the product of (i) the
aggregate Principal Balance of the Group I Mortgage Loans and related REO
Properties then outstanding and (ii) the Uncertificated REMIC 1 Pass-Through
Rate for REMIC 1 Regular Interest LT1AA minus the Group I Marker Rate, divided
by (b) 12.
"REMIC 1 Group II Interest Loss Allocation Amount": With
respect to any Distribution Date, an amount equal to (a) the product of (i) the
aggregate Principal Balance of the Group II Mortgage Loans and related REO
Properties then outstanding and (ii) the Uncertificated REMIC 1 Pass-Through
Rate for REMIC 1 Regular Interest LT2AA minus the Group II Marker Rate, divided
by (b) 12.
"REMIC 1 Overcollateralization Target Amount": 1% of the
Overcollateralization Target Amount.
34
"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 LT1A1, REMIC 1 Regular Interest
LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1
Regular Interest LT2A2, REMIC 1 Regular Interest LT2M1, REMIC 1 Regular Interest
LT2M2 , REMIC 1 Regular Interest LT2M3, REMIC 1 Regular Interest LT1P and REMIC
1 Regular Interest LT2P, in each case as of such date of determination.
"REMIC 1 Group I Principal Loss Allocation Amount": With
respect to any Distribution Date, an amount equal to the product of (i) the
aggregate Principal Balance of the Group I Mortgage Loans and related REO
Properties then outstanding and (ii) 1 minus a fraction, the numerator of which
is two times the aggregate of the Uncertificated Principal Balances of REMIC 1
Regular Interest LT1A1, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest
LT1M2 and REMIC 1 Regular Interest LT1M3 and the denominator of which is the
aggregate of the Uncertificated Principal Balances of REMIC 1 Regular Interest
LT1A1, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1
Regular Interest LT1M3 and REMIC 1 Regular Interest LT1ZZ.
"REMIC 1 Group II Principal Loss Allocation Amount": With
respect to any Distribution Date, an amount equal to the product of (i) the
aggregate Principal Balance of the Group II Mortgage Loans and related REO
Properties then outstanding and (ii) 1 minus a fraction, the numerator of which
is two times the aggregate of the Uncertificated Principal Balances of REMIC 1
Regular Interest LT2A2, REMIC 1 Regular Interest LT2M1, REMIC 1 Regular Interest
LT2M2 and REMIC 1 Regular Interest LT2M3 and the denominator of which is the
aggregate of the Uncertificated Principal Balances of REMIC 1 Regular Interest
LT2A2, REMIC 1 Regular Interest LT2M1, REMIC 1 Regular Interest LT2M2, REMIC 1
Regular Interest LT2M3 and REMIC 1 Regular Interest LT2ZZ.
"REMIC 1 Regular Interest LT1AA": 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 LT1AA
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 LT1A1": 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 LT1A1
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 LT1M1": 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 LT1M1
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,
35
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 LT1M2": 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 LT1M2
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 LT1M3": 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 LT1M3
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 LT1P": 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 LT1P shall
accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to any amounts distributed to
REMIC 1 Regular Interest LT1P.
"REMIC 1 Regular Interest LT1ZZ": 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 LT1ZZ
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 LT2AA": 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 LT2AA
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 LT2A2": 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 LT2A2
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 LT2M1": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
36
1. REMIC 1 Regular Interest LT2M1 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 LT2M2": 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 LT2M2
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 LT2M3": 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 LT2M3
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 LT2P": 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 LT2P shall
accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to any amounts distributed to
REMIC 1 Regular Interest LT2P.
"REMIC 1 Regular Interest LT2ZZ": 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 LT2ZZ
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 LT1AA,
REMIC 1 Regular Interest LT1A1, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1ZZ,
REMIC 1 Regular Interest LT2AA, REMIC 1 Regular Interest LT2A2, REMIC 1 Regular
Interest LT2M1, REMIC 1 Regular Interest LT2M2, REMIC 1 Regular Interest LT2M3,
REMIC 1 Regular Interest LT2ZZ, REMIC 1 Regular Interest LT1P and REMIC 1
Regular Interest LT2P.
"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 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
37
Chapter 1 of the Code, and related provisions, and regulations and rulings
promulgated thereunder, as the foregoing may be in effect from time to time.
"REMIC Regular Interests": The REMIC 1 Regular Interests.
"Remittance Report": A report prepared by the Master Servicer
and delivered to the Trustee pursuant to Section 4.04.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code.
"REO Account": The account or accounts maintained by the
Master Servicer in respect of an REO Property pursuant to Section 3.23.
"REO Disposition": The sale or other disposition of an REO
Property on behalf of the Trust Fund.
"REO Imputed Interest": As to any REO Property, for any
calendar month during which such REO Property was at any time part of the Trust
Fund, one month's interest at the applicable Net Mortgage Rate on the Principal
Balance of such REO Property (or, in the case of the first such calendar month,
of the related Mortgage Loan if appropriate) as of the Close of Business on the
Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO
Property, for any calendar month, the excess, if any, of (a) the aggregate of
all amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
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 Master Servicer pursuant to Section 3.23 for unpaid
Servicing Fees in respect of the related Mortgage Loan and unreimbursed
Servicing Advances and Advances in respect of such REO Property or the related
Mortgage Loan, over (b) the REO Imputed Interest in respect of such REO Property
for such calendar month.
"REO Property": A Mortgaged Property acquired by the Master
Servicer on behalf of the Trust Fund through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.23.
"Request for Release": A release signed by a Servicing
Officer, in the form of Exhibit E attached hereto.
"Reserve Fund": The reserve fund established and maintained
pursuant to Section 3.28.
"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
38
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 ▇▇▇▇▇▇ ▇▇▇ eligible condominium project,
(iv) a manufactured home, or (v) a detached one-family dwelling in a planned
unit development, none of which is a co-operative or mobile home.
"Residual Certificate": The Class R Certificates.
"Residual Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee,
the Chairman or Vice Chairman of the Board of Directors or Trustees, the
Chairman or Vice Chairman of the Executive or Standing Committee of the Board of
Directors or Trustees, the President, any vice president, any assistant vice
president, the Secretary, any assistant secretary, the Treasurer, any assistant
treasurer, the Cashier, any assistant cashier, any trust officer or assistant
trust officer, the Controller and any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and, with respect to a particular matter,
to whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"S&P": Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., or its successor in interest.
"Seller": Option One Owner Trust 2001-1A, a Delaware business
trust, in its capacity as Seller under the Mortgage Loan Purchase Agreement.
"Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09.
"Servicing Advances": All customary, reasonable and necessary
"out of pocket" costs and expenses (including reasonable attorneys' fees and
expenses) incurred by the Master Servicer in the performance of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration, inspection and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property and (iv) compliance with the
obligations under Sections 3.01, 3.09, 3.14, 3.16, and 3.23.
"Servicing Fee": With respect to each Mortgage Loan and for
any calendar month, an amount equal to one month's interest (or in the event of
any payment of interest which
39
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 Master Servicer
involved in, or responsible for, the administration and servicing of Mortgage
Loans, whose name and specimen signature appear on a list of servicing officers
furnished by the Master Servicer to the Trustee and the Depositor on the Closing
Date, as such list may from time to time be amended.
"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 master 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 master servicer appointed pursuant to Section 7.02) to service
the Mortgage Loans properly and effectively.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the outstanding principal balance of such
Mortgage Loan as of the Cut-off Date as shown in the Mortgage Loan Schedule,
minus the sum of (i) the principal portion of each Monthly Payment due on a Due
Date subsequent to the Cut-off Date to the extent received from the Mortgagor or
advanced by the Master Servicer and distributed pursuant to Section 4.01 on or
before such date of determination, (ii) all Principal Prepayments received after
the Cut-off Date to the extent distributed pursuant to Section 4.01 on or before
such date of determination, (iii) all Liquidation Proceeds and Insurance
Proceeds to the extent distributed pursuant to Section 4.01 on or before such
date of determination, and (iv) any Realized Loss incurred with respect thereto
as a result of a Deficient Valuation made during or prior to the Due Period for
the most recent Distribution Date coinciding with or preceding such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such Mortgage Loan would be distributed, zero.
With respect to any REO Property: (a) as of any date of determination up to but
not including the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, an
amount (not less than zero) equal to the Stated Principal Balance of the related
Mortgage Loan as of the date on which such REO Property was acquired on behalf
of the Trust Fund, minus the aggregate amount of REO Principal Amortization in
respect of such REO Property for all previously ended calendar months, to the
extent distributed pursuant to Section 4.01 on or before such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.
40
"Stepdown Date": The earlier to occur of (i) the Distribution
Date on which the 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 December 2004 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
Principal Distribution Amount to the Certificates then entitled to distributions
of principal on such Distribution Date) is equal to or greater than 20.00%.
"Sub-Servicer": Any Person with which either Master Servicer
has entered into a Sub- Servicing Agreement and which meets the qualifications
of a Sub-Servicer pursuant to Section 3.02.
"Sub-Servicing Account": An account established by a
Sub-Servicer which meets the requirements set forth in Section 3.08 and is
otherwise acceptable to the applicable Master Servicer.
"Sub-Servicing Agreement": The written contract between either
Master Servicer and a Sub- Servicer relating to servicing and administration of
certain Mortgage Loans as provided in Section 3.02.
"Substitution Adjustment": As defined in Section 2.03(d)
hereof.
"Tax Matters Person": The tax matters person appointed
pursuant to Section 9.01(e) hereof.
"Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed by the Trustee on behalf of each REMIC, together with any and
all other information reports or returns that may be required to be furnished to
the Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.
"Termination Price": As defined in Section 10.01(a) hereof.
"Trigger Event": A Trigger Event has occurred with respect to
a Distribution Date if the Delinquency Percentage exceeds 80.00% of the Credit
Enhancement Percentage.
"Trust": First Franklin Mortgage Loan Trust 2001-FF2, 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, the Dividend Account and
the Reserve Fund.
"Trustee": ▇▇▇▇▇ Fargo Bank Minnesota, N.A., 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
41
created and in the exercise and performance of any of the powers and duties of
the Trustee hereunder, which amount shall equal one twelfth of the product of
(i) the Trustee Fee Rate, multiplied by (ii) the aggregate Principal Balance of
the Mortgage Loans and any REO Properties (after giving effect to scheduled
payments of principal due during the Due Period relating to the previous
Distribution Date, to the extent received or advanced and prepayments collected
during the Prepayment Period relating to the previous Distribution Date).
"Trustee Fee Rate": 0.0065% 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 Group I Mortgage Loans or Group II Mortgage Loans, as applicable, for
such Distribution Date.
"Uncertificated Accrued Interest": With respect to each REMIC
Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated Pass- Through Rate on the Uncertificated
Principal Balance of such REMIC Regular Interest. In each case, Uncertificated
Accrued Interest will be reduced by any Net Prepayment Interest Shortfalls and
Relief Act Interest Shortfalls (allocated to such REMIC Regular Interests based
on the priorities set forth in Section 1.03).
"Uncertificated Pass-Through Rate": The Uncertificated REMIC 1
Pass-Through Rate.
"Uncertificated Principal Balance": With respect to each REMIC
Regular Interest, the amount of such REMIC Regular Interest outstanding as of
any date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 4.07 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 LT1ZZ and REMIC 1
Regular Interest LT2ZZ shall be increased by interest deferrals as provided in
Section 4.07. The Uncertificated Principal Balance of each REMIC Regular
Interest that has an Uncertificated Principal Balance shall never be less than
zero.
"Uncertificated REMIC 1 Pass-Through Rate": For any
Distribution Date, with respect to REMIC 1 Regular Interest LT1AA, REMIC 1
Regular Interest LT1A1, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest
LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1ZZ and REMIC
1 Regular Interest LT1P, the Unadjusted Net WAC 30/360 Rate of the Group I
Mortgage Loans for such Distribution Date and with respect to REMIC 1 Regular
Interest LT2AA, REMIC 1 Regular Interest LT2A2, REMIC 1 Regular Interest LT2M1,
REMIC 1 Regular Interest LT2M2, REMIC 1 Regular Interest LT2M3, REMIC 1 Regular
Interest LT2ZZ and REMIC 1 Regular Interest LT2P, the Unadjusted Net WAC 30/360
Rate of the Group II Mortgage Loans for such Distribution Date.
42
"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 Class R Certificates, no partnership or
other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are required by
the applicable operative agreement to be United States Persons, or an estate the
income of which from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States, or
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have authority to control all substantial decisions of the trust. The
term "United States" shall have the meaning set forth in Section 7701 of the
Code or successor provisions.
"Unpaid Interest Shortfall Amount": With respect to the Class
A Certificates and the Mezzanine Certificates and (i) the first Distribution
Date, zero, and (ii) any Distribution Date after the first Distribution Date,
the amount, if any, by which (a) the sum of (1) the Monthly Interest
Distributable Amount for such Class for the immediately preceding Distribution
Date and (2) the outstanding Unpaid Interest Shortfall Amount, if any, for such
Class for such preceding Distribution Date exceeds (b) the aggregate amount
distributed on such Class in respect of interest pursuant to clause (a) of this
definition on such preceding Distribution Date, plus interest on the amount of
interest due but not paid on the Certificates of such Class 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 ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇
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 ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ 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.
43
"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 Class R Certificates shall have 1% of the Voting Rights. The
Voting Rights allocated to any Class of Certificates (other than the Class P
Certificates and the Class R Certificates) shall be allocated among all Holders
of each such Class in proportion to the outstanding Certificate Principal
Balance of such Certificates and the Voting Rights allocated to the Class P
Certificates and the Class R Certificates shall be allocated among all Holders
of each such Class in proportion to such Holders' respective Percentage
Interest; provided, however that when none of the Regular Certificates are
outstanding, 100% of the Voting Rights shall be allocated among Holders of the
Class R Certificates in accordance with such Holders' respective Percentage
Interests in the Certificates of such Class.
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, any Relief Act Interest Shortfalls,
incurred in respect of the Mortgage Loans for any Distribution Date shall be
allocated first, among the Class C Certificates on a PRO RATA basis based on,
and to the extent of, one month's interest at the then applicable Pass-Through
Rate on the Notional Amount of each such Certificate and, thereafter, among the
Class A Certificates and the Mezzanine Certificates on a PRO RATA basis based
on, and to the extent of, one month's interest at the then applicable respective
Pass-Through Rate on the respective Certificate Principal Balance of each such
Certificate and (2) the aggregate amount of any Realized Losses and Net WAC Rate
Carryover Amounts, incurred for any Distribution Date shall be allocated among
the Class C Certificates on a PRO RATA basis based on, and to the extent of, one
month's interest at the then applicable Pass-Through Rate on the Notional Amount
of each such Certificate.
For purposes of calculating the amount of Uncertificated
Accrued Interest for the Uncertificated 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 (i) with respect to
the Group I Mortgage Loans, first, to Uncertificated Accrued Interest payable to
REMIC 1 Regular Interest LT1AA and REMIC 1 Regular Interest LT1ZZ 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 LT1AA, REMIC 1
Regular Interest LT1A1, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular
44
Interest LT1M2, REMIC 1 Regular Interest LT1M3 and REMIC 1 Regular Interest
LT1ZZ 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 Uncertificated REMIC 1 Regular
Interest and (ii) with respect to the Group II Mortgage Loans first, to
Uncertificated Accrued Interest payable to REMIC 1 Regular Interest LT2AA and
REMIC 1 Regular Interest LT2ZZ up to an aggregate amount equal to the REMIC 1
Group II Interest Loss Allocation Amount, 98% and 2%, respectively, and
thereafter among REMIC 1 Regular Interest LT2AA, REMIC 1 Regular Interest LT2A2,
REMIC 1 Regular Interest LT2M1, REMIC 1 Regular Interst LT2M2, REMIC 1 Regular
Interest LT2M3 and REMIC 1 Regular Interest LT2ZZ 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 Uncertificated REMIC 1 Regular Interest.
45
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 (including the PMI Policy) in respect of the Mortgage
Loans; (iv) the rights of the Depositor under the Mortgage Loan Purchase
Agreement, (v) all other assets included or to be included in the Trust Fund and
(vi) all proceeds of any of the foregoing. Such assignment includes all interest
and principal due to the Depositor or the Master 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 ▇▇▇▇▇ Fargo Bank
Minnesota, N.A., as Trustee," or with respect to any lost Mortgage
Note, an original Lost Note Affidavit stating that the original
mortgage note was lost, misplaced or destroyed, together with a copy of
the related mortgage note; provided, however, that such substitutions
of Lost Note Affidavits for original Mortgage Notes may occur only with
respect to Mortgage Loans, the aggregate Cut-off Date Principal Balance
of which is less than or equal to 1.00% of the Pool Balance as of the
Cut-off Date;
(ii) the original Mortgage with evidence of recording thereon,
and the original recorded power of attorney, if the Mortgage was
executed pursuant to a power of attorney, with evidence of recording
thereon or, if such Mortgage or power of attorney has been submitted
for recording but has not been returned from the applicable public
recording office, has been lost or is not otherwise available, a copy
of such Mortgage or power of attorney, as the case may be, certified to
be a true and complete copy of the original submitted for recording;
(iii) an original Assignment, in form and substance acceptable
for recording. The Mortgage shall be assigned either (A) in blank or
(B) to "▇▇▇▇▇ Fargo Bank Minnesota, N.A.,
as Trustee";
46
(iv) an original copy of any intervening assignment of
Mortgage showing a complete chain of assignments;
(v) the original or a certified copy of lender's title
insurance policy; and
(vi) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any.
The Trustee agrees to execute and deliver (or cause the
Custodian to execute and deliver) to the Depositor 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.
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 Option
One 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 Option One,
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 Master 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 enforce the obligations of Option One 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 Option One does not cure such defect
or deliver such missing document within such time period, the Trustee shall
enforce the obligations of Option One to either repurchase or substitute for
such Mortgage Loan in accordance with Section 2.03.
The Trustee shall enforce the obligations of Option One 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 Option One under the
Mortgage Loan Purchase Agreement to deliver such assignments for recording
within 45 days of the Closing Date. In the event that any such Assignment is
lost or returned unrecorded because of a defect
47
therein, the Trustee shall enforce the obligations of Option One 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.
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 Option One's expense) to be completed such endorsements "Pay to the order of
▇▇▇▇▇ Fargo Bank Minnesota, N.A., as Trustee, without recourse."
The Depositor herewith delivers to the Trustee an executed
copy of the Mortgage Loan Purchase Agreement and the PMI Policy.
The Master 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 Master Servicer shall
provide the Custodian with a certified true copy of any such document submitted
for recordation within two weeks of its execution, and shall provide the
original of any document submitted for recordation or a copy of such document
certified by the appropriate public recording office to be a true and complete
copy of the original within 270 days of its submission for recordation. In the
event that the Master Servicer cannot provide a copy of such document certified
by the public recording office within such 270 day period, the Master Servicer
shall deliver to the Custodian, within such 270 day period, an Officers'
Certificate of the Master 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 Master 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 Master Servicer shall deliver a
copy of such document certified by an officer of the Master 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, 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
48
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 Master
Servicer in substantially the form attached hereto as Exhibit F-1, within 45
days after the Closing Date, with respect to each Original Mortgage Loan (or,
with respect to any document delivered after the Startup Day, within 45 days of
receipt and with respect to any Qualified Substitute Mortgage, within 45 days
after the assignment thereof) that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in the exception report annexed thereto as
not being covered by such certification), (i) all documents required to be
delivered to it pursuant Section 2.01 of this Agreement are in its possession,
(ii) such documents have been reviewed by it and have not been mutilated,
damaged or torn and appear on their face to relate to such Mortgage Loan and
(iii) based on its examination and only as to the foregoing, the information set
forth in the Mortgage Loan Schedule that corresponds to items (1) and (2) of the
Mortgage Loan Schedule accurately reflects information set forth in the Mortgage
File. It is herein acknowledged that, in conducting such review, the Trustee (or
the Custodian, as applicable) is under no duty or obligation to inspect, review
or examine any 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 Master 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 defective in any
material respect, at the conclusion of its review the Trustee shall so notify
Option One, the Depositor and the Master Servicer. In addition, upon the
discovery by the Depositor or the Master 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 Option One 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 Option One.
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(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 Option One 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 Master
Servicer of such defect, missing document or breach and request that Option One
deliver such missing document or that Option One cure such defect or breach
within 90 days from the date Option One was notified of such missing document,
defect or breach, and if Option One does not deliver such missing document or if
Option One does not cure such defect or breach in all material respects during
such period, the Trustee shall enforce Option One's obligation under the
Mortgage Loan Purchase Agreement and cause Option One 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)); provided that, in connection with any such breach that could
not reasonably have been cured within such 90 day period, if Option One has
commenced to cure such breach within such 90 day period, Option One shall be
permitted to proceed thereafter diligently and expeditiously to cure the same
within the additional period provided under the Mortgage Loan Purchase
Agreement. The Purchase Price for the repurchased Mortgage Loan shall be
deposited in the Collection Account, and the Trustee, upon receipt of written
certification from the Master Servicer of such deposit, shall release to Option
One the related Mortgage File and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as Option One shall
furnish to it and as shall be necessary to vest in Option One 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, Option One may cause such Mortgage Loan to be removed from the
Trust Fund (in which case it shall become a Deleted Mortgage Loan) and
substitute one or more Qualified Substitute Mortgage Loans in the manner and
subject to the limitations set forth in Section 2.03(d). It is understood and
agreed that the obligation of Option One 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 Option One
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 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 Master
Servicer or receipt of notice by the Master Servicer of the breach of any
representation, warranty or covenant of the Master Servicer set forth in Section
2.05 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the Master 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
50
that is within two years after the Closing Date. As to any Deleted Mortgage Loan
for which Option One substitutes a Qualified Substitute Mortgage Loan or Loans,
such substitution shall be effected by Option One delivering to the Trustee, for
such Qualified Substitute Mortgage Loan or Loans, the Mortgage Note, the
Mortgage and the Assignment to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, as are required by Section
2.01, together with an Officers' Certificate providing that each such Qualified
Substitute Mortgage Loan satisfies the definition thereof and specifying the
Substitution Adjustment (as described below), if any, in connection with such
substitution. The Trustee shall acknowledge receipt for such Qualified
Substitute Mortgage Loan or Loans and, within 45 days thereafter, shall review
such documents as specified in Section 2.02 and deliver to the Master Servicer,
with respect to such Qualified Substitute Mortgage Loan or Loans, a
certification substantially in the form attached hereto as Exhibit F-1, with any
applicable exceptions noted thereon. Within one year of the date of
substitution, the Trustee shall deliver to the Master Servicer a certification
substantially in the form of Exhibit F-2 hereto with respect to such Qualified
Substitute Mortgage Loan or Loans, with any applicable exceptions noted thereon.
Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the
month of substitution are not part of the Trust Fund and will be retained by
Option One. 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 Option One shall
thereafter be entitled to retain all amounts subsequently received in respect of
such Deleted Mortgage Loan. Option One 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 Option One, 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 Option One substitutes one or more
Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Master 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, Option One will deliver or cause to be delivered
to the Master 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
Master Servicer of such deposit, shall release to Option One the related
Mortgage File or Files and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as Option One shall
deliver to it and as shall be necessary to vest therein any Deleted Mortgage
Loan released pursuant hereto.
In addition, Option One 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
51
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 Master Servicer or
the Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, the party discovering such
fact shall within two Business Days give written notice thereof to the other
parties hereto. In connection therewith, Option One or the Depositor, as the
case may be, shall repurchase or, subject to the limitations set forth in
Section 2.03(d), substitute one or more Qualified Substitute Mortgage Loans for
the affected Mortgage Loan within 90 days of the earlier of discovery or receipt
of such notice with respect to such affected Mortgage Loan. Such repurchase or
substitution shall be made (i) by Option One 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 Option One 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 Option One, or Section 2.03(b), if made by the Depositor.
The Trustee shall reconvey to the Depositor or Option One, as the case may be,
the Mortgage Loan to be released pursuant hereto in the same manner, and on the
same terms and conditions, as it would a Mortgage Loan repurchased for breach of
a representation or warranty.
SECTION 2.04. Intentionally Omitted.
SECTION 2.05. Representations, Warranties and
Covenants of the Master Servicer.
