EXHIBIT 4.1
LONG BEACH SECURITIES CORP.,
Depositor
LONG BEACH MORTGAGE COMPANY,
Master Servicer
FEDERAL NATIONAL MORTGAGE ASSOCIATION,
Guarantor (with respect to the Class I-A Certificates
and the Class I-S1 Certificates)
WACHOVIA BANK, NATIONAL ASSOCIATION,
Trustee
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trust Administrator
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2002
------------------------------
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates, Series 2002-3
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS ...........................................................................................13
Section 1.01 Defined Terms...............................................................................13
Section 1.02 Accounting..................................................................................74
Section 1.03 Allocation of Certain Interest Shortfalls...................................................74
Section 1.04 Rights of the NIMS Insurer, the Certificate Insurer and the Guarantor.......................76
Section 1.05 Determination of Material Adverse Effect....................................................77
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES.......................................78
Section 2.01 Conveyance of Mortgage Loans................................................................78
Section 2.02 Acceptance of REMIC 1 by the Trustee........................................................81
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..............................................................82
Section 2.04 Representations, Warranties and Covenants of the Master Servicer............................85
Section 2.05 Representations and Warranties of the Depositor.............................................87
Section 2.06 Issuance of Certificates....................................................................89
Section 2.07 Reserved....................................................................................89
Section 2.08 Conveyance of REMIC Regular Interests and Acceptance of REMIC 1 by the
Trustee; Issuance of Certificates...........................................................89
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS...................................................91
Section 3.01 Master Servicer to Act as Master Servicer...................................................91
Section 3.02 Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers......................93
Section 3.03 Successor Sub-Servicers.....................................................................95
Section 3.04 Liability of the Master Servicer............................................................95
Section 3.05 No Contractual Relationship Between Sub-Servicers and the NIMS Insurer, the
Certificate Insurer, the Guarantor, the Trustee, the Trust Administrator or
Certificateholders..........................................................................95
Section 3.06 Assumption or Termination of Sub-Servicing Agreements by Trust
Administrator...............................................................................96
Section 3.07 Collection of Certain Mortgage Loan Payments................................................96
Section 3.08 Sub-Servicing Accounts......................................................................97
Section 3.09 Collection of Taxes, Assessments and Similar Items; Servicing Accounts......................98
Section 3.10 Collection Account and Distribution Account.................................................98
Section 3.11 Withdrawals from the Collection Account and Distribution Account...........................101
Section 3.12 Investment of Funds in the Collection Account and the Distribution Account.................103
Section 3.13 Agreement to Appoint a Special Servicer....................................................104
i
Section 3.14 Maintenance of Hazard Insurance and Errors and Omissions and Fidelity
Coverage...................................................................................106
Section 3.15 Enforcement of Due-On-Sale Clauses; Assumption Agreements..................................107
Section 3.16 Realization Upon Defaulted Mortgage Loans..................................................109
Section 3.17 Trustee and Trust Administrator to Cooperate; Release of Mortgage Files....................111
Section 3.18 Servicing Compensation.....................................................................112
Section 3.19 Reports to the Trustee and the Trust Administrator; Collection Account
Statements.................................................................................113
Section 3.20 Statement as to Compliance.................................................................113
Section 3.21 Independent Public Accountants' Servicing Report...........................................114
Section 3.22 Access to Certain Documentation............................................................114
Section 3.23 Title, Management and Disposition of REO Property..........................................115
Section 3.24 Obligations of the Master Servicer in Respect of Prepayment Interest
Shortfalls.................................................................................118
Section 3.25 Obligations of the Master Servicer in Respect of Mortgage Rates and Monthly
Payments...................................................................................118
Section 3.26 Reserve Funds..............................................................................118
Section 3.27 Advance Facility...........................................................................121
Section 3.28 Policy; Claims Under the PMI Policy........................................................121
Section 3.29 Group I Mortgage Loans Subject to Relief Act...............................................122
Section 3.30 Cap Agreements.............................................................................122
Section 3.31 Payments on the Certificate Insurance Policy...............................................123
ARTICLE IV FLOW OF FUNDS........................................................................................126
Section 4.01 Distributions..............................................................................126
Section 4.02 Preference Claims..........................................................................134
Section 4.03 Statements.................................................................................135
Section 4.04 Remittance Reports; Advances...............................................................139
Section 4.05 Distributions on the REMIC Regular Interests...............................................140
Section 4.06 Allocation of Realized Losses..............................................................145
Section 4.07 Compliance with Withholding Requirements...................................................146
Section 4.08 Commission Reporting.......................................................................147
Section 4.09 The Guaranty...............................................................................147
Section 4.10 Replacement Credit Enhancement.............................................................147
ARTICLE V THE CERTIFICATES......................................................................................148
Section 5.01 The Certificates...........................................................................148
Section 5.02 Registration of Transfer and Exchange of Certificates......................................150
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..........................................154
Section 5.04 Persons Deemed Owners......................................................................155
ii
ARTICLE VI THE MASTER SERVICER AND THE DEPOSITOR................................................................155
Section 6.01 Liability of the Master Servicer and the Depositor.........................................155
Section 6.02 Merger or Consolidation of the Depositor or the Master Servicer............................155
Section 6.03 Limitation on Liability of the Depositor, the Master Servicer and Others...................156
Section 6.04 Limitation on Resignation of Master Servicer...............................................157
Section 6.05 Rights of the Depositor, the NIMS Insurer, the Certificate Insurer, the
Guarantor, the Trustee and the Trust Administrator in Respect of the Master
Servicer...................................................................................158
ARTICLE VII DEFAULT.............................................................................................158
Section 7.01 Master Servicer Events of Default..........................................................158
Section 7.02 Trust Administrator to Act; Appointment of Successor.......................................161
Section 7.03 Notification to Certificateholders.........................................................163
Section 7.04 Waiver of Master Servicer Events of Default................................................163
ARTICLE VIII THE TRUSTEE AND THE TRUST ADMINISTRATOR............................................................164
Section 8.01 Duties of Trustee and Trust Administrator..................................................164
Section 8.02 Certain Matters Affecting the Trustee and the Trust Administrator..........................165
Section 8.03 Neither Trustee nor Trust Administrator Liable for Certificates or Mortgage
Loans......................................................................................166
Section 8.04 Trustee and Trust Administrator May Own Certificates.......................................167
Section 8.05 Trustee's and Trust Administrator's Fees and Expenses......................................167
Section 8.06 Eligibility Requirements for Trustee and Trust Administrator...............................168
Section 8.07 Resignation or Removal of Trustee and Trust Administrator..................................169
Section 8.08 Successor Trustee or Trust Administrator...................................................170
Section 8.09 Merger or Consolidation of Trustee or Trust Administrator..................................171
Section 8.10 Appointment of Co-Trustee or Separate Trustee..............................................171
Section 8.11 Appointment of Custodians..................................................................172
Section 8.12 Appointment of Office or Agency............................................................172
Section 8.13 Representations and Warranties of the Trustee and the Trust Administrator..................173
Section 8.14 Cap Agreement..............................................................................173
ARTICLE IX TERMINATION..........................................................................................174
Section 9.01 Termination Upon Purchase or Liquidation of All Mortgage Loans.............................174
Section 9.02 Additional Termination Requirements........................................................176
ARTICLE X REMIC PROVISIONS......................................................................................177
Section 10.01 REMIC Administration.......................................................................177
Section 10.02 Prohibited Transactions and Activities.....................................................181
Section 10.03 Trustee, Trust Administrator, Master Servicer and Depositor Indemnification................181
iii
ARTICLE XI MISCELLANEOUS PROVISIONS.............................................................................182
Section 11.01 Amendment..................................................................................182
Section 11.02 Recordation of Agreement; Counterparts.....................................................183
Section 11.03 Limitation on Rights of Certificateholders.................................................184
Section 11.04 Governing Law; Jurisdiction................................................................184
Section 11.05 Notices....................................................................................184
Section 11.06 Severability of Provisions.................................................................185
Section 11.07 Notice to the Rating Agencies, the NIMS Insurer, the Certificate Insurer
and the Guarantor..........................................................................185
Section 11.08 Article and Section References.............................................................186
Section 11.09 Third-Party Beneficiaries..................................................................187
Section 11.10 Grant of Security Interest.................................................................187
Section 11.11 Non-Petition...............................................................................187
iv
Exhibits
Exhibit A-1 Form of Class I-A Certificates
Exhibit A-2 Form of Class II-A Certificates
Exhibit A-3 Form of Class I-S1 Certificates
Exhibit A-4 Form of Class I-S2 Certificates
Exhibit A-5 Form of Class II-S1 Certificates
Exhibit A-6 Form of Class II-S2 Certificates
Exhibit A-7 Form of Class I-C Certificates
Exhibit A-8 Form of Class II-C Certificates
Exhibit A-9 Form of Class I-P Certificates
Exhibit A-10 Form of Class II-P Certificates
Exhibit A-11 Form of Class R Certificates
Exhibit A-12 Form of Class R-CX Certificates
Exhibit A-13 Form of Class R-PX Certificates
Exhibit B-1 Form of Group I Cap Agreement
Exhibit B-2 Form of Group II Cap Agreement
Exhibit C Form of Mortgage Loan Purchase Agreement
Exhibit D Mortgage Loan Schedule
Exhibit E-1 Request for Release (for 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, Class R-CX Certificate
Transfer Affidavit and Class R-PX
Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M Certificate Insurance Policy
Schedules
Schedule I Prepayment Charge Schedule
Schedule II Cap Premium Schedules
Schedule III [Reserved]
Schedule IV PMI Mortgage Loan Schedule (Not applicable)
v
This POOLING AND SERVICING AGREEMENT is dated as of August 1, 2002 (the
"Agreement"), among LONG BEACH SECURITIES CORP., as depositor (the "Depositor"),
LONG BEACH MORTGAGE COMPANY, as master servicer (the "Master Servicer"), FEDERAL
NATIONAL MORTGAGE ASSOCIATION, as Guarantor of the Class I-A Certificates and
the Class I-S1 Certificates (the "Guarantor"), WACHOVIA BANK, NATIONAL
ASSOCIATION, as trustee (the "Trustee"), and DEUTSCHE BANK NATIONAL TRUST
COMPANY, 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 thirteen classes of
certificates, designated as (i) the Class I-A Certificates, (ii) the Class II-A
Certificates, (iii) the Class I-S1 Certificates, (iv) the Class II-S1
Certificates, (v) the Class I-S2 Certificates, (vi) the Class II-S2
Certificates, (vii) the Class I-C Certificates, (viii) the Class II-C
Certificates, (ix) the Class I-P Certificates, (x) the Class II-P Certificates,
(xi) the Class R Certificates, (xii) the Class R-CX Certificates and (xiii)
Class R-PX Certificate.
