EXHIBIT 4.1
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LONG BEACH SECURITIES CORP.,
Depositor
LONG BEACH MORTGAGE COMPANY,
Master Servicer
FEDERAL NATIONAL MORTGAGE ASSOCIATION,
Guarantor (with respect to the Class I-A Certificates
and the Class I-S Certificates)
FIRST UNION NATIONAL BANK,
Trustee
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
Trust Administrator
POOLING AND SERVICING AGREEMENT
Dated as of April 1, 2002
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Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates, Series 2002-1
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.............................................................................................9
Section 1.01 Defined Terms................................................................................9
Section 1.02 Accounting..................................................................................77
Section 1.03 Allocation of Certain Interest Shortfalls...................................................77
Section 1.04 Rights of the NIMS Insurer and the Guarantor................................................79
Section 1.05 Guarantor Purchase Option...................................................................81
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES.......................................81
Section 2.01 Conveyance of Mortgage Loans................................................................81
Section 2.02 Acceptance of REMIC 1A and REMIC 1B by the Trustee..........................................84
Section 2.03 Cure, Repurchase or Substitution of Mortgage Loans by the Seller; Remedies
for Breaches by Depositor or Master Servicer; Remedies for Breaches
Relating to Prepayment Charges..............................................................85
Section 2.04 Representations, Warranties and Covenants of the Master Servicer............................88
Section 2.05 Representations and Warranties of the Depositor.............................................90
Section 2.06 Issuance of Certificates....................................................................92
Section 2.07 [Reserved]..................................................................................92
Section 2.08 Conveyance of REMIC Regular Interests and Acceptance of REMIC 1A and REMIC
1B by the Trustee; Issuance of Certificates.................................................92
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS...................................................94
Section 3.01 Master Servicer to Act as Master Servicer...................................................94
Section 3.02 Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers......................96
Section 3.03 Successor Sub-Servicers.....................................................................97
Section 3.04 Liability of the Master Servicer............................................................98
Section 3.05 No Contractual Relationship Between Sub-Servicers and the NIMS Insurer, the
Guarantor, the Trustee, the Trust Administrator or Certificateholders.......................98
Section 3.06 Assumption or Termination of Sub-Servicing Agreements by Trust
Administrator...............................................................................98
Section 3.07 Collection of Certain Mortgage Loan Payments................................................99
Section 3.08 Sub-Servicing Accounts.....................................................................100
Section 3.09 Collection of Taxes, Assessments and Similar Items; Servicing Accounts.....................100
Section 3.10 Collection Account and Distribution Account................................................101
Section 3.11 Withdrawals from the Collection Account and Distribution Account...........................104
Section 3.12 Investment of Funds in the Collection Account and the Distribution Account.................105
Section 3.13 Agreement to Appoint a Special Servicer....................................................107
i
Section 3.14 Maintenance of Hazard Insurance and Errors and Omissions and Fidelity
Coverage...................................................................................109
Section 3.15 Enforcement of Due-On-Sale Clauses; Assumption Agreements..................................110
Section 3.16 Realization Upon Defaulted Mortgage Loans..................................................112
Section 3.17 Trustee and Trust Administrator to Cooperate; Release of Mortgage Files....................114
Section 3.18 Servicing Compensation.....................................................................115
Section 3.19 Reports to the Trustee and the Trust Administrator; Collection Account
Statements.................................................................................116
Section 3.20 Statement as to Compliance.................................................................116
Section 3.21 Independent Public Accountants' Servicing Report...........................................116
Section 3.22 Access to Certain Documentation............................................................117
Section 3.23 Title, Management and Disposition of REO Property..........................................117
Section 3.24 Obligations of the Master Servicer in Respect of Prepayment Interest
Shortfalls.................................................................................121
Section 3.25 Obligations of the Master Servicer in Respect of Mortgage Rates and Monthly
Payments...................................................................................121
Section 3.26 Reserve Funds..............................................................................121
Section 3.27 Advance Facility...........................................................................123
Section 3.28 Policy; Claims Under the PMI Policy........................................................124
Section 3.29 Group I Mortgage Loans Subject to Relief Act...............................................124
ARTICLE IV FLOW OF FUNDS........................................................................................125
Section 4.01 Distributions..............................................................................125
Section 4.02 Preference Claims..........................................................................135
Section 4.03 Statements.................................................................................136
Section 4.04 Remittance Reports; Advances...............................................................140
Section 4.05 Distributions on the REMIC Regular Interests...............................................141
Section 4.06 Allocation of Realized Losses..............................................................145
Section 4.07 Compliance with Withholding Requirements...................................................148
Section 4.08 Commission Reporting.......................................................................148
Section 4.09 The Guaranty...............................................................................149
ARTICLE V THE CERTIFICATES......................................................................................149
Section 5.01 The Certificates...........................................................................149
Section 5.02 Registration of Transfer and Exchange of Certificates......................................151
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..........................................156
Section 5.04 Persons Deemed Owners......................................................................156
ARTICLE VI THE MASTER SERVICER AND THE DEPOSITOR................................................................156
Section 6.01 Liability of the Master Servicer and the Depositor.........................................156
Section 6.02 Merger or Consolidation of the Depositor or the Master Servicer............................157
Section 6.03 Limitation on Liability of the Depositor, the Master Servicer and Others...................157
ii
Section 6.04 Limitation on Resignation of Master Servicer...............................................158
Section 6.05 Rights of the Depositor, the NIMS Insurer, the Guarantor, the Trustee and
the Trust Administrator in Respect of the Master Servicer..................................159
ARTICLE VII DEFAULT.............................................................................................160
Section 7.01 Master Servicer Events of Default..........................................................160
Section 7.02 Trust Administrator to Act; Appointment of Successor.......................................162
Section 7.03 Notification to Certificateholders.........................................................164
Section 7.04 Waiver of Master Servicer Events of Default................................................165
ARTICLE VIII THE TRUSTEE AND THE TRUST ADMINISTRATOR............................................................165
Section 8.01 Duties of Trustee and Trust Administrator..................................................165
Section 8.02 Certain Matters Affecting the Trustee and the Trust Administrator..........................166
Section 8.03 Neither Trustee nor Trust Administrator Liable for Certificates or Mortgage
Loans......................................................................................168
Section 8.04 Trustee and Trust Administrator May own Certificates.......................................168
Section 8.05 Trustee's and Trust Administrator's Fees and Expenses......................................168
Section 8.06 Eligibility Requirements for Trustee and Trust Administrator...............................170
Section 8.07 Resignation or Removal of Trustee and Trust Administrator..................................170
Section 8.08 Successor Trustee or Trust Administrator...................................................171
Section 8.09 Merger or Consolidation of Trustee or Trust Administrator..................................172
Section 8.10 Appointment of Co-Trustee or Separate Trustee..............................................172
Section 8.11 Appointment of Custodians..................................................................173
Section 8.12 Appointment of Office or Agency............................................................174
Section 8.13 Representations and Warranties of the Trustee and the Trust Administrator..................174
ARTICLE IX TERMINATION..........................................................................................175
Section 9.01 Termination Upon Purchase or Liquidation of All Mortgage Loans.............................175
Section 9.02 Additional Termination Requirements........................................................177
ARTICLE X REMIC PROVISIONS......................................................................................178
Section 10.01 REMIC Administration.......................................................................178
Section 10.02 Prohibited Transactions and Activities.....................................................182
Section 10.03 Trustee, Trust Administrator, Master Servicer and Depositor Indemnification................182
ARTICLE XI MISCELLANEOUS PROVISIONS.............................................................................183
Section 11.01 Amendment..................................................................................183
Section 11.02 Recordation of Agreement; Counterparts.....................................................184
Section 11.03 Limitation on Rights of Certificateholders.................................................185
Section 11.04 Governing Law; Jurisdiction................................................................186
Section 11.05 Notices....................................................................................186
Section 11.06 Severability of Provisions.................................................................186
iii
Section 11.07 Notice to the Rating Agencies, the NIMS Insurer and the Guarantor..........................187
Section 11.08 Article and Section References.............................................................188
Section 11.09 NIMS Insurer's Rights......................................................................188
Section 11.10 Grant of Security Interest.................................................................188
iv
Exhibits
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Exhibit A-1 Form of Class I-A Certificates
Exhibit A-2 Form of Class II-A1 Certificates
Exhibit A-3 Form of Class II-A2 Certificates
Exhibit A-4 Form of Class II-A3 Certificates
Exhibit A-5 Form of Class II-A4 Certificates
Exhibit A-6 Form of Class I-S Certificates
Exhibit A-7 Form of Class II-S Certificates
Exhibit A-8 Form of Class II-M1 Certificates
Exhibit A-9 Form of Class M2 Certificates
Exhibit A-10 Form of Class M3 Certificates
Exhibit A-11 Form of Class II-M4 Certificates
Exhibit A-12 Form of Class I-C Certificates
Exhibit A-13 Form of Class II-C Certificates
Exhibit A-14 Form of Class I-P Certificates
Exhibit A-15 Form of Class II-P Certificates
Exhibit A-16 Form of Class R Certificates
Exhibit A-17 Form of Class R-X Certificates
Exhibit B [Reserved]
Exhibit C Form of Mortgage Loan Purchase Agreement
Exhibit D Mortgage Loan Schedule
Exhibit E-1 Request for Release (for Trust Administrator/Custodian)
Exhibit E-2 Request for Release (Certificate - Mortgage Loan Paid in Full)
Exhibit F-1 Form of Trust Administrator's Initial Certification
Exhibit F-2 Form of Trust Administrator's Final Certification
Exhibit G Relief Act Forms
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of ERISA Representation
Exhibit J Form of Investment Letter
Exhibit K Form of Class R Certificate and Class R-X Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Schedules
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Schedule I Prepayment Charge Schedule
Schedule II PMI Mortgage Loans Schedule
v
This POOLING AND SERVICING AGREEMENT is dated as of March 1, 2002 (the
"Agreement"), among LONG BEACH SECURITIES CORP., as depositor (the "Depositor"),
LONG BEACH MORTGAGE COMPANY, as master servicer (the "Master Servicer"), FEDERAL
NATIONAL MORTGAGE ASSOCIATION, as Guarantor of the Class I-A Certificates and
the Class I-S Certificates (the "Guarantor"), FIRST UNION NATIONAL BANK, as
trustee (the "Trustee"), and BANKERS TRUST COMPANY OF CALIFORNIA, N.A., as trust
administrator (the "Trust Administrator").
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 seventeen classes of
certificates, designated as (i) the Class I-A Certificates, (ii) the Class II-A1
Certificates, (iii) the Class II-A2 Certificates, (iv) the Class II-A3
Certificates, (v) the Class II-A4 Certificates, (vi) the Class I-S Certificates,
(vii) the Class II-S Certificates, (viii) the Class II-M1 Certificates, (ix) the
Class M2 Certificates, (x) the Class M3 Certificates, (xi) the Class II-M4
Certificates, (xii) the Class I-C Certificates, (xiii) the Class II-C
Certificates, (xiv) the Class I-P Certificates, (xv) the Class II-P
Certificates, (xvi) the Class R Certificates and (xvii) the Class R-X
Certificates. For purposes of determining distributions of principal and
interest and the allocation of losses realized on Mortgage Loans, the Class M2
Certificates will consist of two Components: I-M2 Component and II-M2 Component,
and the Class M3 Certificates will consist of two components: I-M3 Component and
II-M3 Component. For federal and state income tax purposes, each Component will
be treated as a separate regular interest in a REMIC.
1
REMIC 1A
As provided herein, the Trust Administrator will make an election to
treat the segregated pool of assets consisting of the Group I Mortgage Loans and
certain other related assets subject to this Agreement (exclusive of the Group I
Reserve Fund and the Master Servicer Prepayment Charge Payment Amounts with
respect to the Group I Mortgage Loans) 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 1A." The Class R-1A Interest will represent
the sole class of "residual interests" in REMIC 1A 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 1A 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 1A Regular Interests. None of the REMIC 1A
Regular Interests will be certificated.
Uncertificated
REMIC 1A Initial Uncertificated Assumed Final
Designation Pass-Through Rate Principal Balance Maturity Date(1)
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LT1A-1 Variable(2) $872,499,900.00 May 2032
LT1A-2 Variable(2) $0.00(3) May 2032
LT1A-3 Variable(2) $95,000,000.00 May 2032
LT1A-4 Variable(2) $15,000,000.00 May 2032
LT1A-5 Variable(2) $17,500,000.00 May 2032
LT1A-P Variable(2) $100.00 May 2032
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(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity date for
the Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each REMIC 1A Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated
REMIC 1A Pass-Through Rate" herein.
(3) References to REMIC 1A Regular Interest LT1A-2 have been left in the
Agreement for administrative convenience. This Regular Interest has no principal
amount and will pay no Interest. For federal income tax purposes this Regular
Interest will be disregarded.
2
REMIC 1B
As provided herein, the Trust Administrator will make an election to
treat the segregated pool of assets consisting of the Group II Mortgage Loans
and certain other related assets subject to this Agreement (exclusive of the
Group II Reserve Fund and the Master Servicer Prepayment Charge Payment Amounts
with respect to Group II Mortgage Loans) as a REMIC for federal income tax
purposes, and such segregated pool of assets will be designated as "REMIC 1B."
The Class R-1B Interest will represent the sole class of "residual interests" in
REMIC 1B 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 1B 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
1B Regular Interests. None of the REMIC 1B Regular Interests will be
certificated.
Uncertificated
REMIC 1B Initial Uncertificated Assumed Final
Designation Pass-Through Rate Principal Balance Maturity Date(1)
----------- ----------------- ----------------- ----------------
LT1B-1 Variable(2) $515,530,135.26 May 2032
LT1B-2 Variable(2) $7,969,764.74 May 2032
LT1B-3 Variable(2) $57,000,000.00 May 2032
LT1B-4 Variable(2) $9,000,000.00 May 2032
LT1B-5 Variable(2) $10,500,000.00 May ▇▇▇▇
▇▇▇▇-▇ Variable(2) $100.00 May 2032
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(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity date for
the Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each REMIC 1B Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated
REMIC 1B Pass-Through Rate" herein.
3
REMIC 2
As provided herein, the Trust Administrator shall make an election to
treat the segregated pool of assets consisting of the REMIC 1A Regular Interests
and the REMIC 1B Regular Interests as a REMIC for federal income tax purposes,
and such segregated pool of assets will be designated as "REMIC 2". The Class
R-2 Interest represents the sole class of "residual interests" in REMIC 2 for
purposes of the REMIC Provisions. The following table irrevocably sets forth the
designation, the Uncertificated REMIC 2 Pass-Through Rate, the initial
Uncertificated Principal Balance, and solely for purposes of satisfying Treasury
regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for
each of the REMIC 2 Regular Interests. None of the REMIC 2 Regular Interests
will be certificated.
Uncertificated
REMIC 2 Initial Uncertificated Assumed Final
Designation Pass-Through Rate Principal Balance Maturity Date(1)
----------- ----------------- ----------------- ----------------
LT2A-1 Variable(2) $979,999,902.00 May 2032
LT2B-1 Variable(2) $8,875,000.00 May 2032
LT2C-1 Variable(2) $460,000.00 May 2032
LT2D-1 Variable(2) $490,000.00 May 2032
LT2E-1 Variable(2) $10,174,998.00 May 2032
LT2A-2 Variable(2) $587,999,902.00 May 2032
LT2B-2 Variable(2) $3,867,500.00 May 2032
LT2C-2 Variable(2) $575,000.00 May 2032
LT2D-2 Variable(2) $396,000.00 May 2032
LT2E-2 Variable(2) $261,000.00 May 2032
LT2F-2 Variable(2) $330,000.00 May 2032
LT2G-2 Variable(2) $270,000.00 May 2032
LT2H-2 Variable(2) $210,000.00 May 2032
LT2I-2 Variable(2) $24,000.00 May 2032
LT2J-2 Variable(2) $6,065,998.00 May 2032
LT2S-1A Variable(3) N/A(9) May 2032
LT2S-1B Variable(4) N/A(9) May 2032
▇▇▇▇-▇▇ ▇▇▇▇▇▇▇▇(▇) ▇/▇(▇) ▇▇▇ ▇▇▇▇
▇▇▇▇-▇▇ Variable(6) N/A(10) May 2032
LT2S-1E Variable(7) N/A(10) May 2032
LT2S-1F Variable(8) N/A(11) May 2032
LT2S-2A Variable(3) N/A(12) May 2032
LT2S-2B Variable(4) N/A(12) May 2032
LT2S-2C Variable(5) N/A(12) May 2032
LT2S-2D Variable(6) N/A(13) May 2032
LT2S-2E Variable(7) N/A(13) May 2032
LT2S-2F Variable(8) N/A(14) May 2032
LT2P-1 Variable(2) $100.00 May 2032
LT2P-2 Variable(2) $100.00 May 2032
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(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity date for
the Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each REMIC 2 Regular Interest.
4
(2) Calculated in accordance with the definition of "Uncertificated
REMIC 2 Pass-Through Rate" herein.
(3) 4.00% per annum for the first 30 Distribution Dates and 0.00% per
annum thereafter.
(4) 0.75% per annum for the first 20 Distribution Dates and 0.00% per
annum thereafter.
(5) 0.50% per annum for the first 10 Distribution Dates and 0.00% per
annum thereafter.
(6) 4.75% per annum for the first 20 Distribution Dates and 0.00% per
annum thereafter.
(7) 0.50% per annum for the first 10 Distribution Dates and 0.00% per
annum thereafter.
(8) 5.25% per annum for the first 10 Distribution Dates and 0.00% per
annum thereafter.
(9) REMIC 2 Regular Interest LT2S-1A, REMIC 2 Regular Interest LT2S-1B
and REMIC 2 Regular Interest LT2S-1C will not have Uncertificated Principal
Balances, but will accrue interest on their respective Uncertificated Notional
Amounts outstanding from time to time which, in each case, shall equal the
Uncertificated Principal Balance of REMIC 1A Regular Interest LT1A-3.
(10) REMIC 2 Regular Interest LT2S-1D and REMIC 2 Regular Interest
LT2S-1E will not have Uncertificated Principal Balances, but will accrue
interest on their Uncertificated Notional Amounts outstanding from time to time
which, in each case, shall equal the Uncertificated Principal Balance of REMIC
1A Regular Interest LT1A-4.
(11) REMIC 2 Regular Interest LT2S-1F will not have an Uncertificated
Principal Balance, but will accrue interest on its Uncertificated Notional
Amount outstanding from time to time which shall equal the Uncertificated
Principal Balance of REMIC 1A Regular Interest LT1A-5.
(12) REMIC 2 Regular Interest LT2S-2A, REMIC 2 Regular Interest LT2S-2B
and REMIC 2 Regular Interest LT2S-2C will not have Uncertificated Principal
Balances, but will accrue interest on their respective Uncertificated Notional
Amounts outstanding from time to time which, in each case, shall equal the
Uncertificated Principal Balance of REMIC 1B Regular Interest LT1B-3.
(13) REMIC 2 Regular Interest LT2S-2D and REMIC 2 Regular Interest
LT2S-2E, will not have Uncertificated Principal Balances, but will accrue
interest on their Uncertificated Notional Amounts outstanding from time to time
which, in each case, shall equal the Uncertificated Principal Balance of REMIC
1B Regular Interest LT1B-4.
(14) REMIC 2 Regular Interest LT2S-2F will not have an Uncertificated
Principal Balance, but will accrue interest on its Uncertificated Notional
Amount outstanding from time to time which shall equal the Uncertificated
Principal Balance of REMIC 1A Regular Interest LT1B-5.
5
REMIC 3
As provided herein, the Trust Administrator shall make an election to
treat the segregated pool of assets consisting of the REMIC 2 Regular Interests
as a REMIC for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC 3." The Class R-3 Interest represents the sole
class of "residual interests" in REMIC 3 for purposes of the REMIC Provisions.
The following table 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 3 and each class of uncertificated "regular interests" in REMIC 3:
Original Class
Certificate Principal Pass-Through Assumed Final
Class Designation Balance Rate Maturity Date(1)
----------------- --------------------- ------------ ----------------
Class I-A $887,500,000.00 Variable(2) May 2032
Class II-A1 $386,750,000.00 Variable(2) May 2032
Class II-A2 $57,500,000.00 Variable(2) May 2032
Class II-A3 $39,600,000.00 Variable(2) May 2032
Class II-A4 $26,150,000.00 Variable(2) May 2032
Class II-M1 $33,000,000.00 Variable(2) May 2032
Class M2 $73,000,000.00(3) Variable(2) May 2032
Class M3 $70,000,000.00(4) Variable(2) May 2032
Class II-M4 $2,400,000.00 Variable(2) May 2032
Class I-S N/A(5) N/A(5) May 2032
Class II-S N/A(6) N/A(6) May 2032
LT3-IC $17,499,900.00(7) Variable(2) May 2032
LT3-IIC $6,599,900.00(8) Variable(2) May 2032
LT3-IP $100.00 N/A(9) May 2032
LT3-IIP $100.00 N/A(9) May 2032
-------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity date for
the Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each Class of Certificates or uncertificated
interests that represents one or more of the "regular interests" in REMIC 3.
(2) Calculated in accordance with the definition of "Pass-Through Rate"
herein.
(3) The Class M2 Certificate consists of two Components: the I-M2
Component and the II-M2 Component. The Certificate Principal Balance with
respect to any Distribution Date (and the related Accrual Period) will equal the
sum of the Component Principal Balances of the I-M2 Component and the II-M2
Component. The initial Component Principal Balance for the I-M2 Component is
$46,000,000 and for the II-M2 Component is $27,000,000. For federal income tax
purposes, the I-M2 Component and the II-M2 Component will be treated as separate
regular interests in REMIC 3.
(4) The Class M3 Certificate consists of two Components: the I-M3
Component and the II-M3 Component. The Certificate Principal Balance with
respect to any Distribution Date (and the related Accrual Period) will equal the
sum of the Component Principal Balances of the I-M3 Component and the II-M3
Component. The initial Component Principal Balance for the I-M3 Component is
$49,000,000 and for the II-M3 Component is $21,000,000. For federal income tax
purposes, the I-M3 Component and the II-M3 Component will be treated as separate
regular interests in REMIC 3.
6
(5) The Class I-S Certificates will receive all amounts distributed to
REMIC 2 Regular Interest LT2S-1A, REMIC 2 Regular Interest LT2S-1B, REMIC 2
Regular Interest LT2S-1C, REMIC 2 Regular Interest LT2S-1D, REMIC 2 Regular
Interest LT2S-1E, and REMIC 2 Regular Interest LT2S-1F.
(6) The Class II-S Certificates will receive all amounts distributed to
REMIC 2 Regular Interest LT2S-2A, REMIC 2 Regular Interest LT2S-2B, REMIC 2
Regular Interest LT2S-2C, REMIC 2 Regular Interest LT2S-2D, REMIC 2 Regular
Interest LT2S-2E, and REMIC 2 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇.
(7) REMIC 3 Regular Interest LT3-IC will accrue interest at its
variable Pass-Through Rate on its Notional Amount outstanding from time to time,
which shall equal the aggregate of the Uncertificated Principal Balances of the
REMIC 2 Group I Regular Interests. REMIC 3 Regular Interest LT3-IC will not
accrue interest on its Uncertificated Principal Balance.
(8) REMIC 3 Regular Interest LT3-IIC will accrue interest at its
variable Pass-Through Rate on its Notional Amount outstanding from time to time,
which shall equal the aggregate of the Uncertificated Principal Balances of the
REMIC 2 Group II Regular Interests. REMIC 3 Regular Interest LT3-IIC will not
accrue interest on its Uncertificated Principal Balance.
(9) REMIC 3 Regular Interest LT3-IP and REMIC 3 Regular Interest
LT3-IIP will not accrue interest.
7
REMIC X
As provided herein, the Trust Administrator will make an election to
treat the segregated pool of assets consisting of REMIC 3 Regular Interest
LT3-IC, REMIC 3 Regular Interest LT3-IIC, REMIC 3 Regular Interest LT3-IP, and
REMIC 3 Regular Interest LT3-IIP as a REMIC for federal income tax purposes, and
such segregated pool of assets will be designated as "REMIC X." The Class R-X
Interest will represent the sole class of "residual interests" in REMIC X for
purposes of the REMIC Provisions (as defined herein) under federal income tax
law. The following table irrevocably sets forth the designation, the
Pass-Through Rate, Original Class Certificate Principal Balance, and solely for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each of the REMIC X Regular Interests.
Uncertificated
REMIC X Initial Uncertificated Assumed Final
Designation Pass-Through Rate Principal Balance Maturity Date(1)
----------- ----------------- ----------------- ----------------
Class I-C Variable(2) $17,499,900.00(4) July 2032
Class II-C Variable(2) $6,599,900.00(4) July 2032
Class I-P N/A(3) $100.00 July 2032
Class II-P N/A(3) $100.00 July 2032
-------------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity date for
the Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each REMIC X Regular Interest.
(2) Calculated in accordance with the definition of "Pass-Through Rate"
herein.
(3) The Class P Certificates will not accrue interest.
(4) The Class I-C Certificates and Class II-C Certificates will accrue
interest at their variable Pass-Through Rates on their respective Notional
Amounts outstanding from time to time, which shall equal the Notional Amounts of
REMIC 3 Regular Interest LT3-IC and REMIC 3 Regular Interest LT3-IIC,
respectively. The Class I-C Certificates and Class II-C Certificates will not
accrue interest on their respective Certificate Principal Balances.
8
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 I-A Certificates, Class II-A1
Certificates, Mezzanine Certificates and Mezzanine Components shall be made on
the basis of the actual number of days elapsed on the basis of a 360-day year
and all other calculations of interest described herein shall be made on the
basis of a 360-day year consisting of twelve 30-day months. The Class P
Certificates and the Residual Certificates are not entitled to distributions in
respect of interest and, accordingly, will not accrue interest.
"1933 Act": The Securities Act of 1933, as amended.
"I-M2 Component": The Component of the Class M2 Certificate,
representing rights to distributions as set forth herein.
"I-M2 Component Principal Distribution Amount": With respect to any
Distribution Date on or after the Group I Stepdown Date and on which a Group I
Trigger Event is not in effect, the amount equal to the lesser of (I) the
Component Principal Balance of the I-M2 Component immediately prior to such
Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class I-A Certificates (after taking into
account the payment of the Class I-A Principal Distribution Amount on such
Distribution Date) and (ii) the Component Principal Balance of the I-M2
Component immediately prior to such Distribution Date over (y) the lesser of (A)
the product of (i) 86.20% and (ii) the aggregate Stated Principal Balance of the
Group I Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Group I Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) minus the Group I Overcollateralization Floor.
"I-M3 Component": The Component of the Class M3 Certificate,
representing rights to distributions as set forth herein.
"I-M3 Component Principal Distribution Amount": With respect to any
Distribution Date on or after the Group I Stepdown Date and on which a Group I
Trigger Event is not in effect, the amount equal to the lesser of the (I) the
Component Principal Balance of the I-M3 Component immediately prior to such
Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the I-A Certificate (after taking into account
the payment of the Class I-A Principal Distribution Amount on such Distribution
Date), (ii) the Component Principal Balance of the I-M2 Component (after taking
into account the payment of the I-M2 Component Principal Distribution Amount on
such Distribution Date) and (iii) the
9
Component Principal Balance of the I-M3 Component immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 96.00% and (ii)
the aggregate Stated Principal Balance of the Group I Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Group I Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) minus the Group I Overcollateralization Floor.
"II-M2 Component": The Component of the Class M2 Certificate,
representing rights to distributions as set forth herein.
"II-M2 Component Principal Distribution Amount": With respect to any
Distribution Date on or after the Group II Stepdown Date and on which a Group II
Trigger Event is not in effect, the amount equal to the lesser of the (I) the
Component Principal Balance of the II-M2 Component immediately prior to such
Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class II-A Certificates (after taking into
account the payment of the Class II-A Principal Distribution Amount on such
Distribution Date), (ii) the aggregate Certificate Principal Balance of the
Class II-M1 Certificates (after taking into account the payment of the Class
II-M1 Principal Distribution Amount on such Distribution Date) and (iii) the
Component Principal Balance of the II-M2 Component immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 90.00% and (ii)
the aggregate Stated Principal Balance of the Group II Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Group II Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) minus the Group II Overcollateralization Floor.
"II-M3 Component": The Component of the Class M3 Certificate,
representing rights to distributions as set forth herein.
"II-M3 Component Principal Distribution Amount": With respect to any
Distribution Date on or after the Group II Stepdown Date and on which a Group II
Trigger Event is not in effect, the amount equal to the lesser of the (I) the
Component Principal Balance of the II-M3 Component immediately prior to such
Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class II-A Certificates (after taking into
account the payment of the Class II-A Principal Distribution Amount on such
Distribution Date), (ii) the aggregate Certificate Principal Balance of the
Class II-M1 Certificate (after taking into account the payment of the Class
II-M1 Principal Distribution Amount on such Distribution Date), (iii) the
Component Principal Balance of the II-M2 Component (after taking into account
the payment of the II-M2 Component Principal Distribution Amount on such
Distribution Date) and (iv) the Component Principal Balance of the II-M3
Component immediately prior to such Distribution Date over (y) the lesser of (A)
the product of (i) 97.00% and (ii) the aggregate
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Stated Principal Balance of the Group II Mortgage Loans as of the last day of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Group II Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) minus the Group II Overcollateralization Floor.
"Account": Either of the Collection Account and Distribution Account.
"Accrual Period": With respect to the Class II-A Fixed-Rate
Certificates, Class S Certificates, Class C Certificates, the REMIC 1A Regular
Interests, the REMIC 1B Regular Interests, the REMIC 2 Regular Interests, the
REMIC 3 Regular Interest LT3-IC and REMIC 3 Regular Interest LT3-IIC, and each
Distribution Date, the calendar month prior to the month of such Distribution
Date. With respect to the Class I-A Certificates, the Class II-A1 Certificates,
the Mezzanine Certificates, the Mezzanine Components and each Distribution Date,
the period commencing on the immediately preceding Distribution Date (or in the
case of the first such Accrual Period, commencing on the Closing Date) and
ending on the day immediately preceding such Distribution Date.
"Adjustable Rate Mortgage Loan": A Mortgage Loan which provides for an
adjustable Mortgage Rate payable with respect thereto.
"Adjusted Net Maximum Mortgage Rate": With respect to any Mortgage Loan
(or the related REO Property), as of any date of determination, a per annum rate
of interest equal to the Maximum Mortgage Rate for such Mortgage Loan (if such
Mortgage Loan is an Adjustable Rate Mortgage Loan) or the Mortgage Rate for such
Mortgage Loan (if such Mortgage Loan is a Fixed Rate Mortgage Loan), in either
such case as of the first day of the month preceding the month in which the
Distribution Date occurs, minus the sum of (i) the Servicing Fee Rate and (ii)
the PMI Insurer Fee Rate, if applicable.
"Adjusted Net Minimum 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 Minimum Mortgage Rate for such Mortgage Loan (if such
Mortgage Loan is an Adjustable Rate Mortgage Loan) or the Mortgage Rate for such
Mortgage Loan (if such Mortgage Loan is a Fixed Rate Mortgage Loan), in either
such case as of the Cut-off Date, minus the sum of (i) the Servicing Fee Rate
and (ii) the PMI Insurer Fee 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 Mortgage Rate for such Mortgage Loan as of the first day
of the month preceding the month in which the Distribution Date occurs, minus
the sum of (i) the Servicing Fee Rate and (ii) PMI Insurer Fee 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
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related Mortgage Note. The first Adjustment Date following the Cut-off Date as
to each Adjustable Rate Mortgage Loan is set forth in the Mortgage Loan
Schedule.
"Advance": As to any Mortgage Loan or REO Property, any advance made by
the Master Servicer in respect of any Distribution Date pursuant to Section
4.04.
"Advancing Person": As defined in Section 3.27 hereof.
"Adverse REMIC Event": As defined in Section 10.01(f) hereof.
"Affiliate": With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise and "controlling" and "controlled" shall have meanings
correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
"Allocated Realized Loss Amount": With respect to any Distribution Date
and the Class II-M1 Certificates, the Class II-M4 Certificates or any of the
Mezzanine Components, the sum of (i) any Realized Losses allocated to such Class
of Certificates or Components on any Distribution Date and (ii) the amount of
any Allocated Realized Loss Amount for such Class of Certificates or Components
remaining unpaid from the previous Distribution Date.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form (excepting therefrom, if applicable,
the mortgage recordation information which has not been required pursuant to
Section 2.01 hereof or returned by the applicable recorder's office), which is
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect or record the sale of the Mortgage.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"Bankruptcy Loss": With respect to any Mortgage Loan, a Realized Loss
resulting from a Deficient Valuation or Debt Service Reduction.
"Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Class A Certificates, the Class S Certificates and the Mezzanine
Certificates shall be Book-Entry Certificates.
"Book-Entry Custodian": The custodian appointed pursuant to
Section 5.01.
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"Business Day": Any day other than a Saturday, a Sunday or a day on
which the Guarantor or banking or savings institutions in the State of
California, the State of Delaware, the State of Maryland, the State of
Minnesota, the State of New York, the Commonwealth of Pennsylvania, the State of
Washington, or in the city in which the Corporate Trust Office of the Trust
Administrator or the Corporate Trust Office of the Trustee is located, are
authorized or obligated by law or executive order to be closed.
"Certificate": Any Regular Certificate or Residual Certificate.
"Certificate Margin": With respect to the Class I-A Certificates on
each Distribution Date (A) on or prior to the Optional Termination Date, 0.12%
per annum and (B) after the Optional Termination Date, 0.24% per annum. With
respect to the Class II-A1 Certificates on each Distribution Date (A) on or
prior to the Optional Termination Date, 0.32% per annum and (B) after the
Optional Termination Date, 0.64% per annum. With respect to the Class II-M1
Certificates on each Distribution Date (A) on or prior to the Optional
Termination Date, 0.75% per annum and (B) after the Optional Termination Date,
1.1125% per annum. With respect to the I-M2 Component and the II-M2 Component on
each Distribution Date (A) on or prior to the Optional Termination Date, 1.375%
per annum and (B) after the Optional Termination Date, 2.0625% per annum. With
respect to the I-M3 Component and the II-M3 Component on each Distribution Date
(A) on or prior to the Optional Termination Date, 2.50% per annum and (B) after
the Optional Termination Date, 3.75% per annum. With respect to the Class II-M4
Certificates on each Distribution Date (A) on or prior to the Optional
Termination Date, 3.00% per annum and (B) after the Optional Termination Date,
4.50% per annum.
"Certificate Owner": With respect to each Book-Entry Certificate, any
beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class A
Certificates, Class II-M1 Certificates, Class II-M4 Certificates or Class P
Certificates immediately prior to any Distribution Date, an amount equal to the
Initial Certificate Principal Balance thereof reduced by the sum of all amounts
actually distributed in respect of principal of such Class and, in the case of a
Class II-M1 Certificate and a Class II-M4 Certificate, Realized Losses allocated
thereto on all prior Distribution Dates. With respect to any Class M2
Certificates and any date of determination, an amount equal to the sum of the
Component Principal Balances of the I-M2 Component and the II-M2 Component. With
respect to any Class M3 Certificates and any date of determination, an amount
equal to the sum of the Component Principal Balances of the I-M3 Component and
the II-M3 Component. With respect to any Class I-C Certificates as of any date
of determination, an amount equal to the Uncertificated Principal Balance of
REMIC 3 Regular Interest LT3-IC. With respect to any Class II-C Certificates as
of any date of determination, an amount equal to the Uncertificated Principal
Balance of REMIC 3 Regular Interest LT3-IIC. The Class S Certificates will not
have a Certificate Principal Balance.
"Certificate Register": The register maintained pursuant to Section
5.02 hereof.
"Certificateholder" or "Holder": The Person in whose name a Certificate
is registered in the Certificate Register, except that a Disqualified
Organization or a Non-United States Person shall not be a Holder of a Residual
Certificate for any purposes hereof and, solely for the purposes of giving any
consent pursuant to this Agreement, any Certificate registered in the
13
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, the Trust Administrator, the
NIMS Insurer and the Guarantor may conclusively rely upon a certificate of the
Depositor or the Master Servicer in determining whether a Certificate is held by
an Affiliate thereof. All references herein to "Holders" or "Certificateholders"
shall reflect the rights of Certificate Owners as they may indirectly exercise
such rights through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Trustee, the Trust
Administrator, the NIMS Insurer and the Guarantor shall be required to recognize
as a "Holder" or "Certificateholder" only the Person in whose name a Certificate
is registered in the Certificate Register.
"Class": Collectively, Certificates which have the same priority of
payment and bear the same class designation and the form of which is identical
except for variation in the Percentage Interest evidenced thereby.
"Class I-A Certificate": Any one of the Class I-A Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-1 executed, authenticated and delivered by the Trust Administrator on
behalf of the Trustee, representing the rights to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 3.
"Class I-A Principal Distribution Amount": With respect to any
Distribution Date on or after the Group I Stepdown Date and on which a Group I
Trigger Event is not in effect, the amount equal to the lesser of (I) the
aggregate Certificate Principal Balance of the Class I-A Certificates
immediately prior to such Distribution Date and (II) the excess of (x) the
aggregate Certificate Principal Balance of the Class I-A Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 77.00% and (ii) the aggregate Stated Principal Balance of the
Group I Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Group I Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) minus the Group I Overcollateralization Floor.
"Class I-C Certificate": Any one of the Class I-C Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-12, executed, authenticated and delivered by the Trust Administrator
on behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC X.
"Class I-P Certificate": Any one of the Class I-P Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-14, executed, authenticated and delivered by the Trust Administrator
on behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC X.
14
"Class I-S Certificate": Any one of the Class I-S Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-6, executed, authenticated and delivered by the Trust Administrator on
behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 3.
"Class II-A Certificates": The Class II-A1 Certificates, the Class
II-A2 Certificates, the Class II-A3 Certificates and the Class II-A4
Certificates.
"Class II-A Fixed-Rate Certificates": The Class II-A2 Certificates, the
Class II-A3 Certificates and the Class II-A4 Certificates.
"Class II-A Principal Distribution Amount": With respect to any
Distribution Date on or after the Group II Stepdown Date and on which a Group II
Trigger Event is not in effect, the amount equal to the lesser of (I) the
aggregate Certificate Principal Balance of the Class II-A Certificates
immediately prior to such Distribution Date and (II) the excess of (x) the
aggregate Certificate Principal Balance of the Class II-A Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 70.00% and (ii) the aggregate Stated Principal Balance of the
Group II Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Group II Mortgage Loans as of the last day of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) minus the Group II Overcollateralization Floor.
"Class II-A Remaining Principal Distribution Amount": With respect to
any Distribution Date, prior to the Group II Stepdown Date or on which a Group
II Trigger Event is in effect, an amount equal to the Group II Principal
Distribution Amount minus the Class II-A1 Principal Distribution Amount for such
Distribution Date and, for any Distribution Date, on or after the Group II
Stepdown Date and on which a Group II Trigger Event is not in effect, an amount
equal to the Class II-A Principal Distribution Amount minus the Class II-A1
Principal Distribution Amount for such Distribution Date.
"Class II-A1 Allocation Percentage": With respect to any Distribution
Date, the percentage obtained by dividing (x) the aggregate Certificate
Principal Balance of the Class II-A1 Certificates immediately prior to such
Distribution Date by (y) the aggregate Certificate Principal Balances of the
Class II-A Certificates immediately prior to such Distribution Date.
"Class II-A1 Certificate": Any one of the Class II-A1 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-2, executed, authenticated and delivered by the Trust Administrator on
behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 3.
"Class II-A1 Principal Distribution Amount": With respect to any
Distribution Date, prior to the Group II Stepdown Date or on which a Group II
Trigger Event is in effect, an amount equal to the lesser of (I) the aggregate
of the Certificate Principal Balance of the Class II-A1 Certificates immediately
prior to such Distribution Date and (II) the product of (x) the Group II
15
Principal Distribution Amount and (y) the Class II-A1 Allocation Percentage for
such Distribution Date and, for any Distribution Date, on or after the Group II
Stepdown Date and on which a Group II Trigger Event is not in effect, an amount
equal to the lesser of (I) the aggregate of the Certificate Principal Balance of
the Class II-A1 Certificates immediately prior to such Distribution Date and
(II) the product of (x) the Class II-A Principal Distribution Amount and (y) the
Class II-A1 Allocation Percentage for such Distribution Date.
"Class II-A2 Certificate": Any one of the Class II-A2 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-3, executed, authenticated and delivered by the Trust Administrator on
behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 3.
"Class II-A3 Certificate": Any one of the Class II-A3 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-4, executed, authenticated and delivered by the Trust Administrator on
behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 3.
"Class II-A4 Certificate": Any one of the Class II-A4 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-5, executed, authenticated and delivered by the Trust Administrator on
behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 3.
"Class II-C Certificate": Any one of the Class II-C Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-13, executed, authenticated and delivered by the Trust Administrator
on behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC X.
"Class II-M1 Certificate": Any one of the Class II-M1 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-8, executed, authenticated and delivered by the Trust Administrator on
behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 3.
"Class II-M1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Group II Stepdown Date and on which a Group II
Trigger Event is not in effect, an amount equal to the lesser of (I) the
aggregate Certificate Principal Balance of the Class II-M1 Certificates
immediately prior to such Distribution Date and (II) the excess of (x) the sum
of (i) the aggregate Certificate Principal Balance of the Class II-A
Certificates (after taking into account the payment of the Class II-A Principal
Distribution Amount on such Distribution Date) and (ii) the aggregate
Certificate Principal Balance of the Class II-M1 Certificates immediately prior
to such Distribution Date over (y) the lesser of (A) the product of (i) 81.00%
and (ii) the aggregate Stated Principal Balance of the Group II Mortgage Loans
as of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Group II Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the Group II
Overcollateralization Floor.
16
"Class II-M4 Certificates" Any one of the Class II-M4 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-11, executed, authenticated and delivered by the Trust Administrator
on behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 3.
"Class II-M4 Principal Distribution Amount": With respect to any
Distribution Date on or after the Group II Stepdown Date and on which a Group II
Trigger Event is not in effect, an amount equal to the lesser of (I) the
aggregate Certificate Principal Balance of the Class II-M4 Certificates
immediately prior to such Distribution Date and (II) the excess of (x) the sum
of (i) the aggregate Certificate Principal Balance of the Class II-A
Certificates (after taking into account the payment of the Class II-A Principal
Distribution Amount on such Distribution Date), (ii) the aggregate Certificate
Principal Balance of the Class II-M1 Certificates (after taking into account the
payment of the Class II-M1 Principal Distribution Amount on such Distribution
Date), (iii) the Component Principal Balance of the II-M2 Component (after
taking into account the payment of the II-M2 Component Principal Distribution
Amount on such Distribution Date), (iv) the Component Principal Balance of the
II-M3 Component (after taking into account the payment of the II-M3 Component
Principal Distribution Amount on such Distribution Date) and (v) the aggregate
Certificate Principal Balance of the Class II-M4 Certificates immediately prior
to such Distribution Date over (y) the lesser of (A) the product of (i) 97.80%
and (ii) the aggregate Stated Principal Balance of the Group II Mortgage Loans
as of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Group II Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the Group II
Overcollateralization Floor.
"Class II-P Certificate": Any one of the Class II-P Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-15, executed, authenticated and delivered by the Trust Administrator
on behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC X.
"Class II-S Certificate": Any one of the Class II-S Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-7, executed, authenticated and delivered by the Trust Administrator on
behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing a Regular Interest in REMIC 3.
"Class A Certificates": The Class I-A Certificates and the Class II-A
Certificates.
"Class A Principal Distribution Amount": With respect to any
Distribution Date, the Class I-A Principal Distribution Amount or the Class II-A
Principal Distribution Amount.
"Class C Certificates": The Class I-C Certificates and the Class II-C
Certificates.
"Class Factors": The Trustee will determine a Class Factor (carried to
eight decimal places) for each Class of Regular Certificates in connection with
each Distribution Date. When the Class Factor is multiplied by the Original
Class Certificate Principal Balance (or Original
17
Class Notional Amount) of a Certificate of that Class, the product will equal
the Certificate Principal Balance (or Notional Amount) of such Certificate
(after giving effect to the distribution to Certificateholders on such
Distribution Date of, to the extent part of the Group I Available Funds or the
Group II Available Funds, as applicable, for such Distribution Date, scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period).
"Class M2 Certificate": Any one of the Class M2 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-9, executed, authenticated and delivered by the Trust Administrator on
behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing two Regular Interests in REMIC 3, the I-M2
Component and the II-M2 Component.
"Class M3 Certificate": Any one of the Class M3 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-10, executed, authenticated and delivered by the Trust Administrator
on behalf of the Trustee, representing the right to distributions as set forth
herein and therein and evidencing two Regular Interests in REMIC 3, the I-M3
Component and the II-M3 Component.
"Class P Certificates": The Class I-P Certificates and the Class II-P
Certificates.
"Class R Certificate": Any one of the Class R Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-16, executed, authenticated and delivered by the Trust Administrator
on behalf of the Trustee, evidencing the ownership of the Class R-1A Interest,
the Class R-1B Interest, the Class R-2 Interest and the Class R-3 Interest.
"Class R-1A Interest": The Residual Interest in REMIC 1A.
"Class R-1B Interest": The Residual Interest in REMIC 1B
"Class R-2 Interest": The Residual Interest in REMIC 2.
"Class R-3 Interest": The Residual Interest in REMIC 3.
"Class R-X Certificate": Any one of the Class R-X Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-17, executed, authenticated and delivered by the Trust Administrator
on behalf of the Trustee, evidencing the ownership of the Class R-X Interest.
"Class R-X Interest": The Residual Interest in REMIC X.
"Class S Certificates": The Class I-S Certificates and the Class II-S
Certificates.
"Close of Business": As used herein, with respect to any Business Day,
5:00 p.m. (New York time).
"Closing Date": April 2, 2002.
18
"Closing Date Mortgage Loans": The Group I Closing Date Mortgage Loans
and the Group II Closing Date Mortgage Loans.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The account or accounts created and maintained by
the Master Servicer pursuant to Section 3.10(a), which shall be entitled
"Bankers Trust Company of California, N.A., as Trust Administrator for the
benefit of First Union National Bank, as Trustee, in trust for registered
Holders of Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1," which must be an Eligible Account.
"Commission": The Securities and Exchange Commission.
"Compensating Interest": As defined in Section 3.24.
"Component": Any one of the Mezzanine Components.
"Component Principal Balance": With respect to any Mezzanine Components
immediately prior to any Distribution Date, will be an amount equal to the
Initial Component Principal Balance thereof reduced by the sum of all amounts
distributed in respect of principal of such Component pursuant to Section 4.01
and Realized Losses allocated thereto on all prior Distribution Dates.
"Corporate Trust Office": The principal corporate trust office of the
Trust Administrator or the Trustee at which at any particular time its corporate
trust business in connection with this Agreement shall be administered, which
office with respect to the Trust Administrator at the date of the execution of
this instrument is located at ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, or at such other address as the Trust Administrator may designate from
time to time by notice to the Certificateholders, the Depositor, the Trustee and
the Master Servicer, and which office with respect to the Trustee at the date of
the execution of this instrument is located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, or at such other address as the
Trustee may designate from time to time by notice to the Certificateholders, the
Depositor, the Trust Administrator and the Master Servicer.
"Corresponding Certificates": With respect to (i) REMIC 2 Regular
Interest LT2B-1, (ii) REMIC 2 Regular Interest LT2C-1 and REMIC 2 Regular
Interest LT2G-2, (iii) REMIC 2 Regular Interest LT2D-1 and REMIC 2 Regular
Interest LT2H-2, (iv) REMIC 2 Regular Interest LT2B-2, (v) REMIC 2 Regular
Interest LT2C-2, (vi) REMIC 2 Regular Interest LT2D-2, (vii) REMIC 2 Regular
Interest LT2E-2, (viii) REMIC 2 Regular Interest LT2F-2, (ix) REMIC 2 Regular
Interest LT2I-2, (x) REMIC 2 Regular Interest LT2P-1 and (xi) REMIC 2 Regular
Interest LT2P-2, (i) the Class I-A Certificates, (ii) the Class M2 Certificates,
(iii) the Class M3 Certificates, (iv) the Class II-A1 Certificates, (v) the
Class II-A2 Certificates, (vi) the Class II-A3 Certificates, (vii) the Class
II-A4 Certificates, (viii) the Class II-M1 Certificates, (ix) the Class II-M4
Certificates, (x) REMIC 3 Regular Interest LT3-IP and (xi) REMIC 3 Regular
Interest LT3-IIP, respectively.
"Cumulative Loss Percentage": With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses
19
incurred from the Cut-off Date to the last day of the preceding calendar month
and the denominator of which is the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date.
"Custodial Agreement": An agreement that may be entered into or an
agreement assigned to the Trustee with respect to the Mortgage Loans.
"Custodian": A custodian, which shall not be the Depositor, the Master
Servicer, the Seller or any Affiliate of any of them, appointed pursuant to a
Custodial Agreement.
"Cut-off Date": With respect to each Closing Date Mortgage Loan, April
1, 2002; and with respect to each Qualified Substitute Mortgage Loan, its date
of substitution, as applicable.
"Cut-off Date Aggregate Principal Balance": The aggregate of the
Cut-off Date Principal Balances of the Mortgage Loans.
"Cut-off Date Principal Balance": With respect to any Mortgage Loan,
the unpaid principal balance thereof as of the Cut-off Date (with respect to a
Closing Date Mortgage Loan); or as of the applicable date of substitution (with
respect to a Qualified Substitute Mortgage Loan), after giving effect to
scheduled payments due on or before the Cut-off Date, whether or not received.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Deficiency Amount": With respect to any Distribution Date, the sum of
(i) the Guaranteed Interest Distribution Amount and (ii) the Guaranteed
Principal Distribution Amount.
"Deficient Valuation": With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.01(b) hereof.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by
one or more Qualified Substitute Mortgage Loans.
"Delinquent": With respect to any Mortgage Loan and related Monthly
Payment, the Monthly Payment due on a Due Date which is not made by the Close of
Business on the next scheduled Due Date for such Mortgage Loan. For example, a
Mortgage Loan is 60 or more days Delinquent if the Monthly Payment due on a Due
Date is not made by the Close of Business on the second scheduled Due Date after
such Due Date.
"Depositor": Long Beach Securities Corp., a Delaware corporation, or
any successor in interest.
20
"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 Trust
Administrator (or the Master Servicer on behalf of the Trustee or the Trust
Administrator) shall not be considered to Directly Operate an REO Property
solely because the Trustee or the Trust Administrator (or the Master Servicer on
behalf of the Trustee or the Trust Administrator) establishes rental terms,
chooses tenants, enters into or renews leases, deals with taxes and insurance,
or makes decisions as to repairs or capital expenditures with respect to such
REO Property.
"Disqualified Organization": Any: (A) "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of (i) the United
States, any state or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (ii) any organization (other than a cooperative described in Section
521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code
unless such organization is subject to the tax imposed by Section 511 of the
Code, or (iii) any organization described in Section 1381(a)(2)(C) of the Code;
(B) "electing large partnership" within the meaning of Section 775 of the Code;
or (C) other Person so designated by the Trustee based upon an Opinion of
Counsel provided by nationally recognized counsel to the Trustee that the
holding of an ownership interest in a Residual Certificate by such Person may
cause the Trust Fund or any Person having an ownership interest in any Class of
Certificates (other than such Person) to incur liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the transfer
of an ownership interest in a Residual Certificate to such Person. A corporation
will not be treated as an instrumentality of the United States or of any state
or political subdivision thereof if all of its activities are subject to income
tax and a majority of its board of directors is not selected by a governmental
unit. The terms "United States," "state" and "international organization" shall
have the meanings set forth in Section 7701 of the Code.
"Distribution Account": The trust account or accounts created and
maintained by the Trust Administrator pursuant to Section 3.10(b) which shall be
entitled "Distribution Account, Bankers Trust Company of California, N.A., as
Trust Administrator for the benefit of First Union
21
National Bank, as Trustee, in trust for the registered Certificateholders of
Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates, Series 2002-1"
and which must be an Eligible Account.
"Distribution Date": The 25th day of any calendar month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in May 2002.
"Due Date": With respect to each Distribution Date, the first day of
the calendar month in which such Distribution Date occurs, which is the day of
the month on which the Monthly Payment is due on a Mortgage Loan, exclusive of
any days of grace.
"Due Period": With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month in which such
Distribution Date occurs and ending on the first day of the month in which such
Distribution Date occurs.
"Effective Date": As defined in Section 3.13 hereof.
"Eligible Account": Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company) are
rated P-1 by ▇▇▇▇▇'▇, F-1 by Fitch or A-1+ by S&P (or comparable ratings if
▇▇▇▇▇'▇, Fitch and S&P are not the Rating Agencies) at the time any amounts are
held on deposit therein; provided that so long as Washington Mutual Bank, FA is
the Sub-Servicer, any account maintained with Washington Mutual Bank, FA shall
be an Eligible Account if the long-term unsecured debt obligations of Washington
Mutual Bank, FA are rated no lower than "A2" by ▇▇▇▇▇'▇ or "A" by Fitch, (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, the Trust Administrator 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 Trust
Administrator. Eligible Accounts may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Extraordinary Trust Fund Expense": Any amounts reimbursable to the
Trustee or the Trust Administrator, or any director, officer, employee or agent
of the Trustee or the Trust Administrator, from the Trust Fund pursuant to
Section 8.05, any amounts payable from the Distribution Account in respect of
taxes pursuant to Section 10.01(g)(iii), any amounts payable from the
Distribution Account in respect of any REMIC pursuant to Section 10.01(c), any
amounts payable from the Trust Fund as a trustee fee for any successor trustee
and any amounts
22
payable by the Trustee or the Trust Administrator for the recording of the
assignments of mortgage pursuant to Section 2.01.
"▇▇▇▇▇▇ ▇▇▇": Federal National Mortgage Association, or any successor
thereto.
"FDIC": Federal Deposit Insurance Corporation, or any successor
thereto.
"Final Recovery Determination": With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Seller or the Master Servicer pursuant to or as contemplated by Section
2.03 or 9.01), a determination made by the Master Servicer that all Insurance
Proceeds, Liquidation Proceeds and other payments or recoveries which the Master
Servicer, in its reasonable good faith judgment, expects to be finally
recoverable in respect thereof have been so recovered. The Master Servicer shall
maintain records, prepared by a Servicing Representative, of each Final Recovery
Determination made thereby.
"Fitch": Fitch, Inc., or its successor in interest.
"Fixed Rate Mortgage Loan": A Mortgage Loan which provides for a fixed
Mortgage Rate payable with respect thereto.
"Formula Rate": For any Distribution Date and the Class I-A
Certificates, the Class II-A1 Certificates, the Class II-M1 Certificates, the
Mezzanine Components and the Class II-M4 Certificates, the lesser of (i) LIBOR
plus the related Certificate Margin and (ii) the related Maximum Cap Rate.
With respect to the Class II-A2 Certificates and (A) any Distribution
Date on or prior to the October 2004 Distribution Date, the lesser of 3.50% per
annum and the related Maximum Cap Rate and (B) any Distribution Date after the
October 2004 Distribution Date, 3.50% per annum.
With respect to the Class II-A3 Certificates and (A) any Distribution
Date on or prior to the October 2004 Distribution Date, the lesser of 4.92% per
annum and the related Maximum Cap Rate and (B) any Distribution Date after the
October 2004 Distribution Date, 4.92% per annum.
With respect to the Class II-A4 Certificates and (A) any Distribution
Date on or prior to the Optional Termination Date, the lesser of 6.46% per annum
and the related Maximum Cap Rate and (B) any Distribution Date after the
Optional Termination Date, the lesser of 6.96% per annum and 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.
23
"Group I Available Funds": With respect to any Distribution Date, an
amount equal to the excess of (i) the sum of (a) the aggregate of the Monthly
Payments on the Group I Mortgage Loans due on the related Due Date and received
on or prior to the related Determination Date, (b) Liquidation Proceeds,
Insurance Proceeds, Principal Prepayments and other unscheduled recoveries of
principal and interest in respect of the Group I Mortgage Loans during the
related Prepayment Period (other than any Prepayment Charges collected by the
Master Servicer in connection with the full or partial prepayment of any of the
Group I Mortgage Loans and any Master Servicer Prepayment Charge Payment Amount
in connection with Group I Mortgage Loans), (c) the aggregate of any amounts
received in respect of an REO Property acquired in respect of a Group I Mortgage
Loan withdrawn from any REO Account and deposited in the Collection Account for
such Distribution Date, (d) the aggregate of any amounts deposited in the
Collection Account by the Master Servicer in respect of related Prepayment
Interest Shortfalls on the Group I Mortgage Loans for such Distribution Date,
(e) the aggregate of any Advances made by the Master Servicer or the Trust
Administrator for such Distribution Date with respect to the Group I Mortgage
Loans, (f) the aggregate of any related advances made by or on behalf of the
Trust Administrator for such Distribution Date with respect to the Group I
Mortgage Loans pursuant to Section 7.02(b) and (g) the aggregate of any amounts
constituting proceeds of repurchases or substitutions of the Group I Mortgage
Loans occurring during the related Prepayment Period over (ii) the sum of (a)
amounts reimbursable or payable to the Depositor, the Master Servicer, the
Trustee, the Trust Administrator, the Seller, the Guarantor, the NIMS Insurer or
any Sub-Servicer pursuant to Section 3.11 or Section 3.12 in respect of the
Group I Mortgage Loans or otherwise payable in respect of Extraordinary Trust
Fund Expenses in connection with the Group I Mortgage Loans, (b) amounts
deposited in the Collection Account or the Distribution Account pursuant to
clauses (i)(a) through (g) above, as the case may be, in connection with the
Group I Mortgage Loans, in error, (c) Stayed Funds in connection with the Group
I Mortgage Loans, (d) any indemnification payments or expense reimbursements
made by the Trust Fund pursuant to Section 8.05 in connection with the Group I
Mortgage Loans and (e) amounts reimbursable to the Trust Administrator for an
advance made pursuant to Section 7.02(b) in connection with the Group I Mortgage
Loans which advance the Trust Administrator has determined to be nonrecoverable
from the Stayed Funds in respect of which it was made.
"Group I Certificates": The Class I-A Certificates, the Class I-S
Certificates, the Class I-C Certificates and the Class I-P Certificates.
"Group I Closing Date Mortgage Loan": Any of the Group I Mortgage Loans
included in the Trust Fund as of the Closing Date. The aggregate principal
balance of the Group I Closing Date Mortgage Loans as of the Cut-off Date is
equal to $1,000,003,086.05.
"Group I Credit Enhancement Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (x) the sum of the aggregate Component Principal Balances of the Group
I Mezzanine Components and the Uncertificated Principal Balance of REMIC 3
Regular Interest LT3-IC, and the denominator of which is (y) the aggregate
Stated Principal Balance of the Group I Mortgage Loans, calculated prior to
taking into account payments of principal on the Group I Mortgage Loans due on
the related Due Date or received during the related Prepayment Period and
distribution of the Group I Principal Distribution Amount in respect of the
Certificates and Components then entitled to distributions of principal on such
Distribution Date.
24
"Group I Cumulative Loss Trigger Event": A Group I Cumulative Loss
Trigger Event has occurred with respect to a Distribution Date on or after the
Distribution Date in May 2005, if the percentage obtained by dividing (x) the
aggregate amount of Realized Losses incurred with respect to the Group I
Mortgage Loans from the Cut-off Date through the last day of the related Due
Period by (y) the aggregate Stated Principal Balance of the Group I Mortgage
Loans as of the Cut-off Date, exceeds the applicable percentage set forth below
for such Distribution Date:
Distribution Date Occurring in Cumulative Loss Percentage
------------------------------ --------------------------
May 2005 through April 2006 2.50% for the first month, plus an additional 1/12th
of 1.75% for each month thereafter.
May 2006 through April 2007 4.25% for the first month, plus an additional 1/12th
of 1.00% for each month thereafter.
May 2007 through April 2008 5.25% for the first month, plus an additional 1/12th
of 0.75% for each month thereafter.
May 2008 through April 2009 6.00% for the first month, plus an additional 1/12th
of 0.75% for each month thereafter.
May 2009 and thereafter 6.75% for each month
"Group I Delinquency Percentage": With respect to any Distribution
Date, the percentage obtained by dividing (x) the aggregate Stated Principal
Balance of Group I Mortgage Loans Delinquent 60 days or more by (y) the
aggregate Stated Principal Balance of the Group I Mortgage Loans, in each case,
calculated prior to taking into account payments of principal on the Group I
Mortgage Loans due on the related Due Date or received during the related
Prepayment Period.
"Group I Delinquency Trigger Event": A Group I Trigger Event has
occurred with respect to a Distribution Date if the Group I Delinquency
Percentage exceeds 80% of the Group I Credit Enhancement Percentage.
"Group I Excess Overcollateralized Amount": With respect to the Class
I-A Certificates and the Group I Mezzanine Components and any Distribution Date,
the excess, if any, of (i) the Group I Overcollateralized Amount for such
Distribution Date (assuming that 100% of the Group I Principal Remittance Amount
is applied as a principal payment on such Distribution Date) over (ii) the Group
I Overcollateralization Target Amount for such Distribution Date.
"Group I Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (x) the Group I Net Monthly Excess Cashflow for
such Distribution Date and (y) the Group I Overcollateralization Deficiency
Amount for such Distribution Date.
"Group I Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Group I Available Funds for such Distribution Date
attributable to interest received or advanced with respect to the Group I
Mortgage Loans or to Compensating Interest paid by the Master Servicer with
respect to the Group I Mortgage Loans.
25
"Group I Mezzanine Components": The I-M2 Component and the I-M3
Component.
"Group I Mortgage Loans": Those Mortgage Loans identified as Group I
Mortgage Loans on the Mortgage Loan Schedule.
"Group I Net Monthly Excess Cashflow": With respect to each
Distribution Date, the sum of (a) any Group I Overcollateralization Release
Amount for such Distribution Date and (b) the positive excess of (x) Group I
Available Funds for such Distribution Date over (y) the sum for such
Distribution Date of (A) the Monthly Interest Distributable Amounts for the
Class I-A Certificates, the Class I-S Certificates and the Group I Mezzanine
Components, (B) the Unpaid Interest Shortfall Amounts for the Class I-A
Certificates and the Class I-S Certificates, (C) the Group I Principal
Remittance Amount, (D) the Guarantor Reimbursement Amount and (E) the Guaranty
Fee.
"Group I Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Group I
Overcollateralization Target Amount exceeds the Group I Overcollateralized
Amount on such Distribution Date (assuming that 100% of the aggregate Group I
Principal Remittance Amount is applied as a principal payment on such
Distribution Date).
"Group I Overcollateralization Floor": $5,000,000.
"Group I Overcollateralization Release Amount": With respect to any
Distribution Date, the lesser of (x) the Group I Principal Remittance Amount for
such Distribution Date and (y) the Group I Excess Overcollateralized Amount.
"Group I Overcollateralization Target Amount": With respect to any
Distribution Date (i) prior to the Group I Stepdown Date, $19,999,900, (ii) on
or after the Group I Stepdown Date provided a Group I Trigger Event is not in
effect, the greater of (x) 4.00% of the aggregate Stated Principal Balance of
the Group I Mortgage Loans on the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (y) the Group I
Overcollateralization Floor, and (iii) on or after the Group I Stepdown Date if
a Group I Trigger Event is in effect, the Group I Overcollateralization Target
Amount for the immediately preceding Distribution Date. Notwithstanding the
foregoing, the Group I Overcollateralization Target Amount shall never exceed
the Group I Overcollateralization Target Amount as described in clause (i)
above.
"Group I Overcollateralized Amount": With respect to any Distribution
Date, the amount, if any, by which (i) the aggregate Stated Principal Balance of
the Group I Mortgage Loans on the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) exceeds (ii) the sum of
the aggregate Certificate Principal Balances of the Class I-A Certificates, the
Uncertificated Principal Balance of REMIC 3 Regular Interest LT3-IP and the
aggregate Component Principal Balances of the Group I Mezzanine Components as of
such Distribution Date (after giving effect to distributions to be made on such
Distribution Date, other than distributions of the Group I Extra Principal
Distribution Amount, if any).
26
"Group I Principal Distribution Amount": The sum of (i) (x) the Group I
Principal Remittance Amount minus (y) the amount of any Group I
Overcollateralization Release Amount for such Distribution Date, and (ii) the
Group I Extra Principal Distribution Amount for such Distribution Date.
"Group I Principal Remittance Amount": With respect to any Distribution
Date, the sum of (i) all scheduled payments of principal collected or advanced
on the Group I Mortgage Loans by the Master Servicer that were due during the
related Due Period, (ii) all partial and full principal prepayments of the Group
I Mortgage Loans applied by the Master Servicer during the related Prepayment
Period, (iii) the principal portion of all Net Liquidation Proceeds and
Insurance Proceeds received during the related Prepayment Period with respect to
the Group I Mortgage Loans, (iv) that portion of the Purchase Price,
representing principal of any repurchased Group I Mortgage Loan, deposited to
the Collection Account during the related Prepayment Period, (v) the principal
portion of any Substitution Adjustments deposited in the Collection Account
during the related Prepayment Period with respect to the Group I Mortgage Loans
and (vi) on the Distribution Date on which the Trust is to be terminated in
accordance with this Agreement, that portion of the Termination Price
representing principal with respect to the Group I Mortgage Loans.
"Group I Reserve Fund": The reserve fund established pursuant to
Section 3.26.
"Group I Stepdown Date": The earlier of (a) the Distribution Date in
May 2005 and (b) the date on which the aggregate Certificate Principal Balance
of the Class I-A Certificates has been reduced to zero.
"Group I Trigger Event": A Group I Trigger Event has occurred with
respect to a Distribution Date if either a Group I Cumulative Loss Trigger Event
or a Group I Delinquency Trigger Event has occurred with respect to such
Distribution Date.
"Group II Available Funds": With respect to any Distribution Date, an
amount equal to the excess of (i) the sum of (a) the aggregate of the Monthly
Payments on the Group II Mortgage Loans due on the related Due Date and received
on or prior to the related Determination Date, (b) Liquidation Proceeds,
Insurance Proceeds, Principal Prepayments and other unscheduled recoveries of
principal and interest in respect of the Group II Mortgage Loans during the
related Prepayment Period (other than any Prepayment Charges collected by the
Master Servicer in connection with the full or partial prepayment of any of the
Group II Mortgage Loans and any Master Servicer Prepayment Charge Payment Amount
in connection with Group II Mortgage Loans), (c) the aggregate of any amounts
received in respect of an REO Property acquired in respect of a Group II
Mortgage Loan withdrawn from any REO Account and deposited in the Collection
Account for such Distribution Date, (d) the aggregate of any amounts deposited
in the Collection Account by the Master Servicer in respect of related
Prepayment Interest Shortfalls on the Group II Mortgage Loans for such
Distribution Date, (e) the aggregate of any Advances made by the Master Servicer
or the Trust Administrator for such Distribution Date with respect to the Group
II Mortgage Loans, (f) the aggregate of any related advances made by or on
behalf of the Trust Administrator for such Distribution Date with respect to the
Group II Mortgage Loans pursuant to Section 7.02(b) and (g) the aggregate of any
amounts constituting proceeds of repurchases or substitutions of the Group II
Mortgage Loans occurring during the related Prepayment Period over (ii) the sum
of (a) amounts reimbursable or payable to the Depositor, the
27
Master Servicer, the Trustee, the Trust Administrator, the Seller, the
Guarantor, the NIMS Insurer or any Sub-Servicer pursuant to Section 3.11 or
Section 3.12 in respect of the Group II Mortgage Loans or otherwise payable in
respect of Extraordinary Trust Fund Expenses in connection with the Group II
Mortgage Loans, (b) amounts deposited in the Collection Account or the
Distribution Account pursuant to clauses (i)(a) through (g) above, as the case
may be, in connection with the Group II Mortgage Loans, in error, (c) Stayed
Funds in connection with the Group II Mortgage Loans, (d) the PMI Insurer Fee
payable from the Distribution Account, (e) any indemnification payments or
expense reimbursements made by the Trust Fund pursuant to Section 8.05 in
connection with the Group II Mortgage Loans and (f) amounts reimbursable to the
Trust Administrator for an advance made pursuant to Section 7.02(b) in
connection with the Group II Mortgage Loans which advance the Trust
Administrator has determined to be nonrecoverable from the Stayed Funds in
respect of which it was made.
"Group II Certificates": The Class II-A Certificates, the Class II-S
Certificates, the Group II-M1 Certificates, the Class II-M4 Certificates, the
Class II-C Certificates and the Class II-P Certificates.
"Group II Closing Date Mortgage Loan": Any of the Group II Mortgage
Loans included in the Trust Fund as of the Closing Date. The aggregate principal
balance of the Group II Closing Date Mortgage Loans as of the Cut-off Date is
equal to $599,999,910.80.
"Group II Credit Enhancement Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (x) the sum of the aggregate Certificate Principal Balances of the
Class II-M1 Certificates, the Class II-M4 Certificates, the Uncertificated
Principal Balance of REMIC 3 Regular Interest LT3-IIC and the aggregate
Component Principal Balances of the Group II Mezzanine Components, and the
denominator of which is (y) the aggregate Stated Principal Balance of the Group
II Mortgage Loans calculated prior to taking into account payments of principal
on the Group II Mortgage Loans due on the related Due Date or received during
the related Prepayment Period and distribution of the Group II Principal
Distribution Amount in respect of the Certificates and Components then entitled
to distributions of principal on such Distribution Date.
"Group II Cumulative Loss Trigger Event": A Group II Cumulative Loss
Trigger Event has occurred with respect to a Distribution Date on or after the
Distribution Date in May 2005, if the percentage obtained by dividing (x) the
aggregate amount of Realized Losses incurred with respect to the Group II
Mortgage Loans from the Cut-off Date through the last day of the related Due
Period by (y) the aggregate Stated Principal Balance of the Group II Mortgage
Loans as of the Cut-off Date, exceeds the percentage set forth below for such
Distribution Date:
Distribution Date Occurring in Cumulative Loss Percentage
------------------------------ --------------------------
May 2005 through April 2006 2.00% for the first month, plus an additional 1/12th
of 1.25% for each month thereafter.
May 2006 through April 2007 3.25% for the first month, plus an additional 1/12th
of 0.75% for each month thereafter.
May 2007 through April 2008 4.00% for the first month, plus an additional 1/12th
of 0.75% for each month thereafter.
28
Distribution Date Occurring in Cumulative Loss Percentage
------------------------------ --------------------------
May 2008 through April 2009 4.75% for the first month, plus an additional 1/12th
of 0.50% for each month thereafter.
May 2009 and thereafter 5.25% for each month
"Group II Delinquency Percentage": With respect to any Distribution
Date, the percentage obtained by dividing (x) the aggregate Stated Principal
Balance of Group II Mortgage Loans Delinquent 60 days or more by (y) the
aggregate Stated Principal Balance of the Group II Mortgage Loans, in each case,
calculated prior to taking into account payments of principal on the Group II
Mortgage Loans due on the related Due Date or received during the related
Prepayment Period.
"Group II Delinquency Trigger Event": A Group II Delinquency Trigger
Event has occurred with respect to a Distribution Date if the Group II
Delinquency Percentage exceeds 50% of the Group II Credit Enhancement
Percentage.
"Group II Excess Overcollateralized Amount": With respect to the Class
II-A Certificates, the Class II-M1 Certificates, the Class II-M4 Certificates
and the Group II Mezzanine Components and any Distribution Date, the excess, if
any, of (i) the Group II Overcollateralized Amount for such Distribution Date
(assuming that 100% of the Group II Principal Remittance Amount is applied as a
principal payment on such Distribution Date) over (ii) the Group II
Overcollateralization Target Amount for such Distribution Date.
"Group II Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (x) the Group II Net Monthly Excess Cashflow
for such Distribution Date and (y) the Group II Overcollateralization Deficiency
Amount for such Distribution Date.
"Group II Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Group II Available Funds for such Distribution Date
attributable to interest received or advanced with respect to the Group II
Mortgage Loans or to Compensating Interest paid by the Master Servicer with
respect to the Group II Mortgage Loans.
"Group II Mezzanine Components": The II-M2 Component and the Class
II-M3 Component.
"Group II Mortgage Loans": Those Mortgage Loans identified as Group II
Mortgage Loans on the Mortgage Loan Schedule.
"Group II Net Monthly Excess Cashflow": With respect to each
Distribution Date, the sum of (a) any Group II Overcollateralization Release
Amount for such Distribution Date and (b) the positive excess of (x) Group II
Available Funds for such Distribution Date over (y) the sum for such
Distribution Date of (A) the Monthly Interest Distributable Amounts for the
Class II-A Certificates, the Class II-S Certificates, the Class II-M1
Certificates, the Class II-M4 Certificates and the Group II Mezzanine
Components, (B) the Unpaid Interest Shortfall Amounts for the Class II-A
Certificates and the Class II-S Certificates and (C) the Group II Principal
Remittance Amount.
29
"Group II Overcollateralization Deficiency Amount": With respect
to any Distribution Date, the amount, if any, by which the Group II
Overcollateralization Target Amount exceeds the Group II Overcollateralized
Amount on such Distribution Date (assuming that 100% of the aggregate Group II
Principal Remittance Amount is applied as a principal payment on such
Distribution Date).
"Group II Overcollateralization Floor": $3,000,000.
"Group II Overcollateralization Release Amount": With respect to any
Distribution Date, the lesser of (x) the Group II Principal Remittance Amount
for such Distribution Date and (y) the Group II Excess Overcollateralized
Amount.
"Group II Overcollateralization Target Amount": With respect to any
Distribution Date (i) prior to the Group II Stepdown Date, $6,599,900, (ii) on
or after the Group II Stepdown Date provided a Group II Trigger Event is not in
effect, the greater of (x) 2.20% of the aggregate Stated Principal Balance of
the Group II Mortgage Loans on the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (y) the Group II
Overcollateralization Floor, and (iii) on or after the Group II Stepdown Date if
a Group II Trigger Event is in effect, the Group II Overcollateralization Target
Amount for the immediately preceding Distribution Date. Notwithstanding the
foregoing, the Group II Overcollateralization Target Amount shall never exceed
the Group II Overcollateralization Target Amount as described in clause (i)
above.
"Group II Overcollateralized Amount": With respect to any Distribution
Date, the amount, if any, by which (i) the aggregate Stated Principal Balance of
the Group II Mortgage Loans on the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) exceeds (ii) the sum of
the aggregate Certificate Principal Balances of the Class II-A Certificates, the
Class II-M1 Certificates, the Class II-M4 Certificates, the Uncertificated
Principal Balance of REMIC 3 Regular Interest LT3-IIP, and the aggregate
Component Principal Balances of the Group II Mezzanine Components as of such
Distribution Date (after giving effect to distributions to be made on such
Distribution Date, other than distributions of the Group II Extra Principal
Distribution Amount, if any).