The Master 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 Master Servicer is duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its
formation and has all licenses necessary to carry on its business as
now being conducted and is licensed, qualified and in good standing in
the states where the Mortgaged Property is located if the laws of such
state require licensing or qualification in order to conduct business
of the type conducted by the Master Servicer or to ensure the
enforceability or validity of each Mortgage Loan; the Master Servicer
has the power and authority to execute and deliver this Agreement and
to perform in accordance herewith; the execution, delivery and
performance of this Agreement (including all instruments of transfer to
be delivered pursuant to this Agreement) by the Master Servicer and the
consummation of the transactions contemplated hereby have been duly and
validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Master Servicer, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally; and all
requisite
52
corporate action has been taken by the Master Servicer to make this
Agreement valid and binding upon the Master Servicer in accordance with
its terms;
(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer
and will not result in the breach of any term or provision of the
charter or by-laws of the Master Servicer or result in the breach of
any term or provision of, or conflict with or constitute a default
under or result in the acceleration of any obligation under, any
agreement, indenture or loan or credit agreement or other instrument to
which the Master Servicer or its property is subject, or result in the
violation of any law, rule, regulation, order, judgment or decree to
which the Master Servicer or its property is subject;
(iii) The execution and delivery of this Agreement by the
Master Servicer and the performance and compliance with its obligations
and covenants hereunder do not require the consent or approval of any
governmental authority or, if such consent or approval is required, it
has been obtained;
(iv) This Agreement, and all documents and instruments
contemplated hereby which are executed and delivered by the Master
Servicer, constitute and will constitute valid, legal and binding
obligations of the Master Servicer, enforceable in accordance with
their respective terms, except as the enforcement thereof may be
limited by applicable bankruptcy laws and general principles of equity;
(v) [Reserved];
(vi) The Master Servicer 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;
(vii) There is no action, suit, proceeding or investigation
pending or, to its knowledge, threatened against the Master Servicer
that, either individually or in the aggregate, (A) may result in any
change in the business, operations, financial condition, properties or
assets of the Master Servicer that might prohibit or materially and
adversely affect the performance by such Master Servicer of its
obligations under, or validity or enforceability of, this Agreement, or
(B) may result in any material impairment of the right or ability of
the Master Servicer to carry on its business substantially as now
conducted, or (C) may result in any material liability on the part of
the Master Servicer, or (D) would draw into question the validity or
enforceability of this Agreement or of any action taken or to be taken
in connection with the obligations of the Master Servicer contemplated
herein, or (E) would otherwise be likely to impair materially the
ability of the Master Servicer to perform under the terms of this
Agreement;
(viii) Neither this Agreement nor any information, certificate
of an officer, statement furnished in writing or report delivered to
the Trustee by the Master Servicer in connection with the transactions
contemplated hereby contains any untrue statement of a material fact;
53
(ix) The Master Servicer covenants that its computer and other
systems used in servicing the Mortgage Loans operate in a manner such
that the Master Servicer can service the Mortgage Loans in accordance
with the terms of this Agreement; and
(x) The Master Servicer will not waive any Prepayment Charge
unless it is waived in accordance with the standard set forth in
Section 3.01.
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 Master Servicer or the Trustee of a breach of any of the
foregoing representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan, Prepayment Charge or the
interests therein of the Certificateholders, the party discovering such breach
shall give prompt written notice (but in no event later than two Business Days
following such discovery) to the Master Servicer and the Trustee.
Notwithstanding the foregoing, within 90 days of the earlier of discovery by the
Master Servicer or receipt of notice by the Master Servicer of the breach of the
representation or covenant of the Master Servicer set forth in Section 2.05(x)
above which materially and adversely affects the interests of the Holders of the
Class P Certificates in any Prepayment Charge, the Master 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 Option One made in
its capacity as a party to the Mortgage Loan Purchase Agreement.
SECTION 2.06. Representations and Warranties of
the Depositor.
The Depositor represents and warrants to the Trust and the
Trustee on behalf of the Certificateholders as follows:
(i) This agreement constitutes a legal, valid and binding
obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a
proceeding at law or in equity);
(ii) Immediately prior to the sale and assignment by the
Depositor to the Trustee on behalf of the Trust of each Mortgage Loan,
the Depositor had good and marketable title to each Mortgage Loan
(insofar as such title was conveyed to it by the Seller) subject to no
prior lien, claim, participation interest, mortgage, security interest,
pledge, charge or other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred
all right, title and interest in the Mortgage Loans to the Trustee on
behalf of the Trust;
54
(iv) The Depositor has not transferred the Mortgage Loans to
the Trustee on behalf of the Trust with any intent to hinder, delay or
defraud any of its creditors;
(v) The Depositor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
with full corporate power and authority to own its assets and conduct
its business as presently being conducted;
(vi) The Depositor is not in violation of its articles of
incorporation or by-laws or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Depositor is a party or by which it or
its properties may be bound, which default might result in any material
adverse changes in the financial condition, earnings, affairs or
business of the Depositor or which might materially and adversely
affect the properties or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this
Agreement by the Depositor, and the consummation of the transactions
contemplated thereby, do not and will not result in a material breach
or violation of any of the terms or provisions of, or, to the knowledge
of the Depositor, constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Depositor is a party or by which the Depositor is bound or to which
any of the property or assets of the Depositor is subject, nor will
such actions result in any violation of the provisions of the articles
of incorporation or by-laws of the Depositor or, to the best of the
Depositor's knowledge without independent investigation, any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Depositor or any of its properties or
assets (except for such conflicts, breaches, violations and defaults as
would not have a material adverse effect on the ability of the
Depositor to perform its obligations under this Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body of the United States or any other jurisdiction is
required for the issuance of the Certificates, or the consummation by
the Depositor of the other transactions contemplated by this Agreement,
except such consents, approvals, authorizations, registrations or
qualifications as (a) may be required under State securities or Blue
Sky laws, (b) have been previously obtained or (c) the failure of which
to obtain would not have a material adverse effect on the performance
by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations
pending before or, to the Depositor's knowledge, threatened by any
court, administrative agency or other tribunal to which the Depositor
is a party or of which any of its properties is the subject: (a) which
if determined adversely to the Depositor would have a material adverse
effect on the business, results of operations or financial condition of
the Depositor; (b) asserting the invalidity of this Agreement or the
Certificates; (c) seeking to prevent the issuance of the Certificates
or the consummation by the Depositor of any of the transactions
contemplated by this Agreement, as the case may be; or (d) which might
materially and adversely affect the
55
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, together with the Dividend Account Certificate,
constitute the entire beneficial ownership interest in the Trust Fund.
SECTION 2.08. [Reserved].
SECTION 2.09. Conveyance of REMIC Regular
Interests and Acceptance of REMIC 1
by the Trustee; Issuance of
Certificates.
(a) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the REMIC 1 Regular Interests for the benefit of the holders
of the Certificates. The Trustee acknowledges receipt of the REMIC 1 Regular
Interests (which are uncertificated) and declares that it holds and will hold
the same in trust for the exclusive use and benefit of the holders of the
Certificates. The interests evidenced by the Class R-2 Interest, together with
the Regular Certificates, constitute the entire beneficial ownership interest in
REMIC 2.
(b) In exchange for the REMIC 1 Regular Interests and,
concurrently with the assignment to the Trustee thereof, pursuant to the written
request of the Depositor executed by an officer of the Depositor, the Trustee
has executed, authenticated and delivered to or upon the order of the Depositor,
the Regular Certificates in authorized denominations evidencing (together with
the Class R-2 Interest) the entire beneficial ownership interest in REMIC 2.
(c) Concurrently with (i) the assignment and delivery to the
Trustee of REMIC 1 (including the Residual Interest therein represented by the
Class R-1 Interest) and the acceptance by the Trustee thereof, pursuant to
Section 2.01, Section 2.02 and Section 2.09(a) and (ii) the assignment and
delivery to the Trustee of REMIC 2 (including the Residual Interest therein
represented by the Class R-2 Interest) and the acceptance by the Trustee
thereof, pursuant to Section 2.09(b), the Trustee, pursuant to the written
request of the Depositor executed by an officer of the Depositor, has executed,
authenticated and delivered to or upon the order of the Depositor, the Class R
Certificates in authorized denominations evidencing the Class R-1 Interest and
the Class R-2 Interest.
56
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Master Servicer to Act as Master
Servicer.
The Master Servicer shall service and administer the Mortgage
Loans on behalf of the Trust and in the best interests of and for the benefit of
the Certificateholders (as determined by the Master 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 Master Servicer, any
Sub-Servicer or any Affiliate of the Master Servicer or any
Sub-Servicer may have with the related Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Master Servicer or any Affiliate of the Master Servicer;
(iii) the Master Servicer's obligation to make Advances or
Servicing Advances; or
(iv) the Master Servicer's or any Sub-Servicer's right to
receive compensation for its services hereunder or with respect to any
particular transaction.
To the extent consistent with the foregoing, the Master
Servicer (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 Master Servicer, maximize recovery
of total proceeds taking into account the value of such Prepayment Charge and
the related Mortgage Loan or (B) such waiver is made in connection with a
refinancing of the related Mortgage Loan unrelated to a default or a reasonably
foreseeable default where (x) the related mortgagor has stated to the Master
Servicer or an applicable Sub- Servicer an intention to refinance the related
Mortgage Loan and (y) the Master Servicer has concluded in its reasonable
judgement that the waiver of such Prepayment Charge would induce such mortgagor
to refinance with the Master Servicer; provided, however, that the Master
Servicer shall waive no more than 5.00% of the Prepayment Charges (by number of
Prepayment Charges) set forth on the Prepayment Charge Schedule in accordance
with clause (ii)(B) above. If a Prepayment Charge is waived as permitted by
meeting the standards described in clauses (i) and (ii)(B) above, then the
Master Servicer is required to pay the amount of such waived Prepayment Charge,
for the benefit of the Holders of the Class P Certificates, by depositing such
amount into the Collection Account together with and at the time that the amount
prepaid on the related Mortgage Loan is required to be deposited into the
Collection Account. Notwithstanding any other provisions of this
57
Agreement, any payments made by the Master Servicer in respect of any waived
Prepayment Charges pursuant to clauses (i) and (ii)(B) 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 Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee when the Master Servicer believes it
appropriate in its best judgment in accordance with the servicing standards set
forth above, to execute and deliver, on behalf of the Certificateholders and the
Trustee, and upon notice to the Trustee, any and all instruments of satisfaction
or cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties and to institute foreclosure proceedings or obtain a deed-in-lieu of
foreclosure so as to convert the ownership of such properties, and to hold or
cause to be held title to such properties, on behalf of the Trustee and
Certificateholders. The Master Servicer shall service and administer the
Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Master Servicer shall also comply in the performance of this Agreement with
all reasonable rules and requirements of each insurer under any 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 Master Servicer, and
furnish to the Master Servicer and any Sub-Servicer any special or limited
powers of attorney for each county in which a Mortgaged Property is located and
other documents necessary or appropriate to enable the Master 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 Master Servicer and submitted to the Trustee for execution. The Trustee
shall not be liable for the actions of the Master Servicer or any Sub-Servicers
under such powers of attorney.
Subject to Section 3.09 hereof, in accordance with the
standards of the preceding paragraph, the Master Servicer shall advance or cause
to be advanced funds as necessary for the purpose of effecting the timely
payment of taxes and assessments on the Mortgaged Properties, which advances
shall be Servicing Advances reimbursable in the first instance from related
collections from the Mortgagors pursuant to Section 3.09, and further as
provided in Section 3.11. Any cost incurred by the Master Servicer or by
Sub-Servicers in effecting the timely payment of taxes and assessments on a
Mortgaged Property shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid Principal Balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
Notwithstanding anything in this Agreement to the contrary,
the Master Servicer may not make any future advances with respect to a Mortgage
Loan (except as provided in Section 4.04) and the Master Servicer shall not (i)
permit any modification with respect to any Mortgage Loan that would change the
Mortgage Rate, reduce or increase the Principal Balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Master Servicer, reasonably foreseeable) or (ii) permit any modification,
waiver or amendment of any term of any Mortgage Loan that would both (A) effect
an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code
(or Treasury
58
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
Master Servicer and Sub-Servicers.
(a) The Master 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 Master Servicer, any Sub-Servicing Agreement that meets the requirements
applicable to Sub-Servicing Agreements set forth in this Agreement and that is
otherwise permitted under this Agreement.
Each Sub-Servicer shall be (i) authorized to transact business
in the state or states 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 ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ 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 Master Servicer
will examine each Sub-Servicing Agreement and will be familiar with the terms
thereof. The terms of any Sub-Servicing Agreement will not be inconsistent with
any of the provisions of this Agreement. The Master Servicer and the
Sub-Servicers may enter into and make amendments to the Sub-Servicing Agreements
or enter into different forms of Sub-Servicing Agreements; provided, however,
that any such amendments or different forms shall be consistent with and not
violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Certificateholders without the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights; provided, further, that the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights shall not be required (i) to cure
any ambiguity or defect in a Sub-Servicing Agreement, (ii) to correct, modify or
supplement any provisions of a Sub- Servicing Agreement, or (iii) to make any
other provisions with respect to matters or questions arising under a
Sub-Servicing Agreement, which, in each case, shall not be inconsistent with the
provisions of this Agreement. Any variation without the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Sub-Servicing Accounts, or credits and charges to the Sub-
Servicing Accounts or the timing and amount of remittances by the Sub-Servicers
to the Master Servicer, are conclusively deemed to be inconsistent with this
Agreement and therefore prohibited. The Master Servicer shall deliver to the
Trustee copies of all Sub-Servicing Agreements, and any amendments or
modifications thereof, promptly upon the Master Servicer's execution and
delivery of such instruments.
(b) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee and the Certificateholders, shall
enforce the obligations of each Sub-Servicer under the related Sub-Servicing
Agreement and of Option One under the Mortgage Loan Purchase
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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 Master Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Master Servicer shall pay the costs of such enforcement at its own expense, and
shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement, to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loans, or (ii) from a specific recovery
of costs, expenses or attorneys' fees against the party against whom such
enforcement is directed. Enforcement of the Mortgage Loan Purchase Agreement
against Option One shall be effected by the Master Servicer to the extent it is
not Option One and otherwise by the Trustee in accordance with the foregoing
provisions of this paragraph.
SECTION 3.03. Successor Sub-Servicers.
The Master Servicer shall be entitled to terminate any
Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer
pursuant to any Sub-Servicing Agreement in accordance with the terms and
conditions of such Sub-Servicing Agreement. In the event of termination of any
Sub-Servicer, all servicing obligations of such Sub-Servicer shall be assumed
simultaneously by the Master Servicer without any act or deed on the part of
such Sub-Servicer or the Master Servicer, and the Master Servicer either shall
service directly the related Mortgage Loans or shall enter into a Sub- Servicing
Agreement with a successor Sub-Servicer which qualifies under Section 3.02.
Any Sub-Servicing Agreement shall include the provision that
such agreement may be immediately terminated by the Master Servicer or the
Trustee (if the Trustee is acting as Master Servicer) without fee, in accordance
with the terms of this Agreement, in the event that the Master Servicer (or the
Trustee, if such party is then acting as Master Servicer) shall, for any reason,
no longer be the Master Servicer (including termination due to a Master Servicer
Event of Termination).
SECTION 3.04. Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement or the provisions
of this Agreement relating to agreements or arrangements between the Master
Servicer and a Sub-Servicer or reference to actions taken through a Sub-Servicer
or otherwise, the Master Servicer shall remain obligated and primarily liable to
the Trustee and the Certificateholders for the servicing and administering of
the Mortgage Loans in accordance with the provisions of Section 3.01 without
diminution of such obligation or liability by virtue of such Sub-Servicing
Agreements or arrangements or by virtue of indemnification from the Sub-Servicer
and to the same extent and under the same terms and conditions as if the Master
Servicer alone were servicing and administering the Mortgage Loans. The Master
Servicer shall be entitled to enter into any agreement with a Sub-Servicer for
indemnification of the Master Servicer by such Sub-Servicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.
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SECTION 3.05. No Contractual Relationship Between
Sub-Servicers and the Trustee or
Certificateholders.
Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the Trustee 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 Master Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Master Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.
SECTION 3.06. Assumption or Termination of
Sub-Servicing Agreements by Trustee.
In the event the Master Servicer shall for any reason no
longer be the servicer (including by reason of the occurrence of a Master
Servicer Event of Termination), the Trustee shall thereupon assume all of the
rights and obligations of the Master Servicer under each Sub-Servicing Agreement
that the Master Servicer may have entered into, unless the Trustee elects to
terminate any Sub- Servicing Agreement in accordance with its terms as provided
in Section 3.03. Upon such assumption, the Trustee (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 Master Servicer's interest therein and to have
replaced the departing Master Servicer as a party to each Sub-Servicing
Agreement to the same extent as if each Sub-Servicing Agreement had been
assigned to the assuming party, except that (i) the departing Master Servicer
shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement that arose before it ceased to be the Master Servicer
and (ii) neither the Trustee nor any successor Master Servicer shall be deemed
to have assumed any liability or obligation of the Master Servicer that arose
before it ceased to be the Master Servicer.
The Master Servicer at its 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 Master Servicer upon receipt of documentation
of such costs, and if such predecessor Master Servicer defaults in its
obligation to pay such costs, such costs shall be paid by the successor Master
Servicer or the Trustee (in which case the successor Master Servicer or the
Trustee, as applicable, shall be entitled to reimbursement therefor from the
assets of the Trust).
SECTION 3.07. Collection of Certain Mortgage Loan
Payments.
The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Master Servicer
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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 Master Servicer shall make timely advances on such Mortgage Loan
during such extension pursuant to Section 4.04 and in accordance with the
amortization schedule of such Mortgage Loan without modification thereof by
reason of such arrangement. Notwithstanding the foregoing, in the event that any
Mortgage Loan is in default or, in the judgment of the Master Servicer, such
default is reasonably foreseeable, the Master Servicer, consistent with the
standards set forth in Section 3.01, may also waive, modify or vary any term of
such Mortgage Loan (including modifications that would change the Mortgage Rate,
forgive the payment of principal or interest or extend the final maturity date
of such Mortgage Loan), accept payment from the related Mortgagor of an amount
less than the Stated Principal Balance in final satisfaction of such Mortgage
Loan, 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"), provided,
however, that in no event shall the Master Servicer grant any such forbearance
(other than as permitted by the second sentence of this Section) with respect to
any one Mortgage Loan more than once in any 12 month period or more than three
times over the life of such Mortgage Loan, and provided, further, that in
determining which course of action permitted by this sentence it shall pursue,
the Master Servicer shall adhere to the Loss Mitigation Procedures. The Master
Servicer's analysis supporting any forbearance and the conclusion that any
forbearance meets the standards of Section 3.01 and the Loss Mitigation
Procedures 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 Master Servicer for deposit in the Collection Account not later
than two Business Days after the deposit of such amounts in the Sub-Servicing
Account. For purposes of this Agreement, the Master Servicer shall be deemed to
have received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.
SECTION 3.09. Collection of Taxes, Assessments and
Similar Items; Servicing Accounts.
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The Master 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 Master 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 Master
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 timely 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 Master 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 Master Servicer's obligations and responsibilities in respect of the
Mortgage Loans under this Agreement in accordance with Article X. In the event
the Master 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
Master 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 Master Servicer knows, or in the exercise of the required
standard of care of the Master 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 Master
Servicer receives notice of a tax lien with respect to the Mortgage being
imposed, the Master Servicer will, within 10 business days of receipt of such
notice, advance or cause to be advanced funds necessary to discharge such lien
on the Mortgaged Property. As part of its servicing duties, the Master 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 Master Servicer
may pay to itself any excess interest on funds in the Servicing Accounts, to the
extent such action is in conformity with the servicing standard set forth in
Section 3.01, is permitted by law and such amounts are not required to be paid
to Mortgagors or used for any of the other purposes set forth above.
SECTION 3.10. Collection Account and Distribution
Account.
(a) On behalf of the Trust Fund, the Master Servicer shall
establish and maintain, or cause to be established and maintained, one or more
accounts (such account or accounts, the "Collection Account"), held in trust for
the benefit of the Trustee and the Certificateholders. On behalf of the Trust
Fund, the Master Servicer shall deposit or cause to be deposited in the clearing
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account in which it customarily deposits payments and collections on mortgage
loans in connection with its mortgage loan servicing activities on a daily
basis, and in no event more than one Business Day after the Master Servicer's
receipt thereof, and shall thereafter deposit in the Collection Account, in no
event more than two Business Days after the Master 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) payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds (other
than proceeds collected in respect of any particular REO Property and
amounts paid 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 Master
Servicer pursuant to the second paragraph of Section 3.14(a) in respect
of any blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or
purchased in accordance with Section 2.03 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 Master Servicer
and any Master Servicer Prepayment Charge Payment Amounts in connection
with the Principal Prepayment of any of the Mortgage Loans; and
(ix) without duplication, all payments of claims under the PMI
Policy.
The foregoing requirements for deposit in the Collection
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of Servicing
Fees, late payment charges, assumption fees, insufficient funds charges and
ancillary income (other than Prepayment Charges) need not be deposited by the
Master Servicer in the Collection Account and may be retained by the Master
Servicer as additional compensation. In the event the Master Servicer shall
deposit in the Collection Account any amount not required to be deposited
therein, it may at any time withdraw such amount from the Collection Account,
any provision herein to the contrary notwithstanding.
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(b) On behalf of the Trust Fund, the Trustee shall establish
and maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Master Servicer shall
deliver to the Trustee in immediately available funds for deposit in the
Distribution Account on or before 3:00 p.m. New York time (i) on the Master
Servicer Remittance Date, that portion of the Available Funds (calculated
without regard to the references in the definition thereof to amounts that may
be withdrawn from the Distribution Account) for the related Distribution Date
then on deposit in the Collection Account, the amount of all Prepayment Charges
collected during the applicable Prepayment Period by the Master Servicer and
Master Servicer Prepayment Charge Payment Amounts in connection with the
Principal Prepayment of any of the Mortgage Loans then on deposit in the
Collection Account, the amount of any funds reimbursable to an Advancing Person
pursuant to Section 3.29 and the amount required to be remitted to the Trustee
in respect of Dividend Mortgage Loans pursuant to Section 3.31(c) and (ii) on
each Business Day as of the commencement of which the balance on deposit in the
Collection Account exceeds $75,000 following any withdrawals pursuant to the
next succeeding sentence, the amount of such excess, but only if the Collection
Account constitutes an Eligible Account solely pursuant to clause (ii) of the
definition of "Eligible Account." If the balance on deposit in the Collection
Account exceeds $75,000 as of the commencement of business on any Business Day
and the Collection Account constitutes an Eligible Account solely pursuant to
clause (ii) of the definition of "Eligible Account," the Master Servicer shall,
on or before 3:00 p.m. New York time on such Business Day, withdraw from the
Collection Account any and all amounts payable or reimbursable to the Master
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 Master Servicer shall give 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 Master 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 Master Servicer to the Trustee for deposit in an account (which
may be the Distribution Account and must satisfy the standards for the
Distribution Account as set forth in the definition thereof) and for all
purposes of this Agreement shall be deemed to be a part of the Collection
Account; provided, however, that the Trustee shall have the sole authority to
withdraw any funds held pursuant to this subsection (d). In the event the Master
Servicer shall deliver to the Trustee for deposit in the Distribution Account
any amount not required to be deposited therein, it may at any time request that
the Trustee withdraw such amount from the Distribution Account and remit to it
any such amount, any provision herein to the contrary notwithstanding. In
addition, the Master Servicer, with respect to items (i) through (iv) below,
shall deliver to the Trustee from time to time for deposit, and the Trustee,
with respect to items (i) through (iv) below, shall so deposit, in the
Distribution Account:
(i) any Advances, as required pursuant to Section 4.04;
(ii) any amounts required to be deposited pursuant to Section
3.23(d) or (f) in connection with any REO Property;
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(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 Master Servicer shall, from time to time, make
withdrawals from the Collection Account for any of the following purposes or as
described in Section 4.04:
(i) to remit to the Trustee for deposit in the Distribution
Account the amounts required to be so remitted pursuant to Section
3.10(b) or permitted to be so remitted pursuant to the first sentence
of Section 3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Master
Servicer for (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 Master 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 Master 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 and Insurance Proceeds received with respect to
such Mortgage Loan are insufficient to reimburse the Master Servicer or
any Sub-Servicer for Servicing Advances;
(iv) to pay to the Master Servicer as servicing compensation
(in addition to the Servicing Fee) on the Master Servicer Remittance
Date any interest or investment income earned on funds deposited in the
Collection Account;
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(v) to pay Option One with respect to each Mortgage Loan that
has previously been purchased or replaced pursuant to Section 2.03 or
Section 3.16(c) all amounts received thereon subsequent to the date of
purchase or substitution, as the case may be;
(vi) to reimburse the Master Servicer for any Advance or
Servicing Advance previously made which the Master Servicer has
determined to be a Nonrecoverable Advance in accordance with the
provisions of Section 4.04;
(vii) to pay, or to reimburse the Master 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 Master Servicer for expenses incurred
by or reimbursable to the Master Servicer pursuant to Section 6.03;
(ix) to pay itself any Prepayment Interest Excess;
(x) to reimburse itself for expenses incurred pursuant to
Section 9.01(c)(i);
(xi) to deposit into the Dividend Account the Dividend Portion
of each Monthly Payment received on each Dividend Mortgage Loan
pursuant to Section 3.31; 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 Master Servicer shall deposit in
the Collection Account any amount not required to be deposited therein, it may
at any time withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.