1
REMIC 1
As provided herein, the Trust Administrator will make an election to
treat the segregated pool of assets consisting of the Mortgage Loans and certain
other related assets subject to this Agreement (exclusive of the Reserve Funds
and the Master Servicer Prepayment Charge Payment Amounts) as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 1." The Class R-1 Interest will represent the sole class of
"residual interests" in REMIC 1 for purposes of the REMIC Provisions (as defined
herein) under federal income tax law. The following table irrevocably sets forth
the designation, the Uncertificated REMIC 1 Pass-Through Rate, the initial
Uncertificated Principal Balance, and solely for purposes of satisfying Treasury
regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for
each of the REMIC 1 Regular Interests. None of the REMIC 1 Regular Interests
will be certificated.
Uncertificated Rate
REMIC 1 Initial Uncertificated Change Assumed Final
Designation Pass-Through Rate Principal Balance Date(3) Maturity Date(1)
----------- ----------------- ----------------------- ------------- ---------------
LT1A-A Variable(2) $378,703,678.00 N/A September 2032
LT1A-B Variable(2) 1,996,350.51 N/A September 2032
LT1IS1-1 Variable(2) 48,100,000.00 July 2005 September 2032
LT1IS1-2 Variable(2) 200,000.00 June 2005 September 2032
LT1IS1-3 Variable(2) 300,000.00 May 2005 September 2032
LT1IS1-4 Variable(2) 300,000.00 April 2005 September 2032
LT1IS1-5 Variable(2) 300,000.00 March 2005 September 2032
LT1IS1-6 Variable(2) 8,900,000.00 February 2005 September 2032
LT1IS1-7 Variable(2) 400,000.00 January 2005 September 2032
LT1IS1-8 Variable(2) 500,000.00 December 2004 September 2032
LT1IS1-9 Variable(2) 600,000.00 November 2004 September 2032
LT1IS1-10 Variable(2) 600,000.00 October 2004 September 2032
LT1IS1-11 Variable(2) 7,600,000.00 September 2004 September 2032
LT1IS1-12 Variable(2) 700,000.00 August 2004 September 2032
LT1IS1-13 Variable(2) 800,000.00 July 2004 September 2032
LT1IS1-14 Variable(2) 400,000.00 June 2004 September 2032
LT1IS1-15 Variable(2) 500,000.00 May 2004 September 2032
LT1IS1-16 Variable(2) 8,500,000.00 April 2004 September 2032
LT1IS1-17 Variable(2) 500,000.00 March 2004 September 2032
LT1IS1-18 Variable(2) 500,000.00 February 2004 September 2032
LT1IS1-19 Variable(2) 500,000.00 January 2004 September 2032
LT1IS1-20 Variable(2) 600,000.00 December 2003 September 2032
LT1IS1-21 Variable(2) 9,700,000.00 November 2003 September 2032
LT1IS1-22 Variable(2) 500,000.00 October 2003 September 2032
LT1IS1-23 Variable(2) 500,000.00 September 2003 September 2032
LT1IS1-24 Variable(2) 600,000.00 August 2003 September 2032
LT1IS1-25 Variable(2) 400,000.00 July 2003 September 2032
LT1IS1-26 Variable(2) 10,700,000.00 June 2003 September 2032
LT1IS1-27 Variable(2) 400,000.00 May 2003 September 2032
2
Uncertificated Rate
REMIC 1 Initial Uncertificated Change Assumed Final
Designation Pass-Through Rate Principal Balance Date(3) Maturity Date(1)
----------- ----------------- ----------------------- ------------- ---------------
LT1IS1-28 Variable(2) 400,000.00 April 2003 September 2032
LT1IS1-29 Variable(2) 400,000.00 March 2003 September 2032
LT1IS1-30 Variable(2) 300,000.00 February 2003 September 2032
LT1IS1-31 Variable(2) 13,600,000.00 January 2003 September 2032
LT1IS1-32 Variable(2) 300,000.00 December 2002 September 2032
LT1IS1-33 Variable(2) 300,000.00 November 2002 September 2032
LT1IS1-34 Variable(2) 200,000.00 October 2002 September 2032
LT1IS1-35 Variable(2) 200,000.00 September 2002 September 2032
LT1A-P Variable(2) 100.00 N/A September 2032
LT1B-A Variable(2) 369,500,973.26 N/A September 2032
LT1IIS1-1 Variable(2) 50,500,000.00 July 2005 September 2032
LT1IIS1-2 Variable(2) 1,700,000.00 June 2005 September 2032
LT1IIS1-3 Variable(2) 1,100,000.00 May 2005 September 2032
LT1IIS1-4 Variable(2) 300,000.00 April 2005 September 2032
LT1IIS1-5 Variable(2) 600,000.00 March 2005 September 2032
LT1IIS1-6 Variable(2) 9,300,000.00 February 2005 September 2032
LT1IIS1-7 Variable(2) 500,000.00 January 2005 September 2032
LT1IIS1-8 Variable(2) 900,000.00 December 2004 September 2032
LT1IIS1-9 Variable(2) 900,000.00 November 2004 September 2032
LT1IIS1-10 Variable(2) 1,000,000.00 October 2004 September 2032
LT1IIS1-11 Variable(2) 8,100,000.00 September 2004 September 2032
LT1IIS1-12 Variable(2) 1,100,000.00 August 2004 September 2032
LT1IIS1-13 Variable(2) 1,200,000.00 July 2004 September 2032
LT1IIS1-14 Variable(2) 700,000.00 June 2004 September 2032
LT1IIS1-15 Variable(2) 800,000.00 May 2004 September 2032
LT1IIS1-16 Variable(2) 8,900,000.00 April 2004 September 2032
LT1IIS1-17 Variable(2) 800,000.00 March 2004 September 2032
LT1IIS1-18 Variable(2) 800,000.00 February 2004 September 2032
LT1IIS1-19 Variable(2) 900,000.00 January 2004 September 2032
LT1IIS1-20 Variable(2) 900,000.00 December 2003 September 2032
LT1IIS1-21 Variable(2) 10,000,000.00 November 2003 September 2032
LT1IIS1-22 Variable(2) 900,000.00 October 2003 September 2032
LT1IIS1-23 Variable(2) 800,000.00 September 2003 September 2032
LT1IIS1-24 Variable(2) 900,000.00 August 2003 September 2032
LT1IIS1-25 Variable(2) 800,000.00 July 2003 September 2032
LT1IIS1-26 Variable(2) 10,900,000.00 June 2003 September 2032
LT1IIS1-27 Variable(2) 700,000.00 May 2003 September 2032
LT1IIS1-28 Variable(2) 700,000.00 April 2003 September 2032
LT1IIS1-29 Variable(2) 700,000.00 March 2003 September 2032
LT1IIS1-30 Variable(2) 600,000.00 February 2003 September 2032
LT1IIS1-31 Variable(2) 11,200,000.00 January 2003 September 2032
LT1IIS1-32 Variable(2) 500,000.00 December 2002 September 2032
LT1IIS1-33 Variable(2) 400,000.00 November 2002 September 2032
LT1IIS1-34 Variable(2) 300,000.00 October 2002 September 2032
3
Uncertificated Rate
REMIC 1 Initial Uncertificated Change Assumed Final
Designation Pass-Through Rate Principal Balance Date(3) Maturity Date(1)
----------- ----------------- ----------------------- ------------- ---------------
LT1IIS1-35 Variable(2) 100,000.00 September 2002 September 2032
LT1B-P Variable(2) 100.00 N/A September 2032
------------------------
1 Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity date for
the Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each REMIC 1 Regular Interest.
2 Calculated in accordance with the definition of "Uncertificated REMIC
1 Pass-Through Rate" herein.
3 The rates for the REMIC 1 Regular Interests will not change. The
"Rate Change Date" listed here is solely for the purpose of calculating weighted
average rates for higher-tier REMIC interests.
4
REMIC 2
As provided herein, the Trust Administrator shall make an election to
treat the segregated pool of assets consisting of the REMIC 1 Regular Interests
as a REMIC for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC 2". The Class R-2 Interest represents the sole
class of "residual interests" in REMIC 2 for purposes of the REMIC Provisions.
The following table irrevocably sets forth the designation, the Uncertificated
REMIC 2 Pass-Through Rate, the initial Uncertificated Principal Balance, and
solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC 2
Regular Interests. None of the REMIC 2 Regular Interests will be certificated.