"Group II Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) (x) the Group II Principal Remittance Amount
minus (y) the amount of any Group II Overcollateralization Release Amount for
such Distribution Date, and (ii) the Group II Extra Principal Distribution
Amount for such Distribution Date.
"Group II Principal Remittance Amount": With respect to any
Distribution Date, the sum of (i) all scheduled payments of principal collected
or advanced on the Group II Mortgage Loans by the Master Servicer that were due
during the related Due Period, (ii) all partial and full principal prepayments
of the Group II Mortgage Loans applied by the Master Servicer during the related
Prepayment Period, (iii) the principal portion of all Net Liquidation Proceeds
and Insurance Proceeds received during the related Prepayment Period with
respect to the Group II Mortgage Loans, (iv) that portion of the Purchase Price,
representing principal of any
30
repurchased Group II Mortgage Loan, deposited to the Collection Account during
the related Prepayment Period, (v) the principal portion of any Substitution
Adjustments deposited in the Collection Account during the related Prepayment
Period with respect to the Group II Mortgage Loans and (vi) on the Distribution
Date on which the Trust is to be terminated in accordance with this Agreement,
that portion of the Termination Price representing principal with respect to the
Group II Mortgage Loans.
"Group II Reserve Fund": The reserve fund established pursuant to
Section 3.26.
"Group II Stepdown Date": The earlier of (a) the Distribution Date in
May 2005 and (b) the date on which the aggregate Certificate Principal Balance
of the Class II-A Certificates has been reduced to zero.
"Group II Trigger Event": A Group II Trigger Event has occurred with
respect to a Distribution Date if either a Group II Cumulative Loss Trigger
Event or a Group II Delinquency Trigger Event has occurred with respect to such
Distribution Date.
"Guaranteed Certificates": The Class I-A Certificates and the Class I-S
Certificates.
"Guaranteed Interest Distribution Amount": With respect to any
Distribution Date and the Guaranteed Certificates, the amount, if any, after
giving effect to the distributions of the Guaranty Fee and the Guarantor
Reimbursement Amount to the Guarantor and the Monthly Interest Distributable
Amount and any Unpaid Interest Shortfall Amount to the Guaranteed Certificates,
by which the (i) sum of (x) the Monthly Interest Distributable Amount and the
Unpaid Interest Shortfall Amount payable on the Guaranteed Certificates for such
Distribution Date and (y) the Net Prepayment Interest Shortfalls and the Relief
Act Interest Shortfalls allocated to the Guaranteed Certificates for such
Distribution Date exceeds (ii) the amount of interest actually paid (without
giving effect to any Guarantor Payment) to the Holders of the related Classes of
Guaranteed Certificates on such Distribution Date.
"Guaranteed Principal Distribution Amount": With respect to any
Distribution Date, the amount, if any, by which (i) the aggregate Certificate
Principal Balance of the Class I-A Certificates (after giving effect to all
amounts distributable and allocable to principal on such Class I-A Certificates
but prior to giving effect to any Guarantor Payment on such Distribution Date)
exceeds (ii) the aggregate Stated Principal Balance of the Group I Mortgage
Loans (after giving effect to the principal portion of Monthly Payments due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period).
"Guarantor": ▇▇▇▇▇▇ ▇▇▇, or its successor in interest.
"Guarantor Interest Reimbursement Amount": With respect to any
Distribution Date, (i) the sum of any accrued but unpaid Guaranty Fees, not
including the Guaranty Fee due on such Distribution Date, and (ii) the sum of
all amounts paid by the Guarantor in respect of the Guaranteed Interest
Distribution Amounts on all prior Distribution Dates to the extent not
previously reimbursed.
31
"Guarantor Payment": Any payment made by the Guarantor in respect of a
Guaranteed Interest Distribution Amount or a Guaranteed Principal Distribution
Amount.
"Guarantor Principal Reimbursement Amount": With respect to any
Distribution Date, the sum of all amounts paid by the Guarantor in respect of
Guaranteed Principal Distribution Amounts on all prior Distribution Dates to the
extent not previously reimbursed.
"Guarantor Reimbursement Amount": With respect to any Distribution
Date, the sum of Guarantor Interest Reimbursement Amount and the Guarantor
Principal Reimbursement Amount.
"Guaranty": The obligations of the Guarantor pursuant to Section 4.09.
"Guaranty Fee": With respect to any Distribution Date and with respect
to the Guaranteed Certificates, the fee payable to the Guarantor in respect of
its services as Guarantor that accrues at the applicable Guaranty Fee Rate for
such Guaranteed Certificates on a balance equal to the aggregate Certificate
Principal Balance of the Class I-A Certificates immediately prior to such
Distribution Date, computed on the basis of a 360-day year and the actual number
of days elapsed in the related Accrual Period.
"Guaranty Fee Rate": The per annum rate set forth in a side letter of
the Guarantor, addressed to the Trustee, the Trust Administrator, the Seller and
the Master Servicer.
"Indenture": The indenture, if any, entered into following the Closing
Date, among Long Beach Asset Holdings Corp. CI 2002-1, as issuer, Long Beach
Asset Holdings CI 2002-1 LLC, as co-issuer, Bankers Trust Company of California,
N.A., as indenture trust administrator, and First Union National Bank, as
indenture trustee, relating to the NIM Notes to be issued thereunder.
"Independent": When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Master Servicer and
their respective Affiliates, (b) does not have any direct financial interest in
or any material indirect financial interest in the Depositor or the Master
Servicer or any Affiliate thereof, and (c) is not connected with the Depositor
or the Master Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, trust administrator, partner, director or Person
performing similar functions; provided, however, that a Person shall not fail to
be Independent of the Depositor or the Master Servicer or any Affiliate thereof
merely because such Person is the beneficial owner of 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
32
Master Servicer) if the Trustee and the Trust Administrator have received an
Opinion of Counsel to the effect that the taking of any action in respect of any
REO Property by such Person, subject to any conditions therein specified, that
is otherwise herein contemplated to be taken by an Independent Contractor will
not cause such REO Property to cease to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for purposes of Section 860D(a) of the Code), or cause any
income realized in respect of such REO Property to fail to qualify as Rents from
Real Property.
"Index": With respect to each Adjustable Rate Mortgage Loan and with
respect to each related Adjustment Date, the index as specified in the related
Mortgage Note.
"Information Supplement": The Information Supplement of the Depositor
dated March 22, 2002, relating to the Guaranteed Certificates.
"Initial Certificate Principal Balance": With respect to any Regular
Certificate (other than any Class S Certificate), the amount designated "Initial
Certificate Principal Balance" on the face thereof.
"Initial Component Principal Balance": With respect to the I-M2
Component, $46,000,000; the II-M2 Component, $27,000,000; the I-M3 Component,
$49,000,000; and the II-M3 Component, $21,000,000.
"Initial Notional Amount": With respect to any Class S Certificate or
Class C Certificate, the amount designated "Initial Notional Amount" on the face
thereof.
"Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan or the related Mortgaged
Property (including any related 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.
"Insured NIM Notes": Long Beach Asset Holdings Corp. CI 2002-1 NIM
Notes, Series 2002-1, Class N-2 Notes and Class N-3 Notes issued pursuant to the
Indenture, which are backed by certain Class C Certificates and Class P
Certificates and insured by the NIMS Insurer.
"Interest Determination Date": With respect to the Class I-A
Certificates, the Class II-A1 Certificates, the Mezzanine Certificates and the
Mezzanine Components 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.
33
"LIBOR": With respect to each Accrual Period, the rate determined by
the Trust Administrator on the related Interest Determination Date on the basis
of the "Interest Settlement Rate" for United States dollar deposits of one-month
maturity set forth by the British Bankers' Association (the "BBA"), as such rate
appears on the Telerate Page 3750, as of 11:00 a.m. (London time) on such
Interest Determination Date. With respect to any Interest Determination Date, if
the BBA's Interest Settlement Rate does not appear on Telerate Page 3750 as of
11:00 a.m. (London time) on such date, or if Telerate Page 3750 is not available
on such date the Trust Administrator will obtain such rate from Reuters Monitor
Money Rates Service page "LIBOR01" or Bloomberg L.P. page "BBAM." Alternatively,
the Trust Administrator may request the principal London office of each of the
Reference Banks to provide a quotation of its rate. On such Interest
Determination Date, LIBOR for the related Accrual Period will be established by
the Trust Administrator as follows:
(i) If on such Interest Determination Date two or more
Reference Banks provide such offered quotations, LIBOR for the related
Accrual Period shall be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole multiples of
0.03125%); and
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, LIBOR for the related
Accrual Period shall be the higher of (i) LIBOR as determined on the
previous Interest Determination Date and (ii) the Reserve Interest
Rate.
The Trust Administrator will select a particular index as the
alternative index only if it receives an Opinion of Counsel that the selection
of such index will not cause any REMIC to lose its classification as a REMIC for
federal income tax purposes.
"LIBOR Business Day": Any day on which banks in London, England and The
City of New York are open for conducting transactions in foreign currency and
exchange.
"Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage
Loan in respect of which the Master Servicer has determined, in accordance with
the servicing procedures specified herein, as of the end of the related
Prepayment Period, that all Liquidation Proceeds which it expects to recover
with respect to the liquidation of the Mortgage Loan or disposition of the
related REO Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan or (iii) such Mortgage Loan is
removed from the Trust Fund by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03 or Section 9.01. With respect to
any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property or (ii) such REO Property is
removed from the Trust Fund by reason of its being sold or purchased pursuant to
Section 3.23 or Section 9.01.
"Liquidation Proceeds": The amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received by
the Master Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power
34
of eminent domain or condemnation, (ii) the liquidation of a defaulted Mortgage
Loan by means of a trustee's sale, foreclosure sale or otherwise or (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.03, Section 3.23 or Section 9.01.
"Loan Group I": All of the Group I Mortgage Loans collectively.
"Loan Group II": All of the Group II Mortgage Loans collectively.
"Loan-to-Value Ratio": As of any date and as to any Mortgage Loan, the
fraction, expressed as a percentage, the numerator of which is the (x) Principal
Balance of the Mortgage Loan (if such Mortgage Loan is secured by a first lien
on the related Mortgaged Property) or the sum of the Principal Balance of the
Mortgage Loan and any other mortgage loan secured by a senior lien on the
related Mortgaged Property (if such Mortgage Loan is secured by a junior lien on
the related Mortgaged Property) and the denominator of which is (y) the Value of
the related Mortgaged Property.
"Lost Note Affidavit": With respect to any Mortgage Loan as to which
the original Mortgage Note has been permanently lost or destroyed and has not
been replaced, an affidavit from the Seller certifying that the original
Mortgage Note has been lost or destroyed (together with a copy of the related
Mortgage Note and indemnifying the Trust against any loss, cost or liability
resulting from the failure to deliver the original Mortgage Note) in the form of
Exhibit H hereto.
"Marker Rate 1": With respect to REMIC 3 Regular Interest LT3-IC and
any Distribution Date other than the first Distribution Date, a per annum rate
equal to 2 times the weighted average of the Uncertificated REMIC 2 Pass-Through
Rates for REMIC 2 Regular Interest LT2B-1, REMIC 2 Regular Interest LT2C-1,
REMIC 2 Regular Interest LT2D-1, and REMIC 2 Regular Interest LT2E-1, with the
rate on REMIC 2 Regular Interest LT2B-1 subject to a cap equal to the lesser of
(i) LIBOR plus the Certificate Margin of the Class I-A Certificates and (ii) the
lower of the Net WAC Rate and the Maximum Cap Rate applicable to the Class I-A
Certificates, with the rate on REMIC 2 Regular Interest LT2C-1 subject to a cap
equal to the lesser of (i) LIBOR plus the Certificate Margin of the I-M2
Component and (ii) the lower of the Net WAC Rate and the Maximum Cap Rate
applicable to the Group I Mezzanine Components, with the rate on REMIC 2 Regular
Interest LT2D-1 subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the I-M3 Component and (ii) the lower of the Net WAC Rate
and the Maximum Cap Rate applicable to the Group I Mezzanine Components, with
the rate on REMIC 2 Regular Interest LT2E-1 subject to a cap of zero for the
purpose of this calculation, provided that in each case the rate used herein
shall be multiplied by a fraction the numerator of which is the actual number of
days elapsed in the Accrual Period and the denominator of which is 30. With
respect to REMIC 3 Regular Interest LT3-IC and the first Distribution Date, a
per annum rate equal to the weighted average of the Uncertificated REMIC 2
Pass-Through Rates for REMIC 2 Regular Interest LT2B-1, REMIC 2 Regular Interest
LT2C-1, REMIC 2 Regular Interest LT2D-1, and REMIC 2 Regular Interest LT2E-1.
"Marker Rate 2": With respect to REMIC 3 Regular Interest LT3-IIC and
any Distribution Date other than the first Distribution Date, a per annum rate
equal to 2 times the weighted average of the Uncertificated REMIC 2 Pass-Through
Rates for REMIC 2 Regular
35
Interest LT2B-2, REMIC 2 Regular Interest LT2C-2, REMIC 2 Regular Interest
LT2D-2, REMIC 2 Regular Interest LT2E-2, REMIC 2 Regular Interest LT2F-2, REMIC
2 Regular Interest LT2G-2, REMIC 2 Regular Interest LT2H-2, REMIC 2 Regular
Interest LT2I-2 and REMIC 2 Regular Interest LT2J-2, calculated as follows:
o with the rate on REMIC 2 Regular Interest LT2B-2 subject to a cap equal to
the lesser of (i) LIBOR plus the Certificate Margin of the Class II-A1
Certificates and (ii) the lower of the Net WAC Rate and the Maximum Cap
Rate applicable to the Class II-A1 Certificates;
o with the rate on REMIC 2 Regular Interest LT2C-2 subject to a cap equal to
(A) with respect to any of the first 30 Distributions Dates, the lesser of
(i) 3.50% and (ii) the lower of the Net WAC Rate and the Maximum Cap Rate
applicable to the Class II-A2 Certificates, and (B) for any subsequent
Distribution Date, 3.50%;
o with the rate on REMIC 2 Regular Interest LT2D-2 subject to a cap equal to
(A) with respect to any of the first 30 Distributions Dates, the lesser of
(i) 4.92% and (ii) the lower of the Net WAC Rate and the Maximum Cap Rate
applicable to the Class II-A3 Certificates, and (B) for any subsequent
Distribution Date, 4.92%;
o with the rate on REMIC 2 Regular Interest LT2E-2 subject to a cap equal to
(A) with respect to any Distribution Date on or prior to the Optional
Termination Date, the lesser of (i) 6.46% and (ii) the lower of the Net WAC
Rate and the Maximum Cap Rate applicable to the Class II-A4 Certificates
and (B) with respect to any Distribution Date after the Optional
Termination Date the lesser of (i) 6.96% and (ii) the lower of the Net WAC
Rate and the Maximum Cap Rate applicable to the Class II-A4 Certificates;
o with the rate on REMIC 2 Regular Interest LT2F-2 subject to a cap equal to
the lesser of (i) LIBOR plus the Certificate Margin of the Class II-M1
Certificates and (ii) the lower of the Net WAC Rate and the Maximum Cap
Rate applicable to the Class II-M1 Certificates;
o with the rate on REMIC 2 Regular Interest LT2G-2 subject to a cap equal to
the lesser of (i) LIBOR plus the Certificate Margin of the II-M2 Component
and (ii) the lower of the Net WAC Rate and the Maximum Cap Rate applicable
to the Group II Mezzanine Components,
o with the rate on REMIC 2 Regular Interest LT2H-2 subject to a cap equal to
the lesser of (i) LIBOR plus the Certificate Margin of the II-M3 Component
and (ii) the lower of the Net WAC Rate and the Maximum Cap Rate applicable
to the Group II Mezzanine Components;
o with the rate on REMIC 2 Regular Interest LT2I-2 subject to a cap equal to
the lesser of (i) LIBOR plus the Certificate Margin of the Class II-M4
Certificates and (ii) the lower of the Net WAC Rate and the Maximum Cap
Rate applicable to the Class II-M4 Certificates; and
o with the rate on REMIC 2 Regular Interest LT2J-2 subject to a cap of zero
for the purpose of this calculation,
provided that in each case the rate used herein shall be multiplied by a
fraction the numerator of which is the actual number of days in the Accrual
Period and the denominator of which is 30.
36
With respect to REMIC 3 Regular Interest LT3-IIC and the first Distribution
Date, a per annum rate equal to the weighted average of the Uncertificated REMIC
2 Pass-Through Rates for REMIC 2 Regular Interest LT2B-2, REMIC 2 Regular
Interest LT2C-2, REMIC 2 Regular Interest LT2D-2, REMIC 2 Regular Interest
LT2E-2, REMIC 2 Regular Interest LT2F-2, REMIC 2 Regular Interest LT2G-2, REMIC
2 Regular Interest LT2H-2, REMIC 2 Regular Interest LT2I-2 and REMIC 2 Regular
Interest LT2J-2.
"Master Servicer": Long Beach Mortgage Company, a Delaware corporation,
or any successor servicer appointed as herein provided, in its capacity as
Master Servicer hereunder.
"Master Servicer Event of Default": One or more of the events described
in Section 7.01.
"Master Servicer Prepayment Charge Payment Amount": The amounts (i)
payable by the Master Servicer in respect of any Prepayment Charges waived other
than in accordance with the standard set forth Section 2.04(a)(viii) or (ii)
collected from the Master Servicer in its capacity as Seller in respect of a
remedy for the breach of the representation and warranty made by the Master
Servicer in its capacity as Seller set forth in Section 2.04(a)(vii).
"Master Servicer Remittance Date": With respect to any Distribution
Date, 3:00 p.m. New York time on the Business Day preceding the Distribution
Date.
"Master Servicer Termination Test": With respect to any Distribution
Date, the Master Servicer Termination Test will be failed with respect to the
Master Servicer if the Cumulative Loss Percentage exceeds 6.125%.
"Maximum Cap Rate":
For any Distribution Date and the Class I-A Certificates and the Group
I Mezzanine Components, (a) a per annum rate equal to the excess, if any, of (i)
the weighted average of the Adjusted Net Maximum Mortgage Rates of the Group I
Mortgage Loans, weighted on the basis of the Stated Principal Balances thereof
as of the Due Date in the month preceding the month of such Distribution Date,
over (ii) the sum of (A) the product of (I) the Guaranty Fee Rate and (II) the
percentage equivalent of a fraction, the numerator of which is (w) the aggregate
Certificate Principal Balance of the Class I-A Certificates immediately prior to
such Distribution Date, and the denominator of which is (x) the aggregate Stated
Principal Balance of the Group I Mortgage Loans as of the Due Date in the month
preceding the month of such Distribution Date and (B) the percentage equivalent
of a fraction, the numerator of which is (y) the Pass-Through Rate for the Class
I-S Certificates for such Distribution Date multiplied by the I-S Notional
Amount immediately prior to such Distribution Date and the denominator of which
is (z) the aggregate Stated Principal Balance of the Group I Mortgage Loans as
of the Due Date in the month preceding the month of such Distribution Date
multiplied by (b) a fraction the numerator of which is 30 and the denominator of
which is the actual number of days elapsed in the related Accrual Period.
For any Distribution Date and the Class II-A Certificates, Class II-M1
Certificates, the Group II Mezzanine Components and the Class II-M4
Certificates, (a) a per annum rate equal to the excess, if any, of (i) the
weighted average of the Adjusted Net Maximum Mortgage Rates of the Group II
Mortgage Loans, weighted on the basis of the Stated Principal Balances thereof
as
37
of the Due Date in the month preceding the month of such Distribution Date, over
(ii) the percentage equivalent of a fraction, the numerator of which is (y) the
Pass-Through Rate for the Class II-S Certificates for such Distribution Date
multiplied by the II-S Notional Amount immediately prior to such Distribution
Date, and the denominator of which is (z) the aggregate Stated Principal Balance
of the Group II Mortgage Loans as of the Due Date in the month preceding the
month of such Distribution Date multiplied by (b) a fraction the numerator of
which is 30 and the denominator of which is the actual number of days elapsed in
the related Accrual Period.
"Maximum LT2E-1 Uncertificated Accrued Interest Deferral Amount": With
respect to any Distribution Date, the sum of:
(A) the excess of (a) accrued interest at the Uncertificated REMIC 2
Pass-Through Rate applicable to REMIC 2 Regular Interest LT2E-1
for such Distribution Date on a balance equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2E-1 minus the REMIC 2 Overcollateralized Amount 1, in each
case for such Distribution Date, over (b) Uncertificated Accrued
Interest on REMIC 2 Regular Interest LT2B-1 with the rate on
REMIC 2 Regular Interest LT2B-1 subject to a cap equal to the
lesser of (i) LIBOR plus the Certificate Margin of the Class I-A
Certificates and (ii) the lower of the Net WAC Rate and the
Maximum Cap Rate applicable to the Class I-A Certificates,
Uncertificated Accrued Interest on REMIC 2 Regular Interest
LT2C-1 with the rate on REMIC 2 Regular Interest LT2C-1 subject
to a cap equal to the lesser of (i) LIBOR plus the Certificate
Margin of the I-M2 Component and (ii) the lower of the Net WAC
Rate and the Maximum Cap Rate applicable to the Group I Mezzanine
Components, Uncertificated Accrued Interest on REMIC 2 Regular
Interest LT2D-1 with the rate on REMIC 2 Regular Interest LT2D-1
subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the I-M3 Component and (ii) the lower of
the Net WAC Rate and the Maximum Cap Rate applicable to the Group
I Mezzanine Components, provided, that in each case the rates set
forth in clauses (i) above shall be multiplied by a fraction the
numerator of which is the actual number of days elapsed in the
Accrual Period and the denominator of which is 30, and
(B) the REMIC 2 Group I Diverted Excess Spread.
"Maximum LT2J-2 Uncertificated Accrued Interest Deferral Amount": With
respect to any Distribution Date, the sum of:
(A) the excess of (a) accrued interest at the Uncertificated REMIC 2
Pass-Through Rate applicable to REMIC 2 Regular Interest LT2J-2
for such Distribution Date on a balance equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2J-2 minus the REMIC 2 Overcollateralized Amount 2, in each
case for such Distribution Date, over (b) the sum of:
o Uncertificated Accrued Interest on REMIC 2 Regular Interest
LT2B-2 with the rate on REMIC 2 Regular Interest LT2B-2 subject
to a cap equal to the lesser of (i) LIBOR plus the Certificate
Margin of the Class II-A1 Certificates and (ii) the
38
lower of the Net WAC Rate and the Maximum Cap Rate applicable to
the Class II-A1 Certificates;
o Uncertificated Accrued Interest on REMIC 2 Regular Interest
LT2C-2, with the rate on REMIC 2 Regular Interest LT2C-2 subject
to a cap equal to (A) for the first 30 Distribution Dates, the
lesser of (i) 3.50% and (ii) the lower of the Net WAC Rate and
the Maximum Cap Rate applicable to the Class II-A2 Certificates,
and (B) for any subsequent Distribution Date, 3.50%;
o Uncertificated Accrued Interest on REMIC 2 Regular Interest
LT2D-2, with the rate on REMIC 2 Regular Interest LT2D-2 subject
to a cap equal to (A) for the first 30 Distribution Dates, the
lesser of (i) 4.92% and (ii) the lower of the Net WAC Rate and
the Maximum Cap Rate applicable to the Class II-A3 Certificates,
and (B) for any subsequent Distribution Date, 4.92%;
o Uncertificated Accrued Interest on REMIC 2 Regular Interest
LT2E-2, with the rate on REMIC 2 Regular Interest LT2E-2 subject
to a cap equal to (A) with respect to any Distribution Date on or
prior to the Optional Termination Date, the lesser of (i) 6.46%
and (ii) the lower of the Net WAC Rate and the Maximum Cap Rate
applicable to the Class II-A4 Certificates and (B) with respect
to any Distribution Date after the Optional Termination Date the
lesser of (i) 6.96% and (ii) the lower of the Net WAC Rate and
the Maximum Cap Rate applicable to the Class II-A4 Certificates;
o Uncertificated Accrued Interest on REMIC 2 Regular Interest
LT2F-2 with the rate on REMIC 2 Regular Interest LT2F-2 subject
to a cap equal to the lesser of (i) LIBOR plus the Certificate
Margin of the Class II-M1 Certificates and (ii) the lower of the
Net WAC Rate and the Maximum Cap Rate applicable to the Class
II-M1 Certificates;
o Uncertificated Accrued Interest on REMIC 2 Regular Interest
LT2G-2 with the rate on REMIC 2 Regular Interest LT2G-2 subject
to a cap equal to the lesser of (i) LIBOR plus the Certificate
Margin of the II-M2 Component and (ii) the lower of the Net WAC
Rate and the Maximum Cap Rate applicable to the Group II
Mezzanine Components;
o Uncertificated Accrued Interest on REMIC 2 Regular Interest
LT2H-2 with the rate on REMIC 2 Regular Interest LT2H-2 subject
to a cap equal to the lesser of (i) LIBOR plus the Certificate
Margin of the II-M3 Component and (ii) the lower of the Net WAC
Rate and the Maximum Cap Rate applicable to the Group II
Mezzanine Components; and
o Uncertificated Accrued Interest on REMIC 2 Regular Interest
LT2I-2 with the rate on REMIC 2 Regular Interest LT2I-2 subject
to a cap equal to the lesser of (i) LIBOR plus the Certificate
Margin of the Class II-M4 Certificates and (ii) the lower of the
Net WAC Rate and the Maximum Cap Rate applicable to the Class
II-M4 Certificates,
39
provided, that in each case the rates set forth in clauses (i) above
shall be multiplied by a fraction the numerator of which is the actual
number of days elapsed in the Accrual Period and the denominator of
which is 30, and
(B) the REMIC 2 Group II Diverted Excess Spread.
"Maximum Mortgage Rate": With respect to each Mortgage Loan, the
percentage set forth in the related Mortgage Note as the maximum Mortgage Rate
thereunder.
"Mezzanine Certificates": The Class II-M1 Certificates, the Class M2
Certificates, the Class M3 Certificates and the Class II-M4 Certificates.
"Mezzanine Components": The Group I Mezzanine Components and the Group
II Mezzanine Components.
"Minimum Mortgage Rate": With respect to each Mortgage Loan, the
percentage set forth in the related Mortgage Note as the minimum Mortgage Rate
thereunder.
"Monthly Interest Distributable Amount": With respect to any
Distribution Date and the Class A Certificates, the Class II-M1 Certificates,
the Mezzanine Components, the Class II-M4 Certificates, the Class S
Certificates, REMIC 3 Regular Interest LT3-IC and REMIC 3 Regular Interest
LT3-IIC and any Distribution Date, the amount of interest accrued during the
related Accrual Period at the related Pass-Through Rate on the Certificate
Principal Balance (or Notional Amount in the case of the Class S Certificates,
REMIC 3 Regular Interest LT3-IC and REMIC 3 Regular Interest LT3-IIC) of such
Class or on the Component Principal Balance, in the case of the Mezzanine
Components, on such Component immediately prior to such Distribution Date, in
each case, reduced by any Net Prepayment Interest Shortfalls and Relief Act
Interest Shortfalls and in each case as such shortfall allocations are set forth
in Section 1.03. With respect to the Class I-C Certificates and any Distribution
Date, the Monthly Interest Distributable Amount shall equal the Monthly Interest
Distributable Amount for REMIC 3 Regular Interest LT3-IC for such Distribution
Date. With respect to the Class II-C Certificates and any Distribution Date, the
Monthly Interest Distributable Amount shall equal the Monthly Interest
Distributable Amount for REMIC 3 Regular Interest LT3-IIC for such Distribution
Date. Notwithstanding the foregoing, for federal income tax purposes and under
the REMIC Provisions, the Monthly Interest Distributable Amount for the Class
I-S Certificates and any Distribution Date will be deemed to be the
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-1A,
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-1B,
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-1C,
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-1D,
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-1E, and
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-1F for such
Distribution Date and the Monthly Interest Distributable Amount for the Class
II-S Certificates and any Distribution Date will be deemed to be the
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-2A,
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-2B,
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-2C,
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-2D,
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-2E, and
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-2F for such
Distribution Date.
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"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related Mortgagor from time to time under the related Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any reduction in
the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Master Servicer pursuant to Sections 3.01 and 3.07; and (c) on the
assumption that all other amounts, if any, due under such Mortgage Loan are paid
when due.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc. or its successor in
interest.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first lien or second lien on, or first priority security interest or second
priority security interest in, a Mortgaged Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee and delivered to the Trust Administrator pursuant to Section 2.01 or
Section 2.03(d) as from time to time held as a part of the Trust Fund, the
Mortgage Loans so held being identified in the Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The agreement between the Master
Servicer, in its capacity as Seller, and the Depositor, regarding the transfer
of the Mortgage Loans by the Seller to or at the direction of the Depositor,
substantially in the form attached hereto as Exhibit C.
"Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
included in REMIC 1A and REMIC 1B on such date, attached hereto as Exhibit D.
The Mortgage Loan Schedule shall be prepared by the Seller and shall set forth
the following information as of the Cut-off Date with respect to each Mortgage
Loan, as applicable:
(i) the Mortgagor's name and the Master Servicer's Mortgage Loan
identifying number;
(ii) the street address of the Mortgaged Property including the
state and zip code;
(iii) a code indicating whether the Mortgaged Property is
owner-occupied;
(iv) the type of Residential Dwelling constituting the Mortgaged
Property;
(v) the original months to maturity;
(vi) the Loan-to-Value Ratio and the combined Loan-to-Value Ratio at
origination;
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(vii) the Mortgage Rate in effect immediately following the Cut-off
Date;
(viii) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(ix) the stated maturity date;
(x) the amount of the Monthly Payment due on the first Due Date
after the Cut-off Date;
(xi) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance;
(xii) the original principal amount of the Mortgage Loan;
(xiii) the Stated Principal Balance of the Mortgage Loan as of the
Close of Business on the Cut-off Date;
(xiv) whether such Mortgage Loan is a Fixed Rate Mortgage Loan or an
Adjustable Rate Mortgage Loan, and with respect to each
Adjustable Rate Mortgage Loan: (a) the Gross Margin, (b) the
Maximum Mortgage Rate, (c) the Minimum Mortgage Rate, (d) the
Periodic Rate Cap for the first Adjustment Date and each
subsequent Adjustment Date and (e) the next Adjustment Date
immediately following the Cut-off Date;
(xv) a code indicating the purpose of the Mortgage Loan (i.e.,
purchase financing, rate/term refinancing, cash-out
refinancing);
(xvi) the Mortgage Rate at origination;
(xvii) a code indicating the documentation program;
(xviii) the Seller's risk grade and the FICO score;
(xix) the Value of the Mortgaged Property;
(xx) the sale price of the Mortgaged Property, if applicable;
(xxi) whether such Mortgage Loan is secured by a first lien or a
second lien on the related Mortgaged Property;
(xxii) the date of origination;
(xxiii) the stated remaining months to maturity as of the Cut-off Date;
(xxiv) the current principal and interest payment of the Mortgage Loan
as of the Cut-off Date;
42
(xxv) the interest "paid to date" of the Mortgage Loan as of the
Cut-off Date;
(xxvi) a code indicating whether the Mortgage Loan is a Group I
Mortgage Loan or a Group II Mortgage Loan;
(xxvii) a code indicating the Index that is associated with such
Mortgage Loan (if such Mortgage Loan is an Adjustable Rate
Mortgage Loan);
(xxviii) the rate adjustment frequency (if such Mortgage Loan is an
Adjustable Rate Mortgage Loan);
(xxix) the number of years the prepayment penalty is in effect; and
(xxx) if such Mortgage Loan is a Group II Mortgage Loan, whether such
Mortgage Loan is covered under the PMI Policy.
The Mortgage Loan Schedule shall set forth the following information,
with respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1)
the number of Mortgage Loans; (2) the Cut-off Date Principal Balance of the
Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans and
(4) the weighted average maturity of the Mortgage Loans. The Mortgage Loan
Schedule shall be amended from time to time by the Master Servicer in accordance
with the provisions of this Agreement. With respect to any Qualified Substitute
Mortgage Loan, Cut-off Date shall refer to the related Cut-off Date for such
Mortgage Loan, determined in accordance with the definition of Cut-off Date
herein. The Mortgage Loan Schedule shall clearly identify the Mortgage Loans
that are included in Group I Mortgage Loans, and therefore in REMIC 1A, and
those that are included in Group II Mortgage Loans and therefore in REMIC 1B.
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on Exhibit D
from time to time, and any REO Properties acquired in respect thereof.
"Mortgage Rate": With respect to each Fixed Rate Mortgage Loan, the
annual rate set forth in the related Mortgage Note, as amended, modified or
supplemented from time to time. With respect to each Adjustable Rate Mortgage
Loan, the annual rate at which interest accrues on such Mortgage Loan from time
to time in accordance with the provisions of the related Mortgage Note, which
rate (A) as of any date of determination until the first Adjustment Date
following the Cut-off Date shall be the rate set forth in the Mortgage Loan
Schedule as the Mortgage Rate in effect immediately following the Cut-off Date
and (B) as of any date of determination thereafter shall be the rate as adjusted
on the most recent Adjustment Date, to equal the sum, rounded to the next
highest or nearest 0.125% (as provided in the Mortgage Note), of the Index,
determined as set forth in the related Mortgage Note, plus the related Gross
Margin subject to the limitations set forth in the related Mortgage Note. With
respect to each Mortgage Loan that becomes an REO Property, as of any date of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.
43
"Mortgaged Property": The underlying property securing a Mortgage Loan,
including any REO Property, consisting of a fee simple estate in a parcel of
real property improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property), the related Liquidation Proceeds net of Advances, Servicing Advances,
Servicing Fees and any other Servicing Fees received and retained in connection
with the liquidation of such Mortgage Loan or Mortgaged Property in accordance
with the terms of this Agreement.
"Net Monthly Excess Cashflow": With respect to each Distribution Date,
the Group I Net Monthly Excess Cashflow or Group II Net Monthly Excess Cashflow.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the related
REO Property), as of any date of determination, a per annum rate of interest
equal to the then applicable Mortgage Rate for such Mortgage Loan minus the
Servicing Fee Rate.
"Net Prepayment Interest Shortfall": With respect to any Distribution
Date, the excess, if any, of any Prepayment Interest Shortfalls for such date
over the related Compensating Interest.
"Net WAC Rate":
For any Distribution Date (other than the first Distribution Date) and
the Class I-A Certificates and the Group I Mezzanine Components, (a) a per annum
rate equal to the excess, if any, of (i) the weighted average of the Adjusted
Net Mortgage Rates of the Group I Mortgage Loans, weighted on the basis of the
Stated Principal Balances thereof as of the Due Date in the month preceding the
month of such Distribution Date, over (ii) the sum of (A) the product of (I) the
Guaranty Fee Rate and (II) the percentage equivalent of a fraction, the
numerator of which is (w) the aggregate Certificate Principal Balance of the
Class I-A Certificates immediately prior to such Distribution Date, and the
denominator of which is (x) the aggregate Stated Principal Balance of the Group
I Mortgage Loans as of the Due Date in the month preceding the month of such
Distribution Date and (B) the percentage equivalent of a fraction, the numerator
of which is (y) the Pass-Through Rate for the Class I-S Certificates for such
Distribution Date multiplied by the Class I-S Notional Amount immediately prior
to such Distribution Date and the denominator of which is (z) the aggregate
Stated Principal Balance of the Group I Mortgage Loans as of the Due Date in the
month preceding the month of such Distribution Date multiplied by (b) a fraction
the numerator of which is 30 and the denominator of which is the actual number
of days elapsed in the related Accrual Period.
For any Distribution Date (other than the first Distribution Date) and
the Class II-A Certificates, the Class II-M1 Certificates, the Group II
Mezzanine Components and the Class II-M4 Certificates, (a) a per annum rate
equal to the excess, if any, of (i) the weighted average of the Adjusted Net
Mortgage Rates of the Group II Mortgage Loans, weighted on the basis of the
Stated Principal Balances thereof as of the Due Date in the month preceding the
month of such Distribution Date, over (ii) the percentage equivalent of a
fraction, the numerator of which is (y) the Pass-Through Rate for the Class II-S
Certificates for such Distribution Date multiplied by
44
the Class II-S Notional Amount immediately prior to such Distribution Date, and
the denominator of which is (z) the aggregate Stated Principal Balance of the
Group II Mortgage Loans as of the Due Date in the month preceding the month of
such Distribution Date multiplied by (b) a fraction the numerator of which is 30
and the denominator of which is the actual number of days elapsed in the related
Accrual Period.
"Net WAC Rate Carryover Amount": With respect to the Class A
Certificates, the Class II-M1 Certificates, the Mezzanine Components, the Class
II-M4 Certificates and any Distribution Date for which the Pass-Through Rate for
such Class of Certificates or such Component for such Distribution Date is the
Net WAC Rate, the sum of (i) the positive excess of (A) the amount of interest
that would have been payable to such Class of Certificates or such Component on
such Distribution Date if the Pass-Through Rate for such Class of Certificates
or such Component for such Distribution Date were calculated at the related
Formula Rate over (B) the amount of interest payable on such Class of
Certificates or such Component at the Net WAC Rate for such Distribution Date
and (ii) the related Net WAC Rate Carryover Amount for the previous Distribution
Date not previously paid together with interest thereon at a rate equal to the
related Formula Rate for such Class of Certificates or such Component for the
most recently ended Accrual Period.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed or extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.
"NIM Notes": The Insured NIM Notes and the Other NIM Notes.
"NIMS Insurer": Radian Asset Assurance Inc., or any successor thereto
that shall be the insurer under an insurance policy insuring certain payments on
Insured NIM Notes, if any, provided, however, upon the occurrence of certain
events (as set forth in the Indenture and/or any other agreement among Radian
Asset Assurance Inc., Financial Security Assurance Inc., Long Beach Asset
Holdings Corp., the Master Servicer, the Trust Administrator and the Guarantor),
the NIMS Insurer shall be Financial Security Assurance Inc.
"Nonrecoverable Advance": Any Advance or Servicing Advance previously
made or proposed to be made in respect of a Mortgage Loan or REO Property that,
in the good faith business judgment of the Master Servicer, will not or, in the
case of a proposed Advance or Servicing Advance, would not be ultimately
recoverable from related late payments, Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
"Notional Amount": With respect to the Class I-S Certificates,
immediately prior to any Distribution Date up to and including the Distribution
Date in February 2003, the sum of the Uncertificated Principal Balances of REMIC
1A Regular Interest LT1A-3 REMIC 1A Regular Interest LT1A-4 and REMIC 1A Regular
Interest LT1A-5 immediately after the Distribution Date in February 2003 and up
to and including the Distribution Date in December 2003, the sum of the
Uncertificated Principal Balances of REMIC 1A Regular Interest LT1A-3 and
Uncertificated Principal Balances of REMIC 1A Regular Interest LT1A-4; and,
immediately prior to any subsequent Distribution Date, an amount equal to the
Uncertificated Principal Balance of REMIC 1A Regular Interest LT1A-3. With
respect to the Class II-S Certificates, immediately prior to any Distribution
Date up to and including the Distribution Date in February
45
2003, the sum of the Uncertificated Principal Balances of REMIC 1B Regular
Interest LT1B-3 REMIC 1B Regular Interest LT1B-4 and REMIC 1B Regular Interest
LT1B-5; immediately after the Distribution Date in February 2003 and up to and
including the Distribution Date in December 2003, the sum of the Uncertificated
Principal Balances of REMIC 1B Regular Interest LT1B-3 and Uncertificated
Principal Balances of REMIC 1B Regular Interest LT1B-4; and, immediately prior
to any subsequent Distribution Date, an amount equal to the Uncertificated
Principal Balance of REMIC 1B Regular Interest LT1B-3. With respect to REMIC 3
Regular Interest LT3-IC, immediately prior to any Distribution Date, an amount
equal to the aggregate of the Uncertificated Principal Balances of the REMIC 2
Group I Regular Interests. With respect to the REMIC 3 Regular Interest LT3-IIC,
immediately prior to any Distribution Date, an amount equal to the aggregate of
the Uncertificated Principal Balances of the REMIC 2 Group II Regular Interests.
With respect to the Class I-C Certificates, immediately prior to any
Distribution Date, an amount equal to the Notional Amount of REMIC 3 Regular
Interest LT3-IC. With respect to the Class II-C Certificates, immediately prior
to any Distribution Date, an amount equal to the Notional Amount of REMIC 3
Regular Interest LT3-IIC.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Master Servicer, the Seller
or the Depositor, as applicable.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor or the Master Servicer,
reasonably acceptable to the Trustee, if such opinion is delivered to the
Trustee, or the Trust Administrator, if such opinion is delivered to the Trust
Administrator, except that any opinion of counsel relating to (a) the
qualification of any Trust REMIC as a REMIC or (b) compliance with the REMIC
Provisions must be an opinion of Independent counsel.
"Optional Termination Date": The first Distribution Date on which the
Terminator may elect to terminate the Trust Fund pursuant to Section 9.01.
"Original Class Certificate Principal Balance": With respect to the
Class A Certificates, the Mezzanine Certificates and the Class P Certificate,
the corresponding Certificate Principal Balance on the Closing Date.
"Original Class Notional Amount": With respect to the Class I-S
Certificates, $127,500,000. With respect to the Class II-S Certificates,
$76,500,000. With respect to REMIC 3 Regular Interest LT3-IC and the Class I-C
Certificates, $17,499,900. With respect to REMIC 3 Regular Interest LT3-IIC and
the Class II-C Certificates, $6,599,900.
"Other NIM Notes": Long Beach Asset Holdings Corp. CI 2002-1 NIM Notes,
Series 2002-1, Class N-1 Notes issued pursuant to the Indenture, which are
backed by certain Class C Certificates and Class P Certificates.
"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.
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"Pass-Through Rate":
With respect to the Class I-A Certificates, the Class II-A1
Certificates, the Class II-A4 Certificates, the Class II-M1 Certificates, the
Mezzanine Components and the Class II-M4 Certificates for any Distribution Date
(other than the first Distribution Date), the lesser of (x) the related Formula
Rate for such Distribution Date and (y) the related Net WAC Rate for such
Certificates or Components for such Distribution Date.
With respect to the Class II-A2 Certificates and (A) any Distribution
Date on or prior to the October 2004 Distribution Date (other than the first
Distribution Date), the lesser of the related Formula Rate and the related Net
WAC Rate and (B) any Distribution Date after the October 2004 Distribution Date,
the related Formula Rate.
With respect to the Class II-A3 Certificates and (A) any Distribution
Date on or prior to the October 2004 Distribution Date (other than the first
Distribution Date), the lesser of the related Formula Rate and the related Net
WAC Rate and (B) any Distribution Date after the October 2004 Distribution Date,
the related Formula Rate.
With respect to the Class A Certificates, the Class II-M1 Certificates,
the Mezzanine Components and the Class II-M4 Certificates and the first
Distribution Date, the related Formula Rate for such Distribution Date.
With respect to the Class S Certificates and any Distribution Date, a
per annum rate equal to 5.25% for the Distribution Date in May 2002 through the
Distribution Date in February 2003, 4.75% for the Distribution Date in March
2002 through the Distribution Date in December 2003, 4.00% for the Distribution
Date in January 2004 through the Distribution Date in October 2004 and 0.00%
thereafter; provided, however, for federal income tax purposes and under the
REMIC Provisions, (A) the Class S Certificates will not have a Pass-Through
Rate, (B) the Monthly Interest Distributable Amount for the Class I-S
Certificates and any Distribution Date will be deemed to be the sum of the
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-1A, the
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-1B, the
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-1C, the
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-1D, the
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-1E, and the
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-1F for such
Distribution Date, and (C) the Monthly Interest Distributable Amount for the
Class II-S Certificates and any Distribution Date will be deemed to be the sum
of the Uncertificated Accrued Interest for REMIC 2 Regular Interests LT2S-2A,
the Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-2B, the
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-2C, the
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-2D, the
Uncertificated Accrued Interest for REMIC 2 Regular Interests LT2S-2E, and the
Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S-2F for such
Distribution Date.
With respect to REMIC 3 Regular Interest LT3-IC and any Distribution
Date, a per annum rate equal to the percentage equivalent of a fraction, the
numerator of which is the excess of (a) the sum of the amounts calculated
pursuant to clauses (A) through (F) below over (b) the Guaranty Fee for such
Distribution Date, and the denominator of which is the aggregate of the
Uncertificated Principal Balances of the REMIC 2 Group I Regular Interests. For
purposes of
47
calculating the Pass-Through Rate for REMIC 3 Regular Interest LT3-IC, the
numerator is equal to the sum of the following components:
(A) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2A-1 minus Marker Rate 1, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2A-1;
(B) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2B-1 minus Marker Rate 1, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2B-1;
(C) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2C-1 minus Marker Rate 1, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2C-1;
(D) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2D-1 minus Marker Rate 1, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2D-1;
(E) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2E-1 minus Marker Rate 1, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2E-1; and
(F) 100% of the interest on REMIC 2 Regular Interest LT2P-1.
With respect to REMIC 3 Regular Interest LT3-IIC 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 (K) below for such Distribution Date, and the denominator of which is
the aggregate of the Uncertificated Principal Balances of the REMIC 2 Group II
Regular Interests. For purposes of calculating the Pass-Through Rate for REMIC 3
Regular Interest LT3-IIC, the numerator is equal to the sum of the following
components:
(A) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2A-2 minus Marker Rate 2, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2A-2;
(B) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2B-2 minus Marker Rate 2, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2B-2;
(C) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2C-2 minus Marker Rate 2, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2C-2;
(D) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2D-2 minus Marker Rate 2, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2D-2;
48
(E) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2E-2 minus Marker Rate 2, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2E-2;
(F) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2F-2 minus Marker Rate 2, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2F-2;
(G) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2G-2 minus Marker Rate 2, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2G-2;
(H) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2H-2 minus Marker Rate 2, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2H-2;
(I) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2I-2 minus Marker Rate 2, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2I-2;
(J) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2J-2 minus Marker Rate 2, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2J-2; and
(K) 100% of the interest on REMIC 2 Regular Interest LT2P-2.
With respect to the Class I-C Certificates and any Distribution Date, a
per annum rate equal to the Pass-Through Rate on REMIC 3 Regular Interest LT3-IC
for such Distribution Date, and with respect to the Class II-C Certificates and
any Distribution Date, a per annum rate equal to the Pass-Through Rate on REMIC
3 Regular Interest LT3-IIC for such Distribution Date; provided, however, for
federal income tax purposes and under the REMIC Provisions, (A) the Class C
Certificates will not have a Pass-Through Rate, (B) the Monthly Interest
Distributable Amount for the Class I-C Certificates and any Distribution Date
will be deemed to be the Monthly Interest Distributable Amount for REMIC 3
Regular Interest LT3-IC for such Distribution Date, and (C) the Monthly Interest
Distributable Amount for the Class II-C Certificates and any Distribution Date
will be deemed to be the Monthly Interest Distributable Amount for REMIC 3
Regular Interest LT3-IIC for such Distribution Date.
"Percentage Interest": With respect to any Certificate (other than a
Residual Certificate), a fraction, expressed as a percentage, the numerator of
which is the Initial Certificate Principal Balance or Initial Notional Amount
represented by such Certificate and the denominator of which is the Original
Class Certificate Principal Balance or Original Class Notional Amount of the
related Class. With respect to a Residual Certificate, the portion of the Class
evidenced thereby, expressed as a percentage, as stated on the face of such
Certificate; provided, however, with respect to each Class referred to in this
paragraph, that the sum of all such percentages for each such Class totals 100%.
49
"Periodic Rate Cap": With respect to each Adjustable Rate Mortgage Loan
and any Adjustment Date therefor, the fixed percentage set forth in the related
Mortgage Note, which is the maximum amount by which the Mortgage Rate for such
Mortgage Loan may increase or decrease (without regard to the Maximum Mortgage
Rate or the Minimum Mortgage Rate) on such Adjustment Date from the Mortgage
Rate in effect immediately prior to such Adjustment Date.
"Permitted Investments": Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued or managed by the Depositor, the Master Servicer, the NIMS
Insurer, the Trustee, the Trust Administrator or any of their respective
Affiliates or for which an Affiliate of the NIMS Insurer, the Trustee or the
Trust Administrator serves as an advisor:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit
of, bankers' acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee, the
Trust Administrator or their respective agents acting in their
commercial capacities) incorporated under the laws of the United States
of America or any state thereof and subject to supervision and
examination by federal and/or state authorities, so long as, at the
time of such investment or contractual commitment providing for such
investment, such depository institution or trust company (or, if the
only Rating Agency is S&P, in the case of the principal depository
institution in a depository institution holding company, debt
obligations of the depository institution holding company) or its
ultimate parent has a short-term uninsured debt rating in one of the
two highest available ratings of Fitch and the highest available rating
category of ▇▇▇▇▇'▇ and S&P and provided that each such investment has
an original maturity of no more than 365 days; and provided further
that, if the only Rating Agency is S&P and if the depository or trust
company is a principal subsidiary of a bank holding company and the
debt obligations of such subsidiary are not separately rated, the
applicable rating shall be that of the bank holding company; and,
provided further that, if the original maturity of such short-term
obligations of a domestic branch of a foreign depository institution or
trust company shall exceed 30 days, the short-term rating of such
institution shall be A-1+ in the case of S&P if S&P is the Rating
Agency; and (B) any other demand or time deposit or deposit which is
fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days
with respect to any security described in clause (i) above and entered
into with a depository institution or trust company (acting as
principal) rated F-1+ or higher by Fitch, rated A-1+ or higher by S&P
and rated A2 or higher by ▇▇▇▇▇'▇;
(iv) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of the United
States of America or any State thereof and that are rated by a Rating
Agency in its highest long-term unsecured rating category at the time
of such investment or contractual commitment providing for such
investment;
50
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than 30 days after the date of
acquisition thereof) that is rated by a Rating Agency in its highest
short-term unsecured debt rating available at the time of such
investment;
(vi) units of taxable money market funds (which may be 12b-1
funds, as contemplated under the rules promulgated by the Securities
and Exchange Commission under the Investment Company Act of 1940),
which funds have the highest rating available for such securities from
the Rating Agencies or which have been designated in writing by the
Rating Agencies as Permitted Investments; and
(vii) if previously confirmed in writing to the Trustee and
the Trust Administrator, any other demand, money market or time
deposit, or any other obligation, security or investment, as may be
acceptable to the Rating Agencies in writing as a permitted investment
of funds backing securities having ratings equivalent to its highest
initial rating of the Class II-A Certificates;
provided, that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any transferee of a Residual Certificate other
than a Disqualified Organization or a non-U.S. Person.
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"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 or Section 4975 of the Code.
"PMI Insurer": Mortgage Guaranty Insurance Corporation, a monoline
private insurance company organized and created under the laws of the State of
Wisconsin, 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 (ii) the aggregate Stated Principal
Balance of the PMI Mortgage Loans and any related REO Properties as of the first
day of the related Due Period.
"PMI Insurer Fee Rate": 0.45% per annum.
"PMI Mortgage Loans": The Mortgage Loans insured by the PMI Insurer set
forth on the list of Mortgage Loans attached hereto as Schedule II.
51
"PMI Policy": The Primary Mortgage Insurance Policy (71-70035 (10/96)
with 71-7135 (8/94)), which includes a Master Reporting Program Endorsement
(71-7139 (8/94)) with respect to the PMI Mortgage Loans and the Terms Letter
dated March 22, 2002, issued by the PMI Insurer
"Prepayment Assumption": The pricing prepayment assumption as described
in the Prospectus Supplement.
"Prepayment Charge": With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof (other than any Master
Servicer Prepayment Charge Payment Amount).
"Prepayment Charge Schedule": As of the Cut-off Date, a list attached
hereto as Schedule I (including the Prepayment Charge Summary attached thereto),
setting forth the following information with respect to each Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination of the related Mortgage Loan;
(iv) the date on which the first monthly payment was due on the
related Mortgage Loan;
(v) the term of the related Prepayment Charge; and
(vi) the principal balance of the related Mortgage Loan as of
the Cut-off Date.
The Prepayment Charge Schedule shall be amended from time to time by
the Master Servicer in accordance with the provisions of this Agreement and a
copy of each related amendment shall be furnished by the Master Servicer to the
NIMS Insurer.
"Prepayment Interest Shortfall": With respect to any Distribution Date,
for each Mortgage Loan that was during the related Prepayment Period the subject
of a Principal Prepayment in full or in part that was applied by the Master
Servicer to reduce the outstanding principal balance of such loan on a date
preceding the Due Date in the succeeding Prepayment Period, an amount equal to
interest at the applicable Net Mortgage Rate on the amount of such Principal
Prepayment for the lesser of (i) the number of days commencing on the date on
which the prepayment is applied and ending on the last day of the related
Prepayment Period and (ii) 30 days. The obligations of the Master Servicer in
respect of any Prepayment Interest Shortfall are set forth in Section 3.24.
"Prepayment Period": With respect to the first Distribution Date, the
period from March 1, 2002 through April 30, 2002, and with respect to any
Distribution Date thereafter, the calendar month immediately preceding the
calendar month in which such Distribution Date occurs.
52
"Prime Rate": The prime rate of United States money center commercial
banks as published in The Wall Street Journal.
"Principal Balance": As to any Mortgage Loan other than a Liquidated
Mortgage Loan, and any day, the related Cut-off Date Principal Balance, minus
all collections credited against the Cut-off Date Principal Balance of any such
Mortgage Loan. For purposes of this definition, a Liquidated Mortgage Loan shall
be deemed to have a Principal Balance equal to the Principal Balance of the
related Mortgage Loan as of the final recovery of related Liquidation Proceeds
and a Principal Balance of zero thereafter. As to any REO Property and any day,
the Principal Balance of the related Mortgage Loan shall equal the Principal
Balance of the related Mortgage Loan immediately prior to such Mortgage Loan
becoming REO Property minus any REO Principal Amortization received with respect
thereto on or prior to such day.
"Principal Distribution Amount": With respect to any Distribution Date,
the sum of the Group I Principal Distribution Amount and the Group II Principal
Distribution Amount.
"Principal Prepayment": Any payment of principal made by the Mortgagor
on a Mortgage Loan which is received in advance of its scheduled Due Date and
which is not accompanied by an amount of interest representing the full amount
of scheduled interest due on any Due Date in any month or months subsequent to
the month of prepayment.
"Principal Remittance Amount": With respect to any Distribution Date,
the sum of the Group I Principal Remittance Amount and the Group II Principal
Remittance Amount.
"Prospectus Supplement": That certain Prospectus Supplement dated March
22, 2002 relating to the public offering of the Class II-A Certificates, the
Class II-S Certificates and the Mezzanine Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO Property to
be purchased pursuant to or as contemplated by Section 2.03, Section 3.16(c) or
Section 9.01, and as confirmed by an Officers' Certificate from the Master
Servicer to the Trustee and the Trust Administrator, an amount equal to the sum
of (i) 100% of the Stated Principal Balance thereof as of the date of purchase
(or such other price as provided in Section 9.01), (ii) in the case of (x) a
Mortgage Loan, accrued interest on such Stated Principal Balance at the
applicable Net Mortgage Rate in effect from time to time from the Due Date as to
which interest was last paid by the Mortgagor or by an advance by the Master
Servicer through the end of the calendar month in which the purchase is to be
effected and (y) an REO Property, the sum of (1) accrued interest on such Stated
Principal Balance at the applicable Net Mortgage Rate in effect from time to
time from the Due Date as to which interest was last paid by the Mortgagor or by
an advance by the Master Servicer through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, plus (2) REO Imputed Interest for such REO Property for each calendar
month commencing with the calendar month in which such REO Property was acquired
and ending with the calendar month in which such purchase is to be effected, net
of the total of all net rental income, Insurance Proceeds, Liquidation Proceeds
and Advances that as of the date of purchase had been distributed in respect of
REO Imputed Interest pursuant to Section 4.01, (iii) any unreimbursed Servicing
Advances, Advances and Nonrecoverable Advances and any unpaid Servicing Fees
allocable to such Mortgage Loan or REO Property, (iv) any amounts previously
withdrawn from the Collection Account in respect of
53
such Mortgage Loan or REO Property pursuant to Section 3.11 (a)(ix) and Section
3.16(b), and (v) in the case of a Mortgage Loan required to be purchased
pursuant to Section 2.03, enforcement expenses reasonably incurred or to be
incurred by the NIMS Insurer, the Master Servicer, the Guarantor, the Trustee or
the Trust Administrator in respect of the breach or defect giving rise to the
purchase obligation.
Notwithstanding the foregoing, if an amount of Mortgage Loans (measured
by the aggregate principal balance) that is in excess of 2% of the aggregate
principal balance of the Closing Date Mortgage Loans as of the Cut-Off Date has
previously been repurchased (exclusive of any Mortgage Loans purchased by the
Master Servicer pursuant to Section 3.16(c)) or substituted for, then in
addition to those requirements set forth above, the Purchase Price shall include
the amount of any related Prepayment Charge (other than with respect to a
Purchase Price paid in connection with Section 9.01).
"Qualified Insurer": Any insurance company acceptable to ▇▇▇▇▇▇ ▇▇▇.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement or the Mortgage
Loan Purchase Agreement which must, on the date of such substitution, (i) have
an outstanding principal balance (or in the case of a substitution of more than
one mortgage loan for a Deleted Mortgage Loan, an aggregate principal balance),
after application of all scheduled payments of principal and interest due during
or prior to the month of substitution, not in excess of, and not more than 5.00%
less than, the outstanding principal balance of the Deleted Mortgage Loan as of
the Due Date in the calendar month during which the substitution occurs, (ii)
have a Mortgage Rate not less than (and not more than one percentage point in
excess of) the Mortgage Rate of the Deleted Mortgage Loan, (iii) if the
Qualified Substitute Mortgage Loan is an Adjustable Rate Mortgage Loan, have a
Maximum Mortgage Rate not greater than the Maximum Mortgage Rate on the Deleted
Mortgage Loan and have a Minimum Mortgage Rate not less than the Minimum
Mortgage Rate of the Deleted Mortgage Loan, (iv) if the Qualified Substitute
Mortgage Loan is an Adjustable Rate Mortgage Loan, have a Gross Margin equal to
or greater than the Gross Margin of the Deleted Mortgage Loan, (v) if the
Qualified Substitute Mortgage Loan is an Adjustable Rate Mortgage Loan, have a
next Adjustment Date not more than two months later than the next Adjustment
Date on the Deleted Mortgage Loan, (vi) have a remaining term to maturity not
greater than (and not more than one year less than) that of the Deleted Mortgage
Loan, (vii) be current (with no contractual delinquencies outstanding) as of the
date of substitution, (viii) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (ix) have a risk grading determined by the Seller
at least equal to the risk grading assigned on the Deleted Mortgage Loan, (x)
have been underwritten or reunderwritten by the Seller in accordance with the
same or, as determined by the Seller, more favorable, underwriting criteria and
guidelines as the Deleted Mortgage Loan, (xi) with respect to Qualified
Substituted Mortgage Loans substituted for Deleted Mortgage Loans that are Group
I Mortgage Loans, have had an original Principal Balance that conformed to
▇▇▇▇▇▇ ▇▇▇ loan limits as of the date of its origination and be otherwise
acceptable to the Guarantor, (xii) be secured by the same property type as the
Deleted Mortgage Loan, (xiii) have a lien priority equal to or superior to that
of the Deleted Mortgage Loan, (xiv) be covered by the PMI Policy if the Deleted
Mortgage Loan that is a Group II Mortgage Loan was covered by the PMI Policy,
and (xv) conform to each representation and warranty set forth in Section 3.01
of the Mortgage Loan Purchase Agreement
54
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 (applied separately for the Group I Mortgage Loans and Group
II Mortgage Loans), the Mortgage Rates described in clauses (ii) through (v)
hereof shall be satisfied for each such mortgage loan, the risk gradings
described in clause (ix) hereof shall be satisfied as to each such mortgage
loan, the terms described in clause (vi) hereof shall be determined on the basis
of weighted average remaining term to maturity (provided that no such mortgage
loan may have a remaining term to maturity longer than the Deleted Mortgage
Loan), the Loan-to-Value Ratios described in clause (viii) hereof shall be
satisfied as to each such mortgage loan and, except to the extent otherwise
provided in this sentence, the representations and warranties described in
clause (xv) hereof must be satisfied as to each Qualified Substitute Mortgage
Loan or in the aggregate, as the case may be.
Notwithstanding the foregoing, if an amount of Mortgage Loans (measured
by the aggregate principal balance) that is in excess of 2% of the aggregate
principal balance of the Closing Date Mortgage Loans as of the Cut-Off Date has
previously been repurchased (exclusive of any Mortgage Loans purchased by the
Master Servicer pursuant to Section 3.16(c)) or substituted for, then in
addition to clauses (i) through (xiv) above, each Qualified Substitute Mortgage
Loan shall also have a Prepayment Charge provision at least as favorable to the
Holders of the related Class P Certificates as the Prepayment Charge provisions
in the Deleted Mortgage Loan.
"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, the Trust Administrator 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 and Insurance Proceeds
in respect of such Mortgage Loan.
"Record Date": With respect to (i) the Class II-A Fixed-Rate
Certificates, the Class S Certificates, the Class P Certificates, the Class C
Certificates, the Residual Certificates and any Definitive Certificates, the
Close of Business on the last Business Day of the calendar month preceding the
month in which the related Distribution Date occurs and (ii) with respect to the
Class I-A Certificates, the Class II-A1 Certificates and the Mezzanine
Certificates, the Close of Business on the Business Day immediately preceding
the related Distribution Date; provided, however, that following the date on
which Definitive Certificates for a Class I-A Certificate, a Class II-A1
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.
"Recording Documents": As defined in Section 2.01 hereof.
"Reference Banks": Those banks (i) with an established place of
business in London, England, (ii) not controlling, under the control of or under
common control with the Depositor,
55
the Seller or the Master Servicer or any affiliate thereof and (iii) which have
been designated as such by the Trust Administrator with the consent of the NIMS
Insurer; provided, however, that if fewer than two of such banks provide a LIBOR
rate, then any leading banks selected by the Trust Administrator with the
consent of the NIMS Insurer which are engaged in transactions in United States
dollar deposits in the international Eurocurrency market.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of which were
not used to purchase the related Mortgaged Property.
"Regular Certificates": The Class A Certificates, the Class S
Certificates, the Mezzanine Certificates, the Class C Certificates and the Class
P Certificates.
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
"Relief Act Interest Shortfall": With respect to any Distribution Date,
for any Mortgage Loan with respect to which there has been a reduction in the
amount of interest collectible thereon for the most recently ended Due Period as
a result of the application of the Relief Act, the amount by which (i) interest
collectible on such Mortgage Loan during such Due Period is less than (ii) one
month's interest on the Principal Balance of such Mortgage Loan at the Mortgage
Rate for such Mortgage Loan before giving effect to the application of the
Relief Act.
"REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
"REMIC 1A": The segregated pool of assets subject hereto, constituting
a primary trust created hereby and to be administered hereunder, with respect to
which a REMIC election is to be made consisting of: (i) such Group I Mortgage
Loans as from time to time are subject to this Agreement, together with the
Mortgage Files relating thereto, and together with all collections thereon and
proceeds thereof, (ii) any REO Property acquired with respect to a Group I
Mortgage Loan, together with all collections thereon and proceeds thereof, (iii)
the Trustee's rights with respect to the Group I Mortgage Loans under all
insurance policies required to be maintained pursuant to this Agreement and any
proceeds thereof, (iv) the Depositor's rights with respect to the Group I
Mortgage Loans under the Mortgage Loan Purchase Agreement (including any
security interest created thereby), (v) the obligations of the Guarantor to the
Holders of the Guaranteed Certificates under the Guaranty and, (vi) solely to
the extent that they relate to the Group I Mortgage Loans or payments or
property received on or with respect to the Group I Mortgage Loans, 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 Funds and
Master Servicer Prepayment Charge Payment Amounts.
"REMIC 1A Regular Interest LT1A-1": One of the separate non-
certificated beneficial ownership interests in REMIC 1A issued hereunder and
designated as a Regular Interest in REMIC 1A. REMIC 1A Regular Interest LT1A-1
shall accrue interest at the related Uncertificated REMIC 1A 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
56
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
"REMIC 1A Regular Interest LT1A-2": One of the separate non-
certificated beneficial ownership interests in REMIC 1A issued hereunder and
designated as a Regular Interest in REMIC 1A. REMIC 1A Regular Interest LT1A-2
shall accrue interest at the related Uncertificated REMIC 1A 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 1A Regular Interest LT1A-3": One of the separate non-
certificated beneficial ownership interests in REMIC 1A issued hereunder and
designated as a Regular Interest in REMIC 1A. REMIC 1A Regular Interest LT1A-3
shall accrue interest at the related Uncertificated REMIC 1A 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 1A Regular Interest LT1A-4": One of the separate non-
certificated beneficial ownership interests in REMIC 1A issued hereunder and
designated as a Regular Interest in REMIC 1A. REMIC 1A Regular Interest LT1A-4
shall accrue interest at the related Uncertificated REMIC 1A 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 1A Regular Interest LT1A-5": One of the separate non-
certificated beneficial ownership interests in REMIC 1A issued hereunder and
designated as a Regular Interest in REMIC 1A. REMIC 1A Regular Interest LT1A-5
shall accrue interest at the related Uncertificated REMIC 1A 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 1A Regular Interest LT1A-P": One of the separate non-
certificated beneficial ownership interests in REMIC 1A issued hereunder and
designated as a Regular Interest in REMIC 1A. REMIC 1A Regular Interest LT1A-P
shall accrue interest at the related Uncertificated REMIC 1A Pass-Through Rate
in effect from time to time, and shall be entitled to any Prepayment Charges
relating to the Group I Mortgage Loans collected by the Master Servicer and to a
distribution of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
"REMIC 1A Regular Interests": REMIC 1A Regular Interest LT1A-1, REMIC
1A Regular Interest LT1A-2, REMIC 1A Regular Interest LT1A-3, REMIC 1A Regular
Interest LT1A-4, REMIC 1A Regular Interest LT1A-5 and REMIC 1A Regular Interest
LT1A-P.
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"REMIC 1B": The segregated pool of assets subject hereto, constituting
a primary trust created hereby and to be administered hereunder, with respect to
which a REMIC election is to be made consisting of: (i) such Group II Mortgage
Loans as from time to time are subject to this Agreement, together with the
Mortgage Files relating thereto, and together with all collections thereon and
proceeds thereof, (ii) any REO Property acquired with respect to a Group II
Mortgage Loan, together with all collections thereon and proceeds thereof, (iii)
the Trustee's rights with respect to the Group II Mortgage Loans under all
insurance policies, including the PMI Policy, required to be maintained pursuant
to this Agreement and any proceeds thereof, (iv) the Depositor's rights with
respect to the Group II Mortgage Loans under the Mortgage Loan Purchase
Agreement (including any security interest created thereby), and (v) solely to
the extent that they relate to the Group II Mortgage Loans or payments or
property received on or with respect to the Group II Mortgage Loans, 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 Funds and
Master Servicer Prepayment Charge Payment Amounts.
"REMIC 1B Regular Interest LT1B-1": One of the separate non-
certificated beneficial ownership interests in REMIC 1B issued hereunder and
designated as a Regular Interest in REMIC 1B. REMIC 1B Regular Interest LT1B-1
shall accrue interest at the related Uncertificated REMIC 1B 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 1B Regular Interest LT1B-2": One of the separate non-
certificated beneficial ownership interests in REMIC 1B issued hereunder and
designated as a Regular Interest in REMIC 1B. REMIC 1B Regular Interest LT1B-2
shall accrue interest at the related Uncertificated REMIC 1B 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 1B Regular Interest LT1B-3": One of the separate non-
certificated beneficial ownership interests in REMIC 1B issued hereunder and
designated as a Regular Interest in REMIC 1B. REMIC 1B Regular Interest LT1B-3
shall accrue interest at the related Uncertificated REMIC 1B 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 1B Regular Interest LT1B-4": One of the separate non-
certificated beneficial ownership interests in REMIC 1B issued hereunder and
designated as a Regular Interest in REMIC 1B. REMIC 1B Regular Interest LT1B-4
shall accrue interest at the related Uncertificated REMIC 1B 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
58
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
"REMIC 1A Regular Interest LT1B-5": One of the separate non-
certificated beneficial ownership interests in REMIC 1B issued hereunder and
designated as a Regular Interest in REMIC 1B. REMIC 1B Regular Interest LT1B-5
shall accrue interest at the related Uncertificated REMIC 1B 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 1B Regular Interest LT1B-P": One of the separate non-
certificated beneficial ownership interests in REMIC 1B issued hereunder and
designated as a Regular Interest in REMIC 1B. REMIC 1B Regular Interest LT1B-P
shall accrue interest at the related Uncertificated REMIC 1B Pass-Through Rate
in effect from time to time, and shall be entitled to any Prepayment Charges
relating to the Group II Mortgage Loans collected by the Master Servicer and to
a distribution of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
"REMIC 1B Regular Interests": REMIC 1B Regular Interest LT1B-1, REMIC
1B Regular Interest LT1B-2, REMIC 1B Regular Interest LT1B-3, REMIC 1B Regular
Interest LT1B-4, REMIC 1B Regular Interest LT1B-5, and REMIC 1B Regular Interest
LT1B-P.
"REMIC 2": The segregated pool of assets consisting of all of the REMIC
1A Regular Interests and the REMIC 1B Regular Interests conveyed in trust to the
Trustee, for the benefit of REMIC 3, as holder of the REMIC 2 Regular Interests
and the Class R Certificateholders, as holders of the Class R-2 Interest,
pursuant to Article II hereunder, and all amounts deposited therein, with
respect to which a separate REMIC election is to be made.
"REMIC 2 Group I Diverted Excess Spread": 1% of any amount of Group I
Net Monthly Excess Cash Flow that, pursuant to Section 4.01(d)(i)(c), is used to
make payments to the Class II-A Certificates, the Class II-M1 Certificates, the
Class II-M4 Certificates, or a Group II Mezzanine Component.
"REMIC 2 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 2 Pass-Through Rate for REMIC 2
Regular Interest LT2A-1 minus Marker Rate 1, divided by (b) 12.
"REMIC 2 Group I Regular Interests": REMIC 2 Regular Interest LT2A-1,
REMIC 2 Regular Interest LT2B-1, REMIC 2 Regular Interest LT2C-1, REMIC 2
Regular Interest LT2D-1, REMIC 2 Regular Interest LT2E-1, and REMIC 2 Regular
Interest LT2P-1.
"REMIC 2 Group II Diverted Excess Spread": 1% of any amount of Group II
Net Monthly Excess Cash Flow that, pursuant to Section 4.01(d)(ii)(c), is used
to make payments to the Class I-A Certificates or a Group I Mezzanine Component.
59
"REMIC 2 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 2 Pass-Through Rate for REMIC 2
Regular Interest LT2A-2 minus Marker Rate 2, divided by (b) 12.
"REMIC 2 Group II Regular Interests": REMIC 2 Regular Interest LT2A-2,
REMIC 2 Regular Interest LT2B-2, REMIC 2 Regular Interest LT2C-2, REMIC 2
Regular Interest LT2D-2, REMIC 2 Regular Interest LT2E-2, REMIC 2 Regular
Interest LT2F-2, REMIC 2 Regular Interest LT2G-2, REMIC 2 Regular Interest
LT2H-2, REMIC 2 Regular Interest LT2I-2, REMIC 2 Regular Interest LT2J-2, and
REMIC 2 Regular Interest LT2P-2.
"REMIC 2 Overcollateralization Target Amount 1": 1% of the Group I
Overcollateralization Target Amount.
"REMIC 2 Overcollateralization Target Amount 2": 1% of the Group II
Overcollateralization Target Amount.
"REMIC 2 Overcollateralized Amount 1": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC 2 Regular Interest LT2A-1, REMIC 2 Regular Interest LT2B-1, REMIC 2
Regular Interest LT2C-1, REMIC 2 Regular Interest LT2D-1, REMIC 2 Regular
Interest LT2E-1, and REMIC 2 Regular Interest LT2P-1 minus (ii) the aggregate of
the Uncertificated Principal Balances of REMIC 2 Regular Interest LT2B-1, REMIC
2 Regular Interest LT2C-1, and REMIC 2 Regular Interest LT2D-1, in each case as
of such date of determination.
"REMIC 2 Overcollateralized Amount 2": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC 2 Regular Interest LT2A-2, REMIC 2 Regular Interest LT2B-2, REMIC 2
Regular Interest LT2C-2, REMIC 2 Regular Interest LT2D-2, REMIC 2 Regular
Interest LT2E-2, REMIC 2 Regular Interest LT2F-2, REMIC 2 Regular Interest
LT2G-2, REMIC 2 Regular Interest LT2H-2, REMIC 2 Regular Interest LT2I-2, REMIC
2 Regular Interest LT2J-2, and REMIC 2 Regular Interest LT2P-2 minus (ii) the
aggregate of the Uncertificated Principal Balances of REMIC 2 Regular Interest
LT2B-2, REMIC 2 Regular Interest LT2C-2, REMIC 2 Regular Interest LT2D-2, REMIC
2 Regular Interest LT2E-2, REMIC 2 Regular Interest LT2F-2, REMIC 2 Regular
Interest LT2G-2, REMIC 2 Regular Interest LT2H-2, and REMIC 2 Regular Interest
LT2I-2, in each case as of such date of determination.
"REMIC 2 Principal Loss Allocation Amount 1": With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Principal
Balance of the Group I Mortgage Loans and related REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is 2 times the
aggregate of the Uncertificated Principal Balances of REMIC 2 Regular Interest
LT2B-1, REMIC 2 Regular Interest LT2C-1, and REMIC 2 Regular Interest LT2D-1 and
the denominator of which is the aggregate of the Uncertificated Principal
Balances of REMIC 2 Regular Interest LT2B-1, REMIC 2 Regular Interest LT2C-1,
REMIC 2 Regular Interest LT2D-1, and REMIC 2 Regular Interest LT2E-1.