The Master 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 Master Servicer shall provide written notification to the Trustee, on
or prior to the next succeeding Master Servicer Remittance Date, upon making any
withdrawals from the Collection Account pursuant to subclause (vi) above;
provided that an Officers' Certificate in the form described under Section
4.04(d) shall suffice for such written notification to the Trustee in respect
hereof.
(b) The Trustee shall, from time to time, make withdrawals
from the Distribution Account, for any of the following purposes, without
priority:
(i) to make distributions in accordance with Section 4.01;
(ii) to pay itself the Trustee Fee pursuant to Section 8.05;
(iii) to pay any amounts in respect of taxes pursuant to
Section 9.01(g);
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(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;
(vii) to pay to an Advancing Person reimbursements for
Advances and/or Servicing Advances pursuant to Section 3.29; and
(viii) to pay the PMI Insurer the PMI Insurer Fee.
SECTION 3.12. Investment of Funds in the
Collection Account, the Distribution
Account and the Dividend Account.
(a) The Master Servicer may direct any depository institution
maintaining the Collection Account or the Dividend Account and the Trustee shall
direct any depository institution maintaining the Distribution Account (each
such account, for purposes of this Section 3.12, an "Investment Account"), to
invest the funds in such Investment Account in one or more Permitted Investments
bearing interest or sold at a discount, and maturing, unless payable on demand,
(i) no later than the Business Day immediately preceding the date on which such
funds are required to be withdrawn from such account pursuant to this Agreement,
if a Person other than the Trustee is the obligor thereon 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
the Dividend Account and any income and gain realized thereon) over each such
investment, and any certificate or other instrument evidencing any such
investment shall be delivered directly to the Trustee or its agent, together
with any document of transfer necessary to transfer title to such investment to
the Trustee or its nominee. In the event amounts on deposit in an Investment
Account are at any time invested in a Permitted Investment payable on demand,
the Trustee shall:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an amount equal
to the lesser of (1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Trustee that such
Permitted Investment would not constitute a Permitted Investment in
respect of funds thereafter on deposit in the Investment Account.
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(b) All income and gain realized from the investment of funds
deposited in the Collection Account, the Dividend Account and any REO Account
held by or on behalf of the Master Servicer shall be for the benefit of the
Master Servicer and shall be subject to its withdrawal in accordance with
Section 3.11, Section 3.31 or Section 3.23, as applicable. The Master Servicer
shall deposit in the Collection Account, the Dividend 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.
(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 Master 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 lesser of (i) the current Principal
Balance of such Mortgage Loan and (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. The Master 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 Master Servicer will comply in the performance of this Agreement
with all reasonable rules and requirements of each insurer under any such hazard
policies. Any amounts to be collected by the Master Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Master Servicer would
follow in servicing loans held for its own account, subject to the terms and
conditions of the related Mortgage and Mortgage Note) shall be deposited in the
Collection Account, subject to withdrawal pursuant to Section 3.11, if received
in respect of a Mortgage Loan, or in the REO Account, subject to withdrawal
pursuant to Section 3.23, if received in respect of an REO Property. Any cost
incurred by the Master Servicer in maintaining any such insurance shall not, for
the purpose of calculating distributions to
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Certificateholders, be added to the unpaid Principal Balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
It is understood and agreed that no earthquake or other additional insurance is
to be required of any Mortgagor other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property or REO Property is at any time
in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards and flood insurance has been
made available, the Master Servicer will cause to be maintained a flood
insurance policy in respect thereof. Such flood insurance shall be in an amount
equal to the lesser of (i) the unpaid Principal Balance of the related Mortgage
Loan and (ii) the maximum amount of such insurance available for the related
Mortgaged Property under the national flood insurance program (assuming that the
area in which such Mortgaged Property is located is participating in such
program).
In the event that the Master Servicer shall obtain and
maintain a blanket policy with an insurer having a General Policy Rating of
B:III or better in Best's Key Rating Guide (or such other rating that is
comparable to such rating) insuring against hazard losses on all of the Mortgage
Loans, it shall conclusively be deemed to have satisfied its obligations as set
forth in the first two sentences of this Section 3.14, it being understood and
agreed that such policy may contain a deductible clause, in which case the
Master Servicer shall, in the event that there shall not have been maintained on
the related Mortgaged Property or REO Property a policy complying with the first
two sentences of this Section 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection Account
from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
prepare and present, on behalf of itself, the Trustee and Certificateholders,
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy.
(b) The Master Servicer shall keep in force during the term of
this Agreement a policy or policies of insurance covering errors and omissions
for failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac if it were the purchaser of
the Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, unless the Master Servicer has obtained a waiver
of such requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Master Servicer shall
be deemed to have complied with this provision if an Affiliate of the Master
Servicer has such errors and omissions and fidelity bond coverage and, by the
terms of such insurance policy or fidelity bond, the coverage afforded
thereunder extends to the Master Servicer. Any such errors and omissions policy
and fidelity bond shall by its terms not be cancelable without thirty days'
prior written notice to the Trustee. The Master Servicer shall also cause each
Sub-Servicer to maintain a policy of insurance covering errors and omissions and
a fidelity bond which would meet such requirements.
SECTION 3.15. Enforcement of Due-On-Sale Clauses;
Assumption Agreements.
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The Master Servicer will, to the extent it has knowledge of
any conveyance or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains or is to remain liable under the Mortgage Note and/or
the Mortgage), exercise its rights to accelerate the maturity of such Mortgage
Loan under the "due-on-sale" clause, if any, applicable thereto; provided,
however, that the Master Servicer shall not be required to take such action if
in its sole business judgment the Master 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 Master Servicer reasonably believes it is unable
under applicable law to enforce such "due-on-sale" clause, or if any of the
other conditions set forth in the proviso to the preceding sentence apply, the
Master Servicer will enter into an assumption and modification agreement from or
with the person to whom such property has been conveyed or is proposed to be
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. The Master Servicer 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 Master Servicer and has a credit risk rating at least equal to
that of the original Mortgagor. In connection with any assumption or
substitution, the Master Servicer shall apply such underwriting standards and
follow such practices and procedures as shall be normal and usual in its general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Master Servicer shall not take or enter into any assumption
and modification agreement, however, unless (to the extent practicable 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 Master Servicer in respect of an assumption, modification or substitution of
liability agreement shall be retained by the Master Servicer as additional
servicing compensation. In connection with any such assumption, no material term
of the Mortgage Note (including but not limited to the related Mortgage Rate and
the amount of the Monthly Payment) may be amended or modified, except as
otherwise required pursuant to the terms thereof. The Master Servicer shall
notify the Trustee that any such substitution, modification or assumption
agreement has been completed by forwarding to the Trustee the executed original
of such substitution, modification or assumption agreement, which document shall
be added to the related Mortgage File and shall, for all purposes, be considered
a part of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof.
The Master Servicer shall be entitled to any Prepayment
Interest Excess, which it may withdraw from the Collection Account pursuant to
Section 3.11(a).
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason 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 Master 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 (including, if such is the action to be taken that results from
adherence to the Loss Mitigation Procedures, selling such Mortgage Loans other
than converting the ownership of the related properties as provided in Section
3.16(e) below) as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07. The Master Servicer shall be responsible for all costs
and expenses incurred by it in any such proceedings; provided, however, that
such costs and expenses will be recoverable as Servicing Advances by the Master
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 Master 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 Master Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Master Servicer shall not, on behalf of the Trustee,
either (i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property, if, as a result of any
such action, the Trustee, the Trust Fund or the Certificateholders would be
considered to hold title to, to be a "mortgagee-in-possession" of, or to be an
"owner" or "operator" of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless the Master Servicer has
also previously determined, based on its reasonable judgment and a report
prepared by 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 Master Servicer, subject to the
Master 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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If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund; provided that any amounts disbursed by the
Master 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, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(iii) and (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)(i) Any Sub-Servicer not an Affiliate of the Master
Servicer may, at its option, purchase a Mortgage Loan which has become 90 or
more days delinquent or for which the Master Servicer has accepted a deed in
lieu of foreclosure. Prior to purchase pursuant to this Section 3.16(c)(i), the
Master Servicer shall be required to continue to make Advances pursuant to
Section 4.04. Such Sub-Servicer shall not use any procedure in selecting
Mortgage Loans to be repurchased which is materially adverse to the interests of
the Certificateholders. Such Sub-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)(i) shall be
accomplished by remittance to the Master Servicer for 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 Sub- Servicer and will
execute such documents provided to it as are necessary to convey the Mortgage
Loan to the Sub-Servicer.
(ii) If the Master Servicer Optional Purchase Delinquency
Trigger has been met, the Master Servicer may, at its option, purchase a
Mortgage Loan which has become 90 or more days delinquent or for which the
Master Servicer has accepted a deed in lieu of foreclosure. Prior to purchase
pursuant to this Section 3.16(c)(ii), the Master Servicer shall be required to
continue to make Advances pursuant to Section 4.04. The Master 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)(ii) 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 Master Servicer and will execute such
documents provided to it as are necessary to convey the Mortgage Loan to the
Master Servicer.
Notwithstanding the foregoing: (A) the Master Servicer shall
have the option to purchase pursuant to this Section 3.16(c)(ii) only such
delinquent Mortgage Loans having an aggregate Principal Balance such that, if
such delinquent Mortgage Loans were not in the Trust, the Master Servicer
Optional Purchase Delinquency Trigger would not be met; (B) if the Master
Servicer purchases any delinquent Mortgage Loans pursuant to this Section
3.16(c)(ii), it must purchase Mortgage Loans that are delinquent the greatest
number of days before it may purchase any that are
73
delinquent any fewer number of days; (C) if the Master Servicer purchases some
but not all Mortgage Loans that are delinquent any given number of days, it must
purchase Mortgage Loans having the same delinquency status in the order of
lowest Principal Balance to highest Principal Balance; (D) the Master Servicer
may at any time relinquish its rights to purchase delinquent Mortgage Loans
pursuant to this Section 3.16(c)(ii) in writing delivered to the Trustee, and
from and after the taking of such action by the Master Servicer, the provisions
of this Section 3.16(c)(ii) shall no longer be of any force or effect.
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to unpaid Servicing
Fees; second, to reimburse the Master 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. The portion of the
recovery so allocated to unpaid Servicing Fees shall be reimbursed to the Master
Servicer or any Sub-Servicer pursuant to Section 3.11(a)(iii).
SECTION 3.17. Trustee to Cooperate; Release of
Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer of a notification that payment in full shall be
escrowed in a manner customary for such purposes, the Master Servicer shall
deliver to the Trustee two executed copies of 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 five Business Days, release and send by overnight mail, at the
expense of the Master Servicer, the related Mortgage File to the Master
Servicer. The Trustee agrees to indemnify the Master Servicer, out of its own
funds, for any loss, liability or expense (other than special, indirect,
punitive or consequential damages which will not be paid by the Trustee)
incurred by the Master Servicer as a proximate result of the Trustee's breach of
its obligations pursuant to this Section 3.17. 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 Master Servicer and delivery to the Trustee
of two copies 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 Master Servicer, and the Trustee shall, at the
direction of the Master Servicer, execute such
74
documents as shall be necessary to the prosecution of any such proceedings. Such
Request for Release shall obligate the Master Servicer to return each and every
document previously requested from the Mortgage File to the Trustee when the
need therefor by the Master Servicer no longer exists, unless the Mortgage Loan
has been liquidated and the Liquidation Proceeds relating to the Mortgage Loan
have been deposited in the Collection Account or the Mortgage File or such
document has been delivered to an attorney, or to a public trustee or other
public official as required by law, for purposes of initiating or pursuing legal
action or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Master Servicer has delivered, 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 Master 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 two copies of a Request
for Release 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,
one copy of such Request for Release with respect to such Mortgage Loan shall be
released by the Trustee to the Master Servicer or its designee.
(c) Upon written certification of a Servicing Officer, the
Trustee shall execute and deliver to the Master Servicer or the Sub-Servicer, as
the case may be, copies of, any court pleadings, requests for trustee's sale or
other documents necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment,
or to enforce any other remedies or rights provided by the Mortgage Note or
Mortgage or otherwise available at law or in equity. Each such certification
shall include a request that such pleadings or documents be executed by the
Trustee and a statement as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee will not
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee's sale.
SECTION 3.18. Servicing Compensation.
As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Servicing Fee with
respect to each Mortgage Loan payable solely from payments of interest in
respect of such Mortgage Loan, subject to Section 3.24. In addition, the Master
Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance
Proceeds or Liquidation Proceeds to the extent permitted by Section 3.11(a)(iii)
and out of amounts derived from the operation and sale of an REO Property to the
extent permitted by Section 3.23. Except as provided in Section 3.29, the right
to receive the Servicing Fee may not be transferred in whole or in part except
in connection with the transfer of all of the Master Servicer's responsibilities
and obligations under this Agreement; provided, however, that the Master
Servicer may pay from the Servicing Fee any amounts due to a Sub- Servicer
pursuant to a Sub-Servicing Agreement entered into under Section 3.02.
Additional servicing compensation in the form of assumption
fees, late payment charges, insufficient funds charges, ancillary income or
otherwise (other than Prepayment Charges)
75
shall be retained by the Master Servicer only to the extent such fees or charges
are received by the Master Servicer. The Master Servicer shall also be entitled
pursuant to Section 3.11(a)(iv) to withdraw from the Collection Account and
pursuant to Section 3.23(b) to withdraw from any REO Account, as additional
servicing compensation, interest or other income earned on deposits therein,
subject to Section 3.12 and Section 3.24. The Master Servicer shall be required
to pay all expenses incurred by it in connection with its servicing activities
hereunder (including premiums for the insurance required by Section 3.14, to the
extent such premiums are not paid by the related Mortgagors or by a Sub-Servicer
and servicing compensation of each Sub-Servicer) and shall not be entitled to
reimbursement therefor except as specifically provided herein.
The Master Servicer shall be entitled to any Prepayment
Interest Excess, which it may withdraw from the Collection Account pursuant to
Section 3.11(a)(ix).
SECTION 3.19. Reports to the Trustee; Collection
Account Statements.
Not later than twenty days after each Distribution Date, the
Master 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 Master Servicer to the Trustee.
SECTION 3.20. Statement as to Compliance.
The Master Servicer will deliver to the Trustee and the
Depositor not later than 90 days following the end of the fiscal year of the
Master Servicer (which, as of the Closing Date, ends on the last day of April),
commencing in 2002, an Officers' Certificate stating, as to each signatory
thereof, that (i) a review of the activities of the Master Servicer during the
preceding year and of performance under this Agreement has been made under such
officers' supervision and (ii) to the best of such officers' knowledge, based on
such review, the Master Servicer has fulfilled all of its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. Copies of any such statement shall be
provided by the Trustee to any Certificateholder and to any Person identified to
the Trustee as a prospective transferee of a Certificate, upon request at the
expense of the requesting party, provided such statement is delivered by the
Master Servicer to the Trustee.
SECTION 3.21. Independent Public Accountants'
Servicing Report.
Not later than 90 days following the end of each fiscal year
of the Master Servicer (which, as of the Startup Day, ends on the last day of
April), commencing in 2002, the Master Servicer, at its expense, shall cause a
nationally recognized firm of independent certified public accountants to
furnish to the Master Servicer a report stating that (i) it has obtained a
letter of representation regarding certain matters from the management of the
Master Servicer which includes an assertion that the Master Servicer has
complied with certain minimum residential mortgage loan servicing standards,
identified in the Uniform Single Attestation Program for Mortgage Bankers
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established by the Mortgage Bankers Association of America, with respect to the
servicing of residential mortgage loans during the most recently completed
fiscal year and (ii) on the basis of an examination conducted by such firm in
accordance with standards established by the American Institute of Certified
Public Accountants, such representation is fairly stated in all material
respects, subject to such exceptions and other qualifications that may be
appropriate. In rendering its report such firm may rely, as to matters relating
to the direct servicing of residential mortgage loans by Sub-Servicers, upon
comparable reports of firms of independent certified public accountants rendered
on the basis of examinations conducted in accordance with the same standards
(rendered within one year of such report) with respect to those Sub-Servicers.
Immediately upon receipt of such report, the Master Servicer shall furnish a
copy of such report to the Trustee and each Rating Agency. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon request
at the Master Servicer's expense, provided that such statement is delivered by
the Master Servicer to the Trustee.
SECTION 3.22. Access to Certain Documentation;
Filing of Reports by Trustee.
(a) The Master Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder,
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
Master 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 Master Servicer as a prospective
transferee of a Certificate, upon reasonable request during normal business
hours at the offices of the Master Servicer designated by it at the expense of
the Person requesting such access.
(b) Within 15 days after each Distribution Date, the Trustee
shall file with the Securities and Exchange Commission via the Electronic Data
Gathering Analysis and Retrieval System (▇▇▇▇▇), a Form 8-K with a copy of the
statement to Certificateholders for such Distribution Date as an exhibit
thereto. Prior to January 30, 2002, the Trustee shall file a Form 15 Suspension
Notification with respect to the Trust Fund, if applicable. Prior to March 30,
2002, the Trustee shall file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust Fund. The Depositor hereby grants to the
Trustee a limited power of attorney to execute 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 Fund. The Depositor
agrees to promptly furnish to the Trustee, from time to time upon request, such
further information, reports and financial statements within its control related
to this Agreement and the Mortgage Loans as the Trustee reasonably deems
appropriate to prepare and file all necessary reports with the Securities and
Exchange Commission. The Trustee shall have no responsibility to file any items
with the Securities and Exchange Commission other than those specified in this
Section.
SECTION 3.23. Title, Management and Disposition of
REO Property.
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(a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. The Master Servicer, on behalf of REMIC 1, shall sell
any REO Property as soon as practicable and in any event no later than the end
of the third full taxable year after the taxable year in which such REMIC
acquires ownership of such REO Property for purposes of Section 860G(a)(8) of
the Code or request from the Internal Revenue Service, no later than 60 days
before the day on which the three-year grace period would otherwise expire, an
extension of such three-year period, unless the Master 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 Master 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 Master 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 Master Servicer shall be permitted to allow the Collection
Account to serve as the REO Account, subject to separate ledgers for each REO
Property. The Master Servicer shall be entitled to retain or withdraw any
interest income paid on funds deposited in the REO Account.
(c) The Master Servicer shall have full power and authority,
subject only to the specific requirements and prohibitions of this Agreement, to
do any and all things in connection with any REO Property as are consistent with
the manner in which the Master Servicer manages and operates similar property
owned by the Master Servicer or any of its Affiliates, all on such terms and for
such period as the Master Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Master 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 Master Servicer's receipt thereof, and shall
thereafter deposit in the REO Account, in no event more than two Business Days
after the Master 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
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(iii) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the REO Account with
respect to an REO Property are insufficient for the purposes set forth in
clauses (i) through (iii) above with respect to such REO Property, the Master
Servicer shall advance from its own funds such amount as is necessary for such
purposes if, but only if, the Master Servicer would make such advances if the
Master Servicer owned the REO Property and if in the Master 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 Master 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 Master 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 Master Servicer may take such actions as are specified
in such Opinion of Counsel.
The Master Servicer may contract with any Independent
Contractor for the operation and management of any REO Property, provided that:
(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 Master Servicer as soon as
practicable, but in no event later than thirty days following the
receipt thereof by such Independent Contractor;
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(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 Master Servicer of any of its
duties and obligations to the Trustee on behalf of the
Certificateholders with respect to the operation and management of any
such REO Property; and
(4) the Master Servicer shall be obligated with respect
thereto to the same extent as if it alone were performing all duties
and obligations in connection with the operation and management of such
REO Property.
The Master Servicer shall be entitled to enter into any
agreement with any Independent Contractor performing services for it related to
its duties and obligations hereunder for indemnification of the Master Servicer
by such Independent Contractor, and nothing in this Agreement shall be deemed to
limit or modify such indemnification. The Master Servicer shall be solely liable
for all fees owed by it to any such Independent Contractor, irrespective of
whether the Master Servicer's compensation pursuant to Section 3.18 is
sufficient to pay such fees; provided, however, that to the extent that any
payments made by such Independent Contractor would constitute Servicing Advances
if made by the Master Servicer, such amounts shall be reimbursable as Servicing
Advances made by the Master Servicer.
(d) In addition to the withdrawals permitted under Section
3.23(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and Advances made
in respect of such REO Property or the related Mortgage Loan. On the Master
Servicer Remittance Date, the Master Servicer shall withdraw from each REO
Account maintained by it and deposit into the Distribution Account in accordance
with Section 3.10(d)(ii), for distribution on the related Distribution Date in
accordance with Section 4.01, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to Section
3.23(c) or this Section 3.23(d).
(e) Subject to the time constraints set forth in Section
3.23(a), each REO Disposition shall be carried out by the Master Servicer in a
manner, at such price and upon such terms and conditions as shall be in
conformity with the requirements of the Loss Mitigation Procedures and 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 Master Servicer or any
Sub-Servicer as provided above, shall be deposited in the Distribution Account
in accordance with Section 3.10(d)(ii) on the Master Servicer Remittance Date in
the month following the receipt thereof for distribution on the related
Distribution Date in accordance with Section 4.01. Any REO Disposition shall be
for cash only (unless changes in the REMIC Provisions made subsequent to the
Startup Day allow a sale for other consideration).
(g) The Master Servicer shall file information returns with
respect to the receipt of mortgage interest received in a trade or business,
reports of foreclosures and abandonments of any
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Mortgaged Property and cancellation of indebtedness income with respect to any
Mortgaged Property as required by Sections 6050H, 6050J and 6050P of the Code,
respectively. Such reports shall be in form and substance sufficient to meet the
reporting requirements imposed by such Sections 6050H, 6050J and 6050P of the
Code.
SECTION 3.24. Obligations of the Master Servicer
in Respect of Prepayment Interest
Shortfalls.
Not later than 3:00 p.m. New York time on each Master Servicer
Remittance Date, the Master 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) its
aggregate Servicing Fee received in the related Due Period. The Master 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 Master 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 Master Servicer
in Respect of Mortgage Rates and
Monthly Payments.
In the event that a shortfall in any collection on or
liability with respect to 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 Master Servicer in a manner not
consistent with the terms of the related Mortgage Note and this Agreement, the
Master Servicer, upon discovery or receipt of notice thereof, immediately shall
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 Master Servicer to seek recovery of any such amounts from the related
Mortgagor under the terms of the related Mortgage Note, as permitted by law.
SECTION 3.27. Solicitations.
From and after the Closing Date, the Master 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 Master 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 Master
Servicer may solicit any Mortgagor for whom the Master 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 Master
Servicer or any of its Affiliates which (i) concern optional
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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 and television
advertisements shall not constitute solicitation under this Section, nor is the
Master Servicer prohibited from responding to unsolicited requests or inquiries
made by a Mortgagor or an agent of a Mortgagor. Furthermore, the Master Servicer
shall be permitted to include in its monthly statements to borrowers or
otherwise, statements regarding the availability of the Master Servicer's
counseling services with respect to refinancing mortgage loans.
SECTION 3.28. Reserve Fund.
No later than the Closing Date, the Trustee shall establish
and maintain with itself a separate, segregated trust account titled, "Reserve
Fund, ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as Trustee, in trust for registered
Holders of First Franklin Mortgage Loan Trust 2001-FF2, Asset-Backed
Certificates, Series 2001-FF2." On the Closing Date, the Depositor will deposit,
or cause to be deposited, into the Reserve Fund $1,000.
On each Distribution Date as to which there is a Net WAC Rate
Carryover Amount payable to the Class A Certificates or the Mezzanine
Certificates, the Trustee has been directed by the Class C Certificateholders
to, and therefore will, deposit into the Reserve Fund the amounts described in
Section 4.01(d)(viii), rather than distributing such amounts to the Class C
Certificateholders. On each such Distribution Date, the Trustee shall hold all
such amounts for the benefit of the Holders of the Class A Certificates and the
Mezzanine Certificates, and will distribute such amounts to the Holders of the
Class A Certificates and the Mezzanine Certificates in the amounts and
priorities set forth in Section 4.01(d). If no Net WAC Rate Carryover Amounts
are payable on a Distribution Date, the Trustee shall deposit into the Reserve
Fund on behalf of the Class C Certificateholders, from amounts otherwise
distributable to the Class C Certificateholders, an amount such that when added
to other amounts already on deposit in the Reserve Fund, the aggregate amount on
deposit therein is equal to $1,000.