Uncertificated Rate
REMIC 2 Initial Uncertificated Change Assumed Final
Designation Pass-Through Rate Principal Balance Date Maturity Date(1)
----------- ----------------- ----------------------- ------------- ---------------
LT2A-A Variable(2) $459,000,028.51 N/A September 2032
LT2IS2-1 Variable(2) 35,700,000.00 February 2005(7) September 2032
LT2IS2-2 Variable(2) 5,300,000.00 August 2004(7) September 2032
LT2IS1-1 Variable(3) N/A(5) July 2005 September 2032
LT2IS1-2 Variable(3) N/A(5) June 2005 September 2032
LT2IS1-3 Variable(3) N/A(5) May 2005 September 2032
LT2IS1-4 Variable(3) N/A(5) April 2005 September 2032
LT2IS1-5 Variable(3) N/A(5) March 2005 September 2032
LT2IS1-6 Variable(3) N/A(5) February 2005 September 2032
LT2IS1-7 Variable(3) N/A(5) January 2005 September 2032
LT2IS1-8 Variable(3) N/A(5) December 2004 September 2032
LT2IS1-9 Variable(3) N/A(5) November 2004 September 2032
LT2IS1-10 Variable(3) N/A(5) October 2004 September 2032
LT2IS1-11 Variable(3) N/A(5) September 2004 September 2032
LT2IS1-12 Variable(3) N/A(5) August 2004 September 2032
LT2IS1-13 Variable(3) N/A(5) July 2004 September 2032
LT2IS1-14 Variable(3) N/A(5) June 2004 September 2032
LT2IS1-15 Variable(3) N/A(5) May 2004 September 2032
LT2IS1-16 Variable(3) N/A(5) April 2004 September 2032
LT2IS1-17 Variable(3) N/A(5) March 2004 September 2032
LT2IS1-18 Variable(3) N/A(5) February 2004 September 2032
LT2IS1-19 Variable(3) N/A(5) January 2004 September 2032
LT2IS1-20 Variable(3) N/A(5) December 2003 September 2032
LT2IS1-21 Variable(3) N/A(5) November 2003 September 2032
LT2IS1-22 Variable(3) N/A(5) October 2003 September 2032
LT2IS1-23 Variable(3) N/A(5) September 2003 September 2032
LT2IS1-24 Variable(3) N/A(5) August 2003 September 2032
LT2IS1-25 Variable(3) N/A(5) July 2003 September 2032
LT2IS1-26 Variable(3) N/A(5) June 2003 September 2032
LT2IS1-27 Variable(3) N/A(5) May 2003 September 2032
LT2IS1-28 Variable(3) N/A(5) April 2003 September 2032
LT2IS1-29 Variable(3) N/A(5) March 2003 September 2032
5
Uncertificated Rate
REMIC 2 Initial Uncertificated Change Assumed Final
Designation Pass-Through Rate Principal Balance Date Maturity Date(1)
----------- ----------------- ----------------------- ------------- -------------------
LT2IS1-30 Variable(3) N/A(5) February 2003 September 2032
LT2IS1-31 Variable(3) N/A(5) January 2003 September 2032
LT2IS1-32 Variable(3) N/A(5) December 2002 September 2032
LT2IS1-33 Variable(3) N/A(5) November 2002 September 2032
LT2IS1-34 Variable(3) N/A(5) October 2002 September 2032
LT2IS1-35 Variable(3) N/A(5) September 2002 September 2032
LT2A-P Variable(2) $100.00 N/A September 2032
LT2B-A Variable(2) 459,000,973.26 N/A September 2032
LT2IIS2-1 Variable(2) 34,000,000.00 February 2005(7) September 2032
LT2IIS2-2 Variable(2) 7,000,000.00 August 2004(7) September 2032
LT2IIS1-1 Variable(4) N/A(6) July 2005 September 2032
LT2IIS1-2 Variable(4) N/A(6) June 2005 September 2032
LT2IIS1-3 Variable(4) N/A(6) May 2005 September 2032
LT2IIS1-4 Variable(4) N/A(6) April 2005 September 2032
LT2IIS1-5 Variable(4) N/A(6) March 2005 September 2032
LT2IIS1-6 Variable(4) N/A(6) February 2005 September 2032
LT2IIS1-7 Variable(4) N/A(6) January 2005 September 2032
LT2IIS1-8 Variable(4) N/A(6) December 2004 September 2032
LT2IIS1-9 Variable(4) N/A(6) November 2004 September 2032
LT2IIS1-10 Variable(4) N/A(6) October 2004 September 2032
LT2IIS1-11 Variable(4) N/A(6) September 2004 September 2032
LT2IIS1-12 Variable(4) N/A(6) August 2004 September 2032
LT2IIS1-13 Variable(4) N/A(6) July 2004 September 2032
LT2IIS1-14 Variable(4) N/A(6) June 2004 September 2032
LT2IIS1-15 Variable(4) N/A(6) May 2004 September 2032
LT2IIS1-16 Variable(4) N/A(6) April 2004 September 2032
LT2IIS1-17 Variable(4) N/A(6) March 2004 September 2032
LT2IIS1-18 Variable(4) N/A(6) February 2004 September 2032
LT2IIS1-19 Variable(4) N/A(6) January 2004 September 2032
LT2IIS1-20 Variable(4) N/A(6) December 2003 September 2032
LT2IIS1-21 Variable(4) N/A(6) November 2003 September 2032
LT2IIS1-22 Variable(4) N/A(6) October 2003 September 2032
LT2IIS1-23 Variable(4) N/A(6) September 2003 September 2032
LT2IIS1-24 Variable(4) N/A(6) August 2003 September 2032
LT2IIS1-25 Variable(4) N/A(6) July 2003 September 2032
LT2IIS1-26 Variable(4) N/A(6) June 2003 September 2032
LT2IIS1-27 Variable(4) N/A(6) May 2003 September 2032
LT2IIS1-28 Variable(4) N/A(6) April 2003 September 2032
LT2IIS1-29 Variable(4) N/A(6) March 2003 September 2032
LT2IIS1-30 Variable(4) N/A(6) February 2003 September 2032
LT2IIS1-31 Variable(4) N/A(6) January 2003 September 2032
LT2IIS1-32 Variable(4) N/A(6) December 2002 September 2032
6
Uncertificated Rate
REMIC 2 Initial Uncertificated Change Assumed Final
Designation Pass-Through Rate Principal Balance Date Maturity Date(1)
----------- ----------------- ----------------------- ------------- ---------------
LT2IIS1-33 Variable(4) N/A(6) November 2002 September 2032
LT2IIS1-34 Variable(4) N/A(6) October 2002 September 2032
LT2IIS1-35 Variable(4) N/A(6) September 2002 September 2032
LT2B-P Variable(2) 100.00 N/A September 2032
-------------------
1 Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity date for
the Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each REMIC 2 Regular Interest.
2 Calculated in accordance with the definition of "Uncertificated REMIC
2 Pass-Through Rate" herein.
3 Each REMIC 2 IS1 Interest will have a Pass-Through Rate of 5.25% per
annum for each Distribution Date Starting in September 2002 and ending with the
Rate Change Date for such Regular Interest, and 0.00% per annum thereafter.
4 Each REMIC 2 IIS1 Interest will have a Pass-Through Rate of 4.25% per
annum for each Distribution Date Starting in September 2002 and ending with the
Rate Change Date for such Regular Interest, and 0.00% per annum thereafter.
5 The REMIC 2 IS1 Interests will not have Uncertificated Principal
Balances but will accrue interest on their respective Uncertificated Notional
Amounts from time to time which, in each case, will equal the Uncertificated
Principal Balance of the REMIC 1 IS1 Interest with the same numerical
designation.
6 The REMIC 2 IIS1 Interests will not have Uncertificated Principal
Balances but will accrue interest on their respective Uncertificated Notional
Amounts from time to time which, in each case, will equal the Uncertificated
Principal Balance of the REMIC 1 IIS1 Interest with the same numerical
designation.
7 The REMIC 2 IS2 Interests and REMIC 2 IIS2 Interests will not change
rates. The "Rate Change Date" listed for these interests is solely for the
purpose of calculating weighted average rates for higher-tier REMIC interests.
7
REMIC 3
As provided herein, the 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 irrevocably sets forth the designation, the Uncertificated
REMIC 3 Pass-Through Rate, the initial Uncertificated Principal Balance, and
solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC 3
Regular Interests. None of the REMIC 3 Regular Interests will be certificated.
Uncertificated
REMIC 3 Rate
Pass-Through Initial Uncertificated Change Assumed Final
Designation Rate Principal Balance Date Maturity Date (1)
----------- -------------- ----------------------- ------------- ------------------
LT3A-1 Variable(2) $490,000,027.94 N/A September 2032
LT3B-1 Variable(2) 5,000,000.00 N/A September 2032
LT3C-1 Variable(2) 5,000,000.57 N/A September 2032
LT3IS2-1 Variable(3) N/A(7) February 2005 September 2032
LT3IS2-2 Variable(3) N/A(7) August 2004 September 2032
LT3IS1 Variable(4) N/A(8) N/A September 2032
LT3A-2 Variable(2) 490,000,953.79 N/A September 2032
LT3B-2 Variable(2) 5,000,000.00 N/A September 2032
LT3C-2 Variable(2) 5,000,019.47 N/A September 2032
LT3IIS2-1 Variable(5) N/A(9) February 2005 September 2032
LT3IIS2-2 Variable(5) N/A(9) August 2004 September 2032
LT3IIS1 Variable(6) N/A(10) N/A September 2032
LT3A-P Variable(2) $100.00 N/A September 2032
LT3B-P Variable(2) $100.00 N/A September 2032
-------------------
1 Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity date for
the Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each REMIC 3 Regular Interest.
2 Calculated in accordance with the definition of "Uncertificated REMIC
3 Pass-Through Rate" herein.
3 Each REMIC 3 IS2 Interest will have a Pass-Through Rate of 4.25% per
annum for each Distribution Date Starting in September 2002 and ending with the
Rate Change Date for such Regular Interest, and 0.00% per annum thereafter.
4 REMIC 3 Regular Interest LT3IS1 will have a Pass-Through Rate of
5.25% per annum for each Distribution Date starting September 2002 and ending
July 2005. For federal income tax purposes, REMIC 3 Regular Interest LT3IS1 will
not have a Pass-Through Rate but will be entitled to receive all of the interest
paid to REMIC 3 on the REMIC 2 IS1 Interests.
5 Each REMIC 3 IIS2 Interest will have a Pass-Through Rate of 4.25% per
annum for each Distribution Date Starting in September 2002 and ending with the
Rate Change Date for such Regular Interest, and 0.00% per annum thereafter.
6 REMIC 3 Regular Interest LT3IIS1 will have a Pass-Through Rate of
4.25% per annum for each Distribution Date starting September 2002 and ending
July 2005. For federal income tax purposes, REMIC 3 Regular Interest LT3IIS1
will not have a Pass-Through Rate but will be entitled to receive all of the
interest paid to REMIC 3 on the REMIC 2 IIS1 Interests.
8
7 The REMIC 3 IS2 Interests will not have Uncertificated Principal
Balances, but will accrue interest on their respective Uncertificated Notional
Amounts from time to time which, in each case, will equal the Uncertificated
Principal Balance of the REMIC 2 IS2 Interest with the same numerical
designation.
8 REMIC 3 Regular Interest LT3IS1 will not have an Uncertificated
Principal Balance, but will accrue interest on its Uncertificated Notional
Amount from time to time which will at all times be equal to sum of the
Uncertificated Notional Amounts of the REMIC 2 IS1 Interests.
9 The REMIC 3 IIS2 Interests will not have Uncertificated Principal
Balances, but will accrue interest on their respective Uncertificated Notional
Amounts from time to time which, in each case, will equal the Uncertificated
Principal Balance of the REMIC 2 IIS2 Interest with the same numerical
designation.
10 REMIC 3 Regular Interest LT3IIS1 will not have an Uncertificated
Principal Balance, but will accrue interest on its Uncertificated Notional
Amount from time to time which will at all times be equal to sum of the
Uncertificated Notional Amounts of the REMIC 2 IIS1 Interests.