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"REMIC 2 Principal Loss Allocation Amount 2": With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Principal
Balance of the Group II Mortgage Loans and related REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is 2 times the
aggregate of the Uncertificated Principal Balances of REMIC 2 Regular Interest
LT2B-2, REMIC 2 Regular Interest LT2C-2, REMIC 2 Regular Interest LT2D-2, REMIC
2 Regular Interest LT2E-2, REMIC 2 Regular Interest LT2F-2, REMIC 2 Regular
Interest LT2G-2, REMIC 2 Regular Interest LT2H-2, and REMIC 2 Regular Interest
LT2I-2 and the denominator of which is the aggregate of the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2B-2, REMIC 2 Regular Interest
LT2C-2, REMIC 2 Regular Interest LT2D-2, REMIC 2 Regular Interest LT2E-2, REMIC
2 Regular Interest LT2F-2, REMIC 2 Regular Interest LT2G-2, REMIC 2 Regular
Interest LT2H-2, REMIC 2 Regular Interest LT2I-2, and REMIC 2 Regular Interest
LT2J-2.
"REMIC 2 Regular Interest LT2A-1": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2A-1 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 2 Regular Interest LT2A-2": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2A-2 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 2 Regular Interest LT2B-1": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2B-1 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 2 Regular Interest LT2B-2": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2B-2 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 2 Regular Interest LT2C-1": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2C-1 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
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"REMIC 2 Regular Interest LT2C-2": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2C-2 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 2 Regular Interest LT2D-1": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2D-1 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 2 Regular Interest LT2D-2": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2D-2 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 2 Regular Interest LT2E-1": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2E-1 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 2 Regular Interest LT2E-2": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2E-2 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 2 Regular Interest LT2F-2": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2F-2 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 2 Regular Interest LT2G-2": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2G-2 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
62
"REMIC 2 Regular Interest LT2H-2": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2H-2 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 2 Regular Interest LT2I-2": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2I-2 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 2 Regular Interest LT2J-2": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2J-2 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 2 Regular Interest LT2P-1": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2P-1 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to any amounts distributed to REMIC 1A
Regular Interest LT1P-1.
"REMIC 2 Regular Interest LT2P-2": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2P-2 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to any amounts distributed to REMIC 1B
Regular Interest LT1P-2.
"REMIC 2 Regular Interest LT2S-1A": One of the separate non-
certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2S-1A
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate on
its Uncertificated Notional Amount outstanding from time to time.
"REMIC 2 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇": One of the separate non-
certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2S-1B
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate on
its Uncertificated Notional Amount outstanding from time to time.
"REMIC 2 Regular Interest LT2S-1C": One of the separate non-
certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2S-1C
shall accrue interest at the related Uncertificated
63
REMIC 2 Pass-Through Rate on its Uncertificated Notional Amount outstanding from
time to time.
"REMIC 2 Regular Interest LT2S-1D": One of the separate non-
certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2S-1D
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate on
its Uncertificated Notional Amount outstanding from time to time.
"REMIC 2 Regular Interests LT2S-1E": One of the separate non-
certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2S-1E
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate on
its Uncertificated Notional Amount outstanding from time to time.
"REMIC 2 Regular Interest LT2S-1F": One of the separate non-
certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2S-1F
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate on
its Uncertificated Notional Amount outstanding from time to time.
"REMIC 2 Regular Interest LT2S-2A": One of the separate non-
certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2S-2A
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate on
its Uncertificated Notional Amount outstanding from time to time.
"REMIC 2 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇": One of the separate non-
certificated beneficial ownership interests in REMIC-2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2S-2B
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate on
its Uncertificated Notional Amount outstanding from time to time.
"REMIC 2 Regular Interest LT2S-2C": One of the separate non-
certificated beneficial ownership interests in REMIC-2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2S-2C
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate on
its Uncertificated Notional Amount outstanding from time to time.
"REMIC 2 Regular Interest LT2S-2D": One of the separate non-
certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2S-2D
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate on
its Uncertificated Notional Amount outstanding from time to time.
"REMIC 2 Regular Interests LT2S-2E": One of the separate non-
certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2S-2E
shall accrue interest at the related Uncertificated
64
REMIC 2 Pass-Through Rate on its Uncertificated Notional Amount outstanding from
time to time.
"REMIC 2 Regular Interests LT2S-2F": One of the separate non-
certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2S-2F
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate on
its Uncertificated Notional Amount outstanding from time to time.
"REMIC 2 Regular Interests": REMIC 2 Regular Interest LT2A-1, REMIC 2
Regular Interest LT2B-1, REMIC 2 Regular Interest LT2C-1, REMIC 2 Regular
Interest LT2D-1, REMIC 2 Regular Interest LT2E-1, REMIC 2 Regular Interest
LT2P-1, REMIC 2 Regular Interest LT2S-1A, REMIC 2 Regular Interest LT2S-1B,
REMIC 2 Regular Interest LT2S-1C, REMIC 2 Regular Interest LT2S-1D, REMIC 2
Regular Interest LT2S-1E, REMIC 2 Regular Interest LT2S-1F, REMIC 2 Regular
Interest LT2A-2, REMIC 2 Regular Interest LT2B-2, REMIC 2 Regular Interest
LT2C-2, REMIC 2 Regular Interest LT2D-2, REMIC 2 Regular Interest LT2E-2, REMIC
2 Regular Interest LT2F-2, REMIC 2 Regular Interest LT2G-2, REMIC 2 Regular
Interest LT2H-2, REMIC 2 Regular Interest LT2I-2, REMIC 2 Regular Interest
LT2J-2, REMIC 2 Regular Interest LT2P-2, REMIC 2 Regular Interest LT2S-2A, REMIC
2 Regular Interest LT2S-2B, REMIC 2 Regular Interest LT2S-2C, and REMIC 2
Regular Interest LT2S-2D, REMIC 2 Regular Interest LT2S-2E, and REMIC 2 Regular
▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇.
"REMIC 3": The segregated pool of assets consisting of all of the REMIC
2 Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates (other than the Class C Certificates and the
Class P Certificates), REMIC X, as the holder of the REMIC 3 Regular Interests,
and the Class R Certificateholders, as holders of the Class R-3 Interest,
pursuant to Article II hereunder, and all amounts deposited therein, with
respect to which a separate REMIC election is to be made.
"REMIC 3 Regular Interest LT3-IC": One of the separate non-certificated
beneficial ownership interests in REMIC 3 issued hereunder and designated as a
Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3-IC shall accrue
interest at the related Pass-Through Rate in effect from time to time on its
Notional Amount outstanding from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
"REMIC 3 Regular Interest LT3-IP": One of the separate non-certificated
beneficial ownership interests in REMIC 3 issued hereunder and designated as a
Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3-IP shall be entitled
to any amounts distributed to REMIC 2 Regular Interest LT2P-1.
"REMIC 3 Regular Interest LT3-IIC": One of the separate non-
certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3-IIC
shall accrue interest at the related Pass-Through Rate in effect from time to
time on its Notional Amount outstanding from time to time, and shall be entitled
to distributions of principal, subject to the terms and conditions hereof, in an
65
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
"REMIC 3 Regular Interest LT3-IIP": One of the separate non-
certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3-IIP
shall be entitled to any amounts distributed to REMIC 2 Regular Interest LT2P-2.
"REMIC 3 Regular Interests": REMIC 3 Regular Interest LT3-IC, REMIC 3
Regular Interest LT3-IIC, REMIC 3 Regular Interest LT3-IP, and REMIC 3 Regular
Interest LT3-IIP.
"REMIC Provisions": Provisions of the federal income tax law relating
to real estate mortgage investment conduits which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.
"REMIC Regular Interests": The REMIC 1A Regular Interests, the REMIC 1B
Regular Interests, the REMIC 2 Regular Interests and the REMIC 3 Regular
Interests.
"REMIC X": The segregated pool of assets consisting of the REMIC 3
Regular Interests, conveyed in trust to the Trustee, for the benefit of the
Holders of the Class C Certificates, the Class P Certificates, and the Class R-X
Certificates, pursuant to Article II hereunder, and all amounts deposited
therein, with respect to which a separate REMIC election is to be made.
"Remittance Report": A report prepared by the Master Servicer and
delivered to the NIMS Insurer, the Guarantor, the Trust Administrator and the
Trustee pursuant to Section 4.04.
"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.
"REO Account": The account or accounts maintained by the Master
Servicer in respect of an REO Property pursuant to Section 3.23.
"REO Disposition": The sale or other disposition of an REO Property on
behalf of the Trust Fund.
"REO Imputed Interest": As to any REO Property, for any calendar month
during which such REO Property was at any time part of the Trust Fund, one
month's interest at the applicable Net Mortgage Rate on the Principal Balance of
such REO Property (or, in the case of the first such calendar month, of the
related Mortgage Loan if appropriate) as of the Close of Business on the
Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO Property, for any
calendar month, the excess, if any, of (a) the aggregate of all amounts received
in respect of such REO Property during such calendar month, whether in the form
of rental income, sale proceeds (including, without limitation, that portion of
the Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 9.01 that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i) payable
66
pursuant to Section 3.23 in respect of the proper operation, management and
maintenance of such REO Property or (ii) payable or reimbursable to the Master
Servicer pursuant to Section 3.23 for unpaid Servicing Fees in respect of the
related Mortgage Loan and unreimbursed Servicing Advances and Advances in
respect of such REO Property or the related Mortgage Loan, over (b) the REO
Imputed Interest in respect of such REO Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Master Servicer on
behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.23.
"Request for Release": A release signed by a Servicing Representative,
in the form of Exhibit E-1 or E-2 attached hereto.
"Reserve Funds": The Group I Reserve Fund and the Group II Reserve
Fund.
"Reserve Interest Rate": With respect to any Interest Determination
Date, the rate per annum that the Trust Administrator determines to be either
(i) the arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 0.03125%) of the one-month United States dollar lending rates which
banks in The City of New York selected by the Trust Administrator with the
consent of the NIMS Insurer are quoting on the relevant Interest Determination
Date to the principal London offices of leading banks in the London interbank
market or (ii) in the event that the Trust Administrator 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 Trust Administrator with
the consent of the NIMS Insurer are quoting on such Interest Determination Date
to leading European banks.
"Residential Dwelling": Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a ▇▇▇▇▇▇ ▇▇▇ eligible condominium project, (iv) a
manufactured home, or (v) a detached one-family dwelling in a planned unit
development, none of which is a co-operative or mobile home.
"Residual Certificates": The Class R Certificates and the Class R-X
Certificates.
"Residual Interest": The sole class of "residual interests" in a REMIC
within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee or the
Trust Administrator, 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 or the Trust Administrator, respectively,
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.
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"S&P": Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc., or its successor in interest.
"Seller": Long Beach Mortgage Company, a Delaware corporation, or its
successor in interest, in its capacity as seller under the Mortgage Loan
Purchase Agreement.
"Servicing Account": The account or accounts created and maintained
pursuant to Section 3.09.
"Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and expenses)
incurred by the Master Servicer in the performance of its servicing obligations
in connection with a default, delinquencies or other unanticipated event or
where reimbursement is otherwise permitted in accordance with any of the terms
of this Agreement, including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of the Mortgaged Property,
(ii) any enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property and (iv) compliance with the
obligations under Sections 3.01, 3.09, 3.16, and 3.23.
"Servicing Fee": With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (or in the event of any
payment of interest which accompanies a Principal Prepayment in full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the Servicing Fee Rate on the same principal amount
on which interest on such Mortgage Loan accrues for such calendar month. A
portion of such Servicing Fee may be retained by any Sub-Servicer as its
servicing compensation.
"Servicing Fee Rate": 0.50% per annum.
"Servicing Representative": Any officer or employee of the Master
Servicer involved in, or responsible for, the administration and servicing of
Mortgage Loans, whose name and specimen signature appear on a list of servicing
representatives furnished by the Master Servicer to the Trustee, the Trust
Administrator and the Depositor on the Closing Date, as such list may from time
to time be amended.
"Special Servicer": As defined in Section 3.13 hereof.
"Specially Serviced Mortgage Loan": A Mortgage Loan that (i) has been
delinquent in payment with respect to three or more monthly payments (provided,
however, that the third such payment shall not be deemed to be delinquent for
purposes of this clause (i) until the close of business on the last day of the
month in which such payment first became due), and (ii) has been transferred to
the Special Servicer in accordance with Section 3.13.
"Startup Day": As defined in Section 10.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan: (a) as
of any date of determination up to but not including the Distribution Date on
which the proceeds, if any, of a Liquidation Event with respect to such Mortgage
Loan would be distributed, the related Cut-off
68
Date Principal Balance, as shown in the Mortgage Loan Schedule, minus the sum of
(i) the principal portion of each Monthly Payment due on a Due Date subsequent
to the Cut-off Date, to the extent received from the Mortgagor or advanced by
the Master Servicer and distributed pursuant to Section 4.01 on or before such
date of determination, (ii) all Principal Prepayments received after the Cut-off
Date, to the extent distributed pursuant to Section 4.01 on or before such date
of determination, (iii) all Liquidation Proceeds and Insurance Proceeds to the
extent distributed pursuant to Section 4.01 on or before such date of
determination, and (iv) any Realized Loss incurred with respect thereto as a
result of a Deficient Valuation made during or prior to the Due Period for the
most recent Distribution Date coinciding with or preceding such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such Mortgage Loan would be distributed, zero.
With respect to any REO Property: (a) as of any date of determination up to but
not including the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, an
amount (not less than zero) equal to the Stated Principal Balance of the related
Mortgage Loan as of the date on which such REO Property was acquired on behalf
of the Trust Fund, minus the aggregate amount of REO Principal Amortization in
respect of such REO Property for all previously ended calendar months, to the
extent distributed pursuant to Section 4.01 on or before such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.
"Stayed Funds": If the Master Servicer is the subject of a proceeding
under the federal Bankruptcy Code and the making of a Remittance (as defined in
Section 7.02(b)) is prohibited by Section 362 of the federal Bankruptcy Code,
funds that are in the custody of the Master Servicer, a trustee in bankruptcy or
a federal bankruptcy court and should have been the subject of such Remittance
absent such prohibition.
"Stepdown Date": The Group I Stepdown Date or the Group II Stepdown
Date.
"Sub-Servicer": Any Person with which the Master Servicer has entered
into a Sub-Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
"Sub-Servicing Account": An account 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 the Master
Servicer and a Sub-Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.02.
"Substitution Adjustment": An amount equal to the excess of the
Principal Balance of the related Deleted Mortgage Loan over the Principal
Balance of such Qualified Substitute Mortgage Loan that the Seller is required
to deposit in the Collection Account on or prior to the next succeeding
Determination Date in connection with a substitution of a Qualified Substitute
Mortgage Loan.
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"Substitution Shortfall Amounts": As defined in Section 2.03(d) hereof.
"Tax Returns": The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit 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.
"Telerate Page 3750": The display designated as page "3750" on the Dow
▇▇▇▇▇ Telerate Capital Markets Report (or such other page as may replace page
3750 on that report for the purpose of displaying London interbank offered rates
of major banks).
"Termination Price": As defined in Section 9.01(a) hereof.
"Terminator": As defined in Section 9.01.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
"Trigger Event": The Group I Trigger Event or the Group II Trigger
Event.
"Trust": Long Beach Mortgage Loan Trust 2002-1, the trust created
hereunder.
"Trust Administrator": Bankers Trust Company of California, N.A., a
national banking association, or its successor in interest, or any successor
Trust Administrator appointed as herein provided.
"Trust Fund": All of the assets of the Trust, which is the trust
created hereunder consisting of REMIC 1A, REMIC 1B, REMIC 2, REMIC 3, REMIC X,
the Reserve Funds and any Master Servicer Prepayment Charge Payment Amounts.
"Trust REMIC": Any of REMIC 1A, REMIC 1B, REMIC 2, REMIC 3 and/or
REMIC X.
"Trustee": First Union National Bank, a national banking association,
or its successor in interest, or any successor trustee appointed as herein
provided.
"Uncertificated Accrued Interest": With respect to each REMIC Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the related Uncertificated Pass-Through Rate on the Uncertificated Principal
Balance or Uncertificated Notional Amount
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of such REMIC Regular Interest. In each case, Uncertificated Accrued Interest
will be reduced by any Net Prepayment Interest Shortfalls and Relief Act
Interest Shortfalls allocated to such REMIC Regular Interests pursuant to
Section 1.03.
"Uncertificated Notional Amount":
(a) With respect to REMIC 2 Regular Interest LT2S-1A and any
Distribution Date, the Uncertificated Principal Balance of REMIC 1A Regular
Interest LT1A-3 for such Distribution Date;
(b) With respect to REMIC 2 Regular Interest LT2S-1B and any
Distribution Date, the Uncertificated Principal Balance of REMIC 1A Regular
Interest LT1A-3 for such Distribution Date;
(c) With respect to REMIC 2 Regular Interest LT2S-1C and any
Distribution Date, the Uncertificated Principal Balance of REMIC 1A Regular
Interest LT1A-3 for such Distribution Date;
(d) With respect to REMIC 2 Regular Interest LT2S-1D and any
Distribution Date, the Uncertificated Principal Balance of REMIC 1A Regular
Interest LT1A-4 for such Distribution Date;
(e) With respect to REMIC 2 Regular Interest LT2S-1E and any
Distribution Date, the Uncertificated Principal Balance of REMIC 1A Regular
Interest LT1A-4 for such Distribution Date;
(f) With respect to REMIC 2 Regular Interest LT2S-1F and any
Distribution Date, the Uncertificated Principal Balance of REMIC 1A Regular
Interest LT1A-5 for such Distribution Date;
(g) With respect to REMIC 2 Regular Interest LT2S-2A and any
Distribution Date, the Uncertificated Principal Balance of REMIC 1B Regular
Interest LT1B-3 for such Distribution Date;
(h) With respect to REMIC 2 Regular Interest LT2S-2B and any
Distribution Date, the Uncertificated Principal Balance of REMIC 1B Regular
Interest LT1B-3 for such Distribution Date;
(i) With respect to REMIC 2 Regular Interest LT2S-2C and any
Distribution Date, the Uncertificated Principal Balance of REMIC 1B Regular
Interest LT1B-3 for such Distribution Date;
(j) With respect to REMIC 2 Regular Interest LT2S-2D and any
Distribution Date, the Uncertificated Principal Balance of REMIC 1B Regular
Interest LT1B-4 for such Distribution Date;
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(k) With respect to REMIC 2 Regular Interest LT2S-2E and any
Distribution Date, the Uncertificated Principal Balance of REMIC 1A Regular
Interest LT1B-4 for such Distribution Date; and
(l) With respect to REMIC 2 Regular Interest LT2S-2F and any
Distribution Date, the Uncertificated Principal Balance of REMIC 1A Regular
Interest LT1B-5 for such Distribution Date.
"Uncertificated Pass-Through Rate": The Uncertificated REMIC 1A
Pass-Through Rate, the Uncertificated REMIC 1B Pass-Through Rate, or the
Uncertificated REMIC 2 Pass-Through Rate.
"Uncertificated Principal Balance": With respect to each REMIC Regular
Interest (other than REMIC 2 Regular Interest LT2S-1A, REMIC 2 Regular Interest
LT2S-1B, REMIC 2 Regular Interest LT2S-1C, REMIC 2 Regular Interest LT2S-1D,
REMIC 2 Regular Interest LT2S-1E, REMIC 2 Regular Interest LT2S-1F, REMIC 2
Regular Interest LT2S-2A, REMIC 2 Regular Interest LT2S-2B, REMIC 2 Regular
Interest LT2S-2C, REMIC 2 Regular Interest LT2S-2D, REMIC 2 Regular Interest
LT2S-2E and REMIC 2 Regular Interest LT2S-2F) 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 (other than
REMIC 2 Regular Interest LT2S-1A, REMIC 2 Regular Interest LT2S-1B, REMIC 2
Regular Interest LT2S-1C, REMIC 2 Regular Interest LT2S-1D, REMIC 2 Regular
Interest LT2S-1E, REMIC 2 Regular Interest LT2S-1F, REMIC 2 Regular Interest
LT2S-2A, REMIC 2 Regular Interest LT2S-2B, REMIC 2 Regular Interest LT2S-2C,
REMIC 2 Regular Interest LT2S-2D, REMIC 2 Regular Interest LT2S-2E, and REMIC 2
Regular Interest LT2S-2F) shall equal the amount set forth in the Preliminary
Statement hereto as its initial Uncertificated Principal Balance. On each
Distribution Date, the Uncertificated Principal Balance of each REMIC Regular
Interest shall be reduced by all distributions of principal made on such REMIC
Regular Interest on such Distribution Date pursuant to Section 4.05 and, if and
to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.06, and the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2E-1 and REMIC 2
Regular Interest LT2J-2 shall be increased by interest deferrals as provided in
Section 4.05. The Uncertificated Principal Balance of each REMIC Regular
Interest that has an Uncertificated Principal Balance shall never be less than
zero. REMIC 2 Regular Interest LT2S-1A, REMIC 2 Regular Interest LT2S-1B, REMIC
2 Regular Interest LT2S-1C, REMIC 2 Regular Interest LT2S-1D, REMIC 2 Regular
Interest LT2S-1E, REMIC 2 Regular Interest LT2S-1F, REMIC 2 Regular Interest
LT2S-2A, REMIC 2 Regular Interest LT2S-2B, REMIC 2 Regular Interest LT2S-2C,
REMIC 2 Regular Interest LT2S-2D, REMIC 2 Regular Interest LT2S-2E, and REMIC 2
Regular Interest LT2S-2F will not have Uncertificated Principal Balances.
Notwithstanding the foregoing, the Uncertificated Principal Balance of (i) REMIC
3 Regular Interest LT3-IC shall always be equal to the excess, if any, of (A)
the then aggregate Uncertificated Principal Balances of the REMIC 2 Group I
Regular Interests over (B) the sum of the Certificate Principal Balance of the
Class I-A Certificates, the Uncertificated Principal Balance of REMIC 3 Regular
Interest LT3-IP, the then aggregate Component Principal Balance of the Group I
Mezzanine Components, and the amount, if any, paid to the Class I-A Certificates
on the first Distribution Date as the Group I Extra Principal Distribution
Amount and (ii) REMIC 3 Regular Interest LT3-IIC shall always be equal to the
excess, if any, of (A) the then aggregate Uncertificated Principal Balances of
the REMIC 2 Group II Regular Interests over (B) the sum
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of the Certificate Principal Balances of the Class II-A Certificates, the Class
II-M1 Certificates and the Class II-M4 Certificates, the Uncertificated
Principal Balance of REMIC 3 Regular Interest LT3-IIP, and the then aggregate
Component Principal Balance of the Group II Mezzanine Components.
"Uncertificated REMIC 1A Pass-Through Rate": With respect to each REMIC
1A Regular Interest (other than REMIC 1A Regular Interest LT1A-2) and any
Distribution Date, a per annum rate equal to the weighted average of the
Adjusted Net Mortgage Rates of those Group I Mortgage Loans that have Adjusted
Net Minimum Mortgage Rates of 5.25% or greater, weighted on the basis of the sum
of the Stated Principal Balances of such Group I Mortgage Loans as of the Due
Date preceding the month of such Distribution Date. With respect to REMIC 1A
Regular Interest LT1A-2 and any Distribution Date, a per annum rate equal to the
weighted average of the Adjusted Net Mortgage Rates of those Group I Mortgage
Loans that have Adjusted Net Minimum Mortgage Rates of less than 5.25%, weighted
on the basis of the sum of the Stated Principal Balances of such Group I
Mortgage Loans as of the Due Date preceding the month of such Distribution Date.
"Uncertificated REMIC 1B Pass-Through Rate": With respect to each REMIC
1B Regular Interest (other than REMIC 1B Regular Interest LT1B-2) and any
Distribution Date, a per annum rate equal to the weighted average of the
Adjusted Net Mortgage Rates of those Group II Mortgage Loans that have Adjusted
Net Minimum Mortgage Rates of 5.25% or greater, weighted on the basis of the sum
of the Stated Principal Balances of such Group II Mortgage Loans as of the Due
Date preceding the month of such Distribution Date. With respect to REMIC 1B
Regular Interest LT1B-2 and any Distribution Date, a per annum rate equal to the
weighted average of the Adjusted Net Mortgage Rates of those Group II Mortgage
Loans that have Adjusted Net Minimum Mortgage Rates of less than 5.25%, weighted
on the basis of the sum of the Stated Principal Balances of such Group II
Mortgage Loans as of the Due Date preceding the month of such Distribution Date.
"Uncertificated REMIC 2 Pass-Through Rate":
(a) With respect to REMIC 2 Regular Interest LT2A-1, REMIC 2 Regular
Interest LT2B-1, REMIC 2 Regular Interest LT2C-1, REMIC 2 Regular Interest
LT2D-1, REMIC 2 Regular Interest LT2E-1, and REMIC 2 Regular Interest LT2P-1,
and any Distribution Date, a per annum rate equal to the weighted average of (w)
the Uncertificated REMIC 1A Pass-Through Rate with respect to REMIC 1A Regular
Interest LT1A-1, REMIC 1A Regular Interest LT1A-2 and REMIC 1 Regular Interest
LT1A-P for such Distribution Date, (x) the excess, if any, of (i) the
Uncertificated REMIC 1A Pass-Through Rate with respect to REMIC 1A Regular
Interest LT1A-3 for such Distribution Date over (ii) 5.25% per annum (in the
case of the Distribution Date in May 2002 through the Distribution Date in
February 2003), 4.75% per annum (in the case of the Distribution Date in March
2003 through the Distribution Date in December 2003), 4.00% per annum (in the
case of the Distribution Date in January 2004 through the Distribution Date in
October 2004) or 0.00% per annum (in the case of any Distribution Date
thereafter), (y) the excess, if any, of (i) the Uncertificated REMIC 1A
Pass-Through Rate with respect to REMIC 1A Regular Interest LT1A-4 for such
Distribution Date over (ii) 5.25% per annum (in the case of the Distribution
Date in May 2002 through the Distribution Date in February 2003), 4.75% (in the
case of the Distribution Date in March 2003 through the Distribution Date in
December 2003), or 0.00% per annum (in the case of any
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Distribution Date thereafter), and (z) the excess, if any, of (i) the
Uncertificated REMIC 1A Pass-Through Rate with respect to REMIC 1A Regular
Interest LT1A-5 for such Distribution Date over (ii) 5.25% per annum (in the
case of the Distribution Date in May 2002 through the Distribution Date in
February 2003), or 0.00% per annum (in the case of any Distribution Date
thereafter), weighted on the basis of the Uncertificated Principal Balances of
REMIC 1A Regular Interest LT1A-1, REMIC 1A Regular Interest LT1A-2, REMIC 1A
Regular Interest LT1A-P, REMIC 1A Regular Interest LT1A-3, REMIC 1A Regular
Interest LT1A-4, and REMIC 1A Regular Interest LT1A-5, respectively, and
multiplied by 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;
(b) With respect to REMIC 2 Regular Interest LT2A-2, REMIC 2 Regular
Interest LT2B-2, REMIC 2 Regular Interest LT2C-2, REMIC 2 Regular Interest
LT2D-2, REMIC 2 Regular Interest LT2E-2, REMIC 2 Regular Interest LT2F-2, REMIC
2 Regular Interest LT2G-2, REMIC 2 Regular Interest LT2H-2, REMIC 2 Regular
Interest LT2I-2, REMIC 2 Regular Interest LT2J-2, and REMIC 2 Regular Interest
LT2P-2, and any Distribution Date, a per annum rate equal to the weighted
average of (w) the Uncertificated REMIC 1B Pass-Through Rate with respect to
REMIC 1B Regular Interest LT1B-1, REMIC 1B Regular Interest LT1B-2 and REMIC 1
Regular Interest LT1B-P for such Distribution Date, (x) the excess, if any, of
(i) the Uncertificated REMIC 1B Pass-Through Rate with respect to REMIC 1B
Regular Interest LT1B-3 for such Distribution Date over (ii) 5.25% per annum (in
the case of the Distribution Date in May 2002 through the Distribution Date in
February 2003), 4.75% per annum (in the case of the Distribution Date in March
2003 through the Distribution Date in December 2003), 4.00% per annum (in the
case of the Distribution Date in January 2004 through the Distribution Date in
October 2004) or 0.00% per annum (in the case of any Distribution Date
thereafter), (y) the excess, if any, of (i) the Uncertificated REMIC 1B
Pass-Through Rate with respect to REMIC 1B Regular Interest LT1B-4 for such
Distribution Date over (ii) 5.25% per annum (in the case of the Distribution
Date in May 2002 through the Distribution Date in February 2003), 4.75% (in the
case of the Distribution Date in March 2003 through the Distribution Date in
December 2003), or 0.00% per annum (in the case of any Distribution Date
thereafter), and (z) the excess, if any, of (i) the Uncertificated REMIC 1B
Pass-Through Rate with respect to REMIC 1B Regular Interest LT1B-5 for such
Distribution Date over (ii) 5.25% per annum (in the case of the Distribution
Date in May 2002 through the Distribution Date in February 2003), or 0.00% per
annum (in the case of any Distribution Date thereafter), weighted on the basis
of the Uncertificated Principal Balances of REMIC 1B Regular Interest LT1B-1,
REMIC 1B Regular Interest LT1B-2, REMIC 1B Regular Interest LT1B-P, REMIC 1B
Regular Interest LT1B-3, REMIC 1B Regular Interest LT1B-4, and REMIC 1B Regular
Interest LT1B-5, respectively, and multiplied by 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;
(c) With respect to REMIC 2 Regular Interest LT2S-1A and any
Distribution Date from the Distribution Date in May 2002 through the
Distribution Date in October 2004, 4.00% per annum; with respect to REMIC 2
Regular Interest LT2S-1A and any Distribution Date thereafter, 0.00% per annum;
(d) With respect to REMIC 2 Regular Interest LT2S-1B and any
Distribution Date from the Distribution Date in May 2002 through the
Distribution Date in December 2003, 0.75% per annum; with respect to REMIC 2
Regular Interest LT2S-1B and any Distribution Date thereafter, 0.00% per annum;
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(e) With respect to REMIC 2 Regular Interest LT2S-1C and any
Distribution Date from the Distribution Date in May 2002 through the
Distribution Date in February 2003, 0.50% per annum; with respect to REMIC 2
Regular Interest LT2S-1C and any Distribution Date thereafter, 0.00% per annum;
(f) With respect to REMIC 2 Regular Interest LT2S-1D and any
Distribution Date from the Distribution Date in May 2002 through the
Distribution Date in December 2003, 4.75% per annum; with respect to REMIC 2
Regular Interest LT2S-1D and any Distribution Date thereafter, 0.00% per annum;
(g) With respect to REMIC 2 Regular Interest LT2S-1E and any
Distribution Date from the Distribution Date in May 2002 through the
Distribution Date in February 2003, 0.50% per annum; with respect to REMIC 2
Regular Interest LT2S-1E and any Distribution Date thereafter, 0.00% per annum;
(h) With respect to REMIC 2 Regular Interest LT2S-1F and any
Distribution Date from the Distribution Date in May 2002 through the
Distribution Date in February 2003, 5.25% per annum; with respect to REMIC 2
Regular Interest LT2S-1F and any Distribution Date thereafter, 0.00% per annum;
(i) With respect to REMIC 2 Regular Interest LT2S-2A and any
Distribution Date from the Distribution Date in May 2002 through the
Distribution Date in October 2004, 4.00% per annum; with respect to REMIC 2
Regular Interest LT2S-2A and any Distribution Date thereafter, 0.00% per annum;
(j) With respect to REMIC 2 Regular Interest LT2S-2B and any
Distribution Date from the Distribution Date in May 2002 through the
Distribution Date in December 2003, 0.75% per annum; with respect to REMIC 2
Regular Interest LT2S-2B and any Distribution Date thereafter, 0.00% per annum;
(k) With respect to REMIC 2 Regular Interest LT2S-2C and any
Distribution Date from the Distribution Date in May 2002 through the
Distribution Date in February 2003, 0.50% per annum; with respect to REMIC 2
Regular Interest LT2S-2C and any Distribution Date thereafter, 0.00% per annum;
(l) With respect to REMIC 2 Regular Interest LT2S-2D and any
Distribution Date from the Distribution Date in May 2002 through the
Distribution Date in December 2003, 4.75% per annum; with respect to REMIC 2
Regular Interest LT2S-2D and any Distribution Date thereafter, 0.00% per annum;
(m) With respect to REMIC 2 Regular Interest LT2S-2E and any
Distribution Date from the Distribution Date in May 2002 through the
Distribution Date in February 2003, 0.50% per annum; with respect to REMIC 2
Regular Interest LT2S-2E and any Distribution Date thereafter, 0.00% per annum;
and
(n) With respect to REMIC 2 Regular Interest LT2S-2F and any
Distribution Date from the Distribution Date in May 2002 through the
Distribution Date in February 2003, 5.25%
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per annum; with respect to REMIC 2 Regular Interest LT2S-2F and any Distribution
Date thereafter, 0.00% per annum.
"Uninsured Cause": Any cause of damage to a Mortgaged Property such
that the complete restoration of such property is not fully reimbursable by the
hazard insurance policies required to be maintained pursuant to Section 3.14.
"United States Person" or "U.S. Person": (i) A citizen or resident of
the United States; (ii) a corporation, partnership or other entity classified as
a corporation or partnership for tax purposes created or organized in, or under
the laws of, the United States or any political subdivision thereof (except, in
the case of a partnership or entity treated as a partnership, to the extent
provided in regulations) provided that, solely for purposes of the restrictions
on the transfer of the Residual Certificates, no partnership or other entity
treated as a partnership shall be treated as a United States Person unless all
persons that own an interest in such partnership or other entity, either
directly or through any entity that is not a corporation for United States
federal income tax purposes, are required by the applicable operative agreement
to be United States Persons; (iii) an estate the income of which is subject to
United States federal income taxation regardless of its source, or (iv) a trust
if a court within the United States is able to exercise primary supervision over
the administration of the trust and one or more United States Persons have the
authority to control all substantial decisions of the trust or if the trust was
in existence on August 20, 1996, was treated as a United States Person on August
19, 1996, and made a valid election to continue to be treated as a United States
Person. The term "United States" shall have the meaning set forth in Section
7701 of the Code or successor provisions.
"Unpaid Interest Shortfall Amount": With respect to the Class A
Certificates, the Class S Certificates, the Class II-M1 Certificates, the
Mezzanine Components and the Class II-M4 Certificates and (i) the first
Distribution Date, zero, and (ii) any Distribution Date after the first
Distribution Date, the amount, if any, by which (a) the sum of (1) the Monthly
Interest Distributable Amount for such Class of Certificates or such Component
for the immediately preceding Distribution Date and (2) the outstanding Unpaid
Interest Shortfall Amount, if any, for such Class of Certificates or such
Component for such preceding Distribution Date exceeds (b) the aggregate amount
distributed on such Class of Certificates or such Component in respect of
interest pursuant to clause (a) of this definition on such preceding
Distribution Date, plus interest on the amount of interest due but not paid on
such Class of Certificates or such Component on such preceding Distribution
Date, to the extent permitted by law, at the Pass-Through Rate for such Class of
Certificates or such Component for the related Accrual Period.
"Value": With respect to any Mortgaged Property, the lesser of (i) the
value thereof as determined by an appraisal made for the originator of the
Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser
who met the minimum requirements of ▇▇▇▇▇▇ ▇▇▇, and (ii) the purchase price paid
for the related Mortgaged Property by the Mortgagor with the proceeds of the
Mortgage Loan, provided, however, in the case of a Refinanced Mortgage Loan,
such value of the Mortgaged Property is based solely upon the value determined
by an appraisal made for the originator of such Refinanced Mortgage Loan at the
time of origination of such Refinanced Mortgage Loan by an appraiser who met the
minimum requirements of ▇▇▇▇▇▇ Mae.
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"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
97% 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 S Certificates shall have 1% of the Voting
Rights, the Class P Certificates shall have 1% of the Voting Rights and the
Class R Certificates shall have 1% of the Voting Rights, provided that, if and
for so long as the Class C Certificates and Class P Certificates are held by one
or more foreign entities and serve as collateral for the NIM Notes, the total
combined voting power of such Classes of Certificates shall not exceed 9.9%. The
Voting Rights allocated to any Class of Certificates (other than the Class P
Certificates and the Class R Certificates) shall be allocated among all Holders
of each such Class in proportion to the outstanding Certificate Principal
Balance or Notional Amount of such Certificates and the Voting Rights allocated
to the Class P Certificates and the Class R Certificates shall be allocated
among all Holders of each such Class in proportion to such Holders' respective
Percentage Interest; provided, however, that when none of the Regular
Certificates are outstanding, 100% of the Voting Rights shall be allocated among
Holders of the Class R Certificates in accordance with such Holders' respective
Percentage Interests in the Certificates of such Class. Notwithstanding any of
the foregoing, on any date on which any Guaranteed Certificates are outstanding
or any amounts are owed the Guarantor under this Agreement, all of the Voting
Rights allocated to the Guaranteed Certificates shall be vested in the
Guarantor.
"Washington Mutual Mortgage Loans": The Mortgage Loans acquired by the
Seller from Washington Mutual Bank, FA, Washington Mutual Bank or Washington
Mutual Bank fsb.
Section 1.02 Accounting.
Unless otherwise specified herein, for the purpose of any definition or
calculation, whenever amounts are required to be netted, subtracted or added or
any distributions are taken into account, such definition or calculation and any
related definitions or calculations shall be determined without duplication of
such functions.
Section 1.03 Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class I-A Certificates, the Class I-S Certificates,
the Group I Mezzanine Components and REMIC 3 Regular Interest LT3-IC for any
Distribution Date, the aggregate amount of any Net Prepayment Interest
Shortfalls and any Relief Act Interest Shortfalls incurred in respect of the
Group I Mortgage Loans for any Distribution Date shall be allocated first, to
REMIC 3 Regular Interest LT3-IC to the extent of one month's interest at the
then applicable Pass-Through Rate on the Notional Amount of such Regular
Interest and, thereafter, among the Class I-A Certificates, the Class I-S
Certificates and the Group I Mezzanine Components on a pro rata basis based on,
and to the extent of, interest for the related Accrual Period at the then
applicable respective Pass-Through Rate on the respective Certificate Principal
Balance or Notional Amount of each such Certificate or the respective Component
Principal Balance of each such Component.
For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class II-A Certificates, the Class II-S
Certificates, the Class II-M1 Certificates, the Group II
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Mezzanine Components, the Class II-M4 Certificates and REMIC 3 Regular Interest
LT3-IIC for any Distribution Date, the aggregate amount of any Net Prepayment
Interest Shortfalls and any Relief Act Interest Shortfalls incurred in respect
of the Group II Mortgage Loans for any Distribution Date shall be allocated
first, to REMIC 3 Regular Interest LT3-IIC to the extent of one month's interest
at the then applicable Pass-Through Rate on the Notional Amount of such Regular
Interest and, thereafter, among the Class II-A Certificates, the Class II-S
Certificates, the Class II-M1 Certificates, the Group II Mezzanine Components
and the Class II-M4 Certificates on a pro rata basis based on, and to the extent
of, interest for the related Accrual Period at the then applicable respective
Pass-Through Rate on the respective Certificate Principal Balance or Notional
Amount of each such Certificate or the respective Component Principal Balance of
each such Component.
For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class I-C Certificates for any Distribution Date,
the aggregate amount of any Net Prepayment Interest Shortfalls and any Relief
Act Interest Shortfalls allocated to REMIC 3 Regular Interest LT3-IC pursuant to
the paragraphs above shall be allocated among the Class I-C Certificates on a
pro rata basis based on one month's interest at the then applicable Pass-Through
Rate on the Notional Amount of each such Certificate.
For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class II-C Certificates for any Distribution Date,
the aggregate amount of any Net Prepayment Interest Shortfalls and any Relief
Act Interest Shortfalls allocated to REMIC 3 Regular Interest LT3-IIC pursuant
to the paragraphs above shall be allocated among the Class II-C Certificates on
a pro rata basis based on one month's interest 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 1A Regular Interests for any Distribution
Date, the aggregate amount of any Net Prepayment Interest Shortfalls and any
Relief Act Interest Shortfalls incurred for any Distribution Date (i) in respect
of those Group I Mortgage Loans with Adjusted Net Minimum Mortgage Rates of less
than 5.25% shall be allocated to REMIC 1A Regular Interest LT1A-2 and (ii) in
respect of those Group I Mortgage Loans with Adjusted Net Minimum Mortgage Rates
of 5.25% or greater shall be allocated first to REMIC Regular Interest LT1A-1,
second to REMIC 1A Regular Interest LT1A-5, third to REMIC 1A Regular Interest
LT1A-4, and fourth to REMIC 1A Regular Interest LT1A-3, in each case to the
extent of interest for the related Accrual Period at the then applicable
respective Uncertificated REMIC 1A Pass-Through Rate on the respective
Uncertificated Principal Balance of each such REMIC 1A Regular Interest.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the Uncertificated REMIC 1B Regular Interests for any Distribution
Date, the aggregate amount of any Net Prepayment Interest Shortfalls and any
Relief Act Interest Shortfalls incurred for any Distribution Date (i) in respect
of those Group II Mortgage Loans with Adjusted Net Minimum Mortgage Rates of
less than 5.25% shall be allocated to REMIC 1B Regular Interest LT1B-2 and (ii)
in respect of those Group II Mortgage Loans with Adjusted Net Minimum Mortgage
Rates of 5.25% or greater shall be allocated first to REMIC 1B Regular Interest
LT1B-1, second to REMIC 1B Regular Interest LT1B-5, third to REMIC 1B Regular
Interest LT1B-4, and fourth to REMIC 1B Regular Interest LT1B-5, in each case to
the extent of interest for the related Accrual
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Period at the then applicable respective Uncertificated REMIC 1B Pass-Through
Rate on the respective Uncertificated Principal Balance of each such REMIC 1B
Regular Interest.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC 2 Regular Interests for any Distribution Date, the
aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred in respect of the Group I Mortgage Loans for any
Distribution Date shall be allocated first, pro rata to REMIC 2 Regular Interest
LT2A-1 and REMIC 2 Regular Interest LT2E-1, up to an aggregate amount equal to
the REMIC 2 Group I Interest Loss Allocation Amount, with allocations between
REMIC 2 Regular Interest LT2A-1 and REMIC 2 Regular Interest LT2E-1 being made
98% and 2%, respectively. Thereafter, Net Prepayment Interest Shortfalls and any
Relief Act Interest Shortfalls incurred in respect of the Group I Mortgage Loans
for any Distribution Date shall be allocated pro rata among REMIC 2 Regular
Interest LT2A-1, REMIC 2 Regular Interest LT2B-1, REMIC 2 Regular Interest
LT2C-1, REMIC 2 Regular Interest LT2D-1, REMIC 2 Regular Interest LT2E-1, REMIC
2 Regular Interest LT2S-1A, REMIC 2 Regular Interest LT2S-1B, REMIC 2 Regular
Interest LT2S-1C, REMIC 2 Regular Interest LT2S-1D, REMIC 2 Regular Interest
LT2S-1E, and REMIC 2 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC 2 Regular Interests for any Distribution Date, the
aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred in respect of the Group II Mortgage Loans for any
Distribution Date shall be allocated first, pro rata to REMIC 2 Regular Interest
LT2A-2 and REMIC 2 Regular Interest LT2J-2, up to an aggregate amount equal to
the REMIC 2 Group II Interest Loss Allocation Amount, with allocations between
REMIC 2 Regular Interest LT2A-2 and REMIC 2 Regular Interest LT2J-2 being made
98% and 2%, respectively. Thereafter, Net Prepayment Interest Shortfalls and any
Relief Act Interest Shortfalls incurred in respect of the Group II Mortgage
Loans for any Distribution Date shall be allocated pro rata among REMIC 2
Regular Interest LT2A-2, REMIC 2 Regular Interest LT2B-2, REMIC 2 Regular
Interest LT2C-2, REMIC 2 Regular Interest LT2D-2, REMIC 2 Regular Interest
LT2E-2, REMIC 2 Regular Interest LT2F-2, REMIC 2 Regular Interest LT2G-2, REMIC
2 Regular Interest LT2H-2, REMIC 2 Regular Interest LT2I-2, REMIC 2 Regular
Interest LT2J-2, REMIC 2 Regular Interest LT2S-2A, REMIC 2 Regular Interest
LT2S-2B, REMIC 2 Regular Interest LT2S-2C, REMIC 2 Regular Interest LT2S-2D,
REMIC 2 Regular Interest LT2S-2E and REMIC 2 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇.
For purposes of the preceding four paragraphs, pro rata allocations
shall be based on interest for the related Accrual Period at the then applicable
respective Uncertificated REMIC 2 Pass-Through Rate, Uncertificated REMIC 1A
Pass-Through Rate or Uncertificated REMIC 1B Pass-Through Rate on the respective
Uncertificated Principal Balance or Uncertificated Notional Amount of each such
Uncertificated REMIC 2 Regular Interest, Uncertificated REMIC 1A Regular
Interest or Uncertificated REMIC 1B Regular Interest.
Section 1.04 Rights of the NIMS Insurer and the Guarantor.
(a) Each of the rights of the NIMS Insurer set forth in this Agreement
shall exist so long as the Insured NIM Notes remain outstanding; provided,
however, the NIMS Insurer shall not have any rights hereunder (except as
provided in Section 9.01) so long as any
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default has occurred and is continuing under the insurance policy issued by the
NIMS Insurer with respect to the Insured NIM Notes.
(b) If and when (i) no Insured NIM Notes remain outstanding, (ii) any
Guaranteed Certificates remain outstanding and (iii) no default under the
Guaranty shall have occurred and be continuing, the Guarantor shall be entitled
to exercise the rights of the NIMS Insurer set forth in this Agreement.
(c) Notwithstanding anything to the contrary anywhere in this
Agreement, all rights of the Guarantor hereunder, except any rights to
indemnification, shall permanently terminate upon the later to occur of (A) such
time as the Guaranteed Certificates shall no longer be outstanding and (B) the
payment in full to the Guarantor of any amounts owed to the Guarantor in respect
of its guarantee of payment on the Guaranteed Certificates; provided that the
Guarantor shall not have any rights hereunder, except indemnification rights, so
long as any default has occurred and is continuing under the Guaranty.
(d) Notwithstanding anything to the contrary anywhere in this
Agreement, all rights and benefits of the NIMS Insurer hereunder shall
permanently terminate upon such time as the Insured NIM Notes shall no longer be
outstanding.
(e) The rights of the NIMS Insurer or the Guarantor referenced in
Sections 3.02(a), 3.03, 3.05, 3.16(b), 3.27(a), 6.04, 7.02(a), 7.04, 8.07 and
8.10 of this Agreement shall be applied as follows:
(i) In the event that the Class II-M1 Certificates are rated at
least "AA" (in the case of Fitch and/or S&P) or "Aa2" (in the case of ▇▇▇▇▇'▇),
the ▇▇▇▇ Insurer shall have the right to act, after consultation with the
Guarantor;
(ii) In the event that (x) the rating of the Class II-M1
Certificates is reduced by two of the three Rating Agencies to less than "AA" or
"Aa2" and (y) each of the aggregate Certificate Principal Balance of the Class
M2 Certificates and the Component Principal Balance of the I-M3 Component is
greater than zero or the Group I Overcollateralized Amount or the Group II
Overcollateralized Amount is greater than zero, the NIMS Insurer and the
Guarantor each shall have the right to act, upon the receipt of the reasonable
consent of the other; and
(iii) In the event that (x) the rating of the Class II-M1
Certificates is reduced by two of the three Rating Agencies to less than "AA" or
"Aa2" and (y) the I-M3 Component has no aggregate Component Principal Balance
and each of the Group I Overcollateralized Amount and the Group II
Overcollateralized Amount is equal to zero, the Guarantor shall have the sole
right to act.
The NIMS Insurer and the Guarantor shall promptly consult each other
with regard to the rights referred to in this sub-section. If this consultation
would create a delay that would have a material adverse effect on this
Agreement, each party may act individually with respect to their rights and
consult with the other party after such action has been taken. Any consents
required between the NIMS Insurer and the Guarantor shall not be unreasonably
withheld or delayed.
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Section 1.05 Guarantor Purchase Option.
If neither the Master Servicer nor the NIMS Insurer has exercised its
right to purchase all of the Mortgage Loans and each REO Property in both Loan
Groups remaining in REMIC 1A and REMIC 1B pursuant to Sections 9.01(a) and (b)
and the Class I-A Certificates are outstanding, the Guarantor shall have the
right to purchase all of the Group I Mortgage Loans and each REO Property in
Loan Group I remaining in REMIC 1A during any Prepayment Period following the
Group I Stepdown Date and the Optional Termination Date; provided, that the
aggregate Stated Principal Balance of the Group I Mortgage Loans and each REO
Property in Loan Group I remaining in the Trust Fund on the immediately
preceding Distribution Date is equal to or less than 5% of the aggregate Stated
Principal Balance of the Group I Closing Date Mortgage Loans as of the Cut-off
Date. The price payable by the Guarantor upon the exercise of the foregoing
option shall be equal to the aggregate Purchase Price of all of the Mortgage
Loans included in REMIC 1A, plus the appraised value of each REO Property (if
any) in REMIC 1A, such appraisal to be conducted by an appraiser mutually agreed
upon by the Master Servicer, the Guarantor, the Trustee and the Trust
Administrator in their reasonable discretion, plus any unpaid Guarantor
Reimbursement Amount and unpaid Guaranty Fee, any amounts necessary to reimburse
the NIMS Insurer for all amounts paid under the NIMs insurance policy, any other
amounts reimbursable or otherwise payable to the NIMS Insurer, in each case with
interest thereon at the applicable rate set forth in the Indenture and to the
extent not previously reimbursed or paid, and any additional amounts necessary
to pay all interest accrued on, as well as amounts necessary to pay in full the
principal balance of, the NIM Notes and the Class I-A Certificates.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee
without recourse for the benefit of the Certificateholders all the right, title
and interest of the Depositor, including any security interest therein for the
benefit of the Depositor, in and to the Mortgage Loans identified on the
Mortgage Loan Schedule, the rights of the Depositor under the Mortgage Loan
Purchase Agreement (other than the Depositor's rights under Section 17 thereof),
and all other assets included or to be included in REMIC 1A or REMIC 1B. Such
assignment includes all scheduled payments on the Mortgage Loans due after the
Cut-off Date and all unscheduled collections in respect of the Mortgage Loans
received after March 1, 2002 (other than the portion of such collections due on
or prior to the Cut-off Date). The Depositor herewith delivers to the Trust
Administrator on behalf of the Trustee an executed copy of the Mortgage Loan
Purchase Agreement and the PMI Policy.
If the assignment and transfer of the Mortgage Loans and the other
property specified in Section 2.01 from the Depositor to the Trustee pursuant to
this Agreement is held or deemed not to be a sale or is held or deemed to be a
pledge of security for a loan, the Depositor intends that
81
the rights and obligations of the parties shall be established pursuant to the
terms of this Agreement and that, in such event, (i) the Depositor shall be
deemed to have granted and does hereby grant to the Trustee as of the Closing
Date a perfected, first priority security interest in the entire right, title
and interest of the Depositor in and to the Mortgage Loans and all other
property conveyed to the Trust Fund pursuant to this Section 2.01 and all
proceeds thereof and (ii) this Agreement shall constitute a security agreement
under applicable law.
In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with, the Trust Administrator as custodian for
the Trustee (in which capacity it will, unless otherwise specified, be acting
under this Article II) the following documents or instruments with respect to
each Mortgage Loan so transferred and assigned (with respect to each Mortgage
Loan, a "Mortgage File"):
(a) the original Mortgage Note, endorsed in blank or in the following
form: "Pay to the order of Bankers Trust Company of California, N.A., as Trust
Administrator for the benefit of First Union National Bank, as Trustee under the
applicable agreement, without recourse," with all prior and intervening
endorsements showing a complete chain of endorsement from the originator to the
Person so endorsing to the Trustee or (in the case of not more than 1.00% of the
Mortgage Loans, by aggregate principal balance as of the Cut-off Date) a copy of
such original Mortgage Note with an accompanying Lost Note Affidavit executed by
the Seller;
(b) the original Mortgage with evidence of recording thereon, and a
copy, certified by the appropriate recording office, of the recorded power of
attorney, if the Mortgage was executed pursuant to a power of attorney, with
evidence of recording thereon;
(c) an original Assignment in blank;
(d) the original recorded Assignment or Assignments showing a complete
chain of assignment from the originator to the Person assigning the Mortgage to
the Trustee or in blank;
(e) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(f) the original lender's title insurance policy, together with all
endorsements or riders issued with or subsequent to the issuance of such policy
(or a copy of the above, in the case of the Washington Mutual Mortgage Loans),
insuring the priority of the Mortgage as a first lien on the Mortgaged Property
represented therein as a fee interest vested in the Mortgagor, or in the event
such title policy is unavailable, a written commitment or uniform binder or
preliminary report of title issued by the title insurance or escrow company.
The Master Servicer, in its capacity as Seller, shall promptly (and in
no event later than thirty (30) Business Days, subject to extension upon a
mutual agreement between the Master Servicer and the Trustee), following the
later of the Closing Date and the date of receipt by the Master Servicer of the
recording information for a Mortgage submit or cause to be submitted for
recording, at no expense to the Trust Fund, the Trustee, the Trust Administrator
or the Depositor, in the appropriate public office for real property records,
each Assignment referred to in Sections 2.01(c) and (d) above and shall execute
each original Assignment referred to in clause (c) above
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in the following form: "Bankers Trust Company of California, N.A., as Trust
Administrator for the benefit of First Union National Bank, as Trustee under
applicable agreement, without recourse." In the event that any such Assignment
is lost or returned unrecorded because of a defect therein, the Master Servicer,
in its capacity as Seller, shall promptly prepare or cause to be prepared a
substitute Assignment or cure or cause to be cured such defect, as the case may
be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, however, for administrative convenience and
facilitation of servicing and to reduce closing costs, the Assignments shall not
be required to be completed and submitted for recording with respect to any
Mortgage Loan if either (x) the Trustee, the Trust Administrator, the NIMS
Insurer, the Guarantor and each Rating Agency has received an opinion of
counsel, reasonably satisfactory to the Trustee, the Trust Administrator, the
NIMS Insurer, the Guarantor and each Rating Agency, to the effect that the
recordation of such Assignments in any specific jurisdiction is not necessary to
protect the Trust's interest in the related Mortgage Note or (y) each Rating
Agency shall have determined that no such opinion is required in order for such
Rating Agency to assign the initial ratings to the Class II-A Certificates, the
Class II-S Certificates, the Mezzanine Certificates and the NIM Notes; provided
further, however, notwithstanding the delivery of any opinion of counsel, each
Assignment shall be submitted for recording by the Master Servicer, in its
capacity as Seller, in the manner described above, at no expense to the Trust
Fund, the Trustee, or the Trust Administrator, upon the earliest to occur of:
(i) reasonable direction by Holders of Certificates entitled to at least 25% of
the Voting Rights, (ii) the occurrence of a Master Servicer Event of Default,
(iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Seller, (iv) the occurrence of a servicing transfer as described in Section 7.02
hereof and (iv) if the Seller is not the Master Servicer and with respect to any
one Assignment, the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Mortgagor under the related Mortgage. Notwithstanding the
foregoing, if the Master Servicer is unable to pay the cost of recording the
Assignments, such expense shall be paid by the Trust Administrator and shall be
reimbursable to the Trust Administrator as an Extraordinary Trust Fund Expense.
If any of the documents referred to in Sections 2.01(b), (c), (d) or
(e) above (collectively, the "Recording Documents") has as of the Closing Date
been submitted for recording but either (x) has not been returned from the
applicable public recording office or (y) has been lost or such public recording
office has retained the original of such document, the obligations of the
Depositor to deliver such Recording Documents shall be deemed to be satisfied
upon (1) delivery to the Trust Administrator of a copy of each such Recording
Document certified by the Seller in the case of (x) above or the applicable
public recording office in the case of (y) above to be a true and complete copy
of the original that was submitted for recording and (2) if such copy is
certified by the Seller, delivery to the Trust Administrator promptly upon
receipt thereof, and in any event no later than one year after the Closing Date,
of either the original or a copy of such Recording Document certified by the
applicable public recording office to be a true and complete copy of the
original. In instances where, due to a delay on the part of the recording office
where any such Recording Documents have been delivered for recordation, the
Recording Documents cannot be delivered to the Trustee within one year after
execution and delivery hereof, the Depositor shall deliver to the Trustee within
such time period an Officer's Certificate stating the date by which the
Depositor expects to receive such Recording Documents from the applicable
recording office. In the event that Recording Documents have still not been
received by the Depositor and delivered to the Trustee by the date specified in
its previous Officer's Certificate delivered to the Trustee, the Depositor shall
deliver to the Trustee by such date an additional Officer's Certificate stating
a revised date by which the Depositor expects to receive the
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applicable Recording Documents. This procedure shall be repeated until the
Recording Documents have been received by the Depositor and delivered to the
Trustee. If the original lender's title insurance policy (or a copy thereof, in
the case of the Washington Mutual Mortgage Loans) was not delivered pursuant to
Section 2.01(f) above, the Depositor shall deliver or cause to be delivered to
the Trust Administrator promptly after receipt thereof, and in any event within
120 days after the Closing Date, the original lender's title insurance policy
(or a copy thereof, in the case of the Washington Mutual Mortgage Loans). The
Depositor shall deliver or cause to be delivered to the Trust Administrator
promptly upon receipt thereof any other original documents constituting a part
of a Mortgage File received with respect to any Mortgage Loan, including, but
not limited to, any original documents evidencing an assumption or modification
of any Mortgage Loan.
All original documents relating to the Mortgage Loans that are not
delivered to the Trust Administrator are and shall be held by or on behalf of
the Seller, the Depositor or the Master Servicer, as the case may be, in trust
for the benefit of the Trustee on behalf of the Certificateholders. In the event
that any such original document is required pursuant to the terms of this
Section to be a part of a Mortgage File, such document shall be delivered
promptly to the Trust Administrator. Any such original document delivered to or
held by the Depositor that is not required pursuant to the terms of this Section
to be a part of a Mortgage File, shall be delivered promptly to the Master
Servicer.
Section 2.02 Acceptance of REMIC 1A and REMIC 1B by the Trustee.
Subject to the provisions of Section 2.01 and subject to any exceptions
noted on the exception report described in the next paragraph below, the Trust
Administrator on behalf of the Trustee acknowledges receipt of the documents
referred to in Section 2.01 above and all other assets included in the
definition of "REMIC 1A" under clauses (i), (iii), (iv) and (vi) (to the extent
of amounts deposited into the Distribution Account) and the definition of REMIC
1B under clauses (i), (iii), (iv) and (v) (to the extent of amounts deposited
into the Distribution Account) and declares that it holds and will hold such
documents and the other documents delivered to it constituting the Mortgage
File, and all such assets and such other assets included in the definition of
"REMIC 1A" and "REMIC 1B" in trust for the exclusive use and benefit of all
present and future Certificateholders.
The Trust Administrator agrees, for the benefit of the
Certificateholders, to review each Mortgage File on or before the Closing Date,
with respect to each Mortgage Loan and to certify to the Trustee, the Guarantor,
the NIMS Insurer, the Depositor and the Master Servicer in substantially the
form attached hereto as Exhibit F-1 that, as to each Closing Date Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in the exception report annexed
thereto as not being covered by such certification), (i) all documents
constituting part of such Mortgage File (other than such documents described in
Section 2.01(e)) required to be delivered to it pursuant to this Agreement are
in its possession, (ii) such documents have been reviewed by the Trust
Administrator and are not mutilated, torn or defaced unless initialed by the
related borrower and relate to such Mortgage Loan and (iii) based on the Trust
Administrator's examination and only as to the foregoing, the information set
forth in the Mortgage Loan Schedule that corresponds to items (i), (ii), (ix),
(xii), (xiv) (to the extent of the Periodic Rate Cap for the first Adjustment
Date and subsequent Adjustment Dates) and (xvi) of the definition of "Mortgage
Loan Schedule"
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accurately reflects information set forth in the Mortgage File. It is herein
acknowledged that, in conducting such review, the Trust Administrator was under
no duty or obligation (i) to inspect, review or examine any such documents,
instruments, certificates or other papers to determine whether they are genuine,
enforceable, or appropriate for the represented purpose (including with respect
to Section 2.01(f), whether such title insurance policy (a) contains all
necessary endorsements, (b) insures the priority of the Mortgage as a first lien
or (c) whether the interest vested in the Mortgagor is a fee interest) or
whether they have actually been recorded or that they are other than what they
purport to be on their face or (ii) to determine whether any Mortgage File
should include any of the documents specified in clause (e) of Section 2.01.
Prior to the first anniversary date of this Agreement, the Trust
Administrator shall deliver to the Depositor, the Master Servicer, the Trustee,
the NIMS Insurer and the Guarantor a final certification in the form annexed
hereto as Exhibit F-2 evidencing the completeness of the Mortgage Files, with
any applicable exceptions noted thereon.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the Trust
Administrator 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 Trust Administrator shall so notify the Depositor, the Seller,
the Trustee, the Guarantor, the NIMS Insurer and the Master Servicer. In
addition, upon the discovery by the Depositor, the Master Servicer, the
Guarantor, the Trustee or the Trust Administrator of a breach of any of the
representations and warranties made by the Seller in the Mortgage Loan Purchase
Agreement in respect of any Mortgage Loan which materially and adversely affects
the value of such Mortgage Loan or the interests of the related
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties.
Section 2.03 Cure, Repurchase or Substitution of Mortgage Loans by the Seller;
Remedies for Breaches by Depositor or Master Servicer; Remedies for Breaches
Relating to Prepayment Charges.
(a) Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, the Mortgage File or of the
breach by the Seller of any representation, warranty or covenant under the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially and adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders (in the case of any such representation or
warranty made to the knowledge or the best of knowledge of the Seller, as to
which the Seller has no knowledge, without regard to the Seller's lack of
knowledge with respect to the substance of such representation or warranty being
inaccurate at the time it was made), the Trust Administrator shall promptly
notify the Depositor, the Seller, the NIMS Insurer, the Guarantor and the Master
Servicer of such defect, missing document or breach and request that the Seller
deliver such missing document or cure such defect or breach within 90 days from
the date the Seller was notified of such missing document, defect or breach, and
if the Seller does not deliver such missing document or cure such defect or
breach in all material respects during such period, the Master Servicer (or, in
accordance with Section 3.02(b), the Trustee or the Trust Administrator) shall
enforce the obligations of the Seller under the Mortgage Loan Purchase Agreement
to repurchase such Mortgage Loan from REMIC 1A or REMIC 1B at the Purchase Price
within 90 days after the date on which the Seller was notified (subject to
Section 2.03(e))
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of such missing document, defect or breach, if and to the extent that the Seller
is obligated to do so under the Mortgage Loan Purchase Agreement. The Purchase
Price for the repurchased Mortgage Loan shall be deposited in the Collection
Account, and the Trust Administrator, upon receipt of written certification from
the Master Servicer of such deposit, shall release to the Seller the related
Mortgage File, and the Trust Administrator, on behalf of the Trustee, shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as the Seller shall furnish to it and as shall be necessary to
vest in the Seller any Mortgage Loan released pursuant hereto, and neither the
Trustee nor the Trust Administrator shall have any further responsibility with
regard to such Mortgage File. In lieu of repurchasing any such Mortgage Loan as
provided above, if so provided in the Mortgage Loan Purchase Agreement, the
Seller may cause such Mortgage Loan to be removed from REMIC 1A or REMIC 1B (in
which case it shall become a Deleted Mortgage Loan) and substitute one or more
Qualified Substitute Mortgage Loans in the manner and subject to the limitations
set forth in Section 2.03(d). It is understood and agreed that the obligation of
the Seller to cure or to repurchase (or to substitute for) any Mortgage Loan as
to which a document is missing, a material defect in a constituent document
exists or as to which such a breach has occurred and is continuing shall
constitute the sole remedy respecting such omission, defect or breach available
to the Certificateholders, the Trust Administrator on behalf of the Trustee, the
Trustee on behalf of the Certificateholders, and the NIMS Insurer and the
Guarantor.
(b) Within 90 days of the earlier of discovery by the Depositor or
receipt of notice by the Depositor of the breach of any representation or
warranty of the Depositor set forth in Section 2.05 with respect to any Mortgage
Loan, which materially adversely affects the value of such Mortgage Loan or the
interest therein of the Certificateholders, the Depositor shall cure such breach
in all material respects.
(c) As promptly as practicable (and no later than 90 days) after the
earlier of discovery by the Master Servicer or receipt of notice by the Master
Servicer of the breach of any representation, warranty or covenant of the Master
Servicer set forth in Section 2.04 which materially and adversely affects the
value of any Mortgage Loan or the interests of the Certificateholders in any
Mortgage Loan, the Master Servicer shall cure such breach in all material
respects.
Within 90 days of the earlier of discovery by the Master Servicer or
receipt of notice by the Master Servicer of the breach of any representation,
warranty or covenant of the Master Servicer set forth in Section 2.04(a)(vii) or
(viii) which materially and adversely affects the interests of the Holders of
the Class P Certificates to any Prepayment Charge, the Master Servicer shall
cure such breach in all material respects. If the representation made by the
Master Servicer in its capacity as Seller in Section 2.04(a)(vii) is breached,
the Master Servicer in its capacity as Seller shall pay into the Collection
Account the amount of the scheduled Prepayment Charge, less any amount
previously collected and deposited by, or paid by, the Master Servicer into the
Collection Account; and if the covenant made by the Master Servicer in Section
2.04(a)(viii) is breached, the Master Servicer shall pay into the Collection
Account the amount of the waived Prepayment Charge.
(d) Any substitution of Qualified Substitute Mortgage Loans for Deleted
Mortgage Loans made pursuant to Section 2.03(a) shall be effected prior to the
date which is two years after the Startup Date for REMIC 1A or REMIC 1B.
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As to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, such substitution shall be effected
by the Seller delivering to the Trust Administrator on behalf of the Trustee,
for such Qualified Substitute Mortgage Loan or Loans, the Mortgage Note, the
Mortgage, the Assignment to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, as are required by Section
2.01, together with an Officers' Certificate providing that each such Qualified
Substitute Mortgage Loan satisfies the definition thereof and specifying the
Substitution Shortfall Amounts (as described below), if any, in connection with
such substitution. The Trust Administrator shall acknowledge receipt for such
Qualified Substitute Mortgage Loan or Loans and, within ten Business Days
thereafter, review such documents as specified in Section 2.02 and deliver to
the Depositor, the Master Servicer, the Trustee, the NIMS Insurer and the
Guarantor, with respect to such Qualified Substitute Mortgage Loan or Loans, a
certification substantially in the form attached hereto as Exhibit F-1, with any
applicable exceptions noted thereon. Within one year of the date of
substitution, the Trust Administrator shall deliver to the Depositor, the
Seller, the Trustee, the NIMS Insurer, the Guarantor and the Master Servicer a
certification substantially in the form of Exhibit F-2 hereto with respect to
such Qualified Substitute Mortgage Loan or Loans, with any applicable exceptions
noted thereon. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution are not part of REMIC 1A or REMIC
1B, as the case may be, and will be retained by the Seller. For the month of
substitution, distributions to Certificateholders will reflect the Monthly
Payment due on such Deleted Mortgage Loan on or before the Due Date in the month
of substitution, and the Seller shall thereafter be entitled to retain all
amounts subsequently received in respect of such Deleted Mortgage Loan. The
Trust Administrator shall give or cause to be given written notice to the
Guarantor, the Trustee, the NIMS Insurer and the Certificateholders that such
substitution has taken place, and the Master Servicer shall amend or cause to be
amended the Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan from the terms of this Agreement and the substitution of the
Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of such
amended Mortgage Loan Schedule to the Guarantor, the NIMS Insurer, the Trust
Administrator and the Trustee. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be
subject in all respects to the terms of this Agreement and the Mortgage Loan
Purchase Agreement, including all applicable representations and warranties
thereof included in the Mortgage Loan Purchase Agreement as of the date of
substitution.
For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amounts (the "Substitution Shortfall Amounts"), if
any, by which the aggregate Purchase Price of all such Deleted Mortgage Loans in
Loan Group I or Loan Group II, respectively, exceeds the aggregate of the Stated
Principal Balance of the Qualified Substitute Mortgage Loans that will become
part of Loan Group I or Loan Group II, respectively, as of the date of
substitution, together with one month's interest on such Stated Principal
Balance at the applicable Net Mortgage Rate, plus all outstanding Advances and
Servicing Advances with respect to such Deleted Mortgage Loan. On the date of
such substitution, the Seller will deliver or cause to be delivered to the
Master Servicer for deposit in the Collection Account an amount equal to the sum
of Substitution Shortfall Amounts, if any, and the Trust Administrator, upon
receipt of the related Qualified Substitute Mortgage Loan or Loans and
certification by the Master Servicer of such deposit, shall release to the
Seller the related Mortgage File or Files and the Trust Administrator, on behalf
of the Trustee, or the Trustee shall execute and deliver such instruments of
transfer or
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assignment, without recourse, as the Seller shall deliver to it and as shall be
necessary to vest therein any Deleted Mortgage Loan released pursuant hereto.
In addition, the Master Servicer in its capacity as Seller shall obtain
at its own expense and deliver to the NIMS Insurer, the Guarantor, the Trust
Administrator and the Trustee an Opinion of Counsel to the effect that such
substitution will not cause (a) any federal tax to be imposed on REMIC 1A or
REMIC 1B, created hereunder, including without limitation, any federal tax
imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code, or
(b) any Trust REMIC hereunder to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
(e) Upon discovery by the Depositor, the Seller, the Master Servicer,
the Trust Administrator or the Trustee that any Mortgage Loan does not
constitute a "qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code, the party discovering such fact shall within two Business Days give
written notice thereof to the other parties. In connection therewith, the Master
Servicer in its capacity as Seller shall repurchase or, subject to the
limitations set forth in Section 2.03(d), substitute one or more Qualified
Substitute Mortgage Loans for the affected Mortgage Loan within 90 days of the
earlier of discovery or receipt of such notice with respect to such affected
Mortgage Loan. Any such repurchase or substitution shall be made in the same
manner as set forth in Section 2.03(a). The Trustee and the Trust Administrator
shall reconvey to the Seller the Mortgage Loan to be released pursuant hereto in
the same manner, and on the same terms and conditions, as it would a Mortgage
Loan repurchased for breach of a representation or warranty.
Section 2.04 Representations, Warranties and Covenants of the Master Servicer.
(a) The Master Servicer hereby represents, warrants and covenants to
the Trust Administrator and the Trustee, for the benefit of the Trust
Administrator, the Trustee and the Certificateholders, and to the Guarantor and
Depositor, that as of the Closing Date or as of such date specifically provided
herein:
(i) The Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
is duly authorized and qualified to transact any and all business contemplated
by this Agreement and has all licenses necessary to carry on its business as now
being conducted and is licensed, qualified and in good standing in the states
where the Mortgaged Properties are located if the laws of such state require
licensing or qualification in order to conduct business of the type conducted by
the Master Servicer or to ensure the enforceability or validity of each Mortgage
Loan and, in any event, is in compliance with the doing business laws of any
such State, to the extent necessary to ensure its ability to enforce each
Mortgage Loan and to service the Mortgage Loans in accordance with the terms of
this Agreement;
(ii) The Master Servicer has the full power and authority to
service each Mortgage Loan, to execute, deliver and perform, and to enter into
and consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary action on the part of the Master Servicer the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery thereof by the Depositor,
the Guarantor, the Trust Administrator and the Trustee, constitutes a legal,
valid and binding
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obligation of the Master Servicer, enforceable against the Master Servicer in
accordance with its terms, except to the extent that (a) the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the Master
Servicer, the servicing of the Mortgage Loans by the Master Servicer hereunder,
the consummation by the Master Servicer of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms hereof are in
the ordinary course of business of the Master Servicer and will not (A) result
in a breach of any term or provision of the charter or by-laws of the Master
Servicer or (B) conflict with, result in a breach, violation or acceleration of,
or result in a default under, the terms of any other material agreement or
instrument to which the Master Servicer is a party or by which it may be bound,
or any statute, order or regulation applicable to the Master Servicer of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Master Servicer; and the Master Servicer is not a party
to, bound by, or in breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order or regulation of
any court, regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to the Master
Servicer's knowledge, would in the future materially and adversely affect, (x)
the ability of the Master Servicer to perform its obligations under this
Agreement or (y) the business, operations, financial condition, properties or
assets of the Master Servicer taken as a whole;
(iv) The Master Servicer is an approved seller/servicer for ▇▇▇▇▇▇
▇▇▇ or ▇▇▇▇▇▇▇ Mac in good standing and is a HUD approved mortgagee pursuant to
Section 203 and Section 211 of the National Housing Act;
(v) No litigation is pending against the Master Servicer that
would materially and adversely affect the execution, delivery or enforceability
of this Agreement or the ability of the Master Servicer to service the Mortgage
Loans or to perform any of its other obligations hereunder in accordance with
the terms hereof;
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of, or compliance by the Master Servicer
with, this Agreement or the consummation by the Master Servicer of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained prior to
the Closing Date;
(vii) The information set forth in the Prepayment Charge Schedule
is complete, true and correct in all material respects at the date or dates
respecting which such information is furnished and each Prepayment Charge is
permissible and enforceable in accordance with its terms under applicable law
upon the Mortgagor's full and voluntary principal prepayment (except to the
extent that: (1) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally; or (2) the collectability thereof may be limited
due to acceleration in connection
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with a foreclosure or other involuntary prepayment); provided that the
representation, warranty and covenant contained in this clause (vii) is made by
the Master Servicer only in its capacity as Seller; and
(viii) The Master Servicer will not waive any Prepayment Charge or
part of a Prepayment Charge unless such waiver is related to a default or a
reasonably foreseeable default and would maximize recovery of total proceeds
taking into account the value of such Prepayment Charge and related Mortgage
Loan and doing so is standard and customary in servicing mortgage loans similar
to the Mortgage Loans (including any waiver of a Prepayment Charge in connection
with a refinancing of a Mortgage Loan that is related to a default or a
reasonably foreseeable default).
(ix) For each Mortgage Loan, the Master Servicer will accurately,
fully and in a timely manner report its borrower credit files to each of
Equifax, Transunion, and Experian (the "Credit Repositories").