For federal and state income tax purposes, the Class C
Certificateholders will be deemed to be the owners of the Reserve Fund and all
amounts deposited into the Reserve Fund (other than the initial deposit therein
of $1,000) shall be treated as amounts distributed by REMIC 2 to the Holders of
the Class C Certificates. Upon the termination of the Trust, or the payment in
full of the Class A Certificates and the Mezzanine Certificates, all amounts
remaining on deposit in the Reserve Fund will be released by the Trust and
distributed to the Class C Certificateholders or their designees. The Reserve
Fund will be part of the Trust but not part of any REMIC and any payments to the
Holders of the Class A Certificates or the Mezzanine Certificates of Net WAC
Rate Carryover Amounts will not be payments with respect to a "regular interest"
in a REMIC within the meaning of Code Section 860(G)(a)(1).
By accepting a Class C Certificate, each Class C
Certificateholder hereby agrees to direct the Trustee, and the Trustee hereby is
directed, to deposit into the Reserve Fund the amounts described above on each
Distribution Date as to which there is any Net WAC Rate Carryover Amount rather
than distributing such amounts to the Class C Certificateholders. By accepting a
Class C Certificate, each Class C Certificateholder further agrees that such
direction is given for good and valuable consideration, the receipt and
sufficiency of which is acknowledged by such acceptance.
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At the direction of the Holders of a majority in Percentage
Interest in the Class C Certificates, the Trustee shall direct any depository
institution maintaining the Reserve Fund to invest the funds in such account in
one or more Permitted Investments bearing interest or sold at a discount, and
maturing, unless payable on demand, (i) no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the Trustee
or an Affiliate manages or advises such investment, and (ii) no later than the
date on which such funds are required to be withdrawn from such account pursuant
to this Agreement, if the Trustee or an Affiliate manages or advises such
investment. If no investment direction of the Holders of a majority in
Percentage Interest in the Class C Certificates with respect to the Reserve Fund
is received by the Trustee, the Trustee shall invest the funds in such account
in Permitted Investments managed by the Trustee or an Affiliate of the kind
described in clause (vi) of the definition of Permitted Investments.
For federal tax return and information reporting, the right of
the Class A Certificateholders and the Mezzanine Certificateholders to receive
payments from the Reserve Fund in respect of any Net WAC Rate Carryover Amount
shall be assigned a value of zero.
SECTION 3.29. Advance Facility.
(a) The Trustee on behalf of the Trust Fund, with the consent
of the Master Servicer, is hereby authorized to enter into a facility with any
Person which provides that such Person (an "Advancing Person") may make all or a
portion of the Advances and/or Servicing Advances to the Trust Fund under this
Agreement and the Trustee is further authorized, subject to Section 11.01, to
enter into any amendment of this Agreement in connection with such facility. No
such facility shall reduce or otherwise affect the Master Servicer's obligation
to fund such Advances and/or Servicing Advances. To the extent that an Advancing
Person makes all or a portion of any Advance or any Servicing Advance and
provides the Trustee with notice acknowledged by the Servicer that such
Advancing Person is entitled to reimbursement, such Advancing Person shall be
entitled to receive reimbursement pursuant to this Agreement for such amount to
the extent provided in Section 3.29(b). Such notice from the Advancing Person
must specify the amount of the reimbursement and must specify which Section of
this Agreement permits the applicable Advance or Servicing Advance to be
reimbursed. The Trustee shall be entitled to rely without independent
investigation on the Advancing Person's statement with respect to the amount of
any reimbursement pursuant to this Section 3.29 and with respect to the
Advancing Person's statement with respect to the Section of this Agreement that
permits the applicable Advance or Servicing Advance to be reimbursed. An
Advancing Person whose obligations are limited to the making of Advances and/or
Servicing Advances shall not be required to meet the qualifications of a Master
Servicer or a Sub-Servicer and will not be deemed to be a Sub-Servicer under
this Agreement.
(b) If an advancing facility is entered into, then the Master
Servicer shall not be permitted to reimburse itself therefor under Section
3.11(ii), Section 3.11(iii), Section 3.11(v), Section 3.11(vi), Section
3.11(vii) and Section 4.04(b) prior to the remittance to the Trust Fund, but
instead the Master Servicer shall include such amounts in the applicable
remittance to the Trustee made pursuant to Section 3.10(a). The Trustee is
hereby authorized to pay to the Advancing Person, reimbursements for Advances
and Servicing Advances from the Distribution Account to the same extent the
Master Servicer would have been permitted to reimburse itself for such Advances
and/or
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Servicing Advances in accordance with Section 3.11(ii), Section 3.11(iii),
Section 3.11(v), Section 3.11(vi), Section 3.11(vii) or Section 4.04(b), as the
case may be, had the Master Servicer itself funded such Advance or Servicing
Advance. The Trustee is hereby authorized to pay directly to the Advancing
Person such portion of the Servicing Fee as the parties to any advancing
facility agree.
(c) All Advances and Servicing Advances made pursuant to the
terms of this Agreement shall be deemed made and shall be reimbursed on a "first
in-first out" (FIFO) basis.
Section 3.30. PMI Policy; Claims Under the PMI Policy.
Notwithstanding anything to the contrary elsewhere in this
Article III, the Master Servicer shall not agree to any modification or
assumption of a PMI Mortgage Loan or take any other action with respect to a PMI
Mortgage Loan that could result in denial of coverage under the PMI Policy. The
Master Servicer shall notify the PMI Insurer that the Trustee, on behalf of the
Certificateholders, is the Owner, as that term is defined in the PMI Policy, of
each PMI Mortgage Loan. The Master Servicer shall, on behalf of the Trustee,
prepare and file on a timely basis with the PMI Insurer, with a copy to the
Trustee, all claims which may be made under the PMI Policy with respect to the
PMI Mortgage Loans. Consistent with all rights and obligations hereunder, the
Master Servicer shall take all actions required under the PMI Policy as a
condition to the payment of any such claim. Any amount received from the PMI
Insurer with respect to any such PMI Mortgage Loan shall be deposited by the
Master Servicer, no later than two Business Days following receipt thereof, into
the Collection Account.
SECTION 3.31. Dividend Account.
(a) No later than the Closing Date, on behalf of the Trust
Fund, the Master Servicer shall establish and maintain, or cause to be
established and maintained, a separate, segregated account which shall be
entitled "▇▇▇▇▇ Fargo Bank Minnesota, N.A., as Trustee, in trust for the
registered holder of the Dividend Account Certificate issued by First Franklin
Mortgage Loan Trust 2001-FF2" and which shall be an Eligible Account. The
investment of funds in the Dividend Account shall be as provided in Section
3.12.
(b) On each Master Servicer Remittance Date, the Master
Servicer shall deposit into the Dividend Account an amount equal to the
applicable Dividend Portion of each Monthly Payment on each Dividend Mortgage
Loan that was due during the related Due Period, to the extent received by the
Master Servicer on or prior to the related Determination Date. On each Master
Servicer Remittance Date, the Trustee shall deposit or cause to be deposited
into the Dividend Account an amount equal to the applicable Dividend Portion of
each Monthly Payment on each Dividend Mortgage Loan, to the extent advanced by
the Master Servicer to the Trustee as part of the Advances remitted to the
Trustee by the Master Servicer pursuant to Section 4.04(b); provided, however,
that the Master Servicer may net such amount from the amount otherwise required
to be advanced by the Master Servicer to the Trustee as part of the Advances
remitted to the Trustee by the Master Servicer pursuant to Section 4.04(b), and
instead deposit such amount directly into the Dividend Account on the Master
Servicer Remittance Date, such deposit to be deemed an Advance for all purposes
hereunder. If any portion of the amount otherwise required to be advanced by the
Master Servicer to the Trustee as part of the Advances remitted to the Trustee
by the Master Servicer
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pursuant to Section 4.04(b) is instead to be deposited by the Master Servicer
directly into the Dividend Account, then the Remittance Report of the Master
Servicer to the Trustee required to be delivered pursuant to Section 4.04(a)
shall so indicate.
(c) The Master Servicer shall make withdrawals from the
Dividend Account, with respect to each Dividend Mortgage Loan, to refund to the
related Mortgagor the Dividend Portions of Monthly Payments made by such
Mortgagor, at the times and subject to the conditions set forth in the related
Mortgage Note, but only from amounts previously deposited into the Dividend
Account in respect of such Dividend Mortgage Loan. In addition, the Master
Servicer shall make withdrawals from the Dividend Account, with respect to each
Dividend Mortgage Loan, to remit on each Master Servicer Remittance Date to the
Trustee for deposit into the Distribution Account, the Dividend Portions of
Monthly Payments made by the related Mortgagor as to which such Mortgagor will
not (as determined as of the related Determination Date) be entitled to be
refunded in accordance with the terms of the related Mortgage Note.
(d) The Trustee acknowledges the establishment of the Dividend
Account. Concurrently with the establishment of the Trust pursuant to this
Agreement and in exchange for the Dividend Account, 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
Dividend Account Certificate. The provisions of Section 4.01(e) and of Article V
(as to payment, authentication, execution, registration, denomination, transfer,
exchange and otherwise) that are applicable to the Class C Certificates and the
Class P Certificates, shall be applicable also to the Dividend Account
Certificate.
(e) For federal and state income tax purposes, the holder of
the Dividend Account Certificate will be deemed to be the owner of the Dividend
Account and all amounts deposited into the Dividend Account (subject to the
rights of Mortgagors under Dividend Mortgage Loans to refunds as provided in the
related Mortgage Notes and subject to the rights of the Master Servicer to all
income or gain from the investment of amounts on deposit in the Dividend
Account). Upon the termination of the Trust, the Master Servicer and the Trustee
shall cause all amounts remaining on deposit in the Dividend Account to be
released by the Trust and distributed to the holder of the Dividend Account
Certificate or its designee. The Dividend Account will be part of the Trust but
not part of any REMIC and any payments to the holder of the Dividend Account
Certificate of any amounts therefrom will not be payments with respect to a
"regular interest" in a REMIC within the meaning of Code Section 860(G)(a)(1).
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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 related
Monthly Interest Distributable Amount for such Certificates 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 related
Monthly Interest Distributable Amount for such Certificates 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;
86
(ii) to the Holders of the Class M-2 Certificates, the Monthly
Interest Distributable Amount allocable to such Certificates; and
(iii) to the Holders of the Class M-3 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
distributed in the following amounts and order of priority:
(i) first, to the Holders of the Class A-1 Certificates, until
the Certificate Principal Balances thereof have been reduced to zero;
(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 Balances thereof have
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
distributed 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;
(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 Balances thereof have
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 distributed 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; and
(iii) third, to the Holders of the Class M-3 Certificates,
until the Certificate Principal Balance thereof has been reduced to
zero.
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(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
distributed 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
Balances thereof have been reduced to zero;
(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 Balances thereof have 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 distributed 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 Balances thereof have been reduced to zero;
and
(iii) third, to the Holders of the Class A-1 Certificates, an
amount equal to the excess, if any, of (x) the amount required to be
distributed pursuant to clause (c)(I)(i) above for such Distribution
Date over (y) the sum of (A) the amount actually distributed pursuant
to clause (c)(I)(i) above from the Group I Principal Distribution
Amount on such Distribution Date and (B) the amount, if any,
distributed 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
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undistributed for such Distribution Date shall be distributed 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; and
(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.
(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, payable to
such Holders as part of the Group I Principal Distribution Amount
and/or the Group II Principal Distribution Amount as described under
Section 4.01(b) and Section 4.01(c) above;
(ii) to the Holders of the Class M-1 Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
(iii) to the Holders of the Class M-1 Certificates, in an
amount equal to the Allocated Realized Loss Amount allocable to such
Certificates;
(iv) to the Holders of the Class M-2 Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
(v) to the Holders of the Class M-2 Certificates, in an amount
equal to the Allocated Realized Loss Amount allocable to such
Certificates;
(vi) to the Holders of the Class M-3 Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
(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 make payments to the Reserve Fund, to the extent
required to pay the holders of the Class A Certificates and the
Mezzanine Certificates any Net WAC Rate Carryover Amounts for such
classes;
(ix) to the PMI Insurer, any payments made under the PMI
Policy, to the extent such payments were the result of incorrect data
supplied to the PMI Insurer by Option One;
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(x) 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;
(xi) 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
(xii) any remaining amounts to the Holders of the Residual
Certificates (in respect of the appropriate Class R Interest).
On each Distribution Date, after making the distributions of
the Available Funds as described above, the Trustee will first, withdraw from
the Reserve Fund all income from the investment of funds in the Reserve Fund and
distribute such amount to the Holders of the Class C Certificates, and second,
withdraw from the Reserve Fund, to the extent of amounts remaining on deposit
therein, the amount of any Net WAC Rate Carryover Amount for such Distribution
Date and distribute such amount first, concurrently to the Class A-1
Certificates and the Class A-2 Certificates; second, to the Class M-1
Certificates, third, to the Class M-2 Certificates and fourth, to the Class M-3
Certificates, in each case to the extent of the Net WAC Rate Carryover Amount
allocable to each such Class.
On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period and any Master Servicer Prepayment Charge Amounts paid by the Master
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.
On each Distribution Date, all amounts remitted to the Trustee
for deposit in the Distribution Account by the Master Servicer in respect of
Dividend Mortgage Loans pursuant to Section 3.31(c) will be withdrawn from the
Distribution Account and distributed by the Trustee to the holder of the
Dividend Account Certificate and shall not be available for distribution to the
Holders of any Class of Certificates.
(e) The Trustee shall make distributions in respect of a
Distribution Date to each Certificateholder of record on the related Record Date
(other than as provided in Section 10.01 respecting the final distribution), in
the case of Certificateholders of the Regular Certificates, by check or money
order mailed to such Certificateholder at the address appearing in the
Certificate Register, or by wire transfer. Distributions among
Certificateholders shall be made in proportion to the Percentage Interests
evidenced by the Certificates held by such Certificateholders.
(f) Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, which shall credit the amount of such
distribution to the accounts of its Depository
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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 Master Servicer shall
have any responsibility therefor except as otherwise provided by applicable law.
SECTION 4.02. Reserved.
SECTION 4.03. Statements.
(a) On each Distribution Date, based, as applicable, on
information provided to it by the Master Servicer, the Trustee shall prepare and
make available to each Holder of the Regular Certificates, the Master Servicer
and the Rating Agencies, a statement as to the distributions made on such
Distribution Date:
(i) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Regular Certificates, separately
identified, allocable to principal and the amount of the distribution
made to the Holders of the Class P Certificates allocable to Prepayment
Charges and Master Servicer Prepayment Charge Payment Amounts;
(ii) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Regular Certificates (other than
the Class P Certificates) allocable to interest, separately identified;
(iii) the Overcollateralized Amount, the Overcollateralization
Release Amount, the Overcollateralization Deficiency Amount and the
Overcollateralization Target Amount as of such Distribution Date and
the Excess Overcollateralized Amount for the Mortgage Pool for such
Distribution Date;
(iv) the aggregate amount of servicing compensation received
by the Master Servicer with respect to the related Due Period and such
other customary information as the Trustee deems necessary or
desirable, or which a Certificateholder reasonably requests, to enable
Certificateholders to prepare their tax returns;
(v) the 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;
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(viii) the number and aggregate unpaid principal balance of
Mortgage Loans that were (A) Delinquent (exclusive of Mortgage Loans in
bankruptcy or foreclosure and REO Properties) (1) 30 to 59 days, (2) 60
to 89 days and (3) 90 or more days, (B) as to which foreclosure
proceedings have been commenced and Delinquent (1) 30 to 59 days, (2)
60 to 89 days and (3) 90 or more days, (C) in bankruptcy and Delinquent
(1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more days, in each
case as of the Close of Business on the last day of the calendar month
preceding such Distribution Date and (D) REO Properties;
(ix) [reserved];
(x) the total number and cumulative principal balance of all
REO Properties as of the Close of Business of the last day of the
preceding Prepayment Period;
(xi) the aggregate amount of Principal Prepayments made during
the related Prepayment Period;
(xii) the aggregate amount of Realized Losses incurred during
the related Prepayment Period and the cumulative amount of Realized
Losses;
(xiii) the aggregate amount of extraordinary Trust Fund
expenses withdrawn from the Collection Account for such Distribution
Date;
(xiv) the Certificate Principal Balance of the Class A
Certificates, the Mezzanine Certificates and the Class C Certificates,
after giving effect to the distributions made on such Distribution
Date;
(xv) the Monthly Interest Distributable Amount in respect of
the Class A Certificates, the 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 Master 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;
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(xx) when the Stepdown Date or a Trigger Event has occurred;
(xxi) the Available Funds;
(xxii) the respective Pass-Through Rates applicable to the
Class A Certificates, the Mezzanine Certificates and the Class C
Certificates for such Distribution Date and the Pass- Through Rate
applicable to the Class A Certificates and the Mezzanine Certificates
for the immediately succeeding Distribution Date;
(xxiii) (A) the amount of payments received related to claims
under the PMI Policy during the related Prepayment Period (and the
number of Mortgage Loans to which such payments related) and (B) the
cumulative amount of payments received related to claims under the PMI
Policy since the Closing Date (and the number of Mortgage Loans to
which such payments related);
(xxiv) (A) the dollar amount of claims made under the PMI
Policy that were denied during the Prepayment Period (and the number of
Mortgage Loans to which such denials related) and (B) the dollar amount
of the cumulative claims made under the PMI Policy that were denied
since the Closing Date (and the number of Mortgage Loans to which such
denials related); and
(xxv) the amount on deposit in the Dividend Account
immediately prior to the related Master Servicer Remittance Date, the
amount deposited into the Dividend Account on the related Master
Servicer Remittance Date (separately identifying the amount received
from Mortgagors and the amount advanced) and the amount withdrawn from
the Dividend Account on the related Master Servicer Remittance Date
(separately identifying the amount refunded to Mortgagors and the
amount distributed to the holder of the Dividend Account Certificate on
such Distribution Date).
The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders and the Rating Agencies via the
Trustee's internet website. The Trustee's internet website shall initially be
located at "▇▇▇.▇▇▇▇▇▇▇.▇▇▇". Assistance in using the website can be obtained by
calling the Trustee's customer service desk at (▇▇▇) ▇▇▇-▇▇▇▇. Parties that are
unable to use website 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 and shall not be responsible for the content or accuracy of
any information provided by third parties for purposes of preparing such
statement and may affix thereto any disclaimer it deems appropriate in its
reasonable discretion (without suggesting liability on the part of any other
party hereto).
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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 Class R 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 Class R 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 Class R Certificateholder. Such obligation of the
Trustee shall be deemed to have been satisfied to the extent that substantially
comparable information shall be prepared and furnished to Certificateholders by
the Trustee pursuant to any requirements of the Code as from time to time in
force.
SECTION 4.04. Remittance Reports; Advances.
(a) On the second Business Day following each Determination
Date but in no event later than the 22nd day of the each month (or if such 22nd
day is not a Business Day, the preceding Business Day), the Master Servicer
shall deliver to the Trustee by telecopy or electronic mail (or by such other
means as the Master Servicer and the Trustee may agree from time to time) a
Remittance Report with respect to the related Distribution Date. Not later than
the 22nd day of each month (or if such 22nd day is not a Business Day, the
preceding Business Day), the Master Servicer shall deliver or cause to be
delivered to the Trustee in addition to the information provided on the
Remittance Report, such other information reasonably available to it with
respect to the Mortgage Loans as the Trustee may reasonably require to perform
the calculations necessary to make the distributions contemplated by Section
4.01 and to prepare the statements to Certificateholders contemplated by Section
4.03. The Trustee shall not be responsible to recompute, recalculate or verify
any information provided to it by the Master Servicer.
(b) The amount of Advances to be made by the Master Servicer
for any Distribution Date shall equal, subject to Section 4.04(d), the sum of
(i) the aggregate amount of Monthly Payments (net of the related Servicing Fee),
due during the related Due Period in respect
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of the Mortgage Loans, which Monthly Payments were delinquent on a contractual
basis as of the Close of Business on the related Determination Date and (ii)
with respect to each REO Property, which REO Property was acquired during or
prior to the related Due Period and as to which REO Property an REO Disposition
did not occur during the related Due Period, an amount equal to the excess, if
any, of the REO Imputed Interest on such REO Property for the most recently
ended calendar month, over the net income from such REO Property transferred to
the Distribution Account pursuant to Section 3.23 for distribution on such
Distribution Date. For purposes of the preceding sentence, the Monthly Payment
on each Balloon Mortgage Loan with a delinquent Balloon Payment is equal to the
assumed monthly payment that would have been due on the related Due Date based
on the original principal amortization schedule for the such Balloon Mortgage
Loan.
On or before 3:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account (or, in the case of
Advances of the Dividend Portions of Monthly Payments on Dividend Mortgage
Loans, deposit immediately available funds into the Dividend Account) an amount
equal to the aggregate amount of Advances, if any, to be made in respect of the
Mortgage Loans and REO Properties for the related Distribution Date either (i)
from its own funds or (ii) from the Collection Account, to the extent of funds
held therein for future distribution (in which case it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.04, used by the
Master Servicer in discharge of any such Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of Advances to be made
by the Master Servicer with respect to the Mortgage Loans and REO Properties.
Any amounts held for future distribution used by the Master Servicer to make an
Advance as permitted in the preceding sentence or withdrawn by the Master
Servicer as permitted in Section 3.11(a)(ii) in reimbursement of Advances
previously made shall be appropriately reflected in the Master Servicer's
records and replaced by the Master Servicer by deposit in the Collection Account
on or before any future Master Servicer Remittance Date to the extent that the
Available Funds for the related Distribution Date (determined without regard to
Advances to be made on the Master Servicer Remittance Date) shall be less than
the total amount that would be distributed to the Classes of Certificateholders
pursuant to Section 4.01 on such Distribution Date if such amounts held for
future distributions had not been so used to make Advances or reimburse for
previously made Advances. The Trustee will provide notice to the Master Servicer
by telecopy by the Close of Business on any Master Servicer Remittance Date in
the event that the amount remitted by the Master Servicer to the Trustee on such
date is less than the Advances required to be made by the Master Servicer for
the related Distribution Date, as set forth in the related Remittance Report.
(c) The obligation of the Master Servicer to make such
Advances is mandatory, notwithstanding any other provision of this Agreement but
subject to (d) below, and, with respect to any Mortgage Loan, shall continue
until the Mortgage Loan is paid in full or until the recovery of all Liquidation
Proceeds thereon.
(d) Notwithstanding anything herein to the contrary, no
Advance or Servicing Advance shall be required to be made hereunder by the
Master Servicer if such Advance or Servicing Advance would, if made, constitute
a Nonrecoverable Advance. The determination by the Master Servicer that it has
made a Nonrecoverable Advance or that any proposed Advance or Servicing
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Advance, if made, would constitute a Nonrecoverable Advance, shall be evidenced
by an Officers' Certificate of the Master Servicer delivered to the Depositor
and the Trustee.