9
REMIC 4
As provided herein, the Trust Administrator shall make an election to
treat the segregated pool of assets consisting of the REMIC 3 Regular Interests
as a REMIC for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC 4." The Class R-4 Interest represents the sole
class of "residual interests" in REMIC 4 for purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Class Certificate Principal Balance for each
Class of Certificates that represents one or more of the "regular interests" in
REMIC 4 and each class of uncertificated "regular interests" in REMIC 4:
Original Class Certificate Pass-Through Assumed Final
Class Designation Principal Balance Rate Maturity Date(1)
----------------- --------------------------- ------------- ----------------
Class I-A $500,000,000.00 Variable(2) September 2032
Class II-A 500,000,000.00 Variable(2) September 2032
Class I-S1 N/A(3) N/A(3) September 2032
Class II-S1 N/A(4) N/A(4) September 2032
Class I-S2 N/A(5) N/A(5) September 2032
Class II-S2 N/A(6) N/A(6) September 2032
LT4-IC 28.51(7) Variable(2) September 2032
LT4-IIC 973.26(8) Variable(2) September 2032
LT4-IP $100.00 N/A(9) September 2032
LT4-IIP $100.00 N/A(9) September 2032
-------------------
1 Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity date for
the Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each Class of Certificates or uncertificated
interests that represents one or more of the "regular interests" in REMIC 4.
2 Calculated in accordance with the definition of "Pass-Through Rate"
herein.
3 The Class I-S1 Certificates will receive all amounts distributed on
REMIC 3 Regular Interest LT3IS1.
4 The Class II-S1 Certificates will receive all amounts distributed on
REMIC 3 Regular Interest LT3IIS1.
5 The Class I-S2 Certificates will receive all amounts distributed on
REMIC 3 IS2 Interests.
6 The Class II-S2 Certificates will receive all amounts distributed to
the REMIC 3 IIS2 Interests.
7 REMIC 4 Regular Interest LT4-IC will accrue interest at its variable
Pass-Through Rate on its Notional Amount outstanding from time to time, which
shall equal the aggregate of the Uncertificated Principal Balances of the REMIC
3 Group I Regular Interests. REMIC 4 Regular Interest LT4-IC will not accrue
interest on its Uncertificated Principal Balance.
8 REMIC 4 Regular Interest LT4-IIC will accrue interest at its variable
Pass-Through Rate on its Notional Amount outstanding from time to time, which
shall equal the aggregate of the Uncertificated Principal Balances of the REMIC
3 Group II Regular Interests. REMIC 4 Regular Interest LT4-IIC will not accrue
interest on its Uncertificated Principal Balance.
9 REMIC 4 Regular Interest LT4-IP and REMIC 4 Regular Interest LT4-IIP
will not accrue interest.
10
REMIC CX
As provided herein, the Trust Administrator will make an election to
treat the segregated pool of assets consisting of REMIC 4 Regular Interest
LT4-IC, REMIC 4 Regular Interest LT4-IIC as a REMIC for federal income tax
purposes, and such segregated pool of assets will be designated as "REMIC CX."
The Class R-CX Interest will represent the sole class of "residual interests" in
REMIC CX for purposes of the REMIC Provisions (as defined herein) under federal
income tax law. The following table irrevocably sets forth the designation, the
Pass-Through Rate, Original Class Certificate Principal Balance, and solely for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each of the REMIC CX Regular Interests.
Uncertificated REMIC CX Initial Uncertificated Assumed Final
Designation Pass-Through Rate Principal Balance Maturity Date(1)
---------------- ----------------------- ---------------------- ----------------
Class I-C Variable $28.51(2) September 2032
Class II-C Variable 973.26(2) September 2032
-------------------------
1 Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity date for
the Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each REMIC X Regular Interest.
2 The Class I-C Certificates and Class II-C Certificates will not
accrue interest on their respective Certificate Principal Balances. Instead, the
monthly interest due on the Class I-C Certificates will be 100% of the interest
paid on REMIC 4 Regular Interest LT4-IC. The monthly interest due on the Class
II-C Certificates will be 100% of the interest paid on the REMIC 4 Regular
Interest LT4-IIC.
11
REMIC PX
As provided herein, the Trust Administrator will make an election to
treat the segregated pool of assets consisting of REMIC 4 Regular Interest
LT4-IP and REMIC 4 Regular Interest LT4-IIP as a REMIC for federal income tax
purposes, and such segregated pool of assets will be designated as "REMIC PX."
The Class R-PX Interest will represent the sole class of "residual interests" in
REMIC PX for purposes of the REMIC Provisions (as defined herein) under federal
income tax law. The following table irrevocably sets forth the designation, the
Pass-Through Rate, Original Class Certificate Principal Balance, and solely for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each of the REMIC PX Regular Interests.
Uncertificated REMIC PX Initial Uncertificated Assumed Final
Designation Pass-Through Rate Principal Balance Maturity Date(1)
--------------- ------------------------ ---------------------- -----------------
Class I-P N/A(2) $100.00 September 2032
Class II-P N/A(2) $100.00 September 2032
-------------------------
1 Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity date for
the Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each REMIC X Regular Interest.
2 The Class I-P Certificates and the Class II-P Certificates will not
accrue interest.
12
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Unless otherwise specified, all
calculations in respect of interest on the Class A Certificates shall be made on
the basis of the actual number of days elapsed on the basis of a 360-day year
and all other calculations of interest described herein shall be made on the
basis of a 360-day year consisting of twelve 30-day months. The Class P
Certificates and the Residual Certificates are not entitled to distributions in
respect of interest and, accordingly, will not accrue interest.
"1933 Act": The Securities Act of 1933, as amended.
"Account": Either of the Collection Account and Distribution Account.
"Accrual Period": With respect to the Class S Certificates, Class C
Certificates, the REMIC 1 Regular Interests, the REMIC 2 Regular Interests,
REMIC 3 Regular Interest LT3IS1, REMIC 3 Regular Interest LT3IIS1, the REMIC 3
IS2 Interests, the REMIC 3 IIS2 Interests, REMIC 4 Regular Interest LT4-IC and
REMIC 4 Regular Interest LT4-IIC, and each Distribution Date, the calendar month
prior to the month of such Distribution Date. With respect to the Class A
Certificates, the remaining REMIC 3 Regular Interests and each Distribution
Date, the period commencing on the immediately preceding Distribution Date (or
in the case of the first such Accrual Period, commencing on the Closing Date)
and ending on the day immediately preceding such Distribution Date.
"Adjustable Rate Mortgage Loan": A Mortgage Loan which provides for an
adjustable Mortgage Rate payable with respect thereto.
"Adjusted Net Maximum Mortgage Rate": With respect to any Mortgage Loan
(or the related REO Property), as of any Distribution Date, a per annum rate of
interest equal to the Maximum Mortgage Rate for such Mortgage Loan (if such
Mortgage Loan is an Adjustable Rate Mortgage Loan) or the Mortgage Rate for such
Mortgage Loan (if such Mortgage Loan is a Fixed Rate Mortgage Loan), in either
such case as of the first day of the month preceding the month in which such
13
Distribution Date occurs, minus the sum of (i) the Servicing Fee Rate, (ii) the
PMI Insurer Fee Rate, if applicable, and (iii) the Trust Administrator Fee Rate.
"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,
(ii) the PMI Insurer Fee Rate, if applicable, (iii) the Trust Administrator Fee
Rate, (iv) with respect to a Group I Mortgage Loan, the Guaranty Fee Rate and
(v) with respect to a Group I Mortgage Loan, the highest possible Group I
Certificate Insurer Premium Rate, whether or not then in effect, or with respect
to a Group II Mortgage Loan, the highest possible Group II Certificate Insurer
Premium Rate whether or not then in effect.
"Adjusted Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property), as of any Distribution Date, a per annum rate of interest
equal to the Mortgage Rate for such Mortgage Loan as of the first day of the
month preceding the month in which such Distribution Date occurs, minus the sum
of (i) the Servicing Fee Rate, (ii) the PMI Insurer Fee Rate, if applicable, and
(iii) the Trust Administrator Fee Rate.
"Adjustment Date": With respect to each Adjustable Rate Mortgage Loan,
each date, on which the Mortgage Rate of such Mortgage Loan changes pursuant to
the related Mortgage Note. The first Adjustment Date following the Cut-off Date
as to each Adjustable Rate Mortgage Loan is set forth in the Mortgage Loan
Schedule.
"Advance": As to any Mortgage Loan or REO Property, any advance made by
the Master Servicer in respect of any Distribution Date pursuant to Section
4.04.
"Advancing Person": As defined in Section 3.27 hereof.
"Adverse REMIC Event": As defined in Section 10.01(f) hereof.
"Affiliate": With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise and "controlling" and "controlled" shall have meanings
correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
"Approved Rating Thresholds": As defined in Section 3.30(b) hereof.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form (excepting therefrom, if applicable,
the mortgage recordation information which has not been required pursuant to
Section 2.01 hereof or returned by the applicable recorder's office), which is
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect or record the sale of the Mortgage.
"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
14
Date, the Class A Certificates and the Class S1 Certificates shall be Book-Entry
Certificates.
"Book-Entry Custodian": The custodian appointed pursuant to Section
5.01(b).
"Business Day": Any day other than a Saturday, a Sunday or a day on
which the Guarantor or banking or savings institutions in the State of
California, the State of Delaware, the State of Maryland, the State of New York,
the State of Washington, or in the city in which the Corporate Trust Office of
the Trust Administrator or the Corporate Trust Office of the Trustee is located,
are authorized or obligated by law or executive order to be closed.
"Cap Agreements": The Group I Cap Agreement and the Group II Cap
Agreement.
"Cap Provider": Bank of America, N.A. or any successor thereto.
"Certificate": Any Regular Certificate or Residual Certificate.
"Certificate Insurance Policy": The Certificate Insurance Policy (No.
CA00292A) dated August 2, 2002, issued by the Certificate Insurer for the
benefit of the Holders of the Insured Certificates, pursuant to which the
Certificate Insurer guarantees payment of Insured Payments. A copy of the
Certificate Insurance Policy is attached hereto as Exhibit M.
"Certificate Insurer": XL Capital Assurance, Inc., a monoline financial
guaranty insurance company incorporated in the State of New York, or any
successor thereto.
"Certificate Insurer Default": The existence and continuance of any of
the following:
(a) the Certificate Insurer fails to make a payment required
under the Certificate Insurance Policy in accordance with its terms;
(b) the Certificate Insurer (i) files any petition or commences
any case or proceeding under any state or federal law relating to insolvency or
bankruptcy, (ii) consents to the entry of any decree or order for relief in an
involuntary case or proceeding under any state or federal bankruptcy or
insolvency law, (iii) makes a general assignment for the benefit of its
creditors or (iv) admits in writing its inability to pay its debts as they come
due; or
(c) a court of competent jurisdiction, the New York Department of
Insurance or other competent regulatory agency enters an order, judgment or
decree under any state or federal bankruptcy or insolvency law which has
continued in effect and unstayed for a period of 60 or more consecutive days (i)
appointing a custodian, trustee, agent or receiver for the Certificate Insurer
or for all or any material portion of its property or (ii) authorizing the
taking of possession by a custodian, trustee, agent or receiver of the
Certificate Insurer or the taking of possession of all or any material portion
of its property.