(b) It is understood and agreed that the representations, warranties
and covenants set forth in this Section 2.04 shall survive delivery of the
Mortgage Files to the Trust Administrator and shall inure to the benefit of the
Trust Administrator, the Trustee, the Depositor and the Certificateholders. Upon
discovery by any of the Depositor, the Master Servicer, the Trust Administrator
or the Trustee of a breach of any of the foregoing representations, warranties
and covenants which materially and adversely affects the value of any Mortgage
Loan, Prepayment Charge or the interests therein of the Certificateholders, the
party discovering such breach shall give prompt written notice (but in no event
later than two Business Days following such discovery) to the other of such
parties. The obligation of the Master Servicer set forth in Section 2.03(c) to
cure breaches (or, in the case of (a)(vii) or (a)(viii) above, to pay a Master
Servicer Prepayment Charge Payment Amount) shall constitute the sole remedy
against the Master Servicer available to the Certificateholders, the Depositor,
the Guarantor, the Trust Administrator or the Trustee on behalf of the
Certificateholders respecting a breach of the representations, warranties and
covenants contained in this Section 2.04. The preceding sentence shall not,
however, limit any remedies available to the Certificateholders, the Depositor,
the Guarantor, the Trust Administrator or the Trustee on behalf of the
Certificateholders, (i) pursuant to the Mortgage Loan Purchase Agreement signed
by the Master Servicer in its capacity as Seller, respecting a breach of the
representations, warranties and covenants of the Master Servicer in its capacity
as Seller contained in the Mortgage Loan Purchase Agreement or (ii) pursuant to
Section 7.01 hereof.
Section 2.05 Representations and Warranties of the Depositor.
The Depositor hereby represents, warrants and covenants to the Trust
Administrator, and the Trustee, for the benefit of the Trust Administrator, the
Trustee and the Certificateholders, and to the Guarantor and the Master
Servicer, that as of the Closing Date or as of such date specifically provided
herein:
(i) Each of this Agreement and the Mortgage Loan Purchase
Agreement constitutes a legal, valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
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effect affecting the enforcement of creditors' rights in general and except as
such enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity);
(ii) Immediately prior to the sale and assignment by the Depositor
to the Trustee on behalf of the Trust of each Mortgage Loan, the Depositor had
good and marketable title to each Mortgage Loan subject to no prior lien, claim,
participation interest, mortgage, security interest, pledge, charge or other
encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred all
right, title interest in the Mortgage Loans to the Trustee on behalf of the
Trust;
(iv) The Depositor is solvent and will not be made insolvent by
the transfer of the Mortgage Loans. The Depositor has not transferred the
Mortgage Loans to the Trustee with any intent to hinder, delay or defraud any of
its creditors;
(v) The Depositor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware, with full
corporate power and authority to own its assets and conduct its business as
presently being conducted;
(vi) The Depositor is not in violation of its articles of
incorporation or by-laws or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
the Depositor is a party or by which it or its properties may be bound, which
default might result in any material adverse changes in the financial condition,
earnings, affairs or business of the Depositor or which might materially and
adversely affect the properties or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this Agreement
and the Mortgage Loan Purchase Agreement by the Depositor, and the consummation
of the transactions contemplated hereby and thereby, do not and will not result
in a material breach or violation of any of the terms or provisions of, or, to
the knowledge of the Depositor, constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Depositor is a party or by which the Depositor is bound or to which
any of the property or assets of the Depositor is subject, nor will such actions
result in any violation of the provisions of the articles of incorporation or
by-laws of the Depositor or, to the best of the Depositor's knowledge without
independent investigation, any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Depositor or
any of its properties or assets (except for such conflicts, breaches, violations
and defaults as would not have a material adverse effect on the ability of the
Depositor to perform its obligations under this Agreement or the Mortgage Loan
Purchase Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency or
body of the United States or any other jurisdiction is required for the issuance
of the Certificates, or the consummation by the Depositor of the other
transactions contemplated by this Agreement or the Mortgage Loan Purchase
Agreement, except such consents, approvals, authorizations, registrations or
qualifications as (a) may be required
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under State securities or blue sky laws, (b) have been previously obtained or
(c) the failure of which to obtain would not have a material adverse effect on
the performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement or the Mortgage Loan Purchase Agreement;
(ix) There are no actions, proceedings or investigations pending
before or, to the Depositor's knowledge, threatened by any court, administrative
agency or other tribunal to which the Depositor is a party or of which any of
its properties is the subject: (a) which if determined adversely to the
Depositor would have a material adverse effect on the business, results of
operations or financial condition of the Depositor; (b) asserting the invalidity
of this Agreement, the Mortgage Loan Purchase Agreement or the Certificates; (c)
seeking to prevent the issuance of the Certificates or the consummation by the
Depositor of any of the transactions contemplated by this Agreement or the
Mortgage Loan Purchase Agreement, as the case may be; or (d) which might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement or the
Mortgage Loan Purchase Agreement; and
(x) The Depositor has the full power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary action
on the part of the Depositor the execution, delivery and performance of this
Agreement and this Agreement, assuming the due authorization, execution and
delivery thereof by the parties thereto other than the Depositor, constitutes a
legal, valid and binding obligation of the Depositor, enforceable against the
Depositor in accordance with its terms, except to the extent that (a) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
Section 2.06 Issuance of Certificates.
The Trustee acknowledges the assignment to it (or the Trust
Administrator) 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 Trust Administrator, pursuant to the written request
of the Depositor executed by an officer of the Depositor, has executed,
authenticated and delivered to or upon the written order of the Depositor, the
Certificates in authorized denominations. The interests evidenced by the
Certificates constitute the entire beneficial ownership interest in the Trust
Fund.
Section 2.07 [Reserved].
Section 2.08 Conveyance of REMIC Regular Interests and Acceptance of REMIC 1A
and REMIC 1B 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 1A Regular Interests and
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REMIC 1B Regular Interests for the benefit of the holders of the REMIC 2 Regular
Interests and the Class R-2 Interest. The Trustee acknowledges receipt of the
REMIC 1A Regular Interests and REMIC 1B Regular Interests (which are
uncertificated) and declares that it holds and will hold the same in trust for
the exclusive use and benefit of the holders of the REMIC 2 Regular Interests
and the Class R-2 Interest. The interests evidenced by the Class R-2 Interest,
together with the REMIC 2 Regular Interests, constitute the entire beneficial
ownership interest in REMIC 2.
(b) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC 2 Regular Interests for the benefit of the holders of the
Certificates (other than the Class C Certificates, the Class P Certificates and
the Class R-X Certificates), and REMIC X, as holder of REMIC 3 Regular
Interests. The Trustee acknowledges receipt of the REMIC 2 Regular Interests
(which are uncertificated) and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the Certificates
(other than the Class C Certificates, the Class P Certificates and the Class R-X
Certificates), and REMIC X, as holder of REMIC 3 Regular Interests. The
interests evidenced by the Class R-3 Interest, the Regular Certificates (other
than the Class C Certificates and the Class P Certificates), and the REMIC 3
Regular Interests, constitute the entire beneficial ownership interest in REMIC
3.
(c) In exchange for the REMIC 2 Regular Interests and, concurrently
with the assignment to the Trustee thereof, pursuant to the written request of
the Depositor executed by an officer of the Depositor, the Trust Administrator
has executed, authenticated and delivered to or upon the order of the Depositor,
the Regular Certificates (other than the Class C Certificates and the Class P
Certificates) in authorized denominations evidencing (together with the Class
R-3 Interest and the REMIC 3 Regular Interests) the entire beneficial ownership
interest in REMIC 3.
(d) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC 3 Regular Interests for the benefit of the holders of the Class
C Certificates, the Class P Certificates, and the Class R-X Certificates. The
Trustee acknowledges receipt of the REMIC 3 Regular Interests and declares that
it holds and will hold the same in trust for the exclusive use and benefit of
the holders of the Class C Certificates, the Class P Certificates, and the Class
R-X Certificates. The interests evidenced by the Class C Certificates, the Class
P Certificates, and the Class R-X Certificates constitute the entire beneficial
ownership interest in REMIC X.
(e) In exchange for the REMIC 3 Regular Interests and, concurrently
with the assignment to the Trustee thereof, pursuant to the written request of
the Depositor executed by an officer of the Depositor, the Trust Administrator
has executed, authenticated and delivered to or upon the order of the Depositor,
the Class C Certificates and the Class P Certificates in authorized
denominations evidencing (together with the Class R-X Interest) the entire
beneficial ownership interest in REMIC X.
(f) Concurrently with (i) the assignment and delivery to the Trustee of
REMIC 1A (including the Residual Interest therein represented by the Class R-1A
Interest) and the acceptance by the Trustee thereof, pursuant to Section 2.01,
Section 2.02 and Section 2.08(a),
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(ii) the assignment and delivery to the Trustee of REMIC 1B (including the
Residual Interest therein represented by the Class R-1B Interest) and the
acceptance by the Trustee thereof, pursuant to Section 2.01, Section 2.02 and
Section 2.08(a), (iii) the assignment and delivery to the Trustee of REMIC 2
(including the Residual Interest therein represented by the Class R-2 Interest)
and the acceptance by the Trustee thereof, pursuant to Section 2.08(b), and (iv)
the assignment and delivery to the Trustee of the REMIC 3 Regular Interests
(including the Residual Interest in REMIC 3 represented by the Class R-3
Interest) and the acceptance by the Trustee thereof, pursuant to Section
2.08(d), the Trust Administrator, 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-1A Interest, the Class R-1B
Interest, the Class R-2 Interest and the Class R-3 Interest, and the Class R-X
Certificates evidencing the Class R-X Interest.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
Section 3.01 Master Servicer to Act as Master Servicer.
The Master Servicer shall service and administer the Mortgage Loans on
behalf of the Trustee and the Trust Administrator 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 respective Mortgage Loans and, to the extent consistent with
such terms, in the same manner in which it services and administers similar
mortgage loans for its own portfolio, giving due consideration to customary and
usual standards of practice of mortgage lenders and loan servicers administering
similar mortgage loans in the local areas where the related Mortgaged Property
is located but without regard to:
(i) any relationship that the Master Servicer, any
Sub-Servicer or any Affiliate of the Master Servicer or any
Sub-Servicer may have with the related Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Master Servicer or any Affiliate of the Master Servicer;
(ii) the Master Servicer's obligation to make Advances or
Servicing Advances; or
(iv) the Master Servicer's or any Sub-Servicer's right to
receive compensation for its services hereunder or with respect to any
particular transaction.
To the extent consistent with the foregoing, the Master Servicer shall
seek to maximize the timely and complete recovery of principal and interest on
the Mortgage Notes. Subject only to the above-described servicing standards and
the terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration in accordance with
policies and procedures
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generally accepted in the mortgage banking industry. Without limiting the
generality of the foregoing, the Master Servicer in its own name or in the name
of a Sub-Servicer is hereby authorized and empowered by the Trustee and the
Trust Administrator when the Master Servicer believes it appropriate in its best
judgment in accordance with the servicing standards set forth above, to execute
and deliver, on behalf of the Certificateholders, the Trustee and the Trust
Administrator, and upon notice to the Trustee and the Trust Administrator, 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, the
Trust Administrator, on behalf of the Trustee, shall execute, at the written
request of the Master Servicer, and furnish to the Master Servicer and any
Sub-Servicer such documents as are necessary or appropriate to enable the Master
Servicer or any Sub-Servicer to carry out their servicing and administrative
duties hereunder, and the Trustee and the Trust Administrator each hereby grants
to the Master Servicer and each Sub-Servicer a power of attorney to carry out
such duties including a power of attorney to take title to Mortgaged Properties
after foreclosure on behalf of the Trust Administrator, the Trustee and the
Certificateholders. The Trustee and the Trust Administrator shall execute a
separate power of attorney in favor of the Master Servicer and/or each
Sub-Servicer for the purposes described herein to the extent necessary or
desirable to enable the Master Servicer to perform its duties hereunder. Neither
the Trustee nor the Trust Administrator shall be liable for the actions of the
Master Servicer or any Sub-Servicers under such powers of attorney.
Subject to Section 3.09 hereof, in accordance with the standards of the
preceding paragraph, the Master Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from collections on the related
Mortgage Loans from the Mortgagors pursuant to Section 3.09, and further as
provided in Section 3.11. Any cost incurred by the Master Servicer or by
Sub-Servicers in effecting the timely payment of taxes and assessments on a
Mortgaged Property shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
Notwithstanding anything in this Agreement to the contrary, the Master
Servicer may not make any future advances 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
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Section 1001 of the Code (or final, temporary or proposed Treasury regulations
promulgated thereunder) and (B) cause any Trust REMIC to fail to qualify as a
REMIC under the Code or the imposition of any tax on "prohibited transactions"
or "contributions after the startup date" under the REMIC Provisions.
The Master Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Master
Servicer from the responsibilities or liabilities arising under this Agreement.
For each Mortgage Loan, the Master Servicer will accurately and fully
report its borrower credit files to each of the Credit Repositories in a timely
manner.
Section 3.02 Sub-Servicing Agreements Between the Master Servicer and
Sub-Servicers.
(a) The Master Servicer may enter into Sub-Servicing Agreements
provided (i) that such agreements would not result in a withdrawal or a
downgrading by any Rating Agency of the ratings on any Class of Certificates or
any of the NIM Notes, as evidenced by a letter to that effect delivered by each
Rating Agency to the Depositor, the NIMS Insurer and the Guarantor and (ii)
that, except in the case of any Sub-Servicing Agreements the Master Servicer may
enter into with Washington Mutual, Inc. or any Affiliate thereof, the NIMS
Insurer or the Guarantor (as provided in Section 1.04) shall have consented to
such Sub-Servicing Agreements (which consent shall not be unreasonably withheld)
with Sub-Servicers, for the servicing and administration of the Mortgage Loans.
That certain Subservicing Agreement by and between the Master Servicer and
Washington Mutual Bank, FA dated April 9, 2001 is hereby acknowledged as being
permitted under this Agreement and meeting the requirements applicable to
Sub-Servicing Agreements set forth in this Agreement. The Trustee and the Trust
Administrator are hereby authorized to acknowledge, at the request of the Master
Servicer, any Sub-Servicing Agreement that meets the requirements applicable to
Sub-Servicing Agreements set forth in this Agreement and that is otherwise
permitted under this Agreement.
Each Sub-Servicer shall be (i) authorized to transact business in the
state or states in which the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution the deposit accounts in which
are insured by the FDIC and (iii) a ▇▇▇▇▇▇ ▇▇▇ approved mortgage servicer. Each
Sub-Servicing Agreement must impose on the Sub-Servicer requirements conforming
to the provisions set forth in Section 3.08. The Master Servicer will examine
each Sub-Servicing Agreement and will be familiar with the terms thereof. The
terms of any Sub-Servicing Agreement will not be inconsistent with any of the
provisions of this Agreement. The Master Servicer and the Sub-Servicers may
enter into and make amendments to the Sub-Servicing Agreements or enter into
different forms of Sub-Servicing Agreements; provided, however, that any such
amendments or different forms shall be consistent with and not violate the
provisions of this Agreement, and that no such amendment or different form shall
be made or entered into which could be reasonably expected to be materially
adverse to the interests of the Certificateholders, without the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights. Any
variation without the consent of the Holders of Certificates entitled to at
least 66% of the Voting Rights from the provisions set forth in Section 3.08
relating to insurance or priority requirements of
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Sub-Servicing Accounts, or credits and charges to the Sub-Servicing Accounts or
the timing and amount of remittances by the Sub-Servicers to the Master
Servicer, are conclusively deemed to be inconsistent with this Agreement and
therefore prohibited. The Master Servicer shall deliver to the Guarantor, the
NIMS Insurer, the Trust Administrator and the Trustee copies of all
Sub-Servicing Agreements, and any amendments or modifications thereof, promptly
upon the Master Servicer's execution and delivery of such instruments.
(b) As part of its servicing activities hereunder, the Master Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, the Trust Administrator and the Certificateholders,
shall enforce the obligations of each Sub-Servicer under the related
Sub-Servicing Agreement and, subject to the last sentence of this paragraph, of
the Seller under the Mortgage Loan Purchase Agreement including, without
limitation, any obligation to make advances in respect of delinquent payments as
required by a Sub-Servicing Agreement, or to purchase or otherwise remedy as
contemplated herein a Mortgage Loan on account of missing or defective
documentation or on account of a breach of a representation, warranty or
covenant, as described in Section 2.03(a). Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Sub-Servicing
Agreements, and the pursuit of other appropriate remedies, shall be in such form
and carried out to such an extent and at such time as the Master Servicer, in
its good faith business judgment, would require were it the owner of the related
Mortgage Loans. The Master Servicer shall pay the costs of such enforcement at
its own expense, and shall be reimbursed therefor only (i) from a general
recovery resulting from such enforcement, to the extent, if any, that such
recovery exceeds all amounts due in respect of the related Mortgage Loans or
(ii) from a specific recovery of costs, expenses or attorneys' fees against the
party against whom such enforcement is directed. Enforcement of the Mortgage
Loan Purchase Agreement against the Seller shall be effected by the Master
Servicer to the extent it is not the Seller, and otherwise by the Trust
Administrator or the Trustee, in accordance with the foregoing provisions of
this paragraph.
Section 3.03 Successor Sub-Servicers.
The Master Servicer, with the written consent of the NIMS Insurer or
the Guarantor (as provided in Section 1.04), shall be entitled to terminate any
Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer
pursuant to any Sub-Servicing Agreement in accordance with the terms and
conditions of such Sub-Servicing Agreement. In the event of termination of any
Sub-Servicer, all servicing obligations of such Sub-Servicer shall be assumed
simultaneously by the Master Servicer without any act or deed on the part of
such Sub-Servicer or the Master Servicer, and the Master Servicer either shall
service directly the related Mortgage Loans or shall enter into a Sub-Servicing
Agreement with a successor Sub-Servicer which qualifies under Section 3.02.
Any Sub-Servicing Agreement shall include the provision that such
agreement may be immediately terminated by the Trustee or the Trust
Administrator without fee, in accordance with the terms of this Agreement, and
the Trustee or the Trust Administrator shall so terminate such Sub-Servicing
Agreement at the direction of the NIMS Insurer or the Guarantor (as provided in
Section 1.04) in the event that the Master Servicer (or the Trustee or the Trust
Administrator, if then acting as Master Servicer) shall, for any reason, no
longer be the Master Servicer (including termination due to a Master Servicer
Event of Default).
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Section 3.04 Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer and a Sub-Servicer or reference to actions taken through a Sub-Servicer
or otherwise, the Master Servicer shall remain obligated and primarily liable to
the Trustee and the Certificateholders for the servicing and administering of
the Mortgage Loans in accordance with the provisions of Section 3.01 without
diminution of such obligation or liability by virtue of such Sub-Servicing
Agreements or arrangements or by virtue of indemnification from the Sub-Servicer
and to the same extent and under the same terms and conditions as if the Master
Servicer alone were servicing and administering the Mortgage Loans. The Master
Servicer shall be entitled to enter into any agreement with a Sub-Servicer for
indemnification of the Master Servicer by such Sub-Servicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification and no such indemnification shall be an expense of the Trust.
Section 3.05 No Contractual Relationship Between Sub-Servicers and the NIMS
Insurer, the Guarantor, the Trustee, the Trust Administrator 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 Trust Administrator, the Trustee, the NIMS
Insurer, the Guarantor and the Certificateholders shall not be deemed parties
thereto and shall have no claims, rights, obligations, duties or liabilities
with respect to the Sub-Servicer except as set forth in Section 3.06. The Master
Servicer shall be solely liable for all fees owed by it to any Sub-Servicer,
irrespective of whether the Master Servicer's compensation pursuant to this
Agreement is sufficient to pay such fees and such fees shall not be an expense
of the Trust.
Section 3.06 Assumption or Termination of Sub-Servicing Agreements by Trust
Administrator.
In the event the Master Servicer shall for any reason no longer be the
master servicer (including by reason of the occurrence of a Master Servicer
Event of Default), the Trust Administrator or its designee shall thereupon
assume all of the rights and obligations of the Master Servicer under each
Sub-Servicing Agreement that the Master Servicer may have entered into, unless
the Trustee or the Trust Administrator elects to terminate any Sub-Servicing
Agreement in accordance with its terms as provided in Section 3.03. Upon such
assumption, the Trust Administrator, its designee or the successor servicer for
the Trust Administrator appointed pursuant to Section 7.02 shall be deemed,
subject to Section 3.03, to have assumed all of the Master Servicer's interest
therein and to have replaced the Master Servicer as a party to each
Sub-Servicing Agreement to the same extent as if each Sub-Servicing Agreement
had been assigned to the assuming party, except that (i) the Master Servicer
shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement that arose before it ceased to be the Master Servicer
and (ii) none of the Trust Administrator, its designee or any successor Master
Servicer shall be deemed to have assumed any liability or obligation of the
Master Servicer that arose before it ceased to be the Master Servicer.
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The Master Servicer at its own expense and without reimbursement shall,
upon request of the Trust Administrator, deliver to the assuming party all
documents and records relating to each Sub-Servicing Agreement and the Mortgage
Loans then being serviced and an accounting of amounts collected and held by or
on behalf of it, and otherwise use its best efforts to effect the orderly and
efficient transfer of the Sub-Servicing Agreements to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments.
The Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or, if applicable, any penalty interest, or (ii) extend the due
dates for the Monthly Payments due on a Mortgage Note for a period of not
greater than 180 days; provided that any extension pursuant to this clause (ii)
shall not affect the amortization schedule of any Mortgage Loan for purposes of
any computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, the Master Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to Section 4.04
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements, subject to Section 4.04(d)
pursuant to which the Master Servicer shall not be required to make any such
advances that are Nonrecoverable Advances. Notwithstanding the foregoing, in the
event that any Mortgage Loan is in default or, in the judgment of the Master
Servicer, such default is reasonably foreseeable, the Master Servicer,
consistent with the standards set forth in Section 3.01, may also waive, modify
or vary any term of such Mortgage Loan (including modifications that would
change the Mortgage Rate, forgive the payment of principal or interest or extend
the final maturity date of such Mortgage Loan no later than two years with
respect to a Group I Mortgage Loan), accept payment from the related Mortgagor
of an amount less than the Stated Principal Balance in final satisfaction of
such Mortgage Loan (such payment, a "Short Pay-off") or consent to the
postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor; provided, that in the judgment of the Master
Servicer, any such modification, waiver or amendment could reasonably be
expected to result in collections and other recoveries in respect of such
Mortgage Loans in excess of Net Liquidation Proceeds that would be recovered
upon the foreclosure of, or other realization upon, such Mortgage Loan and
provided further, that the NIMS Insurer's prior written consent shall be
required for any modification, waiver or amendment if the aggregate number of
outstanding Mortgage Loans which have been modified, waived or amended exceeds
5% of the number of Closing Date Mortgage Loans as of the Cut-off Date. If the
Component Principal Balance of the I-M3 Component has been reduced to zero and
Class C Certificates are no longer outstanding, the Master Servicer shall not
take any action pursuant to the preceding sentence with respect to a Group I
Mortgage Loan without obtaining the prior written consent of the Guarantor to
such modification. The Master Servicer shall submit to the Guarantor with its
request for consent, such information related to the proposed modification as
can be expected to be needed by the Guarantor to evaluate the Master Servicer's
request, including the terms of the proposed modification and the reasons for
the Master Servicer's decision that such Group I Mortgage Loan should be
modified. The Guarantor shall be deemed to have consented to the Master
Servicer's request in the event that the Guarantor does not either provide the
Master Servicer with its
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written consent to such requested modification or written notice of its
objection to such modification within five Business Days of its receipt of the
Master Servicer's request. Requests for modification shall be sent to the
Guarantor at: ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇,
Attn: Vice President-Loss Mitigation. With respect to each Group I Mortgage Loan
which is modified with the consent of the Guarantor, the Master Servicer shall
give written notice to the NIMS Insurer to the address set forth in Section
11.05 and to the Guarantor to the following address: ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attn: Bond Administration. Such notice
shall be delivered within thirty Business Days following such modification and
shall include information with respect to the modification, including, without
limitation, the interest rate, the principal balance and the maturity date of
such Group I Mortgage Loan before and after such modification.
Section 3.08 Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage Loan
pursuant to a Sub-Servicing Agreement, the Sub-Servicer shall be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall be
entitled "Bankers Trust Company of California, N.A., as Trust Administrator for
the benefit of First Union National Bank, as Trustee, in trust for registered
Holders of Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1. The Sub-Servicer shall be required to deposit in the clearing
account (which account must be an Eligible Account) in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event more than
one Business Day after the Sub-Servicer's receipt thereof, all proceeds of
Mortgage Loans received by the Sub-Servicer less its servicing compensation to
the extent permitted by the Sub-Servicing Agreement, and shall thereafter
deposit such amounts in the Sub-Servicing Account, in no event more than two
Business Days after the deposit of such funds into the clearing account. The
Sub-Servicer shall thereafter be required to deposit such proceeds in the
Collection Account or remit such proceeds to the Master Servicer for deposit in
the Collection Account not later than two Business Days after the deposit of
such amounts in the Sub-Servicing Account. For purposes of this Agreement, the
Master Servicer shall be deemed to have received payments on the Mortgage Loans
when the Sub-Servicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items; Servicing
Accounts.
The Master Servicer shall establish and maintain, or cause to be
established and maintained, one or more accounts (the "Servicing Accounts").
Servicing Accounts shall be Eligible Accounts. The Master Servicer shall deposit
in the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Master Servicer's receipt thereof, all
collections from the Mortgagors (or related advances from Sub-Servicers) for the
payment of taxes, assessments, hazard insurance premiums and comparable items
for the account of the Mortgagors ("Escrow Payments") collected on account of
the Mortgage Loans and shall thereafter deposit such Escrow Payments in the
Servicing Accounts, in no event more than two Business Days after the deposit of
such funds in the clearing account, for the purpose of effecting the payment of
any such items as required under the terms of this Agreement. Withdrawals of
amounts from a Servicing Account may be made only to (i) effect payment of
taxes,
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assessments, hazard insurance premiums, and comparable items; (ii) reimburse the
Master Servicer (or a Sub-Servicer to the extent provided in the related
Sub-Servicing Agreement) out of related collections for any advances made
pursuant to Section 3.01 (with respect to taxes and assessments) and Section
3.14 (with respect to hazard insurance); (iii) refund to Mortgagors any sums as
may be determined to be overages; (iv) pay interest, if required and as
described below, to Mortgagors on balances in the Servicing Account; (v) clear
and terminate the Servicing Account upon the termination of the Master
Servicer's obligations and responsibilities in respect of the Mortgage Loans
under this Agreement in accordance with Article IX or (vi) recover amounts
deposited in error. As part of its servicing duties, the Master Servicer or
Sub-Servicers shall pay to the Mortgagors interest on funds in Servicing
Accounts, to the extent required by law and, to the extent that interest earned
on funds in the Servicing Accounts is insufficient, to pay such interest from
its or their own funds, without any reimbursement therefor. To the extent that a
Mortgage does not provide for Escrow Payments, the Master Servicer shall
determine whether any such payments are made by the Mortgagor in a manner and at
a time that avoids the loss of the Mortgaged Property due to a tax sale or the
foreclosure of a tax lien. The Master Servicer assumes full responsibility for
the payment of all such bills within such time and shall effect payments of all
such bills irrespective of the Mortgagor's faithful performance in the payment
of same or the making of the Escrow Payments and shall make advances from its
own funds to effect such payments; provided, however, that such advances shall
constitute Servicing Advances.
Section 3.10 Collection Account and Distribution Account.
(a) On behalf of the Trust Fund, the Master Servicer shall
establish and maintain, or cause to be established and maintained, one or more
accounts (such account or accounts, the "Collection Account"), held in trust for
the benefit of the Trustee and the Certificateholders. On behalf of the Trust
Fund, the Master Servicer shall deposit or cause to be deposited in the clearing
account (which account must be an Eligible Account) in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event more than
one Business Day after the Master Servicer's receipt thereof, and shall
thereafter deposit in the Collection Account, in no event more than two Business
Days after the deposit of such funds into the clearing account, as and when
received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the related Mortgage Loans due on or before
the Cut-off Date or payments (other than Principal Prepayments) received by it
on or prior to the Cut-off Date but allocable to a Due Period subsequent
thereto):
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds (other than
proceeds collected in respect of any particular REO Property and
amounts paid by the Master Servicer in connection with a purchase of
Mortgage Loans and REO Properties pursuant to Section 9.01);
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(iv) any amounts required to be deposited pursuant to Section 3.12
in connection with any losses realized on Permitted Investments with
respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Master Servicer
pursuant to the second paragraph of Section 3.14(a) in respect of any
blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with Section 2.03, Section 3.16 or Section 9.01 and all
Master Servicer Prepayment Charge Payment Amounts required to be
deposited in the Collection Account pursuant to Section 2.03;
(vii) all Substitution Shortfall Amounts;
(viii) all Prepayment Charges collected by the Master Servicer;
and
(ix) without duplication, all payments of claims received by the
Master Servicer under the PMI Policy.
For purposes of the immediately preceding sentence, the Cut-off Date
with respect to any Qualified Substitute Mortgage Loan shall be deemed to be the
date of substitution.
The foregoing requirements for deposit in the Collection Accounts shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges
(other than Prepayment Charges) need not be deposited by the Master Servicer in
the Collection Account and shall, upon collection, belong to the Master Servicer
as additional compensation for its servicing activities. In the event the Master
Servicer shall deposit in the Collection Account any amount not required to be
deposited therein, it may at any time withdraw such amount from the Collection
Account, any provision herein to the contrary notwithstanding.
(b) On behalf of the Trust Fund, the Trust Administrator, as agent
for 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 Trust Administrator in immediately available funds
for deposit in the Distribution Account on or before 3:00 p.m. New York time (i)
on the Master Servicer Remittance Date, that portion of the Group I Available
Funds and the Group II Available Funds (calculated without regard to the
references in the definition thereof to amounts that may be withdrawn from the
Distribution Account) for the related Distribution Date then on deposit in the
Collection Account, the amount of all Prepayment Charges on the Prepayment
Charge Schedule collected by the Master Servicer in connection with any of the
Mortgage Loans and any Master Servicer Prepayment Charge Payment Amounts then on
deposit in the Collection Account and the amount of any funds reimbursable to an
Advancing Person pursuant to Section 3.27 and (ii) on each Business Day as of
the commencement of which the balance on deposit in the Collection Account
exceeds $75,000 following any withdrawals pursuant to the next succeeding
sentence, the amount of such excess, but only if the Collection Account
constitutes an Eligible Account solely pursuant to
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clause (ii) of the definition of "Eligible Account." If the balance on deposit
in the Collection Account exceeds $75,000 as of the commencement of business on
any Business Day and the Collection Account constitutes an Eligible Account
solely pursuant to clause (ii) of the definition of "Eligible Account," the
Master Servicer shall, on or before 3:00 p.m. New York time on such Business
Day, withdraw from the Collection Account any and all amounts payable or
reimbursable to the Depositor, the Master Servicer, the Trustee, the Trust
Administrator, the Seller 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, the
Trust Administrator, the NIMS Insurer, the Guarantor and the Depositor of the
location of the Collection Account maintained by it when established and prior
to any change thereof. The Trust Administrator shall give notice to the Master
Servicer, the Trustee, the NIMS Insurer, the Guarantor 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 Trust Administrator 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 and the Trust Administrator 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 Trust Administrator
for deposit in the Distribution Account any amount not required to be deposited
therein, it may at any time request that the Trust Administrator withdraw, and
the Trust Administrator shall withdraw, such amount from the Distribution
Account and remit to the Master Servicer any such amount, any provision herein
to the contrary notwithstanding. In addition, the Master Servicer shall deliver
to the Trust Administrator from time to time for deposit, and the Trust
Administrator shall so deposit, in the Distribution Account:
(i) any Advances, as required pursuant to Section 4.04, unless
delivered directly to the Trustee or the Trust Administrator by an
Advancing Person;
(ii) any amounts required to be deposited pursuant to Section
3.23(d) or (f) in connection with any REO Property;
(iii) any amounts to be paid by the Master Servicer in connection
with a purchase of Mortgage Loans and REO Properties pursuant to
Section 9.01;
(iv) any amounts required to be deposited pursuant to Section 3.24
in connection with any Prepayment Interest Shortfalls; and
(v) any Stayed Funds, as soon as permitted by the federal
bankruptcy court having jurisdiction in such matters.
(e) Promptly upon receipt of any Stayed Funds, whether from the
Master Servicer, a trustee in bankruptcy, federal bankruptcy court or other
source, the Trust
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Administrator shall deposit such funds in the Distribution Account, subject to
withdrawal thereof pursuant to Section 7.02(b) or as otherwise permitted
hereunder.
Section 3.11 Withdrawals from the Collection Account and Distribution Account.
(a) The Master Servicer shall, from time to time, make withdrawals
from the Collection Account, for any of the following purposes or as described
in Section 4.04, without priority:
(i) to remit to the Trust Administrator, as agent for the Trustee,
for deposit in the Distribution Account the amounts required to be so
remitted pursuant to Section 3.10(b) or permitted to be so remitted
pursuant to the first sentence of Section 3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Master Servicer
for Advances, but only to the extent of amounts received which
represent Late Collections (net of the related Servicing Fees) of
Monthly Payments on the related Mortgage Loans in accordance with the
provisions of Section 4.04;
(iii) subject to Section 3.16(d), to pay the Master Servicer or
any Sub-Servicer (a) any unpaid Servicing Fees or (b) any unreimbursed
Servicing Advances with respect to each Mortgage Loan, but only to the
extent of any Late Collections, Liquidation Proceeds, Insurance
Proceeds or other amounts as may be collected by the Master Servicer
from a Mortgagor, or otherwise received with respect to such Mortgage
Loan;
(iv) to pay to the Master Servicer as servicing compensation (in
addition to the Servicing Fee) on the Master Servicer Remittance Date
any interest or investment income earned on funds deposited in the
Collection Account;
(v) to pay to the Master Servicer or the Seller, as the case may
be, with respect to each Mortgage Loan that has previously been
purchased or replaced pursuant to Section 2.03 or Section 3.16(c) all
amounts received thereon subsequent to the date of purchase or
substitution, as the case may be;
(vi) to reimburse the Master Servicer for any Advance or Servicing
Advance previously made which the Master Servicer has determined to be
a Nonrecoverable Advance in accordance with the provisions of Section
4.04;
(vii) to reimburse the Master Servicer or the Depositor for
expenses incurred by or reimbursable to the Master Servicer or the
Depositor, as the case may be, pursuant to Section 6.03;
(viii) to reimburse the Guarantor (with respect to Group I
Mortgage Loans only), the NIMS Insurer, the Master Servicer, the Trust
Administrator or the Trustee, as the case may be, for enforcement
expenses reasonably incurred in respect of the breach or defect giving
rise to the purchase obligation under Section 2.03 of this Agreement
that were included in the Purchase Price of the Mortgage Loan,
including any expenses arising out of the enforcement of the purchase
obligation;
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(ix) to pay, or to reimburse the Master Servicer for advances in
respect of, expenses incurred in connection with any Mortgage Loan
pursuant to Section 3.16(b); and
(x) to clear and terminate the Collection Account pursuant to
Section 9.01.
The Master Servicer shall keep and maintain separate accounting, on an
individual Mortgage Loan basis, for the purpose of justifying any withdrawal
from the Collection Account, to the extent held by or on behalf of it, pursuant
to subclauses (ii), (iii), (v), (vi), (viii) and (ix) above. The Master Servicer
shall provide written notification to the Trustee, the Trust Administrator, the
NIMS Insurer and the Guarantor, on or prior to the next succeeding Master
Servicer Remittance Date, upon making any withdrawals from the Collection
Account pursuant to subclause (vii) above.
(b) The Trust Administrator shall, from time to time, make
withdrawals from the Distribution Account, for any of the following purposes,
without priority:
(i) to make distributions to Certificateholders in accordance with
Section 4.01;
(ii) to pay to itself and the Trustee amounts to which it is
entitled pursuant to Section 8.05 or to pay any other Extraordinary
Trust Fund Expenses;
(iii) to pay to itself any interest income earned on funds
deposited in the Distribution Account pursuant to Section 3.12(c);
(iv) to reimburse itself and the Trustee pursuant to Section 7.02
or pursuant to Section 7.01 to the extent such amounts in Section 7.01
were not reimbursed by the Master Servicer;
(v) to pay any amounts in respect of taxes pursuant to Section
10.01(g);
(vi) to remit to the Master Servicer any amount deposited in the
Distribution Account by the Master Servicer but not required to be
deposited therein in accordance with Section 3.10(d);
(vii) to pay to an Advancing Person reimbursements for Advances
and/or Servicing Advances pursuant to Section 3.27;
(viii) to clear and terminate the Distribution Account pursuant to
Section 9.01; and
(ix) to pay the PMI Insurer the PMI Insurer Fee based on
information received from the Master Servicer.
Section 3.12 Investment of Funds in the Collection Account and the Distribution
Account.
(a) The Master Servicer may direct any depository institution
maintaining the Collection Account and any REO Account (for purposes of this
Section 3.12, an "Investment
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Account"), and the Trust Administrator, in its individual capacity, may direct
any depository institution maintaining the Distribution Account (for purposes of
this Section 3.12, the Distribution Account is also an "Investment Account"), to
invest the funds in such Investment Account in one or more Permitted Investments
bearing interest or sold at a discount, and maturing, unless payable on demand,
(i) no later than the Business Day immediately preceding the date on which such
funds are required to be withdrawn from such account pursuant to this Agreement,
if a Person other than the Trust Administrator is the obligor thereon and (ii)
no later than the date on which such funds are required to be withdrawn from
such account pursuant to this Agreement, if the Trust Administrator is the
obligor thereon. All such Permitted Investments shall be held to maturity,
unless payable on demand. Any investment of funds in an Investment Account shall
be made in the name of the Trust Administrator (in its capacity as such), as
agent for the Trustee, or in the name of a nominee of the Trust Administrator.
The Trust Administrator shall be entitled to sole possession (except with
respect to investment direction of funds held in the Collection Account and any
REO Account and any income and gain realized thereon) over each such investment,
and any certificate or other instrument evidencing any such investment shall be
delivered directly to the Trust Administrator or its agent, together with any
document of transfer necessary to transfer title to such investment to the Trust
Administrator 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 Trust Administrator shall:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on
such date; and
(y) demand payment of all amounts due thereunder promptly upon
actual notice by a Responsible Officer of the Trust
Administrator that such Permitted Investment would not
constitute a Permitted Investment in respect of funds
thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account and any REO Account held by or on behalf of
the Master Servicer shall be for the benefit of the Master Servicer and shall be
subject to its withdrawal in accordance with Section 3.11 or Section 3.23, as
applicable. The Master Servicer shall deposit in the Collection Account or any
REO Account, as applicable, the amount of any loss of principal incurred in
respect of any such Permitted Investment made with funds in such accounts
immediately upon realization of such loss.
(c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by or on behalf of the Trust
Administrator shall be for the benefit of the Trust Administrator and shall be
subject to its withdrawal at any time. The Trust Administrator shall deposit in
the Distribution Account, the amount of any loss of principal incurred in
respect of any such Permitted Investment made with funds in such accounts
immediately upon realization of such loss.
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(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 Trust Administrator may, and subject to Section 8.01
and Section 8.02(v), upon the request of the Holders of Certificates
representing more than 50% of the Voting Rights allocated to any Class of
Certificates shall, take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of appropriate
proceedings.
Section 3.13 Agreement to Appoint a Special Servicer.
(a) The Guarantor may require the Master Servicer to enter into a
special subservicing agreement with a servicer with expertise in servicing
delinquent mortgage loans as designated by the Guarantor (the "Special
Servicer") on or after the earliest Distribution Date with respect to which the
aggregate Component Principal Balance of the I-M3 Component and the aggregate
Certificate Principal Balance of the Class C Certificates has been reduced to
zero. Such special subservicing agreement shall relate to the servicing of only
Group I Mortgage Loans that (x) have been delinquent in payment with respect to
three or more Monthly Payments (provided, however, that the third such Monthly
Payment shall not be deemed to be delinquent for purposes of this clause (x)
until the close of business on the last day of the month in which such Monthly
Payment first became due) and (y) have been transferred to the Special Servicer
in accordance with this Section 3.13 and the related special subservicing
agreement (a "Specially Serviced Mortgage Loan").
(b) The special subservicing agreement shall be consistent with
the provisions of this Agreement, including but not limited to this Section
3.13, Section 3.02 (a), Section 3.02 (b), and Section 3.08, except as provided
otherwise in this Section 3.13. In addition, the special subservicing agreement
shall be on terms which shall be reasonably acceptable to the Guarantor and the
Master Servicer and shall provide, at a minimum that:
(1) the Special Servicer shall at all times, meet the eligibility
criteria described in Section 3.02(a);
(2) the Special Servicer shall service only the Specially Serviced
Mortgage Loans in a manner consistent with the provisions with this
Agreement except as provided otherwise in the special subservicing
agreement;
(3) the Special Servicer shall use the ▇▇▇▇▇▇ ▇▇▇ foreclosure
network (and pay the customary fees therefor) for foreclosures and
bankruptcies relating to Specially Serviced Mortgage Loans;
(4) the Special Servicer shall use the ▇▇▇▇▇▇ Mae disposition
service (and pay the customary fees therefor) for the disposition of
REO Property related to Specially Serviced Mortgage Loans;
(5) the Special Servicer shall make Servicing Advances on the
Specially Serviced Mortgage Loans to the same extent and in the same
manner as the Master Servicer with respect to the Group I Mortgage
Loans pursuant to this Agreement;
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(6) the Special Servicer shall be entitled to receive the
Servicing Fee with respect to all Specially Serviced Mortgage Loans;
(7) prior to the transfer of servicing to the Special Servicer,
the Master Servicer and the Special Servicer shall have provided all
notices relating to such transfer of servicing as required to be
delivered to the borrowers by applicable state and federal law;
(8) the Special Servicer shall indemnify the Master Servicer, the
Trust Administrator and the Trustee for any liabilities to them arising
from failures of the Special Servicer to perform its obligations
according to the terms of the subservicing agreement;
(9) the Master Servicer shall promptly give notice thereof to the
Trustee, the Trust Administrator, the NIMS Insurer and the Guarantor of
the transfer of servicing to the Special Servicer, including the loan
number together with the borrower's name and the unpaid principal
balance of the transferred Mortgage Loan at the time of transfer;
(10) each of the respective obligations, duties, and liabilities
of the Master Servicer and the Special Servicer (or either of them)
with respect to the servicing of the Specially Serviced Mortgage Loans
that have arisen prior to the date on which the servicing of such
Specially Serviced Mortgage Loan was transferred to the Special
Servicer (the "Effective Date"), or that arise on and after the
Effective Date, under this Agreement and the subservicing agreement and
that remain unperformed or unsatisfied shall survive any transfer of
servicing;
(11) once a Group I Mortgage Loan becomes a Specially Serviced
Mortgage Loan, such Mortgage Loan shall remain a Specially Serviced
Mortgage Loan, and shall continue to be serviced by the Special
Servicer, until the earlier of the liquidation or other disposition of
such Mortgage Loan or the termination of the subservicing agreement,
regardless of delinquency status or otherwise;
(12) the Guarantor may remove the Special Servicer if the Special
Servicer at any time fails to meet any of the above criteria or
otherwise, in the judgment of the Guarantor, fails to perform according
to the terms of the subservicing agreement and the provisions of this
Section 3.13; provided that prior to any such removal the Guarantor
shall designate a successor Special Servicer meeting the requirements
of this Section 3.13, and no removal of a Special Servicer shall be
effective until a successor Special Servicer has entered into a special
subservicing agreement meeting the requirements of this Section 3.13
and agreed to assume the duties of the Special Servicer or the Master
Servicer has undertaken such duties; and
(13) in connection with any transfer of a Group I Mortgage Loan to
the Special Servicer as a Specially Serviced Mortgage Loan, the Master
Servicer shall execute any appropriate assignments or other documents
reasonable and necessary to further the prosecution of the Special
Servicer obligations under the special subservicing agreement.
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Section 3.14 Maintenance of Hazard Insurance and Errors and Omissions and
Fidelity Coverage.
(a) The Master Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the least of (i) the then
current principal balance of such Mortgage Loan, (ii) the amount necessary to
fully compensate for any damage or loss to the improvements that are a part of
such property on a replacement cost basis and (iii) the maximum insurable value
of the improvements which are a part of such Mortgaged Property, in each case in
an amount not less than such amount as is necessary to avoid the application of
any coinsurance clause contained in the related hazard insurance policy. The
Master Servicer shall also cause to be maintained fire insurance with extended
coverage on each REO Property in an amount which is at least equal to the lesser
of (i) the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding principal balance of the related Mortgage Loan
at the time it became an REO Property, plus accrued interest at the Mortgage
Rate and related Servicing Advances. The Master Servicer will comply in the
performance of this Agreement with all reasonable rules and requirements of each
insurer under any such hazard policies. Any amounts to be collected by the
Master Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing loans held for its own account,
subject to the terms and conditions of the related Mortgage and Mortgage Note)
shall be deposited in the Collection Account, subject to withdrawal pursuant to
Section 3.11, if received in respect of a Mortgage Loan, or in the REO Account,
subject to withdrawal pursuant to Section 3.23, if received in respect of an REO
Property. Any cost incurred by the Master Servicer in maintaining any such
insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
It is understood and agreed that no earthquake or other additional insurance is
to be required of any Mortgagor other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property or REO Property is at any time
in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards and flood insurance has been
made available, the Master Servicer will cause to be maintained a flood
insurance policy in respect thereof. Such flood insurance shall be in an amount
equal to the lesser of (i) the unpaid principal balance of the related Mortgage
Loan and (ii) the maximum amount of such insurance available for the related
Mortgaged Property under the national flood insurance program (assuming that the
area in which such Mortgaged Property is located is participating in such
program).
In the event that the Master Servicer shall obtain and maintain a
blanket policy with an insurer having a General Policy Rating of A:X or better
in Best's Key Rating Guide (or such other rating that is comparable to such
rating) insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first two sentences of this Section 3.14, it being understood and agreed that
such policy may contain a deductible clause, in which case the Master Servicer
shall, in the event that there shall not have been maintained on the related
Mortgaged Property or REO Property a policy complying with the first two
sentences of this Section 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection Account
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from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
prepare and present, on behalf of itself, the Trustee, the Trust Administrator
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 ▇▇▇▇▇▇ ▇▇▇ if it were the purchaser of the Mortgage
Loans, unless the Master Servicer or any of its Affiliates has obtained a waiver
of such requirements from ▇▇▇▇▇▇ Mae. The Master Servicer shall also maintain a
fidelity bond in the form and amount that would meet the requirements of ▇▇▇▇▇▇
▇▇▇, unless the Master Servicer or any of its Affiliates has obtained a waiver
of such requirements from ▇▇▇▇▇▇ Mae. The Master Servicer shall provide the
Trustee, the Trust Administrator, the NIMS Insurer and the Guarantor (upon such
party's reasonable request) with copies of any such insurance policies and
fidelity bond. The Master Servicer shall be deemed to have complied with this
provision if an Affiliate of the Master Servicer has such errors and omissions
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 and the
Trust Administrator. The Master Servicer shall also cause each Sub-Servicer to
maintain a comparable policy of insurance covering errors and omissions and a
fidelity bond meeting such requirements.
Section 3.15 Enforcement of Due-On-Sale Clauses; Assumption Agreements.
The Master Servicer shall, to the extent it has knowledge of any
conveyance or prospective conveyance of any Mortgaged Property by any Mortgagor
(whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains or is to remain liable under the Mortgage Note and/or the
Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan
under the "due-on-sale" clause, if any, applicable thereto; provided, however,
that the Master Servicer shall not be required to take such action if in its
sole business judgment the Master Servicer believes that the collections and
other recoveries in respect of such Mortgage Loans could reasonably be expected
to be maximized if the Mortgage Loan were not accelerated, and the Master
Servicer shall not exercise any such rights if prohibited by law from doing so.
If the Master Servicer reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, or if any of the other conditions set forth
in the proviso to the preceding sentence apply, the Master Servicer will enter
into an assumption and modification agreement from or with the person to whom
such property has been conveyed or is proposed to be conveyed, pursuant to which
such person becomes liable under the Mortgage Note and, to the extent permitted
by applicable state law, the Mortgagor remains liable thereon. The Master
Servicer may also enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note, provided that no such substitution shall be effective unless such
person satisfies the underwriting criteria of the Master Servicer and has a
credit risk rating at least equal to that of the original Mortgagor. In
connection with any assumption, modification or substitution, the Master
Servicer shall apply such underwriting standards and follow such practices and
procedures as shall be normal and
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usual in its general mortgage servicing activities and as it applies to other
mortgage loans owned solely by it. The Master Servicer shall not take or enter
into any assumption and modification agreement, however, unless (to the extent
practicable under the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy, or a new policy meeting the requirements of this Section is obtained.
Any fee collected by the Master Servicer in respect of any assumption,
modification or substitution of liability agreement will be retained by the
Master Servicer as additional servicing compensation. In connection with any
such assumption, no material term of the Mortgage Note (including but not
limited to the related Mortgage Rate and the amount of the Monthly Payment) may
be amended or modified, except as otherwise required pursuant to the terms
thereof. The Master Servicer shall notify the Trustee, the Trust Administrator,
the NIMS Insurer and the Guarantor that any such substitution, modification or
assumption agreement has been completed by forwarding to the Trust Administrator
(with a copy to the Trustee and the NIMS Insurer) the executed original of such
substitution, modification or assumption agreement, which document shall be
added to the related Mortgage File and shall, for all purposes, be considered a
part of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof. If the aggregate Component Principal
Balance of the I-M3 Component has been reduced to zero and Class C Certificates
are no longer outstanding, the Master Servicer shall not take or enter into any
substitution, assumption or modification agreement without obtaining the prior
written consent of the Guarantor to such substitution, assumption or
modification agreement. The Master Servicer shall submit to the Guarantor with
its request for consent, such information related to the proposed substitution,
assumption or modification agreement as can be expected to be needed by the
Guarantor to evaluate the Master Servicer's request, including the terms of the
proposed substitution, assumption or modification and the reasons for the Master
Servicer's decision that such substitution, assumption or modification agreement
should be taken or entered into with respect to such Group I Mortgage Loan. The
Guarantor shall be deemed to have consented to the Master Servicer's request in
the event that the Guarantor does not either provide the Master Servicer with
its written consent to such requested substitution, assumption or modification
agreement or written notice of its objection to such substitution, assumption or
modification agreement within five Business Days of its receipt of the Master
Servicer's request. Such requests shall be sent to the Guarantor at: ▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attn: Vice President-Loss
Mitigation. With respect to each substitution, assumption or modification
agreement which is entered into with the consent of the Guarantor, the Master
Servicer shall give written notice to the NIMS Insurer to the address set forth
in Section 11.05 and to the Guarantor to the following address: ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attn: Bond Administration. Such
notice shall be delivered within thirty Business Days following the date of such
substitution, assumption or modification agreement.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Master Servicer may be restricted by law from preventing,
for any reason whatever. For purposes of this Section 3.15, the term
"assumption" is deemed to also include a sale of the Mortgaged Property subject
to the Mortgage that is not accompanied by an assumption or substitution of
liability agreement.
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Section 3.16 Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall use reasonable efforts consistent
with the servicing standard set forth in Section 3.01, to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07. The Master Servicer shall be responsible for all costs
and expenses incurred by it in any such proceedings; provided, however, that
such costs and expenses will constitute and be recoverable as Servicing Advances
by the Master Servicer as contemplated in Section 3.11 and Section 3.23. The
foregoing is subject to the provision that, in any case in which Mortgaged
Property shall have suffered damage from an Uninsured Cause, the Master Servicer
shall not be required to expend its own funds toward the restoration of such
property unless it shall determine in its sole and absolute discretion that such
restoration will increase the proceeds of liquidation of the related Mortgage
Loan after reimbursement to itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section 3.16
or any other provision of this Agreement, with respect to any Mortgage Loan as
to which 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 Administrator, the Trust Fund or the
Certificateholders would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless the Master Servicer has also previously
determined, based on its reasonable judgment and a report prepared by an
Independent Person who regularly conducts environmental audits using customary
industry standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best
economic interest of the Trust Fund to take such actions as are
necessary to bring the Mortgaged Property into compliance
therewith; and
(2) there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or
petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required
under any federal, state or local law or regulation, or that if
any such materials are present for which such action could be
required, that it would be in the best economic interest of the
Trust Fund to take such actions with respect to the affected
Mortgaged Property.
Notwithstanding the foregoing, with respect to the Group I Mortgage
Loans, if such environmental audit reveals, or if the Master Servicer has
knowledge or notice, that the Mortgaged Property securing such Group I Mortgage
Loan contains such wastes or substances or
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is within one mile of the site of such wastes or substances, the Master Servicer
shall not foreclose or accept a deed in lieu of foreclosure without the prior
written consent of the Guarantor.
The cost of the environmental audit report contemplated by this Section
3.16 shall be advanced by the Master Servicer, subject to the Master Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.11(a)(ix), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received in
respect of the affected Mortgage Loan or other Mortgage Loans. It is understood
by the parties hereto that any such advance will constitute a Servicing Advance.
If the Master Servicer determines, as described above, that it is in
the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(ix), such right of
reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans. It is understood by the parties hereto that any
such advance will constitute a Servicing Advance.
(c) The Master Servicer may at its option purchase from REMIC 1A
or REMIC 1B, as applicable, any Mortgage Loan or related REO Property that is 90
days or more delinquent or that has been otherwise in default for 90 days or
more, which the Master Servicer determines in good faith will otherwise become
subject to foreclosure proceedings (evidence of such determination to be
delivered in writing to the Trust Administrator and the Trustee prior to
purchase), at a price equal to the Purchase Price; provided, however, that the
Master Servicer shall purchase any such Mortgage Loans or related REO Properties
on the basis of delinquency or default, purchasing first the Mortgage Loans or
related REO Properties that became delinquent or otherwise in default on an
earlier date; and provided, further, that such option shall expire as of the
last day of the calendar quarter during which such Mortgage Loan or related REO
Property became 90 days delinquent or otherwise in default for 90 days or more.
In the event the Master Servicer does not exercise its option to purchase from
REMIC 1A or REMIC 1B any such Mortgage Loan or related REO Property prior to the
expiration of such option, the NIMS Insurer shall be entitled to purchase such
Mortgage Loan or related REO Property at any time thereafter. In the event
neither the Master Servicer nor the NIMS Insurer exercises its option to
purchase from REMIC 1A any such Group I Mortgage Loan or related REO Property
prior to the expiration of such option, the Guarantor shall be entitled to
purchase such Group I Mortgage Loan or related REO Property at any time
thereafter. The Purchase Price for any Mortgage Loan or related REO Property
purchased hereunder shall be deposited in the Collection Account, and the Trust
Administrator, upon receipt of written certification from the Master Servicer of
such deposit, shall release or cause to be released to the Master Servicer, the
NIMS Insurer or the Guarantor, as applicable, the related Mortgage File and the
Trustee, or the Trust Administrator on behalf of the Trustee, shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as the Master
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Servicer, the NIMS Insurer or the Guarantor, as applicable, shall furnish and as
shall be necessary to vest in the Master Servicer, the NIMS Insurer or the
Guarantor, as applicable, title to any Mortgage Loan or related REO Property
released pursuant hereto.
(d) Proceeds received (other than any Prepayment Charges received)
in connection with any Final Recovery Determination, as well as any recovery
resulting from a partial collection of Insurance Proceeds or Liquidation
Proceeds, in respect of any Mortgage Loan, will be applied in the following
order of priority: first, to reimburse the Master Servicer or any Sub-Servicer
for any related unreimbursed Servicing Advances and Advances, pursuant to
Section 3.11(a)(ii) or (a)(iii); second, to accrued and unpaid interest on the
Mortgage Loan, to the date of the Final Recovery Determination, or to the Due
Date prior to the Distribution Date on which such amounts are to be distributed
if not in connection with a Final Recovery Determination; and third, as a
recovery of principal of the Mortgage Loan. If the amount of the recovery so
allocated to interest is less than the full amount of accrued and unpaid
interest due on such Mortgage Loan, the amount of such recovery will be
allocated by the Master Servicer as follows: first, to unpaid Servicing Fees;
and second, to the balance of the interest then due and owing. The portion of
the recovery so allocated to unpaid Servicing Fees shall be reimbursed to the
Master Servicer or any Sub-Servicer pursuant to Section 3.11(a)(iii).
Section 3.17 Trustee and Trust Administrator to Cooperate; Release of Mortgage
Files.
(a) Upon the payment in full of any Mortgage Loan, or the receipt
by the Master Servicer of a notification that payment in full shall be escrowed
in a manner customary for such purposes, the Master Servicer will promptly
notify the Trustee and Trust Administrator by a certification in the form of
Exhibit E-2 (which certification shall include a statement to the effect that
all amounts received or to be received in connection with such payment which are
required to be deposited in the Collection Account pursuant to Section 3.10 have
been or will be so deposited) of a Servicing Representative and shall request
delivery to it of the related Mortgage File. Upon receipt of such certification
and request, the Trust Administrator shall promptly release the related Mortgage
File to the Master Servicer. No expenses incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
Collection Account or the Distribution Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trust Administrator
shall, upon request of the Master Servicer and delivery to the Trust
Administrator of a Request for Release in the form of Exhibit E-l, release the
related Mortgage File to the Master Servicer, and the Trustee or the Trust
Administrator, on behalf of the Trustee, shall, at the direction of the Master
Servicer, execute such documents as shall be necessary to the prosecution of any
such proceedings and the Master Servicer shall retain such Mortgage File in
trust for the benefit of the Certificateholders. Such Request for Release shall
obligate the Master Servicer to return each and every document previously
requested from the Mortgage File to the Trust Administrator when the need
therefor by the Master Servicer no longer exists, unless the Mortgage Loan has
been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have
been deposited in the Collection Account or the Mortgage File or such document
has been delivered to an attorney, or to a public trustee or other public
official as required by law, for purposes of initiating or pursuing legal action
or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Master Servicer has delivered to the Trust
Administrator a certificate of a
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Servicing Representative certifying as to the name and address of the Person to
which such Mortgage File or such document was delivered and the purpose or
purposes of such delivery. Upon receipt of a certificate of a Servicing
Representative stating that such Mortgage Loan was liquidated and that all
amounts received or to be received in connection with such liquidation that are
required to be deposited into the Collection Account have been so deposited, or
that such Mortgage Loan has become an REO Property, a copy of the Request for
Release shall be released by the Trust Administrator to the Master Servicer or
its designee.
(c) Upon written certification of a Servicing Representative, the
Trust Administrator shall execute and deliver to the Master Servicer any court
pleadings, requests for trustee's sale or other documents reasonably necessary
to the foreclosure or trustee's sale in respect of a Mortgaged Property or to
any legal action brought to obtain judgment against any Mortgagor on the
Mortgage Note or Mortgage or to obtain a deficiency judgment, or to enforce any
other remedies or rights provided by the Mortgage Note or Mortgage or otherwise
available at law or in equity, or shall exercise and deliver to the Master
Servicer a power of attorney sufficient to authorize the Master Servicer to
execute such documents on its behalf, provided that the Trust Administrator
shall be obligated to execute the documents identified above if necessary to
enable the Master Servicer to perform its duties hereunder. Each such
certification shall include a request that such pleadings or documents be
executed by the Trust Administrator and a statement as to the reason such
documents or pleadings are required.
Section 3.18 Servicing Compensation.
As compensation for the activities of the Master Servicer hereunder,
the Master Servicer shall be entitled to the Servicing Fee with respect to each
Mortgage Loan payable solely from payments of interest in respect of such
Mortgage Loan, subject to Section 3.24. In addition, the Master Servicer shall
be entitled to recover unpaid Servicing Fees out of Late Collections, Insurance
Proceeds or Liquidation Proceeds to the extent permitted by Section 3.11(a)(iii)
and out of amounts derived from the operation and sale of an REO Property to the
extent permitted by Section 3.23. The right to receive the Servicing Fee may not
be transferred in whole or in part except in connection with the transfer of all
of the Master Servicer's responsibilities and obligations under this Agreement;
provided, however, that the Master Servicer may pay from the Servicing Fee any
amounts due to a Sub-Servicer pursuant to a Sub-Servicing Agreement entered into
under Section 3.02.
Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by
the Master Servicer (subject to Section 3.24) only to the extent such fees or
charges are received by the Master Servicer. The Master Servicer shall also be
entitled pursuant to Section 3.11(a)(iv) to withdraw from the Collection
Account, and pursuant to Section 3.23(b) to withdraw from any REO Account, as
additional servicing compensation, interest or other income earned on deposits
therein, subject to Section 3.12. The Master Servicer shall be required to pay
all expenses incurred by it in connection with its servicing activities
hereunder (including premiums for the insurance required by Section 3.14, to the
extent such premiums are not paid by the related Mortgagors or by a
Sub-Servicer, it being understood however, that payment of such premiums by the
Master Servicer shall constitute Servicing Advances and servicing compensation
of each Sub-Servicer, and to the extent provided herein and in Section 8.05, the
fees and expenses of the Trustee and the Trust
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Administrator) and shall not be entitled to reimbursement therefor except as
specifically provided herein.
Section 3.19 Reports to the Trustee and the Trust Administrator; Collection
Account Statements.
Not later than fifteen days after each Distribution Date, the Master
Servicer shall forward to the Trustee, the Trust Administrator, the NIMS Insurer
and the Depositor (and, upon request, the Guarantor) a statement prepared by the
Master Servicer setting forth the status of the Collection Account as of the
close of business on such Distribution Date and showing, for the period covered
by such statement, the aggregate amount of deposits into and withdrawals from
the Collection Account of each category of deposit specified in Section 3.10(a)
and each category of withdrawal specified in Section 3.11. Such statement may be
in the form of the then current ▇▇▇▇▇▇ ▇▇▇ Monthly Accounting Report for its
Guaranteed Mortgage Pass-Through Program with appropriate additions and changes,
and shall also include information as to the aggregate of the outstanding
principal balances of all of the Mortgage Loans as of the last day of the
calendar month immediately preceding such Distribution Date. Copies of such
statement shall be provided by the Trust Administrator to any Certificateholder
and to any Person identified to the Trust Administrator 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 Trust
Administrator.
Section 3.20 Statement as to Compliance.
The Master Servicer shall deliver to the Trust Administrator, the
Trustee, the Depositor, the NIMS Insurer, the Guarantor and each Rating Agency
on or before April 15 of each calendar year commencing in 2003, 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 Trust
Administrator to any Certificateholder and to any Person identified to the Trust
Administrator as a prospective transferee of a Certificate, upon the request and
at the expense of the requesting party, provided that such statement is
delivered by the Master Servicer to the Trust Administrator.
Section 3.21 Independent Public Accountants' Servicing Report.
Not later than April 15 of each calendar year commencing in 2003, the
Master Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Master Servicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer which includes an
assertion that the Master Servicer has complied with certain minimum residential
mortgage loan servicing standards, identified in the Uniform Single Attestation
Program for Mortgage Bankers established by the Mortgage Bankers Association of
America, with respect to the servicing of residential mortgage loans during the
most recently completed fiscal year and (ii) on the basis of an examination
conducted by such firm in accordance with standards
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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
Trust Administrator, the Trustee, the NIMS Insurer, the Guarantor and each
Rating Agency. Copies of such statement shall be provided by the Trust
Administrator to any Certificateholder upon request at the Master Servicer's
expense, provided that such statement is delivered by the Master Servicer to the
Trust Administrator. In the event such firm of independent certified public
accountants requires the Trust Administrator to agree to the procedures
performed by such firm, the Master Servicer shall direct the Trust Administrator
in writing to so agree; it being understood and agreed that the Trust
Administrator will deliver such letter of agreement in conclusive reliance upon
the direction of the Master Servicer, and the Trust Administrator has not made
any independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures.
Section 3.22 Access to Certain Documentation.
(a) The Master Servicer shall provide to the Office of Thrift
Supervision, the FDIC and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder
access to the documentation regarding the Mortgage Loans serviced by the Master
Servicer under this Agreement, as may be required by applicable laws and
regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the Master
Servicer designated by it. In addition, access to the documentation regarding
the Mortgage Loans serviced by the Master Servicer under this Agreement will be
provided to any Certificateholder, the Guarantor (with respect to Group I
Mortgage Loans only), the NIMS Insurer, the Trust Administrator, the Trustee and
to any Person identified to the Master Servicer as a prospective transferee of a
Certificate, upon reasonable request during normal business hours at the offices
of the Master Servicer designated by it at the expense of the Person requesting
such access.
(b) For a period of two years from the Closing Date, the Guarantor
may contact the Seller to confirm that the Seller continues to actively engage
in a program to originate mortgage loans to low-income families and to obtain
other non-proprietary information about the Seller's activities that may assist
the Guarantor in completing its own regulatory requirements during normal
business hours and subject to reimbursement for expenses. The Seller shall use
reasonable efforts to provide such information to the Guarantor.
Section 3.23 Title, Management and Disposition of REO Property.
(a) The deed or certificate of sale of any REO Property shall be
taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. The Master Servicer, on behalf of REMIC 1A or REMIC 1B,
as applicable (and on behalf of the Trustee for the benefit of the
Certificateholders), shall sell any REO Property as soon as practicable and, in
any event, shall either sell any REO Property before the close of the third
taxable year after the year REMIC 1A or REMIC 1B, as applicable, acquires
ownership of such REO Property for
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purposes of Section 860G(a)(8) of the Code or request from the Internal Revenue
Service, no later than 60 days before the day on which the three-year grace
period would otherwise expire, an extension of the three-year grace period,
unless the Master Servicer shall have delivered to the Trust Administrator,
Trustee, the NIMS Insurer, the Guarantor and the Depositor an Opinion of
Counsel, addressed to the Trust Administrator, the Trustee, the NIMS Insurer,
the Guarantor and the Depositor, to the effect that the holding by REMIC 1A or
REMIC 1B of such REO Property subsequent to three years after its acquisition
will not result in the imposition on any Trust REMIC of taxes on "prohibited
transactions" thereof, as defined in Section 860F of the Code, or cause any
Trust REMIC to fail to qualify as a REMIC under Federal law at any time that any
Certificates are outstanding. If an extension of the three-year period is
granted, the Master Servicer shall sell the related REO Property no later than
60 days prior to the expiration of such extension period. The Master Servicer
shall manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any Trust REMIC of any "income from non-permitted
assets" within the meaning of Section 860F(a)(2)(B) of the Code, or any "net
income from foreclosure property" which is subject to taxation under the REMIC
Provisions.
(b) The Master Servicer shall segregate and hold all funds
collected and received in connection with the operation of any REO Property
separate and apart from its own funds and general assets and shall establish and
maintain, or cause to be established and maintained, with respect to REO
Properties an account held in trust for the Trustee for the benefit of the
Certificateholders (the "REO Account"), which shall be an Eligible Account. The
Master Servicer may allow the Collection Account to serve as the REO Account,
subject to separate ledgers for each REO Property. The Master Servicer may
retain or withdraw any interest income paid on funds deposited in the REO
Account.
(c) The Master Servicer shall have full power and authority,
subject only to the specific requirements and prohibitions of this Agreement, to
do any and all things in connection with any REO Property as are consistent with
the manner in which the Master Servicer manages and operates similar property
owned by the Master Servicer or any of its Affiliates, all on such terms and for
such period as the Master Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Master Servicer shall deposit,
or cause to be deposited in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof and shall thereafter deposit in the REO Account, in
no event more than two Business Days after the deposit of such funds into the
clearing account, all revenues received by it with respect to an REO Property
and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of such REO Property including, without limitation:
(i) all insurance premiums due and payable in respect of such
REO Property;
(ii) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien
thereon; and
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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 as Servicing Advances such amount as is necessary for
such purposes if, but only if, the Master Servicer would make such advances if
the Master Servicer owned the REO Property and if such Servicing Advance would
not constitute a Nonrecoverable Advance.
Notwithstanding the foregoing, none of the Master Servicer, the Trust
Administrator or the Trustee shall:
(i) authorize the Trust Fund to enter into, renew or extend any
New Lease with respect to any REO Property, if the New Lease
by its terms will give rise to any income that does not
constitute Rents from Real Property;
(ii) authorize any amount to be received or accrued under any New
Lease other than amounts that will constitute Rents from
Real Property;
(iii) authorize any construction on any REO Property, other than
construction permitted under Section 856(e)(4)(B) of the
Code; or
(iv) authorize any Person to Directly Operate any REO
Property on any date more than 90 days after its date
of acquisition by the Trust Fund;
unless, in any such case, the Master Servicer has obtained an Opinion of Counsel
(the cost of which shall constitute a Servicing Advance), a copy of which shall
be provided to the NIMS Insurer, the Trust Administrator and the Trustee, to the
effect that such action will not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code at
any time that it is held by REMIC 1A or REMIC 1B, in which case the Master
Servicer may take such actions as are specified in such Opinion of Counsel.
The Master Servicer may contract with any Independent Contractor for
the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered to
require, that the Independent Contractor pay all costs and
expenses incurred in connection with the operation and
management of such REO Property, including those listed
above, and remit all related revenues (net of such costs and
expenses) to the Master Servicer as soon as practicable, but
in no event later than thirty days following the receipt
thereof by such Independent Contractor;
(iii) none of the provisions of this Section 3.23(c) relating to
any such contract or to actions taken through any such
Independent Contractor shall be
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deemed to relieve the Master Servicer of any of its duties
and obligations to the Trustee on behalf of the
Certificateholders with respect to the operation and
management of any such REO Property; and
(iv) the Master Servicer shall be obligated with respect thereto
to the same extent as if it alone were performing all duties
and obligations in connection with the operation and
management of such REO Property.
The Master Servicer shall be entitled to enter into any agreement with
any Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of whether
the Master Servicer's compensation pursuant to Section 3.18 is sufficient to pay
such fees; provided, however, that to the extent that any payments made by such
Independent Contractor would constitute Servicing Advances if made by the Master
Servicer, such amounts shall be reimbursable as Servicing Advances made by the
Master Servicer.
(d) In addition to the withdrawals permitted under Section
3.23(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and Advances made
in respect of such REO Property or the related Mortgage Loan. On the Master
Servicer Remittance Date, the Master Servicer shall withdraw from each REO
Account maintained by it and deposit into the Distribution Account in accordance
with Section 3.10(d)(ii), for distribution on the related Distribution Date in
accordance with Section 4.01, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to Section
3.23(c) or this Section 3.23(d).
(e) Subject to the time constraints set forth in Section 3.23(a),
each REO Disposition shall be carried out by the Master Servicer at such price
and upon such terms and conditions as the Master Servicer shall deem necessary
or advisable, as shall be normal and usual in its general servicing activities
for similar properties.
(f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Master Servicer or any
Sub-Servicer as provided above, shall be deposited in the Distribution Account
in accordance with Section 3.10(d)(ii) on the Master Servicer Remittance Date in
the month following the receipt thereof for distribution on the related
Distribution Date in accordance with Section 4.01. Any REO Disposition shall be
for cash only (unless changes in the REMIC Provisions made subsequent to the
Startup Day allow a sale for other consideration).
(g) The Master Servicer shall file information returns with
respect to the receipt of mortgage interest received in a trade or business,
reports of foreclosures and abandonments of any Mortgaged Property and
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code,
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respectively. Such reports shall be in form and substance sufficient to meet the
reporting requirements imposed by such Sections 6050H, 6050J and 6050P of the
Code.
Section 3.24 Obligations of the Master Servicer in Respect of Prepayment
Interest Shortfalls.
The Master Servicer shall deliver to the Trust Administrator for
deposit into the Distribution Account on or before 3:00 p.m. New York time on
the Master Servicer Remittance Date from its own funds an amount ("Compensating
Interest") equal to the lesser of (i) the aggregate of the Prepayment Interest
Shortfalls for the related Distribution Date resulting solely from Principal
Prepayments during the related Prepayment Period and (ii) the amount of its
aggregate Servicing Fee for the most recently ended calendar month.
Section 3.25 Obligations of the Master Servicer in Respect of Mortgage Rates and
Monthly Payments.
In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Rates, Monthly Payments or Stated Principal Balances that were made by
the Master Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, the Master Servicer, upon discovery or receipt
of notice thereof, immediately shall deliver to the Trust Administrator for
deposit in the Distribution Account from its own funds the amount of any such
shortfall and shall indemnify and hold harmless the Trust Fund, the Trust
Administrator, the Trustee, the Depositor, the Guarantor and any successor
master servicer in respect of any such liability; provided, that in the case of
the Guarantor such indemnity shall only apply with respect to Group I Mortgage
Loans. Such indemnities shall survive the termination or discharge of this
Agreement. Notwithstanding the foregoing, this Section 3.25 shall not limit the
ability of the Master Servicer to seek recovery of any such amounts from the
related Mortgagor under the terms of the related Mortgage Note, as permitted by
law and shall not be an expense of the Trust.
Section 3.26 Reserve Funds.
No later than the Closing Date, the Trust Administrator, on behalf of
the Trustee, on behalf of the Certificateholders, shall establish and maintain
with itself two separate, segregated trust accounts titled, "Group I Reserve
Fund, Bankers Trust Company of California, N.A., as Trust Administrator for the
benefit of First Union National Bank, as Trustee, in trust for registered
Holders of Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1" and "Group II Reserve Fund, Bankers Trust Company of California,
N.A., as Trust Administrator for the benefit of First Union National Bank, as
Trustee, in trust for registered Holders of Long Beach Mortgage Loan Trust
2002-1, Asset-Backed Certificates, Series 2002-1," respectively. On the Closing
Date, the Depositor shall deposit, or cause to be deposited, into each of the
Reserve Funds $1,000.
On each Distribution Date as to which there is a Net WAC Rate Carryover
Amount payable to the Class I-A Certificates or Group I Mezzanine Components,
the Trust Administrator has been directed by the Class I-C Certificateholders
to, and therefore shall, deposit into the Group I Reserve Fund the amounts
described in Section 4.01(d)(i)(h), rather than distributing such amounts to the
Class C Certificateholders. On each Distribution Date as to which there is a Net
WAC Rate Carryover Amount payable to the Class II-A Certificates, the Class
II-M1
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Certificates, Group II Mezzanine Components or the Class II-M4 Certificates, the
Trust Administrator has been directed by the Class II-C Certificateholders to,
and therefore shall, deposit into the Group II Reserve Fund the amounts
described in Section 4.01(d)(ii)(l), rather than distributing such amounts to
the Class II-C Certificateholders. On each such Distribution Date, the Trust
Administrator shall hold all such amounts for the benefit of the Holders of the
Class A Certificates, and the Mezzanine Certificates, and shall distribute such
amounts in respect of the Class A Certificates, the Class II-M1 Certificates,
the Mezzanine Components and the Class II-M4 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 Trust Administrator shall deposit into
each Reserve Fund on behalf of the related Class C Certificateholders, from
amounts otherwise distributable to such Class C Certificateholders, an amount
such that when added to other amounts already on deposit in such Reserve Fund,
the aggregate amount on deposit therein is equal to $1,000.