SECTION 4.05. [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 LT1AA, REMIC 1 Regular Interest LT1A1, REMIC 1
Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest LT1ZZ, REMIC 1 Regular
Interest LT2AA, REMIC 1 Regular Interest LT2A2, REMIC 1 Regular
Interest LT2M1, REMIC 1 Regular Interest LT2M2, REMIC 1 Regular
Interest LT2M3, REMIC 1 Regular Interest LT2ZZ, REMIC 1 Regular
Interest LT1P and REMIC 1 Regular Interest LT2P, 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 LT2AA shall be reduced
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 such amount will be payable to the Holders of REMIC
1 Regular Interest LT1A1, REMIC 1 Regular Interest LT1M1, REMIC 1
Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular
Interest LT2A2, REMIC 1 Regular Interest LT2M1, REMIC 1 Regular
Interest LT2M2 and REMIC 1 Regular Interest LT2M3 in the same
proportion as the Extra Principal Distribution Amount is allocated to
the Corresponding Certificates; 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) with respect to the Group I Mortgage Loans, to
the Holders of REMIC 1 Regular Interest LT1AA, 98.00% of such
remainder (other than amounts payable pursuant to Section
4.07(a)(ii)(d), until the Uncertificated Principal Balance of
such Uncertificated REMIC 1 Regular Interest is reduced to
zero and with respect to the Group II Mortgage Loans, to the
Holders of REMIC 1 Regular Interest LT2AA, 98.00% of such
remainder, until the Uncertificated Principal Balance of such
Uncertificated REMIC 1 Regular Interest is reduced to zero;
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(b) with respect to the Group I Mortgage Loans, to
the Holders of REMIC 1 Regular Interest LT1A1, REMIC 1 Regular
Interest LT1M1, REMIC 1 Regular Interest LT1M2 and REMIC 1
Regular Interest LT1M3, 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
and with respect to the Group II Mortgage Loans, to the
Holders of REMIC 1 Regular Interest LT2A2, REMIC 1 Regular
Interest LT2M1, REMIC 1 Regular Interest LT2M2 and REMIC 1
Regular Interest LT2M3, 1.00% of such remainder (other than
amounts payable pursuant to Section 4.07(a)(ii)(d), 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) with respect to the Group I Mortgage Loans, to
the Holders of REMIC 1 Regular Interest LT1ZZ, 1.00% of such
remainder, until the Uncertificated Principal Balance of such
REMIC 1 Regular Interest is reduced to zero and with respect
to the Group II Mortgage Loans, to the Holders of REMIC 1
Regular Interest LT2ZZ, 1.00% of such remainder, until the
Uncertificated Principal Balance of such REMIC 1 Regular
Interest is reduced to zero;
(d) with respect to the Group I Mortgage Loans, to
the Holders of REMIC 1 Regular Interest LT1P, on the
Distribution Date immediately following the expiration of the
latest Prepayment Charge as identified on the Prepayment
Charge Schedule or any Distribution Date thereafter until the
Uncertificated Principal Balance thereof has been distributed
pursuant to this clause and with respect to the Group II
Mortgage Loans, to the Holders of REMIC 1 Regular Interest
LT2P, on the Distribution Date immediately following the
expiration of the latest Prepayment Charge as identified on
the Prepayment Charge Schedule or any Distribution Date
thereafter until the Uncertificated Principal Balance thereof
has been distributed pursuant to this clause; then
(e) any remaining amount to the Holders of the Class
R Certificates (in respect of the Class R-1 Interest);
provided, however, that with respect to the Group I Mortgage Loans, 98.00% and
2.00% of any principal payments that are attributable to an
Overcollateralization Release Amount shall be allocated to Holders of REMIC 1
Regular Interest LT1AA and REMIC 1 Regular Interest LT1ZZ, respectively and with
respect to the Group II Mortgage Loans, 98.00% and 2.00% of any principal
payments that are attributable to an Overcollateralization Release Amount shall
be allocated to Holders of REMIC 1 Regular Interest LT2AA and REMIC 1 Regular
Interest LT2ZZ, respectively.
SECTION 4.08. Allocation of Realized Losses.
(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
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thereof has been reduced to zero; third, to the Class M-3 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero, fourth, to
the Class M-2 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; and fifth, 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 Certificate shall be made by reducing the amount otherwise payable in
respect thereof pursuant to Section 4.01(d)(x). No allocations of any Realized
Losses shall be made to the Certificate Principal Balances of the Class A
Certificates or the Class P Certificates.
(b) All Realized Losses on the Mortgage Loans shall be deemed
to have been allocated in the specified percentages, as follows: (i) with
respect to Realized Losses on the Group I Mortgage Loans, first, to
Uncertificated Accrued Interest payable to the REMIC 1 Regular Interest LT1AA
and REMIC 1 Regular Interest LT1ZZ up to an aggregate amount equal to the REMIC
1 Group I Interest Loss Allocation Amount, 98% and 2%, respectively; second, to
the Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA and
REMIC 1 Regular Interest LT1ZZ up to an aggregate amount equal to the REMIC 1
Group I Principal Loss Allocation Amount, 98% and 2%, respectively; third, to
the Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC 1
Regular Interest LT1M3 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1M3 has been reduced to zero; and fourth, to the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC 1 Regular Interest
LT1M2 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M2 has been
reduced to zero and fifth, to the Uncertificated Principal Balances of REMIC 1
Regular Interest LT1AA, REMIC 1 Regular Interest LT1M1 and REMIC 1 Regular
Interest LT1ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LT1M1 has been reduced to zero and (ii) with
respect to Realized Losses on the Group II Mortgage Loans, first, to
Uncertificated Accrued Interest payable to the REMIC 1 Regular Interest LT2AA
and REMIC 1 Regular Interest LT2ZZ up to an aggregate amount equal to the REMIC
1 Group II Interest Loss Allocation Amount, 98% and 2%, respectively; second, to
the Uncertificated Principal Balances of REMIC 1 Regular Interest LT2AA and
REMIC 1 Regular Interest LT2ZZ up to an aggregate amount equal to the REMIC 1
Group II Principal Loss Allocation Amount, 98% and 2%, respectively; third, to
the Uncertificated Principal Balances of REMIC 1 Regular Interest LT2AA, REMIC 1
Regular Interest LT2M3 and REMIC 1 Regular Interest LT2ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT2M3 has been reduced to zero; fourth, to the Uncertificated Principal
Balances of REMIC 1 Regular Interest LT2AA, REMIC 1 Regular Interest LT2M2 and
REMIC 1 Regular Interest LT2ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT2M2 has been
reduced to zero and fifth, to the Uncertificated Principal Balances of REMIC 1
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Regular Interest LT2AA, REMIC 1 Regular Interest LT2M1 and REMIC 1 Regular
Interest LT2ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LT2M1 has been reduced to zero.
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 Class R 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 Class R 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.
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Upon surrender for registration of transfer of any Certificate
at any office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of a Class R 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, 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, respectively, in
each case that was evidenced by the Class R Certificate being exchanged.
(b) Except as provided in paragraph (c) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of such Certificates may not
be transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Certificates; (iii) ownership
and transfers of registration of such Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall for all
purposes deal with the Depository as representative of the Certificate Owners of
the Certificates for purposes of exercising the rights of Holders under this
Agreement, and requests and directions for and votes of such representative
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and Persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners; and (vii)
the direct participants of the Depository shall have no rights under this
Agreement under or with respect to any of the Certificates held on their behalf
by the Depository, and the Depository may be treated by the Trustee and its
agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures. The parties hereto
are hereby authorized to execute a Letter of Representations with the Depository
or take such other action as may be
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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 Master 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
Master 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 Master 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 Class R Certificate shall be made
unless such disposition is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and any applicable state
securities laws or is made in accordance with the 1933 Act and laws. In the
event of any such transfer, except with respect to the initial transfer of any
Class C Certificate, Class P Certificate or Class R 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 Class R 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.
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No transfer of a Class C Certificate, Class P Certificate or
Class R Certificate or any interest therein shall be made to any Plan subject to
ERISA or Section 4975 of the Code, any Person acting, directly or indirectly, on
behalf of any such Plan or any Person acquiring such Certificates with "Plan
Assets" of a Plan within the meaning of the Department of Labor regulation
promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets") unless the Depositor,
the Trustee and the Master Servicer are provided with an Opinion of Counsel
which establishes to the satisfaction of the Depositor, the Trustee and the
Master Servicer that the purchase of such Certificates is permissible under
applicable law, will not constitute or result in any prohibited transaction
under ERISA or Section 4975 of the Code and will not subject the Depositor, the
Master Servicer, the Trustee or the Trust Fund to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of the Depositor, the Master Servicer, the Trustee or
the Trust Fund. An Opinion of Counsel will not 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.
If any Class C Certificate, Class P Certificate or Class R
Certificate or any interest therein is acquired or held in violation of the
provisions of the second preceding paragraph, the next preceding permitted
beneficial owner will be treated as the beneficial owner of that Certificate
retroactive to the date of transfer to the purported beneficial owner. Any
purported beneficial owner whose acquisition or holding of any such Certificate
or interest therein was effected in violation of the provisions of the preceding
paragraph shall indemnify and hold harmless the Depositor, the Master 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 Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Depositor or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (v) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in a Class R Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in a Class
R Certificate unless such Ownership Interest is a PRO RATA undivided
interest.
(iii) In connection with any proposed transfer of any
Ownership Interest in a Class R Certificate, the Trustee shall as a
condition to registration of the transfer, require delivery to it, in
form and substance satisfactory to it, of each of the following:
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(A) an affidavit in the form of Exhibit K hereto from the
proposed transferee to the effect that such
transferee is a Permitted Transferee and that it is
not acquiring its Ownership Interest in the Class R
Certificate that is the subject of the proposed
transfer as a nominee, trustee or agent for any
Person who is not a Permitted Transferee; and
(B) a covenant of the proposed transferee to the effect
that the proposed transferee agrees to be bound by
and to abide by the transfer restrictions applicable
to the Class R Certificates.
(iv) Any attempted or purported transfer of any Ownership
Interest in a Class R Certificate in violation of the provisions of this Section
shall be absolutely null and void and shall vest no rights in the purported
transferee. If any purported transferee shall, in violation of the provisions of
this Section, become a Holder of a Class R Certificate, then the prior Holder of
such Class R Certificate that is a Permitted Transferee shall, upon discovery
that the registration of transfer of such Class R Certificate was not in fact
permitted by this Section, be restored to all rights as Holder thereof
retroactive to the date of registration of transfer of such Class R Certificate.
The Trustee shall be under no liability to any Person for any registration of
transfer of a Class R Certificate that is in fact not permitted by this Section
or for making any distributions due on such Class R Certificate to the Holder
thereof or taking any other action with respect to such Holder under the
provisions of this Agreement so long as the Trustee received the documents
specified in clause (iii). The Trustee shall be entitled to recover from any
Holder of a Class R Certificate that was in fact not a Permitted Transferee at
the time such distributions were made all distributions made on such Class R
Certificate. Any such distributions so recovered by the Trustee shall be
distributed and delivered by the Trustee to the prior Holder of such Class R
Certificate that is a Permitted Transferee.
(v) If any Person other than a Permitted Transferee acquires
any Ownership Interest in a Class R Certificate in violation of the restrictions
in this Section, then the Trustee shall have the right but not the obligation,
without notice to the Holder of such Class R Certificate or any other Person
having an Ownership Interest therein, to notify the Depositor to arrange for the
sale of such Class R Certificate. The proceeds of such sale, net of commissions
(which may include commissions payable to the Depositor or its affiliates in
connection with such sale), expenses and taxes due, if any, will be remitted by
the Trustee to the previous Holder of such Class R Certificate that is a
Permitted Transferee, except that in the event that the Trustee determines that
the Holder of such Class R Certificate may be liable for any amount due under
this Section or any other provisions of this Agreement, the Trustee may withhold
a corresponding amount from such remittance as security for such claim. The
terms and conditions of any sale under this clause (v) shall be determined in
the sole discretion of the Trustee and it shall not be liable to any Person
having an Ownership Interest in a Class R Certificate as a result of its
exercise of such discretion.
(vi) If any Person other than a Permitted Transferee acquires
any Ownership Interest in a Class R Certificate in violation of the restrictions
in this Section, then the Trustee 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.
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The foregoing provisions of this Section shall cease to apply
to transfers occurring on or after the date on which there shall have been
delivered to the Trustee, in form and substance satisfactory to the Trustee, (i)
written notification from each Rating Agency that the removal of the
restrictions on transfer set forth in this Section will not cause such Rating
Agency to downgrade its rating of the Certificates and (ii) an Opinion of
Counsel to the effect that such removal will not cause any REMIC created
hereunder to fail to qualify as a REMIC.
(e) No service charge shall be made for any registration of
transfer or exchange of Certificates of any Class, but the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer or
exchange shall be canceled by the Certificate Registrar and disposed of pursuant
to its standard procedures.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the
Certificate Registrar or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (ii) there
is delivered to the Trustee, the Depositor and the Certificate Registrar such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Trustee or the Certificate Registrar that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute on behalf of the Trust, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Trustee or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee and the Certificate Registrar) in
connection therewith. Any duplicate Certificate issued pursuant to this Section,
shall constitute complete and indefeasible evidence of ownership in the Trust,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
SECTION 5.04. Persons Deemed Owners.
The Master Servicer, the Depositor, the Trustee, the
Certificate Registrar, any Paying Agent and any agent of the Master 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 Master 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
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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 incorporated and validly
existing under the laws of the United States of America or any state thereof,
authorized under such laws to exercise corporate trust powers and subject to
supervision or examination by federal or state authorities. The Paying Agent
shall initially be the Trustee. The Trustee may appoint a successor to act as
Paying Agent, which appointment shall be reasonably satisfactory to the
Depositor.
(b) The Trustee shall cause the Paying Agent (if other than
the Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent shall hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to such Certificateholders and shall agree that it shall comply with all
requirements of the Code regarding the withholding of payments in respect of
Federal income taxes due from Certificate Owners and otherwise comply with the
provisions of this Agreement applicable to it.
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ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
SECTION 6.01. Liability of the Master Servicer and
the Depositor.
The Master Servicer shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and undertaken
by Master 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 Master Servicer or the
Depositor.
Any entity into which the Master Servicer or Depositor may be
merged or consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Master Servicer or the Depositor shall be a party, or
any corporation succeeding to the business of the Master Servicer or the
Depositor, shall be the successor of the Master 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 Master Servicer
shall satisfy all the requirements of Section 7.02 with respect to the
qualifications of a successor Master Servicer.
SECTION 6.03. Limitation on Liability of the
Master Servicer and Others.
Neither the Master Servicer or the Depositor nor any of the
directors or officers or employees or agents of the Master 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
Master 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 Master 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 Master Servicer or the
Depositor, as the case may be, or by reason of its reckless disregard of its
obligations and duties of the Master Servicer or the Depositor, as the case may
be, hereunder; provided, further, that this provision shall not be construed to
entitle the Master Servicer to indemnity in the event that amounts advanced by
the Master Servicer to retire any senior lien exceed Liquidation Proceeds (in
excess of related liquidation expenses) realized with respect to the related
Mortgage Loan. The Master Servicer and any director or officer or employee or
agent of the Master 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 Master Servicer and the Depositor, and any director or
officer or employee or agent of the Master 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
106
by reason of its reckless disregard of obligations and duties hereunder. The
Master Servicer or the Depositor may undertake any such action which it may deem
necessary or desirable in respect of this Agreement, and the rights and duties
of the parties hereto and the interests of the Certificateholders hereunder. In
such event, unless the Depositor or the Master 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 Master Servicer shall be entitled to be reimbursed therefor from the
Collection Account as and to the extent provided in Section 3.11, any such right
of reimbursement being prior to the rights of the Certificateholders to receive
any amount in the Collection Account. The Master Servicer's right to indemnity
or reimbursement pursuant to this Section shall survive any resignation or
termination of the Master 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 Master Servicer solely in its
capacity as Master Servicer hereunder and in no other capacities.
SECTION 6.04. Master Servicer Not to Resign.
Subject to the provisions of Section 7.01 and Section 6.02,
the Master Servicer shall not resign from the obligations and duties hereby
imposed on it except (i) upon determination that the performance of its
obligations or duties hereunder are no longer permissible under applicable law
or are in material conflict by reason of applicable law with any other
activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Master Servicer so causing such a conflict being of a type and
nature carried on by the Master Servicer or its subsidiaries or Affiliates at
the date of this Agreement or (ii) upon satisfaction of the following
conditions: (a) the Master Servicer has proposed a successor servicer to the
Trustee in writing and such proposed successor servicer is reasonably acceptable
to the Trustee and (b) each Rating Agency shall have delivered a letter to the
Trustee prior to the appointment of the successor servicer stating that the
proposed appointment of such successor servicer as Master Servicer hereunder
will not result in the reduction or withdrawal of the then current rating of the
Certificates; provided, however, that no such resignation by the Master Servicer
shall become effective until such successor servicer or, in the case of (i)
above, the Trustee shall have assumed the Master Servicer's responsibilities and
obligations hereunder or the Trustee shall have designated a successor servicer
in accordance with Section 7.02. Any such resignation shall not relieve the
Master Servicer of responsibility for any of the obligations specified in
Sections 7.01 and 7.02 as obligations that survive the resignation or
termination of the Master Servicer. Any such determination permitting the
resignation of the Master Servicer pursuant to clause (i) above shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee. Any
such determination permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee.
SECTION 6.05. Delegation of Duties.
In the ordinary course of business, the Master 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 Master 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
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Section 3.02, no such delegation is permitted that results in the delegee
subservicing any Mortgage Loans. The Master 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 Master Servicer's Affiliates or their
respective successors and assigns.
SECTION 6.06. Reserved.
SECTION 6.07. Inspection.
The Master Servicer, in its capacity as Master Servicer, shall
afford the Trustee, upon reasonable notice, during normal business hours, access
to all records maintained by the Master Servicer in respect of its rights and
obligations hereunder and access to officers of the Master Servicer responsible
for such obligations. Upon request, the Master 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. Master Servicer Events of
Termination.
(a) If any one of the following events ("Master Servicer
Events of Termination") shall occur and be continuing:
(i) (A) The failure by the Master Servicer to make any
Advance; or (B) any other failure by the Master 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 Master Servicer by
the Trustee or to the Trustee by any Holders of a Regular Certificate
evidencing at least 25% of the Voting Rights; or
(ii) The failure by the Master Servicer to make any required
Servicing Advance which failure continues unremedied for a period of 30
days, or the failure by the Master Servicer duly to observe or perform,
in any material respect, any other covenants, obligations or agreements
of the Master 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 Master 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) actual knowledge of such failure
by a Servicing Officer of the Master Servicer; or
(iii) The entry against the Master 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 Master 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 Master 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 Master
Servicer and such decree or order shall have remained in force
undischarged, unbonded or unstayed for a period of 60 days; or the
Master Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligations;
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(b) then, and in each and every such case, so long as a Master
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 Master Servicer Remittance Date (provided the Trustee shall give the Master
Servicer notice of such failure to advance by 5:00 P.M. New York time on the
Master Servicer Remittance Date), the Trustee shall terminate all of the rights
and obligations of the Master Servicer under this Agreement 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 Master Servicer and (y) in the case of (i)(B), (ii), (iii) and
(iv) 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 Master Servicer (and to the Trustee
if given by Holders of Certificates), terminate all of the rights and
obligations of the Master Servicer as servicer under this Agreement. Any such
notice to the Master Servicer shall also be given to each Rating Agency, the
Depositor and the Master Servicer. On or after the receipt by the Master
Servicer (and by the Trustee if such notice is given by the Holders) of such
written notice, all authority and power of the Master 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 Master 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 Master
Servicer agrees to cooperate with the Trustee (or the applicable successor
Master Servicer) in effecting the termination of the responsibilities and rights
of the Master Servicer hereunder, including, without limitation, the delivery to
the Trustee of all documents and records requested by it to enable it to assume
the Master 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 Master Servicer) for the
administration by it of all cash amounts that shall at the time be held by the
Master 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 Master Servicer in such accounts or thereafter received by the
Master Servicer with respect to the Mortgage Loans or any REO Property received
by the Master Servicer. All reasonable costs and expenses (including attorneys'
fees) incurred in connection with transferring the Mortgage Files to the
successor Master Servicer and amending this Agreement to reflect such succession
as Master Servicer pursuant to this Section shall be paid by the predecessor
Master Servicer (or if the predecessor Master Servicer is the Trustee, the
initial Master Servicer) upon presentation of reasonable documentation of such
costs and expenses and to the extent not paid by the Master Servicer, by the
Trust.
SECTION 7.02. Trustee to Act; Appointment of Successor.
(a) Within 90 days of the time the Master 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 Master Servicer as is
approved in accordance with this Agreement) shall be the successor in all
respects to the Master 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
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and liabilities relating thereto placed on the Master 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 Master Servicer, immediately will assume all of the obligations of the
Master Servicer to make advances. Notwithstanding the foregoing, the Trustee, in
its capacity as successor Master 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 Master
Servicer) shall be entitled to such compensation as the Master 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
Master 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 Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder;
provided, that the appointment of any such successor Master 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 Master
Servicer hereunder, unless the Trustee is prohibited by law from so acting, 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 Master 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 Master
Servicer shall not affect any liability of the predecessor Master Servicer which
may have arisen under this Agreement prior to its termination as Master 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 Master
Servicer be liable for any acts or omissions of the predecessor Master Servicer
or for any breach by such Master 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 Master Servicer upon presentation of
reasonable documentation of such costs, and if such predecessor Master Servicer
defaults in its obligation to pay such costs, such costs shall be paid by the
successor Master Servicer or the Trustee (in which case the successor Master
Servicer or the Trustee, as applicable, shall be entitled to reimbursement
therefor from the assets of the Trust).
(b) Any successor to the Master 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 Master Servicer hereunder and a fidelity bond
in respect of its officers, employees and agents to the same extent as the
Master Servicer is so required pursuant to Section 3.14.
SECTION 7.03. Waiver of Defaults.
The Majority Certificateholders may, on behalf of all
Certificateholders, waive any events permitting removal of the Master Servicer
as servicer pursuant to this Article VII, provided,
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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 Master 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
Master 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 Master Servicer Event of Termination for five Business Days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to all Certificateholders notice of
such occurrence unless such default or Master Servicer Event of Termination
shall have been waived or cured.
SECTION 7.05. Survivability of Master Servicer
Liabilities.
Notwithstanding anything herein to the contrary, upon
termination of the Master Servicer hereunder, any liabilities of the Master
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 Master Servicer
Event of Termination and after the curing of all Master 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 Master
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 Master Servicer Event of
Termination, and after the curing of all such Master 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 or investigating the facts related thereto;
(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
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proceeding for any 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 Master Servicer to comply with the obligations of the
Master Servicer referred to in clauses (i) and (ii) of Section 7.01(a)
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 Master 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 Master 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 Master 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 Master Servicer Event of
Termination and after the curing of all Master 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 Master Servicer or, if paid
by the Trustee, shall be reimbursed by the Master Servicer upon demand
and, if not reimbursed by the Master Servicer, shall be reimbursed by
the Trust. Nothing in this clause (v) shall derogate from the
obligation of the Master 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 Master Servicer until such time as the Trustee may be
required to act as Master Servicer pursuant to Section 7.02 and
thereupon only for the acts or omissions of the Trustee as successor
Master 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 or a custodian; and
(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.
SECTION 8.03. Trustee Not Liable for Certificates
or Mortgage Loans.
The recitals contained herein and in the Certificates (other
than the authentication of the Trustee on the Certificates) shall be taken as
the statements of the Depositor, and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or related document. The Trustee shall not be accountable for the
use or application by the Master Servicer, or for the use or application of any
funds paid to the Master Servicer in respect of the Mortgage Loans or deposited
in or withdrawn from the Collection Account by the Master 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,
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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 Master
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 Master Servicer pursuant to
Section 7.02); the compliance by the Depositor, Option One, the Seller or the
Master 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 Master 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 Master Servicer (other than if the Trustee shall assume the duties of
the Master Servicer pursuant to Section 7.02), any Sub-Servicer or any
Mortgagor; any action of the Master Servicer (other than if the Trustee shall
assume the duties of the Master Servicer pursuant to Section 7.02), or any Sub-
Servicer taken in the name of the Trustee; the failure of the Master 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
Master Servicer (other than if the Trustee shall assume the duties of the Master
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 Master 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 Master Servicer, the Depositor or their Affiliates.
SECTION 8.05. Trustee Fee and Expenses.
(a) The Trustee shall withdraw from the Distribution Account
on each Distribution Date and pay to itself the Trustee Fee. The Trustee, or any
director, officer, employee or agent of the Trustee, shall be indemnified by
REMIC 1 and held harmless against any loss, liability or expense (not including
expenses and disbursements incurred or made by the Trustee, including the
compensation and the expenses and disbursements of its agents and counsel, in
the ordinary course of the Trustee's performance in accordance with the
provisions of this Agreement) incurred by the Trustee arising out of or in
connection with the acceptance or administration of its obligations and duties
under this Agreement, other than any loss, liability or expense (i) resulting
from the Master Servicer's actions or omissions in connection with this
Agreement and the Mortgage Loans for which the Trustee is indemnified under
Section 8.05(b), (ii) that constitutes a specific liability of the Trustee under
this Agreement or (iii) 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
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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.
(b) The Master 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 Master
Servicer's obligations and duties under this Agreement. Such indemnity shall
survive the termination or discharge of this Agreement and the resignation or
removal of the Trustee and the Master Servicer for actions prior to such
resignation or removal. Any payment hereunder made by the Master Servicer to the
Trustee shall be from the Master Servicer's own funds, without reimbursement
from the Trust Fund therefor.
SECTION 8.06. Eligibility Requirements for
Trustee.
The Trustee hereunder shall at all times be an entity duly
organized and validly existing under the laws of the United States of America or
any state thereof, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authority. If such
entity publishes reports of condition at least annually, pursuant to law or to
the requirements of the aforesaid supervising or examining authority, then for
the purposes of this Section 8.06, the combined capital and surplus of such
entity shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. The principal office of the
Trustee (other than the initial Trustee) shall be in a state with respect to
which an Opinion of Counsel has been delivered to such Trustee at the time such
Trustee is appointed Trustee to the effect that the Trust will not be a taxable
entity under the laws of such state. In case at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section 8.06, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.07.