"Certificate Insurer Deficiency Amount": With respect to the Insured
Certificates and any Distribution Date, the excess, if any, of (A) the sum of
(i) the Monthly Interest Distributable Amount plus any Unpaid Interest Shortfall
Amount for each class of the Insured Certificates, (ii) the Insured Principal
Amount, (iii) the Group I Certificate Insurer Premium, (iv) the Group II
Certificate Insurer Premium and (v) the Guarantor Fee, in each case for such
15
Distribution Date over (B) the sum of the Group I Available Funds and the Group
II Available Funds for such Distribution Date.
"Certificate Insurer Premiums": The Group I Certificate Insurer Premium
and the Group II Certificate Insurer Premium.
"Certificate Insurer Reimbursement Amounts": The Group I Certificate
Insurer Reimbursement Amount and the Group II Certificate Insurer Reimbursement
Amount.
"Certificate Margin": With respect to the Class I-A Certificates on
each Distribution Date (A) on or prior to the Optional Termination Date, 0.10%
per annum and (B) after the Optional Termination Date, 0.20% per annum. With
respect to the Class II-A Certificates on each Distribution Date (A) on or prior
to the Optional Termination Date, 0.30% per annum and (B) after the Optional
Termination Date, 0.60% per annum.
"Certificate Owner": With respect to each Book-Entry Certificate, any
beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class A
Certificates or Class P Certificates immediately prior to any Distribution Date,
an amount equal to the Initial Certificate Principal Balance thereof reduced by
the sum of all amounts actually distributed in respect of principal of such
Class. With respect to any Class I-C Certificates as of any date of
determination, an amount equal to the Uncertificated Principal Balance of REMIC
4 Regular Interest LT4-IC. With respect to any Class II-C Certificates as of any
date of determination, an amount equal to the Uncertificated Principal Balance
of REMIC 4 Regular Interest LT4-IIC. The Class S Certificates and the Residual
Certificates will not have a Certificate Principal Balance.
"Certificate Register": The register established and maintained
pursuant to Section 5.02 hereof.
"Certificateholder" or "Holder": The Person in whose name a Certificate
is registered in the Certificate Register, except that a Disqualified
Organization or a Non-United States Person shall not be a Holder of a Residual
Certificate for any purposes hereof and, solely for the purpose of giving any
consent or direction pursuant to this Agreement, any Certificate registered in
the name of the Depositor or the Master Servicer or any Affiliate thereof shall
be deemed not to be outstanding and the Voting Rights to which it is entitled
shall not be taken into account in determining whether the requisite percentage
of Voting Rights necessary to effect any consent, direction or other action has
been obtained, except as otherwise provided in Section 11.01. The Trustee, the
Trust Administrator, the Certificate Insurer, the NIMS Insurer and the Guarantor
may conclusively rely upon a certificate of the Depositor or the Master Servicer
in determining whether a Certificate is held by an Affiliate thereof. All
references herein to "Holders" or "Certificateholders" shall reflect the rights
of Certificate Owners as they may indirectly exercise such rights through the
Depository and participating members thereof, except as otherwise specified
herein; provided, however, that the Trustee, the Trust Administrator, the
Certificate Insurer, the NIMS Insurer and the Guarantor shall be required to
recognize as a "Holder" or "Certificateholder" only the Person in whose name a
Certificate is registered in the Certificate Register.
16
"Certificates Controlling Person": As of any date of determination: (i)
the Certificate Insurer, so long as (A) the Insured Certificates are outstanding
or any amounts are owed to the Certificate Insurer under this Agreement or the
Insurance Agreement and (B) no Certificate Insurer Default has occurred and is
continuing; (ii) the Guarantor, so long as (A) the Guaranteed Certificates are
outstanding or any amounts are owed to the Guarantor under this Agreement, (B)
no event of default has occurred and is continuing under the Guaranty and (C)
the Certificate Insurer is not the Certificates Controlling Person under clause
(i) above; and (iii) none, so long as neither the Certificate Insurer nor the
Guarantor is the Certificates Controlling Person pursuant to clause (i) or (ii)
above.
"Class": Collectively, Certificates which have the same priority of
payment and bear the same class designation and the form of which is identical
except for variation in the Percentage Interest evidenced thereby.
"Class I-A Certificate": Any one of the Class I-A Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-1 executed, authenticated and delivered by the 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 4.
"Class I-C Certificate": Any one of the Class I-C Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-7, executed, authenticated and delivered by the 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 CX.
"Class I-P Certificate": Any one of the Class I-P Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-9, executed, authenticated and delivered by the 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 PX.
"Class I-S1 Certificate": Any one of the Class I-S1 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-3, executed, authenticated and delivered by the 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 4.
"Class I-S2 Cap Rate": For any Distribution Date, a per annum rate
equal to the excess, if any, of (i) the weighted average of the Adjusted Net
Mortgage Rates of the Group I Mortgage Loans, weighted on the basis of the
Stated Principal Balances thereof as of the Due Date in the month preceding the
month of such Distribution Date, over (ii) the percentage equivalent of a
fraction, (1) the numerator of which is the sum of (A) the Group I Certificate
Insurer Premium, (B) the Guaranty Fee and (C) the product of (I) the
Pass-Through Rate for the Class I-S1 Certificates for such Distribution Date and
(II) the Notional Amount with respect to the Class I-S1 Certificates immediately
prior to such Distribution Date, and (2) the denominator of which is the
aggregate Stated Principal Balance of the Group I Mortgage Loans as of the Due
Date in the month preceding the month of such Distribution Date.
"Class I-S2 Certificate": Any one of the Class I-S2 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-4, executed, authenticated and delivered by the 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 4.
17
"Class I-S Certificates": The Class I-S1 Certificates and the Class
I-S2 Certificates.
"Class II-A Certificates": Any one of the Class II-A Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-2 executed, authenticated and delivered by the 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 4.
"Class II-C Certificate": Any one of the Class II-C Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-8, executed, authenticated and delivered by the 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 CX.
"Class II-P Certificate": Any one of the Class II-P Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-10, executed, authenticated and delivered by the 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 PX.
"Class II-S1 Certificate": Any one of the Class II-S1 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-5, executed, authenticated and delivered by the 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 4.
"Class II-S2 Cap Rate": For any Distribution Date, a per annum rate
equal to the excess, if any, of (i) the weighted average of the Adjusted Net
Mortgage Rates of the Group II Mortgage Loans, weighted on the basis of the
Stated Principal Balances thereof as of the Due Date in the month preceding the
month of such Distribution Date, over (ii) the percentage equivalent of a
fraction, (1) the numerator of which is the sum of (A) the Group II Certificate
Insurer Premium and (B) the product of (I) the Pass-Through Rate for the Class
II-S1 Certificates for such Distribution Date and (II) the Notional Amount with
respect to the Class II-S1 Certificates immediately prior to such Distribution
Date, and (II) the Notional Amount for REMIC 4 Regular Interest LT4-IICF for
such Distribution Date, and (2) the denominator of which is the aggregate Stated
Principal Balance of the Group II Mortgage Loans as of the Due Date in the month
preceding the month of such Distribution Date.
"Class II-S2 Certificate": Any one of the Class II-S2 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-6, executed, authenticated and delivered by the 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 4.
"Class II-S Certificates": The Class II-S1 Certificates and the Class
II-S2 Certificates.
"Class A Certificates": The Class I-A Certificates and the Class II-A
Certificates.
"Class C Certificates": The Class I-C Certificates and the Class II-C
Certificates.
"Class Factors": The Trustee will determine a Class Factor (carried to
eight decimal places) for each Class of Regular Certificates in connection with
each Distribution Date. When the Class Factor is multiplied by the Original
Class Certificate Principal Balance (or Original Class Notional Amount) of a
18
Certificate of that Class, the product will equal the Certificate Principal
Balance (or Notional Amount) of such Certificate (after giving effect to the
distribution to Certificateholders on such Distribution Date of, to the extent
part of the Group I Available Funds or the Group II Available Funds, as
applicable, for such Distribution Date, scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period).
"Class P Certificates": The Class I-P Certificates and the Class II-P
Certificates.
"Class R Certificate": Any one of the Class R Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-11, executed, authenticated and delivered by the Trust Administrator
on behalf of the Trustee, evidencing the ownership of the Class R-1 Interest,
the Class R-2 Interest, the Class R-3 Interest and the Class R-4 Interest.
"Class R-1 Interest": The Residual Interest in REMIC 1.
"Class R-2 Interest": The Residual Interest in REMIC 2.
"Class R-3 Interest": The Residual Interest in REMIC 3.
"Class R-4 Interest": The Residual Interest in REMIC 4.
"Class R-CX Certificate": Any one of the Class R-CX Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-12, executed, authenticated and delivered by the Trust Administrator
on behalf of the Trustee, evidencing the ownership of the Class R-CX Interest.
"Class R-PX Certificate": Any one of the Class R-PX Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-13, executed, authenticated and delivered by the Trust Administrator
on behalf of the Trustee, evidencing the ownership of the Class R-PX Interest.
"Class R-CX Interest": The Residual Interest in REMIC CX.
"Class R-PX Interest": The Residual Interest in REMIC PX.
"Class S Certificates": The Class S1 Certificates and the Class S2
Certificates.
"Class S1 Certificates": The Class I-S1 Certificates and the Class
II-S1 Certificates.
"Class S2 Certificates": The Class I-S2 Certificates and the Class
II-S2 Certificates.
"Close of Business": As used herein, with respect to any Business Day,
5:00 p.m. (New York time).
"Closing Date": August 2, 2002.
"Closing Date Mortgage Loans": The Group I Closing Date Mortgage Loans
and the Group II Closing Date Mortgage Loans.
19
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The account or accounts created and maintained by
the Master Servicer pursuant to Section 3.10(a), which shall be entitled
"Deutsche Bank National Trust Company, as Trust Administrator for the benefit of
Wachovia Bank, National Association, as Trustee, in trust for registered Holders
of Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates, Series
2002-3," which must at all times be an Eligible Account.
"Commission": The Securities and Exchange Commission.
"Compensating Interest": As defined in Section 3.24.