For federal and state income tax purposes, the Class I-C
Certificateholders shall be deemed to be the owners of the Group I Reserve Fund
and all amounts deposited into such Reserve Fund (other than the initial deposit
therein of $1,000) shall be treated as amounts distributed by REMIC 3 to REMIC X
in respect of the REMIC 3 Regular Interest LT3-IC, and then distributed by REMIC
X to the Holders of the Class I-C Certificates. For federal and state income tax
purposes, the Class II-C Certificateholders shall be deemed to be the owners of
the Group II Reserve Fund and all amounts deposited into such Reserve Fund
(other than the initial deposit therein of $1,000) shall be treated as amounts
distributed by REMIC 3 to REMIC X in respect of REMIC 3 Regular Interest LT3-IIC
and then distributed by REMIC X to the Holders of the Class II-C Certificates.
Upon the termination of the Trust, or the payment in full of the Class I-A
Certificates and the reduction of the Component Principal Balances of the Group
I Mezzanine Components to zero or of the payment in full of the Class II-A
Certificates, the Class II-M1 Certificates and the Class II-M4 Certificates and
the reduction of the Component Principal Balances of the Group II Mezzanine
Components to zero, all amounts remaining on deposit in the related Reserve Fund
shall be released by the Trust Administrator and distributed to the applicable
Class C Certificateholders or their designees. The Reserve Funds will be part of
the Trust but not part of any REMIC and any payments in respect of the Class A
Certificates, the Class II-M1 Certificates, the Mezzanine Components or the
Class II-M4 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
shall be deemed to have directed the Trust Administrator, and the Trust
Administrator shall pursuant to such direction, deposit into the related 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
applicable Class C Certificateholders. By accepting a Class C Certificate, each
Class C Certificateholder further agrees that such direction is given for good
and valuable consideration, the receipt and sufficiency of which is acknowledged
by such acceptance.
At the direction of the Holders of a majority in Percentage Interest in
the Class C Certificates, the Trust Administrator shall direct any depository
institution maintaining the Group I Reserve Fund or Group II Reserve Fund, as
applicable, to invest the funds in such account in one or more Permitted
Investments bearing interest or sold at a discount, and maturing, unless
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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 Trust Administrator 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 Trust Administrator 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 Trust Administrator, the Trust Administrator shall invest the
funds in such account in Permitted Investments managed by the Trust
Administrator or an Affiliate of the kind described in clause (vi) of the
definition of Permitted Investments. Notwithstanding the foregoing, any funds in
the Reserve Funds shall be invested in Bankers Trust's Institutional Cash
Management Fund 1679 for so long as such investment complies with clause (vi) of
the definition of Permitted Investments. All income and gain earned upon such
investment shall be deposited into the related Reserve Fund.
For federal tax return and information reporting, the right of the
Certificateholders to receive payment on account of the Class A Certificates,
the Class II-M1 Certificates, the Mezzanine Components and the Class II-M4
Certificates from the related Reserve Fund in respect of any Net WAC Rate
Carryover Amount shall be assigned a value of zero.
Section 3.27 Advance Facility.
(a) The Trust Administrator, on behalf of the Trustee and the
Trust Fund, at the direction of the Master Servicer and with the consent of the
NIMS Insurer, after consultation with the Guarantor (or, if no Insured NIM Notes
are outstanding, the Guarantor), is hereby authorized to enter into a facility
with any Person which provides that such Person (an "Advancing Person") may make
all or a portion of the Advances and/or Servicing Advances to the Trust Fund
under this Agreement, although no such facility shall reduce or otherwise affect
the Master Servicer's obligation to fund such Advances and/or Servicing
Advances. To the extent that an Advancing Person makes all or a portion of any
Advance or any Servicing Advance and provides the Trust Administrator with
notice acknowledged by the Master Servicer that such Advancing Person is
entitled to reimbursement, such Advancing Person shall be entitled to receive
reimbursement pursuant to this Agreement for such amount to the extent provided
in Section 3.27(b). Such notice from the Advancing Person shall specify the
amount of the reimbursement and shall specify which Section of this Agreement
permits the applicable Advance or Servicing Advance to be reimbursed. The Trust
Administrator shall be entitled to rely without independent investigation on the
Advancing Person's statement with respect to the amount of any reimbursement
pursuant to this Section 3.27 and with respect to the Advancing Person's
statement with respect to the Section of this Agreement that permits the
applicable Advance or Servicing Advance to be reimbursed. An Advancing Person
whose obligations are limited to the making of Advances and/or Servicing
Advances shall not be required to meet the qualifications of a Master Servicer
or a Sub-Servicer pursuant to Article VI hereof and will not be deemed to be a
Sub-Servicer under this Agreement. If the terms of a facility proposed to be
entered into with an Advancing Person by the Trust Fund would not materially and
adversely affect the interests of any Certificateholder, then the NIMS Insurer
shall not withhold its consent, after consultation with the Guarantor, to the
Trust Fund's entering into such facility.
(b) If an advancing facility is entered into, then the Master
Servicer shall not be permitted to reimburse itself under any Section specified
or for any amount specified by the
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Advancing Person in the notice described under Section 3.27(a) above and
acknowledged by the Master Servicer prior to the remittance to the Trust Fund,
but instead the Master Servicer shall include such amounts in the applicable
remittance to the Trustee made pursuant to Section 3.10(a). The Trust
Administrator is hereby authorized to pay to the Advancing Person reimbursements
for Advances and Servicing Advances from the Distribution Account to the same
extent the Master Servicer would have been permitted to reimburse itself for
such Advances and/or Servicing Advances in accordance with the specified
Sections had the Master Servicer itself made such Advance or Servicing Advance.
The Trust Administrator is hereby authorized to pay directly to the Advancing
Person such portion of the Servicing Fee as the parties to any advancing
facility may agree.
(c) All Advances and Servicing Advances made pursuant to the terms
of this Agreement shall be deemed made and shall be reimbursed on a "first
in-first out" (FIFO) basis.
Section 3.28 Policy; Claims Under the PMI Policy
Notwithstanding anything to the contrary elsewhere in this Article III,
the Master Servicer shall not agree to any modification or assumption of a PMI
Mortgage Loan or take any other action with respect to a PMI Mortgage Loan that
could result in denial of coverage under the PMI Policy. The Master Servicer
shall notify the PMI Insurer that the Trustee, as trustee on behalf of the
Certificateholders, is the insured, as that term is defined in the PMI Policy,
of each PMI Mortgage Loan. The Master Servicer shall, on behalf of the Trustee,
prepare and file on a timely basis with the PMI Insurer, with a copy to the
Trustee and the Trust Administrator, all claims which may be made under the PMI
Policy with respect to the PMI Mortgage Loans. The Master Servicer shall take
all actions required under the PMI Policy as a condition to the payment of any
such claim. Any amount received from the PMI Insurer with respect to any such
PMI Mortgage Loan shall be deposited by the Master Servicer, no later than two
Business Days following receipt thereof, into the Collection Account.
Section 3.29 Group I Mortgage Loans Subject to Relief Act.
If any of the Group I Mortgage Loans becomes subject to the Relief Act,
the Master Servicer shall, with respect to such Group I Mortgage Loan, complete
▇▇▇▇▇▇ ▇▇▇ Special Information Worksheet (for Military Indulgence) substantially
in the form set forth on Exhibit G-1 hereto and shall require the related
Mortgagor to complete ▇▇▇▇▇▇ Mae Form 180 Request For Military Indulgence
substantially in the form set forth as Exhibit G-2 hereto. The Master Servicer
shall retain the executed originals of such forms in its servicing files related
to such Group I Mortgage Loan and, upon the Guarantor's request, shall promptly
deliver such forms to the Guarantor at the address specified by the Guarantor,
or if no such address is specified, to ▇▇▇▇▇▇ ▇▇▇, Management Portfolio
Processing Unit, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Mail Stop:
5H-1W-06. Each Remittance Report delivered by the Master Servicer to the
Guarantor pursuant to Section 4.04 in connection with a Distribution Date shall
include a schedule of the Group I Mortgage Loans subject to the Relief Act on
such Distribution Date and shall set forth the amount of Relief Act Interest
Shortfalls for such Distribution Date in connection with each such Group I
Mortgage Loan.
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ARTICLE IV
FLOW OF FUNDS
Section 4.01 Distributions.
(a) (i) On each Distribution Date, the Trust Administrator shall
withdraw from the Distribution Account that portion of the Group I Available
Funds equal to the Group I Interest Remittance Amount for such Distribution
Date, and make the following disbursements and transfers in the order of
priority described below, in each case to the extent of the Group I Interest
Remittance Amount remaining for such Distribution Date:
first, to the Guarantor for payment of (i) the Guaranty Fee
and (ii) any Guarantor Reimbursement Amount then due;
second, concurrently, to the Class I-A Certificates and the
Class I-S Certificates the related Monthly Interest
Distributable Amount and any Unpaid Interest Shortfall
Amount for such Classes, allocated between the Class I-A
Certificates and the Class I-S Certificates pro rata based
on their respective entitlements;
third, to the I-M2 Component, the related Monthly Interest
Distributable Amount; and
fourth, to the I-M3 Component, the related Monthly Interest
Distributable Amount.
(ii) Any Group I Interest Remittance Amount remaining
undistributed pursuant to clause (i) above shall be used in determining the
amount of Group I Net Monthly Excess Cashflow, if any, for such Distribution
Date.
(iii) On each Distribution Date the Trust Administrator shall
withdraw from the Distribution Account that portion of Group II Available Funds
equal to the Group II Interest Remittance Amount for such Distribution Date, and
make the following disbursements and transfers in the order of priority
described below, in each case to the extent of the Group II Interest Remittance
Amount remaining for such Distribution Date:
first, concurrently, to the Class II-A1 Certificates, the
Class II-A2 Certificates, the Class II-A3 Certificates, the
Class II-A4 Certificates and the Class II-S Certificates the
related Monthly Interest Distributable Amount and any Unpaid
Interest Shortfall Amount for such Classes, allocated among
the Class II-A1 Certificates, the Class II-A2 Certificates,
the Class II-A3 Certificates, the Class II-A4 Certificates
and the Class II-S Certificates pro rata based on their
respective entitlements;
second, to the Class II-M1 Certificates, the related Monthly
Interest Distributable Amount;
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third, to the II-M2 Component, the related Monthly Interest
Distributable Amount;
fourth, to the II-M3 Component, the related Monthly Interest
Distributable Amount; and
fifth, to the Class II-M4 Certificates, the related Monthly
Interest Distributable Amount.
(iv) Any Group II Interest Remittance Amount remaining
undistributed pursuant to clause (iii) above shall be used in determining the
amount of Group II Net Monthly Excess Cashflow, if any, for such Distribution
Date.
(b) (i) On each Distribution Date (a) prior to the Group I
Stepdown Date or (b) on which a Group I Trigger Event is in effect, the Trust
Administrator shall withdraw from the Distribution Account that portion of the
Group I Available Funds equal to the Group I Principal Distribution Amount for
such Distribution Date, and make the following disbursements and transfers in
the order of priority described below, in each case to the extent of the Group I
Principal Distribution Amount remaining for such Distribution Date:
first, to ▇▇▇▇▇▇ Mae for payment of (i) the Guaranty Fee and
(ii) any Guarantor Reimbursement Amount then due (to the
extent not paid from the Group I Interest Remittance Amount
for such Distribution Date);
second, to the Class I-A Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
third, to the I-M2 Component, until the Component Principal
Balance thereof has been reduced to zero; and
fourth, to the I-M3 Component, until the Component Principal
Balance thereof has been reduced to zero.
(ii) Any principal remaining undistributed pursuant to clause
(i) above shall be used in determining the amount of Group I Net Monthly Excess
Cashflow, if any, for such Distribution Date.
(iii) On each Distribution Date (a) prior to the Group II
Stepdown Date or (b) on which a Group II Trigger Event is in effect, the Trust
Administrator shall withdraw from the Distribution Account that portion of Group
II Available Funds equal to the Group II Principal Distribution 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
Principal Distribution Amount remaining for such Distribution Date:
first, (i) concurrently, to the Class II-A1 Certificates, the
Class II-A1 Principal Distribution Amount, until the
Certificate Principal Balance of the Class II-A1 Certificates
has been reduced to zero, and to the Class II-A2 Certificates,
the Class II-A Remaining Principal Distribution
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Amount, until the Certificate Principal Balance of the Class
II-A2 Certificates has been reduced to zero; then (ii) to the
Class II-A3 Certificates, any portion of the Class II-A
Remaining Principal Distribution Amount that remains following
the distribution to the Class II-A2 Certificates in clause
(i), until the Certificate Principal Balance thereof has been
reduced to zero; then (iii) to the Class II-A4 Certificates,
any portion of the Class II-A Remaining Principal Distribution
Amount that remains following the distribution to the Class
II-A3 Certificates in clause (ii), until the Certificate
Principal Balance thereof has been reduced to zero;
second, to the Class II-M1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
third, to the II-M2 Component, until the Component Principal
Balance thereof has been reduced to zero;
fourth, to the II-M3 Component, until the Component Principal
Balance thereof has been reduced to zero; and
fifth, to the Class II-M4 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero.
(iv) Any principal remaining undistributed pursuant to clause
(iii) above shall be used in determining the amount of Group II Net Monthly
Excess Cashflow, if any, for such Distribution Date.
(c) (i) On each Distribution Date (a) on or after the Group I
Stepdown Date and (b) on which a Group I Trigger Event is not in effect, the
Trust Administrator shall withdraw from the Distribution Account that portion of
the Group I Available Funds equal to the Group I Principal Distribution Amount
for such Distribution Date, and make the following disbursements and transfers
in the order of priority described below, in each case to the extent of the
Group I Principal Distribution Amount remaining for such Distribution Date:
first, to ▇▇▇▇▇▇ ▇▇▇ for payment of (i) the Guaranty Fee and
(ii) any Guarantor Reimbursement Amount then due (to the
extent not paid from the Group I Interest Remittance Amount
for such Distribution Date);
second, to the Class I-A Certificates, the Class I-A Principal
Distribution Amount until the Certificate Principal Balance
thereof has been reduced to zero;
third, to the I-M2 Component, the I-M2 Component Principal
Distribution Amount, until the Component Principal Balance
thereof has been reduced to zero; and
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fourth, to the I-M3 Component, the I-M3 Component Principal
Distribution Amount, until the Component Principal Balance
thereof has been reduced to zero.
(ii) Any principal remaining undistributed pursuant to clause
(i) above following these distributions shall be used in determining the amount
of Group I Net Monthly Excess Cashflow, if any, for such Distribution Date.
(iii) On each Distribution Date (a) on or after the Group II
Stepdown Date and (b) on which a Group II Trigger Event is not in effect, the
Trust Administrator shall withdraw from the Distribution Account that portion of
Group II Available Funds equal to the Group II Principal Distribution 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 Principal Distribution Amount remaining for such Distribution Date:
first, (i) concurrently, to the Class II-A1 Certificates, the
Class II-A1 Principal Distribution Amount, until the
Certificate Principal Balance of the Class II-A1 Certificates
has been reduced to zero, and to the Class II-A2 Certificates,
the Class II-A Remaining Principal Distribution Amount, until
the Certificate Principal Balance of the Class II-A2
Certificates has been reduced to zero; then (ii) to the Class
II-A3 Certificates, any portion of the Class II-A Remaining
Principal Distribution Amount that remains following the
distribution to the Class II-A2 Certificates in clause (i),
until the Certificate Principal Balance thereof has been
reduced to zero; then (iii) to the Class II-A4 Certificates,
any portion of the Class II-A Remaining Principal Distribution
Amount that remains following the distribution to the Class
II-A3 Certificates in clause (ii), until the Certificate
Principal Balance thereof has been reduced to zero;
second, to the Class II-M1 Certificates, the Class II-M1
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
third, to the II-M2 Component, the II-M2 Component Principal
Distribution Amount, until the Component Principal Balance
thereof has been reduced to zero;
fourth, to the II-M3 Component, the II-M3 Component Principal
Distribution Amount, until the Component Principal Balance
thereof has been reduced to zero; and
fifth, to the Class II-M4 Certificates, the Class II-M4
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero.
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(iv) Any principal remaining undistributed pursuant to clause
(iii) above shall be used in determining the amount of Group II Net Monthly
Excess Cashflow, if any, for such Distribution Date.
(d) (i) On each Distribution Date, any Group I Net Monthly Excess
Cashflow shall be paid in the following order or priority, in each case to the
extent of the Group I Net Monthly Excess Cashflow remaining undistributed:
(a) to the Class I-A Certificates and Group I Mezzanine
Components then entitled to receive distributions in respect of principal, in an
amount equal to any Group I Extra Principal Distribution Amount, payable to such
Classes of Certificates or such Components as part of the Group I Principal
Distribution Amount pursuant to Section 4.01(b)(i) or Section 4.01(c)(i) above,
as applicable;
(b) concurrently, to the Class I-A Certificates and the
Class I-S Certificates, in an amount equal to the Unpaid Interest Shortfall
Amount, if any, for such Classes, allocated between the Class I-A Certificates
and the Class I-S Certificate pro rata, based on their respective entitlements;
(c) to the Class II-A Certificates, the Class II-M1
Certificates, Group II Mezzanine Components and the Class II-M4 Certificates
then entitled to receive distributions in respect of principal, in an amount
equal to any positive excess of the Group II Overcollateralization Deficiency
Amount over the Group II Net Monthly Excess Cashflow for such Distribution Date,
allocated among such Group II Certificates and Group II Mezzanine Components
(after giving effect to the distribution of the Group II Principal Distribution
Amount payable to such Classes of Certificates or such Components) as
distribution of Group II Principal Distribution Amount pursuant to Section
4.01(b)(iii) or 4.01(c)(iii);
(d) to the I-M2 Component, in an amount equal to the
Unpaid Interest Shortfall Amount, if any, for such Component for such
Distribution Date;
(e) to the I-M2 Component, in an amount equal to the
Allocated Realized Loss Amount, if any, for such Component for such Distribution
Date;
(f) to the I-M3 Component, in an amount equal to the
Unpaid Interest Shortfall Amount, if any, for such Component for such
Distribution Date;
(g) to the I-M3 Component, in an amount equal to the
Allocated Realized Loss Amount, if any, for such Component for such Distribution
Date;
(h) to the Group I Reserve Fund, the amount of any Net WAC
Rate Carryover Amounts with respect to the Class I-A Certificates and Group I
Mezzanine Components for such Distribution Date (or, if no Net WAC Rate
Carryover Amounts are payable to such Classes of Certificates or such Components
on such Distribution Date, to the Group I Reserve Fund, an amount such that when
added to other amounts already on deposit in the Group I Reserve Fund, the
aggregate amount on deposit therein is equal to $1,000);
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(i) to REMIC X, as holder of REMIC 3 Regular Interest
LT3-IC, the Monthly Interest Distributable Amount for REMIC 3 Regular Interest
LT3-IC plus, until the Uncertificated Principal Balance of REMIC 3 Regular
Interest LT3-IC is reduced to zero, any Group I Overcollateralization Release
Amount for such Distribution Date (in both cases, net of such portion of amounts
payable pursuant to this clause (i) that were paid pursuant to clause (h)
above);
(j) to REMIC X, as holder of REMIC 3 Regular Interest
LT3-IIC, the Monthly Interest Distributable Amount for REMIC 3 Regular Interest
LT3-IIC for such Distribution Date to the extent not distributed pursuant to
Section 4.01(d)(ii)(m) plus, until the Uncertificated Principal Balance of REMIC
3 Regular Interest LT3-IIC is reduced to zero, the amount, if any, equal to the
amount of any Realized Losses that reduced the Group II Overcollateralization
Release Amount, if any, on such Distribution Date;
(k) if such Distribution Date follows the Prepayment
Period during which occurs the latest date on which a Prepayment Charge may be
required to be paid in respect of any Group I Mortgage Loans, to REMIC X, as
holder of REMIC 3 Regular Interest LT3-IP, in reduction of the Uncertificated
Principal Balance thereof, until the Uncertificated Principal Balance thereof is
reduced to zero; and
(l) any remaining amounts to the Class R Certificates (in
respect of the appropriate Class R-3 Interest).
On each Distribution Date, after making the distributions of the Group
I Available Funds as provided above, the Trust Administrator shall withdraw from
the Group I Reserve Fund the amount on deposit therein and shall distribute such
amounts to the Class I-A Certificates and Group I Mezzanine Components in the
following order and priority, in each case to the extent of amounts remaining in
the Group I Reserve Fund and in each case to the extent of the Net WAC Rate
Carryover Amount for such Classes of Certificates or such Components for such
Distribution Date: first, to the Class I-A Certificates; second, to the I-M2
Component; and third, to the I-M3 Component. Any remaining amount shall be
re-deposited into the Group I Reserve Fund (to the extent of the required amount
of $1,000).
(ii) On each Distribution Date, any Group II Net Monthly
Excess Cashflow shall be paid in the following order of priority, in each case
to the extent of the Group II Net Monthly Excess Cashflow remaining
undistributed:
(a) to the Class II-A Certificates, the Class II-M1
Certificates, the Group II Mezzanine Components and the Class II-M4 Certificates
then entitled to receive distributions in respect of principal, in an amount
equal to any Group II Extra Principal Distribution Amount, payable to such
Classes of Certificates or such Components as part of the Group II Principal
Distribution Amount pursuant to Section 4.01(b)(iii) or 4.01(c)(iii) above, as
applicable;
(b) concurrently, to the Class II-A1 Certificates, the
Class II-A2 Certificates, the Class II-A3 Certificates, the Class II-A4
Certificates and the Class II-S Certificates, in an amount equal to the Unpaid
Interest Shortfall Amount, if any, for such Classes, allocated among the Class
II-A1 Certificates, the Class II-A2 Certificates, the Class II-
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A3 Certificates, the Class II-A4 Certificates and the Class II-S Certificates
pro rata, based on their respective entitlements;
(c) on each Distribution Date after the first Distribution
Date on which the Group I Overcollateralized Amount reaches the Group I
Overcollateralization Target Amount (after giving effect to the Group I Extra
Principal Distribution Amount on such Distribution Date), to the Class I-A
Certificates and Group I Mezzanine Components then entitled to receive
distributions in respect of principal, in an amount equal to any positive excess
of the Group I Overcollateralization Deficiency Amount over the Group I Net
Monthly Excess Cashflow on such Distribution Date, allocated among such Class
I-A Certificates and Group I Mezzanine Components (after giving effect to the
distribution of the Group I Principal Distribution Amount payable to such
Classes of Certificates or such Components) as distribution of Group I Principal
Distribution Amount pursuant to Section 4.01(b)(i) or 4.01(c)(i);
(d) to the Class II-M1 Certificates, in an amount equal to
the Unpaid Interest Shortfall Amount, if any, for such Class for such
Distribution Date;
(e) to the Class II-M1 Certificates, in an amount equal to
the Allocated Realized Loss Amount, if any, for such Class for such Distribution
Date;
(f) to the II-M2 Component, in an amount equal to the
Unpaid Interest Shortfall Amount, if any, for such Component for such
Distribution Date;
(g) to the II-M2 Component, in an amount equal to the
Allocated Realized Loss Amount, if any, for such Component for such Distribution
Date;
(h) to the II-M3 Component, in an amount equal to the
Unpaid Interest Shortfall Amount, if any, for such Component for such
Distribution Date;
(i) to the II-M3 Component, in an amount equal to the
Allocated Realized Loss Amount, if any, for such Component for such Distribution
Date;
(j) to the Class II-M4 Certificates, in an amount equal to
the Unpaid Interest Shortfall Amount, if any, for such Class for such
Distribution Date;
(k) to the Class II-M4 Certificates, in an amount equal to
the Allocated Realized Loss Amount, if any, for such Class for such Distribution
Date;
(l) to the Group II Reserve Fund, the amount of any Net
WAC Rate Carryover Amounts with respect to the Class II-A Certificates, the
Class II-M1 Certificates, the Group II Mezzanine Components and the Class II-M4
Certificates for such Distribution Date (or, if no Net WAC Rate Carryover
Amounts are payable to such Classes of such Certificates and Components on such
Distribution Date, to the Group II Reserve Fund, an amount such that when added
to other amounts already on deposit in the Group II Reserve Fund, the aggregate
amount on deposit therein is equal to $1,000);
(m) to REMIC X, as holder of REMIC 3 Regular Interest
LT3-IIC, the Monthly Interest Distributable Amount for REMIC 3 Regular Interest
LT3-IIC
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plus, until the Uncertificated Principal Balance of REMIC 3 Regular Interest
LT3-IIC is reduced to zero, any Group II Overcollateralization Release Amount
for such Distribution Date (in both cases, net of such portion of amounts
payable pursuant to this clause (m) that were paid pursuant to clause (l)
above);
(n) to REMIC X, as holder of REMIC 3 Regular Interest
LT3-IC, the Monthly Interest Distributable Amount for REMIC 3 Regular Interest
LT3-IC for such Distribution Date to the extent not distributed pursuant to
Section 4.01(d)(i)(i) plus, until the Uncertificated Principal Balance of REMIC
3 Regular Interest LT3-IC is reduced to zero, the amount, if any, equal to the
amount of any Realized Losses that reduced the Group I Overcollateralization
Release Amount, if any, on such Distribution Date;
(o) if such Distribution Date follows the Prepayment
Period during which occurs the latest date on which a Prepayment Charge may be
required to be paid in respect of any Mortgage Loans, to REMIC X, as holder of
REMIC 3 Regular Interest LT3-IIP, in reduction of the Uncertificated Principal
Balance thereof, until the Uncertificated Principal Balance thereof is reduced
to zero; and
(p) any remaining amounts to the Class R Certificates (in
respect of the appropriate Class R-3 Interest).
On each Distribution Date, after making the distributions of the Group
II Available Funds as provided above, the Trust Administrator shall withdraw
from the Group II Reserve Fund the amount on deposit therein and shall
distribute such amounts to the Class II-A1 Certificates, the Class II-M1
Certificates, the Group II Mezzanine Components and the Class II-M4
Certificates, in the following order and priority, in each case to the extent of
amounts remaining in the Group II Reserve Fund and in each case to the extent of
the Net WAC Rate Carryover Amount for such Classes of Certificates or such
Components for such Distribution Date: first, to the Class II-A1 Certificates,
the Class II-A2 Certificates, the Class II-A3 Certificates and the Class II-A4
Certificates, pro rata, based on their respective entitlements; second, to the
Class II-M1 Certificates; third, to the II-M2 Component; fourth, to the II-M3
Component; and fifth, to the Class II-M4 Certificates. Any remaining amount
shall be re-deposited into the Group II Reserve Fund (to the extent of the
required amount of $1,000).
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Group I Mortgage Loans and Group II Mortgage Loans received
during the related Prepayment Period and any Master Servicer Prepayment Charge
Amounts paid by or collected by the Master Servicer during the related
Prepayment Period will be withdrawn from the Distribution Account and
distributed by the Trust Administrator to REMIC 3 Regular Interest LT3-IP (in
respect of Group I Mortgage Loans) or REMIC 3 Regular Interest LT3-IIP (in
respect of Group II Mortgage Loans), respectively, and shall not be available
for distribution to any other Class of Certificates or Component. The payment of
the foregoing amounts in respect of such Regular Interests shall not reduce the
Uncertificated Principal Balance thereof.
Without limiting the provisions of Section 9.01(b), by acceptance of
the Class R Certificates the Holders of the Class R Certificates agree, and it
is the understanding of the parties hereto, that for so long as any of the NIM
Notes are outstanding or any amounts are reimbursable or payable to the NIMS
Insurer in accordance with the terms of the Indenture, in
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connection with any amounts distributable to the Holders of the Class R
Certificates, their rights to receive the amounts so distributable hereby are
assigned and transferred and any such amounts shall be paid by the Trust
Administrator, and to the extent received by the Holders of the Class R
Certificates they shall pay any such amounts, to the Holders of the Class I-C
Certificates and Class II-C Certificates, respectively.
(e) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated pro rata among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date will be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in this Section 4.01 or
Section 9.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Trust Administrator in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Certificates having an
initial aggregate Certificate Principal Balance or Notional Amount that is in
excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the Original Class
Certificate Principal Balance or Original Class Notional Amount of such Class of
Certificates, or otherwise by check mailed by first class mail to the address of
such Holder appearing in the Certificate Register. Notwithstanding the
foregoing, the Holders of the Class I-A Certificates and the Class I-S
Certificates shall receive all distributions pursuant to this Section 4.01(e) by
wire transfer of immediately available funds. The final distribution on each
Certificate will be made in like manner, but only upon presentment and surrender
of such Certificate at the Corporate Trust Office of the Trust Administrator or
such other location specified in the notice to Certificateholders of such final
distribution.
Payments to the Guarantor on each Distribution Date will be made by
wire transfer of immediately available funds to the following Federal Reserve
Account:
Telegraphic: FNMA NYC
ABA: ▇▇▇-▇▇▇-▇▇▇
Ref: 2002-T5
Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. All such credits
and disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the Certificates. None of the Trustee, the Trust Administrator, the Depositor,
the Master Servicer or the Seller shall have any responsibility therefor except
as otherwise provided by applicable law.
(f) The rights of the Certificateholders to receive distributions
in respect of the Certificates, and all interests of the Certificateholders in
such distributions, shall be as set
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forth in this Agreement. None of the Holders of any Class of Certificates, the
Trustee or the Master Servicer shall in any way be responsible or liable to the
Holders of any other Class of Certificates in respect of amounts properly
previously distributed on the Certificates.
(g) Except as otherwise provided in Section 9.01, whenever the
Trust Administrator expects that the final distribution with respect to any
Class of Certificates will be made on the next Distribution Date, the Trust
Administrator shall, no later than three (3) days before the related
Distribution Date, mail to the Trustee, the NIMS Insurer, the Guarantor and each
Holder on such date of such Class of Certificates a notice to the effect that:
(i) the Trust Administrator expects that the final
distribution with respect to such Class of Certificates will be made on such
Distribution Date but only upon presentation and surrender of such Certificates
at the office of the Trust Administrator therein specified, and
(ii) no interest shall accrue on such Certificates from and
after the end of the related Accrual Period; provided, that such notice shall be
sent to the Guarantor only with respect to Guaranteed Certificates.
Any funds not distributed to any Holder or Holders of Certificates of
such Class on such Distribution Date because of the failure of such Holder or
Holders to tender their Certificates shall, on such date, be set aside and held
in trust by the Trust Administrator and credited to the account of the
appropriate non-tendering Holder or Holders. If any Certificates as to which
notice has been given pursuant to this Section 4.01(g) shall not have been
surrendered for cancellation within six months after the time specified in such
notice, the Trust Administrator shall mail a second notice to the remaining
non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto. If
within one year after the second notice all such Certificates shall not have
been surrendered for cancellation, the Trust Administrator shall, directly or
through an agent, mail a final notice to the remaining non-tendering
Certificateholders concerning surrender of their Certificates but shall continue
to hold any remaining funds for the benefit of non-tendering Certificateholders.
The costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in such trust fund.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, the Trust Administrator shall pay to Deutsche
Banc Alex. ▇▇▇▇▇ all such amounts, and all rights of non-tendering
Certificateholders in or to such amounts shall thereupon cease. No interest
shall accrue or be payable to any Certificateholder on any amount held in trust
by the Trust Administrator as a result of such Certificateholder's failure to
surrender its Certificate(s) for final payment thereof in accordance with this
Section 4.01(g).
(h) Notwithstanding anything to the contrary herein, (i) in no
event shall the Certificate Principal Balance of a Class II-M1 Certificate or a
Class II-M4 Certificate or the Component Principal Balance of a Mezzanine
Component be reduced more than once in respect of any particular amount both (a)
allocated to such Certificate or such Component in respect of Realized Losses
pursuant to Section 4.06 and (b) distributed to such Certificate or such
Component in reduction of the Certificate Principal Balance or Component
Principal Balance thereof pursuant to this Section 4.01 from related Net Monthly
Excess Cashflow, (ii) in no event shall the Uncertificated Principal Balance of
a REMIC 2 Regular Interest be reduced more than once in respect of any
particular amount both (a) allocated to such REMIC 2 Regular Interest in
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respect of Realized Losses pursuant to Section 4.06 and (b) distributed on such
REMIC 2 Regular Interest in reduction of the Uncertificated Principal Balance
thereof pursuant to Section 4.05 and (iii) in no event shall the Uncertificated
Principal Balance of a REMIC 1A Regular Interest or REMIC 1B Regular Interest be
reduced more than once in respect of any particular amount both (a) allocated to
such REMIC 1A Regular Interest or REMIC 1B Regular Interest in respect of
Realized Losses pursuant to Section 4.06 and (b) distributed on such REMIC 1A
Regular Interest or REMIC 1B Regular Interest in reduction of the Uncertificated
Principal Balance thereof pursuant to Section 4.05.
(i) Any amounts distributed to REMIC X on any Distribution Date
under Section 4.01(d) shall, on such Distribution Date, be distributed by REMIC
X as follows: (i) amounts received in respect of REMIC 3 Regular Interest LT3-IC
shall be distributed pro rata to the holders of the Class I-C Certificates; (ii)
amounts received in respect of REMIC 3 Regular Interest LT3-IIC shall be
distributed pro rata to the holders of the Class II-C Certificates; (iii)
amounts received in respect of REMIC 3 Regular Interest LT3-IP shall be
distributed pro rata to the holders of the Class I-P Certificates; and (iv)
amounts received in respect of REMIC 3 Regular Interest LT3-IIP shall be
distributed pro rata to the holders of the Class II-P Certificates; provided,
however, that the Class C Certificates shall not be entitled to receive more
than their Monthly Interest Distributable Amount, plus any unpaid Monthly
Interest Distributable Amount from prior periods, plus any remaining Certificate
Principal Balance. Any amounts remaining shall be distributed to the holders of
the Class R-X Certificates. For the avoidance of doubt, the provisions of
Sections 4.01(e), 4.01(f) and 4.01(g) shall apply to the Class C Certificates
and the Class P Certificates.
Section 4.02 Preference Claims.
The Trustee and the Trust Administrator shall promptly notify the NIMS
Insurer of any proceeding or the institution of any action, of which a
Responsible Officer of the Trustee or the Trust Administrator, as applicable,
has actual knowledge, seeking the avoidance as a preferential transfer under
applicable bankruptcy, insolvency, receivership or similar law (a "Preference
Claim") of any distribution made with respect to the Class C Certificates or
Class P Certificates. Each Holder of the Class C Certificates or the Class P
Certificates, by its purchase of such Certificates, the Master Servicer, the
Trust Administrator and the Trustee hereby agree that the NIMS Insurer may at
any time during the continuation of any proceeding relating to a Preference
Claim direct all matters relating to such Preference Claim, including, without
limitation, (i) the direction of any appeal of any order relating to such
Preference Claim and (ii) the posting of any surety, supersedes or performance
bond pending any such appeal. In addition and without limitation of the
foregoing, the NIMS Insurer shall be subrogated to the rights of the Master
Servicer, the Trustee, the Trust Administrator and each Holder of the Class C
Certificates and Class P Certificates in the conduct of any such Preference
Claim, including, without limitation, all rights of any party to an adversary
proceeding action with respect to any court order issued in connection with any
such Preference Claim; provided, however, that the NIMS Insurer will not have
any rights with respect to any Preference Claim set forth in this paragraph
unless the Trust Administrator, as indenture trustee with respect to the Insured
NIM Notes or the holder of any Insured NIM Notes has been required to relinquish
a distribution made on the Class C Certificates, the Class P Certificates or the
Insured NIM Notes, as applicable, and the NIMS Insurer made a payment in respect
of such relinquished amount.
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Section 4.03 Statements.
(a) On each Distribution Date, based, as applicable, on
information provided to it by the Master Servicer, the Trust Administrator shall
prepare and make available by electronic medium (as set forth in the penultimate
paragraph of this Section 4.03(a)) to each Holder of the Regular Certificates,
the Trustee, the Master Servicer, the NIMS Insurer, the Guarantor and the Rating
Agencies, a statement as to the distributions made on such Distribution Date:
(i) the amount of the distribution made on such Distribution Date
to the Holders of each Class of Regular Certificates (other than the
Class S Certificates), including on account of the Mezzanine
Components, 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), including on account of the Mezzanine
Components, allocable to interest, separately identified;
(iii) the Group I Overcollateralized Amount, the Group II
Overcollateralized Amount, the Group I Overcollateralization Release
Amount, the Group II Overcollateralization Release Amount, the Group I
Overcollateralization Deficiency Amount, the Group II
Overcollateralization Deficiency Amount, the Group I
Overcollateralization Target Amount and the Group II
Overcollateralization Target Amount as of such Distribution Date and
the Group I Excess Overcollateralized Amount and the Group II Excess
Overcollateralized Amount, for such Distribution Date;
(iv) the aggregate amount of servicing compensation received by
the Master Servicer with respect to the related Due Period and such
other customary information as the Trust Administrator deems necessary
or desirable, or which a Certificateholder reasonably requests, to
enable Certificateholders to prepare their tax returns;
(v) the Deficiency Amount, the Guarantor Payments and the
Guarantor Reimbursement Amount for such Distribution Date;
(vi) the aggregate amount of Advances for the related Due Period;
(vii) the aggregate Stated Principal Balance of the Mortgage Loans
at the Close of Business at the end of the related Due Period;
(viii) the number, aggregate principal balance, weighted average
remaining term to maturity and weighted average Mortgage Rate of the
Mortgage Loans as of the related Determination Date;
(ix) the number and aggregate unpaid principal balance of Mortgage
Loans (a) delinquent 30-59 days, (b) delinquent 60-89 days, (c)
delinquent 90 or more days in
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each case, as of the last day of the preceding calendar month
provided, however that any aggregate unpaid principal balance of
Mortgage Loans shall be reported as of the last day of the related Due
Period, (d) as to which foreclosure proceedings have been commenced
and (e) with respect to which the related Mortgagor has filed for
protection under applicable bankruptcy laws, with respect to whom
bankruptcy proceedings are pending or with respect to whom bankruptcy
protection is in force;
(x) with respect to any Mortgage Loan that became an REO Property
during the preceding Prepayment Period, the unpaid principal balance
and the Principal Balance of such Mortgage Loan as of the date it
became an REO Property;
(xi) the total number and cumulative principal balance of all REO
Properties as of the Close of Business of the last day of the preceding
Prepayment Period;
(xii) the aggregate amount of Principal Prepayments made during
the related Prepayment Period;
(xiii) the aggregate amount of Realized Losses incurred during the
related Prepayment Period and the cumulative amount of Realized Losses;
(xiv) the aggregate amount of Extraordinary Trust Fund expenses
withdrawn from the Collection Account or the Distribution Account for
such Distribution Date;
(xv) the Certificate Principal Balance of the Class A
Certificates, the Mezzanine Certificates and the Class C Certificates,
after giving effect to the distributions made on such Distribution
Date, the Notional Amount of the Class S Certificates and the Class C
Certificates, after giving effect to the distributions made on such
Distribution Date, and the Component Principal Balance of the Mezzanine
Components, after giving effect to the distributions made on such
Distribution Date;
(xvi) the Monthly Interest Distributable Amount in respect of the
Class A Certificates, the Class S Certificates, the Mezzanine
Certificates, the Mezzanine Components and the Class C Certificates for
such Distribution Date and the Unpaid Interest Shortfall Amount, if
any, with respect to the Class A Certificates, the Class S
Certificates, the Mezzanine Certificates and the Mezzanine Components
for such Distribution Date;
(xvii) the aggregate amount of any Prepayment Interest Shortfalls
for such Distribution Date, to the extent not covered by payments by
the Master Servicer pursuant to Section 3.24, and the aggregate amount
of any Relief Act Interest Shortfalls for such Distribution Date;
(xviii) the Group I Credit Enhancement Percentage and the Group II
Credit Enhancement Percentage for such Distribution Date;
(xix) the Net WAC Rate Carryover Amount for the Class A
Certificates, the Mezzanine Certificates and the Mezzanine Components,
if any, for such Distribution
137
Date and the amount remaining unpaid after reimbursements therefor
on such Distribution Date;
(xx) [reserved];
(xxi) the date when a Stepdown Date or a Trigger Event has
occurred;
(xxii) the Group I Available Funds and Group II Available Funds;
(xxiii) the respective Pass-Through Rates applicable to the Class
A Certificates, the Class S Certificates, the Mezzanine Certificates,
the Mezzanine Components and the Class C Certificates for such
Distribution Date and the Pass-Through Rate applicable to the Class A
Certificates, the Mezzanine Certificates and the Mezzanine Components
for the immediately succeeding Distribution Date;
(xxiv) the Guaranty Fee to be paid to the Guarantor with respect
to the Guaranteed Certificates for such Distribution Date;
(xxv) such other information as the Guarantor may reasonably
request in such format as reasonably required by the Guarantor and any
other information that is required by the Code and regulations
thereunder to be made available to Certificateholders;
(xxvi) the amount on deposit in each of the Reserve Funds;
(xxvii) (A) the dollar amount of payments received related to
claims under the PMI Policy during the related Prepayment Period (and
the number of Mortgage Loans to which such payments related) and (B)
the aggregate dollar amount of payments received related to claims
under the PMI Policy since the Cut-off Date (and the number of Mortgage
Loans to which such payments related); and
(xxviii) (A) the dollar amount of claims made under the PMI Policy
that were denied during the related Prepayment Period (and the number
of Mortgage Loans to which such denials related) and (B) the aggregate
dollar amount of claims made under the PMI Policy that were denied
since the Cut-off Date (and the number of Mortgage Loans to which such
denials related).
Subject to Section 4.03(f) below, the Trust Administrator will make
such statement (and, at its option, any additional files containing the same
information in an alternative format) available each month to
Certificateholders, the Master Servicer, the NIMS Insurer, the Guarantor and the
Rating Agencies via the Trust Administrator's internet website. The Trust
Administrator's internet website shall initially be located at
"http:\\▇▇▇-▇▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇-▇▇▇▇.▇▇▇/▇▇▇▇. Assistance in using the website can
be obtained by calling the Trust Administrator's customer service desk at
▇-▇▇▇-▇▇▇-▇▇▇▇. Parties that are unable to use the above distribution options
are entitled to have a paper copy mailed to them via first class mail by calling
the customer service desk and indicating such. The Trust Administrator 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
138
Trust Administrator shall provide timely and adequate notification to all above
parties regarding any such changes.
In the case of information furnished pursuant to subclauses (i) through
(iii) above, the amounts shall be expressed in a separate section of the report
as a dollar amount for each Class for each $1,000 original dollar amount as of
the Closing Date.
(b) Within a reasonable period of time after the end of each
calendar year, the Trust Administrator 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 Trust Administrator shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be prepared and furnished by the Trust Administrator to Certificateholders
pursuant to any requirements of the Code as are in force from time to time.
(c) On each Distribution Date, the Trust Administrator shall
forward to the Holders of the Residual Certificates and the NIMS Insurer a copy
of the reports forwarded to the Regular Certificateholders in respect of such
Distribution Date with such other information as the Trust Administrator deems
necessary or appropriate.
(d) Within a reasonable period of time after the end of each
calendar year, the Trust Administrator shall deliver to each Person who at any
time during the calendar year was a Holder of a Residual Certificate, if
requested in writing by such Person, such information as is reasonably necessary
to provide to such Person a statement containing the information provided
pursuant to the previous paragraph aggregated for such calendar year or
applicable portion thereof during which such Person was a Holder of a Residual
Certificate. Such obligation of the Trust Administrator shall be deemed to have
been satisfied to the extent that substantially comparable information shall be
prepared and furnished to Certificateholders by the Trust Administrator pursuant
to any requirements of the Code as from time to time in force.
(e) On each Distribution Date the Trust Administrator shall
provide Bloomberg Financial Markets, L.P. ("Bloomberg") CUSIP level factors for
each Class of Certificates as of such Distribution Date, using a format and
media mutually acceptable to the Trust Administrator and Bloomberg.
(f) On the fourth Business Day preceding each Distribution Date,
the Trust Administrator shall deliver to the Guarantor (by electronic medium as
specified in the next sentence) a statement identifying the Class Factor for
each Class of Certificates. The Trust Administrator shall deliver such statement
on or before 12:00 noon (New York time) on such day via the internet using the
following domain name: ▇▇▇▇_▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇. If a Guarantor Payment will be
payable on a Distribution Date, all information required under Section 4.03(a)
must also be similarly delivered to Guarantor on such third Business Day
proceeding such Distribution Date. The second consecutive failure by the Trust
Administrator to deliver the Class Factor (or to deliver an accurate Class
Factor) to the Guarantor shall constitute an event of default and permit the
Guarantor to remove the Trust Administrator for cause;
139
provided that the Master Servicer had delivered the Remittance Report for the
related Distribution Date to the Trust Administrator pursuant to Section 4.04.
Section 4.04 Remittance Reports; Advances.
(a) Within one Business Day after each Determination Date, but in
no event later than such date which would allow the Trust Administrator to
submit a claim to the NIMS Insurer under the Indenture, the Master Servicer
shall deliver to the NIMS Insurer, the Guarantor, the Trust Administrator and
the Trustee by telecopy or electronic mail (or by such other means as the Master
Servicer, the NIMS Insurer, the Guarantor, the Trust Administrator and the
Trustee, as the case may be, may agree from time to time) a Remittance Report
with respect to the related Distribution Date. Not later than each Master
Servicer Remittance Date (or, in the case of certain information, as agreed
between the Trust Administrator and the Master Servicer, not later than four
Business Days after the end of each Due Period), the Master Servicer shall
deliver or cause to be delivered to the Trust Administrator 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 Trust Administrator
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 Trust Administrator shall
not be responsible to recompute, recalculate or verify any information provided
to it by the Master Servicer.
(b) The amount of Advances to be made by the Master Servicer for
any Distribution Date shall equal, subject to Section 4.04(d), the sum of (i)
the aggregate amount of Monthly Payments (with each interest portion thereof net
of the related Servicing Fee), due on the related Due Date in respect of the
Mortgage Loans, which Monthly Payments were delinquent as of the close of
business on the related Determination Date, plus (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Prepayment Period and as to which such REO Property an REO Disposition did not
occur during the related Prepayment Period, an amount equal to the excess, if
any, of the Monthly Payments (with each interest portion thereof net of the
related Servicing Fee) that would have been due on the related Due Date in
respect of the related Mortgage Loans, over the net income from such REO
Property transferred to the Distribution Account pursuant to Section 3.23 for
distribution on such Distribution Date.
On or before 3:00 p.m. New York time on the Master Servicer Remittance
Date, the Master Servicer shall remit in immediately available funds to the
Trust Administrator for deposit in the Distribution Account an amount equal to
the aggregate amount of Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case, it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.04, used by the
Master Servicer in discharge of any such Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of Advances to be made
by the Master Servicer with respect to the Mortgage Loans and REO Properties.
Any amounts held for future distribution and so used shall be appropriately
reflected in the Master Servicer's records and replaced by the Master Servicer
by deposit in the Collection Account on or before any future Master Servicer
Remittance Date to the extent that the Available Funds for the related
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Distribution Date (determined without regard to Advances to be made on the
Master Servicer Remittance Date) shall be less than the total amount that would
be distributed to the Classes of Certificateholders pursuant to Section 4.01 on
such Distribution Date if such amounts held for future distributions had not
been so used to make Advances. The Trust Administrator will provide notice to
the NIMS Insurer, the Guarantor, the Trustee and the Master Servicer by telecopy
by the close of business on any Master Servicer Remittance Date in the event
that the amount remitted by the Master Servicer to the Trust Administrator on
such date is less than the Advances required to be made by the Master Servicer
for the related Distribution Date.
(c) The obligation of the Master Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan, shall continue until the
Mortgage Loan is paid in full or until the recovery of all Liquidation Proceeds
thereon.
(d) Notwithstanding anything herein to the contrary, no Advance or
Servicing Advance shall be required to be made hereunder by the Master Servicer
if such Advance or Servicing Advance would, if made, constitute a Nonrecoverable
Advance. The determination by the Master Servicer that it has made a
Nonrecoverable Advance or that any proposed Advance or Servicing Advance, if
made, would constitute a Nonrecoverable Advance, shall be evidenced by an
Officers' Certificate of the Master Servicer delivered to the NIMS Insurer, the
Guarantor, the Depositor, the Trust Administrator and the Trustee.
Section 4.05 Distributions on the REMIC Regular Interests.
(a) On each Distribution Date, the Trust Administrator shall cause
the Group I Available Funds, in the following order of priority, to be
distributed by REMIC 1A to REMIC 2 on account of the REMIC 1A Regular Interests
or withdrawn from the Distribution Account and distributed to the Holders of the
Class R Certificates (in respect of the Class R-1A Interest), as the case may
be:
(1) first, with respect to the Group I Mortgage Loans with
Adjusted Net Minimum Mortgage Rates of less than 5.25%, to the Holders
of REMIC 1A Regular Interest LT1A-2 in an amount equal to (A) the
Uncertificated Accrued Interest for such REMIC 1A Regular Interest for
such Distribution Date, plus (B) any amounts in respect thereof
remaining unpaid from previous Distribution Dates, and with respect to
the Group I Mortgage Loans with Adjusted Net Minimum Mortgage Rates of
5.25% or greater, in the following order: first to the Holders of REMIC
1A Regular Interest LT1A-3, then to REMIC 1A Regular Interest LT1A-4,
and then to REMIC 1A Regular Interest LT1A-5 in an amount equal to (A)
the Uncertificated Accrued Interest for each such REMIC 1A Regular
Interest for such Distribution Date, plus (B) any amounts in respect
thereof remaining unpaid from previous Distribution Dates, and second,
pro rata, to the Holders of REMIC 1A Regular Interest LT1A-1 and REMIC
1A Regular Interest LT1A-P in an amount equal to (A) the Uncertificated
Accrued Interest for such REMIC 1A Regular Interest for such
Distribution Date, plus (B) any amounts in respect thereof remaining
unpaid from previous Distribution Dates;
(2) second, to the Holders of REMIC 1A Regular Interest LT1A-P, on
the Distribution Date immediately following the expiration of the
latest Prepayment Charge
141
as identified on the Prepayment Charge Schedule or any Distribution
Date thereafter until $100 has been distributed pursuant to this
clause;
(3) third, the remainder of the Group I Available Funds for such
Distribution Date with respect to those Group I Mortgage Loans with
Adjusted Net Minimum Mortgage Rates of less than 5.25%, to the Holders
of REMIC 1A Regular Interest LT1A-2 until the Uncertificated Principal
Balance of such REMIC 1A Regular Interest is reduced to zero and with
respect to those Group I Mortgage Loans with Adjusted Net Minimum
Mortgage Rates of 5.25% or greater, in the following order: to the
Holders of REMIC 1A Regular Interest LT1A-1, REMIC 1A Regular Interest
LT1A-5, REMIC 1A Regular Interest LT1A-4, and REMIC 1A Regular Interest
LT1A-3, until the Uncertificated Principal Balance of each such REMIC
1A Regular Interest is reduced to zero; and
(4) fourth, any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-1A Interest).
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Group I Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC 1A to the Holders of REMIC 1A Regular
Interest LT1A-P. The payment of the foregoing amounts to the Holders of REMIC 1A
Regular Interest LT1A-P shall not reduce the Uncertificated Principal Balance
thereof.
(b) On each Distribution Date, the Trust Administrator shall cause
the Group II Available Funds, in the following order of priority, to be
distributed by REMIC 1B to REMIC 2 on account of the REMIC 1B Regular Interests
or withdrawn from the Distribution Account and distributed to the Holders of the
Class R Certificates (in respect of the Class R-1B Interest), as the case may
be:
(1) first, with respect to the Group II Mortgage Loans with
Adjusted Net Minimum Mortgage Rates of less than 5.25%, to the Holders
of REMIC 1B Regular Interest LT1B-2 in an amount equal to (A) the
Uncertificated Accrued Interest for such REMIC 1B Regular Interest for
such Distribution Date, plus (B) any amounts in respect thereof
remaining unpaid from previous Distribution Dates, and with respect to
the Group II Mortgage Loans with Adjusted Net Minimum Mortgage Rates of
5.25% or greater, in the following order: first to the Holders of REMIC
1B Regular Interest LT1B-3, then to REMIC 1B Regular Interest LT1B-4,
and then to REMIC 1B Regular Interest LT1B-5 in an amount equal to (A)
the Uncertificated Accrued Interest for each such REMIC 1B Regular
Interest for such Distribution Date, plus (B) any amounts in respect
thereof remaining unpaid from previous Distribution Dates, and second,
pro rata, to the Holders of REMIC 1B Regular Interest LT1B-1 and REMIC
1B Regular Interest LT1B-P in an amount equal to (A) the Uncertificated
Accrued Interest for such REMIC 1B Regular Interest for such
Distribution Date, plus (B) any amounts in respect thereof remaining
unpaid from previous Distribution Dates;
(2) second, to the Holders of REMIC 1B Regular Interest LT1B-P, on
the Distribution Date immediately following the expiration of the
latest Prepayment Charge
142
as identified on the Prepayment Charge Schedule or any Distribution
Date thereafter until $100 has been distributed pursuant to this
clause;
(3) third, the remainder of the Group II Available Funds for such
Distribution Date with respect to those Group II Mortgage Loans with
Adjusted Net Minimum Mortgage Rates of less than 5.25%, to the Holders
of REMIC 1B Regular Interest LT1B-2 until the Uncertificated Principal
Balance of such REMIC 1B Regular Interest is reduced to zero and with
respect to those Group II Mortgage Loans with Adjusted Net Minimum
Mortgage Rates of 5.25% or greater, in the following order: to the
Holders of REMIC 1B Regular Interest LT1B-1, REMIC 1B Regular Interest
LT1B-5, REMIC 1B Regular Interest LT1B-4, and REMIC 1B Regular Interest
LT1B-3, until the Uncertificated Principal Balance of each such REMIC
1B Regular Interest is reduced to zero; and
(4) fourth, any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-1B Interest).
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Group II Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC 1B to the Holders of REMIC 1B Regular
Interest LT1B-P. The payment of the foregoing amounts to the Holders of REMIC 1B
Regular Interest LT1B-P shall not reduce the Uncertificated Principal Balance
thereof.
(c) On each Distribution Date, the Trust Administrator shall cause
in the following order of priority, the following amounts to be distributed by
REMIC 2 to REMIC 3 on account of the REMIC 2 Regular Interests or withdrawn from
the Distribution Account and distributed to the holders of the Class R
Certificates (in respect of the Class R-2 Interest), as the case may be:
(1) first, Group I Available Funds equal to the Group I
Interest Remittance Amount shall be distributed (i) first, to the
Holders of REMIC 2 Regular Interest LT2S-1A, REMIC 2 Regular Interest
LT2S-1B, REMIC 2 Regular Interest LT2S-1C, REMIC 2 Regular Interest
LT2S-1D, REMIC 2 Regular Interest LT2S-1E and REMIC 2 Regular ▇▇▇▇▇▇▇▇
▇▇▇▇-▇▇, 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; and (ii)
second, to Holders of REMIC 2 Regular Interest LT2A-1, REMIC 2 Regular
Interest LT2B-1, REMIC 2 Regular Interest LT2C-1, REMIC 2 Regular
Interest LT2D-1, REMIC 2 Regular Interest LT2E-1 and REMIC 2 Regular
Interest LT2P-1, 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;
provided, however, that amounts payable as Uncertificated Accrued
Interest in respect of REMIC 2 Regular Interest LT2E-1 shall be
reduced, when the REMIC 2 Overcollateralized Amount 1 is less than the
REMIC 2 Overcollateralization Target Amount 1, by the lesser of (x) the
amount of such difference and (y) the Maximum LT2E-1 Uncertificated
Accrued Interest Deferral Amount;
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(2) second, Group II Available Funds equal to the Group II
Interest Remittance Amount shall be distributed (i) first, to the
Holders of REMIC 2 Regular Interest LT2S-2A, REMIC 2 Regular Interest
LT2S-2B, REMIC 2 Regular Interest LT2S-2C, REMIC 2 Regular Interest
LT2S-1D, REMIC 2 Regular Interest LT2S-2E and REMIC 2 Regular ▇▇▇▇▇▇▇▇
▇▇▇▇-▇▇, 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; and (ii)
second, to Holders of REMIC 2 Regular Interest LT2A-2, REMIC 2 Regular
Interest LT2B-2, REMIC 2 Regular Interest LT2C-2, REMIC 2 Regular
Interest LT2D-2, REMIC 2 Regular Interest LT2E-2, REMIC 2 Regular
Interest LT2F-2, REMIC 2 Regular Interest LT2G-2, REMIC 2 Regular
Interest LT2H-2, REMIC 2 Regular Interest LT2I-2, REMIC 2 Regular
Interest LT2J-2, and REMIC 2 Regular Interest LT2P-2, 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; provided, however, that
amounts payable as Uncertificated Accrued Interest in respect of REMIC
2 Regular Interest LT2J-2 shall be reduced, when the REMIC 2
Overcollateralized Amount 2 is less than the REMIC 2
Overcollateralization Target Amount 2, by the lesser of (x) the amount
of such difference and (y) the Maximum LT2J-2 Uncertificated Accrued
Interest Deferral Amount;
(3) third, to the Holders of REMIC 2 Regular Interests, in an
amount equal to the remainder of the Group I Available Funds for such
Distribution Date after the distributions made pursuant to clause (1)
above, allocated as follows:
(A) (i) 98% to the Holders of REMIC 2 Regular Interest LT2A-1,
(ii) 1.00% to the Holders of REMIC 2 Regular Interest LT2B-1,
REMIC 2 Regular Interest LT2C-1 and REMIC 2 Regular Interest
LT2D-1, in the same proportion as principal payments are allocated
to the Corresponding Certificates, and (iii) 1.00% to the Holders
of REMIC 2 Regular Interest LT2E-1, until the Uncertificated
Principal Balance of all such Uncertificated REMIC 2 Regular
Interests is reduced to zero;
(B) then, to the Holders of REMIC 2 Regular Interest LT2P-1,
on the Distribution Date immediately following the expiration of
the latest Prepayment Charge with respect to Group I Mortgage
Loans as identified on the Prepayment Charge Schedule or any
Distribution Date thereafter until $100 has been distributed
pursuant to this clause; and
(C) then, any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-2 Interest);
(4) fourth, to the Holders of REMIC 2 Regular Interests, in an
amount equal to the remainder of the Group II Available Funds for such
Distribution Date after the distributions made pursuant to clause (2)
above, allocated as follows:
(A) (i) 98% to the Holders of REMIC 2 Regular Interest LT2A-2,
(ii) 1.00% to the Holders of REMIC 2 Regular Interest LT2B-2,
REMIC 2 Regular Interest LT2C-2, REMIC 2 Regular Interest LT2D-2,
REMIC 2 Regular Interest
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LT2E-2, REMIC 2 Regular Interest LT2F-2, REMIC 2 Regular Interest
LT2G-2, REMIC 2 Regular Interest LT2H-2 and REMIC 2 Regular
Interest LT2I-2 in the same proportion as principal payments are
allocated to the Corresponding Certificates, and (iii) 1.00% to
the Holders of REMIC 2 Regular Interest LT2J-2, until the
Uncertificated Principal Balance of all such Uncertificated REMIC
2 Regular Interests is reduced to zero;
(B) then, to the Holders of REMIC 2 Regular Interest LT2P-2,
on the Distribution Date immediately following the expiration of
the latest Prepayment Charge with respect to Group II Mortgage
Loans as identified on the Prepayment Charge Schedule or any
Distribution Date thereafter until $100 has been distributed
pursuant to this clause;
(C) then, any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-2 Interest); and
(5) fifth, to REMIC 2 Regular Interest LT2P-1, 100% of the amount
of Prepayment Charges paid in respect of REMIC 1A Regular Interest
LT1P-1, and to REMIC 2 Regular Interest LT2P-2, 100% of the amount of
Prepayment Charges paid in respect of REMIC 1B Regular Interest LT1B-P
provided, however, that 98% and 2% of any principal payments that are
attributable to Group I Overcollateralization Release Amount shall be allocated
to Holders of REMIC 2 Regular Interest LT2A-1 and REMIC 2 Regular Interest
LT2E-1, respectively, and 98% and 2% of any principal payments that are
attributable to Group II Overcollateralization Release Amount shall be allocated
to Holders of REMIC 2 Regular Interest LT2A-2 and REMIC 2 Regular Interest
LT2J-2, respectively.
Section 4.06 Allocation of Realized Losses.
(a) Prior to each Determination Date, the Master Servicer shall
determine as to each Mortgage Loan and REO Property: (i) the total amount of
Realized Losses, if any, incurred in connection with any Final Recovery
Determinations made during the related Prepayment Period; (ii) whether and the
extent to which such Realized Losses constituted Bankruptcy Losses; and (iii)
the respective portions of such Realized Losses allocable to interest and
allocable to principal. Prior to each Determination Date, the Master Servicer
shall also determine as to each Mortgage Loan: (i) the total amount of Realized
Losses, if any, incurred in connection with any Deficient Valuations made during
the related Prepayment Period; and (ii) the total amount of Realized Losses, if
any, incurred in connection with Debt Service Reductions in respect of Monthly
Payments due during the related Due Period. The information described in the two
preceding sentences that is to be supplied by the Master Servicer shall be
evidenced by an Officers' Certificate delivered to the NIMS Insurer, the Trust
Administrator and the Trustee (and upon request, to the Guarantor) by the Master
Servicer prior to the Determination Date immediately following the end of (i) in
the case of Bankruptcy Losses allocable to interest, the Due Period during which
any such Realized Loss was incurred, and (ii) in the case of all other Realized
Losses, the Prepayment Period during which any such Realized Loss was incurred.
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(b) For the avoidance of doubt, through application of definitions
in Section 1.01, (A) all Realized Losses on the Group I Mortgage Loans on any
Distribution Date shall reduce the amount otherwise payable in respect of REMIC
3 Regular Interest LT3-IC pursuant to Section 4.01(d)(i)(i) (through the
reduction of the Group I Net Monthly Excess Cashflow resulting both from a
reduction in the Group I Overcollateralization Release Amount which reduces the
amount of the Group I Net Monthly Excess Cashflow and the application of the
Group I Net Monthly Excess Cashflow to fund the amount of the Group I
Overcollateralization Deficiency Amount, if any, caused by such Realized Losses)
until the Group I Overcollateralization Release Amount is reduced to zero and/or
the Group I Extra Principal Distribution Amount equals the Group I Net Monthly
Excess Cashflow, in each case for such Distribution Date after giving effect to
all Realized Losses incurred with respect to the Group I Mortgage Loans during
or prior to the related Due Period and distributions of principal with respect
to the Class I-A Certificates and the Group I Mezzanine Components on such
Distribution Date; and (B) all Realized Losses on the Group II Mortgage Loans on
any Distribution Date shall reduce the amount otherwise payable in respect of
REMIC 3 Regular Interest LT3-IIC pursuant to Section 4.01(d)(ii)(m) (through the
reduction of the Group II Net Monthly Excess Cashflow resulting both from a
reduction in the Group II Overcollateralization Release Amount which reduces the
amount of the Group II Net Monthly Excess Cashflow and the application of the
Group II Net Monthly Excess Cashflow to fund the amount of the Group II
Overcollateralization Deficiency Amount, if any, caused by such Realized Losses)
until the Group II Overcollateralization Release Amount is reduced to zero
and/or the Group II Extra Principal Distribution Amount equals the Group II Net
Monthly Excess Cashflow, in each case for such Distribution Date after giving
effect to all Realized Losses incurred with respect to the Group II Mortgage
Loans during or prior to the related Due Period and distributions of principal
with respect to the Class II-A Certificates, the Class II-M1 Certificates, the
Group II Mezzanine Components and the Class II-M4 Certificates on such
Distribution Date. If on any Distribution Date after giving effect to all
Realized Losses incurred with respect to the Group I Mortgage Loans during or
prior to the related Due Period and distributions of principal with respect to
the Class I-A Certificates and the Group I Mezzanine Components on such
Distribution Date, a Group I Overcollateralization Deficiency Amount exists and
such amount exceeds the Group I Net Monthly Excess Cashflow, the Realized Losses
equal to the amount of such excess shall be allocated by the Trust Administrator
on such Distribution Date as follows: first to the I-M3 Component, until the
Component Principal Balance thereof has been reduced to zero, and second to the
I-M2 Component until the Component Principal Balance thereof has been reduced to
zero. If on any Distribution Date after giving effect to all Realized Losses
incurred with respect to the Group II Mortgage Loans during or prior to the
related Due Period and distributions of principal with respect to the Class II-A
Certificates, the Class II-M1 Certificates, the Group II Mezzanine Components
and the Class II-M4 Certificates on such Distribution Date, a Group II
Overcollateralization Deficiency Amount exists and such amount exceeds the Group
II Net Monthly Excess Cashflow, the Realized Losses equal to the amount of such
excess shall be allocated by the Trust Administrator on such Distribution Date
as follows: first to the Class II-M4 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero, second to the II-M3
Component, until the Component Principal Balance thereof has been reduced to
zero, third to the II-M2 Component until the Component Principal Balance thereof
has been reduced to zero, and fourth to the Class II-M1 Certificates until the
Certificate Principal Balance thereof has been reduced to zero. All Realized
Losses to be allocated to the Certificate Principal Balances of the Class II-M1
Certificates and the Class II-M4 Certificates and Component
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Principal Balances of all Components on any Distribution Date shall be so
allocated after the actual distributions to be made on such date as provided in
Section 4.01. All references above to the Certificate Principal Balance of the
Class II-M1 Certificates and the Class II-M4 Certificates and Component
Principal Balance of any Component shall be to the Certificate Principal Balance
of the Class II-M1 Certificates or the Class II-M4 Certificates or Component
Principal Balance of such Component immediately prior to the relevant
Distribution Date, before reduction thereof by any Realized Losses, in each case
to be allocated to the Class II-M1 Certificates or the Class II-M4 Certificates
or such Components on such Distribution Date.
Any allocation of Realized Losses to a Class II-M1 Certificate or a
Class II-M4 Certificate or a Mezzanine Component on any Distribution Date shall
be made by reducing the Certificate Principal Balance or Component Principal
Balance thereof by the amount so allocated. No allocations of any Realized
Losses shall be made to the Class A Certificates, the Class S Certificates or
the Class P Certificates. Any Realized Losses that reduce the distributions in
respect of and/or the Uncertificated Principal Balance of REMIC 3 Regular
Interest LT3-IC or REMIC 3 Regular Interest LT3-IIC, shall be allocated by the
Trust Administrator to reduce the distributions in respect of and/or the
Certificate Principal Balance of the Class I-C Certificates and the Class II-C
Certificates, respectively.
(c) All Realized Losses on the Group I Mortgage Loans shall be
allocated by the Trust Administrator on each Distribution Date as follows: with
respect to those Group I Mortgage Loans with Adjusted Net Minimum Mortgage Rates
of less than 5.25%, to REMIC 1A Regular Interest LT1A-2 until the Uncertificated
Principal Balance thereof has been reduced to zero, and with respect to those
Group I Mortgage Loans with Adjusted Net Minimum Mortgage Rates of 5.25% or
greater, first to REMIC 1A Regular Interest LT1A-1 until the Uncertificated
Principal Balance thereof has been reduced to zero, second to REMIC 1A Regular
Interest LT1A-5 until the Uncertificated Principal Balance thereof has been
reduced to zero, third to REMIC 1A Regular Interest LT1A-4 until the
Uncertificated Principal Balance thereof has been reduced to zero, and fourth to
REMIC 1A Regular Interest LT1A-3 until the Uncertificated Principal Balance
thereof has been reduced to zero. All Realized Losses on the Group II Mortgage
Loans shall be allocated by the Trust Administrator on each Distribution Date as
follows: with respect to those Group II Mortgage Loans with Adjusted Net Minimum
Mortgage Rates of less than 5.25%, to REMIC 1B Regular Interest LT1B-2 until the
Uncertificated Principal Balance thereof has been reduced to zero, and with
respect to those Group II Mortgage Loans with Adjusted Net Minimum Mortgage
Rates of 5.25% or greater, first to REMIC 1B Regular Interest LT1B-1 until the
Uncertificated Principal Balance thereof has been reduced to zero, second to
REMIC 1B Regular Interest LT1B-5 until the Uncertificated Principal Balance
thereof has been reduced to zero, third to REMIC 1B Regular Interest LT1B-4
until the Uncertificated Principal Balance thereof has been reduced to zero, and
fourth to REMIC 1B Regular Interest LT1B-3 until the Uncertificated Principal
Balance thereof has been reduced to zero.
(d) All Realized Losses on the Group I Mortgage Loans shall be
deemed to have been allocated in the specified percentages, as follows: first,
to Uncertificated Accrued Interest payable to the REMIC 2 Regular Interest
LT2A-1 and REMIC 2 Regular Interest LT2E-1 up to an aggregate amount equal to
the REMIC 2 Group I Interest Loss Allocation Amount, 98% and 2.00%,
respectively; second, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LT2A-1 and REMIC 2 Regular Interest LT2E-1 up to an aggregate
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amount equal to the REMIC 2 Principal Loss Allocation Amount-1, 98% and 2.00%,
respectively; third, to the Uncertificated Principal Balances of REMIC 2 Regular
Interest LT2A-1, REMIC 2 Regular Interest LT2D-1 and REMIC 2 Regular Interest
LT2E-1, 98%, 1.00% and 1.00%, respectively, until the Uncertificated Principal
Balance of REMIC 2 Regular Interest LT2D-1 has been reduced to zero; and fourth,
to the Uncertificated Principal Balances of REMIC 2 Regular Interest LT2A-1,
REMIC 2 Regular Interest LT2C-1 and REMIC 2 Regular Interest LT2E-1, 98%, 1.00%
and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC 2
Regular Interest LT2C-1 has been reduced to zero.
(e) All Realized Losses on the Group II Mortgage Loans shall be
deemed to have been allocated in the specified percentages, as follows: first,
to Uncertificated Accrued Interest payable to the REMIC 2 Regular Interest
LT2A-2 and REMIC 2 Regular Interest LT2J-2 up to an aggregate amount equal to
the REMIC 2 Group II Interest Loss Allocation Amount, 98% and 2.00%,
respectively; second, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LT2A-2 and REMIC 2 Regular Interest LT2J-2 up to an aggregate
amount equal to the REMIC 2 Principal Loss Allocation Amount 2, 98% and 2.00%,
respectively; third, to the Uncertificated Principal Balances of REMIC 2 Regular
Interest LT2A-2, REMIC 2 Regular Interest LT2I-2 and REMIC 2 Regular Interest
LT2J-2, 98%, 1.00% and 1.00%, respectively, until the Uncertificated Principal
Balance of REMIC 2 Regular Interest LT2I-2 has been reduced to zero; fourth, to
the Uncertificated Principal Balances of REMIC 2 Regular Interest LT2A-2, REMIC
2 Regular Interest LT2H-2 and REMIC 2 Regular Interest LT2J-2, 98%, 1.00% and
1.00%, respectively, until the Uncertificated Principal Balance of REMIC 2
Regular Interest LT2H-2 has been reduced to zero; fifth, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2A-2, REMIC 2 Regular Interest
LT2G-2 and REMIC 2 Regular Interest LT2J-2, 98%, 1.00% and 1.00%, respectively,
until the Uncertificated Principal Balance of REMIC 2 Regular Interest LT2G-2
has been reduced to zero; and sixth, to the Uncertificated Principal Balances of
REMIC 2 Regular Interest LT2A-2, REMIC 2 Regular Interest LT2F-2 and REMIC 2
Regular Interest LT2J-2, 98%, 1.00% and 1.00%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2F-2 has been
reduced to zero.
Section 4.07 Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the Trust
Administrator shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount that the
Trust Administrator reasonably believes are applicable under the Code. The
consent of Certificateholders shall not be required for such withholding. In the
event the Trust Administrator does withhold any amount from interest or original
issue discount payments or advances thereof to any Certificateholder pursuant to
federal withholding requirements, the Trust Administrator shall indicate the
amount withheld to such Certificateholders.
Section 4.08 Commission Reporting.
(a) Within 15 days after each Distribution Date, the Trust
Administrator shall, in accordance with industry standards and applicable
regulations, file with the Commission via the Electronic Data Gathering Analysis
and Retrieval system, a Form 8-K with a copy of the statement to
Certificateholders for such Distribution Date as an Exhibit thereto. Prior to
April 30, 2003, the Trust Administrator shall in accordance with industry
standards file a Form
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15 Suspension Notification with respect to the Trust Fund, if applicable. Prior
to July 31, 2003, the Trust Administrator shall file a Form 10-K, in substance
conforming to industry standards and applicable regulations, with respect to the
Trust Fund. The Depositor hereby grants to the Trust Administrator 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 Trust Administrator 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 Trust Administrator, 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 Trust
Administrator reasonably deems appropriate to prepare and file all necessary
reports with the Commission. The Trust Administrator shall have no
responsibility to file any items other than those specified in this Section.
Section 4.09 The Guaranty.
On each Distribution Date following receipt of a statement (as set
forth in Section 4.03) that indicates a Deficiency Amount for such Distribution
Date, the Guarantor shall distribute to the Trust Administrator a Guarantor
Payment in an aggregate amount equal to the Deficiency Amount for such
Distribution Date directly to the Holders of the Guaranteed Certificates,
without first depositing such amount in the Distribution Account, as follows:
(i) the Guaranteed Interest Distribution Amount shall be distributed as interest
with respect to the Class I-A Certificates and Class I-S Certificates as
provided in Section 4.01(a)(i); and (ii) the Guaranteed Principal Distribution
Amount shall be distributed as principal with respect to the Class I-A
Certificates as provided in Section 4.01(b)(i) or Section 4.01(c)(i), as
applicable.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
(a) The Certificates in the aggregate will represent the entire
beneficial ownership interest in the Mortgage Loans and all other assets
included in REMIC 1A and REMIC 1B.
The Certificates will be substantially in the forms annexed hereto as
Exhibits A-1 through A-17. The Certificates of each Class will be issuable in
registered form only, in denominations of authorized Percentage Interests as
described in the definition thereof. Each Certificate will share ratably in all
rights of the related Class.