SECTION 8.07. Resignation or Removal of Trustee.
The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Depositor, the
Master 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
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liquidation, then the Depositor or the Master Servicer may remove the Trustee.
If the Depositor or the Master 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 Master 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 Master 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 Master Servicer and the predecessor Trustee
shall execute and deliver such instruments and do such other things as may
reasonably be required for fully and certainly vesting and confirming in the
successor Trustee all such rights, powers, duties and obligations.
No successor Trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor Trustee
shall be eligible under the provisions of Section 8.06 and the appointment of
such successor Trustee shall not result in a downgrading of the Regular
Certificates by either Rating Agency, as evidenced by a letter from each Rating
Agency.
Upon acceptance of appointment by a successor Trustee as
provided in this Section 8.08, the successor Trustee shall mail notice of the
appointment of a successor Trustee hereunder to all Holders of Certificates at
their addresses as shown in the Certificate Register and to each Rating Agency.
SECTION 8.09. Merger or Consolidation of Trustee.
Any entity into which the Trustee may be merged or converted
or with which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the business of the Trustee, shall be the successor of the Trustee
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.
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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 Master 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 Master Servicer. If the Master
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, or in the case a Master 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 Master
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 Master Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Master 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 Master 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
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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 Master 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
Master Servicer and each Certificateholder upon reasonable notice during normal
business hours, access to all records maintained by the Trustee in respect of
its duties hereunder and access to officers of the Trustee responsible for
performing such duties. Upon request, the Trustee shall furnish the Depositor,
the Master Servicer and any requesting Certificateholder with its most recent
financial statements. The Trustee shall cooperate fully with the Seller, the
Master Servicer, the Depositor and such Certificateholder and shall make
available to the Seller, the Master 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 Master 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.
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SECTION 8.13. Suits for Enforcement.
In case a Master Servicer Event of Termination or other
default by the Master 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 Master Servicer shall pay any and all tax related
expenses (not including taxes) of each REMIC, including but not limited to any
professional fees or expenses related to audits or any administrative or
judicial proceedings with respect to each REMIC that involve the Internal
Revenue Service or state tax authorities, but only to the extent that (i) such
expenses are ordinary or routine expenses, including expenses of a routine audit
but not expenses of litigation (except as described in (ii)); or (ii) such
expenses or liabilities (including taxes and penalties) are attributable to the
negligence or willful misconduct of the Master Servicer in fulfilling its duties
hereunder. The Master Servicer shall be entitled to reimbursement of expenses to
the extent provided in clause (i) above from the Collection Account.
(d) The Trustee shall prepare, sign and file, all of the
REMICs' federal and state tax and information returns (including Form 8811) as
the direct representative each REMIC created hereunder. The expenses of
preparing and filing such returns shall be borne by the Trustee.
(e) The Holder of the Class R Certificate at any time holding
the largest Percentage Interest thereof shall be the "tax matters person" as
defined in the REMIC Provisions (the "Tax Matters Person") with respect to each
REMIC and shall act as Tax Matters Person for each REMIC. 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.
(f) The Trustee, the Master 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 Master Servicer nor the Holder of any
Residual Certificate shall take any action, cause any REMIC created hereunder to
take any action or fail to
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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 Master 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 Master
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 Master 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.
(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 Master 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
2002, the Master Servicer shall deliver to the Trustee and each Rating Agency an
Officers' Certificate stating the Master Servicer's compliance with the
provisions of this Section 9.01.
(l) The Trustee will apply for an Employee Identification
Number from the Internal Revenue Service via a Form SS-4 or other acceptable
method for all tax entities.
SECTION 9.02. Prohibited Transactions and
Activities.
Neither the Depositor, the Master 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
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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 Master Servicer of its duties
and obligations set forth herein, the Master 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 Master 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 Class R Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of such Class R Certificate
on which the Master Servicer has relied. The foregoing shall not be deemed to
limit or restrict the rights and remedies of the Holder of such Class R
Certificate now or hereafter existing at law or in equity. Notwithstanding the
foregoing, however, in no event shall the Master 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 Master 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 Losses attributable to the action or
inaction of the Master Servicer, the Depositor or the Holder of such Class R
Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Class R 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 Class R 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
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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
Master 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 Master 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 Master Servicer of the Mortgage Loans as
described below and (iv) the Distribution Date in November 2031. 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
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to the Court of St.
James's, living on the date hereof.
The Master Servicer 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 the Principal Balance of the
Mortgage Loans and REO Properties (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) or the market value of the Mortgage Loans and REO Properties, in each
case plus accrued and unpaid interest thereon at the weighted average of the
Mortgage Rates through the end of the Due Period preceding the final
Distribution Date plus unreimbursed Servicing Advances, Advances, any unpaid
Servicing Fees allocable to such Mortgage Loans and REO Properties, any accrued
and unpaid Net WAC Rate Carryover Amount, plus any additional amounts necessary
to pay all interest accrued on, as well as amounts necessary to retire the
principal balance of, the notes issued pursuant to the Indenture, dated November
20, 2001, between First ▇▇▇▇▇▇▇▇ ▇▇▇ Trust 2001-FF2 as issuer and the Trustee as
indenture trustee (the "Termination Price").
In connection with any such purchase pursuant to the preceding
paragraph, the Master Servicer 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
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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 Master Servicer, by letter 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 Class R Certificates, the Holders of the
Class R Certificates agree, in connection with any termination hereunder, to
assign and transfer any amounts in excess of the par value of the Mortgage
Loans, and to the extent received in respect of such termination, to pay any
such amounts to the Holders of the Class C Certificates.
(d) In the event that all Certificateholders shall not
surrender their Certificates for final payment and cancellation on or before
such final Distribution Date, the Trustee shall promptly following such date
cause all funds in the Distribution Account not distributed in final
distribution to Certificateholders to be withdrawn therefrom and credited to the
remaining Certificateholders by depositing such funds in a separate Servicing
Account for the benefit of such Certificateholders, and the Master Servicer (if
the Master 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 Class R Certificateholder 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 Class R Certificateholder for
payment.
SECTION 10.02. Additional Termination Requirements.
(a) In the event that the Master Servicer 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
Master Servicer shall adopt and the Trustee shall sign a plan of
complete liquidation of each REMIC created
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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
Master Servicer for cash pursuant to the terms of the plan of complete
liquidation.
(b) By their acceptance of Certificates, the Holders thereof
hereby agree to appoint the Trustee as their attorney in fact to: (i) adopt such
a plan of complete liquidation (and the Certificateholders hereby appoint the
Trustee as their attorney in fact to sign such plan) as appropriate and (ii) to
take such other action in connection therewith as may be reasonably required to
carry out such plan of complete liquidation all in accordance with the terms
hereof.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
This Agreement may be amended from time to time by the
Depositor, the Master 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 or (iii) 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 an Opinion of Counsel delivered to the Trustee, 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
shall be required to address the effect of any such amendment on any such
consenting Certificateholder.
In addition, this Agreement may be amended from time to time
by the Depositor, the Master 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 in a manner other than as
described in clause (x) above, without the consent of the Holders of
Certificates of such Class evidencing at least a 66% Percentage Interest in such
Class, or (z) reduce the percentage of Voting Rights required by clause (y)
above without the consent of the Holders of all Certificates of such Class then
outstanding. Upon approval of an amendment, a copy of such amendment shall be
sent to the Rating Agencies.
Notwithstanding any provision of this Agreement to the
contrary, the Trustee shall not consent to any amendment to this Agreement
unless it shall have first received an Opinion of Counsel, delivered by (and at
the expense of) the Person seeking such Amendment, to the effect that such
amendment will not result in the imposition of a tax on any REMIC created
hereunder constituting part of the Trust Fund pursuant to the REMIC Provisions
or cause any REMIC created hereunder constituting part of the Trust 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 Master 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 Master
Servicer and each Rating Agency.
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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 Master Servicer at the expense of the Trust, but only upon
direction of Certificateholders accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
together constitute but one and the same instrument.
SECTION 11.03. Limitation on Rights of
Certificateholders.
The death or incapacity of any Certificateholder shall not (i)
operate to terminate this Agreement or the Trust, (ii) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust, or (iii) otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
Except as expressly provided for herein, no Certificateholder
shall have any right to vote or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made 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
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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 Master Servicer, Option One Mortgage
Corporation, ▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇,
or such other address or telecopy number as may hereafter be furnished to the
Depositor and the Trustee in writing by the Master Servicer, (b) in the case of
the Trustee, ▇▇▇▇▇ Fargo Bank Minnesota, N.A., ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: First Franklin Mortgage Loan Trust Series
2001-FF2, with a copy to ▇▇▇▇▇ Fargo Bank Minnesota, N.A., Sixth and Marquette,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: First Franklin Series 2001-FF2, or such
other address or telecopy number as may hereafter be furnished to the Depositor
and the Master Servicer in writing by the Trustee, and (c) in the case of the
Depositor, Financial Asset Securities Corp., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Legal, or such other address or telecopy number as
may be furnished to the Master 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 Master Servicer
Default shall be given by telecopy and by certified mail. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have duly been given when
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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 Master 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 Master Servicer, as the case may be, has actual
knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Master Servicer Event of
Termination that has not been cured or waived;
(iii) the resignation or termination of the Master 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 Master Servicer
pursuant to Section 7.02 hereof, any event that would result in the
inability of the Trustee to make Advances.
(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 Master 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
132
(iii) each notice delivered pursuant to Section 7.01(a) hereof
which relates to the fact that the Master 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, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (ii) ▇▇▇▇▇'▇
Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and (iii)
Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, 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 Master 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.
(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
133
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.
134
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized, all as of the day and year first above written.
FINANCIAL ASSET SECURITIES CORP.,
as Depositor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
OPTION ONE MORTGAGE CORPORATION,
as Master Servicer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Secretary
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A.,
as Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
135
STATE OF )
) ss.:
COUNTY OF )
On the ___th day of November, 2001 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
136
STATE OF )
) ss.:
COUNTY OF )
On the ___th day of November, 2001 before me, a notary public
in and for said State, personally appeared _______________ known to me to be a
_______________ of Option One Mortgage Corporation, 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
137
STATE OF )
) ss.:
COUNTY OF )
On the ___th day of November, 2001 before me, a notary public
in and for said State, personally appeared __________________, known to me to be
an _____________________ of ▇▇▇▇▇ Fargo Bank Minnesota, N.A., a national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said association, and acknowledged to me
that such 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
138
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 : November 1, 2001
First Distribution Date : December 26, 2001
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 : A-1
Assumed Maturity Date :
A-1-1
First Franklin Mortgage Loan Trust 2001-FF2
Asset-Backed Certificates,
Series 2001-FF2
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 Master Servicer, or the Trustee referred to
below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class A-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 November 1, 2001 (the "Agreement") among the
Depositor, Option One Mortgage Corporation, as master servicer (the "Master
Servicer"), and ▇▇▇▇▇ Fargo Bank Minnesota, N.A., 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: November 19, 2001
FIRST FRANKLIN MORTGAGE LOAN
TRUST 2001-FF2
By: ▇▇▇▇▇ FARGO BANK
MINNESOTA, N.A., not in
its individual capacity,
but solely as Trustee
By____________________________
This is one of the Class A-1 Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
▇▇▇▇▇ Fargo Bank Minnesota, N.A.,
as Trustee
A-1-3
[Reverse of Class A-1 Certificate]
FIRST FRANKLIN MORTGAGE LOAN TRUST 2001-FF2
Asset-Backed Certificates,
Series 2001-FF2
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2001-FF2, Asset-Backed
Certificates, Series 2001-FF2 (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 Master Servicer and the Trustee and of Holders of the
requisite percentage of the Percentage Interests of each Class of Certificates
affected by such amendment, as specified in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-1-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer and the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Trustee, the Master 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 Master 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.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
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 : November 1, 2001
First Distribution Date : December 26, 2001
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 : A-2
Assumed Maturity Date :
A-2-1
First Franklin Mortgage Loan Trust 2001-FF2
Asset-Backed Certificates,
Series 2001-FF2
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 Master Servicer, or the Trustee referred to
below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class A-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 November 1, 2001 (the "Agreement") among the
Depositor, Option One Mortgage Corporation, as master servicer (the "Master
Servicer"), and ▇▇▇▇▇ Fargo Bank Minnesota, N.A., 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: November 19, 2001
FIRST FRANKLIN MORTGAGE LOAN
TRUST 2001-FF2
By: ▇▇▇▇▇ FARGO BANK
MINNESOTA, N.A., not
in its individual
capacity, but solely
as Trustee
By_____________________________
This is one of the Class A-2 Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
▇▇▇▇▇ Fargo Bank Minnesota, N.A.,
as Trustee
A-2-3
[Reverse of Class A-2 Certificate]
FIRST FRANKLIN MORTGAGE LOAN TRUST 2001-FF2
Asset-Backed Certificates,
Series 2001-FF2
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2001-FF2, Asset-Backed
Certificates, Series 2001-FF2 (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 Master Servicer and the Trustee and of Holders of the
requisite percentage of the Percentage Interests of each Class of Certificates
affected by such amendment, as specified in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-2-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer and the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Trustee. the Master 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 Master 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.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
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 : November 1, 2001
First Distribution Date : December 26, 2001
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 :
A-3-1
First Franklin Mortgage Loan Trust 2001-FF2
Asset-Backed Certificates,
Series 2001-FF2
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 Master Servicer, or the Trustee referred to
below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-1 Certificate (obtained by
dividing the Denomination of this Class M-1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of November 1, 2001 (the "Agreement") among the
Depositor, Option One Mortgage Corporation, as master servicer (the "Master
Servicer"), and ▇▇▇▇▇ Fargo Bank Minnesota, N.A., 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: November 19, 2001
FIRST FRANKLIN MORTGAGE LOAN TRUST
2001-FF2
By: ▇▇▇▇▇ FARGO BANK
MINNESOTA, N.A., not in
its individual capacity,
but solely as Trustee
By__________________________________
This is one of the Class M-1 Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
▇▇▇▇▇ Fargo Bank Minnesota, N.A.,
as Trustee
A-3-3
[Reverse of Class M-1 Certificate]
First Franklin Mortgage Loan Trust 2001-FF2
Asset-Backed Certificates,
Series 2001-FF2
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2001-FF2, Asset-Backed
Certificates, Series 2001-FF2 (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 Master 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 Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer and the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Trustee, the Master 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 Master 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
A-3-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number ________________, or, if mailed by check, to ____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
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 : November 1, 2001
First Distribution Date : December 26, 2001
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 :
A-4-1
First Franklin Mortgage Loan Trust 2001-FF2
Asset-Backed Certificates,
Series 2001-FF2
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 Master Servicer, or the Trustee referred to
below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-2 Certificate (obtained by
dividing the Denomination of this Class M-2 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of November 1, 2001 (the "Agreement") among the
Depositor, Option One Mortgage Corporation, as master servicer (the "Master
Servicer"), and ▇▇▇▇▇ Fargo Bank Minnesota, N.A., 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: November 19, 2001
FIRST FRANKLIN MORTGAGE LOAN TRUST
2001-FF2
By: ▇▇▇▇▇ FARGO BANK MINNESOTA,
N.A., not in its individual
capacity, but solely as
Trustee
By________________________________
This is one of the Class M-2 Certificates
referenced in the within-mentioned Agreement
By____________________________________
Authorized Signatory of
▇▇▇▇▇ Fargo Bank Minnesota, N.A.,
as Trustee
A-4-3
[Reverse of Class M-2 Certificate]
First Franklin Mortgage Loan Trust 2001-FF2
Asset-Backed Certificates,
Series 2001-FF2
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2001-FF2, Asset-Backed
Certificates, Series 2001-FF2 (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 Master Servicer and the Trustee and of Holders of the
requisite percentage of the Percentage Interests of each Class of Certificates
affected by such amendment, as specified in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-4-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer and the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Trustee, the Master 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 Master Servicer may purchase, in whole, from the Trust the Mortgage
Loans at a purchase price determined as provided in the Agreement. In the event
that no such optional termination occurs, the obligations and responsibilities
created by the Agreement will terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust, (iii) the
Distribution Date in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-4-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
________________________________________________________________________________
Dated:_________________
_________________________________________
Signature by or on behalf of assignor
A-4-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number ________________, or, if mailed by check, to ____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
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 : November 1, 2001
First Distribution Date : December 26, 2001
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 :
A-5-1
First Franklin Mortgage Loan Trust 2001-FF2
Asset-Backed Certificates,
Series 2001-FF2
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 Master Servicer, or the Trustee referred to
below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-3 Certificate (obtained by
dividing the Denomination of this Class M-3 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of November 1, 2001 (the "Agreement") among the
Depositor, Option One Mortgage Corporation, as master servicer (the "Master
Servicer"), and ▇▇▇▇▇ Fargo Bank Minnesota, N.A., 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: November 19, 2001
FIRST FRANKLIN MORTGAGE LOAN TRUST
2001-FF2
By: ▇▇▇▇▇ FARGO BANK MINNESOTA,
N.A., not in its individual
capacity, but solely as
Trustee
By________________________________
This is one of the Class M-3 Certificates
referenced in the within-mentioned Agreement
By____________________________________
Authorized Signatory of
▇▇▇▇▇ Fargo Bank Minnesota, N.A.,
as Trustee
A-5-3
[Reverse of Class M-3 Certificate]
First Franklin Mortgage Loan Trust 2001-FF2
Asset-Backed Certificates,
Series 2001-FF2
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2001-FF2, Asset-Backed
Certificates, Series 2001-FF2 (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 Master Servicer and the Trustee and of Holders of the
requisite percentage of the Percentage Interests of each Class of Certificates
affected by such amendment, as specified in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-5-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer and the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Trustee, the Master 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 Master Servicer may purchase, in whole, from the Trust the Mortgage
Loans at a purchase price determined as provided in the Agreement. In the event
that no such optional termination occurs, the obligations and responsibilities
created by the Agreement will terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust, (iii) the
Distribution Date in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-5-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
________________________________________________________________________________
Dated:_________________
_________________________________________
Signature by or on behalf of assignor
A-5-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number ________________, or, if mailed by check, to ____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
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 AND THE
CLASS M-3 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 : November 1, 2001
First Distribution Date : December 26, 2001
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $
Original Class Certificate
Principal Balance of this Class : $
Percentage Interest : 100.00%
Class : C
A-6-1
First Franklin Mortgage Loan Trust 2001-FF2
Asset-Backed Certificates,
Series 2001-FF2
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 Master Servicer, or the Trustee referred to
below or any of their respective affiliates.
This certifies that Option One Mortgage Securities Corp. 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 November 1, 2001 (the
"Agreement") among the Depositor, Option One Mortgage Corporation, as master
servicer (the "Master Servicer"), and ▇▇▇▇▇ Fargo Bank Minnesota, N.A., 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 Master Servicer or the Depositor; or there shall be delivered
to the Trustee and the Depositor a transferor certificate by the transferor and
an investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
A-6-2
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-6-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: November 19, 2001
FIRST FRANKLIN MORTGAGE LOAN TRUST
2001-FF2
By: ▇▇▇▇▇ FARGO BANK MINNESOTA,
N.A., not in its individual
capacity, but solely as
Trustee
By____________________________________
This is one of the Class C Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
▇▇▇▇▇ Fargo Bank Minnesota, N.A.,
as Trustee
A-6-4
[Reverse of Class C Certificate]
First Franklin Mortgage Loan Trust 2001-FF2
Asset-Backed Certificates,
Series 2001-FF2
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2001-FF2, Asset-Backed
Certificates, Series 2001-FF2 (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 Master 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-6-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer and the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Trustee, the Master 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 Master 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-6-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
________________________________________________________________________________
Dated:_________________
_________________________________________
Signature by or on behalf of assignor
A-6-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number ________________, or, if mailed by check, to ____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
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 : November 1, 2001
First Distribution Date : December 26, 2001
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-7-1
First Franklin Mortgage Loan Trust 2001-FF2
Asset-Backed Certificates,
Series 2001-FF2
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 Master Servicer, or the Trustee referred to
below or any of their respective affiliates.
This certifies that Option One Mortgage Securities Corp. 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 November 1, 2001 (the
"Agreement") among the Depositor, Option One Mortgage Corporation, as master
servicer (the "Master Servicer"), and ▇▇▇▇▇ Fargo Bank Minnesota, N.A., 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 Master Servicer or the Depositor; or there shall be delivered
to the Trustee and the Depositor a transferor certificate by the transferor and
an investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability
A-7-2
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-7-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: November 19, 2001
FIRST FRANKLIN MORTGAGE LOAN TRUST
2001-FF2
By: ▇▇▇▇▇ FARGO BANK MINNESOTA,
N.A., not in its individual
capacity, but solely as
Trustee
By__________________________________
This is one of the Class P Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
▇▇▇▇▇ Fargo Bank Minnesota, N.A.,
as Trustee
A-7-4
[Reverse of Class P Certificate]
First Franklin Mortgage Loan Trust 2001-FF2
Asset-Backed Certificates,
Series 2001-FF2
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2001-FF2, Asset-Backed
Certificates, Series 2001-FF2 (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 Master Servicer and the Trustee and of Holders of the
requisite percentage of the Percentage Interests of each Class of Certificates
affected by such amendment, as specified in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-7-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer and the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Trustee, the Master 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 Master Servicer may purchase, in whole, from the Trust the Mortgage
Loans at a purchase price determined as provided in the Agreement. In the event
that no such optional termination occurs, the obligations and responsibilities
created by the Agreement will terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust, (iii) the
Distribution Date in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-7-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
________________________________________________________________________________
Dated:_________________
_________________________________________
Signature by or on behalf of assignor
A-7-6
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.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CLASS R CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : November 1, 2001
First Distribution Date : December 26, 2001
Percentage Interest : 100.00%
Class : R
A-8-1
First Franklin Mortgage Loan Trust 2001-FF2
Asset-Backed Certificates,
Series 2001-FF2
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 Master Servicer or the Trustee
referred to below or any of their respective affiliates.
This certifies that Option One Mortgage Securities Corp. is the
registered owner of the Percentage Interest evidenced by this Certificate
specified above in the interest represented by all Certificates of the Class to
which this Certificate belongs in a Trust consisting primarily of the Mortgage
Loans deposited by Financial Asset Securities Corp. (the "Depositor"). The Trust
was created pursuant to a Pooling and Servicing Agreement dated as of November
1, 2001 (the "Agreement") among the Depositor, Option One Mortgage Corporation,
as master servicer (the "Master Servicer") and ▇▇▇▇▇ Fargo Bank Minnesota, N.A.,
a national banking association, as trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee in Minneapolis, Minnesota.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Master Servicer or the Depositor; or there shall be delivered
to the Trustee and the Depositor a transferor certificate by the transferor and
an investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability
A-8-2
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.
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-8-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: November 19, 2001
FIRST FRANKLIN MORTGAGE LOAN TRUST
2001-FF2
By: ▇▇▇▇▇ FARGO BANK MINNESOTA,
N.A., not in its individual
capacity, but solely as Trustee
By_________________________________
This is one of the Class R Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
▇▇▇▇▇ Fargo Bank Minnesota, N.A.,
as Trustee
A-8-4
[Reverse of Class R Certificate]
First Franklin Mortgage Loan Trust 2001-FF2
Asset-Backed Certificates,
Series 2001-FF2
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2001-FF2, Asset-Backed
Certificates, Series 2001-FF2 (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 Master Servicer and the Trustee and of Holders of the
requisite percentage of the Percentage Interests of each Class of Certificates
affected by such amendment, as specified in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-8-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer and the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Trustee, the Master 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 Master Servicer may purchase, in whole, from the Trust the Mortgage
Loans at a purchase price determined as provided in the Agreement. In the event
that no such optional termination occurs, the obligations and responsibilities
created by the Agreement will terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust, (iii) the
Distribution Date in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-8-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
________________________________________________________________________________
Dated:_________________
_________________________________________
Signature by or on behalf of assignor
A-8-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number ________________, or, if mailed by check, to ____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF DIVIDEND ACCOUNT CERTIFICATE
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 : November 1, 2001
First Distribution Date : December 26, 2001
Percentage Interest : 100.00%
Class : Dividend Account Certificate
A-9-1
First Franklin Mortgage Loan Trust 2001-FF2
Asset-Backed Certificates,
Series 2001-FF2
Dividend Account Certificate
evidencing the Percentage Interest in the distributions allocable to
the Certificates 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
This Dividend Account Certificate does not evidence an obligation of,
or an interest in, and is not guaranteed by the Depositor, the Master Servicer,
or the Trustee referred to below or any of their respective affiliates.