"Controlling Insurer": As of any date of determination: (i) the NIMS
Insurer, so long as (A) Insured NIM Notes are outstanding or any amounts are
owed to the NIMS Insurer under the Indenture and (B) no NIMS Insurer Default has
occurred and is continuing; (ii) the Certificate Insurer, so long as (A) the
Insured Certificates are outstanding or any amounts are owed to the Certificate
Insurer under this Agreement or the Insurance Agreement, (B) the NIMS Insurer is
not the Controlling Insurer pursuant to clause (i) above and (C) no Certificate
Insurer Default has occurred and is continuing; or (iii) none, so long as
neither the NIMS Insurer nor the Certificate Insurer is the Controlling Insurer
pursuant to clause (i) or (ii) above.
"Corporate Trust Office": The principal corporate trust office of the
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 Certificate
Insurer, the Depositor, the Trust Administrator and the Master Servicer.
"Corresponding Certificates": With respect to (i) REMIC 3 Regular
Interest LT3B-1, (ii) REMIC 3 Regular Interest LT3B-2, (iii) REMIC 3 Regular
Interest LT3P-1, and (iv) REMIC 3 Regular Interest LT3P-2, (i) the Class I-A
Certificates, (ii) the Class II-A Certificates, (iii) REMIC 4 Regular Interest
LT4-IP, and (iv) REMIC 4 Regular Interest LT4-IIP, respectively.
"Cumulative Loss Percentage": With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses incurred from the Cut-off Date to the last day of the
calendar month preceding such Distribution Date and the denominator of which is
the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date.
"Custodial Agreement": Any agreement that may be entered into by the
Trustee, the Trust Administrator and any Custodian or any agreement assigned to
the Trustee, in either case with the consent of the Certificate Insurer
providing for holding and safekeeping of Mortgage Files on behalf of the Trust.
20
"Custodian": A custodian, appointed as provided in Section 8.11 hereof
pursuant to a Custodial Agreement.
"Cut-off Date": With respect to each Closing Date Mortgage Loan, August
1, 2002; and with respect to each Qualified Substitute Mortgage Loan, its date
of substitution, as applicable.
"Cut-off Date Aggregate Principal Balance": The aggregate of the
Cut-off Date Principal Balances of the Mortgage Loans.
"Cut-off Date Principal Balance": With respect to any Mortgage Loan,
the unpaid principal balance thereof as of the Cut-off Date (with respect to a
Closing Date Mortgage Loan); or as of the applicable date of substitution (with
respect to a Qualified Substitute Mortgage Loan), after giving effect to
scheduled payments due on or before the Cut-off Date, whether or not received.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.01(b) hereof.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by
one or more Qualified Substitute Mortgage Loans.
"Delinquent": With respect to any Mortgage Loan and related Monthly
Payment, the Monthly Payment due on a Due Date which is not made by the Close of
Business on the next scheduled Due Date for such Mortgage Loan. For example, a
Mortgage Loan is 60 or more days Delinquent if the Monthly Payment due on a Due
Date is not made by the Close of Business on the second scheduled Due Date after
such Due Date.
"Depositor": Long Beach Securities Corp., a Delaware corporation, or
any successor in interest.
"Depository": The initial Depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
"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.
21
"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, Deutsche Bank National Trust Company, as Trust
Administrator for the benefit of Wachovia Bank, National Association, as
Trustee, in trust for the registered Certificateholders of Long Beach Mortgage
Loan Trust 2002-3, Asset-Backed Certificates, Series 2002-3" and which must be
an Eligible Account.
"Distribution Date": The 25th day of any calendar month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in September 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.
22
"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 the Certificate
Insurer and each Rating Agency without reduction or withdrawal of their then
current ratings of the Certificates (without regard to the Certificate Insurance
Policy) as evidenced by a letter from each Rating Agency to the Trust
Administrator. Eligible Accounts may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Payments": As defined in Section 3.09 hereof.
"Extraordinary Trust Fund Expense": Any amounts reimbursable to the
Trustee or 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 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
23
2.03 or 9.01), a determination made by the Master Servicer that all Insurance
Proceeds, Liquidation Proceeds and other payments or recoveries which the Master
Servicer, in its reasonable good faith judgment, expects to be finally
recoverable in respect thereof have been so recovered. The Master Servicer shall
maintain records, prepared by a Servicing Representative, of each Final Recovery
Determination made thereby.
"Fitch": Fitch Ratings, Inc., or its successor in interest.
"Fixed Rate Mortgage Loan": A Mortgage Loan which provides for a fixed
Mortgage Rate payable with respect thereto.
"Formula Rate": For any Distribution Date and the Class A Certificates,
the lesser of (i) LIBOR plus the related Certificate Margin and (ii) the related
Maximum Cap Rate.
"▇▇▇▇▇▇▇ Mac": The Federal Home Loan Mortgage Corporation, or any
successor thereto.
"Gross Margin": With respect to each Adjustable Rate Mortgage Loan, the
fixed percentage set forth in the related Mortgage Note that is added to the
Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Mortgage Loan.
"Group I Available Funds": With respect to any Distribution Date, an
amount equal to the excess of (i) the sum of (a) the aggregate of the Monthly
Payments on the Group I Mortgage Loans due on the related Due Date and received
on or prior to the related Determination Date, (b) Liquidation Proceeds,
Insurance Proceeds, Principal Prepayments and other unscheduled recoveries of
principal and interest in respect of the Group I Mortgage Loans during the
related Prepayment Period (other than any Prepayment Charges collected by the
Master Servicer in connection with the full or partial prepayment of any of the
Group I Mortgage Loans and any Master Servicer Prepayment Charge Payment Amount
in connection with Group I Mortgage Loans), (c) the aggregate of any amounts
received in respect of an REO Property acquired in respect of a Group I Mortgage
Loan withdrawn from any REO Account and deposited in the Collection Account for
such Distribution Date, (d) the aggregate of any amounts deposited in the
Collection Account by the Master Servicer in respect of related Prepayment
Interest Shortfalls on the Group I Mortgage Loans for such Distribution Date,
(e) the aggregate of any Advances made by the Master Servicer or the 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 Certificate
Insurer or any Sub-Servicer pursuant to Section 3.11 or Section 3.12 in respect
of the Group I Mortgage Loans or otherwise payable in respect of Extraordinary
Trust Fund Expenses in connection with the Group I Mortgage Loans, (b) amounts
deposited in the Collection Account or the Distribution Account pursuant to
clauses (i)(a) through (g) above, as the case may be, in connection with the
Group I Mortgage Loans, in error, (c) Stayed Funds in connection with the Group
I Mortgage Loans, (d) any Group I Trust Administrator Fee pursuant to Section
8.05 and any indemnification payments or expense reimbursements made by the
Trust Fund pursuant to Section 8.05 in connection with the Group I Mortgage
24
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 Cap Agreement": The interest rate cap agreement with respect
to the Group I Reserve Fund consisting of the ISDA Master Agreement and the
schedule and confirmation thereto, each dated August 2, 2002 between the Trust
Administrator, on behalf of the Trust, and the Cap Provider, as such agreement
may be amended and supplemented in accordance with its terms and any replacement
interest rate cap agreement acceptable to the Trustee.
"Group I Cap Controlling Person": The Controlling Insurer; or, if there
is no Controlling Insurer, the Guarantor; or if the Class I-A Certificates are
no longer outstanding, the majority of the Percentage Interest of the Holders of
the Class I-C Certificates.
"Group I Certificate Insurer Premium": For any Distribution Date and
with respect to the Class I-A Certificates and the Class I-S1 Certificates, the
premium due to the Certificate Insurer on such Distribution Date, which amount
shall be equal to the product of one-twelfth of the Group I Certificate Insurer
Premium Rate and the aggregate Certificate Principal Balance of the Class I-A
Certificates immediately prior to such Distribution Date.
"Group I Certificate Insurer Premium Rate": For any Distribution Date,
a per annum rate set forth in a letter agreement between the Certificate
Insurer, the Depositor, the Master Servicer and the Trustee, which rate may
increase as provided in the letter agreement for any Distribution Date on which
an event of default under the Insurance Agreement is continuing.
"Group I Certificate Insurer Reimbursement Amount": The sum of (i) any
unreimbursed Insured Payments applied by the Trust Administrator as payments on
the Class I-A Certificates and the Class I-S1 Certificates, (ii) all other
amounts owed to the Certificate Insurer under the Insurance Agreement and
allocable to the Class I-A Certificates and the Class I-S1 Certificates and
(iii) 50% of all other amounts owed to the Certificate Insurer under the
Insurance Agreement and which cannot be allocated to either the Class I-A
Certificates and the Class I-S1 Certificates or the Class II-A Certificates and
the Class II-S1 Certificates, in each case together with interest on such
amounts at the Late Payment Rate.
"Group I Certificates": The Class I-A Certificates, the Class I-S
Certificates, the Class I-C Certificates and the Class I-P Certificates.
"Group I Closing Date Mortgage Loan": Any of the Group I Mortgage Loans
included in the Trust Fund on the Closing Date. The aggregate Cut-off Date
Principal Balance of the Group I Closing Date Mortgage Loans is equal to
$500,000,128.51.
"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 September 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:
25
Distribution Date Occurring in Cumulative Loss Percentage
----------------------------------- -----------------------------------------------------
September 2005 through August 2006 2.50% for the first month, plus an additional 1/12th
of 1.75% for each month thereafter.
September 2006 through August 2007 4.25% for the first month, plus an additional 1/12th
of 1.00% for each month thereafter.
September 2007 through August 2008 5.25% for the first month, plus an additional 1/12th
of 0.75% for each month thereafter.
September 2008 through August 2009 6.00% for the first month, plus an additional 1/12th
of 0.75% for each month thereafter.
September 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 (i) Group I Mortgage Loans Delinquent 60 days or more (including
Mortgage Loans repurchased since the prior Distribution Date), (ii) REO
Properties related to the Group I Mortgage Loans and (iii) Group I Mortgage
Loans in foreclosure and in bankruptcy (excluding any such Group I Mortgage
Loans which are less than 60 days Delinquent under the bankruptcy plan) by (y)
the aggregate Stated Principal Balance of the Group I Mortgage Loans, in each
case, calculated prior to taking into account payments of principal on the Group
I Mortgage Loans due on the related Due Date or received during the related
Prepayment Period.
"Group I Delinquency Trigger Event": A Group I Trigger Event has
occurred with respect to a Distribution Date if the Group I Delinquency
Percentage exceeds 18%.
"Group I Early Termination Date": An early termination date under the
Group I Cap Agreement.