Upon original issue, the Certificates shall be executed by the Trust
Administrator on behalf of the Trustee and authenticated and delivered by the
Trust Administrator, to or upon the order of the Depositor. The Certificates
shall be executed and attested by manual or facsimile signature on behalf of the
Trust Administrator by an authorized signatory. Certificates bearing the manual
or facsimile signatures of individuals who were at any time the proper officers
of the Trust Administrator shall bind the Trustee and the Trust Administrator,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates. No
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Certificate shall be entitled to any benefit under this Agreement or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided herein executed by the Trustee
or the Trust Administrator by manual signature, and such certificate of
authentication shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
(b) The Book Entry Certificates shall initially be issued as one
or more Certificates held by the Book-Entry Custodian or, if appointed to hold
such Certificates as provided below, the Depository and registered in the name
of the Depository or its nominee and, except as provided below, registration of
the Book-Entry Certificates may not be transferred by the Trustee or the Trust
Administrator except to another Depository that agrees to hold the Book-Entry
Certificates for the respective Certificate Owners with Ownership Interests
therein. The Certificate Owners shall hold their respective Ownership Interests
in and to the Book-Entry Certificates through the book-entry facilities of the
Depository and, except as provided below, shall not be entitled to definitive,
fully registered Certificates ("Definitive Certificates") in respect of such
Ownership Interests. All transfers by Certificate Owners of their respective
Ownership Interests in the Book-Entry Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owner. Each Depository Participant shall only
transfer the Ownership Interests in the Book-Entry Certificates of Certificate
Owners it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The Trust Administrator is
hereby initially appointed as the Book-Entry Custodian and hereby agrees to act
as such in accordance herewith and in accordance with the agreement that it has
with the Depository authorizing it to act as such. The Book-Entry Custodian may,
and if it is no longer qualified to act as such, the Book-Entry Custodian shall,
appoint, by a written instrument delivered to the Depositor, the Master
Servicer, the Trustee and if the Trust Administrator is not the Book-Entry
Custodian, the Trust Administrator and any other transfer agent (including the
Depository or any successor Depository) to act as Book-Entry Custodian under
such conditions as the predecessor Book-Entry Custodian and the Depository or
any successor Depository may prescribe, provided that the predecessor Book-Entry
Custodian shall not be relieved of any of its duties or responsibilities by
reason of any such appointment of other than the Depository. If the Trust
Administrator resigns or is removed in accordance with the terms hereof, the
Trustee, successor Trust Administrator or, if it so elects, the Depository shall
immediately succeed to its predecessor's duties as Book-Entry Custodian. The
Depositor shall have the right to inspect, and to obtain copies of, any
Certificates held as Book-Entry Certificates by the Book-Entry Custodian.
The Trustee, the Trust Administrator, the Master Servicer, the NIMS
Insurer and the Depositor may for all purposes (including the making of payments
due on the Book-Entry Certificates) deal with the Depository as the authorized
representative of the Certificate Owners with respect to the Book-Entry
Certificates for the purposes of the exercise by Certificateholders of the
rights of Certificateholders hereunder. The rights of Certificate Owners with
respect to the Book-Entry Certificates shall be limited to those established by
law and agreements between such Certificate Owners and the Depository
Participants and brokerage firms representing such Certificate Owners. Multiple
requests and directions from, and votes of, the Depository as Holder of the
Book-Entry Certificates with respect to any particular matter shall not be
deemed inconsistent if they are made with respect to different Certificate
Owners. The Trust
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Administrator may establish a reasonable record date in connection with
solicitations of consents from or voting by Certificateholders and shall give
notice to the Depository of such record date.
If (i)(A) the Depositor advises the Trust Administrator in writing that
the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (B) the Depositor is unable to locate a
qualified successor, (ii) the Depositor at its option advises the Trust
Administrator in writing that it elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of a Master Servicer Event
of Default, Certificate Owners representing in the aggregate not less than 51%
of the Ownership Interests of the Book-Entry Certificates advise the Trust
Administrator through the Depository, in writing, that the continuation of a
book-entry system through the Depository is no longer in the best interests of
the Certificate Owners, the Trust Administrator shall notify all Certificate
Owners, through the Depository, of the occurrence of any such event and of the
availability of Definitive Certificates to Certificate Owners requesting the
same. Upon surrender to the Trust Administrator of the Book-Entry Certificates
by the Book-Entry Custodian or the Depository, as applicable, accompanied by
registration instructions from the Depository for registration of transfer, the
Trust Administrator shall issue the Definitive Certificates. Such Definitive
Certificates will be issued in minimum denominations of $100,000, except that
any beneficial ownership that was represented by a Book-Entry Certificate in an
amount less than $100,000 immediately prior to the issuance of a Definitive
Certificate shall be issued in a minimum denomination equal to the amount
represented by such Book-Entry Certificate. None of the Depositor, the Master
Servicer, the Trust Administrator or the Trustee shall be liable for any delay
in the delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Trust Administrator, to the extent applicable with respect to such
Definitive Certificates, and the Trustee and the Trust Administrator shall
recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
Section 5.02 Registration of Transfer and Exchange of Certificates.
(a) The Trust Administrator shall cause to be kept at one of the
offices or agencies to be appointed by the Trust Administrator in accordance
with the provisions of Section 8.12 a Certificate Register for the Certificates
in which, subject to such reasonable regulations as it may prescribe, the Trust
Administrator shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided.
(b) No transfer, sale, pledge or other disposition of any Class C
Certificate, Class P Certificate or Residual Certificate shall be made unless
such disposition is exempt from the registration requirements of the Securities
Act of 1933, as amended (the "1933 Act"), and any applicable state securities
laws or is made in accordance with the 1933 Act and laws. In the event of any
such transfer (other than in connection with the initial transfer of any Class C
Certificate, Class P Certificate or Residual Certificates by the Depositor to
the Seller or the transfer of any Class C Certificate, Class P Certificate or
Residual Certificates by the Seller to an Affiliate of the Seller or to a trust,
the depositor of which is an Affiliate of the Seller or the transfer of any
Class C Certificate, Class P Certificate or Residual Certificates by an
Affiliate of the Seller to one or more entities sponsored by such Affiliate or
to a trust the depositor of which is one or more entities sponsored by such
Affiliate) (i) unless such transfer is made in reliance
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upon Rule 144A (as evidenced by the investment letter delivered to the Trustee
and the Trust Administrator, in substantially the form attached hereto as
Exhibit J) under the 1933 Act, the Trustee, the Trust Administrator 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, the Trust Administrator 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, the Trust
Administrator or the Depositor or (ii) the Trust Administrator 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, the Trust
Administrator and the Trustee certifying to the Depositor, the Trust
Administrator and the Trustee the facts surrounding such transfer, which
investment letter shall not be an expense of the Trustee, the Trust
Administrator or the Depositor. The Holder of a Class C Certificate, Class P
Certificate or Residual Certificate desiring to effect such transfer shall, and
does hereby agree to, indemnify the Trustee, the Trust Administrator, the
Depositor and the Trust Fund against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
(c) Each Transferee of a Mezzanine Certificate will be deemed to
have represented by virtue of its purchase or holding of such Certificate (or
interest therein) that either (a) such Transferee is not a Plan or purchasing
such Certificate with Plan Assets, (b) it has acquired and is holding such
Certificate in reliance on Prohibited Transaction Exemption ("PTE") 94-84 and
FAN 97-03E, as amended by PTE 97-34 at 62 F.R. 39021 (July 21, 1997), as further
amended by ▇▇▇ ▇▇▇▇-▇▇, ▇▇ ▇. ▇. ▇▇▇▇▇ (November 13, 2000) (the "Exemption"),
and that it understands that there are certain conditions to the availability of
the Exemption including that such Certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by a Rating Agency or (c)
the following conditions are satisfied: (i) such Transferee is an insurance
company, (ii) the source of funds used to purchase or hold such Certificate (or
interest therein) is an "insurance company general account" (as defined in U.S.
Department of Labor Prohibited Transaction Class Exemption ("PTCE") 95-60, and
(iii) the conditions set forth in Sections I and III of PTCE 95-60 have been
satisfied.
No transfer of a Class C Certificate, Class P Certificate or Residual
Certificate or any interest therein shall be made to any Plan subject to ERISA
or Section 4975 of the Code, any Person acting, directly or indirectly, on
behalf of any such Plan or any Person acquiring such Certificates with "Plan
Assets" of a Plan within the meaning of the Department of Labor regulation
promulgated at 29 C.F.R.'SS' 2510.3-101 ("Plan Assets") unless the Depositor,
the Trustee, the Trust Administrator and the Master Servicer are provided with
an Opinion of Counsel which establishes to the satisfaction of the Depositor,
the Trustee, the Trust Administrator 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, the Trust
Administrator 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, the Trust
Administrator or the Trust Fund. Neither an Opinion of Counsel nor any
certification will be required in connection with the initial transfer of any
Class C
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Certificate, Class P Certificate or Residual Certificates by the Depositor to
the Seller or the transfer of any Class C Certificate, Class P Certificate or
Residual Certificates by the Seller to an Affiliate of the Seller or to a trust,
the depositor of which is an Affiliate of the Seller or the transfer of any
Class C Certificates, Class P Certificates or Residual Certificates by an
Affiliate of the Seller to one or more entities sponsored by such Affiliate or
to a trust the depositor of which is one or more entities sponsored by such
Affiliate (in which case, the Depositor, the Seller, any such Affiliate and such
entities sponsored by such Affiliate shall have deemed to have represented that
the applicable transferee is not a Plan or a Person investing Plan Assets) and
the Trustee and the Trust Administrator shall be entitled to conclusively rely
upon a representation (which, upon the request of the Trustee or the Trust
Administrator, shall be a written representation) from the Depositor of the
status of each transferee the Seller or such an Affiliate. Each transferee of a
Class C Certificate, Class P Certificate or Residual Certificate shall sign a
letter substantially in the form of Exhibit I to demonstrate its compliance with
this Section 5.02(c) (other than in connection with the initial transfer of any
Class C Certificate, Class P Certificate or Residual Certificates by the
Depositor to the Seller or the transfer of any Class C Certificate, Class P
Certificate or Residual Certificates by the Seller to an Affiliate of the Seller
or to a trust, the depositor of which is an Affiliate of the Seller or the
transfer of any Class C Certificates, Class P Certificates or Residual
Certificates by an Affiliate of the Seller to one or more entities sponsored by
such Affiliate or to a trust the depositor of which is one or more entities
sponsored by such Affiliate).
If any Mezzanine Certificate, Class C Certificate, Class P Certificate
or Residual Certificate or any interest therein is acquired or held in violation
of the provisions of the preceding paragraphs, the next preceding permitted
beneficial owner will be treated as the beneficial owner of that Certificate
retroactive to the date of transfer to the purported beneficial owner. Any
purported beneficial owner whose acquisition or holding of any such Certificate
or interest therein was effected in violation of the provisions of the preceding
paragraph shall indemnify and hold harmless the Depositor, the Master Servicer,
the Trustee, the Trust Administrator and the Trust Fund from and against any and
all liabilities, claims, costs or expenses incurred by those parties as a result
of that acquisition or holding.
(d) Each Person who has or who acquires any Ownership Interest in
a Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Depositor or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (v) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in a Residual Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and
shall promptly notify the Trust Administrator of any change
or impending change in its status as a Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in a Residual
Certificate unless such Ownership Interest is a pro rata
undivided interest.
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(iii) In connection with any proposed transfer of any Ownership
Interest in a Residual Certificate, the Trust Administrator
shall as a condition to registration of the transfer,
require delivery to it, in form and substance satisfactory
to it, of each of the following:
A. an affidavit in the form of Exhibit K hereto from the
proposed transferee to the effect that such transferee is
a Permitted Transferee and that it is not acquiring its
Ownership Interest in the Residual Certificate that is
the subject of the proposed transfer as a nominee,
trustee or agent for any Person who is not a Permitted
Transferee; and
B. a covenant of the proposed transferee to the effect that
the proposed transferee agrees to be bound by and to
abide by the transfer restrictions applicable to the
Residual Certificates.
(iv) Any attempted or purported transfer of any Ownership
Interest in a Residual Certificate in violation of the
provisions of this Section shall be absolutely null and void
and shall vest no rights in the purported transferee. If any
purported transferee shall, in violation of the provisions
of this Section, become a Holder of a Residual Certificate,
then the prior Holder of such Residual Certificate that is a
Permitted Transferee shall, upon discovery that the
registration of transfer of such Residual Certificate was
not in fact permitted by this Section, be restored to all
rights as Holder thereof retroactive to the date of
registration of transfer of such Residual Certificate.
Neither the Trustee nor the Trust Administrator shall be
under any liability to any Person for any registration of
transfer of a Residual Certificate that is in fact not
permitted by this Section or for making any distributions
due on such Residual Certificate to the Holder thereof or
taking any other action with respect to such Holder under
the provisions of this Agreement so long as the Trustee or
the Trust Administrator received the documents specified in
clause (iii). The Trustee and the Trust Administrator shall
be entitled to recover from any Holder of a Residual
Certificate that was in fact not a Permitted Transferee at
the time such distributions were made all distributions made
on such Residual Certificate. Any such distributions so
recovered by the Trustee or the Trust Administrator shall be
distributed and delivered by the Trust Administrator to the
prior Holder of such Residual Certificate that is a
Permitted Transferee.
(v) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Residual Certificate in violation of
the restrictions in this Section, then the Trustee and the
Trust Administrator shall have the right but not the
obligation, without notice to the Holder of such Residual
Certificate or any other Person having an Ownership Interest
therein, to notify the Depositor to arrange for the sale of
such Residual Certificate. The proceeds of such sale, net of
commissions (which may include commissions payable to the
Depositor or its affiliates in connection with
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such sale), expenses and taxes due, if any, will be remitted
by the Trust Administrator to the previous Holder of such
Residual Certificate that is a Permitted Transferee, except
that in the event that the Trust Administrator determines
that the Holder of such Residual Certificate may be liable
for any amount due under this Section or any other
provisions of this Agreement, the Trust Administrator 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 Trust Administrator and it shall not be
liable to any Person having an Ownership Interest in a
Residual Certificate as a result of its exercise of such
discretion.
(vi) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Residual Certificate in violation of
the restrictions in this Section, then the Trust
Administrator will provide to the Internal Revenue Service,
and to the persons designated in Section 860E(e)(3) of the
Code, information needed to compute the tax imposed under
Section 860E(e)(1) of the Code on such transfer.
The foregoing provisions of this Section shall cease to apply to
transfers occurring on or after the date on which there shall have been
delivered to the Trust Administrator, in form and substance satisfactory to the
Trust Administrator, (i) written notification from each Rating Agency that the
removal of the restrictions on Transfer set forth in this Section will not cause
such Rating Agency to downgrade its rating of any of the NIM Notes or the
Certificates and (ii) an Opinion of Counsel to the effect that such removal will
not cause any REMIC created hereunder to fail to qualify as a REMIC.
(e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the Trust
Administrator designated from time to time for such purpose pursuant to Section
8.12, the Trust Administrator, on behalf of the Trustee, shall execute and
authenticate and deliver, in the name of the designated Transferee or
Transferees, one or more new Certificates of the same Class of a like aggregate
Percentage Interest.
(f) At the option of the Holder thereof, any Certificate may be
exchanged for other Certificates of the same Class with authorized denominations
and a like aggregate Percentage Interest, upon surrender of such Certificate to
be exchanged at any office or agency of the Trust Administrator maintained for
such purpose pursuant to Section 8.12. Whenever any Certificates are so
surrendered for exchange the Trust Administrator, on behalf of the Trustee,
shall execute, authenticate and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Trustee) be duly endorsed by, or be accompanied by a written instrument of
transfer in the form satisfactory to the Trust Administrator duly executed by,
the Holder thereof or his attorney duly authorized in writing.
(g) No service charge shall be made for any registration of
transfer or exchange of Certificates of any Class, but the Trust Administrator
may require payment of a sum
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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 Trust Administrator 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 Trust
Administrator or the Trust Administrator receives evidence to its satisfaction
of the destruction, loss or theft of any Certificate and (ii) there is delivered
to the Trustee, the Trust Administrator and the Depositor and (in the case of a
Class C Certificate or Class P Certificate) the NIMS Insurer such security or
indemnity as may be required by them to save each of them, and the Trust Fund,
harmless, then, in the absence of notice to the Trust Administrator that such
Certificate has been acquired by a bona fide purchaser, the Trust Administrator,
on behalf of the Trustee, shall execute, authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like tenor and Percentage Interest. Upon the issuance of any
new Certificate under this Section, the Trust Administrator 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 Trust Administrator) 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 Trust
Administrator, the NIMS Insurer, the Guarantor and any agent of the Master
Servicer, the Depositor, the Trustee, the Trust Administrator, the NIMS Insurer
or the Guarantor may treat the Person, including a Depository, in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 4.01 and for all other purposes
whatsoever, and none of the Master Servicer, the Depositor, the Trustee, the
Trust Administrator, the NIMS Insurer, the Guarantor nor any agent of any of
them shall be affected by notice to the contrary.
ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Master Servicer and the Depositor.
The Depositor and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement and undertaken hereunder by the Depositor and the Master
Servicer herein.
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Section 6.02 Merger or Consolidation of the Depositor or the Master Servicer.
Subject to the following paragraph, the Depositor will keep in full
effect its existence, rights and franchises as a corporation under the laws of
the jurisdiction of its incorporation. Subject to the following paragraph, the
Master Servicer will keep in full effect its existence, rights and franchises as
a corporation under the laws of the jurisdiction of its incorporation and its
qualification as an approved conventional seller/servicer for ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac in good standing. The Depositor and the Master Servicer each will
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Certificates or
any of the Mortgage Loans and to perform its respective duties under this
Agreement.
The Depositor or the Master Servicer may be merged or consolidated with
or into any Person, or transfer all or substantially all of its assets to any
Person, in which case any Person resulting from any merger or consolidation to
which the Depositor or the Master Servicer shall be a party, or any Person
succeeding to the business of the Depositor or the Master Servicer, shall be the
successor of the Depositor or the Master Servicer, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to service mortgage loans on behalf of
▇▇▇▇▇▇ Mae; and provided further that the Rating Agencies' ratings of the NIM
Notes, the Class II-A Certificates and the Mezzanine Certificates in effect
immediately prior to such merger or consolidation will not be qualified, reduced
or withdrawn as a result thereof (as evidenced by a letter to such effect from
the Rating Agencies to the Trust Administrator).
Section 6.03 Limitation on Liability of the Depositor, the Master Servicer and
Others.
None of the Depositor, the Guarantor, the Master Servicer or any of the
directors, officers, employees or agents of the Depositor, the Guarantor or the
Master Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Guarantor, the Master Servicer or any such person against any breach of
warranties, representations or covenants made herein, or against any specific
liability imposed on the Master Servicer, the Depositor, or the Guarantor, as
applicable, pursuant hereto, or against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor, the Guarantor, the Master Servicer and any
director, officer, employee or agent of the Depositor, the Guarantor or the
Master Servicer may rely in good faith on any document of any kind which, prima
facie, is properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor, the Guarantor, the Master Servicer and any
director, officer, employee or agent of the Depositor, the Guarantor or the
Master Servicer shall be indemnified and held harmless by the Trust Fund against
any loss, liability or expense incurred in connection with any legal action
relating to this Agreement or the Certificates, other than any loss, liability
or expense relating to any specific Mortgage Loan or Mortgage Loans (except as
any such loss, liability or expense shall be otherwise reimbursable pursuant to
this Agreement) or any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in
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the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. None of the Depositor, the Guarantor or the
Master Servicer shall be under any obligation to appear in, prosecute or defend
any legal action unless such action is related to its respective duties under
this Agreement and, in its opinion, does not involve it in any expense or
liability; provided, however, that each of the Depositor, the Guarantor and the
Master Servicer may in its discretion undertake any such action which it may
deem necessary or desirable with respect to this Agreement and the rights and
duties of the parties hereto and the interests of the Certificateholders
hereunder. In such event, unless the Depositor, the Guarantor or the Master
Servicer acts without the consent of Holders of Certificates entitled to at
least 51% of the Voting Rights (which consent shall not be necessary in the case
of litigation or other legal action by either to enforce their respective rights
or defend themselves hereunder), the legal expenses and costs of such action and
any liability resulting therefrom (except any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder) shall be expenses, costs and liabilities of
the Trust Fund, and the Depositor, the Guarantor and the Master Servicer shall
be entitled to be reimbursed therefor from the Collection Account as and to the
extent provided in Section 3.11, any such right of reimbursement being prior to
the rights of the Certificateholders to receive any amount in the Collection
Account.
The Master Servicer (except the Trust Administrator or the Trustee to
the extent it has succeeded the Master Servicer as required hereunder)
indemnifies and holds the Trust Administrator, the Trustee, the Depositor, the
Guarantor and the Trust Fund harmless against any and all claims, losses,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any other costs, fees and expenses that the Trust Administrator,
the Trustee, the Depositor, the Guarantor or the Trust Fund may sustain in any
way related to the failure of the Master Servicer to perform its duties and
service the Mortgage Loans in compliance with the terms of this Agreement. The
Master Servicer shall immediately notify the Trust Administrator, the Trustee,
the NIMS Insurer, the Guarantor and the Depositor if a claim is made that may
result in such claims, losses, penalties, fines, forfeitures, legal fees or
related costs, judgments, or any other costs, fees and expenses, and the Master
Servicer shall assume (with the consent of the Trust Administrator) the defense
of any such claim and pay all expenses in connection therewith, including
reasonable counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against the Master Servicer, the Trust
Administrator, the Trustee, the Depositor, the Guarantor and/or the Trust Fund
in respect of such claim. The provisions of this paragraph shall survive the
termination of this Agreement and the payment of the outstanding Certificates.
Section 6.04 Limitation on Resignation of Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (i) upon determination that its duties hereunder are
no longer permissible under applicable law or (ii) with the written consent of
the Trust Administrator and the NIMS Insurer or the Guarantor (as provided in
Section 1.04) and written confirmation from each Rating Agency (which
confirmation shall be furnished to the Depositor and the Trust Administrator)
that such resignation will not cause such Rating Agency to reduce the then
current rating of any of the NIM Notes, the Class II-A Certificates or the
Mezzanine Certificates. Any such determination pursuant to clause (i) of the
preceding sentence permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect obtained at the expense of the
Master
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Servicer and delivered to the Trustee and the Trust Administrator. No
resignation of the Master Servicer shall become effective until the Trust
Administrator or a successor servicer reasonably acceptable to the NIMS Insurer
or the Guarantor (as provided in Section 1.04) shall have assumed the Master
Servicer's responsibilities, duties, liabilities (other than those liabilities
arising prior to the appointment of such successor) and obligations under this
Agreement.
Except as expressly provided herein, the Master Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, nor delegate to or subcontract with, nor authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer hereunder. The foregoing prohibition on
assignment shall not prohibit the Master Servicer from designating a
Sub-Servicer as payee of any indemnification amount payable to the Master
Servicer hereunder; provided, however, that as provided in Section 3.06 hereof,
no Sub-Servicer shall be a third-party beneficiary hereunder and the parties
hereto shall not be required to recognize any Sub-Servicer as an indemnitee
under this Agreement. If, pursuant to any provision hereof, the duties of the
Master Servicer are transferred to a successor master servicer, the entire
amount of the Servicing Fee and other compensation payable to the Master
Servicer pursuant hereto shall thereafter be payable to such successor master
servicer.
Section 6.05 Rights of the Depositor, the NIMS Insurer, the Guarantor, the
Trustee and the Trust Administrator in Respect of the Master Servicer.
The Master Servicer shall afford (and any Sub-Servicing Agreement shall
provide that each Sub-Servicer shall afford) the Depositor, the NIMS Insurer,
the Guarantor, the Trust Administrator and the Trustee, upon reasonable notice,
during normal business hours, access to all records maintained by the Master
Servicer (and any such Sub-Servicer) in respect of the Master Servicer's rights
and obligations hereunder and access to officers of the Master Servicer (and
those of any such Sub-Servicer) responsible for such obligations; provided, that
access to records for the Guarantor shall be limited to those related to Group I
Mortgage Loans. Upon request, the Master Servicer shall furnish to the
Depositor, the NIMS Insurer, the Guarantor, the Trust Administrator and the
Trustee its (and any such Sub-Servicer's) most recent financial statements and
such other information relating to the Master Servicer's capacity to perform its
obligations under this Agreement that it possesses; provided, that any such
information furnished to the Guarantor shall be limited to that which is related
to Group I Mortgage Loans. To the extent such information is not otherwise
available to the public, the Depositor, the NIMS Insurer, the Guarantor, the
Trust Administrator and the Trustee shall not disseminate any information
obtained pursuant to the preceding two sentences without the Master Servicer's
(or any such Sub-Servicer's) written consent, except as required pursuant to
this Agreement or to the extent that it is necessary to do so (i) in working
with legal counsel, auditors, taxing authorities or other governmental agencies,
rating agencies or reinsurers or (ii) pursuant to any law, rule, regulation,
order, judgment, writ, injunction or decree of any court or governmental
authority having jurisdiction over the Depositor, the NIMS Insurer, the
Guarantor, the Trustee, the Trust Administrator or the Trust Fund, and in either
case, the Depositor, the Guarantor, the Trust Administrator or the Trustee, as
the case may be, shall use, and the NIMS Insurer shall be deemed to have agreed
with the parties hereto to use, its best efforts to assure the confidentiality
of any such disseminated non-public information. The Depositor may, but is not
obligated to, enforce the obligations of the Master Servicer under this
Agreement and may, but is not obligated to, perform, or cause a designee to
perform, any defaulted obligation of the Master
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Servicer under this Agreement or exercise the rights of the Master Servicer
under this Agreement; provided that the Master Servicer shall not be relieved of
any of its obligations under this Agreement by virtue of such performance by the
Depositor or its designee. The Depositor shall not have any responsibility or
liability for any action or failure to act by the Master Servicer and is not
obligated to supervise the performance of the Master Servicer under this
Agreement or otherwise.
ARTICLE VII
DEFAULT
Section 7.01 Master Servicer Events of Default.
"Master Servicer Event of Default," wherever used herein, means any one
of the following events:
(i) any failure by the Master Servicer to remit to the Trust
Administrator for distribution to the Certificateholders any
payment (other than an Advance required to be made from its own
funds on any Master Servicer Remittance Date pursuant to Section
4.04) required to be made under the terms of the Certificates and
this Agreement which continues unremedied for a period of one
Business Day after the date upon which written notice of such
failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Depositor, the Trustee, the Trust
Administrator (in which case notice shall be provided by
telecopy), or to the Master Servicer, the Depositor, the Trust
Administrator and the Trustee by the NIMS Insurer, the Guarantor
or the Holders of Certificates entitled to at least 25% of the
Voting Rights; or
(ii) any failure on the part of the Master Servicer duly to
observe or perform in any material respect any of the covenants or
agreements on the part of the Master Servicer contained in this
Agreement which continues unremedied for a period of 45 days (30
days in the case of any failure to maintain a Sub-Servicing
Agreement with an eligible Sub-Servicer to the extent required in
accordance with Section 3.02(c)) after the earlier of (i) the date
on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the
Depositor, the Trust Administrator or the Trustee, or to the
Master Servicer, the Depositor, the Trust Administrator and the
Trustee by the NIMS Insurer, the Guarantor or the Holders of
Certificates entitled to at least 25% of the Voting Rights and
(ii) actual knowledge of such failure by a Servicing
Representative of the Master Servicer; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary
case under any present or future federal or state bankruptcy,
insolvency or similar law or the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceeding, or for
the winding-up or liquidation of its affairs, shall have been
entered against the Master Servicer and if
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such proceeding is being contested by the Master Servicer in good
faith, such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days or results in the
entry of an order for relief or any such adjudication or
appointment; or
(iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or
similar proceedings of or relating to it or of or relating to all
or substantially all of its property; or
(v) the Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to
take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors; or
(vi) any failure by the Master Servicer of the Master Servicer
Termination Test; or
(vii) any failure of the Master Servicer to make, or cause an
Advancing Person to make, any Advance on any Master Servicer
Remittance Date required to be made from its own funds pursuant to
Section 4.04 which continues unremedied until 3:00 p.m. New York
time on the Business Day immediately following the Master Servicer
Remittance Date; or
(viii) the Master Servicer ceases to be an approved seller or
servicer of ▇▇▇▇▇▇ ▇▇▇.
If a Master Servicer Event of Default described in clauses (i) through
(vi) of this Section shall occur, then, and in each and every such case, so long
as such Master Servicer Event of Default shall not have been remedied, the
Depositor or the Trustee may, and at the written direction of the NIMS Insurer,
the Guarantor, or the Holders of Certificates entitled to at least 51% of Voting
Rights, the Trustee shall, by notice in writing to the NIMS Insurer, the
Guarantor and the Master Servicer (and to the Depositor and the Trust
Administrator if given by the Trustee or to the Trustee and the Trust
Administrator if given by the Depositor), terminate all of the rights and
obligations of the Master Servicer in its capacity as Master Servicer under this
Agreement, to the extent permitted by law, and in and to the Mortgage Loans and
the proceeds thereof. If a Master Servicer Event of Default described in clauses
(vii) or (viii) hereof shall occur, the Trust Administrator shall, by notice in
writing to the Master Servicer, the Trustee, the NIMS Insurer, the Guarantor and
the Depositor, terminate all of the rights and obligations of the Master
Servicer in its capacity as Master Servicer under this Agreement and in and to
the Mortgage Loans and the proceeds thereof. On or after the receipt by the
Master Servicer of such written notice, all authority and power of the Master
Servicer under this Agreement, whether with respect to the Certificates (other
than as a Holder of any Certificate) or the Mortgage Loans or otherwise, shall
pass to and be vested in the Trust Administrator pursuant to and under this
Section and, without limitation, the Trust Administrator is hereby authorized
and empowered, as attorney-in-fact or otherwise, to execute and deliver on
behalf of and at the expense of the Master Servicer, any and all documents and
other instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination,
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whether to complete the transfer and endorsement or assignment of the Mortgage
Loans and related documents, or otherwise. The Master Servicer agrees, at its
sole cost and expense, promptly (and in any event no later than ten Business
Days subsequent to such notice) to provide the Trust Administrator with all
documents and records requested by it to enable it to assume the Master
Servicer's functions under this Agreement, and to cooperate with the Trust
Administrator and the Trustee in effecting the termination of the Master
Servicer's responsibilities and rights under this Agreement, including, without
limitation, the transfer within one Business Day to the Trust Administrator for
administration by it of all cash amounts which at the time shall be or should
have been credited by the Master Servicer to the Collection Account held by or
on behalf of the Master Servicer, or any REO Account or Servicing Account held
by or on behalf of the Master Servicer or thereafter be received with respect to
the Mortgage Loans or any REO Property (provided, however, that the Master
Servicer shall continue to be entitled to receive all amounts accrued or owing
to it under this Agreement on or prior to the date of such termination, whether
in respect of Advances or otherwise, and shall continue to be entitled to the
benefits of Section 6.03, notwithstanding any such termination, with respect to
events occurring prior to such termination). For purposes of this Section 7.01,
the Trust Administrator and the Trustee, as applicable, shall not be deemed to
have knowledge of a Master Servicer Event of Default unless a Responsible
Officer of the Trust Administrator or the Trustee, as applicable, assigned to
and working in the Trust Administrator's or the Trustee's Corporate Trust
Office, as the case may be, has actual knowledge thereof or unless written
notice of any event which is in fact such a Master Servicer Event of Default is
received by the Trust Administrator or the Trustee, as applicable, and such
notice references the Certificates, any of the Trust REMICs or this Agreement.
The Trustee and the Trust Administrator, as applicable, shall be
entitled to be reimbursed by the Master Servicer (or by the Trust Fund if the
Master Servicer is unable to fulfill its obligations hereunder) for all costs
associated with the transfer of servicing from the predecessor master servicer,
including without limitation, any costs or expenses associated with the complete
transfer of all servicing data and the completion, correction or manipulation of
such servicing data as may be required by the Trust Administrator or the Trustee
to correct any errors or insufficiencies in the servicing data or otherwise to
enable the Trust Administrator or the Trustee to service the Mortgage Loans
properly and effectively.
Section 7.02 Trust Administrator to Act; Appointment of Successor.
(a) On and after the time the Master Servicer receives a notice of
termination, the Trust Administrator shall be the successor in all respects to
the Master Servicer in its capacity as Master Servicer under this Agreement and
the transactions set forth or provided for herein and shall be subject to all
the responsibilities, duties and liabilities relating thereto and arising
thereafter, which shall be assumed by the Trust Administrator (except for any
representations or warranties of the Master Servicer under this Agreement, the
responsibilities, duties and liabilities contained in Section 2.03(c) and its
obligation to deposit amounts in respect of losses pursuant to Section 3.12) by
the terms and provisions hereof including, without limitation, the Master
Servicer's obligations to make Advances pursuant to Section 4.04; provided,
however, that if the Trust Administrator is prohibited by law or regulation from
obligating itself to make advances regarding delinquent Mortgage Loans, then the
Trust Administrator shall not be obligated to make Advances pursuant to Section
4.04; and provided further, that any failure to perform such duties or
responsibilities caused by the Master Servicer's failure to provide information
required by Section 7.01 shall not be considered a default by the Trust
Administrator as successor to the
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Master Servicer hereunder; provided, however, it is understood and acknowledged
by the parties that there will be a period of transition (not to exceed 90 days)
before the servicing transfer is fully effected. As compensation therefor, the
Trust Administrator shall be entitled to the Servicing Fee and all funds
relating to the Mortgage Loans to which the Master Servicer would have been
entitled if it had continued to act hereunder (other than amounts which were due
or would become due to the Master Servicer prior to its termination or
resignation). Notwithstanding anything herein to the contrary, in no event shall
the Trust Administrator be liable for any Servicing Fee or for any differential
in the amount of the Servicing Fee paid hereunder and the amount necessary to
induce any successor Master Servicer to act as successor Master Servicer under
this Agreement and the transactions set forth or provided for herein. After the
Master Servicer receives a notice of termination, notwithstanding the above and
subject to the next paragraph, the Trust Administrator may, if it shall be
unwilling to so act, or shall, if it is unable to so act or if it is prohibited
by law from making advances regarding delinquent Mortgage Loans, or if the NIMS
Insurer, the Guarantor or the Holders of Certificates entitled to at least 51%
of the Voting Rights so request in writing to the Trust Administrator, promptly
appoint, or petition a court of competent jurisdiction to appoint, an
established mortgage loan servicing institution acceptable to each Rating
Agency, having a net worth of not less than $15,000,000 and reasonably
acceptable to the NIMS Insurer or the Guarantor, as provided in Section 1.04, as
the successor to the Master Servicer under this Agreement in the assumption of
all or any part of the responsibilities, duties or liabilities of the Master
Servicer under this Agreement.
No appointment of a successor to the Master Servicer under this
Agreement shall be effective until the assumption by the successor of all of the
Master Servicer's responsibilities, duties and liabilities hereunder. In
connection with such appointment and assumption described herein, the Trust
Administrator may make such arrangements for the compensation of such successor
out of payments on Mortgage Loans as it and such successor shall agree;
provided, however, that no such compensation shall be in excess of that
permitted the Master Servicer as such hereunder. The Depositor, the Trustee, the
Trust Administrator and such successor shall take such action, consistent with
this Agreement, as shall be necessary to effectuate any such succession. Pending
appointment of a successor to the Master Servicer under this Agreement, the
Trust Administrator shall act in such capacity as hereinabove provided.
Upon removal or resignation of the Master Servicer, the Trust
Administrator, with the cooperation of the Depositor, (x) shall solicit bids for
a successor Master Servicer as described below and (y) pending the appointment
of a successor Master Servicer as a result of soliciting such bids, shall serve
as Master Servicer of the Mortgage Loans serviced by such predecessor Master
Servicer. The Trust Administrator shall solicit, by public announcement, bids
from housing and home finance institutions, banks and mortgage servicing
institutions meeting the qualifications set forth in the first paragraph of this
Section 7.02 (including the Trust Administrator, the Trustee or any affiliate
thereof). Such public announcement shall specify that the successor Master
Servicer shall be entitled to the servicing compensation agreed upon between the
Trust Administrator, the successor Master Servicer and the Depositor; provided,
however, that no such fee shall exceed the Servicing Fee. Within thirty days
after any such public announcement, the Trust Administrator with the cooperation
of the Depositor, shall negotiate in good faith and effect the sale, transfer
and assignment of the servicing rights and responsibilities hereunder to the
qualified party submitting the highest satisfactory bid as to the price they
will pay to obtain such servicing. The Trust Administrator, upon receipt of the
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purchase price shall pay such purchase price to the Master Servicer being so
removed, after deducting from any sum received by the Trust Administrator from
the successor to the Master Servicer in respect of such sale, transfer and
assignment all costs and expenses of any public announcement and of any sale,
transfer and assignment of the servicing rights and responsibilities reasonably
incurred hereunder. After such deductions, the remainder of such sum shall be
paid by the Trust Administrator to the Master Servicer at the time of such sale.
(b) If the Master Servicer fails to remit to the Trust
Administrator for distribution to the Certificateholders any payment required to
be made under the terms of this Agreement (for purposes of this Section 7.02(b),
a "Remittance") because the Master Servicer is the subject of a proceeding under
the Bankruptcy Code and the making of such Remittance is prohibited by Section
362 of the Bankruptcy Code, the Trust Administrator shall upon written notice of
such prohibition, regardless of whether it has received a notice of termination
under Section 7.01, shall be treated as though it had succeeded to the Master
Servicer and shall advance the amount of such Remittance by depositing such
amount in the Distribution Account on the related Distribution Date. The Trust
Administrator shall be obligated to make such advance only if (i) such advance,
in the good faith judgment of the Trust Administrator can reasonably be expected
to be ultimately recoverable from Stayed Funds and (ii) the Trust Administrator
is not prohibited by law from making such advance or obligating itself to do so.
Upon remittance of the Stayed Funds to the Trust Administrator or the deposit
thereof in the Distribution Account by the Master Servicer, a trustee in
bankruptcy or a federal bankruptcy court, the Trust Administrator may recover
the amount so advanced, without interest, by withdrawing such amount from the
Distribution Account; however, nothing in this Agreement shall be deemed to
affect the Trust Administrator's rights to recover from the Master Servicer's
own funds interest on the amount of any such advance. If the Trust Administrator
at any time makes an advance under this Subsection which it later determines in
its good faith judgment will not be ultimately recoverable from the Stayed Funds
with respect to which such advance was made, the Trust Administrator shall be
entitled to reimburse itself for such advance, without interest, by withdrawing
from the Distribution Account, out of amounts on deposit therein, an amount
equal to the portion of such advance attributable to the Stayed Funds.
Section 7.03 Notification to Certificateholders.
(a) Upon any termination of the Master Servicer pursuant to
Section 7.01 above or any appointment of a successor to the Master Servicer
pursuant to Section 7.02 above, the Trust Administrator shall give prompt
written notice thereof to Certificateholders at their respective addresses
appearing in the Certificate Register, to the NIMS Insurer and to the Guarantor.
(b) Not later than the later of 60 days after the occurrence of
any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Master Servicer Event of Default or five days after a
Responsible Officer of the Trustee or the Trust Administrator becomes aware of
the occurrence of such an event, the Trust Administrator shall transmit by mail
to all Holders of Certificates, to the NIMS Insurer and to the Guarantor notice
of each such occurrence, unless such default or Master Servicer Event of Default
shall have been cured or waived.
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Section 7.04 Waiver of Master Servicer Events of Default.
The Holders representing at least 66% of the Voting Rights evidenced by
all Classes of Certificates affected by any default or Master Servicer Event of
Default hereunder may, with the consent of the NIMS Insurer or the Guarantor, as
provided in Section 1.04, waive such default or Master Servicer Event of
Default; provided, however, that a default or Master Servicer Event of Default
under clause (i) or (vii) of Section 7.01 may be waived only by all of the
Holders of the Regular Certificates and the NIMS Insurer or the Guarantor, as
provided in Section 1.04 (as evidenced by the written consent of the NIMS
Insurer or the Guarantor, as the case may be). Upon any such waiver of a default
or Master Servicer Event of Default, such default or Master Servicer Event of
Default shall cease to exist and shall be deemed to have been remedied for every
purpose hereunder. No such waiver shall extend to any subsequent or other
default or Master Servicer Event of Default or impair any right consequent
thereon except to the extent expressly so waived.
ARTICLE VIII
THE TRUSTEE AND THE TRUST ADMINISTRATOR
Section 8.01 Duties of Trustee and Trust Administrator.
Each of the Trustee and the Trust Administrator, prior to the
occurrence of a Master Servicer Event of Default and after the curing of all
Master Servicer Events of Default which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this
Agreement. During a Master Servicer Event of Default, each of the Trustee and
the Trust Administrator shall exercise such of the rights and powers vested in
it by this Agreement, and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs. Any permissive right of the Trustee or
the Trust Administrator enumerated in this Agreement shall not be construed as a
duty.
Each of the Trustee and the Trust Administrator, upon receipt of all
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trust Administrator which are specifically
required to be furnished pursuant to any provision of this Agreement, shall
examine them to determine whether they conform to the requirements of this
Agreement. If any such instrument is found not to conform to the requirements of
this Agreement in a material manner, the Trust Administrator shall take such
action as it deems appropriate to have the instrument corrected, and if the
instrument is not corrected to the Trust Administrator's satisfaction, the Trust
Administrator will provide notice thereof to the Certificateholders.
No provision of this Agreement shall be construed to relieve the
Trustee or the Trust Administrator from liability for its own negligent action,
its own negligent failure to act or its own misconduct; provided, however, that:
(i) Prior to the occurrence of a Master Servicer Event of Default,
and after the curing of all such Master Servicer Events of Default
which may have occurred, the duties
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and obligations of the Trustee and the Trust Administrator shall
be determined solely by the express provisions of this Agreement,
neither the Trustee nor the Trust Administrator shall 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 or the Trust
Administrator and, in the absence of bad faith on the part of the
Trustee or the Trust Administrator, as applicable, the Trustee or the
Trust Administrator, as the case may be, 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 or the Trust Administrator, as the case may be, that conform to
the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) Neither the Trustee nor the Trust Administrator shall be
personally liable with respect to any action taken, suffered or omitted
to be taken by it in good faith in accordance with the direction of the
NIMS Insurer, the Guarantor or the Holders of Certificates entitled to
at least 25% of the Voting Rights relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee or the Trust Administrator, or exercising any trust or power
conferred upon the Trustee or the Trust Administrator, under this
Agreement.
Section 8.02 Certain Matters Affecting the Trustee and the Trust Administrator.
(a) Except as otherwise provided in Section 8.01:
(i) Each of the Trustee and the Trust Administrator may request
and rely conclusively upon and shall be fully protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document reasonably believed by it to
be genuine and to have been signed or presented by the proper party or
parties and the manner of obtaining consents and evidencing the
authorization of the execution thereof shall be subject to such
reasonable regulations as the Trustee or the Trust Administrator, as
applicable, may prescribe;
(ii) Each of the Trustee and the Trust Administrator 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) Neither the Trustee nor the Trust Administrator shall be
under any obligation to exercise any of the trusts or powers vested in
it by this Agreement or to institute, conduct or defend any litigation
hereunder or in relation hereto at the request, order or direction of
any of the NIMS Insurer, the Guarantor or the Certificateholders,
pursuant to the provisions of this Agreement, unless the NIMS Insurer,
the Guarantor or such Certificateholders shall have offered to the
Trustee or the Trust Administrator, as applicable, security or
indemnity satisfactory to it against the costs, expenses and
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liabilities which may be incurred therein or thereby; nothing contained
herein shall, however, relieve the Trustee or the Trust Administrator
of the obligation, upon the occurrence of a Master Servicer Event of
Default (which has not been cured or waived), to exercise such of the
rights and powers vested in it by this Agreement, and to use the same
degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's
own affairs;
(iv) Neither the Trustee nor the Trust Administrator shall be
personally liable for any action taken, suffered or omitted by it in
good faith and believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Agreement;
(v) Prior to the occurrence of a Master Servicer Event of Default
hereunder and after the curing of all Master Servicer Events of Default
which may have occurred, neither the Trustee nor the Trust
Administrator shall be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so
by the NIMS Insurer, the Guarantor or the Holders of Certificates
entitled to at least 25% of the Voting Rights; provided, however, that
if the payment within a reasonable time to the Trustee or the Trust
Administrator, as applicable, 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 or the Trust Administrator, as applicable,
not reasonably assured to the Trustee or the Trust Administrator, as
applicable, by the NIMS Insurer, the Guarantor or such
Certificateholders, the Trustee or the Trust Administrator, as
applicable, may require reasonable indemnity against such expense, or
liability from the NIMS Insurer, the Guarantor or such
Certificateholders as a condition to taking any such action;
(vi) Each of the Trustee and the Trust Administrator may execute
any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents custodians, nominees or
attorneys and shall not be responsible for any willful misconduct or
negligence of such agents, custodians, nominees or attorneys (as long
as such agents, custodians, nominees or attorneys are appointed with
due and proper care);
(vii) Neither the Trustee nor the Trust Administrator shall be
personally liable for any loss resulting from the investment of funds
held in the Collection Account at the direction of the Master Servicer
pursuant to Section 3.12; and
(viii) Except as otherwise expressly provided herein, none of the
provisions of this Agreement shall require the Trustee or the Trust
Administrator to expend or risk its own funds or otherwise to incur any
liability, financial or otherwise, in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers
(not including expenses, disbursements and advances incurred or made by
the Trustee or the Trust Administrator, as applicable, including the
compensation and the expenses and disbursements of its agents and
counsel, in the ordinary course of the Trustee's or the Trust
Administrator's, as applicable, performance in accordance with the
provisions of
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this Agreement) if it shall have reasonable grounds for believing
that repayment of such funds or indemnity satisfactory to it against
such risk or liability is not assured to it.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee or the Trust Administrator, may be
enforced by it without the possession of any of the Certificates, or the
production thereof at the trial or other proceeding relating thereto, and any
such suit, action or proceeding instituted by the Trustee or the Trust
Administrator shall be brought in its name for the benefit of all the Holders of
such Certificates, subject to the provisions of this Agreement.
Section 8.03 Neither Trustee nor Trust Administrator Liable for Certificates or
Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
signature of the Trust Administrator, on behalf of the Trustee, the execution
and authentication of the Trust Administrator on the Certificates, the
acknowledgments of the Trust Administrator contained in Article II and the
representations and warranties of the Trustee and Trust Administrator in Section
8.13) shall be taken as the statements of the Depositor, and neither the Trustee
nor the Trust Administrator shall assume any responsibility for their
correctness. Neither the Trustee nor the Trust Administrator makes any
representations or warranties as to the validity or sufficiency of this
Agreement (other than as specifically set forth in Section 8.13) or of the
Certificates (other than execution and authentication of the Trust
Administrator, on behalf of the Trustee, on the Certificates) or of any Mortgage
Loan or related document. Neither the Trustee nor the Trust Administrator shall
be accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of the Certificates, or for the use or
application of any funds paid to the Depositor or the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from the Collection Account
by the Master Servicer, other than any funds held by or on behalf of the Trustee
or the Trust Administrator in accordance with Section 3.10.
Section 8.04 Trustee and Trust Administrator May own Certificates.
Each of the Trustee and the Trust Administrator in its individual
capacity or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not Trustee or the Trust
Administrator, as applicable, and may transact banking and/or trust business
with the Seller, the Depositor, the Master Servicer, the Guarantor or their
Affiliates.
Section 8.05 Trustee's and Trust Administrator's Fees and Expenses.
(a) The Trust Administrator shall withdraw from the Distribution
Account on each Distribution Date and pay to itself one day's interest earnings
(net of losses) on amounts on deposit in the Distribution Account. In addition
to such interest earnings, the compensation to be paid to the Trust
Administrator in respect of its obligations under this Agreement will be the
amounts paid by the Seller pursuant to a letter agreement between the Trust
Administrator and the Seller. The principal compensation to be paid to the
Trustee in respect of its obligations under this Agreement will be the amounts
paid by the Trust Administrator pursuant to a letter agreement between the Trust
Administrator and the Trustee.
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Each of the Trustee and the Trust Administrator, and any director,
officer, employee or agent of the Trustee or the Trust Administrator, as
applicable, shall be indemnified by the Trust Fund and held harmless against any
loss, liability or expense (not including expenses, disbursements and advances
incurred or made by the Trustee or the Trust Administrator, as applicable,
including the compensation and the expenses and disbursements of its agents and
counsel, in the ordinary course of the Trustee's or the Trust Administrator's,
as the case may be, performance in accordance with the provisions of this
Agreement) incurred by the Trustee or the Trust Administrator, as applicable,
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, (ii) that constitutes a
specific liability of the Trustee or the Trust Administrator, as applicable,
pursuant to Section 10.01(c) or (iii) any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder, or in the case of the Trust Administrator, as a result of a breach of
the Trust Administrator's obligations under Article X hereof. Any amounts
payable to the Trustee or the Trust Administrator, as applicable, or any
director, officer, employee or agent of the Trustee or the Trust Administrator,
as applicable, in respect of the indemnification provided by this paragraph (a),
or pursuant to any other right of reimbursement from the Trust Fund that the
Trustee or the Trust Administrator, as applicable, or any director, officer,
employee or agent of the Trustee or the Trust Administrator, as applicable, may
have hereunder in its capacity as such, may be withdrawn by the Trust
Administrator from the Distribution Account at any time. Such indemnity shall
survive the termination of this Agreement and the resignation of the Trustee or
the Trust Administrator.
As a limitation on the foregoing with respect to certain expenses of
the Trustee or the Trust Administrator, each of the Trustee and the Trust
Administrator shall receive from the Trust Fund amounts with respect to
indemnification for counsel fees and expenses (collectively, "Legal Fees") in
connection with any third-party litigation or other claims alleging violations
of laws or regulations relating to consumer lending and/or servicing of the
Trust Fund (collectively, "Third Party Claims") in an amount not greater than
$25,000 per month, and $600,000 in the aggregate (with amounts in excess of
$25,000 for any month carried-forward to subsequent months, until the $600,000
aggregate maximum is reached). Neither the Trustee nor the Trust Administrator
shall have any obligation to incur additional expenses for which reimbursement
is limited pursuant to this paragraph in excess of the aggregate limit set forth
above unless it has received reasonable security or indemnity for such
additional expenses. The Certificateholders shall hold each of the Trustee and
the Trust Administrator harmless for any consequences to such Certificateholders
resulting from any failure of the Trustee or the Trust Administrator to incur
any such additional expenses in excess of the aforementioned aggregate limit.
(b) Without limiting the Master Servicer's indemnification
obligations under Section 6.03, the Master Servicer agrees to indemnify, the
Trustee and the Trust Administrator from, and hold each of them 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 or the Trust Administrator. Any payment under this
Section 8.05(b) made by the Master Servicer to the Trustee or the Trust
Administrator shall be from the Master Servicer's own funds, without
reimbursement from the Trust Fund therefor.
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Section 8.06 Eligibility Requirements for Trustee and Trust Administrator.
Each of the Trustee and the Trust Administrator hereunder shall at all
times be a corporation or an association (other than the Depositor, the Seller,
the Master Servicer or any Affiliate of the foregoing) organized and doing
business under the laws of any state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by
federal or state authority. If such corporation or association publishes reports
of conditions at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation or association
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of conditions so published. In case at any time the Trustee or the
Trust Administrator shall cease to be eligible in accordance with the provisions
of this Section, the Trustee or the Trust Administrator, as the case may be,
shall resign immediately in the manner and with the effect specified in Section
8.07.
Section 8.07 Resignation or Removal of Trustee and Trust Administrator.
Either of the Trustee or the Trust Administrator may at any time resign
and be discharged from the trust hereby created by giving written notice thereof
to the NIMS Insurer, the Guarantor, the Depositor, the Master Servicer and the
Certificateholders and if the Trustee is resigning to the Trust Administrator,
or if the Trust Administrator is resigning, to the Trustee. Upon receiving such
notice of resignation, the Depositor shall promptly appoint a successor Trustee
or Trust Administrator by written instrument, in duplicate, which instrument
shall be delivered to the resigning Trustee or Trust Administrator and to the
successor Trustee or Trust Administrator acceptable to the NIMS Insurer or the
Guarantor, as provided in Section 1.04, and to the Holders of Certificates
entitled to at least 51% of the Voting Rights. A copy of such instrument shall
be delivered to the Certificateholders, the Trustee or the Trust Administrator,
as applicable, and the Master Servicer by the Depositor. If no successor Trustee
or Trust Administrator shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee or Trust Administrator, as applicable, may petition any court
of competent jurisdiction for the appointment of a successor Trustee or Trust
Administrator, as applicable.
If at any time the Trustee or the Trust Administrator shall cease to be
eligible in accordance with the provisions of Section 8.06 and shall fail to
resign after written request therefor by the Depositor or the NIMS Insurer or
the Guarantor, as provided in Section 1.04 (or in the case of the Trust
Administrator, the Trustee), or if at any time the Trustee or the Trust
Administrator shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of either of the Trustee or the Trust Administrator or
of its property shall be appointed, or any public officer shall take charge or
control of either of the Trustee or the Trust Administrator or of its property
or affairs for the purpose of rehabilitation, conservation or liquidation, then
the Depositor or the NIMS Insurer or the Guarantor, as provided in Section 1.04
(or in the case of the Trust Administrator, the Trustee), may remove the Trustee
or the Trust Administrator, as applicable, and the Depositor may appoint a
successor Trustee or the Trust Administrator, as applicable (which may be the
same person, if both the Trustee and the Trust Administrator are removed),
acceptable to the NIMS Insurer or the Guarantor, as provided in Section 1.04,
and to the Holders of Certificates entitled to at least 51% of the Voting
Rights, by
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written instrument, in duplicate, which instrument shall be delivered
to the Trustee or the Trust Administrator, as applicable, so removed and to the
successor Trustee or the Trust Administrator, as applicable. A copy of such
instrument shall be delivered to the Certificateholders and the Master Servicer
by the Depositor.
The Holders of Certificates entitled to at least 51% of the Voting
Rights, with the consent of the NIMS Insurer or the Guarantor, as provided in
Section 1.04, may at any time remove the Trustee or the Trust Administrator and
appoint a successor Trustee or the Trust Administrator by written instrument or
instruments, in triplicate, signed by the NIMS Insurer, the Guarantor or such
Holders, as applicable, or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Depositor, one complete set
to the Trustee or the Trust Administrator, as the case may be, so removed and
one complete set to the successor so appointed. A copy of such instrument shall
be delivered to the NIMS Insurer, the Guarantor, the Certificateholders and the
Master Servicer by the Depositor. In addition, if the Trustee has knowledge that
the Trust Administrator has breached any of its duties under this Agreement, the
Trustee may remove the Trust Administrator in the same manner as provided in the
prior sentence. For purposes of this Section, the Trustee shall not be deemed to
have knowledge of a breach by the Trust Administrator of any of its duties
hereunder, unless a Responsible Officer of the Trustee, assigned to and working
in the Trustee's Corporate Trust Office has actual knowledge thereof or unless
written notice of any event which is in fact such a breach is received by the
Trustee, and such notice references the Certificates, the Trust Fund or this
Agreement.
Any resignation or removal of the Trustee or the Trust Administrator
and appointment of a successor Trustee or Trust Administrator pursuant to any of
the provisions of this Section shall not become effective until acceptance of
appointment by the successor Trustee or the Trust Administrator as provided in
Section 8.08. Notwithstanding the foregoing, in the event the Trust
Administrator advises the Trustee that it is unable to continue to perform its
obligations pursuant to the terms of this Agreement prior to the appointment of
a successor, the Trustee shall be obligated to perform such obligations until a
new Trust Administrator is appointed and shall be entitled to receive any fees
that would have otherwise been payable to the Trust Administrator hereunder.
Such performance shall be without prejudice to any claim by a party hereto or
beneficiary hereof resulting from the Trust Administrator's breach of its
obligations hereunder.
Section 8.08 Successor Trustee or Trust Administrator.
Any successor Trustee or Trust Administrator appointed as provided in
Section 8.07 shall execute, acknowledge and deliver to the Depositor, and to its
predecessor Trustee or Trust Administrator, as applicable, an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor Trustee or Trust Administrator shall become effective and
such successor Trustee or Trust Administrator, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as Trustee or Trust Administrator herein. The predecessor Trustee or Trust
Administrator shall deliver to the successor Trustee or Trust Administrator all
Mortgage Files and related documents and statements, as well as all moneys, held
by it hereunder (other than any Mortgage Files at the time held by a Custodian,
which Custodian shall become the agent of any successor Trustee hereunder), and
the Depositor and the predecessor Trustee or Trust Administrator shall execute
and deliver such instruments and do such other things as may reasonably be
required for more
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fully and certainly vesting and confirming in the successor Trustee or Trust
Administrator all such rights, powers, duties and obligations.
No successor Trustee or Trust Administrator shall accept appointment as
provided in this Section unless at the time of such acceptance such successor
Trustee or Trust Administrator shall be eligible under the provisions of Section
8.06 and the appointment of such successor Trustee or Trust Administrator shall
not result in a downgrading of any of the NIM Notes or any Class of Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.
Upon acceptance of appointment by a successor Trustee or Trust
Administrator as provided in this Section, the Depositor shall mail notice of
the succession of such Trustee or Trust Administrator hereunder to all Holders
of Certificates at their addresses as shown in the Certificate Register. If the
Depositor fails to mail such notice within 10 days after acceptance of
appointment by the successor Trustee or Trust Administrator, the successor
Trustee or Trust Administrator shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 Merger or Consolidation of Trustee or Trust Administrator.
Any corporation or association into which the Trustee or the Trust
Administrator may be merged or converted or with which it may be consolidated or
any corporation or association resulting from any merger, conversion or
consolidation to which the Trustee or the Trust Administrator, as the case may
be, shall be a party, or any corporation or association succeeding to the
business of the Trustee or the Trust Administrator, shall be the successor of
the Trustee or the Trust Administrator, respectively, hereunder, provided such
corporation or association shall be eligible under the provisions of Section
8.06, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of REMIC 1A or REMIC 1B, or property securing the same may at the time be
located, the Master Servicer and the Trustee, acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee and the NIMS Insurer or the Guarantor (as
provided in Section 1.04), to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of REMIC
1A or REMIC 1B, as applicable, and to vest in such Person or Persons, in such
capacity, such title to REMIC 1A and/or REMIC 1B, or any part thereof and,
subject to the other provisions of this Section 8.10, such powers, duties,
obligations, rights and trusts as the Master Servicer and the Trustee may
consider necessary or desirable. If the Master Servicer shall not have joined in
such appointment or the NIMS Insurer or the Guarantor shall (as provided in
Section 1.04) not have approved such appointment within 15 days after the
receipt by it of a request so to do, or in case a Master Servicer Event of
Default shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof. If such appointment is at the request of the Master
Servicer then any
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expense of the Trustee shall be deemed a Servicing Advance for all purpose of
this Agreement, otherwise it will be an expense of the Trustee and will be
payable out of the Trustee's funds.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee
shall be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of title to
REMIC 1A or REMIC 1B, or any portion thereof in any such jurisdiction) shall be
exercised and performed by such separate trustee or co-trustee at the direction
of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trust conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Appointment of Custodians.
The Trust Administrator may, with the consent of the Depositor and the
Master Servicer, appoint one or more Custodians to hold all or a portion of the
Mortgage Files as agent for the Trust Administrator, by entering into a
Custodial Agreement. The Trust Administrator shall initially serve as the
Custodian and this Agreement shall serve as the Custodial Agreement. The
appointment of any Custodian may at any time be terminated and a substitute
Custodian appointed therefor upon the reasonable request of the Master Servicer
to the Trust Administrator and the consent of the NIMS Insurer, after
consultation with the Guarantor, the consent to which shall not be unreasonably
withheld. The Trust Administrator shall pay any and all fees and expenses of any
Custodian in accordance with each Custodial Agreement. Subject to Article VIII
hereof, the Trust Administrator agrees to comply with the terms of each
Custodial Agreement and to enforce the terms and provisions thereof against the
Custodian for the benefit of the Certificateholders having an interest in any
Mortgage File held by such Custodian. Each Custodian shall be a depository
institution or trust company subject to supervision by federal or state
authority, shall have combined capital and surplus of at least $10,000,000 and
shall be qualified to do business in the jurisdiction in which it holds any
Mortgage File. Each Custodial
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Agreement may be amended only as provided in Section 11.01. In no event shall
the appointment of any Custodian pursuant to a Custodial Agreement diminish the
obligations of the Trust Administrator hereunder.
Section 8.12 Appointment of Office or Agency.
The Trust Administrator will appoint an office or agency in the City of
New York where the Certificates may be surrendered for registration of transfer
or exchange, and presented for final distribution, and where notices and demands
to or upon the Trust Administrator in respect of the Certificates and this
Agreement may be served. As of the Closing Date, the Trust Administrator
designates its offices located at the office of Trust Administrator's agent,
located at DTC transfer agent services, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ Entrance,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ for such purpose.
Section 8.13 Representations and Warranties of the Trustee and the Trust
Administrator.
Each of the Trustee and the Trust Administrator hereby represents and
warrants, severally and not jointly, and with respect to itself only, to the
Master Servicer, the Guarantor and the Depositor and to the Trustee, in the case
of the Trust Administrator, or to the Trust Administrator, in the case of the
Trustee, as of the Closing Date, that:
(i) it is a national banking association duly organized, validly
existing and in good standing under the laws of the United States.
(ii) the execution and delivery of this Agreement, and the
performance and compliance with the terms of this Agreement, will not
violate its charter or bylaws or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material agreement or
other instrument to which it is a party or which is applicable to it or
any of its assets.
(iii) it has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement,
and has duly executed and delivered this Agreement.
(iv) this Agreement, assuming due authorization, execution and
delivery by the Master Servicer and the Depositor, constitutes its
valid, legal and binding obligation, enforceable against it in
accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, receivership, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights generally, and (B)
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law.
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ARTICLE IX
TERMINATION
Section 9.01 Termination Upon Purchase or Liquidation of All Mortgage Loans.
(a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer, the
Guarantor, the Trust Administrator and the Trustee (other than the obligations
of the Master Servicer to the Trustee and the Trust Administrator pursuant to
Section 8.05 and of the Master Servicer to provide for and the Trust
Administrator to make payments in respect of the REMIC 1A Regular Interests,
REMIC 1B Regular Interests, REMIC 2 Regular Interests, REMIC 3 Regular
Interests, and the Classes of Certificates as hereinafter set forth) shall
terminate upon the later of (A) the payment in full of all amounts owing to the
Guarantor hereunder unless the Guarantor shall otherwise consent and (B) payment
to the Certificateholders and the deposit of all amounts held by or on behalf of
the Trustee and required hereunder to be so paid or deposited on the
Distribution Date coinciding with or following the earlier to occur of (i) the
purchase by the Terminator (as defined below) of all Mortgage Loans and each REO
Property remaining in REMIC 1A and REMIC 1B and (ii) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan or
REO Property remaining in REMIC 1A or REMIC 1B; provided, however, that in no
event shall the trust created hereby continue beyond the expiration of 21 years
from the death of the last survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the
late ambassador of the United States to the Court of St. ▇▇▇▇▇, living on the
date hereof. The purchase by the Terminator of all Mortgage Loans and each REO
Property remaining in REMIC 1A and REMIC 1B shall be at a price (the
"Termination Price") equal to the greater of (A) the aggregate Purchase Price of
all the Mortgage Loans included in REMIC 1A and REMIC 1B, plus the appraised
value of each REO Property, if any, included in REMIC 1A and REMIC 1B, such
appraisal to be conducted by an appraiser mutually agreed upon by the Terminator
and the Trustee in their reasonable discretion, any unpaid Guarantor
Reimbursement Amount and unpaid Guaranty Fee and (B) the aggregate fair market
value of all of the assets of REMIC 1A and REMIC 1B (as determined by the
Terminator and the Trustee, as of the close of business on the third Business
Day next preceding the date upon which notice of any such termination is
furnished to Certificateholders pursuant to the third paragraph of this Section
9.01) plus any unpaid Guarantor Reimbursement Amount and unpaid Guaranty Fee,
and in the case of both clauses (A) and (B) of this sentence, any additional
amounts necessary to pay all interest accrued on, as well as amounts necessary
to pay in full the principal balance of, the NIM Notes and any amounts necessary
to reimburse the NIMS Insurer for all amounts paid under the NIMs insurance
policy and any other amounts reimbursable or otherwise payable to the NIMS
Insurer, in each case, with interest thereon at the applicable rate set forth in
the Indenture and to the extent not previously reimbursed or paid.
(b) The Master Servicer shall have the right and, if the Master
Servicer does not exercise such right, the NIMS Insurer, shall have the right
(the party exercising such right, the "Terminator") to purchase all of the
Mortgage Loans and each REO Property in both Loan Groups remaining in REMIC 1A
and REMIC 1B pursuant to clause (i) of the preceding paragraph no later than the
Determination Date in the month immediately preceding the Distribution Date on
which the Certificates will be retired; provided, however, that the Terminator
may elect to purchase all of the Mortgage Loans and each REO Property remaining
in REMIC 1A and REMIC 1B pursuant to clause (i) above only if the aggregate
Stated Principal
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Balance of the Mortgage Loans and each REO Property remaining in the Trust Fund
at the time of such election is equal to or less than 10% of the aggregate
Stated Principal Balance of the Closing Date Mortgage Loans as of the Cut-off
Date. The Terminator shall not be entitled to exercise this right, without the
Guarantor's consent, if the distribution of the Termination Price according to
such priorities would result in the Guarantor being required to make a Guarantor
Payment on the applicable Distribution Date. By acceptance of the Residual
Certificates, the Holders of the Residual Certificates agree, in connection with
any termination hereunder, to assign and transfer any amounts in excess of par,
and to the extent received in respect of such termination, to pay any such
amounts to the Holders of the Class C Certificates.
(c) Notice of the liquidation of the REMIC 1A Regular Interests
and REMIC 1B Regular Interests shall be given promptly by the Trust
Administrator by letter to Certificateholders mailed (a) in the event such
notice is given in connection with the purchase of the Mortgage Loans and each
REO Property by the Terminator, not earlier than the 15th day and not later than
the 25th day of the month next preceding the month of the final distribution on
the Certificates or (b) otherwise during the month of such final distribution on
or before the Determination Date in such month, in each case specifying (i) the
Distribution Date upon which the Trust Fund will terminate and final payment in
respect of the REMIC 1A Regular Interests, REMIC 1B Regular Interests and the
related Certificates will be made upon presentation and surrender of the related
Certificates at the office of the Trust Administrator therein designated, (ii)
the amount of any such final payment, (iii) that no interest shall accrue in
respect of the REMIC 1A Regular Interests, REMIC 1B Regular Interests or the
related Certificates from and after the Accrual Period relating to the final
Distribution Date therefor and (iv) that the Record Date otherwise applicable to
such Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office of the Trust
Administrator designated in such notice for purposes of such surrender. In the
event such notice is given in connection with the purchase of all of the
Mortgage Loans and each REO Property remaining in REMIC 1A by the Guarantor, the
Guarantor shall deliver to the Trust Administrator for deposit in the
Distribution Account not later than the last Business Day of the month next
preceding the month of the final distribution on the Guaranteed Certificates an
amount in immediately available funds equal to the purchase price described in
Section 1.05. The Trust Administrator shall remit to the Master Servicer from
such funds deposited in the Distribution Account (i) any amounts which the
Master Servicer would be permitted to withdraw and retain from the Collection
Account pursuant to Section 3.11 and (ii) any other amounts otherwise payable by
the Trust Administrator to the Master Servicer from amounts on deposit in the
Distribution Account pursuant to the terms of this Agreement, in each case prior
to making any final distributions pursuant to Section 9.01(d) below. Upon
certification to the Trust Administrator by a Servicing Representative of the
making of such final deposit, the Trust Administrator shall promptly release or
cause to be released to the Terminator the Mortgage Files for the remaining
Mortgage Loans, and the Trustee or the Trust Administrator, on behalf of the
Trustee, shall execute all assignments, endorsements and other instruments
necessary to effectuate such transfer.
(d) Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the Trust Administrator shall
distribute to each Certificateholder so presenting and surrendering its
Certificates the amount otherwise distributable on such Distribution Date in
accordance with Section 4.01 in respect of the Certificates so presented and
surrendered. On the final Distribution Date, the Trust Administrator will
withdraw from the Distribution Account and remit to the Guarantor amounts
otherwise payable to the Guarantor on such Distribution Date in
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accordance with Section 4.01. Any funds not distributed to any Holder or Holders
of Certificates being retired on such Distribution Date because of the failure
of such Holder or Holders to tender their Certificates shall, on such date, be
set aside and held in trust by the Trust Administrator and credited to the
account of the appropriate non-tendering Holder or Holders. If any Certificates
as to which notice has been given pursuant to this Section 9.01 shall not have
been surrendered for cancellation within six months after the time specified in
such notice, the Trust Administrator shall mail a second notice to the remaining
non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto. If
within one year after the second notice all such Certificates shall not have
been surrendered for cancellation, the Trust Administrator shall, directly or
through an agent, mail a final notice to remaining related non-tendering
Certificateholders concerning surrender of their Certificates. The costs and
expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in the trust funds.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, the Trust Administrator shall pay to Deutsche
Banc Alex. ▇▇▇▇▇ Inc. all such amounts, and all rights of non-tendering
Certificateholders in or to such amounts shall thereupon cease. No interest
shall accrue or be payable to any Certificateholder on any amount held in trust
by the Trust Administrator as a result of such Certificateholder's failure to
surrender its Certificate(s) for final payment thereof in accordance with this
Section 9.01.
Immediately following the deposit of funds in trust hereunder in
respect of the Certificates, the Trust Fund shall terminate.
Section 9.02 Additional Termination Requirements.
(a) In the event that the Terminator purchases all the Mortgage
Loans and each REO Property or the final payment on or other liquidation of the
last Mortgage Loan or REO Property remaining in REMIC 1A and REMIC 1B pursuant
to Section 9.01, the Trust Fund shall be terminated in accordance with the
following additional requirements:
(i) The Trust Administrator shall specify the first day in the
90-day liquidation period in a statement attached to each Trust
REMIC's final Tax Return pursuant to Treasury regulation Section
1.860F-l and shall satisfy all requirements of a qualified
liquidation under Section 860F of the Code and any regulations
thereunder, as evidenced by an Opinion of Counsel delivered to the
Guarantor, the Trust Administrator, the Trustee, and the Depositor
obtained at the expense of the Terminator;
(ii) During such 90-day liquidation period, and at or prior to the
time of making of the final payment on the Certificates, the Trust
Administrator shall sell all of the assets of REMIC 1A and REMIC
1B to the Terminator for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trust Administrator shall distribute or credit,
or cause to be distributed or credited, to the Holders of the
Residual Certificates all cash on hand in the Trust Fund (other
than cash retained to meet claims), and the Trust Fund shall
terminate at that time.
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(b) In the event that the Guarantor purchases all the Group I
Mortgage Loans and each REO Property related to Loan Group I or the final
payment on or other liquidation of the last Mortgage Loan or REO Property in
Loan Group I remaining in REMIC 1A pursuant to Section 1.05, the REMIC 1A shall
be terminated in accordance with the following additional requirements:
(i) The Trust Administrator shall specify the first day in the
90-day liquidation period in a statement attached to each REMIC
1A's final Tax Return pursuant to Treasury regulation Section
1.860F-l and shall satisfy all requirements of a qualified
liquidation under Section 860F of the Code and any regulations
thereunder, as evidenced by an Opinion of Counsel delivered to the
Guarantor, the Trust Administrator, the Trustee, and the Depositor
obtained at the expense of the Guarantor;
(ii) During such 90-day liquidation period, and at or prior to the
time of making of the final payment with respect to the REMIC 1A
Regular Interests and Class R-1A Interest, the Trust Administrator
shall sell all of the assets of REMIC 1A to the Guarantor for
cash; and
(iii) At the time of the making of the final payment with respect
to the REMIC 1A Regular Interests and Class R-1A Interest, the
Trust Administrator shall distribute or credit, or cause to be
distributed or credited, to the holders of the Residual
Certificates on account of the Class R-1A Interest all cash on
hand in the REMIC 1A (other than cash retained to meet claims),
and the REMIC 1A shall terminate at that time.
(c) At the expense of the Terminator, the Trust Administrator
shall prepare or cause to be prepared the documentation required in connection
with the adoption of a plan of liquidation of each Trust REMIC pursuant to the
Section 9.02(a). At the expense of the Guarantor, the Trustee shall prepare or
cause to be prepared the documentation required in connection with the adoption
of a plan of liquidation of REMIC 1A pursuant to the Section 9.02(b).
(d) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trust Administrator to specify the 90-day
liquidation period for each Trust REMIC, which authorization shall be binding
upon all successor Certificateholders.
ARTICLE X
REMIC PROVISIONS
Section 10.01 REMIC Administration.
(a) The Trust Administrator shall elect to treat each Trust REMIC
as a REMIC under the Code and, if necessary, under applicable state law. Each
such election will be made on Form 1066 or other appropriate federal tax or
information return (including Form 8811) or any appropriate state return for the
taxable year ending on the last day of the calendar year in which
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the Certificates are issued, copies of which forms and returns shall promptly be
furnished by the Trust Administrator to the NIMS Insurer. For the purposes of
the REMIC election in respect of REMIC 1A, the REMIC 1A Regular Interests shall
be designated as the Regular Interests in REMIC 1A and the Class R-1A Interest
shall be designated as the Residual Interest in REMIC 1A. For the purposes of
the REMIC election in respect of REMIC 1B, the REMIC 1B Regular Interests shall
be designated as the Regular Interests in REMIC 1B, and the Class R-1B Interest
shall be designated as the Residual Interest in REMIC 1B. For the purposes of
the REMIC election in respect of REMIC 2, the REMIC 2 Regular Interests shall be
designated as the Regular Interests in REMIC 2 and the Class R-2 Interest shall
be designated as the Residual Interest in REMIC 2. For the purposes of the REMIC
election in respect of REMIC 3, (i) the Regular Certificates (other than the
Class C Certificates and the Class P Certificates) and the REMIC 3 Regular
Interests shall be designated as the Regular Interests in REMIC 3 and (ii) the
Class R-3 Interest shall be designated as the Residual Interest in REMIC 3. For
the purposes of the REMIC election in respect of REMIC X, the Class C
Certificates and the Class P Certificates shall be designated as the Regular
Interests in REMIC X and the Class R-X Interest shall be designated as the
Residual Interest in REMIC X. Neither the Trustee nor the Trust Administrator
shall permit the creation of any "interests" in REMIC 1A, REMIC 1B, REMIC 2,
REMIC 3 or REMIC X (within the meaning of Section 860G of the Code) other than
the REMIC 1A Regular Interests, the REMIC 1B Regular Interests, the REMIC 2
Regular Interests, the REMIC 3 Regular Interests and the interests represented
by the Certificates.
(b) The Closing Date is hereby designated as the "Startup Day" of
each Trust REMIC within the meaning of Section 860G(a)(9) of the Code.