This certifies that Option One Mortgage Securities Corp. is the
registered owner of the Percentage Interest evidenced by this Dividend Account
Certificate 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 November 1, 2001 (the "Agreement") among the Depositor,
Option One Mortgage Corporation, as master servicer (the "Master Servicer"), and
▇▇▇▇▇ Fargo Bank Minnesota, N.A., 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 Dividend Account
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Dividend
Account Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
No transfer of this Dividend Account Certificate shall be made unless
such transfer is made pursuant to an effective registration statement under the
Act and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Master Servicer or the Depositor; or there shall be delivered
to the Trustee and the Depositor a transferor certificate by the transferor and
an investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
A-9-2
Reference is hereby made to the further provisions of this Dividend
Account 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 Dividend Account 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: November 19, 2001
FIRST FRANKLIN MORTGAGE LOAN TRUST
2001-FF2
By: ▇▇▇▇▇ FARGO BANK
MINNESOTA, N.A., not
in its individual
capacity, but solely
as Trustee
By_________________________________
This is one of the Dividend Account Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
▇▇▇▇▇ Fargo Bank Minnesota, N.A.,
as Trustee
A-9-4
[Reverse of Dividend Account Certificate]
First Franklin Mortgage Loan Trust 2001-FF2
Asset-Backed Certificates,
Series 2001-FF2
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2001-FF2, Asset-Backed
Certificates, Series 2001-FF2 (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 the Dividend Account Certificates 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 Master Servicer and the Trustee and of Holders of the
requisite percentage of the Percentage Interests of each Class of Certificates
affected by such amendment, as specified in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-9-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer and the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Trustee, the Master 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 Mortgage Loans as of the Cut-off Date,
the Master Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-9-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_______________________________________________________
________________________________________________________________________________
Dated:_________________
_________________________________________
Signature by or on behalf of assignor
A-9-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number ________________, or, if mailed by check, to ____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
A-9-8
EXHIBIT B
[RESERVED]
B-1
EXHIBIT C
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
C-1
OPTION ONE OWNER TRUST 2001-1A,
as Seller
OPTION ONE MORTGAGE CORPORATION
and
FINANCIAL ASSET SECURITIES CORP.,
as Purchaser
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of November 14, 2001
Adjustable-Rate and Fixed-Rate Mortgage Loans
First Franklin Mortgage Loan Trust 2001-FF2
TABLE OF CONTENTS
Page
----
ARTICLE I.
DEFINITIONS
Section 1.01 DEFINITIONS............................................................................4
ARTICLE II.
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 SALE OF MORTGAGE LOANS.................................................................5
Section 2.02 OBLIGATIONS OF OPTION ONE AND SELLER UPON SALE.........................................5
Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.......................................7
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 OPTION ONE REPRESENTATIONS AND WARRANTIES RELATING TO THE
MORTGAGE LOANS.........................................................................7
Section 3.02 OPTION ONE REPRESENTATIONS AND WARRANTIES RELATING_ TO THE SELLER.....................16
Section 3.03 OPTION ONE REPRESENTATIONS AND WARRANTIES RELATING TO OPTION ONE......................18
Section 3.04 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES.................................19
ARTICLE IV.
OPTION ONE'S COVENANTS
Section 4.01 COVENANTS OF OPTION ONE...............................................................21
Section 5.01 INDEMNIFICATION.......................................................................21
ARTICLE VI.
TERMINATION
Section 6.01 TERMINATION...........................................................................24
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 AMENDMENT.............................................................................24
Section 7.02 GOVERNING LAW.........................................................................25
Section 7.03 NOTICES. .............................................................................25
Section 7.05 COUNTERPARTS..........................................................................25
Section 7.06 FURTHER AGREEMENTS....................................................................25
Section 7.07 INTENTION OF THE PARTIES..............................................................25
Section 7.08 SUCCESSORS AND ASSIGNS: ASSIGNMENT OF PURCHASE AGREEMENT..............................26
Section 7.09 SURVIVAL..............................................................................26
i
Section 7.10 OWNER TRUSTEE.........................................................................26
ii
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of November 14,
2001 (the "Agreement"), among Option One Owner Trust 2001-1A (the "Seller"),
Option One Mortgage Corporation ("Option One") 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 Seller is an indirect subsidiary of Option One
and Option One is the administrator of the Seller; 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, pursuant to the terms of a Pooling and Servicing
Agreement dated as of November 1, 2001 (the "Pooling and Servicing Agreement")
among the Purchaser as depositor, Option One as master servicer and ▇▇▇▇▇ Fargo
Bank Minnesota, N.A. as trustee (the "Trustee"), the Purchaser will convey the
Mortgage Loans to First Franklin Mortgage Loan Trust 2001-FF2 (the "Trust").
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.
"OPTION ONE INFORMATION": The information in the Prospectus Supplement
under "THE POOLING AGREEMENT-The Master Servicer."
"OPTION ONE LOAN INFORMATION": The information in the Prospectus
Supplement as follows: under "SUMMARY OF TERMS--Mortgage Loans," the
first sentence of the fourth bullet point under "RISK
FACTORS--Unpredictability of Prepayments and Effect on Yields," the
third sentence under "RISK FACTORS--Balloon Loan Risk," the second
sentence of the fourth bullet point under "RISK FACTORS--Interest
Generated by the Mortgage Loans May
Be Insufficient to Maintain Overcollateralization," the second sentence
under "RISK FACTORS--High Loan-to-Value Ratios Increase Risk of Loss,"
"THE MORTGAGE POOL" and the first sentence of the sixth paragraph under
"YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS."
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 OPTION ONE AND SELLER UPON SALE. In
connection with any transfer pursuant to Section 2.01 hereof, Option One further
agrees, at its own expense on or prior to the Closing Date, (a) to cause the
books and records of the Seller to indicate that the Mortgage Loans have been
sold to the Purchaser pursuant to this Agreement and (b) to deliver to the
Purchaser and the Trustee a computer file containing a true and complete list of
all such Mortgage Loans specifying for each such Mortgage Loan, as of the
Cut-off Date, (i) its account number and (ii) the Cut-off Date Principal
Balance. Such file, which forms a part of Exhibit D 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 ▇▇▇▇▇ Fargo Bank Minnesota N.A., as
Trustee," or with respect to any lost Mortgage Note, an original Lost Note
Affidavit stating that the original mortgage note was lost, misplaced or
destroyed, together with a copy of the related mortgage note; PROVIDED, HOWEVER,
that such substitutions of Lost Note Affidavits for original Mortgage Notes may
occur only with respect to Mortgage Loans, the aggregate Cut-off Date Principal
Balance of which is less than or equal to 1.00% of the Pool Balance as of the
Cut-off Date;
(ii) the original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed pursuant to a
power of attorney, with evidence of recording thereon or, if such Mortgage or
power of attorney has been submitted for recording but has not been returned
from the applicable public recording office, has been lost or is not otherwise
2
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;
(iii) an original Assignment, in form and substance acceptable for
recording. The Mortgage shall be assigned either (A) in blank, without recourse
or (B) to "▇▇▇▇▇ Fargo Bank Minnesota, N.A., as Trustee";
(iv) an original copy of any intervening assignment of Mortgage showing
a complete chain of assignments;
(v) the original or a certified copy of lender's title insurance
policy; and
(vi) the original or copies of each assumption, modification, written
assurance, substitution agreement or guarantee, if any.
Option One hereby confirms to the Purchaser and the Trustee that it has
caused the appropriate entries to be made the in the general accounting records
of the Seller to indicate that such Mortgage Loans have been transferred to the
Trustee and constitute part of the Trust in accordance with the terms of the
Pooling and Servicing Agreement.
If any of the documents referred to in Section 2.02(ii), (iii) or (iv)
above has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable public recording office or (y) has been
lost or such public recording office has retained the original of such document,
the obligations of the Seller to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Trustee or the Custodian, no later than the
Closing Date, of a copy of each such document certified by Option One 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 Option One, 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. Option One 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. Option One 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, Option One
shall have 90 days to cure such defect or deliver such missing document to the
Purchaser. If Option One does not cure such defect or deliver such missing
document within such time period, Option One shall either repurchase or
substitute for such Mortgage Loan pursuant to Section 2.03 of the Pooling and
Servicing Agreement.
3
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.
Option One 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.
Option One shall be required to deliver such assignments for recording within 45
days of the Closing Date. Option One 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 Option One, 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. In the event that
any Mortgage Note is endorsed in blank as of the Closing Date, promptly
following the Closing Date, the Trustee, at the expense of Option One, shall
cause to be completed such endorsements "Pay to the order of ▇▇▇▇▇ Fargo Bank
Minnesota, N.A., as Trustee, without recourse."
Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.
In consideration of the sale of the Mortgage Loans from the
Seller to the Purchaser on the Closing Date, the Purchaser agrees to pay to the
Seller on the Closing Date (the "Purchase Price") by transfer of (i) immediately
available funds in an amount equal to the net sale proceeds of the Class A-1
Certificates, the Class A-2 Certificates, the Class M-1 Certificates, the Class
M-2 Certificates and the Class M-3 Certificates and (ii) the Class C
Certificates, the Class P Certificates, the Class R Certificates and the
Dividend Account Certificate (collectively the "Option One Certificates") which
Option One Certificates shall be registered in the name of Option One Mortgage
Securities Corp. or its designee. Option One shall pay, and be billed directly
for, all expenses incurred by the Purchaser in connection with the issuance of
the Certificates, including, without limitation, printing fees incurred in
connection with the prospectus relating to the Certificates, blue sky
registration fees and expenses, fees and expenses of Purchaser's counsel, fees
of the rating agencies requested to rate the Certificates, accountant's fees and
expenses and the fees and expenses of the Trustee and other out-of-pocket costs,
if any.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 OPTION ONE REPRESENTATIONS AND WARRANTIES RELATING TO
THE MORTGAGE LOANS.
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Option One, the Seller and the Purchaser understand,
acknowledge and agree that, the representations and warranties set forth in this
Section 3.01 are made as of the Closing Date.
Option One hereby represents and warrants with respect to the
Mortgage Loans to the Purchaser that as of the Closing Date or as of such date
specifically provided herein:
(a) The information set forth in the Mortgage Loan Schedule is
complete, true and correct as of the Cut-off Date;
(b) None of the Mortgage Loans were delinquent in their
monthly payments as of October 31, 2001; neither Option One nor the Seller has
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;
(c) As of the Cut-off Date, there were 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;
(d) As of the Cut-off Date, 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 Purchaser or its designee; 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 Mortgage Loan
Schedule. As of the Cut-off Date, 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
insurer under the title insurer, to the extent required by the policy, and which
assumption agreement has been delivered to the Purchaser or its designee and the
terms of which are reflected in the Mortgage Loan Schedule;
(e) As of the Cut-off Date, 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;
(f) As of the Cut-off Date, all buildings upon the Mortgaged
Property are insured by an insurer that satisfies the requirements of First
Franklin Financial Corporation's ("First Franklin") underwriting guidelines
against loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located, in an amount that
is at least equal to the lesser of (i) the amount necessary to fully compensate
for any damage or loss to the improvements which are a part of such property on
a replacement cost basis or (ii) the outstanding principal balance of the
Mortgage Loan, in each case in an amount not less than such amount as is
necessary to prevent the Mortgagor and/or the Mortgagee from becoming a
co-insurer.
5
As of the Cut-off Date, all such insurance policies contain a standard mortgagee
clause naming First Franklin, its successors and assigns as mortgagee and all
premiums thereon have been paid. As of the Cut-off Date, 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 ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac. 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;
(g) Prior to the Cut-off Date, 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;
(h) As of the Cut-off Date, the Mortgage has not been
satisfied, canceled, 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;
(i) As of the Cut-off Date, the Mortgage is a valid, existing
and enforceable first lien on the Mortgaged Property, including all improvements
on the Mortgaged Property subject only to (A) the lien of current real property
taxes and assessments not yet due and payable, (B) covenants, conditions and
restrictions, rights of way, easements and other matters of the public record as
of the date of recording being acceptable to mortgage lending institutions
generally and specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and which do not adversely
affect the Value of the Mortgaged Property, and (C) other matters to which like
properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property. Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
existing and enforceable first lien and first priority security interest on the
property described therein and the Seller had full right to sell and assign the
same;
(j) 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;
(k) 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;
(l) 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
6
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;
(m) Prior to the sale of the Mortgage Loan by the Seller, the
Seller 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 free
and clear of any encumbrance, equity, lien, pledge, charge, claim or security
interest;
(n) As of the Cut-off Date, all parties which had any interest
in the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, were
(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.
(o) As of the Cut-off Date, the Mortgage Loan was covered by
an American Land Title Association lender's title insurance policy, which has an
adjustable-rate mortgage endorsement in the case of the adjustable-rate Mortgage
Loans, in the form of ALTA 6.0 or 6.1 acceptable to prudent lenders, issued by a
title insurer acceptable to prudent lenders and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject to the
exceptions contained in (i)(A) and (B) above) First Franklin, its successors and
assigns as to the first priority lien of the Mortgage in the original principal
amount of the Mortgage Loan and 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 Rate and Monthly Payment. Additionally,
as of the Cut-off Date, 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. First
Franklin, its successors and assigns, 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. As of the Cut-off Date, no claims
have been made under such tender's title insurance policy, and no prior holder
of the related Mortgage, including Option One and the Seller, has done, by act
or omission, anything which would impair the coverage of such lender's title
insurance policy;
(p) As of the Cut-off Date, there is no default, breach,
violation or event of acceleration existing under the Mortgage or the Mortgage
Note and no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default, breach,
violation or event of acceleration, and neither Option One nor the Seller has
waived any default, breach. violation or event of acceleration;
(q) As of the Cut-off 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;
7
(r) All improvements that were considered in determining the
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 encroached upon the Mortgaged Property. Each appraisal has
been performed in accordance with the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989;
(s) The Mortgage Loan was originated (for purposes of the
Secondary Mortgage Market Enhancement Act of 1984) by First Franklin 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;
(t) Principal payments on the Mortgage Loan commenced no more
than two (2) months after the proceeds of the Mortgage Loan were disbursed. The
Mortgage Loan bears interest at the Mortgage Rate. With respect to each Mortgage
Loan, the Mortgage Note is payable on the first day of each month. The Mortgage
Note is payable in Monthly Payments. With respect to the adjustable-rate
Mortgage Loans, the Monthly Payments are changed on each Adjustment Date to an
amount which will fully amortize the Stated Principal Balance of the Mortgage
Loan over its remaining term at the Mortgage Rate. Interest on the Mortgage Loan
is calculated on the basis of a 360 day year consisting of twelve 30 day months.
The Mortgage Note does not permit negative amortization. No adjustable-rate
Mortgage Loan permits the Mortgagor to convert the Mortgage Loan to a fixed-rate
Mortgage Loan;
(u) The origination, servicing and collection practices used
by Option One and any servicer of the Mortgage Loan as of the Cut-off Date, 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. As of the Cut-off Date, the Mortgage Loan has been serviced by Option
One and any predecessor servicer in accordance with the terms of the Mortgage
Note. As of the Cut-off Date, with respect to escrow deposits and Escrow
Payments, if any, all such payments are in the possession of, or under the
control of, Option One 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 Option One
have been capitalized under any Mortgage or the related Mortgage Note;
(v) As of the Cut-of Date, the Mortgaged Property is free of
damage and waste and there is no proceeding pending for the total or partial
condemnation thereof;
(w) 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. With respect to the Mortgage Loans, when measured by
aggregate Stated Principal Balance as of the Cut-off Date, no more than 20% of
the related Mortgaged Properties were subject to any bankruptcy proceeding or
foreclosure proceeding in the 36 month period preceding the origination date of
the Mortgage Loans. As of the Cut-off Date, the Mortgaged Property has not been
subject to any bankruptcy proceeding or foreclosure proceeding and the Mortgagor
has not filed for protection under applicable bankruptcy laws. There is no
homestead or other exemption available
8
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. As of the
Cut-off Date, [the Mortgagor has not notified Option One and Option One has no
knowledge of any relief requested or allowed to the Mortgagor under the Soldiers
and Sailors Civil Relief Act of 1940];
(x) The Mortgage Loan was underwritten in accordance with the
underwriting standards of First Franklin in effect at the time the Mortgage Loan
was originated; and the Mortgage Note and Mortgage are on forms acceptable to
▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac. With respect to the Mortgage Loans, when measured by
aggregate Stated Principal Balance as of the Cut-off Date, no more than 44.84%
of the Group I Mortgage Loans and no more than 39.95% of the Group II Mortgage
Loans (in each case, based on the aggregate Principal Balance of the related
Loan Group as of the Cut-off Date) were underwritten in accordance with First
Franklin's Direct Access Dividends Program guidelines.
(y) As of the Cut-off Date, 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 (i) above;
(z) The Mortgage File contains an appraisal of the related
Mortgaged Property which satisfied the standards of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, and the rules and regulations
thereunder, as amended from time to time, and was made and signed by an
appraiser who met the minimum requirements of ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac or
complied with First Franklin's automated appraisal methodology as set forth in
First Franklin's underwriting guidelines, duly appointed by First Franklin, 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
the Financial Institutions Reform, Recovery and Enforcement Act of 1989, and the
rules and regulations thereunder;
(aa) As of the Cut-off Date, 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;
(bb) As of the Cut-off Date, 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 Option One or the
Seller, 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. As of the Cut-off Date, 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;
(cc) 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 adjustable- rate or fixed-rate mortgage loans, as
applicable; and if the Mortgage Loan is a Refinanced Mortgage
9
Loan, the Mortgagor has received all disclosure and rescission materials
required by applicable law with respect to the making of a refinanced Mortgage
Loan, and evidence of such receipt is and will remain in the Mortgage File;
(dd) 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;
(ee) The Mortgage Note, the Mortgage, the Assignment and any
other documents required to be delivered with respect to each Mortgage Loan have
been delivered to Option One or the Seller;
(ff) As of the Cut-off 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;
(gg) To the best of Option One's knowledge, 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, modification or amendment of the
Mortgage Loan or in the application of any insurance in relation to such
Mortgage Loan;
(hh) The Assignment is in recordable form and is acceptable
for recording under the laws of the jurisdiction in which the Mortgaged Property
is located;
(ii) 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. As of the Cut-off Date,
the lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac. As of the Cut-off
Date, the consolidated principal amount does not exceed the original principal
amount of the Mortgage Loan;
(jj) As of the Cut-off Date, no more than 1.21% of the Group I
Mortgage Loans and 1.63% of the Group II Mortgage Loans (in each case, based on
the aggregate Principal Balance of the related Loan Group as of the Cut-off
Date) had a balloon payment feature;
(kk) If the Residential Dwelling on the Mortgaged Property is
a condominium unit or a unit in a planned unit development (other than a de
minims planned unit development), such condominium or planned unit development
project meets ▇▇▇▇▇▇ Mae's eligibility requirements;
(ll) As of the Cut-off Date, the Mortgaged Property was in
material compliance with all applicable environmental laws pertaining to
environmental hazards including, without
10
limitation, asbestos, and there is no pending action or proceeding directly
involving any Mortgaged Property of which Option One is aware in which
compliance with any environmental law, rule or regulation is an issue; and to
the best of Option One's knowledge, nothing further remains to be done to
satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to the use and enjoyment of such property;
(mm) Except as previously disclosed to the Purchaser in
writing, First Franklin has made no mortgage loan on any Mortgaged Property
other than the Mortgage Loan. With respect to the Mortgage Loans, when measured
by aggregate Stated Principal Balance as of the Cut-off Date, no more than 65%
of the Mortgage Loans are secured by a Mortgaged Property which was, as of the
date of origination of such Mortgage Loan, subject to a mortgage, deed of trust,
deed to secure debt or other security instrument originated by First Franklin
creating a lien subordinate to the lien of the Mortgage;
(nn) The Mortgage Loan was selected from among the outstanding
adjustable-rate and fixed-rate one to four family mortgage loans in the Seller's
portfolio as of the Cut-off Date as which the representations and warranties
herein could be made and such selection was not made in a manner so as to
adversely affect the interests of the Purchaser;
(oo) Neither Option One nor the Seller has dealt with any
broker or agent or other Person who might be entitled to a fee, commission or
compensation in connection with the transaction contemplated by this Agreement
other than the Purchaser except as Option One or the Seller has previously
disclosed to the Purchaser in writing;
(pp) The Mortgaged Property consists of a parcel of real
property of not more than ten acres with a single family residence erected
thereon, or a two- to four-family dwelling, or an individual condominium unit in
a low rise or high rise condominium project, or an individual unit in a planned
unit development. The Mortgaged Property is improved with a Residential
Dwelling. Without limiting the foregoing, the Mortgaged Property does not
consist of any of the following property types: (a) co-operative units, (b) log
homes, (c) earthen homes, (d) underground homes, (e) mobile homes and (f)
manufactured homes (as defined in the ▇▇▇▇▇▇ ▇▇▇ Seller-Servicer's Guide),
except when the appraisal indicates that the home is of comparable construction
to a stick or beam construction home, is readily marketable, has been
permanently affixed to the site and is not in a mobile home "park." The
Mortgaged Property is either a fee simple estate or a long term residential
lease. If the Mortgage Loan is secured by a long term residential lease, unless
otherwise specifically disclosed in the related Mortgage Loan Schedule, (A) the
terms of such lease expressly permit the mortgaging of the leasehold estate, the
assignment of the lease without the lessor's consent (or the lessors consent has
been obtained and such consent is in the Mortgage File) and the acquisition by
the holder of the Mortgage of the rights of the lessee upon foreclosure or
assignment in lieu of foreclosure or provide the holder of the Mortgage with
substantially similar protection; (B) the terms of such lease do not (x) allow
the termination thereof upon the lessee's default without the holder of the
Mortgage being entitled to receive written notice of, and opportunity to cure,
such default or (y) prohibit the holder of the Mortgage from being insured under
the hazard insurance policy relating to the Mortgaged Property, (C) the original
term of such lease is not less than 15 years; (D) the term of such lease does
not terminate earlier than five years after the maturity date of the Mortgage
Note;
11
and (E) the Mortgaged Property is located in a jurisdiction in which the use of
leasehold estates for residential properties is a widely accepted practice;
(qq) At the time of origination, the Loan-to-Value Ratio of
the Mortgage Loan was not greater than 100%. 22.78% of the Group I Mortgage
Loans and 16.62% of the Group II Mortgage Loans (in each case, based on the
aggregate Principal Balance of the related Loan Group as of the Cut-off Date)
had a Loan-to-Value Ratio at the time of origination greater than 80%, and
17.22% of the Group I Mortgage Loans and 11.20% of the Group II Mortgage Loans
(in each case, based on the aggregate Principal Balance of the related Loan
Group as of the Cut-off Date) had a Loan-to-Value Ratio at the time of
origination greater than 85%. With respect to the Mortgage Loans, when measured
by aggregate Stated Principal Balance as of the Cut-off Date, with respect to no
less than 80% of the Mortgage Loans, the calculation of the Loan-to-Value Ratio
at the time of origination was determined based on a full formal appraisal
acceptable to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac or complied with First Franklin's
automated appraisal methodology as set forth in First Franklin's underwriting
guidelines;
(rr) As of the Cut-off Date, the Mortgage, and if required by
applicable law the related Mortgage Note, contains a 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, at the option of the Mortgagee;
(ss) No Mortgage Loan is subject to the Home Ownership and
Equity Protection Act of 1994;
(tt) The information set forth in the Prepayment Charge
Schedule is complete, true and correct in all material respects as of the
Cut-off Date, and each Prepayment Charge is permissible, enforceable and
collectible under applicable state law;
(uu) The Mortgage Loan was not prepaid in full prior to the
sale of the Mortgage Loans by the Seller, and neither Option One nor the Seller
had received any notification from a Mortgagor that a prepayment in full would
be made after the sale of the Mortgage Loans by the Seller;
(vv) The Mortgage Loan had an original term of maturity of not
more than 360 months;
(ww) 36.07% of the Group I Mortgage Loans and 52.93% of the
Group II Mortgage Loans (in each case, based on the aggregate Principal Balance
of the related Loan Group as of the Cut-off Date) are secured by Mortgaged
Properties located in the state of California;
(xx) The Mortgage Loans have been acquired, serviced,
collected and otherwise dealt with by Option One and any affiliate of Option One
in compliance with all applicable federal, state and local law's and regulations
and the terms of the related Mortgage Note and Mortgage;
(yy) Each Mortgage Loan constitutes a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
12
(zz) No Mortgage Loan is subject to the requirements of the
Home Ownership and Equity Protection Act of 1994 ("HOEPA") and no Mortgage Loan
is in violation of any state law or ordinance similar to HOEPA;
(aaa) The Master Servicer for each Mortgage Loan will
accurately and fully report its borrower credit files to each of the credit
repositories in a timely manner;
(bbb) No proceeds from any 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; and
(ccc) No Mortgage Loan has a Prepayment Charge term longer
than five years after its origination.