"Group I Excess Overcollateralized Amount": With respect to the Class
I-A Certificates and any Distribution Date, the excess, if any, of (i) the Group
I Overcollateralized Amount for such Distribution Date (assuming that 100% of
the Group I Principal Remittance Amount is applied as a principal payment on
such Distribution Date) over (ii) the Group I Overcollateralization Target
Amount for such Distribution Date.
"Group I Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (x) the Group I Net Monthly Excess Cashflow for
such Distribution Date and (y) the Group I Overcollateralization Deficiency
Amount for such Distribution Date.
"Group I Insured Principal Amount": (a) for any Distribution Date
(other than the Distribution Date in September 2032) the amount, if any, by
which the aggregate Certificate Principal Balance of the Class I-A Certificates
(after giving effect to distributions in respect of principal to be made on such
Distribution Date and without regard to any payments made by the Certificate
Insurer or the Guarantor) exceeds the aggregate Stated Principal Balance of the
Group I Mortgage Loans on the last day of the related Due Period (after giving
26
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (b) for the Distribution Date
in September 2032, an amount equal to the aggregate Certificate Principal
Balance of the Class I-A Certificates (after giving effect to distributions in
respect of principal to be made on such Distribution Date and without regard to
any payments made by the Certificate Insurer or the Guarantor).
"Group I Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Group I Available Funds for such Distribution Date
attributable to interest received or advanced with respect to the Group I
Mortgage Loans or to Compensating Interest paid by the Master Servicer with
respect to the Group I Mortgage Loans.
"Group I Mortgage Loans": Those Mortgage Loans identified as Group I
Mortgage Loans on the Mortgage Loan Schedule.
"Group I Net Monthly Excess Cashflow": With respect to each
Distribution Date, the sum of (a) any Group I Overcollateralization Release
Amount for such Distribution Date and (b) the positive excess of (x) Group I
Available Funds for such Distribution Date over (y) the sum for such
Distribution Date of (A) the Monthly Interest Distributable Amounts for the
Class I-A Certificates and the Class I-S Certificates, (B) the Unpaid Interest
Shortfall Amounts for the Class I-A Certificates and the Class I-S1
Certificates, (C) the Group I Principal Remittance Amount, (D) the Guarantor
Reimbursement Amount, (E) the Guaranty Fee, (F) the Group I Certificate Insurer
Premium, (G) the Group I Certificate Insurer Reimbursement Amount and (H) the
Group II Certificate Insurer Reimbursement Amount to the extent paid out of the
Group I Interest Remittance Amount.
"Group I Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Group I
Overcollateralization Target Amount exceeds the Group I Overcollateralized
Amount on such Distribution Date (assuming that 100% of the aggregate Group I
Principal Remittance Amount is applied as a principal payment on such
Distribution Date).
"Group I Overcollateralization Floor": 0.50% of the aggregate Cut-off
Date Principal Balance of the Group I Closing Date Mortgage Loans.
"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, 2.00% of the aggregate
Cut-off Date Principal Balance of the Group I Closing Date Mortgage Loans, (ii)
on or after the Group I Stepdown Date provided a Group I Trigger Event is not in
effect, the greater of (x) the lesser of (I) 2.00% of the aggregate Cut-off Date
Principal Balance of the Group I Closing Date Mortgage Loans and (II) 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.
27
"Group I Overcollateralized Amount": With respect to any Distribution
Date, the amount, if any, by which (i) the aggregate Stated Principal Balance of
the Group I Mortgage Loans on the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) exceeds (ii) the sum of
the aggregate Certificate Principal Balances of the Class I-A Certificates and
the Uncertificated Principal Balance of REMIC 4 Regular Interest LT4-IP as of
such Distribution Date (after giving effect to distributions of the Group I
Principal Remittance Amount to be made on such Distribution Date).
"Group I Principal Distribution Amount": The sum of (i) (x) the Group I
Principal Remittance Amount minus (y) the amount of any Group I
Overcollateralization Release Amount for such Distribution Date, and (ii) the
Group I Extra Principal Distribution Amount for such Distribution Date.
"Group I Principal Remittance Amount": With respect to any Distribution
Date, the sum of (i) all scheduled payments of principal collected or advanced
on the Group I Mortgage Loans by the Master Servicer that were due during the
related Due Period, (ii) all partial and full principal prepayments of the Group
I Mortgage Loans applied by the Master Servicer during the related Prepayment
Period, (iii) the principal portion of all Net Liquidation Proceeds and
Insurance Proceeds received during the related Prepayment Period with respect to
the Group I Mortgage Loans, (iv) that portion of the Purchase Price,
representing principal of any repurchased Group I Mortgage Loan, deposited to
the Collection Account during the related Prepayment Period, (v) the principal
portion of any Substitution Adjustments deposited in the Collection Account
during the related Prepayment Period with respect to the Group I Mortgage Loans
and (vi) on the Distribution Date on which the Trust is to be terminated in
accordance with this Agreement, that portion of the Termination Price
representing principal with respect to the Group I Mortgage Loans.
"Group I Reserve Fund": The trust account or accounts created and
maintained by the Trust Administrator pursuant to Section 3.26 which shall be
entitled "Group I Reserve Fund, Deutsche Bank National Trust Company, as Trust
Administrator for the benefit of Wachovia Bank, National Association, as
Trustee, in trust for the registered Certificateholders of Long Beach Mortgage
Loan Trust 2002-3, Asset-Backed Certificates, Series 2002-3" and which must be
an Eligible Account.
"Group I Stepdown Date": The Distribution Date in September 2005.
"Group I Trigger Event": A Group I Trigger Event has occurred with
respect to a Distribution Date if either a Group I Cumulative Loss Trigger Event
or a Group I Delinquency Trigger Event has occurred with respect to such
Distribution Date.
"Group I Trust Administrator Fee": With respect to each Distribution
Date, one-twelfth of the Trust Administrator Fee Rate multiplied by the
aggregate Stated Principal Balance of the Group I Mortgage Loans as of the last
day of the related Due Period (prior to giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period).
28
"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 Master Servicer,
the Trustee, the Trust Administrator, the Seller, the Guarantor, the Certificate
Insurer or any Sub-Servicer pursuant to Section 3.11 or Section 3.12 in respect
of the Group II Mortgage Loans or otherwise payable in respect of Extraordinary
Trust Fund Expenses in connection with the Group II Mortgage Loans, (b) amounts
deposited in the Collection Account or the Distribution Account pursuant to
clauses (i)(a) through (g) above, as the case may be, in connection with the
Group II Mortgage Loans, in error, (c) Stayed Funds in connection with the Group
II Mortgage Loans, (d) the PMI Insurer Fee payable from the Distribution
Account, (e) any Group II Trust Administrator Fee pursuant to Section 8.05 and
any indemnification payments or expense reimbursements made by the Trust Fund
pursuant to Section 8.05 in connection with the Group II Mortgage Loans and (f)
amounts reimbursable to the 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 Cap Agreement": The interest rate cap agreement with respect
to the Group II Reserve Fund consisting of the ISDA Master Agreement and the
schedule and confirmation thereto, dated as of August 2, 2002 between the Trust
Administrator, on behalf of the Trust, and the Cap Provider, as such agreement
may be amended and supplemented in accordance with its terms and any replacement
interest rate cap agreement acceptable to the Trustee.
"Group II Cap Controlling Person": The Controlling Insurer; or, if
there is no Controlling Insurer, the majority of the Percentage Interest of the
Holders of the Class II-C Certificates.
"Group II Certificates": The Class II-A Certificates, the Class II-S
Certificates, the Class II-C Certificates and the Class II-P Certificates.
"Group II Certificate Insurer Premium": For any Distribution Date and
with respect to the Class II-A Certificates and the Class II-S1 Certificates,
the premium due to the Certificate Insurer on such Distribution Date, which
amount shall be equal to the product of one-twelfth of the Group II Certificate
29
Insurer Premium Rate and the aggregate Certificate Principal Balance of the
Class II-A Certificates immediately prior to such Distribution Date.
"Group II Certificate Insurer Premium Rate": For any Distribution Date,
a per annum rate set forth in a letter agreement between the Certificate
Insurer, the Depositor, the Master Servicer and the Trustee, which rate may
increase as provided in the letter agreement for any Distribution Date on which
an event of default under the Insurance Agreement is continuing.
"Group II Certificate Insurer Reimbursement Amount": The sum of (i) any
unreimbursed Insured Payments applied by the Trust Administrator as payments on
the Class II-A Certificates and the Class II-S1 Certificates, (ii) all other
amounts owed to the Certificate Insurer under the Insurance Agreement and
allocable to the Class II-A Certificates and the Class II-S1 Certificates and
(iii) 50% of all other amounts owed to the Certificate Insurer under the
Insurance Agreement and which cannot be allocated to either the Class I-A
Certificates and the Class I-S1 Certificates or the Class II-A Certificates and
the Class II-S1 Certificates, in each case together with interest on such
amounts at the Late Payment Rate.
"Group II Closing Date Mortgage Loan": Any of the Group II Mortgage
Loans included in the Trust Fund on the Closing Date. The aggregate Cut-off Date
Principal Balance of the Group II Closing Date Mortgage Loans is equal to
$500,001,073.26.
"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 September 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
------------------------------ ------------------------------------------------------
September 2005 through 2.50% for the first month, plus an additional 1/12th
August 2006 of 1.75% for each month thereafter.
September 2006 through 4.25% for the first month, plus an additional 1/12th
August 2007 of 1.00% for each month thereafter.
September 2007 through 5.25% for the first month, plus an additional 1/12th
August 2008 of 0.75% for each month thereafter.
September 2008 through 6.00% for the first month, plus an additional 1/12th
August 2009 of 0.75% for each month thereafter.
September 2009 and thereafter 6.75% for each month
"Group II Delinquency Percentage": With respect to any Distribution
Date, the percentage obtained by dividing (x) the aggregate Stated Principal
Balance of (i) Group II Mortgage Loans Delinquent 60 days or more (including
Mortgage Loans repurchased since the prior Distribution Date), (ii) REO
Properties related to the Group II Mortgage Loans and (iii) Group II Mortgage
Loans in foreclosure and in bankruptcy (excluding any such Group II Mortgage
Loans which are less than 60 days Delinquent under the bankruptcy plan) by (y)
the aggregate Stated Principal Balance of the Group II Mortgage Loans, in each
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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 18%.
"Group II Early Termination Date": An early termination date under the
Group II Cap Agreement.
"Group II Excess Overcollateralized Amount": With respect to the Class
II-A Certificates and any Distribution Date, the excess, if any, of (i) the
Group II Overcollateralized Amount for such Distribution Date (assuming that
100% of the Group II Principal Remittance Amount is applied as a principal
payment on such Distribution Date) over (ii) the Group II Overcollateralization
Target Amount for such Distribution Date.