(c) The Trust Administrator shall pay, out of funds on deposit in
the Distribution Account, any and all expenses relating to any tax audit of the
Trust Fund (including, but not limited to, any professional fees or any
administrative or judicial proceedings with respect to any Trust REMIC that
involve the Internal Revenue Service or state tax authorities) unless such
expenses, professional fees or any administrative or judicial proceedings are
incurred by reason of the Trust Administrator's willful misfeasance, bad faith
or negligence. The Trust Administrator, as agent for each Trust REMIC's tax
matters person, shall (i) act on behalf of the Trust Fund in relation to any tax
matter or controversy involving any Trust REMIC and (ii) represent, after
consultation with the Guarantor and upon accommodation of the Guarantor's
reasonable requests, the Trust Fund in any administrative or judicial proceeding
relating to an examination or audit by any governmental taxing authority with
respect thereto and will be entitled to reimbursement from the Trust Fund for
any expenses incurred by the Trust Administrator in connection therewith unless
such administrative or judicial proceeding relating to an examination or audit
by any governmental taxing authority is incurred by reason of the Trust
Administrator's willful misfeasance, bad faith or negligence. The holder of the
largest Percentage Interest of the Class R Certificates shall be designated, in
the manner provided under Treasury regulations Section 1.860F-4(d) and Treasury
regulations Section 301.6231(a)(7)-1, as the tax matters person of each Trust
REMIC created hereunder other than REMIC X. The holder of the largest Percentage
Interest of the Class R-X Certificates shall be designated, in the manner
provided under Treasury regulations Section 1.860F-4(d) and Treasury regulations
Section 301.6231(a)(7)-1, as the tax matters person of REMIC X. By its
acceptance thereof, each such holder hereby agrees to irrevocably appoint the
Trust Administrator or an Affiliate as its agent to perform all of the duties of
the tax matters person of each respective REMIC.
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(d) The Trust Administrator shall prepare and deliver to the
Trustee in a timely manner, and the Trustee shall sign and file in a timely
manner, all of the Tax Returns in respect of each REMIC created hereunder,
copies of which Tax Returns shall be promptly furnished to the NIMS Insurer. The
expenses of preparing and filing such returns shall be borne by the Trust
Administrator without any right of reimbursement therefor. The Master Servicer
shall provide on a timely basis to the Trust Administrator or its designee such
information with respect to the assets of the Trust Fund as is in its possession
and reasonably required by the Trustee or the Trust Administrator to enable it
to perform its respective obligations under this Article.
(e) The Trust Administrator shall perform on behalf of each Trust
REMIC all reporting and other tax compliance duties that are the responsibility
of such REMIC under the Code, the REMIC Provisions or other compliance guidance
issued by the Internal Revenue Service or any state or local taxing authority.
Among its other duties, as required by the Code, the REMIC Provisions or such
other compliance guidance, the Trust Administrator shall provide (i) to any
Transferor of a Residual Certificate (or other person designated in Section
860E(e)(3) of the Code) and to the Internal Revenue Service such information as
is necessary for the computation of any tax relating to the transfer of a
Residual Certificate to any Person who is not a Permitted Transferee, (ii) to
the Certificateholders such information or reports as are required by the Code
or the REMIC Provisions including reports relating to interest, original issue
discount and market discount or premium (using the Prepayment Assumption as
required) and (iii) to the Internal Revenue Service the name, title, address and
telephone number of the person who will serve as the representative of each
Trust REMIC. The Master Servicer shall provide on a timely basis to the Trust
Administrator such information with respect to the assets of the Trust Fund,
including, without limitation, the Mortgage Loans, as is in its possession and
reasonably required by the Trust Administrator to enable it to perform its
obligations under this subsection. In addition, the Depositor shall provide or
cause to be provided to the Trust Administrator, within ten (10) days after the
Closing Date, all information or data that the Trust Administrator reasonably
determines to be relevant for tax purposes as to the valuations and issue prices
of the Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates. The Depositor shall also
provide such information or data to the NIMS Insurer.
(f) The Trustee and the Trust Administrator shall take such action
and shall cause each Trust REMIC created hereunder to take such action as shall
be necessary to create or maintain the status thereof as a REMIC under the REMIC
Provisions (and the Master Servicer shall assist the Trust Administrator, to the
extent reasonably requested by the Trust Administrator to do specific actions in
order to assist in the maintenance of such status). Neither the Trustee nor the
Trust Administrator shall take any action, cause the Trust Fund to take any
action or fail to take (or fail to cause to be taken) any action that, under the
REMIC Provisions, if taken or not taken, as the case may be, could (i) endanger
the status of any Trust REMIC as a REMIC or (ii) result in the imposition of a
tax upon the Trust Fund (including but not limited to the tax on prohibited
transactions set forth in Section 860F(a) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) (either such
event, an "Adverse REMIC Event") unless the Trustee, the Trust Administrator,
the NIMS Insurer and the Guarantor have received an Opinion of Counsel,
addressed to the Trustee, the Trust Administrator, the NIMS Insurer and the
Guarantor (at the expense of the party seeking to take such action but in no
event at the expense of the Trustee or the Trust Administrator) to the effect
that the contemplated action will not, with respect to any Trust REMIC, endanger
such status or
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result in the imposition of such a tax, nor shall the Master Servicer take or
fail to take any action (whether or not authorized hereunder) as to which the
Trustee or the Trust Administrator has advised it in writing that it has
received an Opinion of Counsel to the effect that an Adverse REMIC Event could
occur with respect to such action; provided that the Master Servicer may
conclusively rely on such Opinion of Counsel and shall incur no liability for
its action or failure to act in accordance with such Opinion of Counsel. The
Trustee and the Trust Administrator shall deliver to the NIMS Insurer and the
Guarantor a copy of any such advice or opinion. In addition, prior to taking any
action with respect to any Trust REMIC or the assets thereof, or causing any
Trust REMIC to take any action, which is not contemplated under the terms of
this Agreement, the Master Servicer will consult with the Trustee and the Trust
Administrator or its designee, in writing, with respect to whether such action
could cause an Adverse REMIC Event to occur with respect to a Trust REMIC, and
the Master Servicer shall not take any such action or cause any Trust REMIC to
take any such action as to which the Trustee or the Trust Administrator has
advised it in writing that an Adverse REMIC Event could occur; provided that the
Master Servicer may conclusively rely on such writing and shall incur no
liability for its action or failure to act in accordance with such writing. The
Trustee and the Trust Administrator may consult with counsel to make such
written advice, and the cost of same shall be borne by the party seeking to take
the action not permitted by this Agreement, but in no event shall such cost be
an expense of the Trustee or the Trust Administrator. At all times as may be
required by the Code, the Trustee and the Trust Administrator will ensure that
substantially all of the assets of both REMIC 1A and REMIC 1B will consist of
"qualified mortgages" as defined in Section 860G(a)(3) of the Code and
"permitted investments" as defined in Section 860G(a)(5) of the Code.
(g) If any tax is imposed on prohibited transactions of any Trust
REMIC created hereunder pursuant to Section 860F(a) of the Code, on the net
income from foreclosure property of any such REMIC pursuant to Section 860G(c)
of the Code, or on any contributions to any such REMIC after the Startup Day
therefor pursuant to Section 860G(d) of the Code, or if any other tax is imposed
by the Code or any applicable provisions of state or local tax laws, such tax
shall be charged (i) to the Trust Administrator pursuant to Section 10.03
hereof, if such tax arises out of or results from a breach by the Trust
Administrator of any of its obligations under this Article X, (ii) to the
Trustee pursuant to Section 10.03 hereof, if such tax arises out of or results
from a breach by the Trustee of any of its obligations under this Article X,
(iii) to the Master Servicer pursuant to Section 10.03 hereof, if such tax
arises out of or results from a breach by the Master Servicer of any of its
obligations under Article III or this Article X, or (iv) otherwise against
amounts on deposit in the Distribution Account and shall be paid by withdrawal
therefrom.
(h) On or before April 15 of each calendar year commencing after
the date of this Agreement, the Trust Administrator shall deliver to the Master
Servicer, the Trustee, the NIMS Insurer, the Guarantor and each Rating Agency a
Certificate from a Responsible Officer of the Trust Administrator stating the
Trust Administrator's compliance with this Article X.
(i) The Trust Administrator shall, for federal income tax
purposes, maintain books and records with respect to each Trust REMIC on a
calendar year and on an accrual basis.
(j) Following the Startup Day, neither the Trustee nor the Trust
Administrator shall accept any contributions of assets to any Trust REMIC other
than in connection with any
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Qualified Substitute Mortgage Loan delivered in accordance with Section 2.03
unless it shall have received an Opinion of Counsel to the effect that the
inclusion of such assets in the Trust Fund will not cause any Trust REMIC to
fail to qualify as a REMIC at any time that any Certificates are outstanding or
subject any Trust REMIC to any tax under the REMIC Provisions or other
applicable provisions of federal, state and local law or ordinances.
(k) None of the Trustee, the Trust Administrator or the Master
Servicer shall enter into any arrangement by which any Trust REMIC will receive
a fee or other compensation for services or permit any Trust REMIC to receive
any income from assets other than "qualified mortgages" as defined in Section
860G(a)(3) of the Code or "permitted investments" as defined in Section
860G(a)(5) of the Code.
Section 10.02 Prohibited Transactions and Activities.
None of the Depositor, the Master Servicer, the Trust Administrator or
the Trustee shall sell, dispose of or substitute for any of the Mortgage Loans
(except in connection with (i) the foreclosure of a Mortgage Loan, including but
not limited to, the acquisition or sale of a Mortgaged Property acquired by deed
in lieu of foreclosure, (ii) the bankruptcy of REMIC 1A or REMIC 1B, (iii) the
termination of REMIC 1A or REMIC 1B pursuant to Article IX of this Agreement,
(iv) a substitution pursuant to Article II of this Agreement or (v) a purchase
of Mortgage Loans pursuant to Article II or III of this Agreement), nor acquire
any assets for any Trust REMIC (other than REO Property acquired in respect of a
defaulted Mortgage Loan), nor sell or dispose of any investments in the
Collection Account or the Distribution Account for gain, nor accept any
contributions to any Trust REMIC after the Closing Date (other than a Qualified
Substitute Mortgage Loan delivered in accordance with Section 2.03), unless it,
the NIMS Insurer and the Guarantor have received an Opinion of Counsel,
addressed to the Trust Administrator, the Trustee, the NIMS Insurer and the
Guarantor (at the expense of the party seeking to cause such sale, disposition,
substitution, acquisition or contribution but in no event at the expense of the
Trustee or the Trust Administrator) that such sale, disposition, substitution,
acquisition or contribution will not (a) affect adversely the status of any
Trust REMIC as a REMIC or (b) cause any Trust REMIC to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC Provisions.
Section 10.03 Trustee, Trust Administrator, Master Servicer and Depositor
Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the Trust
Administrator, the Depositor and the Master Servicer for any taxes and costs
including, without limitation, any reasonable attorneys' fees imposed on or
incurred by the Trust Fund, the Trust Administrator, the Depositor or the Master
Servicer as a result of a breach of the Trustee's covenants set forth in this
Article X or any state, local or franchise taxes imposed upon the Trust as a
result of the location of the Trustee.
(b) The Master Servicer agrees to indemnify the Trust Fund, the
Trust Administrator, the Depositor and the Trustee for any taxes and costs
including, without limitation, any reasonable attorneys' fees imposed on or
incurred by the Trust Fund, the Trust Administrator, the Depositor or the
Trustee as a result of a breach of the Master Servicer's covenants set forth in
Article III or this Article X or any state, local or franchise taxes imposed
upon the Trust as a result of the location of the Master Servicer or any
subservicer.
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(c) The Depositor agrees to indemnify the Trust Fund, the Trust
Administrator, the Master Servicer and the Trustee for any taxes and costs
including, without limitation, any reasonable attorneys' fees imposed on or
incurred by the Trust Fund, the Trust Administrator, the Master Servicer or the
Trustee as a result of a breach of the Depositor's covenants set forth in this
Article X.
(d) The Trust Administrator agrees to indemnify the Trust Fund,
the Trustee, the Depositor and the Master Servicer for any taxes and costs
including, without limitation, any reasonable attorneys' fees imposed on or
incurred by the Trust Fund, the Trustee, the Depositor or the Master Servicer as
a result of a breach of the Trust Administrator's covenants set forth in this
Article X or any state, local or franchise taxes imposed upon the Trust as a
result of the location of the Trust Administrator.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
This Agreement or any Custodial Agreement may be amended from time to
time by the Depositor, the Master Servicer, the Trustee, the Trust
Administrator, the Guarantor and, if applicable, the Custodian, with the consent
of the NIMS Insurer, and without the consent of any of the Certificateholders,
(i) to cure any ambiguity or defect, (ii) to correct, modify or supplement any
provisions herein (including to give effect to the expectations of
Certificateholders), or in any Custodial Agreement, (iii) to modify, eliminate
or add to any of its provisions to such extent as shall be necessary or
desirable to maintain the qualification of the Trust Fund as a REMIC at all
times that any Certificate is outstanding or to avoid or minimize the risk of
the imposition of any tax on the Trust Fund pursuant to the Code that would be a
claim against the Trust Fund, provided that the Trustee, the Trust
Administrator, the NIMS Insurer, the Guarantor, the Depositor and the Master
Servicer have received an Opinion of Counsel to the effect that (A) such action
is necessary or desirable to maintain such qualification or to avoid or minimize
the risk of the imposition of any such tax and (B) such action will not
adversely affect the status of the Trust Fund as a REMIC or adversely affect in
any material respect the interest of any Certificateholder or (iv) to make any
other provisions with respect to matters or questions arising under this
Agreement or in any Custodial Agreement which shall not be inconsistent with the
provisions of this Agreement or such Custodial Agreement, provided that, in each
case, such action shall not, as evidenced by an Opinion of Counsel delivered to
the parties hereto and the NIMS Insurer, adversely affect in any material
respect the interests of any Certificateholder and, provided, further, that (A)
such action will not affect in any material respect the permitted activities of
the Trust and (B) such action will not increase in any material respect the
degree of discretion which the Master Servicer is allowed to exercise in
servicing the Mortgage Loans. No amendment shall be deemed to adversely affect
in any material respect the interests of any Certificateholder who shall have
consented thereto, and no Opinion of Counsel shall be required to address the
effect of any such amendment on any such consenting Certificateholder.
This Agreement or any Custodial Agreement may also be amended from time
to time by the Depositor, the Master Servicer, the Trustee, the Trust
Administrator, the Guarantor and, if
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applicable, the Custodian, with the consent of the NIMS Insurer, and with the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights, for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or any Custodial Agreement
or of modifying in any manner the rights of the Holders of Certificates;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Certificate without the consent of the Holder
of such Certificate, (ii) adversely affect in any material respect the interests
of the Holders of any Class of Certificates in a manner, other than as described
in (i), without the consent of the Holders of Certificates of such Class
evidencing at least 66% of the Voting Rights allocated to such Class, or (iii)
modify the consents required by the immediately preceding clauses (i) and (ii)
without the consent of the Holders of all Certificates then outstanding.
Notwithstanding any other provision of this Agreement, for purposes of the
giving or withholding of consents pursuant to this Section 11.01, Certificates
registered in the name of the Depositor or the Master Servicer or any Affiliate
thereof shall be entitled to Voting Rights with respect to matters affecting
such Certificates.
Notwithstanding any contrary provision of this Agreement, the Trustee,
the Trust Administrator, the NIMS Insurer and the Guarantor shall be entitled to
receive an Opinion of Counsel to the effect that such amendment will not result
in the imposition of any tax on any Trust REMIC pursuant to the REMIC Provisions
or cause any Trust REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
Promptly after the execution of any such amendment the Trust
Administrator shall furnish a copy of such amendment to each Certificateholder
and the NIMS Insurer.
It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee or the Trust Administrator may prescribe.
The cost of any Opinion of Counsel to be delivered pursuant to this
Section 11.01 shall be borne by the Person seeking the related amendment, but in
no event shall such Opinion of Counsel be an expense of the Trustee or the Trust
Administrator.
Each of the Trustee and the Trust Administrator may, but shall not be
obligated to enter into any amendment pursuant to this Section that affects its
rights, duties and immunities under this Agreement or otherwise.
Section 11.02 Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the expense of the Trust, but only upon direction of
Certificateholders
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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 Trust Administrator 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 Trust Administrator to institute such action, suit or
proceeding in its own name as Trust Administrator hereunder and shall have
offered to the Trust Administrator such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or thereby,
and the Trust Administrator 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
Trust Administrator, 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 Trust Administrator shall
be entitled to such relief as can be given either at law or in equity.
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Section 11.04 Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
Section 11.05 Notices.
All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first class mail, postage prepaid, by facsimile or by express delivery service,
to (a) in the case of the Master Servicer, Long Beach Mortgage Company, ▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General
Counsel (telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇), or such other address or telecopy
number as may hereafter be furnished to the other parties hereto in writing by
the Master Servicer, (b) in the case of the Trust Administrator, Bankers Trust
Company of California, N.A., ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Trust Administration Services LB0201 (telecopy number
(▇▇▇) ▇▇▇-▇▇▇▇) or such other address or telecopy number as may hereafter be
furnished to the other parties hereto in writing by the Trust Administrator, (c)
in the case of the Depositor, Long Beach Securities Corp., ▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel (telecopy
number: (▇▇▇) ▇▇▇-▇▇▇▇), or such other address or telecopy number as may be
furnished to the other parties hereto in writing by the Depositor, (d) in the
case of Guarantor, ▇▇▇▇▇▇ Mae, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇, Attention: Vice President-Capital Markets (telecopy number (202)
752-6890), or such other addresses or telecopy number as may be furnished to the
other parties thereto in writing by the Guarantor, (e) in the case of the NIMS
Insurer, Asset Guaranty Insurance Company, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Manager, Asset-Backed Surveillance (telecopy number:
(▇▇▇) ▇▇▇-▇▇▇▇), or such other addresses or telecopy number as may be furnished
to the other parties thereto in writing by the NIMS Insurer, and (f) in the case
of the Trustee, First Union National Bank, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, or such other address or telecopy number as may hereafter
be furnished to the other parties hereto in writing by the Trustee. Any notice
required or permitted to be mailed to a Certificateholder shall be given by
first class mail, postage prepaid, at the address of such Holder as shown in the
Certificate Register. Notice of any Master Servicer default shall be given by
telecopy and by certified mail. Any notice so mailed within the time prescribed
in this Agreement shall be conclusively presumed to have duly been given when
mailed, whether or not the Certificateholder receives such notice. A copy of any
notice required to be telecopied hereunder shall also be mailed to the
appropriate party in the manner set forth above.
Section 11.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
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Section 11.07 Notice to the Rating Agencies, the NIMS Insurer and the Guarantor.
The Trust Administrator shall use its best efforts promptly to provide
notice to the Rating Agencies, the NIMS Insurer and the Guarantor with respect
to each of the following of which it has actual knowledge:
1. Any amendment to this Agreement;
2. The occurrence of any Master Servicer Event of Default that has not
been cured or waived;
3. The resignation or termination of the Master Servicer, the Trust
Administrator or the Trustee;
4. The repurchase or substitution of Mortgage Loans pursuant to or as
contemplated by Section 2.03;
5. The final payment to the Holders of any Class of Certificates;
6. Any change in the location of the Collection Account or the
Distribution Account;
7. The Trustee or the Trust Administrator, as applicable, were it to
succeed as Master Servicer, is unable to make advances regarding
delinquent Mortgage Loans; and
8. The filing of any claim under the Master Servicer's blanket bond and
errors and omissions insurance policy required by Section 3.14 or
the cancellation or material modification of coverage under any such
instrument.
In addition, the Trust Administrator shall promptly make available to
each Rating Agency copies of each Statement to Certificateholders described in
Section 4.03 hereof and the Master Servicer shall promptly furnish to each
Rating Agency copies of the following:
1. each annual statement as to compliance described in Section 3.20
hereof;
2. each annual independent public accountants' servicing report
described in Section 3.21 hereof.
Any such notice pursuant to this Section 11.07 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to ▇▇▇▇▇'▇
Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: MBS
Monitoring/Long Beach Mortgage Loan Trust 2002-1; Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Standard & Poor's Rating Services, Inc., ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and the NIMS Insurer and the Guarantor
at the address provided in Section 11.05.
In addition, each party hereto agrees that it will furnish or make
available to the NIMS Insurer a copy of any opinions, notices, reports,
schedules, certificates, statements, rating
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confirmation letters or other information that are furnished hereunder to the
Trustee, the Trust Administrator or the Certificateholders.
Section 11.08 Article and Section References.
All Article and Section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
Section 11.09 NIMS Insurer's Rights.
The NIMS Insurer shall be deemed a third-party beneficiary of this
Agreement, and shall be entitled to enforce such rights, in each case, as if it
were a party hereto. Notwithstanding anything to the contrary anywhere in this
Agreement, all rights of the NIMS Insurer hereunder (i) shall not be operable
whenever an Insurer Default or an Insurer Insolvency Event and a Backup Insurer
Default (in each case, as defined in the Indenture) shall have occurred and be
continuing and (ii) except in the case of any right to indemnification hereunder
shall permanently cease to be operable upon the later to occur of (A) the
payment in full of the Insured NIM Notes as provided in the Indenture and (B)
the payment in full to the NIMS Insurer of any amounts owed to the NIMS Insurer
as provided in the Indenture.
Section 11.10 Grant of Security Interest.
It is the express intent of the parties hereto that the conveyance of
the Mortgage Loans by the Depositor to the Trustee be, and be construed as, a
sale of the Mortgage Loans by the Depositor and not a pledge of the Mortgage
Loans by the Depositor to secure a debt or other obligation of the Depositor.
However, in the event that, notwithstanding the aforementioned intent of the
parties, the Mortgage Loans are held to be property of the Depositor, then, (a)
it is the express intent of the parties that such conveyance be deemed a pledge
of the Mortgage Loans by the Depositor to the Trustee to secure a debt or other
obligation of the Depositor and (b)(1) this Agreement shall also be deemed to be
a security agreement within the meaning of Articles 8 and 9 of the Uniform
Commercial Code as in effect from time to time in the State of New York; (2) the
conveyance provided for in Section 2.01 hereof shall be deemed to be a grant by
the Depositor to the Trustee of a security interest in all of the Depositor's
right, title and interest in and to the Mortgage Loans and all amounts payable
to the holders of the Mortgage Loans in accordance with the terms thereof and
all proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the Collection Account and the Distribution Account, whether in the form of
cash, instruments, securities or other property; (3) the obligations secured by
such security agreement shall be deemed to be all of the Depositor's obligations
under this Agreement, including the obligation to provide to the
Certificateholders the benefits of this Agreement relating to the Mortgage Loans
and the Trust Fund; and (4) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law.
Accordingly, the Depositor hereby grants to the Trustee a security interest in
the Mortgage Loans and all other property described in clause (2) of the
preceding sentence, for the purpose of securing to the Trustee the performance
by the Depositor
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of the obligations described in clause (3) of the preceding sentence.
Notwithstanding the foregoing, the parties hereto intend the conveyance pursuant
to Section 2.01 to be a true, absolute and unconditional sale of the Mortgage
Loans and assets constituting the Trust Fund by the Depositor to the Trustee.
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IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Guarantor,
the Trust Administrator, and the Trustee have caused their names to be signed
hereto by their respective officers thereunto duly authorized, all as of the day
and year first above written.
LONG BEACH SECURITIES CORP.,
as Depositor
By:
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Title: Vice President
LONG BEACH MORTGAGE COMPANY,
as Master Servicer
By:
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Title: Vice President
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trust Administrator
By:
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Associate
FEDERAL NATIONAL MORTGAGE
ASSOCIATION,
as Guarantor (with respect to the Class I-A
Certificates and the Class I-S Certificates)
By:
--------------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
FIRST UNION NATIONAL BANK,
as Trustee
By:
--------------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF KING )
On the ___th day of April, 2002 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ known to me to be a Vice
President of Long Beach Securities Corp., a Delaware corporation that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
------------------------------
Notary Public
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF KING )
On the ___th day of April, 2002 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ known to me to be a Vice
President of Long Beach Mortgage Company, a corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
------------------------------
Notary Public
192
STATE OF )
) ss.:
COUNTY OF )
On the ___th day of April, 2002 before me, a notary public in and for
said State, personally appeared ____________, known to me to be a ____________
of Bankers Trust Company of California, 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
association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
193
STATE OF )
) ss.:
COUNTY OF )
On the ___th day of April, 2002 before me, a notary public in and for
said State, personally appeared ____________, known to me to be a ____________
of Federal National Mortgage Association, a ____________ that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said association, and acknowledged to me that such association
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
------------------------------
Notary Public
194
STATE OF )
) ss.:
COUNTY OF )
On the ___th day of April, 2002 before me, a notary public in and for
said State, personally appeared ____________, known to me to be a ____________
of First Union National Bank, a ____________ that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said association, and acknowledged to me that such association executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
------------------------------
Notary Public
195
EXHIBIT A-1
CLASS I-A CERTIFICATES
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[____]
Original Class Certificate Principal
Balance of this Class : $[____]
Percentage Interest : [ ]
Pass-Through Rate : Variable
CUSIP [____]
Class : I-A
Assumed Maturity Date : May___, 2032
I-A-1
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class I-A
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
I-A Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class I-A
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trust Administrator or the
Trustee referred to below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class I-A Certificate (obtained by
dividing the Denomination of this Class I-A Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of April___, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S Certificates, Bankers Trust Company
of California, N.A., as trust administrator (the "Trust Administrator"), and
First Union National Bank, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class I-A Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class I-A Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee, the Trust Administrator 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, the Trust Administrator 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 Trust
Administrator, the Master Servicer or the Depositor; or there shall be delivered
to the Trustee, the Trust Administrator 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, the Trust Administrator and the
Depositor against any liability that may
I-A-2
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
Reference is hereby made to the further provisions of this Class I-A
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class I-A Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator on behalf of the Trustee.
I-A-3
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but
solely as Trust Administrator on behalf
of the Trustee
By
------------------------------------------
This is one of the Class I-A Certificates
referenced in the within-mentioned Agreement
By
--------------------------------------------------
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
I-A-4
[Reverse of Class I-A Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Trustee, the Trust Administrator, the
Guarantor and of Holders of the requisite percentage of the Percentage Interests
of each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such
I-A-5
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.
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 Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denomi-nations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trust Administrator, the
Guarantor, the NIMs Insurer and the Trustee and any agent of the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Master Servicer,
the Trust Administrator, the Guarantor, the NIMs Insurer, the Trustee nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
I-A-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------
-------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code
of assignee)
the Percentage Interest evidenced by the within Certificate and
hereby authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust.
I (We) further direct the Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
------------------------------
-------------------------------------
Signature by or on behalf of assignor
I-A-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________,
_______________________________________________________________________________
_______________________________________________________________________________
account number _______________________, or, if mailed by check, to ____________.
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
I-A-8
CLASS I-A CERTIFICATES
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 2
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[____]
Original Class Certificate Principal
Balance of this Class : $[____]
Percentage Interest : [ ]
Pass-Through Rate : Variable
CUSIP [____]
Class : I-A
Assumed Maturity Date : May___, 2032
I-A-1
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class I-A
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
I-A Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class I-A
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trust Administrator or the
Trustee referred to below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class I-A Certificate (obtained by
dividing the Denomination of this Class I-A Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of April___, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S Certificates, Bankers Trust Company
of California, N.A., as trust administrator (the "Trust Administrator"), and
First Union National Bank, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class I-A Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class I-A Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee, the Trust Administrator 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, the Trust Administrator 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 Trust
Administrator, the Master Servicer or the Depositor; or there shall be delivered
to the Trustee, the Trust Administrator 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, the Trust Administrator and the
Depositor against any liability that may
I-A-2
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
Reference is hereby made to the further provisions of this Class I-A
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class I-A Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator on behalf of the Trustee.
I-A-3
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but
solely as Trust Administrator on behalf
of the Trustee
By
------------------------------------------
This is one of the Class I-A Certificates
referenced in the within-mentioned Agreement
By
------------------------------------------------------
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
I-A-4
[Reverse of Class I-A Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Trustee, the Trust Administrator, the
Guarantor and of Holders of the requisite percentage of the Percentage Interests
of each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such
I-A-5
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.
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 Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denomi-nations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trust Administrator, the
Guarantor, the NIMs Insurer and the Trustee and any agent of the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Master Servicer,
the Trust Administrator, the Guarantor, the NIMs Insurer, the Trustee nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
I-A-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
---------------------------------------------------------------
-------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code
of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
------------------------------
-------------------------------------
Signature by or on behalf of assignor
I-A-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________,
account number _______________________, or, if mailed by check, to ____________.
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
I-A-8
I-A-8
CLASS I-A CERTIFICATES
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 3
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[____]
Original Class Certificate Principal
Balance of this Class : $[____]
Percentage Interest : [ ]
Pass-Through Rate : Variable
CUSIP [____]
Class : I-A
Assumed Maturity Date : May___, 2032
I-A-1
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class I-A
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
I-A Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class I-A
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trust Administrator or the
Trustee referred to below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class I-A Certificate (obtained by
dividing the Denomination of this Class I-A Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of April___, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S Certificates, Bankers Trust Company
of California, N.A., as trust administrator (the "Trust Administrator"), and
First Union National Bank, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class I-A Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class I-A Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee, the Trust Administrator 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, the Trust Administrator 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 Trust
Administrator, the Master Servicer or the Depositor; or there shall be delivered
to the Trustee, the Trust Administrator 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, the Trust Administrator and the
Depositor against any liability that may
I-A-2
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
Reference is hereby made to the further provisions of this Class I-A
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class I-A Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator on behalf of the Trustee.
I-A-3
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but
solely as Trust Administrator on behalf
of the Trustee
By
------------------------------------------
This is one of the Class I-A Certificates
referenced in the within-mentioned Agreement
By
------------------------------------------------------
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
I-A-4
[Reverse of Class I-A Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Trustee, the Trust Administrator, the
Guarantor and of Holders of the requisite percentage of the Percentage Interests
of each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such
I-A-5
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.
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 Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denomi-nations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trust Administrator, the
Guarantor, the NIMs Insurer and the Trustee and any agent of the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Master Servicer,
the Trust Administrator, the Guarantor, the NIMs Insurer, the Trustee nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
I-A-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
----------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code
of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
------------------------------
-------------------------------------
Signature by or on behalf of assignor
I-A-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________,
account number _______________________, or, if mailed by check, to ____________.
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
I-A-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________,
account number _______________________, or, if mailed by check, to ____________.
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
I-A-9
EXHIBIT A-2
CLASS II-A1 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[____]
Original Class Certificate Principal
Balance of this Class : $[____]
Percentage Interest : [____]
Pass-Through Rate : Variable
CUSIP : [____]
Class : II-A1
Assumed Maturity Date : May___, 2032
II-A1-1
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class II-A1
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
II-A1 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class II-A1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trust Administrator or the
Trustee referred to below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class II-A1 Certificate (obtained by
dividing the Denomination of this Class II-A1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of April___, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S Certificates, Bankers Trust Company
of California, N.A., as trust administrator (the "Trust Administrator"), and
First Union National Bank, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class II-A1 Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class II-A1 Certificate by virtue of the acceptance hereof assents and
by which such Holder is bound.
Reference is hereby made to the further provisions of this Class II-A1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class II-A1 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 Trust Administrator on behalf of the Trustee.
II-A1-2
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but
solely as Trust Administrator on behalf
of the Trustee
By
------------------------------------------
This is one of the Class II-A1 Certificates
referenced in the within-mentioned Agreement
By
------------------------------------------------------
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
II-A1-3
[Reverse of Class II-A1 Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Trustee, the Trust Administrator, the
Guarantor and of Holders of the requisite percentage of the Percentage Interests
of each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
II-A1-4
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 Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denomi-nations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trust Administrator, the
Guarantor, the NIMs Insurer and the Trustee and any agent of the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Master Servicer,
the Trust Administrator, the Guarantor, the NIMs Insurer, the Trustee nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
II-A1-5
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 Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
------------------------------
-------------------------------------
Signature by or on behalf of assignor
II-A1-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________,
account number _______________________, or, if mailed by check, to ____________.
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
II-A1-7
EXHIBIT A-3
CLASS II-A2 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[____]
Original Class Certificate Principal
Balance of this Class : $[____]
Percentage Interest : 100.00%
Pass-Through Rate : 3.50% (subject to increase and limitation as set forth in
the Agreement)
CUSIP : [____]
Class : II-A2
Assumed Maturity Date : May___, 2032
II-A2-1
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class II-A2
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
II-A2 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class II-A2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trust Administrator or the
Trustee referred to below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class II-A2 Certificate (obtained by
dividing the Denomination of this Class II-A2 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of April___, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S Certificates, Bankers Trust Company
of California, N.A., as trust administrator (the "Trust Administrator"), and
First Union National Bank, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class II-A2 Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class II-A2 Certificate by virtue of the acceptance hereof assents and
by which such Holder is bound.
Reference is hereby made to the further provisions of this Class II-A2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class II-A2 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 Trust Administrator on behalf of the Trustee.
II-A2-2
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but
solely as Trust Administrator on behalf
of the Trustee
By
------------------------------------------
This is one of the Class II-A2 Certificates
referenced in the within-mentioned Agreement
By
------------------------------------------------------
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
II-A2-3
[Reverse of Class II-A2 Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Trustee, the Trust Administrator, the
Guarantor and of Holders of the requisite percentage of the Percentage Interests
of each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
II-A2-4
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 Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denomi-nations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trust Administrator, the
Guarantor, the NIMs Insurer and the Trustee and any agent of the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Master Servicer,
the Trust Administrator, the Guarantor, the NIMs Insurer, the Trustee nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
II-A2-5
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 Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
------------------------------
-------------------------------------
Signature by or on behalf of assignor
II-A2-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________,
account number _______________________, or, if mailed by check, to ____________.
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
II-A2-7
EXHIBIT A-4
CLASS II-A3 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 II-A2 CERTIFICATES TO THE EXTENT
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[____]
Original Class Certificate Principal
Balance of this Class : $[____]
Percentage Interest : 100.00%
Pass-Through Rate : 4.92% (subject to increase and limitation as set forth in
the Agreement)
CUSIP : [____]
Class : II-A3
Assumed Maturity Date : May___, 2032
II-A3-1
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class II-A3
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
II-A3 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class II-A3
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trust Administrator or the
Trustee referred to below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class II-A3 Certificate (obtained by
dividing the Denomination of this Class II-A3 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of April___, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S Certificates, Bankers Trust Company
of California, N.A., as trust administrator (the "Trust Administrator"), and
First Union National Bank, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class II-A3 Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class II-A3 Certificate by virtue of the acceptance hereof assents and
by which such Holder is bound.
Reference is hereby made to the further provisions of this Class II-A3
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class II-A3 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 Trust Administrator on behalf of the Trustee.
II-A3-2
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but
solely as Trust Administrator on behalf
of the Trustee
By
------------------------------------------
This is one of the Class II-A3 Certificates
referenced in the within-mentioned Agreement
By
------------------------------------------------------
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
II-A3-3
[Reverse of Class II-A3 Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Trustee, the Trust Administrator, the
Guarantor and of Holders of the requisite percentage of the Percentage Interests
of each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
II-A3-4
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 Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denomi-nations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trust Administrator, the
Guarantor, the NIMs Insurer and the Trustee and any agent of the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Master Servicer,
the Trust Administrator, the Guarantor, the NIMs Insurer, the Trustee nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
II-A3-5
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 Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
------------------------------
-------------------------------------
Signature by or on behalf of assignor
II-A3-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________,
account number _______________________, or, if mailed by check, to ____________.
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
II-A3-7
EXHIBIT A-5
CLASS II-A4 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 II-A2 CERTIFICATES AND THE CLASS
II-A3 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[____]
Original Class Certificate Principal
Balance of this Class : $[____]
Percentage Interest : 100.00%
Pass-Through Rate : 6.46% (subject to increase and limitation as set forth in
the Agreement)
CUSIP : [____]
Class : II-A4
Assumed Maturity Date : May___, 2032
II-A4-1
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class II-A4
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
II-A4 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class II-A4
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trust Administrator or the
Trustee referred to below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class II-A4 Certificate (obtained by
dividing the Denomination of this Class II-A4 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of April___, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S Certificates, Bankers Trust Company
of California, N.A., as trust administrator (the "Trust Administrator"), and
First Union National Bank, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class II-A4 Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class II-A4 Certificate by virtue of the acceptance hereof assents and
by which such Holder is bound.
Reference is hereby made to the further provisions of this Class II-A4
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class II-A4 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 Trust Administrator on behalf of the Trustee.
II-A4-2
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but
solely as Trust Administrator on behalf
of the Trustee
By
------------------------------------------
This is one of the Class II-A4 Certificates
referenced in the within-mentioned Agreement
By
------------------------------------------------------
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
II-A4-3
[Reverse of Class II-A4 Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Trustee, the Trust Administrator, the
Guarantor and of Holders of the requisite percentage of the Percentage Interests
of each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
II-A4-4
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 Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denomi-nations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trust Administrator, the
Guarantor, the NIMs Insurer and the Trustee and any agent of the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Master Servicer,
the Trust Administrator, the Guarantor, the NIMs Insurer, the Trustee nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
II-A4-5
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 Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
------------------------------
-------------------------------------
Signature by or on behalf of assignor
II-A4-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________,
account number _______________________, or, if mailed by check, to ____________.
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
II-A4-7
EXHIBIT A-6
CLASS I-S CERTIFICATES
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
Initial Certificate Notional Amount of
this Certificate ("Denomination") : $[____]
Original Class Certificate Notional
Amount of this Class : $[____]
Percentage Interest : 100.00%
CUSIP [____]
Pass-Through Rate : Declining
Class : I-S
Assumed Maturity Date : __________, 2004
I-S-1
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class I-S
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Class I-S Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Master Servicer, the
Trust Administrator or the Trustee referred to below or any of their respective
affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class I-S Certificate (obtained by
dividing the Denomination of this Class I-S Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of April___, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S Certificates, Bankers Trust Company
of California, N.A., as trust administrator (the "Trust Administrator"), and
First Union National Bank, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class I-S Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class I-S 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, the Trust Administrator 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, the Trust Administrator 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 Trust
Administrator, the Master Servicer or the Depositor; or there shall be delivered
to the Trustee, the Trust Administrator 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, the Trust Administrator and the
Depositor against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.
I-S-2
Reference is hereby made to the further provisions of this Class I-S
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class I-S Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator on behalf of the Trustee.
I-S-3
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but
solely as Trust Administrator on behalf
of the Trustee
By
------------------------------------------
This is one of the Class I-S Certificates
referenced in the within-mentioned Agreement
By
------------------------------------------------------
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
I-S-4
[Reverse of Class I-S Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Trustee, the Trust Administrator, the
Guarantor and of Holders of the requisite percentage of the Percentage Interests
of each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
I-S-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 Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator 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 Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trust Administrator, the
Guarantor, the NIMs Insurer and the Trustee and any agent of the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Master Servicer,
the Trust Administrator, the Guarantor, the NIMs Insurer, the Trustee nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
I-S-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 Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
------------------------------
-------------------------------------
Signature by or on behalf of assignor
I-S-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________,
account number _______________________, or, if mailed by check, to ____________.
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
I-S-8
EXHIBIT A-7
CLASS II-S CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
Initial Certificate Notional Amount of
this Certificate ("Denomination") : $[____]
Original Class Certificate Notional
Amount of this Class : $[____]
Percentage Interest : 100.00%
Pass-Through Rate : Declining
CUSIP : [____]
Class : II-S
Assumed Maturity Date : __________, 2004
II-S-1
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class II-S
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Class II-S Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Master Servicer, the
Trust Administrator or the Trustee referred to below or any of their respective
affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class II-S Certificate (obtained by
dividing the Denomination of this Class II-S Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of April___, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S Certificates, Bankers Trust Company
of California, N.A., as trust administrator (the "Trust Administrator"), and
First Union National Bank, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class II-S Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class II-S Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this Class II-S
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class II-S Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator on behalf of the Trustee.
II-S-2
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but
solely as Trust Administrator on behalf
of the Trustee
By
------------------------------------------
This is one of the Class II-S Certificates
referenced in the within-mentioned Agreement
By
------------------------------------------------------
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
II-S-3
[Reverse of Class II-S Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Trustee, the Trust Administrator, the
Guarantor and of Holders of the requisite percentage of the Percentage Interests
of each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
II-S-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator 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 Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trust Administrator, the
Guarantor, the NIMs Insurer and the Trustee and any agent of the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Master Servicer,
the Trust Administrator, the Guarantor, the NIMs Insurer, the Trustee nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
II-S-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------
-------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code
of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
------------------------------
-------------------------------------
Signature by or on behalf of assignor
II-S-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________,
account number _______________________, or, if mailed by check, to ____________.
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
II-S-7
EXHIBIT A-8
CLASS II-M1 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 I-A CERTIFICATES, THE CLASS II-A1
CERTIFICATES, THE CLASS II-A2 CERTIFICATES, THE CLASS II-A3 CERTIFICATES, THE
CLASS II-A4 CERTIFICATES, THE CLASS I-S CERTIFICATES AND THE CLASS II-S
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
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 : II-M1
Assumed Maturity Date : May___, 2032
II-M1-1
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class II-M1
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
II-M1 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class II-M1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trust Administrator or the
Trustee referred to below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class II-M1 Certificate (obtained by
dividing the Denomination of this Class II-M1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of April___, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Corporation, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S Certificates, Bankers Trust Company
of California, N.A., as trust administrator (the "Trust Administrator"), and
First Union National Bank, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class II-M1 Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class II-M1 Certificate by virtue of the acceptance hereof assents and
by which such Holder is bound.
Reference is hereby made to the further provisions of this Class II-M1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class II-M1 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 Trust Administrator on behalf of the Trustee.
II-M1-2
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but
solely as Trust Administrator on behalf
of the Trustee
By
------------------------------------------
This is one of the Class II-M1 Certificates
referenced in the within-mentioned Agreement
By
------------------------------------------------------
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
II-M1-3
[Reverse of Class II-M1 Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator 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.
II-M1-4
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 Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator 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 Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trust Administrator, the
Guarantor, the NIMs Insurer and the Trustee and any agent of the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Master Servicer,
the Trust Administrator, the Guarantor, the NIMs Insurer, the Trustee nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
II-M1-5
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 Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
------------------------------
-------------------------------------
Signature by or on behalf of assignor
II-M1-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________,
account number _______________________, or, if mailed by check, to ____________.
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
II-M1-7
EXHIBIT A-9
CLASS M2 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 I-A CERTIFICATES, THE CLASS II-A1
CERTIFICATES, THE CLASS II-A2 CERTIFICATES, THE CLASS II-A3 CERTIFICATES, THE
CLASS II-A4 CERTIFICATES, THE CLASS I-S CERTIFICATES, THE CLASS II-S
CERTIFICATES AND THE CLASS II-M1 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS TWO
SEPARATE "REGULAR INTERESTS" 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"): THE I-M2 COMPONENT AND THE II-M2
COMPONENT.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[____]
Original Class Certificate Principal
Balance of this Class : $[____]
I-M2 Component Balance $[____]
II-M2 Component Balance $[____]
Percentage Interest : 100.00%
Pass-Through Rate : Variable
M2-1
CUSIP : [____]
Class : M2
Assumed Maturity Date : May___, 2032
M2-2
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class M2
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M2 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trust Administrator 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 M2 Certificate (obtained by dividing
the Denomination of this Class M2 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Long Beach Securities
Corp. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of April___, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Corporation, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S Certificates, Bankers Trust Company
of California, N.A., as trust administrator (the "Trust Administrator"), and
First Union National Bank, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class M2 Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class M2 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 M2
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 M2 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 Trust Administrator on behalf of the Trustee.
M2-3
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but
solely as Trust Administrator on behalf
of the Trustee
By
------------------------------------------
This is one of the Class M2 Certificates
referenced in the within-mentioned Agreement
By
------------------------------------------------------
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
M2-4
[Reverse of Class M2 Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Trustee, the Trust Administrator, the
Guarantor and of Holders of the requisite percentage of the Percentage Interests
of each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
M2-5
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 Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator 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 Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trust Administrator, the
Guarantor, the NIMs Insurer and the Trustee and any agent of the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Master Servicer,
the Trust Administrator, the Guarantor, the NIMs Insurer, the Trustee nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
M2-6
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 Trust Administrator 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
M2-7
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.
M2-8
EXHIBIT A-10
CLASS M3 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 I-A CERTIFICATES, THE CLASS II-A1
CERTIFICATES, THE CLASS II-A2 CERTIFICATES, THE CLASS II-A3 CERTIFICATES, THE
CLASS II-A4 CERTIFICATES, THE CLASS I-S CERTIFICATES, THE CLASS II-S
CERTIFICATES, THE CLASS II-M1 CERTIFICATES AND THE CLASS M2 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS TWO
SEPARATE "REGULAR INTERESTS" 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"): THE I-M3 COMPONENT AND THE II-M3
COMPONENT.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[____]
Original Class Certificate Principal
Balance of this Class : $[____]
I-M3 Component Balance $[____]
II-M3 Component Balance $[____]
Percentage Interest : 100.00%
Pass-Through Rate : Variable
M3-1
CUSIP : [____]
Class : M3
Assumed Maturity Date : May___, 2032
M3-2
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class M3
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M3 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M3
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trust Administrator 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 M3 Certificate (obtained by dividing
the Denomination of this Class M3 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Long Beach Securities
Corp. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of April___, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Corporation, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S Certificates, Bankers Trust Company
of California, N.A., as trust administrator (the "Trust Administrator"), and
First Union National Bank, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class M3 Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class M3 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 M3
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 M3 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 Trust Administrator on behalf of the Trustee.
M3-3
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but
solely as Trust Administrator on behalf
of the Trustee
By
------------------------------------------
This is one of the Class M3 Certificates
referenced in the within-mentioned Agreement
By
------------------------------------------------------
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
M3-4
[Reverse of Class M3 Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Trustee, the Trust Administrator, the
Guarantor and of Holders of the requisite percentage of the Percentage Interests
of each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
M3-5
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 Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator 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 Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trust Administrator, the
Guarantor, the NIMs Insurer and the Trustee and any agent of the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Master Servicer,
the Trust Administrator, the Guarantor, the NIMs Insurer, the Trustee nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
M3-6
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 Trust Administrator 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
M3-7
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.
M3-8
EXHIBIT A-11
CLASS II-M4 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 II-A1 CERTIFICATES, THE CLASS II-A2
CERTIFICATES, THE CLASS II-A3 CERTIFICATES, THE CLASS II-A4 CERTIFICATES, THE
CLASS I-S CERTIFICATES, THE CLASS II-S CERTIFICATES, THE CLASS II-M1
CERTIFICATES, THE CLASS M2 CERTIFICATES AND THE CLASS M3 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
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 : II-M4
Assumed Maturity Date : May___, 2032
II-M4-2
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class II-M4
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien and second lien, fixed rate and
adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
II-M4 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class II-M4
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trust Administrator or the
Trustee referred to below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class II-M4 Certificate (obtained by
dividing the Denomination of this Class II-M4 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of April___, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Corporation, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S Certificates, Bankers Trust Company
of California, N.A., as trust administrator (the "Trust Administrator"), and
First Union National Bank, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class II-M4 Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class II-M4 Certificate by virtue of the acceptance hereof assents and
by which such Holder is bound.
Reference is hereby made to the further provisions of this Class II-M4
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class II-M4 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 Trust Administrator on behalf of the Trustee.
II-M4-2
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but
solely as Trust Administrator on behalf
of the Trustee
By
------------------------------------------
This is one of the Class II-M4 Certificates
referenced in the within-mentioned Agreement
By
-------------------------------------------------------
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
II-M4-3
[Reverse of Class II-M4 Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator 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.
II-M4-4
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 Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator 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 Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trust Administrator, the
Guarantor, the NIMs Insurer and the Trustee and any agent of the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Master Servicer,
the Trust Administrator, the Guarantor, the NIMs Insurer, the Trustee nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
II-M4-5
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 Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
------------------------------
-------------------------------------
Signature by or on behalf of assignor
II-M4-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________,
account number _______________________, or, if mailed by check, to ____________.
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
II-M4-7
EXHIBIT A-12
CLASS I-C CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS I-A CERTIFICATES, THE CLASS II-A1
CERTIFICATES, THE CLASS II-A2 CERTIFICATES, THE CLASS II-A3 CERTIFICATES, THE
CLASS II-A4 CERTIFICATES, THE CLASS II-M1 CERTIFICATES, THE CLASS M2
CERTIFICATES, THE CLASS M3 CERTIFICATES AND THE CLASS II-M4 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
Original Certificate Principal Balance $[____]
Initial Notional Amount of this
Certificate ("Denomination") : $[____]
Original Notional Amount of
this Class : $[____]
Percentage : 100.00%
Pass-Through Rate _____________
Class : I-C
I-C-1
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class I-C
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first lien and second lien, fixed rate
and adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
I-C Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class I-C
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trust Administrator or the
Trustee referred to below or any of their respective affiliates.
This certifies that Long Beach Asset Holdings Corp. is the registered
owner of the Percentage Interest evidenced by this Class I-C Certificate
(obtained by dividing the Denomination of this Class I-C Certificate by the
Original Class Certificate Principal Balance) in certain distributions with
respect to a Trust consisting primarily of the Mortgage Loans deposited by Long
Beach Securities Corp. (the "Depositor"). The Trust was created pursuant to a
Pooling and Servicing Agreement dated as of April___, 2002 (the "Agreement")
among the Depositor, Long Beach Mortgage Corporation, as master servicer (the
"Master Servicer"), Federal National Mortgage Association, as guarantor with
respect to the Class I-A Certificates and the Class I-S Certificates, Bankers
Trust Company of California, N.A., as trust administrator (the "Trust
Administrator"), and First Union National Bank, as trustee (the "Trustee"). To
the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class I-C Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class I-C Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee, the Trust Administrator 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, the Trust Administrator 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 Trust
Administrator, the Master Servicer or the Depositor; or there shall be delivered
to the Trustee, the Trust Administrator 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, the Trust Administrator and the
Depositor against any liability that may
I-C-2
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
Reference is hereby made to the further provisions of this Class I-C
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class I-C Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator on behalf of the Trustee.
I-C-3
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but
solely as Trust Administrator on behalf of
the Trustee
By
-------------------------------------------
This is one of the Class I-C Certificates
referenced in the within-mentioned Agreement
By
---------------------------------------------
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
I-C-4
[Reverse of Class I-C Certificate]
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Trustee, the Trust Administrator, the
Guarantor and of Holders of the requisite percentage of the Percentage Interests
of each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
I-C-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator 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 Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trust Administrator, the
Guarantor, the NIMs Insurer and the Trustee and any agent of the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Master Servicer,
the Trust Administrator, the Guarantor, the NIMs Insurer, the Trustee nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
I-C-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address: _____________________________
________________________________________________________________________________
Dated:___________________________
_______________________________________
Signature by or on behalf of assignor
I-C-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number _________________, or, if mailed by check, to __________________.
________________________________________________________________________________
Applicable statements should be mailed to_______________________________________
_______________________________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
I-C-8
EXHIBIT A-13
CLASS II-C CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS I-A CERTIFICATES, THE CLASS II-A1
CERTIFICATES, THE CLASS II-A2 CERTIFICATES, THE CLASS II-A3 CERTIFICATES, THE
CLASS II-A4 CERTIFICATES, THE CLASS II-M1 CERTIFICATES, THE CLASS M2
CERTIFICATES, THE CLASS M3 CERTIFICATES AND THE CLASS II-M4 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
Original Certificate Principal
Balance $[____]
Initial Notional Amount of this
Certificate ("Denomination") : $[____]
Original Notional Amount of
this Class : $[____]
Percentage : 100.00%
Pass-Through Rate _____________
Class : II-C
II-C-1
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class II-C
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first lien and second lien, fixed rate
and adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
II-C Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class II-C
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trust Administrator or the
Trustee referred to below or any of their respective affiliates.
This certifies that Long Beach Asset Holdings Corp. is the registered
owner of the Percentage Interest evidenced by this Class II-C Certificate
(obtained by dividing the Denomination of this Class II-C Certificate by the
Original Class Certificate Principal Balance) in certain distributions with
respect to a Trust consisting primarily of the Mortgage Loans deposited by Long
Beach Securities Corp. (the "Depositor"). The Trust was created pursuant to a
Pooling and Servicing Agreement dated as of April___, 2002 (the "Agreement")
among the Depositor, Long Beach Mortgage Corporation, as master servicer (the
"Master Servicer"), Federal National Mortgage Association, as guarantor with
respect to the Class I-A Certificates and the Class I-S Certificates, Bankers
Trust Company of California, N.A., as trust administrator (the "Trust
Administrator"), and First Union National Bank, as trustee (the "Trustee"). To
the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class II-C Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class II-C Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee, the Trust Administrator 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, the Trust Administrator 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 Trust
Administrator, the Master Servicer or the Depositor; or there shall be delivered
to the Trustee, the Trust Administrator 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, the Trust Administrator and the
Depositor against any liability that may
II-C-2
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
Reference is hereby made to the further provisions of this Class II-C
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class II-C Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator on behalf of the Trustee.
II-C-3
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but
solely as Trust Administrator on behalf of
the Trustee
By __________________________________________
This is one of the Class II-C Certificates
referenced in the within-mentioned Agreement
By ______________________________________________
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
II-C-4
[Reverse of Class II-C Certificate]
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Trustee, the Trust Administrator, the
Guarantor and of Holders of the requisite percentage of the Percentage Interests
of each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
II-C-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator 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 Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trust Administrator, the
Guarantor, the NIMs Insurer and the Trustee and any agent of the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Master Servicer,
the Trust Administrator, the Guarantor, the NIMs Insurer, the Trustee nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
II-C-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address: _____________________________
________________________________________________________________________________
Dated:___________________________
_______________________________________
Signature by or on behalf of assignor
II-C-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number _________________, or, if mailed by check, to __________________.
________________________________________________________________________________
Applicable statements should be mailed to_______________________________________
_______________________________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
II-C-8
EXHIBIT A-14
CLASS I-P CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination")
: $100.00
Original Class Certificate Principal
Balance of this Class : $100.00
Percentage Interest : 100.00%
Class : ▇-▇
▇-▇-▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇-▇
Asset-Backed Certificates,
Series 2002-1
Class I-P
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first lien and second lien, fixed rate
and adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
I-P Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class I-P
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trust Administrator or the
Trustee referred to below or any of their respective affiliates.
This certifies that Long Beach Asset Holdings Corp. is the registered
owner of the Percentage Interest evidenced by this Class I-P Certificate
(obtained by dividing the Denomination of this Class I-P Certificate by the
Original Class Certificate Principal Balance) in certain distributions with
respect to a Trust consisting primarily of the Mortgage Loans deposited by Long
Beach Securities Corp. (the "Depositor"). The Trust was created pursuant to a
Pooling and Servicing Agreement dated as of April___, 2002 (the "Agreement")
among the Depositor, Long Beach Mortgage Corporation, as master servicer (the
"Master Servicer"), Federal National Mortgage Association, as guarantor with
respect to the Class I-A Certificates and the Class I-S Certificates, Bankers
Trust Company of California, N.A., as trust administrator (the "Trust
Administrator"), and First Union National Bank, as trustee (the "Trustee"). To
the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class I-P Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class I-P Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a pass-through rate and will be entitled
to distributions only to the extent set forth in the Agreement.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee, the Trust Administrator 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, the Trust Administrator 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 Trust
Administrator, the Master Servicer or the Depositor; or there shall be delivered
to the Trustee, the Trust Administrator and the Depositor a
I-P-2
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, the Trust Administrator
and the Depositor against any liability that may result if the transfer is not
so exempt or is not made in accordance with such federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
Reference is hereby made to the further provisions of this Class I-P
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class I-P Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator on behalf of the Trustee.
I-P-3
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but solely as
Trust Administrator on behalf of the Trustee
By ________________________________________________
This is one of the Class I-P Certificates
referenced in the within-mentioned Agreement
By ______________________________________
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
I-P-4
[Reverse of Class I-P Certificate]
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Trustee, the Trust Administrator, the
Guarantor and of Holders of the requisite percentage of the Percentage Interests
of each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
I-P-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator 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 Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer, the Trust Administrator, the Guarantor, the NIMs
Insurer or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer, the
Trustee nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
I-P-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address: _____________________________
________________________________________________________________________________
Dated:___________________________
_______________________________________
Signature by or on behalf of assignor
I-P-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number _________________, or, if mailed by check, to __________________.
________________________________________________________________________________
Applicable statements should be mailed to_______________________________________
_______________________________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
I-P-8
EXHIBIT A-15
CLASS II-P CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $100.00
Original Class Certificate Principal
Balance of this Class : $100.00
Percentage Interest : 100.00%
Class : II-P
II-P-1
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class II-P
evidencing the Percentage Interest in the distributions
allocable to the Certificates of the above-referenced Class
with respect to the Trust consisting of first lien and
second lien, fixed rate and adjustable rate mortgage loans
(the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
II-P Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class II-P
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, the Trust Administrator or the
Trustee referred to below or any of their respective affiliates.
This certifies that Long Beach Asset Holdings Corp. is the registered
owner of the Percentage Interest evidenced by this Class II-P Certificate
(obtained by dividing the Denomination of this Class II-P Certificate by the
Original Class Certificate Principal Balance) in certain distributions with
respect to a Trust consisting primarily of the Mortgage Loans deposited by Long
Beach Securities Corp. (the "Depositor"). The Trust was created pursuant to a
Pooling and Servicing Agreement dated as of April___, 2002 (the "Agreement")
among the Depositor, Long Beach Mortgage Corporation, as master servicer (the
"Master Servicer"), Federal National Mortgage Association, as guarantor with
respect to the Class I-A Certificates and the Class I-S Certificates, Bankers
Trust Company of California, N.A., as trust administrator (the "Trust
Administrator"), and First Union National Bank, as trustee (the "Trustee"). To
the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class II-P Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class II-P Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a pass-through rate and will be entitled
to distributions only to the extent set forth in the Agreement.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee, the Trust Administrator 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, the Trust Administrator 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 Trust
Administrator, the Master Servicer or the Depositor; or there shall be delivered
to the Trustee, the Trust Administrator and the Depositor a
II-P-2
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, the Trust Administrator
and the Depositor against any liability that may result if the transfer is not
so exempt or is not made in accordance with such federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
Reference is hereby made to the further provisions of this Class II-P
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class II-P Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator on behalf of the Trustee.
II-P-3
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but solely as
Trust Administrator on behalf of the Trustee
By _______________________________________________
This is one of the Class II-P Certificates
referenced in the within-mentioned Agreement
By___________________________________________
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
II-P-4
[Reverse of Class II-P Certificate]
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Trustee, the Trust Administrator, the
Guarantor and of Holders of the requisite percentage of the Percentage Interests
of each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
II-P-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator 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 Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer, the Trust Administrator, the Guarantor, the NIMs
Insurer or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer, the
Trustee nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
II-P-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address: _____________________________
________________________________________________________________________________
Dated:___________________________
_______________________________________
Signature by or on behalf of assignor
II-P-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number _________________, or, if mailed by check, to __________________.
________________________________________________________________________________
Applicable statements should be mailed to_______________________________________
_______________________________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
II-P-8
EXHIBIT A-16
CLASS R CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
"RESIDUAL INTERESTS" IN FOUR SEPARATE "REAL ESTATE MORTGAGE INVESTMENT
CONDUITS," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
Percentage Interest : 100.00%
Class : R
▇-▇
▇▇▇▇ ▇▇▇▇▇ Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class R
evidencing the Percentage Interest in the distributions
allocable to the Certificates of the above-referenced Class
with respect to the Trust consisting primarily of a pool of
first lien and second lien, fixed rate and adjustable rate
mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Master Servicer, the Trust
Administrator or the Trustee referred to below or any of their respective
affiliates.
This certifies that Long Beach Asset Holdings Corp. is the registered
owner of the Percentage Interest evidenced by this Certificate specified above
in the interest represented by all Certificates of the Class to which this
Certificate belongs in a Trust consisting primarily of the Mortgage Loans
deposited by Long Beach Securities Corp. (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of April___, 2002
(the "Agreement") among the Depositor, Long Beach Mortgage Corporation, as
master servicer (the "Master Servicer"), Federal National Mortgage Association,
as guarantor with respect to the Class I-A Certificates and the Class I-S
Certificates, Bankers Trust Company of California, N.A., as trust administrator
(the "Trust Administrator"), and First Union National Bank, 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 Trust Administrator in Santa Ana, California.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee, the Trust Administrator 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, the Trust Administrator 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 Trust
Administrator, the Master Servicer or the Depositor; or there shall be delivered
to the Trustee, the Trust Administrator and the Depositor a
R-2
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, the Trust Administrator
and the Depositor against any liability that may result if the transfer is not
so exempt or is not made in accordance with such federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
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 Trust Administrator
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 Trust Administrator 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 Trust Administrator 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 Trust Administrator on behalf of the Trustee.
R-3
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but solely as
Trust Administrator on behalf of the Trustee
By _______________________________________________
This is one of the Class R Certificates
referenced in the within-mentioned Agreement
By ________________________________________
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
R-4
[Reverse of Class R Certificate]
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Trustee, the Trust Administrator, the
Guarantor and of Holders of the requisite percentage of the Percentage Interests
of each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
R-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator 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 Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer, the Trust Administrator, the Guarantor, the NIMs
Insurer or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer, the
Trustee nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
By acceptance of the Class R Certificates the Holders of the Class R
Certificates agree that for so long as any of the NIM Notes are outstanding or
any amounts are reimbursable or payable to the NIMS Insurer in accordance with
the terms of the Indenture, in connection with any amounts distributable to the
Holders of the Class R Certificates pursuant to clauses (i)(l) and (ii)(p) aof
Section 4.01(d) of the Agreement, their rights to receive the amounts so
distributable are assigned and transferred and any such amounts shall be paid by
the Trust Administrator, and
R-6
to the extent received by the Holders of the Class R Certificates they shall pay
any such amounts, to the Holders of the Class I-C Certificates and Class II-C
Certificates, respectively.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
R-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address: _____________________________
________________________________________________________________________________
Dated:___________________________
_______________________________________
Signature by or on behalf of assignor
R-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number _________________, or, if mailed by check, to __________________.
________________________________________________________________________________
Applicable statements should be mailed to_______________________________________
_______________________________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
R-9
EXHIBIT A-17
CLASS R-X CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R-X CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, April__, 2002
First Distribution Date : May 28, 2002
Percentage Interest : 100.00%
Class : R-X
R-X-1
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
Class R-X
evidencing the Percentage Interest in the distributions
allocable to the Certificates of the above-referenced Class
with respect to the Trust consisting primarily of a pool of
first lien and second lien, fixed rate and adjustable rate
mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Master Servicer, the Trust
Administrator or the Trustee referred to below or any of their respective
affiliates.
This certifies that Long Beach Asset Holdings Corp. is the registered
owner of the Percentage Interest evidenced by this Certificate specified above
in the interest represented by all Certificates of the Class to which this
Certificate belongs in a Trust consisting primarily of the Mortgage Loans
deposited by Long Beach Securities Corp. (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of April___, 2002
(the "Agreement") among the Depositor, Long Beach Mortgage Corporation, as
master servicer (the "Master Servicer"), Federal National Mortgage Association,
as guarantor with respect to the Class I-A Certificates and the Class I-S
Certificates, Bankers Trust Company of California, N.A., as trust administrator
(the "Trust Administrator"), and First Union National Bank, 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 Trust Administrator in Santa Ana, California.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee, the Trust Administrator 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, the Trust Administrator 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 Trust
Administrator, the Master Servicer or the Depositor; or there shall be delivered
to the Trustee, the Trust Administrator and the Depositor a
R-X-2
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, the Trust Administrator
and the Depositor against any liability that may result if the transfer is not
so exempt or is not made in accordance with such federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
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 Trust Administrator
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 Trust Administrator 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 Trust Administrator will provide the Internal
Revenue Service and any pertinent persons with the information needed to compute
the tax imposed under the applicable tax laws on transfers of residual interests
to disqualified organizations, if any person other than a Permitted Transferee
acquires an Ownership Interest on a Class R-X Certificate in violation of the
restrictions mentioned above.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trust Administrator on behalf of the Trustee.
R-X-3
IN WITNESS WHEREOF, the Trust Administrator, on behalf of the Trustee,
on behalf of the Trust has caused this Certificate to be duly executed.
Dated: April___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-1
By: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
not in its individual capacity, but solely as
Trust Administrator on behalf of the Trustee
By ________________________________________________
This is one of the Class R-X Certificates
referenced in the within-mentioned Agreement
By ____________________________________________
Authorized Signatory of
Bankers Trust Company of California, N.A.,
as Trust Administrator on behalf of the Trustee
R-X-4
[Reverse of Class R-X Certificate]
Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates,
Series 2002-1
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates,
Series 2002-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Trust Administrator is
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 and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Trustee, the Trust Administrator, the
Guarantor and of Holders of the requisite percentage of the Percentage Interests
of each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
R-X-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 Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator accompanied by a written instrument of transfer in form
satisfactory to the Trust Administrator 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 Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer, the Trust Administrator, the Guarantor, the NIMs
Insurer or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trust Administrator, the Guarantor, the NIMs Insurer, the
Trustee nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, the Master
Servicer or NIMs Insurer may purchase, in whole, from the Trust the Mortgage
Loans in the manner and at a purchase price determined as provided in the
Agreement. If neither the Master Servicer nor the NIMs Insurer has exercised its
rights to purchase all of the Mortgage Loans in the Trust, the Class I-A
Certificates are outstanding and the remaining Stated Principal Balance of the
Group I Mortgage Loans is equal to or less than 5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the Cut-off Date, the Guarantor may
purchase, in whole, from the Trust the Group I Mortgage Loans in the manner and
at the 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 Trust Administrator
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the Distribution Date for the Certificates other than the Class S
Certificates in May, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
R-X-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 Trust Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address: _____________________________
________________________________________________________________________________
Dated:___________________________
_______________________________________
Signature by or on behalf of assignor
R-X-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number _________________, or, if mailed by check, to __________________.
________________________________________________________________________________
Applicable statements should be mailed to_______________________________________
_______________________________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
R-X-8
EXHIBIT B
[RESERVED]
B-1
EXHIBIT C
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT
This is a Mortgage Loan Purchase Agreement (the "Agreement"), dated
March ___, 2002, between Long Beach Securities Corp., a Delaware corporation
(the "Purchaser") and Long Beach Mortgage Company, a Delaware corporation (the
"Seller").
Preliminary Statement
The Seller intends to sell the Mortgage Loans (as hereinafter defined)
to the Purchaser on the terms and subject to the conditions set forth in this
Agreement. The Purchaser intends to deposit the Mortgage Loans into a mortgage
pool constituting the trust fund. The trust fund will be evidenced by fixed rate
and adjustable rate asset backed certificates designated as Long Beach Mortgage
Loan Trust Series 2002-1, Asset-Backed Certificates 2002-1 (the "Certificates").
The Certificates will consist of seventeen classes of certificates. The
Certificates will be issued pursuant to a Pooling and Servicing Agreement, dated
as of April 1, 2002 (the "Pooling and Servicing Agreement"), among the
Purchaser, as depositor, First Union National Bank, as trustee (the "Trustee"),
Bankers Trust Company of California, N.A. as trust administrator (the "Trust
Administrator"), ▇▇▇▇▇▇ ▇▇▇, as guarantor with respect to the Class I-A
Certificates and the Class I-S Certificates (the "Guarantor"), and the Seller,
as master servicer (in such capacity, the "Master Servicer"). Capitalized terms
used but not defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
The parties hereto agree as follows:
SECTION 1. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase, on or
before April ___, 2001 (the "Closing Date"), certain fixed-rate and
adjustable-rate conventional residential mortgage loans (the "Mortgage Loans"),
having an aggregate principal balance as of the close of business on April ___,
2001 (the "Cut-off Date") of approximately $____________ after giving effect to
all payments due on the Mortgage Loans on or before the Cut-off Date, whether or
not received.
SECTION 2. Mortgage Loan Schedule.
The Purchaser and the Seller have agreed upon which of the mortgage
loans owned by the Seller are to be purchased by the Purchaser pursuant to this
Agreement on the Closing Date and the Seller will prepare or cause to be
prepared on or prior to the Closing Date a final schedule (the "Closing
Schedule") that shall describe such Mortgage Loans and set forth all of the
Mortgage Loans to be purchased under this Agreement. The Closing Schedule will
conform to the requirements set forth in this Agreement and to the definition of
"Mortgage Loan Schedule" under the Pooling and Servicing Agreement. The Closing
Schedule shall be used as the Mortgage Loan Schedule under the Pooling and
Servicing Agreement.
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SECTION 3. Consideration.
In consideration for the Mortgage Loans to be purchased hereunder, the
Purchaser shall on the Closing Date, as described in Section 8 hereof, (i) pay
to or upon the order of the Seller in immediately available funds an amount (the
"Purchase Price") equal to the net sale proceeds of the Class A Certificates,
the Class S Certificates and the Mezzanine Certificates and (ii) deliver to Long
Beach Asset Holdings Corp. upon the order of the Seller the Class C
Certificates, the Class P Certificates and the Class R Certificates (the "Long
Beach Certificates").
The Purchaser or any assignee, transferee or designee of the Purchaser
shall be entitled to all scheduled payments of principal due after the Cut-off
Date, all other payments of principal due and collected after the Cut-off Date,
and all payments of interest on the Mortgage Loans allocable to the period after
the Cut-off Date. All scheduled payments of principal and interest due on or
before the Cut-off Date and collected after the Cut-off Date shall belong to the
Seller.
Pursuant to the Pooling and Servicing Agreement, the Purchaser will
transfer, assign, set over and otherwise convey to the Trustee without recourse
for the benefit of the Certificateholders, all the right, title and interest of
the Purchaser in and to the Mortgage Loans (other than Sections 17 and 18
hereof), together with its rights under this Agreement.
SECTION 4. Transfer of the Mortgage Loans.
(a) Possession of Mortgage Files. The Seller does hereby sell,
transfer, assign, set over and convey to the Purchaser, without recourse but
subject to the terms of this Agreement, all of its right, title and interest in,
to and under the Mortgage Loans. The contents of each Mortgage File not
delivered to the Purchaser or to any assignee, transferee or designee of the
Purchaser on or prior to the Closing Date are and shall be held in trust by the
Seller for the benefit of the Purchaser or any assignee, transferee or designee
of the Purchaser and promptly transferred to the Trustee. Upon the sale of the
Mortgage Loans the ownership of each Mortgage Note, the related Mortgage and the
other contents of the related Mortgage File is vested in the Purchaser and the
ownership of all records and documents with respect to the related Mortgage Loan
prepared by or that come into the possession of the Seller on or after the
Closing Date shall immediately vest in the Purchaser and shall be delivered
promptly to the Purchaser or as otherwise directed by the Purchaser. All amounts
received by the Seller after the Cut-off Date but prior to the date hereof with
respect to the Mortgage Loans, to which amounts the Seller is not entitled, will
be deposited into the Collection Account within one Business Day after the
Closing Date;
(b) Delivery of Mortgage Loan Documents. The Seller will, on or prior
to the Closing Date, deliver or cause to be delivered to the Purchaser or any
assignee, transferee or designee of the Purchaser each of the following
documents for each Mortgage Loan:
(i) the original Mortgage Note, endorsed in blank or in the
following form: "Pay to the order of Bankers Trust Company of
California, N.A. as Trustee under the applicable agreement, without
recourse," with all prior and
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intervening endorsements, showing a complete chain of endorsement from
the originator to the Person so endorsing to the Trustee or (in the
case of not more than 1.00% of the Mortgage Loans, by aggregate
principal balance as of the Cut-off Date) a copy of such original
Mortgage Note with an accompanying Lost Note Affidavit executed by the
Seller;
(ii) the original Mortgage with evidence of recording thereon,
and a copy, certified by the appropriate recording office, of the
recorded power of attorney, if the Mortgage was executed pursuant to a
power of attorney, with evidence of recording thereon;
(iii) an original Assignment executed in blank;
(iv) the original Assignment or Assignments showing a complete
chain of assignment from the originator to the Person assigning the
Mortgage to the Trustee or in blank;
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original lender's title insurance policy, together with
all endorsements or riders issued with or subsequent to the issuance
of such policy, insuring the priority of the Mortgage as a first lien
or second lien on the Mortgaged Property represented therein as a fee
interest vested in the Mortgagor, or in the event such original title
policy is unavailable, a written commitment or uniform binder or
preliminary report of the title issued by the title insurance or
escrow company.
The Seller shall promptly (and in no event later than thirty (30)
Business Days, subject to extension upon a mutual agreement between the Seller
and the Purchaser), following the later of the Closing Date and the date of
receipt by the Seller of the recording information for a Mortgage, submit or
cause to be submitted for recording, at no expense to the Purchaser, in the
appropriate public office for real property records, each Assignment referred to
in (iii) and (iv) above and shall execute each original Assignment referred to
in clause (iii) above in the following form: "Bankers Trust Company of
California, N.A., as Trustee under the applicable agreement, without recourse."
In the event that any such Assignment is lost or returned unrecorded because of
a defect therein, the Seller shall promptly prepare or cause to be prepared a
substitute Assignment or cure or cause to be cured such defect, as the case may
be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, for administrative convenience and facilitation
of servicing and to reduce closing costs, the Assignments shall not be required
to be completed and submitted for recording with respect to any Mortgage Loan if
either (x) the Trustee, the Guarantor and each Rating Agency has received an
opinion of counsel, reasonably satisfactory to the Trustee, the Guarantor and
each Rating Agency, to the effect that the recordation of such Assignments in
any specific jurisdiction is not necessary to protect the Trust's interest in
the related Mortgage Note, or (y) each Rating Agency shall have determined that
no such opinion is required for such Rating Agency to assign the initial ratings
to the Class A Certificates, the Class S Certificates, the Mezzanine
Certificates and the NIMS Notes; provided, however, that notwithstanding the
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delivery of any opinion of counsel, each Assignment shall be submitted for
recording by the Seller, in the manner described above, at no expense to the
Trust Fund or the Trustee, upon the earliest to occur of: (i) reasonable
direction by Holders of Certificates entitled to at least 25% of the Voting
Rights, (ii) the occurrence of a Master Servicer Event of Default, (iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Seller,
(iv) the occurrence of a servicing transfer as described in Section 7.02 of the
Pooling and Servicing Agreement and (v) if the Seller is not the Master Servicer
and with respect to any one Assignment, the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgagor under the related Mortgage.