Section 3.02 OPTION ONE REPRESENTATIONS AND WARRANTIES RELATING TO THE
SELLER. Option One 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 business trust 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 and Option
One, 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 certificate of trust 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;
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(e) 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,
(f) The Seller has not transferred the Mortgage Loans to the
Purchaser with any intent to hinder, delay or defraud any of its creditors;
(g) 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;
(h) 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;
(i) 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; and
(j) 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.
Section 3.03 OPTION ONE REPRESENTATIONS AND WARRANTIES RELATING TO
OPTION ONE. Option One represents, warrants and covenants to the Purchaser as of
the Closing Date or as of such other date specifically provided herein:
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(a) Option One is duly organized, validly existing and in good
standing as a corporation 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 in accordance with the terms of this Agreement;
(b) Option One has the full power and authority to execute,
deliver and perform, and to enter into and consummate, all transactions
contemplated by this Agreement. Option One 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 and the Seller, constitutes a legal, valid and binding
obligation of Option One, enforceable against it in accordance with its terms
except as the enforceability thereof may be limited by bankruptcy, insolvency or
reorganization;
(c) The execution and delivery of this Agreement by Option One
and the performance of and compliance with the terms of this Agreement will not
violate Option One'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 Option One is a party or which may be
applicable to Option One or its assets;
(d) Option One is not in violation of, and the execution and
delivery of this Agreement by Option One 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 Option One or its
assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of
Option One or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder;
(e) Option One is a HUD approved mortgagee pursuant to Section
203 and Section 211 of the National Housing Act. No event has occurred,
including but not limited to a change in insurance coverage, which would make
Option One unable to comply with HUD eligibility requirements or which would
require notification to HUD;
(f) There are no actions or proceedings against, or
investigations known to it of, Option One 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 Option One of its obligations under, or validity or
enforceability of, this Agreement;
(g) No consent, approval. authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by Option One of, or compliance by Option One 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;
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(h) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of Option One;
(i) Option One 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;
(j) The information delivered by Option One to the Purchaser
with respect to Option One's loan loss, foreclosure and delinquency experience
on mortgage loans underwritten to similar standards as the Mortgage Loans mid
covering mortgaged properties similar to the Mortgaged Properties, is true and
correct in all material respects as of the date of such report; and
(k) Except with respect to any statement regarding the
intentions of the Seller or the Purchaser, or any other statement contained
herein the truth or falsity of which is dependant solely upon the actions of the
Seller or 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 Option One
pursuant to this Agreement or in connection with the transactions contemplated
hereby taken in the aggregate do not contain any untrue statement of material
fact or omit to state a material fact necessary to make the statements contained
therein not misleading.
Section 3.04 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES. It
is understood and agreed that the representations and warranties set forth in
Subsections 3.01, 3.02 and 3.03 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 warranties contained herein that are made to the knowledge
or the best knowledge of Option One, or as to which Option One has no knowledge,
if it is discovered that the substance of any such representation and warranty
is inaccurate and the inaccuracy materially and adversely affects the value of
the related Mortgage Loan, or the interest therein of the Purchaser or the
Purchaser's assignee, designee or transferee, then notwithstanding Option One'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 Option One shall take such action described in the following
paragraphs of this Section 3.04 in respect of such Mortgage Loan. Upon discovery
by either Option One or the Purchaser of a breach of any of the foregoing
representations and warranties that materially and adversely affects the value
of the Mortgage Loans or the interest of the Purchaser (or which materially and
adversely affects the interests of the Purchaser in the related Mortgage Loan in
the case of a representation and warranty relating to a particular Mortgage
Loan), the party discovering such breach shall give prompt written notice to the
other. It is understood by the parties hereto that a breach of the
representations and warranties made in Section 3.01(zz), (aaa), (bbb) and (ccc)
will be deemed to materially and adversely affect the value of the related
Mortgage Loan or the interest of the Purchaser.
Within 90 days of the earlier of either discovery by or notice
to Option One of any breach of a representation or warranty made by Option One
that materially and adversely affects the
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value of a Mortgage Loan or the Mortgage Loans or the interest therein of the
Purchaser, Option One shall use its best efforts promptly to cure such breach in
all material respects and, if such breach cannot be cured, Option One shall, at
the Purchaser's option, repurchase such Mortgage Loan at the Purchase Price. In
the event that a breach shall involve any representation or warranty set forth
in Subsection 3.02 or 3.03 and such breach cannot be cured within 90 days of the
earlier of either discovery by or notice to Option One of such breach, all of
the Mortgage Loans shall, at the Purchaser's option. be repurchased by Option
One at the Purchase Price. Option One may, at the request of the Purchaser and
assuming Option One 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 Option One does not provide a Qualified Substitute Mortgage Loan or Loans, it
shall repurchase the deficient Mortgage Loan. Any repurchase of a Mortgage
Loan(s) pursuant to the foregoing provisions of this Section 3.04 shall occur on
a date designated by the Purchaser and shall be accomplished by deposit in
accordance with Section 2.03 of the Pooling and Servicing Agreement. Any
repurchase or substitution required by this Section shall be made in a manner
consistent with Section 2.03 of the Pooling and Servicing Agreement.
Notwithstanding the foregoing, within 90 days of the earlier
of discovery by Option One or receipt of notice by Option One of the breach of
the representation of Option One set forth in Section 3.01(tt) above which
materially and adversely affects the interests of the Holders of the Class P
Certificates in any Prepayment Charge, Option One 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 Option One shall arrange for the reassignment
of the repurchased or substituted Mortgage Loan to Option One and the delivery
to Option One of any documents held by the Trustee relating to the deficient or
repurchased Mortgage Loan. In the event the Purchase Price is deposited in the
Collection Account. Option One shall, simultaneously with such deposit, give
written notice to the Purchaser that such deposit 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 Option One
substitutes a Qualified Substitute Mortgage Loan or Loans Option One 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. Option One 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 Option One. 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 Option One shall thereafter be entitled to retain
all amounts subsequently received by Option One in respect
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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 Option One 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, 3.02 and 3.03.
It is understood and agreed that the representations and
warranties set forth in Sections 3.01. 3.02 and 3.03 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 Option One
set forth in this Section 3.04 to cure, repurchase and substitute for a
defective Mortgage Loan and the obligations of Option One to indemnify the
Purchaser as provided in Section 5.01 constitute the sole remedies of the
Purchaser respecting a missing or defective document or a breach of the
representations and warranties contained in Section 3.01, 3.02 or 3.03.
ARTICLE IV.
OPTION ONE'S COVENANTS
Section 4.01 COVENANTS OF OPTION ONE. Option One hereby covenants that
except for the transfer hereunder, neither Option One 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;
Option One will notify the Trustee, as assignee of the Purchaser, of the
existence of any Lien on any Mortgage Loan immediately upon discovery thereof,
and Option One 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 Option One; PROVIDED, HOWEVER,
that nothing in this Section 4.01 shall prevent or be deemed to prohibit Option
One 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
Option One 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) Option One indemnifies and holds harmless the Purchaser,
the Purchaser's respective officers and directors and each person, if any, who
controls the Purchaser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, as follows:
(i) against any and all losses, claims, expenses,
damages or liabilities, joint or several, to which the Purchaser or such
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
18
respect thereof including, but not limited to, any loss, claim, expense, damage
or liability related to purchases and sales of the Certificates) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Prospectus Supplement, or any amendment or supplement
thereto, or arise out of, or are based upon, the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements made therein not misleading, to the extent that any untrue
statement or alleged untrue statement therein results (or is alleged to have
resulted) from an error or material omission in the information concerning (x)
the Option One Information or (y) the characteristics of the Mortgage Loans set
forth in the Option One Loan Information furnished by Option One to the
Purchaser for use in the preparation of the Prospectus Supplement, which error
was not superseded or corrected by the delivery to the Purchaser of corrected
written or electronic information, or for which Option One provided written
notice of such error to the Purchaser prior to the confirmation of the sale of
the Certificates; and will reimburse the Purchaser and each such controlling
person for any legal or other expenses reasonably incurred by the Purchaser or
such controlling person in connection with investigating or defending any such
loss, claim, damage. liability or action as such expenses are incurred;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of the
Purchaser; and
(iii) against any and all expense whatsoever
(including the fees and disbursements of counsel chosen by the Purchaser),
reasonably incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency or body.
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under clause (i) or clause (ii) above.
This indemnity agreement will be in addition to any liability
which Option One may otherwise have.
(b) Promptly after receipt by any indemnified party under this
Article V of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Article V, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article V except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Article V.
If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of
19
such claim or action, the indemnifying party shall not be liable to the
indemnified party under this Article V for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Purchaser, if the indemnified parties
under this Article V consist of the Purchaser.
Each indemnified party, as a condition of the indemnity
agreements contained in Section 5.01 (a) and (b) hereof, shall use its best
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall be liable for any settlement of any
such action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to consent to a settlement of any action, the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request
and the indemnifying party has not previously provided the indemnified party
with written notice of its objection to such settlement. No indemnifying party
shall effect any settlement of any pending or threatened proceeding in respect
of which an indemnified party is or could have been a party and indemnity is or
could have been sought hereunder, without the written consent of such
indemnified party, unless settlement includes an unconditional release of such
indemnified party from all liability and claims that are the subject matter of
such proceeding.
(c) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Article is
for any reason held to be unenforceable although applicable in accordance with
its terms, Option One, on the one hand, and the Purchaser, on the other, shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity agreement incurred by Option One and
the Purchaser in such proportions as shall be appropriate to reflect the
relative benefits received by Option One on the one
20
hand and the Purchaser on the other from the sale of the Mortgage Loans;
PROVIDED, HOWEVER, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11 (f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each officer and director of
the Purchaser and each person, if any, who controls the Purchaser within the
meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Purchaser and each director of Option One, each officer of
Option One, and each person, if any, who controls Option One within the meaning
of Section 15 of the Securities Act shall have the same rights to contribution
as Option One.
(d) Option One agrees 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
Option One to perform its duties in compliance with the terms of this Agreement,
(ii) arising from a breach by Option One of its representations and warranties
in Sections 3.01, 3.02 and 3.03 of this Agreement or (iii) related to the
servicing of the Mortgage Loans by reason of any acts, omissions, or alleged
acts or omissions of Option One or any servicer. Option One shall immediately
notify the Purchaser, the Trustee and each Certificateholder if a claim is made
by a third party with respect to this Agreement. Option One 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.
ARTICLE VI.
TERMINATION
Section 6.01 TERMINATION. The respective obligations and
responsibilities of the Seller, Option One and the Purchaser created hereby
shall terminate, except for the Option One's indemnity obligations as provided
herein upon the termination of the Trust as provided in Article X of the Pooling
and Servicing Agreement.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 AMENDMENT. This Agreement may be amended from time to time
by the Seller, Option One and the Purchaser, by written agreement signed by the
Seller, Option One 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.
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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 Seller, Option One Owner Trust 2001-1A, c/o Wilmington
Trust Company, One ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Administration, or such other address
as may hereafter be furnished to Option One and the Purchaser in writing by the
Seller; (ii) if to Option One, Option One Mortgage Corporation, 3 Ada, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, or such other address as may
hereafter be furnished to the Purchaser and the Seller in writing by Option One
and (iii) if to the Purchaser, Financial Asset Securities Corp., ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Legal, or such other address as
may hereafter be furnished to the Seller and Option One in writing by the
Purchaser.
Section 7.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity of
enforceability of the other provisions of this Agreement.
Section 7.05 COUNTERPARTS. This Agreement may be executed in one or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
Section 7.06 FURTHER AGREEMENTS. The Purchaser, the Seller and Option
One 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,
Option One will cooperate with the Purchaser in connection with the sale of any
of the securities representing interests in the Mortgage Loans. In that
connection, Option One 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 Option One as are reasonably required in
connection with such transactions and the offering of investment grade
securities rated by the Rating Agencies.
Section 7.07 INTENTION OF THE PARTIES. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans rather than pledging the Mortgage Loans to secure a loan by the
Purchaser to the Seller. Accordingly, the parties hereto each intend to treat
the transaction for federal income tax purposes and all other purposes as a sale
by the Seller, and a purchase by the Purchaser, of the Mortgage Loans. The
Purchaser will have the right to review the Mortgage Loans and the related
Mortgage Files to determine the characteristics of the Mortgage Loans which will
affect the federal income tar consequences of owning the Mortgage Loans and the
22
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
Seller, the Purchaser, Option One and the Trustee. The obligations of Option One
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 Option One
may assign its obligations hereunder to any Person into which Option One is
merged or any corporation resulting from any merger, conversion or consolidation
to which Option One is a party or any Person succeeding to the business of
Option One. 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, Option One
acknowledges and consents to the assignment by the Purchaser to the Trustee of
all of the Purchasers rights against Option One 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 Option One
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.
Section 7.10 OWNER TRUSTEE. It is expressly understood and agreed by
the parties to this Agreement that (a) this Agreement is executed and delivered
by Wilmington Trust Company, not individually or personally but solely as Owner
Trustee of the Seller, in the exercise of the powers and authority conferred and
vested in it as trustee, (b) each of the representations, undertakings and
agreements herein made on the part of the Seller is made and intended not as
personal representations, undertakings and agreements by Wilmington Trust
Company but is made and intended for the purpose of binding only the Seller, (c)
nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties to this Agreement and by any person claiming by,
through or under the parties to this Agreement and (d) under no circumstances
shall Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Seller or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Seller under this Agreement or any other document.
23
IN WITNESS WHEREOF, the Seller, Option One 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.
FINANCIAL ASSET SECURITIES CORP.,
as Purchaser
By:________________________________
Name:
Title:
OPTION ONE MORTGAGE
CORPORATION
By:_________________________________
Name:
Title:
OPTION ONE OWNER TRUST 2001-1A,
as Seller
By: Wilmington Trust Company, not in its
individual capacity but solely as
Owner Trustee.
By:_________________________________
Name:
Title:
SCHEDULE I
MORTGAGE LOANS
AVAILABLE UPON REQUEST
EXHIBIT D
MORTGAGE LOAN SCHEDULE
D-1
EXHIBIT E
REQUEST FOR RELEASE OF DOCUMENTS
To: ▇▇▇▇▇ Fargo Bank Minnesota, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement dated as of November 1, 2001
among Financial Asset Securities Corp., as Depositor, Option
One Mortgage Corporation, as Master Servicer and ▇▇▇▇▇ Fargo
Bank Minnesota, N.A., 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
▇▇▇▇▇ Fargo Bank Minnesota, N.A.
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
November __, 2001
Financial Asset Securities Corp. Option One Mortgage Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement, dated as of November 1, 2001,
among Financial Asset Securities Corp., Option One Mortgage
Corporation and ▇▇▇▇▇ Fargo Bank Minnesota, N.A., Asset-Backed
Certificates, Series 2001-FF2
--------------------------------------------------------------
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.
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A.
By:
-------------------------------
Name:
Title:
F-1-1
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
----------------
[Date]
Financial Asset Securities Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of November 1, 2001 among Financial
Asset Securities Corp., as Depositor, Option One Mortgage
Corporation, as Master Servicer and ▇▇▇▇▇ Fargo Bank
Minnesota, N.A., as Trustee with respect to First Franklin
Mortgage Loan Trust 2001-FF2, Asset-Backed Certificates,
Series 2001-FF2
----------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement,
the undersigned, as Trustee, hereby certifies that as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage loan paid in full
or listed on Schedule I hereto) it (or its custodian) has received the
applicable documents listed in Section 2.01 of the Pooling and Servicing
Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed on
Schedule I hereto, it has reviewed the documents listed above and has determined
that each such document appears to be complete and, based on an examination of
such documents, the information set forth in items 1, 2, 3, 10, 11, 15 and 28 of
the definition of Mortgage Loan Schedule in the Pooling and Servicing Agreement
accurately reflects information in the Mortgage File.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A., as
Trustee
By:
-----------------------------------
Name:
Title:
F-2-1
EXHIBIT F-3
FORM OF RECEIPT OF MORTGAGE NOTE
Financial Asset Securities Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: First Franklin Mortgage Loan Trust 2001-FF2,
Asset-Backed Certificates Series 2001-FF2
--------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing Agreement, dated
as of November 1, 2001, among Financial Asset Securities Corp. as Depositor,
Option One Mortgage Corporation as Master Servicer and ▇▇▇▇▇ Fargo Bank
Minnesota, N.A. as Trustee (the "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.
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A., as
Trustee
By:
----------------------------------
Name:
Title:
F-3-1
EXHIBIT G
LOSS MITIGATION PROCEDURES
FAS 140 P &S RELEVANT PROVISIONS - RECOVERY FOR DEFAULT LOANS
COLLECTIONS DEPARTMENT PRE-FORECLOSURE PROCESS:
-----------------------------------------------
At 33 calendar days delinquent, all borrowers are sent a 30-day pre-foreclosure
demand letter. Borrowers in states that require more than a 30-day period are
given the amount of time specified by state law.
Borrowers who are unable to pay the total amount past due are reviewed for
foreclosure based upon the following criteria:
"Early Indicator" default risk score. Those borrowers with risk scores
that suggest a strong statistical likelihood of continuing default, are approved
for foreclosure as soon as 48 hours after expiration of the demand letter
(approximately 64 calendar days delinquent).
A. Moderate risk with willingness and ability. Those borrowers with
a moderate statistical likelihood of continuing default wh
demonstrate a willingness and ability to pay (as defined above),
are solicited for extended (up to 6 months) repayment plans in
which a portion of all past due payments are divided equally by 6
and a monthly payment schedule is established which consists of a
"good faith" payment of some portion of the past due amount, one
regular monthly installment and 1/6th of the remaining past due
amount.
B. Low risk with willingness and ability. Those borrowers with a low
risk of continuing default are actively solicited for placement
on a repayment plan and/or are granted additional time to resolve
their financial difficulties informally in arrangement with a
loan counselor. Foreclosure is not typically initiated if or
until the loan becomes 90+ days delinquent and the borrower is
unable or unwilling to continue to make reasonable repayment
arrangements.
C. Broken repayment plans. Those borrowers who are placed on
extended repayment plans but fail to make their scheduled
payments are approved for foreclosure as soon as 48 hours after
the payment plan is broken.
All borrowers are given all reasonable opportunities to pay the total amount
past due (including all contractually permitted fees and charges) prior to the
expiration of the 30 day demand letters. Borrowers who fail to contact Option
One collections when past due, who repeatedly break promises to pay, who have a
willingness but no financial ability, or apparent financial ability but no
willingness, may be referred to foreclosure at any time after the expiration of
the 30-day demand letter, without regard to any other factor, but as a general
rule, a loan is referred to foreclosure no
G-1
later than the 120th day of delinquency. The guidelines outlined herein
presuppose at least some reasonable degree of willingness and ability.
PRE-CONVEYANCE OF TITLE:
Initial contact is made for discovery of mortgagor's intent and a minimum
requirement of two attempted contacts per month is required. In general, contact
made or attempted within the first 48 hours establishes categories as follows:
Willingness and Ability, No Willingness or Willingness and No Ability. Each
category provides a subset of options for loss mitigation efforts and the
options are ranked within each category as follows:
1. WILLINGNESS AND ABILITY-- Typically the mortgagor(s) reason
for default is temporary and a foreseeable solution is
probable. The standard options negotiated, ranked in priority
are:
A. Full Reinstatement
B. Payoff
C. Standard 6 month payment plan
D. Extension of the payment plan
E. Forbearance
F. Pre-Sale/Pre-Foreclosure Sale
G. Short Payoff
H. Modification
2. NO WILLINGNESS -- Typically the mortgagor(s) is unclear of
options to mitigate default and avoidsall calls or is brief
and discloses little when contact is made. In this category
efforts are made to continue attempts to contact and/or
counsel mortgagor(s). When no contact is made, Skip Tracing,
promotional items and/or letters are mailed in attempts to
stimulate communication.
3. WILLINGNESS AND NO ABILITY -- Mortgagor(s) want to save home
or remedy the default, however do not have resources to do so.
In this scenario, the standard options negotiated, ranked in
priority are:
A. Payoff
B. Assumption
C. Pre-Sale/Pre-Foreclosure Sale
D. Short Payoff
E. Deed In Lieu of Foreclosure
F. Write-Off
G. Modification
Foreclosure process is also running parallel to the Loss Mitigation efforts and
in the event no workout is achieved then the Master Servicer obtains title
through foreclosure sale, from which the REO Department will attempt to seek
complete recovery from the sale of said property.
G-2
List of all Loss Mitigation Options used:
----------------------------------------
- Full Reinstatement
- Payoff
- Six (6) Month Re-Payment Plan
- Extension of Six (6) Month Payment Plan
- Forbearance
- Short Payoff
- Pre sale/Pre-Foreclosure Sale
- Assumption
- Modification
- Deed In Lieu of Foreclosure
- Write-off
CONVEYANCE OF TITLE:
-------------------
Once title is acquired as a result of foreclosure sale, Deed In Lieu of
Foreclosure or otherwise, the property is assigned to an REO Agent for complete
and timely disposition. REO Broker/Agents are selected and retained using the
following criteria:
- Experience
- Possess Error and Omissions Insurance
- Licensed to sell Real Property in the related region
- Adhere to Option One Mortgage Corporation's Standards
Review of the current values obtained on the subject property will determine the
marketing strategy and the strategy will focus on disposing of the property in a
timely and practical manner. An analysis worksheet is completed to establish the
marketing strategy on the property.
G-3
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 ▇▇▇▇▇ Fargo
Bank Minnesota, N.A., as trustee on behalf of First Franklin Mortgage Loan Trust
2001-FF2, Asset-Backed Certificates Series 2001-FF2, to accept the transfer of
the above described loan from Seller.
Seller agrees to indemnify ▇▇▇▇▇ Fargo Bank Minnesota, N.A., Financial
Asset Securities Corp. and Option One Mortgage Corporation 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
[RESERVED]
I-1
EXHIBIT J
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Financial Asset Securities Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank Minnesota, N.A.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: First Franklin Mortgage Loan Trust 2001-FF2,
Asset-Backed Certificates Series 2001-FF2
--------------------------------------------
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.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank Minnesota, N.A.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: First Franklin Mortgage Loan Trust 2001-FF2,
Asset-Backed Certificates Series 2001-FF2
--------------------------------------------
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.
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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:
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Name:
Title:
IF AN ADVISER:
_______________________________________
Print Name of Buyer
Date:
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EXHIBIT K
AFFIDAVIT OF TRANSFER OF R CERTIFICATES
PURSUANT TO SECTION 5.02(d)
FIRST FRANKLIN MORTGAGE LOAN TRUST 2001-FF2
ASSET-BACKED CERTIFICATES, SERIES 2001-FF2
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of , the proposed Transferee of an
Ownership Interest in Class R Certificates (the "Certificate") issued pursuant
to the Pooling and Servicing Agreement, (the "Agreement"), relating to the
above-referenced Certificates, among Financial Asset Securities Corp., as
Depositor, Option One Mortgage Corporation, as Master Servicer (the "Master
Servicer") and ▇▇▇▇▇ Fargo Bank Minnesota, N.A., 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:
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Name:
Title:
[Corporate Seal]
ATTEST:
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[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.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: First Franklin Mortgage Loan Trust 2001-FF2,
Asset-Backed Certificates Series 2001-FF2
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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:
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Name:
Title:
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EXHIBIT M
Form of Liquidation Report
Customer Name:
Account Number:
Original Principal Balance:
1. Type of Liquidation (REO disposition/charge-off/short pay-off)
Date last paid
Date of foreclosure
Date of REO
Date of REO Disposition
Property Sale Price/Estimated Market Value at disposition
2. Liquidation Proceeds
Principal Prepayment $_____________
Property Sale Proceeds _____________
Insurance Proceeds _____________
Other (itemize) _____________
Total Proceeds $_____________
3. Liquidation Expenses
Servicing Advances $_____________
Delinquency Advances _____________
Monthly Advances _____________
Servicing Fees _____________
Other Servicing Compensation _____________
Total Advances $_____________
4. Net Liquidation Proceeds $_____________
(Item 2 minus Item 3)
5. Principal Balance of Mortgage Loan $_____________
6. Loss, if any (Item 5 minus Item 4) $_____________
M-1
SCHEDULE I
PREPAYMENT CHARGE SCHEDULE
SCHEDULE II
PMI MORTGAGE LOANS