If any document referred to in Section 4(b)(ii), Section 4(b)(iii) or
Section 4(b)(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 Purchaser of a copy of each
such document certified by the Seller in the case of (x) above or the applicable
public recording office in the case of (y) above to be a true and complete copy
of the original that was submitted for recording and (2) if such copy is
certified by the Seller, delivery to the Purchaser upon receipt thereof, and in
any event no later than one year after the Closing Date, of either the original
or a copy of such 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 was not delivered pursuant to Section 4(b)(vi) above, the
Seller shall deliver or cause to be delivered to the Purchaser or any assignee,
transferee or designee of the Purchaser promptly after receipt thereof, and in
any event within 120 days after the Closing Date, the original lender's title
insurance policy. The Seller shall deliver or cause to be delivered to the
Purchaser or any assignee, transferee or designee of the Purchaser promptly upon
receipt thereof any other original documents constituting a part of a Mortgage
File received with respect to any Mortgage Loan, including, but not limited to,
any original documents evidencing an assumption or modification of any Mortgage
Loan.
Each original document relating to a Mortgage Loan which is not
delivered to the Purchaser or its assignee, transferee or designee, if held by
the Seller, shall be so held for the benefit of the Purchaser or its assignee,
transferee or designee. In the event that any such original document is required
pursuant to the terms of this Section to be a part of a Mortgage File, such
document shall be delivered promptly to the Trustee.
(c) Acceptance of Mortgage Loans. The documents delivered pursuant to
Section 4(b) hereof shall be reviewed by the Purchaser or any assignee,
transferee or designee of the Purchaser at any time before, on and after the
Closing Date (and with respect to each document permitted to be delivered after
the Closing Date within seven days of its delivery) to ascertain that all
required documents have been executed and received and that such documents
relate to the Mortgage Loans identified on the Mortgage Loan Schedule.
(d) Transfer of Interest in Agreements. The Purchaser has the right to
assign its interest under this Agreement (other than Sections 17 and 18 hereof),
in whole or in part, to the Trustee, as may be required to effect the purposes
of the Pooling and Servicing Agreement, without the consent of the Seller, and
the Trustee shall succeed to the rights and obligations
C-4
hereunder of the Purchaser. Any expense reasonably incurred by or on behalf of
the Purchaser or the Trustee in connection with enforcing any obligations of the
Seller under this Agreement will be promptly reimbursed by the Seller.
(e) Examination of Mortgage Files. Prior to the Closing Date, the
Seller shall either (i) deliver in escrow to the Purchaser or to any assignee,
transferee or designee of the Purchaser, for examination, the Mortgage File
pertaining to each Mortgage Loan, or (ii) make such Mortgage Files available to
the Purchaser or to any assignee, transferee or designee of the Purchaser for
examination. Such examination may be made by the Purchaser or the Trustee, and
their respective designees, upon reasonable notice to the Seller during normal
business hours at any time before or after the Closing Date. If any such person
makes such examination prior to the Closing Date and identifies any Mortgage
Loans with respect to which the Seller's representations and warranties
contained in this Agreement are not correct, such Mortgage Loans shall be
deleted from the Closing Schedule. The Purchaser may, at its option and without
notice to the Seller, purchase all or part of the Mortgage Loans without
conducting any partial or complete examination. The fact that the Purchaser or
any person has conducted or has failed to conduct any partial or complete
examination of the Mortgage Files shall not affect the rights of the Purchaser
or any assignee, transferee or designee of the Purchaser to demand repurchase or
other relief as provided herein or under the Pooling and Servicing Agreement.
SECTION 5. Representations, Warranties and Covenants of the Seller.
The Seller hereby represents and warrants to the Purchaser, as of the
date hereof and as of the Closing Date, and covenants, that:
(i) The Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and is
duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by the Seller in any
state in which a Mortgaged Property is located or is otherwise not
required under applicable law to effect such qualification and, in any
event, is in compliance with the doing business laws of any such
state, to the extent necessary to ensure its ability to enforce each
Mortgage Loan and to service the Mortgage Loans in accordance with the
terms of the Pooling and Servicing Agreement;
(ii) The Seller had the full corporate power and authority to
originate, hold and sell each Mortgage Loan and has the full corporate
power and authority to service each Mortgage Loan, and to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all
necessary corporate action on the part of the Seller the execution,
delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery thereof by the
Purchaser, constitutes a legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
(a) bankruptcy, insolvency, moratorium, receivership, conservatorship,
arrangement, moratorium and other similar laws relating to creditors'
rights generally and (b) the general principles of equity, whether
such enforcement is sought in equity or at law;
C-5
(iii) The execution and delivery of this Agreement by the Seller,
the servicing of the Mortgage Loans by the Seller under the Pooling
and Servicing Agreement, the consummation of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of the
Seller and does not (A) result in a breach of any term or provision of
the charter or by-laws of the Seller, (B) conflict with, result in a
breach, violation or acceleration of, or result in a default under,
the terms of any other material agreement, instrument or indenture to
which the Seller is a party or by which it may be bound, or any
statute, order or regulation applicable to the Seller of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Seller or any of its property or (C) result in
the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any
documents or instruments evidencing or securing the Mortgage Loans;
and the Seller is not a party to, bound by, or in breach or violation
of any indenture or other agreement or instrument, or subject to or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it, which materially and adversely affects or, to the Seller's
knowledge, would in the future result in the creation or imposition of
any lien, charge or encumbrance which would have a material adverse
effect upon the Mortgage Loans or any documents or instruments
evidencing or securing the Mortgage Loans or materially and adversely
affect (x) the ability of the Seller to perform its obligations under
this Agreement or the Pooling and Servicing Agreement or (y) the
business, operations, financial condition, properties or assets of the
Seller taken as a whole;
(iv) No consent, approval, authorization, or order of, any court
or governmental agency or body is required for the execution, delivery
and performance by the Seller of, or compliance by the Seller with,
this Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is
required, the Seller has obtained the same;
(v) The Seller is an approved seller/servicer for ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac in good standing and is a HUD approved mortgagee pursuant
to Section 203 and Section 211 of the National Housing Act;
(vi) No litigation or proceeding is pending or, to the best
knowledge of the Seller, threatened, against the Seller that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the Pooling and Servicing
Agreement or the issuance of the Certificates or the ability of the
Seller to service the Mortgage Loans or to perform any of its other
obligations hereunder in accordance with the terms hereof and the
terms of the Pooling and Servicing Agreement or, that would result in
a material adverse change in the financial or operating conditions of
the Seller;
(vii) No certificate of an officer, statement or other
information furnished in writing or report delivered by the Seller to
the Purchaser, any Affiliate of the Purchaser, the Guarantor or the
Trustee for use in connection with the purchase of the Mortgage Loans
and the transactions contemplated hereunder and under the Pooling
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and Servicing Agreement contains any untrue statement of a material
fact, or omits a material fact necessary to make the information,
certificate, statement or report not misleading in any material
respect;
(viii) The Seller has not dealt with any broker, investment
banker, agent or other person, except for the Purchaser or any of its
affiliates, that may be entitled to any commission or compensation in
connection with the sale of the Mortgage Loans;
(ix) Each Mortgage Note, each Mortgage, each Assignment and any
other document required to be delivered by or on behalf of the Seller
under this Agreement or the Pooling and Servicing Agreement to the
Purchaser or any assignee, transferee or designee of the Purchaser for
each Mortgage Loan has been or will be, in accordance with Section
4(b) hereof, delivered to the Purchaser or any such assignee,
transferee or designee. With respect to each Mortgage Loan, the Seller
is in possession of a complete Mortgage File in compliance with the
Pooling and Servicing Agreement, except for such documents that have
been delivered (1) to the Purchaser or any assignee, transferee or
designee of the Purchaser or (2) for recording to the appropriate
public recording office and have not yet been returned;
(x) The Seller (A) is a solvent entity and is paying its debts as
they become due, (B) immediately after giving effect to the transfer
of the Mortgage Loans, will be a solvent entity and will have
sufficient resources to pay its debts as they become due and (C) did
not sell the Mortgage Loans to the Purchaser with the intent to
hinder, delay or defraud any of its creditors;
(xi) The transfer of the Mortgage Loans to the Purchaser at the
Closing Date will be treated by the Seller for financial accounting
and reporting purposes as a sale of assets; and
(xii) Seller currently operates or actively participates in an
on-going business (A) to originate single family mortgage loans,
and/or (B) to make periodic purchases of single family mortgage loans
from originators or sellers, and/or (C) to issue and/or purchase
securities or bonds supported by single family mortgage loans, a
portion of which loans are made to borrowers who are low-income
families (families with incomes of 80% or less of area median income)
living in low-income areas (a census tract or block numbering area in
which the median income does not exceed 80 percent of the area median
income.
SECTION 6. Representations and Warranties of the Seller Relating to the
Individual Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser, that as of
the Closing Date:
(i) The information set forth on the Mortgage Loan Schedule with
respect to each Mortgage Loan is complete, true and correct in all
material respects as of the Cut-off Date, unless another date is set
forth on the Mortgage Loan Schedule;
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(ii) The Mortgage Loans are in compliance with the
characteristics of the Mortgage Loans as set forth on Exhibit 1;
(iii) [RESERVED];
(iv) Each Mortgage is a valid and enforceable first lien or
second lien on the Mortgaged Property, including all improvements
thereon, subject only to (a) the lien of non-delinquent current real
property taxes and assessments, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in
connection with the origination of the related Mortgage Loan and which
do not materially interfere with the benefits of the security intended
to be provided by such Mortgage, (c) other matters to which like
properties are commonly subject which do not materially interfere with
the benefits of the security intended to be provided by such Mortgage
and (d) in the case of a second lien, only to a first lien on such
Mortgaged Property;
(v) Immediately prior to the assignment of the Mortgage Loans to
the Purchaser, the Seller had good title to, and was the sole legal
and beneficial owner of, each Mortgage Loan free and clear of any
pledge, lien, encumbrance or security interest and has full right and
authority, subject to no interest or participation of, or agreement
with, any other party to sell and assign the same. The form of
endorsement of each Mortgage Note satisfied the requirement, if any,
of endorsement in order to transfer all right, title and interest of
the party so endorsing, as noteholder or assignee thereof, in and to
that Mortgage Note; and each Assignment to be delivered hereunder is
in recordable form and is sufficient to effect the assignment of and
to transfer to the assignee thereunder the benefits of the assignor,
as mortgagee or assignee thereof, under each Mortgage to which that
Assignment relates;
(vi) To the best of the Seller's knowledge, there is no
delinquent tax or assessment lien against any Mortgaged Property;
(vii) There is no valid offset, defense or counterclaim to any
Mortgage Note or Mortgage, including the obligation of the Mortgagor
to pay the unpaid principal of or interest on such Mortgage Note, nor
will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
Note or the Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including
the defense of usury and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto;
(viii) To the best of the Seller's knowledge, there are no
mechanics' liens or claims for work, labor or material affecting any
Mortgaged Property which are or may be a lien prior to, or equal with,
the lien of the related Mortgage, except those which are insured
against by the title insurance policy referred to in (xii) below;
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(ix) To the best of the Seller's knowledge, each Mortgaged
Property is free of material damage and is at least in average repair;
(x) Each Mortgage Loan at origination complied in all material
respects with applicable local, state and federal laws, including,
without limitation, usury, equal credit opportunity, real estate
settlement procedures, truth-in-lending and disclosure laws, and
consummation of the transactions contemplated hereby, including
without limitation the receipt of interest does not involve the
violation of any such laws;
(xi) Neither the Seller nor any prior holder of any Mortgage has
modified the Mortgage in any material respect, satisfied, canceled or
subordinated such Mortgage in whole or in part; released the related
Mortgaged Property in whole or in part from the lien of such Mortgage;
or executed any instrument of release, cancellation, modification or
satisfaction with respect thereto (except that a Mortgage Loan may
have been modified by a written instrument signed by the Seller or a
prior holder of the Mortage Loan which has been recorded, if
necessary, to protect the interests of the Seller and the Purchaser
and which has been delivered to the Purchaser or any assignee,
transferee or designee of the Purchaser as part of the Mortgage File,
and the terms of which are reflected in the Mortgage Loan Schedule);
(xii) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, and, with respect to each Adjustable Rate Mortgage Loan,
an adjustable rate mortgage endorsement in an amount at least equal to
the balance of the Mortgage Loan as of the Cut-off Date, or a
commitment (binder) to issue the same was effective on the date of the
origination of each Mortgage Loan, each such policy is valid and
remains in full force and effect, the transfer of the related Mortgage
Loan to the Purchaser and Trustee does not affect the validity or
enforceability of such policy and each such policy was issued by a
generally acceptable title insurer qualified to do business in the
jurisdiction where the Mortgaged Property is located which policy
insures the Seller and successor owners of indebtedness secured by the
insured Mortgage, as to the first or second, as the case may be,
priority lien of the Mortgage; to the best of the Seller's knowledge,
no claims have been made under such mortgage title insurance policy
and no prior holder of the related Mortgage, including the Seller, has
done, by act or omission, anything which would impair the coverage of
such mortgage title insurance policy;
(xiii) Each Mortgage Loan was originated by the Seller (or, if
generated on behalf of the Seller by a Person other than the Seller,
is subject to the same standards and procedures used by the Seller in
originating mortgage loans directly) or by a savings and loan
association, savings bank, commercial bank, credit union, insurance
company or similar institution which is supervised and examined by a
federal or state authority, or by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203
and 211 of the National Housing Act;
(xiv) With respect to each Adjustable Rate Mortgage Loan on each
Adjustment Date, the Mortgage Rate will be adjusted to equal the Index
plus the Gross Margin, rounded to the nearest 0.125%, subject to the
Periodic Rate Cap, the Maximum
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Mortgage Rate and the Minimum Mortgage Rate. The related Mortgage Note
is payable on the first day of each month in self-amortizing monthly
installments of principal and interest, with interest payable in
arrears, and requires a Monthly Payment which is sufficient to fully
amortize the outstanding principal balance of the Mortgage Loan over
its remaining term and to pay interest at the applicable Mortgage
Rate. No Mortgage Loan is subject to negative amortization. All rate
adjustments have been performed in accordance with the terms of the
related Mortgage Note or subsequent modifications, if any;
(xv) To the best of the Seller's knowledge, all of the
improvements which were included for the purpose of determining the
Value of the Mortgaged Property lie wholly within the boundaries and
building restriction lines of such property, and no improvements on
adjoining properties encroach upon the Mortgaged Property;
(xvi) All inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy, have been made
or obtained from the appropriate authorities and to the best of the
Seller's knowledge, the Mortgaged Property is lawfully occupied under
applicable law;
(xvii) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during
the period in which they held and disposed of such interest, were) in
compliance with any and all applicable licensing requirements of the
laws of the state wherein the Mortgaged Property is located;
(xviii) The Mortgage Note and the related Mortgage are genuine,
and each is the legal, valid and binding obligation of the Mortgagor
enforceable against the Mortgagor by the mortgagee or its
representative in accordance with its terms, except only as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by law. To the best of the Seller's
knowledge, all parties to the Mortgage Note and the Mortgage had full
legal capacity to execute all Mortgage Loan documents and to convey
the estate purported to be conveyed by the Mortgage and each Mortgage
Note and Mortgage have been duly and validly executed by such parties;
(xix) The proceeds of each Mortgage Loan have been fully
disbursed, there is no requirement for future advances thereunder and
any and all requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making,
closing or recording the Mortgage Loans were paid;
(xx) The related Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the
benefits of the security, including, (i)
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in the case of a Mortgage designated as a deed of trust, by trustee's
sale, and (ii) otherwise by judicial foreclosure. There is no
homestead or other exemption available to the Mortgagor which would
interfere with the right to sell the Mortgaged Property at a trustee's
sale or the right to foreclose the Mortgage;
(xxi) With respect to each Mortgage constituting a deed of trust,
a trustee, duly qualified under applicable law to serve as such, has
been properly designated and currently so serves and is named in such
Mortgage, and no fees or expenses are or will become payable by the
Purchaser to the trustee under the deed of trust, except in connection
with a trustee's sale after default by the Mortgagor;
(xxii) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made, and no escrow
deposits or payments of other charges or payments due the Seller have
been capitalized under the Mortgage or the related Mortgage Note;
(xxiii) The origination, underwriting and collection practices
used by the Seller with respect to each Mortgage Loan have been in all
respects legal, proper, prudent and customary in the subprime mortgage
servicing business.
(xxiv) There is no pledged account or other security other than
real estate securing the Mortgagor's obligations;
(xxv) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature;
(xxvi) None of the Mortgage Loans provide for primary mortgage
insurance;
(xxvii) The improvements upon each Mortgaged Property are covered
by a valid and existing hazard insurance policy with a generally
acceptable carrier that provides for fire extended coverage and
coverage of such other hazards as are customarily covered by hazard
insurance policies with extended coverage in the area where the
Mortgaged Property is located representing coverage not less than the
lesser of the outstanding principal balance of the related Mortgage
Loan or the minimum amount required to compensate for damage or loss
on a replacement cost basis. All individual insurance policies and
flood policies referred to in this clause (xxvii) and in clause
(xxviii) below contain a standard mortgagee clause naming the Seller
or the original mortgagee, and its successors in interest, as
mortgagee, and the Seller has received no notice that any premiums due
and payable thereon have not been paid; the Mortgage obligates the
Mortgagor thereunder to maintain all such insurance, including flood
insurance, at the Mortgagor's cost and expense, and upon the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at the Mortgagor's cost and expense
and to seek reimbursement therefor from the Mortgagor;
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(xxviii) If the Mortgaged Property is in an area identified in
the Federal Register by the Federal Emergency Management Agency as
subject to special flood hazards, a flood insurance policy in a form
meeting the requirements of the current guidelines of the Flood
Insurance Administration is in effect with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing
coverage not less than the least of (A) the original outstanding
principal balance of the Mortgage Loan, (B) the minimum amount
required to compensate for damage or loss on a replacement cost basis
or (C) the maximum amount of insurance that is available under the
Flood Disaster Protection Act of 1973;
(xxix) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the related Mortgage Note;
and neither the Seller nor any other entity involved in originating or
servicing the Mortgage Loan has waived any default, breach, violation
or event of acceleration;
(xxx) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and
dwelling units in planned unit developments, which, to the best of the
Seller's knowledge, does not include cooperatives and does not
constitute property other than real property under state law. Each
manufactured housing constituting any portion of any Mortgaged
Property is a "single family residence" as defined in Section
25(e)(10) of the Code;
(xxxi) There is no obligation on the part of the Seller or any
other party under the terms of the Mortgage or related Mortgage Note
to make payments in addition to those made by the Mortgagor;
(xxxii) Any future advances made prior to the Cut-off Date have
been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term reflected on the
related Mortgage Loan Schedule. The consolidated principal amount does
not exceed the original principal amount of the Mortgage Loan;
(xxxiii) Each Mortgage Loan was underwritten in accordance with
the Seller's underwriting guidelines as described in the Prospectus
Supplement as applicable to its credit grade;
(xxxiv) Each appraisal of a Mortgage Loan that was used to
determine the appraised value of the related Mortgaged Property was
conducted generally in accordance with the Seller's underwriting
guidelines, and included an assessment of the fair market value of the
related Mortgaged Property at the time of the appraisal. The Mortgage
File contains an appraisal of the applicable Mortgaged Property;
(xxxv) None of the Mortgage Loans is a graduated payment Mortgage
Loan, nor is any Mortgage Loan subject to a temporary buydown or
similar arrangement;
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(xxxvi) With respect to each Mortgage Loan, the related Mortgagor
shall not fail to make the first Monthly Payment due under the terms
of the Mortgage Loan by the second succeeding Due Date after the Due
Date on which such Monthly Payment was due;
(xxxvii) Each Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the
Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the mortgagee
thereunder;
(xxxviii)To the best of the Seller's knowledge no
misrepresentation, negligence, fraud or similar occurrence with
respect to a Mortgage Loan has taken place on the part of any person,
including, without limitation, the Mortgagor, any appraiser, any
builder or developer, or any other party involved in the origination
of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan;
(xxxix) Each Mortgage Loan constitutes a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(xl) The information set forth in the Prepayment Charge Schedule
is complete, true and correct in all material respects at the date or
dates respecting with such information is furnished and each
Prepayment Charge is permissible and enforceable in accordance with
its terms upon the Mortgagor's full and voluntary Principal Prepayment
(except to the extent that: (1) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other
similar laws relating to creditors' rights generally; (2) the
collectability thereof may be limited due to acceleration in
connection with a foreclosure or other involuntary prepayment; or (3)
subsequent changes in applicable law may limit or prohibit
enforceability thereof) under applicable law. No Mortgage Loan has a
Prepayment Charge for a term in excess of five years from the date of
its origination;
(xli) The Loan-to-Value Ratio for each Mortgage Loan was no
greater than 100% at the time of origination;
(xlii) The first date on which each Mortgagor must make a payment
on the related Mortgage Note is no later than 60 days from the date of
this Agreement;
(xliii) [Reserved];
(xliv) The transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions
in effect in any relevant jurisdiction, except any as may have been
complied with;
(xlv) There are no defaults in complying with the terms of the
Mortgage, and either (1) any taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges or ground rents
which previously became due and owing have been paid, or (2) an escrow
of funds has been established in an amount
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sufficient to pay for every such item which remains unpaid and which
has been assessed but is not yet due and payable. Except for payments
in the nature of escrow payments, including without limitation, taxes
and insurance payments, the Seller has not advanced funds, or induced,
solicited or knowingly received any advance of funds by a party other
than the Mortgagor, directly or indirectly, for the payment of any
amount required by the Mortgage Note, except for interest accruing
from the date of the Mortgage Note or date of disbursement of the
Mortgage proceeds, whichever is greater, to the day which precedes by
one month the Due Date of the first installment of principal and
interest;
(xlvi) There is no proceeding pending, or to best of the Seller's
knowledge threatened, for the total or partial condemnation of the
Mortgaged Property or the taking by eminent domain of any Mortgaged
Property;
(xlvii) None of the Mortgage Loans is subject to the Home
Ownership and Equity Protection Act of 1994 or any comparable state
law and any breach of this representation will be deemed to materially
and adversely affect the value of the related loan;
(xlviii) No proceeds from any Mortgage Loans were used to finance
single-premium credit insurance policies;
(xlix) The Seller did not select the Mortgage Loans with the
intent to adversely affect the interests of the Purchaser; and
(l) The Seller has not received any notice that any Mortgagor has
field for any bankruptcy or similar legal protection.
SECTION 7. Repurchase Obligation for Defective Documentation and for
Breach of Representation and Warranty.
(a) The representations and warranties contained in Section 5 (ix) and
Section 6 shall not be impaired by any review and examination of loan files or
other documents evidencing or relating to the Mortgage Loans or any failure on
the part of the Seller or the Purchaser to review or examine such documents and
shall inure to the benefit of any assignee, transferee or designee of the
Purchaser, including the Trustee for the benefit of holders of asset-backed
certificates evidencing an interest in all or a portion of the Mortgage Loans.
Upon discovery by the Seller, the Guarantor the Purchaser or any
assignee, transferee or designee of the Purchaser of any materially defective
document in, or that any material document was not transferred by the Seller (as
listed on the Trustee's initial certification), as part of, any Mortgage File or
of a breach of any of the representations and warranties contained in Section 5
or Section 6 that materially and adversely affects the value of any Mortgage
Loan or the interest of the Purchaser, the Guarantor or the Purchaser's
assignee, transferee or designee in any Mortgage Loan, the party discovering the
breach shall give prompt written notice to the others. Within ninety (90) days
of its discovery or its receipt of notice of any such missing documentation
which was not transferred to the Purchaser as described above or materially
defective documentation or any such breach of a representation
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and warranty, the Seller promptly shall deliver such missing document or cure
such defect or breach in all material respects, or in the event the Seller
cannot deliver such missing document or such defect or breach cannot be cured,
the Seller shall, within 90 days of its discovery or receipt of notice, either
(i) repurchase the affected Mortgage Loan at a price equal to the Purchase Price
(as defined in the Pooling and Servicing Agreement) or (ii) pursuant to the
provisions of the Pooling and Servicing Agreement, cause the removal of such
Mortgage Loan from the Trust Fund and substitute one or more Qualified
Substitute Mortgage Loans; provided, however, that in the case of a breach of
the representation and warranty concerning the Mortgage Loan Schedule contained
in Section 6(i), if such breach relates to any field on the Mortgage Loan
Schedule which identifies any Prepayment Charge and such Prepayment Charge has
been triggered pursuant to the terms of the related Mortgage Note, then in lieu
of purchasing such Mortgage Loan from the Trust Fund at the Purchase Price (as
defined in the Pooling and Servicing Agreement), the Seller shall pay the amount
of the incorrectly identified Prepayment Charge (net of any amount previously
collected by or paid to the Trust Fund in respect of such Prepayment Charge),
and the Seller shall have no obligation to repurchase or substitute for such
Mortgage Loan. The Seller shall amend the Closing Schedule to reflect the
withdrawal of such Mortgage Loan from the terms of this Agreement and the
Pooling and Servicing Agreement and the addition, if any, of a Qualified
Substitute Mortgage Loan. The Seller shall deliver to the Purchaser such amended
Closing Schedule and shall deliver such other documents as are required by this
Agreement or the Pooling and Servicing Agreement within five (5) days of any
such amendment. Any repurchase pursuant to this Section 7(a) shall be
accomplished by deposit in the Collection Account of the amount of the Purchase
Price (as defined in the Pooling and Servicing Agreement) in accordance with
Section 2.03 of the Pooling and Servicing Agreement. Any repurchase or
substitution required by this Section shall be made in a manner consistent with
Section 2.03 of the Pooling and Servicing Agreement and any remedy by the Seller
for a breach of a representation or warranty that materially and adversely
affects the value of any Prepayment Charge shall be made in a manner consistent
with Section 2.03(c) of the Pooling and Servicing Agreement.
(b) It is understood and agreed that the obligations of the Seller set
forth in this Section 7 to cure, repurchase or substitute for a defective
Mortgage Loan constitute the sole remedies of the Purchaser against the Seller
respecting a missing or defective document or a breach of the representations
and warranties contained in Section 5 or Section 6.
SECTION 8. Closing; Payment for the Mortgage Loans.
The closing of the purchase and sale of the Mortgage Loans shall be
held at the Fifth Avenue, New York City office of ▇▇▇▇▇▇ ▇▇▇▇▇▇ White &
▇▇▇▇▇▇▇▇▇ LLP, at 10:00 am New York City time on the Closing Date.
The Purchaser's obligation to close the transactions contemplated by
this Agreement shall be subject to each of the following conditions:
(a) All of the representations and warranties of the Seller under this
Agreement shall be true and correct in all material respects as of the date as
of which they are made and no event shall have occurred which, with notice or
the passage of time, would constitute a default under this Agreement;
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(b) The Purchaser shall have received, or the attorneys of the
Purchaser shall have received in escrow (to be released from escrow at the time
of closing), all Closing Documents as specified in Section 9 of this Agreement,
in such forms as are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required pursuant to the
respective terms thereof;
(c) The Seller shall have delivered or caused to be delivered and
released to the Purchaser or to its designee, all documents (including without
limitation, the Mortgage Loans) required to be so delivered by the Purchaser
pursuant to Section 2.01 of the Pooling and Servicing Agreement; and
(d) All other terms and conditions of this Agreement to be complied
with by Seller, shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall deliver or
cause to be delivered to the Seller on the Closing Date, against delivery and
release by the Seller to the Trustee of all documents required pursuant to the
Pooling and Servicing Agreement, the consideration for the Mortgage Loans as
specified in Section 3 of this Agreement, by delivery to the Seller of the
Purchase Price in immediately available funds and delivery of the Long Beach
Certificates to Long Beach Asset Holdings Corp.
SECTION 9. Closing Documents.
Without limiting the generality of Section 8 hereof, the closing shall
be subject to delivery of each of the following documents:
(a) An Officers' Certificate of the Seller, dated the Closing Date,
upon which the Purchaser, Greenwich Capital Markets, Inc., as representative of
the several underwriters (the "Representative") and the Guarantor may rely and
attached thereto copies of the certificate of incorporation, by-laws and
certificate of good standing of the Seller under the laws of the State of
Delaware;
(b) An Officers' Certificate of the Seller, dated the Closing Date,
upon which the Purchaser, the Representative and the Guarantor may rely, with
respect to certain facts regarding the sale of the Mortgage Loans by the Seller
to the Purchaser;
(c) An Opinion of Counsel of the Seller (which may be in-house counsel
of the Seller), dated the Closing Date and addressed to the Purchaser, the
Representative and the Guarantor;
(d) Such opinions of counsel as the Rating Agencies, the
Representative, the Trustee, or the Guarantor may reasonably request in
connection with the sale of the Mortgage Loans by the Seller to the Purchaser or
the Seller's execution and delivery of, or performance under, this Agreement;
(e) A letter from Deloitte & Touche L.L.P., certified public
accountants, dated the date hereof and to the effect that they have performed
certain specified procedures as a result of which they determined that certain
information of an accounting, financial or
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statistical nature set forth in the Prospectus Supplement under the captions
"Summary of Terms--Mortgage Loans," "Risk Factors," "The Mortgage Pool," and
"Long Beach Mortgage Company," agrees with the records of the Seller;
(f) The Seller shall deliver to the Purchaser for inclusion in the
Prospectus Supplement under the caption "Long Beach Mortgage Company" or for
inclusion in other offering materials, such publicly available information
regarding the Seller, its financial condition and its mortgage loan delinquency,
foreclosure and loss experience, underwriting standards, lending activities and
loan sales, production, and servicing and collection practices, and any similar
nonpublic, unaudited financial information and a computer tape with respect to
the pool information, as the Representative may reasonably request;
(g) Letters from at least two nationally recognized statistical rating
agencies rating the Offered Certificates (as defined in the Prospectus
Supplement); and
(h) Such further information, certificates, opinions and documents as
the Purchaser, the Guarantor or the Representative may reasonably request.
SECTION 10. Costs.
The Seller shall pay (or shall reimburse the Purchaser or any other
Person to the extent that the Purchaser or such other Person shall pay) all
costs and expenses incurred in connection with the transfer and delivery of the
Mortgage Loans, including without limitation, recording fees, fees for title
policy endorsements and continuations and the fees for recording Assignments,
the fees and expenses of the Seller's in-house accountants and in-house
attorneys, the costs and expenses incurred in connection with determining the
Seller's loan loss, foreclosure and delinquency experience, the costs and
expenses incurred in connection with obtaining the documents referred to in
Sections 9(d) and 9(e), the cost of an opinion of counsel regarding the true
sale and non-consolidation of the mortgage loans, the costs and expenses of
printing (or otherwise reproducing) and delivering this Agreement, the Pooling
and Servicing Agreement, the Certificates, the prospectus, the Prospectus
Supplement, the Information Supplement, any blue sky filings and private
placement memorandum relating to the Certificates and other related documents,
costs and expenses of the Trustee, the fees and expenses of the Purchaser's
counsel in connection with the preparation of all documents relating to the
securitization of the Mortgage Loans, the filing fee charged by the Securities
and Exchange Commission for registration of the Certificates, the cost of any
opinions of outside special counsel that may be required for the Seller and the
fees charged by any Rating Agency to rate the Certificates. All other costs and
expenses in connection with the transactions contemplated hereunder shall be
borne by the party incurring such expense.
SECTION 11. Servicing.
The Seller has represented to the Purchaser that the Mortgage Loans are
being serviced in accordance with the terms of the Pooling and Servicing
Agreement, and it is understood and agreed by and between the Seller and the
Purchaser that any interim servicing arrangements with the Seller will be
superseded by the servicing arrangements set forth in the Pooling and Servicing
Agreement.
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SECTION 12. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the Closing Date of the Mortgage Loans
described on the Mortgage Loan Schedule in accordance with the terms and
conditions of this Agreement is mandatory. It is specifically understood and
agreed that each Mortgage Loan is unique and identifiable on the date hereof and
that an award of money damages would be insufficient to compensate the Purchaser
for the losses and damages incurred by the Purchaser in the event of the
Seller's failure to deliver the Mortgage Loans on or before the Closing Date.
The Seller hereby grants to the Purchaser a lien on and a continuing security
interest in the Seller's interest in each Mortgage Loan and each document and
instrument evidencing each such Mortgage Loan to secure the performance by the
Seller of its obligation hereunder, and the Seller agrees that it holds such
Mortgage Loans in custody for the Purchaser, subject to (i) the Purchaser's
right, prior to the Closing Date, to reject any Mortgage Loan to the extent
permitted by this Agreement and (ii) the Purchaser's obligation to deliver or
cause to be delivered the consideration for the Mortgage Loans pursuant to
Section 8 hereof. Any Mortgage Loans rejected by the Purchaser shall
concurrently therewith be automatically released from the security interest
created hereby. The Seller agrees that, upon acceptance of the Mortgage Loans by
the Purchaser or its designee and delivery of payment to the Seller, that its
security interest in the Mortgage Loans shall be released. All rights and
remedies of the Purchaser under this Agreement are distinct from, and cumulative
with, any other rights or remedies under this Agreement or afforded by law or
equity and all such rights and remedies may be exercised concurrently,
independently or successively.
Notwithstanding the foregoing, if on the Closing Date, each of the
conditions set forth in Section 8 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the Purchase Price or shall
not have delivered or caused to be delivered the Long Beach Certificates to Long
Beach Asset Holding Corp., or any such condition shall not have been waived or
satisfied and the Purchaser determines not to pay or cause to be paid the
Purchase Price or not to deliver or cause to be delivered the Long Beach
Certificates to Long Beach Asset Holding Corp, the Purchaser shall immediately
effect the re-delivery of the Mortgage Loans, if delivery to the Purchaser has
occurred and the security interest created by this Section 12 shall be deemed to
have been released.
SECTION 13. Notices.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered to or mailed
by registered mail, postage prepaid, or transmitted by telex or telegraph and
confirmed by a similar mailed writing, if to the Purchaser, addressed to the
Purchaser at ▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel, or such other address as may hereafter be furnished
to the Seller in writing by the Purchaser; if to the Seller, addressed to the
Seller at ▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel, or to such other address as the Seller may designate
in writing to the Purchaser.
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SECTION 14. Severability of Provisions.
Any part, provision, representation or warranty of this Agreement which
is prohibited or which is held to be void or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.
SECTION 15. Agreement of Parties.
The Seller and the Purchaser each agree to execute and deliver such
instruments (including UCC financing statements and continuation statements) and
take such actions as either of the others may, from time to time, reasonably
request in order to effectuate the purpose and to carry out the terms of this
Agreement and the Pooling and Servicing Agreement.
SECTION 16. Survival.
The Seller agrees that the representations, warranties and agreements
made by it herein and in any certificate or other instrument delivered pursuant
hereto shall be deemed to be relied upon by the Purchaser and its successors and
assigns, notwithstanding any investigation heretofore or hereafter made by the
Purchaser or on its behalf, and that the representations, warranties and
agreements made by the Seller herein or in any such certificate or other
instrument shall survive the delivery of and payment for the Mortgage Loans and
shall continue in full force and effect, notwithstanding any restrictive or
qualified endorsement on the Mortgage Notes and notwithstanding subsequent
termination of this Agreement, the Pooling and Servicing Agreement or the Trust
Fund.
SECTION 17. Indemnification, Representative.
(a) The Seller will indemnify and hold harmless each of (i) the
Purchaser and (ii) each person, if any, who controls the Purchaser within the
meaning of Section 15 of the Securities Act of 1933, as amended (the "1933 Act")
or the Securities Exchange Act of 1934, as amended (the "1934 Act") ((i) and
(ii) together, the "Indemnified Party") against any and all losses, claims,
expenses, damages or liabilities, to which the Indemnified Party may become
subject, under the 1933 Act or otherwise, and will reimburse each Indemnified
Party for any legal or other expenses incurred by the Indemnified Party in
connection with investigating or defending any such loss, claim, expenses,
damage, liability or action insofar as such losses, claims, expenses, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Prospectus Supplement dated April ___, 2001 (the "Prospectus Supplement"),
as amended or supplemented, relating to the public offering of the Class A-2
Certificates, the Class S-2 Certificates and the Mezzanine Certificates,
representing interests in the Mortgage Loans, or in
C-19
any other offering document (the "Private Placement Memorandum") relating to the
offering by the Purchaser or an affiliate thereof, of the Class C, Class P and
Class R Certificates, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they were made, not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with (i) information furnished in writing to
the Purchaser or any of its affiliates by the Seller specifically for use
therein, which shall include, with respect to the Prospectus Supplement, the
information set forth under the captions "Summary of Terms--Mortgage Loans,"
"Risk Factors" (but only to the extent that the information under "Risk Factors"
has been furnished by the Seller), "The Mortgage Pool" and "Long Beach Mortgage
Company" and, with respect to any Private Placement Memorandum, any information
of a comparable nature, (ii) the data files containing information with respect
to the Mortgage Loans as transmitted electronically to the Purchaser by the
Seller or any of its affiliates (as such transmitted information may have been
amended in writing by the Seller or any of its affiliates and received by the
Purchaser subsequent to transmission) specifically for use therein, which shall
include, with respect to the Prospectus Supplement, the information set forth
under the captions "Summary of Terms--Mortgage Loans," "Risk Factors" (but only
to the extent that the information under "Risk Factors" has been furnished by
the Seller) and "The Mortgage Pool" and, with respect to any Private Placement
Memorandum, any information of a comparable nature or (iii) any representation,
warranty or covenant made by the Seller or any affiliate of the Seller in this
Agreement and the Pooling and Servicing Agreement, on which the Indemnified
Party has relied ((i) through (iii) collectively "Seller Information"), provided
however, that to the extent that any such losses, claims, expenses, damages or
liabilities to which the Indemnified Party may become subject arise out of or
are based upon both (1) statements, omissions, representations, warranties or
covenants of the Seller described above and (2) any other factual basis, the
Seller shall indemnify and hold harmless the Indemnified Party only to the
extent that the losses, claims expenses, damages or liabilities of the person or
persons asserting the claim are determined to arise from or be based only upon
matters set forth in clause (1) above. The Seller's liability under this Section
17 shall be in addition to any other liability the Seller may otherwise have.
(b) The Purchaser agrees to indemnify and hold harmless the Seller, its
officers and its directors, and each person who controls the Seller within the
meaning of either the 1933 Act against any and all losses, claims, damages or
liabilities, joint or several, to which they may become subject under the 1933
Act, or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Prospectus
Supplement, the prospectus or Private Placement Memorandum, or in any revision
or amendment thereof 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 therein, in the light of the
circumstances in which they were made, not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any untrue statement or
omission or alleged untrue statement or omission made therein in reliance upon
and in conformity with the Seller's Information and will reimburse the Seller
and any controlling person for any legal or other expenses reasonably incurred
by such Seller and any controlling person in connection with investigating or
defending any such loss, claim, damage,
C-20
liability or action. The Purchaser's liability under this Section 17 shall be in
addition to any other liability the Purchaser may otherwise have.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either Section 17(a) or 17(b) above, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the reasonable fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the reasonable fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel, (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party. It is understood that
the indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by the Purchaser, in the case of parties
indemnified pursuant to clause 17(a) and by the Seller, in the case of parties
indemnified pursuant to clause 17(b). The indemnifying party may, at its option,
at any time upon written notice to the indemnified party, assume the defense of
any proceeding and may designate counsel satisfactory to the indemnified party
in connection therewith provided that the counsel so designated would have no
actual or potential conflict of interest in connection with such representation.
Unless it shall assume the defense of any proceeding, the indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. If the indemnifying party assumes the defense of any
proceeding, it shall be entitled to settle such proceeding with the prior
written consent of the indemnified party or, if (i) such settlement does not
include a statement as to, or on admission of fault, culpability or failure to
act by or on behalf of the indemnified party and (ii) such settlement provides
for an unconditional release of the indemnified party in connection with all
matters relating to the proceeding which have been asserted against the
indemnified party in such proceeding by the other parties to such settlement,
without the prior written consent of the indemnified party.
(d) If the indemnification provided for in this Section 17 is
unavailable to an indemnified party under Section 17(a) or 17(b) hereof or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities, in
such proportion as is appropriate to reflect the relative fault of the
indemnified and indemnifying parties in connection with the statements or
omissions which resulted in such losses, claims, damages or
C-21
liabilities, as well as any other relevant equitable considerations. The
relative fault of the indemnified and indemnifying parties shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by such parties and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) of this
Section 17 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Seller on grounds of policy or otherwise, the
Seller on the one hand and the Purchaser on the other hand shall contribute to
the aggregate losses, claims, damages and liabilities (including legal and other
expenses reasonably incurred in connection with investigating or defending same)
(collectively, "Losses") to which the Seller on the one hand and the Purchaser
on the other hand may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Seller on the one hand and the Purchaser
on the other hand from the sale of the Mortgage Loans; provided, however, that
in no case shall the Purchaser be responsible for any amount in excess of ____%
of the aggregate initial principal balance of the Mortgage Loans. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Seller on the one hand and the Purchaser on the other hand shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Seller on the one hand and
the Purchaser on the other hand in connection with the statements or omissions
that resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Seller shall be deemed to be equal to
the total net proceeds from the sale (before deducting expenses) plus the value
of all Certificates retained by the Seller or one of its affiliates and benefits
received by the Purchaser shall be deemed to be equal to ____% of the aggregate
initial principal balance of the Mortgage Loans. Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to the information provided by the Seller on the one hand or the
Purchaser on the other hand. The Seller and the Purchaser agree that it would
not be just and equitable if contribution were determined by pro rata allocation
or any other method of allocation that does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
subsection (e) the Representative shall not be required to contribute any amount
in excess of the amount by which the total price at which the related Offered
Certificates (as defined in the Prospectus Supplement) underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Representative has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. 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 17, each person, if any, who controls the Purchaser within the meaning
of the Securities Act or the 1934 Act and each director, officer, employee and
agent of the Purchaser shall have the same rights to contribution as the
Purchaser, and each person, if any, who controls the Seller within the meaning
of either the Securities Act or the 1934 Act and each director of the Seller
shall have the same rights to contribution as the Seller, subject in each case
to the applicable terms and conditions of this paragraph 17(e).
C-22
(f) The indemnity and contribution agreements contained in this Section
17 shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by the Purchaser or
any person controlling the Purchaser or by or on behalf of the Seller and their
respective directors or officers or any person controlling the Seller, and (iii)
acceptance of and payment for any of the Certificates.
SECTION 18. Indemnification, Guarantor.
(a) [reserved]
SECTION 19. GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES
OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF
LAW PRINCIPLES. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.
SECTION 20. Miscellaneous.
This Agreement may be executed in two or more counterparts, each of
which when so executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns. This Agreement supersedes all prior
agreements and understandings relating to the subject matter hereof. Neither
this Agreement nor any term hereof may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought. The headings in this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof.
It is the express intent of the parties hereto that the conveyance of
the Mortgage Loans by the Seller to the Purchaser as provided in Section 4
hereof be, and be construed as, a sale of the Mortgage Loans by the Seller to
the Purchaser and not as a pledge of the Mortgage Loans by the Seller to the
Purchaser to secure a debt or other obligation of the Seller. However, in the
event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Seller, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller and (b) (1) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code; (2) the conveyance provided for in Section 4 hereof
shall be deemed to be a grant by the Seller to the Purchaser of a security
interest in all of the Seller's right, title and interest in and to the Mortgage
Loans and all amounts payable to the holders of the Mortgage Loans in accordance
with the terms thereof and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time
C-23
held or invested in the Collection Account whether in the form of cash,
instruments, securities or other property; (3) the possession by the Purchaser
or its agent of Mortgage Notes, the related Mortgages and such other items of
property that constitute instruments, money, negotiable documents or chattel
paper shall be deemed to be "possession by the secured party" for purposes of
perfecting the security interest pursuant to Section 9-305 of the New York
Uniform Commercial Code; and (4) notifications to persons holding such property,
and acknowledgments, receipts or confirmations from persons holding such
property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Purchaser for the purpose of perfecting such security interest under
applicable law. Any assignment of the interest of the Purchaser pursuant to
Section 4(d) hereof shall also be deemed to be an assignment of any security
interest created hereby. The Seller and the Purchaser shall, to the extent
consistent with this Agreement, take such actions as may be necessary to ensure
that, if this Agreement were deemed to create a security interest in the
Mortgage Loans, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of this Agreement and the Pooling and Servicing
Agreement.
SECTION 21. Third Party Beneficiary.
The Trustee shall be a third party beneficiary hereof (except with
respect to Section 17 and Section 18) and shall be entitled to enforce the
provisions hereof as if a party hereto, except the provisions of Section 17 and
Section 18 hereof. The Representative, on behalf of the underwriters, shall be a
third party beneficiary hereof solely with respect to Section 17 and shall be
entitled to enforce the provisions of Section 17 as if it were a party hereto.
The Guarantor shall be a third party beneficiary hereof solely with respect to
Section 18 and shall be entitled to enforce the provisions of Section 18 as if
it were a party hereto.
C-24
IN WITNESS WHEREOF, the Purchaser and the Seller have caused their
names to be signed by their respective officers thereunto duly authorized as of
the date first above written.
LONG BEACH SECURITIES CORP.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
LONG BEACH MORTGAGE COMPANY
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: First Vice President
EXHIBIT 1
Pool Characteristics of the Mortgage Loans as delivered on the Closing
Date:
All percentages set forth herein are based upon the aggregate Principal
Balance as of the Cut-off Date.
(1) No Group I Mortgage Loan or Group II Mortgage Loan had a
Loan-to-Value Ratio at origination in excess of approximately ____% and ____%,
respectively;
(2) No more than approximately ____% and ____% of the Group I Mortgage
Loans and Group II Mortgage Loans, respectively, are related to Mortgaged
Properties located in any one zip code area;
(3) Each Mortgaged Property related to a Group I Mortgage Loan and
Group II Mortgage Loan, respectively, is located in one of the states listed in
the chart entitled "Geographic Distribution of the Mortgaged Properties relating
to the Group I Mortgage Loans" and "Geographic Distribution of the Mortgaged
Properties relating to the Group II Mortgage Loans," respectively, in the
Prospectus Supplement;
(4) No more than approximately ____% and ____% of the Group I Mortgage
Loans and Group II Mortgage Loans, respectively, are secured by condominium
units and all condominium Mortgage Loans have been originated on a form
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac with such riders as have been acceptable
to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, as the case may be;
(5) No more than approximately ____% and ____% of the Group I Mortgage
Loans and Group II Mortgage Loans, respectively, are secured by two- to
four-family dwellings. No more than approximately ____% of the Group I Mortgage
Loans are secured by town houses. None of the Group II Mortgage Loans are
secured by town houses. No more than approximately ____% of the Group I Mortgage
Loans are secured by manufactured housing. None of the Group II Mortgage Loans
are secured by manufactured housing. No more than approximately ____% and ____%
of the Group I Mortgage Loans and Group II Mortgage Loans, respectively, are
secured by dwelling units in PUDs. None of the Mortgage Loans are secured by
mobile homes;
(6) No Group I Mortgage Loan or Group II Mortgage Loan had a principal
balance in excess of approximately $__________ and $__________, respectively, at
origination;
(7) Each Mortgage Loan has a first Due Date on or after April___, 2001
and each Adjustable Rate Mortgage Loan has a next Adjustment Date no later than
________ 2006;
(8) On the basis of representations made by the Mortgagors in their
loan applications, no more than approximately ____% and ____% of the Group I
Mortgage Loans and Group II Mortgage Loans, respectively, are secured by
non-owner occupied properties and at least approximately ____% and ____% of the
Group I Mortgage Loans and Group II Mortgage Loans, respectively, are
owner-occupied Mortgaged Properties;
1-1
(9) The Mortgage Rates borne by the Group I Mortgage Loans and Group II
Mortgage Loans as of the Cut-off Date ranged from approximately ____% and ____%
per annum, respectively, to approximately ____% and ____% per annum
respectively, and the weighted average Mortgage Rate as of the Cut-off Date was
approximately ____% and ____% per annum respectively;
(10) Approximately ____% and ____% of the Group I Mortgage Loans and
Group II Mortgage Loans, respectively, were rate/term refinancings,
approximately ____% and ____% of the Group I Mortgage Loans and Group II
Mortgage Loans, respectively, were cash out refinancings and approximately ____%
and ____% of the Group I Mortgage Loans and Group II Mortgage Loans,
respectively, were made to purchase the related Mortgaged Properties;
(11) As of the Cut-off Date, the Gross Margins for the Group I Mortgage
Loans and the Group II Mortgage Loans (which are Adjustable Rate Mortgage Loans)
range from approximately ____% and ____% to approximately, ____% and ____% per
annum, respectively, and the weighted average Gross Margin for the Group I
Mortgage Loan and the Group II Mortgage Loans (which are Adjustable Rate
Mortgage Loans) as of the Cut-off Date was approximately ____% and ____%,
respectively;
(12) No less than approximately ____% and ____% of the Group I Mortgage
Loans and Group II Mortgage Loans, respectively, were originated by the Seller
under the Seller's "Full Documentation" mortgage loan program, no more than
approximately ____% and ____% of the Group I Mortgage Loans and Group II
Mortgage Loans, respectively, were originated by the Seller under the Seller's
"Limited Documentation" mortgage loan program and no more than approximately
____% and ____% of the Group I Mortgage Loans and Group II Mortgage Loans,
respectively, were originated by the Seller under the Seller's "Stated Income
Documentation" mortgage loan program;
(13) With respect to the Seller's underwriting risk categories,
approximately ____%, ____%, ____%, ____% and ____% of the Group I Mortgage Loans
constitute "A-" Risk Mortgage Loans, "B" Risk Mortgage Loans, "B-" Risk Mortgage
Loans, "C" Risk Mortgage Loans and "D" Risk Mortgage Loans, respectively and
approximately ____%, ____%, ____%, ____% and ____% of the Group II Mortgage
Loans constitute "A-" Risk Mortgage Loans, "B" Risk Mortgage Loans, "B-" Risk
Mortgage Loans, "C" Risk Mortgage Loans and "D" Risk Mortgage Loans,
respectively; and
(14) As of the Cut-off Date, there were no Group I Mortgage Loans or
Group II Mortgage Loans with respect to which the monthly payment due thereon in
___________ 2001 had not been made and none of the Mortgage Loans has been
contractually delinquent for more than 30 days more than once during the
preceding twelve months and, except as provided above, no Mortgage Loan has ever
experienced a delinquency of 60 or more days since the origination thereof.
1-2
EXHIBIT D
MORTGAGE LOAN SCHEDULE
[FILED BY PAPER]
D-1
EXHIBIT E-1
REQUEST FOR RELEASE
(for Trust Administrator /Custodian)
Loan Information
Name of Mortgagor: ____________________________
Master Servicer
Loan No.: ____________________________
Trust Administrator/Custodian
Name: ____________________________
Address: ____________________________
Trust Administrator/
Custodian
Mortgage File No.: ____________________________
Depositor
Name: LONG BEACH SECURITIES CORP.
Address: ____________________________
Certificates: Long Beach Mortgage Certificates, Series 2002-1.
E-1
The undersigned Master Servicer hereby acknowledges that it has
received from _______________________, as Trust Administrator for the Holders of
Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates, Series 2002-1,
the documents referred to below (the "Documents"). All capitalized terms not
otherwise defined in this Request for Release shall have the meanings given them
in the Pooling and Servicing Agreement, dated as of March___, 2002, among the
Trust Administrator, the Trustee, the Depositor, Federal National Mortgage
Association and the Master Servicer (the "Pooling and Servicing Agreement").
(a) Promissory Note dated _______________, 20__, in the original principal sum
of $__________, made by ___________________, payable to, or endorsed to the
order of, the Trustee.
(b) Mortgage recorded on ____________________ as instrument no. _______________
in the County Recorder's Office of the County of _________________, State of
____________ in book/reel/docket _________________ of official records at
page/image _____________.
(c) Deed of Trust recorded on ________________ as instrument no. ______________
in the County Recorder's Office of the County of _________________, State of
____________________ in book/reel/docket _________________ of official records
at page/image ______________.
(d) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
___________________ as instrument no. _________ in the County Recorder's Office
of the County of _______________, State of _______________________ in
book/reel/docket ____________ of official records at page/image ____________.
(e) Other documents, including any amendments, assignments or other assumptions
of the Mortgage Note or Mortgage.
(f) _____________________________________________
(g) _____________________________________________
(h) _____________________________________________
(i) _____________________________________________
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trustee, solely for the purposes
provided in the Agreement.
(2) The Master Servicer shall not cause or permit the Documents to
become subject to, or encumbered by, any claim, liens, security interest,
charges, writs of attachment or other impositions nor shall the Master Servicer
assert or seek to assert any claims or rights of setoff to or against the
Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document previously
requested from the Mortgage File to the Trustee when the need therefor no longer
exists, unless the
E-2
Mortgage Loan relating to the Documents has been liquidated and the proceeds
thereof have been remitted to the Collection Account and except as expressly
provided in the Agreement.
(4) The Documents and any proceeds thereof, including any proceeds of
proceeds, coming into the possession or control of the Master Servicer shall at
all times be ear-marked for the account of the Trustee, and the Master Servicer
shall keep the Documents and any proceeds separate and distinct from all other
property in the Master Servicer's possession, custody or control.
Dated:
LONG BEACH MORTGAGE COMPANY
By:
------------------------------------
Name:
Title:
E-3
EXHIBIT E-2
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full]
OFFICERS' CERTIFICATE AND TRUST RECEIPT
MORTGAGE LOAN PASS-THROUGH CERTIFICATES
SERIES 2002-1
____________________________________________________ HEREBY CERTIFIES THAT
HE/SHE IS AN OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH
BENEATH HIS/HER SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN MADE.
LOAN NUMBER: BORROWER'S NAME:
------------------------- ------------------------
COUNTY:
------------------------------
WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE COLLECTION ACCOUNT PURSUANT TO SECTION
[3.10] OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
DATED:
----------------------------------
-------------------------------
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
E-4
EXHIBIT F-1
FORM OF TRUST ADMINISTRATOR'S INITIAL CERTIFICATION
[Date]
Long Beach Securities Corp. Long Beach Mortgage Company
▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Federal National Mortgage Association
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of March___, 2002 among Long Beach Securities
Corp., Long Beach Mortgage Company, Federal National Mortgage
Association, First Union National Bank and Bankers Trust Company of
California, N.A., Long Beach Mortgage Loan Trust 2002-1, Asset-Backed
Certificates, Series 2002-1
Ladies and Gentlemen:
Pursuant to Section 2.02 of the Pooling and Servicing Agreement, the
undersigned, as Trust Administrator on behalf of the Trustee, hereby
acknowledges receipt of each Mortgage File and certifies that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the exception
report annexed hereto as not being covered by this certification), (i) all
documents constituting part of such Mortgage File (other than such documents
described in Section 2.01(e) of the Pooling and Servicing Agreement) required to
be delivered to it pursuant to the Pooling and Servicing Agreement are in its
possession, (ii) such documents have been reviewed by it and are not mutilated,
torn or defaced unless initialed by the related borrower and relate to such
Mortgage Loan and (iii) based on its examination and only as to the foregoing,
the information set forth in the Mortgage Loan Schedule that corresponds to
items (i), (ii), (ix), (xii), (xiv) (to the extent of the Periodic Rate Cap for
the first Adjustment Date and subsequent Adjustment Dates) and (xvi) of the
definition of "Mortgage Loan Schedule" of the Pooling and Servicing Agreement
accurately reflects information set forth in the Mortgage File.
The Trust Administrator has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The Trust
Administrator makes no representations as to: (i) the validity, legality,
sufficiency, enforceability due authorization, recordability or genuineness of
any of the documents contained in the Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
F-1
BANKERS TRUST COMPANY OF CALIFORNIA, N.A., as Trust
Administrator on behalf of the Trustee
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
F-2
EXHIBIT F-2
FORM OF TRUST ADMINISTRATOR'S FINAL CERTIFICATION
[Date]
Long Beach Securities Corp. Long Beach Mortgage Company
▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Federal National Mortgage Association
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of March___, 2002 among Long Beach Securities
Corp., Long Beach Mortgage Company, Federal National Mortgage
Association, First Union National Bank and Bankers Trust Company of
California, N.A., Long Beach Mortgage Loan Trust 2002-1, Asset-Backed
Certificates, Series 2002-1
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trust Administrator on behalf of the
Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attachment hereto), it or a Custodian on its behalf has received:
(a) the original Mortgage Note, endorsed in blank or in the
following form: "Pay to the order of Bankers Trust Company of
California, N.A., as Trust Administrator for the benefit of First Union
National Bank, as Trustee under the applicable agreement, without
recourse," with all prior and intervening endorsements showing a
complete chain of endorsement from the originator to the Person so
endorsing to the Trustee or a copy of such original Mortgage Note with
an accompanying Lost Note Affidavit executed by the Seller;
(b) the original Mortgage with evidence of recording thereon,
and a copy, certified by the appropriate recording office, of the
recorded power of attorney, if the Mortgage was executed pursuant to a
power of attorney, with evidence of recording thereon;
(c) an original Assignment in blank;
(d) the original recorded Assignment or Assignments showing
a complete chain of assignment from the originator to the Person
assigning the Mortgage to the Trustee or in blank;
F-3
(e) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(f) the original lender's title insurance policy, together
with all endorsements or riders issued with or subsequent to the
issuance of such policy, insuring the priority of the Mortgage as a
first lien or second lien on the Mortgaged Property represented therein
as a fee interest vested in the Mortgagor, or in the event such
original title policy is unavailable, a written commitment or uniform
binder or preliminary report of title issued by the title insurance or
escrow company.
The Trust Administrator has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The Trust
Administrator makes no representations as to: (i) the validity, legality,
sufficiency, enforceability or genuineness of any of the documents contained in
the Mortgage File of any of the Mortgage Loans identified on the Mortgage Loan
Schedule, or (ii) the collectability, insurability, effectiveness or suitability
of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
BANKERS TRUST COMPANY OF CALIFORNIA, N.A., as Trust
Administrator on behalf of the Trustee
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
F-4
EXHIBIT G-1
SPECIAL INFORMATION WORKSHEET VII, Ch 3, Exhibit 1: Special Information
Worksheet (for Military Indulgence) (09/30/96)
Check One: ________ Initial Submission _______ Supplemental Submission
Servicer's ▇▇▇▇▇▇ ▇▇▇ Identification Number (9-digits):
-----------------------
▇▇▇▇▇▇ Mae Loan Number (10 digits):
-------------------------------------------
Lender Loan Number:
-----------------------------------------------------------
Remittance Option (Check one):
Actual/Actual (A/A)
---------
Scheduled/Actual (S/A)
---------
Scheduled/Scheduled (Portfolio), also called MRS
--------- or MBS-Acquired
Scheduled/Scheduled (MBS), also called MBS Swaps
---------
Amortization Method (Check one):
Standard
---------
Interest Subsidy
---------
Other (Prior Approval Required)
---------
Temporary Interest Rate: % Temporary P&I Installment
----------- ------------
Effective Start Date (MMYY): Current Pass-Through Rate: %
------- -----------
LPI Date (MMYY):
-------------------
UPB: $
--------------------------------------
Expected End Date (MMYY): Actual End Date (MMYY):
---------- ---------------
Next Scheduled ARM Adjustment Date, if applicable (MMYY):
Has additional forbearance been extended? _____ Yes _____ No
If so, describe the terms of the agreement, including when it begins and ends.
[Attach Request for Military Indulgence (Form 180) if one was obtained.]
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Servicer Name & Address
-------------------------------------------------------------------------------
Signed:
-----------------------------------------------------------------------
Typed Name and Title:
---------------------------------------------------------
Contact Phone No.:
-------------------------------------------
G-1
EXHIBIT G-2
REQUEST FOR MILITARY INDULGENCE Request For Military Indulgence
------------------------------------------------------------------------------
This Form Does Not Affect Your Rights Under The Soldiers' and Sailors' Civil
Relief Act
-------------------------------------------------------------------------------
Loan Number FHA/VA/MI Case Number
-------------------------------------------------------------------------------
Mortgagor (or Trustee)
-------------------------------------------------------------------------------
Address of Property
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
and
------------------------------------- --------------------------------------
mortgagors, trustors or present owners, hereinafter referred to as
"Mortgagor," make the following statement:
1. Name of Person in Military Service __________ Date of Birth ____________
2. If the person in Military Service is not the Mortgagor, what is his or
her relationship to the Mortgagor?
3. Date of Induction Order or Entry into 4. Service Number 5. Approximate Years of any Previous
Military Service Military Service
From To
From To
---------------------------------------------------------------------------------------------------------------
6. Present Military Address 7. Rank and Branch Service 8. Pay Grade
-----------------------------------------------------------------------------------------------------------------
9. Present Address of Mortgagor's Family 10. Relationship and Age of Each
Dependent
-----------------------------------------------------------------------------------------------------------------
11. Name and Address of Employer immediately prior to Military Service. 12. Total Monthly Earnings and Income
of Mortgagor immediately prior to
Military Service.
-----------------------------------------------------------------------------------------------------------------
13. Total Monthly Earnings and Income of Mortgagor (Including Spouse, Other
Members of Household, Other Persons Liable for Payment of Mortgage
Indebtedness) After Entry into Military Service:
a. Base Service Pay b. Contribution to Family Allotment c. Net Pay ("a" minus "b")
-----------------------------------------------------------------------------------------------------------------
d Family Allotment (same as "b" e. Government Allowance for Dependent f. Subtotal ("d" minus "e")
above
-----------------------------------------------------------------------------------------------------------------
g. Other Income, including Allowance for Quarters and Subsistence, and Income of Members
of Household $______________
h. Total Income ("c" plus "f" plus "g") $_______________
-----------------------------------------------------------------------------------------------------------------
14. Describe other obligations and state Monthly Payments Required and what
modifications will be made.
--------------------------------------------------------------------------------------------------------
15. Present Occupants of Property and Relationship to 16. If Property is Rented, Monthly Rental.
Mortgagor.
--------------------------------------------------------------------------------------------------------
17. Effect of Military Service on Family Income is as Follows:
--------------------------------------------------------------------------------------------------------
18. Present mortgage installment
$____________ Deposit, $______________ Interest, $______________ Principal, $_______________ Total
--------------------------------------------------------------------------------------------------------
G-2
By reason of the foregoing, the Mortgagor represents to the Federal National
Mortgage Association (hereinafter referred to as the "Mortgagee"), that he or
she is unable to meet the regular monthly installments or other obligations, if
any, now due on the mortgage to the Mortgagee, or to become due during the
period of military service (as defined by the Soldiers' and Sailors' Civil
Relief Act, as amended,) and requests indulgence to the extent of being
permitted during such period, unless previously notified to the contrary by the
Mortgagee or the servicer of the Mortgage, to make monthly payments of
$_______________ commencing on _____________________ to apply on such mortgage
indebtedness, inclusive of any sums required to be paid to the Tax and Insurance
Account.
The Mortgagor will (1) promptly notify the servicer of the Mortgage of any
increase in his or her income from the property or from any other source, or any
increase in the income of members of his or her household, or of other persons
liable for the payment of the Mortgage, and pay a commensurate portion of such
increases toward the reduction of the balance due upon the Mortgage; (2)
increase the monthly payments proposed hereby to the extent that the Mortgagee
or said servicer may hereafter determine to be necessary to cover any increase
of taxes, assessments, insurance and other similar items; and (3) promptly
notify said servicer, in writing, of the data of termination of such period of
military service.
It is clearly understood that by the submission of the "Request for Military
Indulgence", the Mortgagor does not waive any rights or benefits under the
provision of the Soldiers' & Sailors' Civil Relief Act of 1940, as amended.
-------------------------------
Mortgagor
-------------------------------
Mortgagor
Dated
--------------------------------------
Approved for Federal National Mortgage Association
By:
-------------------------------------------------
(Servicer's Authorized Representative)
-------------------------------------------------
(Servicer's Name)
-------------------------------------------------
(Servicer's Address)
-------------------------------------------------
G-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 Bankers
Trust Company of California, N.A., as Trust Administrator on behalf of Long
Beach Mortgage Loan Trust 2002-1, to accept the transfer of the above described
loan from Seller.
Seller agrees to indemnify Bankers Trust Company of California, N.A.,
First Union National Bank, Long Beach Securities Corp. and Long Beach 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
FORM OF ERISA REPRESENTATION
[DATE]
Long Beach Securities Corp.
▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Long Beach Mortgage Company
▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Bankers Trust Company of California, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Federal National Mortgage Association
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Re: Long Beach Mortgage Loan Trust 2002-1,
Asset-Backed Certificates, Series 2002-1
Ladies and Gentlemen:
___________________ (the "Transferee") intends to acquire from
__________________ (the "Transferor") $____________ Initial Certificate
Principal Balance of the [Class C, Class P, Class R, Class R-X] Certificate of
Long Beach Mortgage Loan Trust 2002-1, Asset-Backed Certificates, Series 2002-1,
(the "Certificates"), issued pursuant to a Pooling and Servicing Agreement dated
as of March 1, 2002 (the "Agreement") among Long Beach Securities Corp., as
depositor (the "Depositor"), Long Beach Mortgage Company, as master servicer
(the "Master Servicer"), Federal National Mortgage Association, as guarantor
with respect to the Class I-A Certificates and the Class I-S Certificates, First
Union National Bank, as trustee (the "Trustee") and Bankers Trust Company of
California, N.A., as trust administrator (the "Trust Administrator").
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned thereto in the Pooling and Servicing Agreement. The Transferee hereby
certifies, represents and warrants to, and covenants with the Depositor, the
Trust Administrator, the Trustee, Federal National Mortgage Association and the
Master Servicer that the following statements in either (1) or (2) are accurate:
_____ (1) The Certificates (i) are not being acquired by, and will not
be transferred to, any employee benefit plan within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or other retirement arrangement, including
individual retirement accounts and annuities, ▇▇▇▇▇ plans and
I-1
bank collective investment funds and insurance company general or
separate accounts in which such plans, accounts or arrangements are
invested, that is subject to Section 406 of ERISA or Section 4975 of
the Internal Revenue Code of 1986 (the "Code") (any of the foregoing,
a "Plan"), (ii) are not being acquired with "plan assets" of a Plan
within the meaning of the Department of Labor ("DOL") regulation, 29
C.F.R. 'SS' 2510.3-101, and (iii) will not be transferred to any entity
that is deemed to be investing in plan assets within the meaning of
the DOL regulation at 29 C.F.R. 'SS' 2510.3-101; or
_____ (2) The Transferee will provide an Opinion of Counsel to the
Depositor, the Trustee, the Trust Administrator and the Master Servicer
which establishes to the satisfaction of the Depositor, the Trust
Administrator, 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 Trust
Administrator, the Master Servicer, the Trustee, 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.
IN WITNESS WHEREOF, the Transferee executed this certificate.
---------------------------------------------
[Transferee]
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
I-2
EXHIBIT J
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Long Beach Securities Corp.
▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Bankers Trust Company of California, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Long Beach Mortgage Loan Trust 2002-1,
Asset-Backed Certificates Series 2002-1
Ladies and Gentlemen:
In connection with our acquisition of $______ Initial Certificate
Principal Balance of the Class [__] Certificate and $______ Initial Certificate
Balance of the Class [__] Certificate of Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates, Series 2002-1 (the "Certificates"), issued pursuant
to a Pooling and Servicing Agreement dated as of March 1, 2002 (the "Agreement")
among Long Beach Securities Corp., as depositor (the "Depositor"), Long Beach
Mortgage Company, as master servicer (the "Master Servicer"), Federal National
Mortgage Association, as guarantor with respect to the Class I-A Certificates
and the Class I-S Certificates, First Union National Bank, as trustee (the
"Trustee") and Bankers Trust Company of California, N.A., as trust administrator
(the "Trust Administrator"), 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
J-1
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 Agreement.
Very truly yours,
[NAME OF TRANSFEREE]
By:
-------------------------------------
Authorized Officer
J-2
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
Long Beach Securities Corp.
▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Bankers Trust Company of California, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Long Beach Mortgage Loan Trust 2002-1,
Asset-Backed Certificates Series 2002-1
Ladies and Gentlemen:
In connection with our acquisition of $______ Initial Certificate
Principal Balance of the Class [__] Certificate and $______ Initial Certificate
Balance of the Class [__] Certificate of Long Beach Mortgage Loan Trust 2002-1
Asset-Backed Certificates, Series 2002-1 (the "Certificates"), issued pursuant
to a Pooling and Servicing Agreement dated as of March 1, 2002 (the "Agreement")
among Long Beach Securities Corp., as depositor (the "Depositor"), Long Beach
Mortgage Company, as master servicer (the "Master Servicer"), Federal National
Mortgage Association, as guarantor with respect to the Class I-A Certificates
and the Class I-S Certificates, First Union National Bank, as trustee (the
"Trustee") and Bankers Trust Company of California, N.A., as trust administrator
(the "Trust Administrator"), 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
J-3
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-4
ANNEX 1 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $________1 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.
_____ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended.
_____ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is attached
hereto.
_____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and examined by
a State or Federal authority having supervision over any such
institutions or is a foreign savings and loan association or equivalent
institution and (b) has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial statements, a copy of which
is attached hereto.
_____ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
--------------------
1 Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in securities.
J-5
_____ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of insurance
or the reinsuring of risks underwritten by insurance companies and
which is subject to supervision by the insurance commissioner or a
similar official or agency of a State, territory or the District of
Columbia.
_____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
_____ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of
1974.
_____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
_____ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business Investment Act of
1958.
_____ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisors
Act of 1940.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
J-6
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
--------------------------------------------
Print Name of Buyer
By:
----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Date:
---------------------------------------
J-7
ANNEX 2 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyers Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
_____ The Buyer owned $_________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule
144A).
_____ The Buyer is part of a Family of Investment Companies which owned
in the aggregate $___________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule
144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
J-8
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
---------------------------------------
Print Name of Buyer or Adviser
By:
-----------------------------------
Name:
----------------------------------
Title:
---------------------------------
IF AN ADVISER:
Print Name of Buyer
---------------------------------------
Date:
----------------------------------
J-9
EXHIBIT K
TRANSFER AFFIDAVIT AND AGREEMENT
LONG BEACH MORTGAGE LOAN TRUST 2002-1,
ASSET-BACKED CERTIFICATES, SERIES 2002-1
STATE OF ____________ )
) ss.:
COUNTY OF __________ )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of ________________________, the
proposed Transferee of an Ownership Interest in the Class [R/R-X] Certificate
(the "Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement") among Long Beach Securities Corp., as depositor (the "Depositor"),
Long Beach Mortgage Company, as master servicer (the "Master Servicer"), Federal
National Mortgage Association, as guarantor with respect to the Class I-A
Certificates and Class I-S Certificates, First Union National Bank, as trustee
(the "Trustee") and Bankers Trust Company of California, N.A., as trust
administrator (the "Trust Administrator"). Capitalized terms used, but not
defined herein shall have the meanings ascribed to such terms in the Agreement.
The Transferee has authorized the undersigned to make this affidavit on behalf
of the Transferee.
2. The Transferee is, as of the date hereof and will be, as of the date
of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised and understands that (i) a tax will
be imposed on Transfers of the Certificate to Persons that are not Permitted
Transferees; (ii) such tax will be imposed on the transferor, or, if such
Transfer is through an agent (which includes a broker, nominee or middleman) of
a Person that is not a Permitted Transferee, on the agent; and (iii) the Person
otherwise liable for the tax shall be relieved of liability for the tax if the
subsequent Transferee furnished to such Person an affidavit that such subsequent
Transferee is a Permitted Transferee and, at the time of Transfer, such Person
does not have actual knowledge that the affidavit is false.
4. The Transferee has been advised and understands that a tax will be
imposed on a "pass-through entity" holding the Certificate if at any time during
the taxable year of the pass-through entity a Person that is not a Permitted
Transferee is the record holder of an interest in such entity. The Transferee
understands that such tax will not be imposed for any period with respect to
which the record holder furnishes to the pass-through entity an affidavit that
such record holder is a Permitted Transferee and the pass-through entity does
not have actual knowledge that such affidavit is false. (For this purpose, a
"pass-through entity" includes a regulated investment company, a real estate
investment trust or common trust fund, a
K-1
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.)
5. The Transferee has reviewed the provisions of Section 5.02(d) of the
Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(d) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit L to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the
Certificate.
8. The Transferee's taxpayer identification number is _____________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be "noneconomic
residual interests" within the meaning of Treasury regulations promulgated
pursuant to the Code and that the transferor of a noneconomic residual interest
will remain liable for any taxes due with respect to the income on such residual
interest, if a significant purpose of the transfer was to impede the assessment
or collection of tax. The Transferee understands that, as the holder of a
noneconomic residual interest, the Transferee may incur tax liabilities in
excess of any cash flows generated by the Certificate. The Transferee intends to
pay taxes associated with holding the Certificate as they become due.
11. The Transferee is not an employee benefit plan that is subject to
ERISA or a plan that is subject to Section 4975 of the Code, nor is it acting on
behalf of such a plan.
K-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
Vice President, attested by its Assistant Secretary, this ___ day of March,
2002.
[TRANSFEREE NAME]
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[Corporate Seal]
ATTEST:
--------------------------
[Assistant] Secretary
Personally appeared before me the above-named ____________________,
known or proved to me to be the same person who executed the foregoing
instrument and to be the ____________________ of the Transferee, and
acknowledged that he executed the same as his free act and deed and the free act
and deed of the Transferee.
Subscribed and sworn before me this ___ day of March, 2002.
----------------------------------------------
NOTARY PUBLIC
My Commission expires the __ day of ____, 20__.
K-3
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Long Beach Securities Corp.
▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Bankers Trust Company of California, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Long Beach Mortgage Loan Trust 2002-1,
Asset-Backed Certificates Series 2002-1
Ladies and Gentlemen:
In connection with our disposition of the Class [__] Certificates (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement dated as
of March 1, 2002 (the "Agreement") among Long Beach Securities Corp., as
depositor (the "Depositor"), Long Beach Mortgage Company, as master servicer
(the "Master Servicer"), Federal National Mortgage Association, as guarantor
with respect to the Class I-A Certificates and the Class I-S Certificates, First
Union National Bank, as trustee (the "Trustee") and Bankers Trust Company of
California, N.A., as trust administrator (the "Trust Administrator") we certify
that (a) we understand that the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are being disposed by us in
a transaction that is exempt from the registration requirements of the Act, (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act, (c) to
the extent we are disposing of the Class [ ] Certificate, we have no knowledge
that the Transferee is not a Permitted Transferee and (d) no purpose of the
proposed disposition of the Class [ ] Certificate is to impede the assessment or
collection of tax.
Very truly yours,
TRANSFEROR
By:
----------------------------------------
Name:
--------------------------------------
Title:
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L-1
SCHEDULE I
PREPAYMENT PREMIUM SCHEDULE
[AVAILABLE UPON REQUEST]