"Group II Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (x) the Group II Net Monthly Excess Cashflow
for such Distribution Date and (y) the Group II Overcollateralization Deficiency
Amount for such Distribution Date.
"Group II Insured Principal Amount": (a) for any Distribution Date
(other than the Distribution Date in September 2032) the amount, if any, by
which the aggregate Certificate Principal Balance of the Class II-A Certificates
(after giving effect to distributions in respect of principal to be made on such
Distribution Date and without regard to any payments made by the Certificate
Insurer) exceeds the aggregate Stated Principal Balance of the Group II Mortgage
Loans on the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) and (b) for the Distribution Date in September
2032, an amount equal to the aggregate Certificate Principal Balance of the
Class II-A Certificates (after giving effect to distributions in respect of
principal to be made on such Distribution Date and without regard to any
payments made by the Certificate Insurer).
"Group II Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Group II Available Funds for such Distribution Date
attributable to interest received or advanced with respect to the Group II
Mortgage Loans or to Compensating Interest paid by the Master Servicer with
respect to the Group II Mortgage Loans.
"Group II Mortgage Loans": Those Mortgage Loans identified as Group II
Mortgage Loans on the Mortgage Loan Schedule.
"Group II Net Monthly Excess Cashflow": With respect to each
Distribution Date, the sum of (a) any Group II Overcollateralization Release
Amount for such Distribution Date and (b) the positive excess of (x) Group II
Available Funds for such Distribution Date over (y) the sum for such
Distribution Date of (A) the Monthly Interest Distributable Amounts for the
Class II-A Certificates and the Class II-S Certificates, (B) the Unpaid Interest
Shortfall Amounts for the Class II-A Certificates and the Class II-S1
Certificates, (C) the Group II Principal Remittance Amount, (D) the Group II
Certificate Insurer Premium, (E) the Group II Certificate Insurer Reimbursement
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Amount and (F) the Group I Certificate Insurer Reimbursement Amount to the
extent paid out of the Group II Interest Remittance Amount.
"Group II Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Group II
Overcollateralization Target Amount exceeds the Group II Overcollateralized
Amount on such Distribution Date (assuming that 100% of the aggregate Group II
Principal Remittance Amount is applied as a principal payment on such
Distribution Date).
"Group II Overcollateralization Floor": 0.50% of the aggregate Cut-off
Date Principal Balance of the Group II Closing Date Mortgage Loans.
"Group II Overcollateralization Release Amount": With respect to any
Distribution Date, the lesser of (x) the Group II Principal Remittance Amount
for such Distribution Date and (y) the Group II Excess Overcollateralized
Amount.
"Group II Overcollateralization Target Amount": With respect to any
Distribution Date (i) prior to the Group II Stepdown Date, 2.00% of the
aggregate Cut-off Date Principal Balance of the Group II Closing Date Mortgage
Loans, (ii) on or after the Group II Stepdown Date provided a Group II Trigger
Event is not in effect, the greater of (x) the lesser of (I) 2.00% of the
aggregate Cut-off Date Principal Balance of the Group II Closing Date Mortgage
Loans and (II) 4.00% 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.
"Group II Overcollateralized Amount": With respect to any Distribution
Date, the amount, if any, by which (i) the aggregate Stated Principal Balance of
the Group II Mortgage Loans on the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) exceeds (ii) the sum of
the aggregate Certificate Principal Balances of the Class II-A Certificates and
the Uncertificated Principal Balance of REMIC 4 Regular Interest LT4-IIP as of
such Distribution Date (after giving effect to distributions of the Group II
Principal Remittance Amount to be made on such Distribution Date).
"Group II Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) (x) the Group II Principal Remittance Amount
minus (y) the amount of any Group II Overcollateralization Release Amount for
such Distribution Date, and (ii) the Group II Extra Principal Distribution
Amount for such Distribution Date.
"Group II Principal Remittance Amount": With respect to any
Distribution Date, the sum of (i) all scheduled payments of principal collected
or advanced on the Group II Mortgage Loans by the Master Servicer that were due
during the related Due Period, (ii) all partial and full principal prepayments
32
of the Group II Mortgage Loans applied by the Master Servicer during the related
Prepayment Period, (iii) the principal portion of all Net Liquidation Proceeds
and Insurance Proceeds received during the related Prepayment Period with
respect to the Group II Mortgage Loans, (iv) that portion of the Purchase Price,
representing principal of any repurchased Group II Mortgage Loan, deposited to
the Collection Account during the related Prepayment Period, (v) the principal
portion of any Substitution Adjustments deposited in the Collection Account
during the related Prepayment Period with respect to the Group II Mortgage Loans
and (vi) on the Distribution Date on which the Trust is to be terminated in
accordance with this Agreement, that portion of the Termination Price
representing principal with respect to the Group II Mortgage Loans.
"Group II Reserve Fund": The trust account or accounts created and
maintained by the Trust Administrator pursuant to Section 3.26 which shall be
entitled "Group II Reserve Fund, Deutsche Bank National Trust Company, as Trust
Administrator for the benefit of Wachovia Bank, National Association, as
Trustee, in trust for the registered Certificateholders of Long Beach Mortgage
Loan Trust 2002-3, Asset-Backed Certificates, Series 2002-3" and which must be
an Eligible Account.
"Group II Stepdown Date": The Distribution Date in September 2005.
"Group II Trigger Event": A Group II Trigger Event has occurred with
respect to a Distribution Date if either a Group II Cumulative Loss Trigger
Event or a Group II Delinquency Trigger Event has occurred with respect to such
Distribution Date.
"Group II Trust Administrator Fee": With respect to each Distribution
Date, one-twelfth of the Trust Administrator Fee Rate multiplied by the
aggregate Stated Principal Balance of the Group II Mortgage Loans as of the last
day of the related Due Period (prior to giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period).
"Guaranteed Certificates": The Class I-A Certificates and the Class
I-S1 Certificates.
"Guaranteed Interest Distribution Amount": With respect to any
Distribution Date and the Guaranteed Certificates, the amount, if any, after
giving effect to the distributions of the Monthly Interest Remittance Amount and
the Insured Payment, if any, on such Distribution Date, by which the (i) sum of
(x) the Monthly Interest Distributable Amount and the Unpaid Interest Shortfall
Amount payable on the Guaranteed Certificates for such Distribution Date and (y)
the Net Prepayment Interest Shortfalls and the Relief Act Interest Shortfalls
allocated to the Guaranteed Certificates for such Distribution Date exceeds (ii)
the amount of interest actually paid (without giving effect to any Guarantor
Payment) to the Holders of the related Classes of Guaranteed Certificates on
such Distribution Date.
"Guaranteed Principal Distribution Amount": With respect to (a) any
Distribution Date other than the Distribution Date in September 2032, the
amount, if any, by which (i) the aggregate Certificate Principal Balance of the
Class I-A Certificates (after giving effect to all amounts distributable and
allocable to principal on such Class I-A Certificates, including any Insured
Payment, but prior to giving effect to any Guarantor Payment on such
Distribution Date) exceeds (ii) the aggregate Stated Principal Balance of the
Group I Mortgage Loans (after giving effect to the principal portion of Monthly
Payments due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (b) the Distribution Date in September 2032, the amount equal to the
33
Certificate Principal Balance of the Class I-A Certificates (after giving effect
to all amounts distributable and allocable to principal on such Class I-A
Certificates, including any Insured Payment, but prior to giving effect to any
Guarantor Payment on such Distribution Date).
"Guarantor": ▇▇▇▇▇▇ ▇▇▇, or its successor in interest.
"Guarantor Deficiency Amount": With respect to any Distribution Date,
the sum of (i) the Guaranteed Interest Distribution Amount and (ii) the
Guaranteed Principal Distribution Amount.
"Guarantor Interest Reimbursement Amount": With respect to any
Distribution Date, (i) the sum of any accrued but unpaid Guaranty Fees, not
including the Guaranty Fee due on such Distribution Date, and (ii) the sum of
all amounts paid by the Guarantor in respect of the Guaranteed Interest
Distribution Amounts on all prior Distribution Dates to the extent not
previously reimbursed.
"Guarantor Payment": Any payment made by the Guarantor in respect of a
Guaranteed Interest Distribution Amount or a Guaranteed Principal Distribution
Amount.
"Guarantor Principal Reimbursement Amount": With respect to any
Distribution Date, the sum of all amounts paid by the Guarantor in respect of
Guaranteed Principal Distribution Amounts on all prior Distribution Dates to the
extent not previously reimbursed.
"Guarantor Reimbursement Amount": With respect to any Distribution
Date, the sum of Guarantor Interest Reimbursement Amount and the Guarantor
Principal Reimbursement Amount.
"Guaranty": The obligations of the Guarantor pursuant to Section 4.09.
"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 or a document of similar import, if any,
entered into following the Closing Date, by one or more Affiliates of the
Depositor or one or more entities sponsored by an Affiliate of the Depositor
relating to the NIM Notes to be issued thereunder.
"Independent": When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Master Servicer and
their respective Affiliates, (b) does not have any direct financial interest in
or any material indirect financial interest in the Depositor or the Master
Servicer or any Affiliate thereof, and (c) is not connected with the Depositor
or the Master Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, trust administrator, partner, director or Person
34
performing similar functions; provided, however, that a Person shall not fail to
be Independent of the Depositor or the Master Servicer or any Affiliate thereof
merely because such Person is the beneficial owner of $500,000.00 or less of any
class of securities issued by the Depositor or the Master Servicer or any
Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the Master
Servicer) that would be an "independent contractor" with respect to any of the
REMICs created hereunder within the meaning of Section 856(d)(3) of the Code if
such REMIC were a real estate investment trust (except that the ownership tests
set forth in that Section shall be considered to be met by any Person that owns,
directly or indirectly, 35% or more of any Class of Certificates), so long as
each such REMIC does not receive or derive any income from such Person and
provided that the relationship between such Person and such REMIC is at arm's
length, all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or
(ii) any other Person (including the Master Servicer) if the Trustee 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 July 30, 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 Notional Amount": With respect to any Class S Certificate or
Class C Certificate, the amount designated "Initial Notional Amount" on the face
thereof.
"Insurance Agreement": An Insurance and Indemnity Agreement dated as of
August 2, 2002, among the Master Servicer, the Depositor and the Certificate
Insurer.
"Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan or the related Mortgaged
Property, to the extent such proceeds are not to be applied to the restoration
of the related Mortgaged Property (including any related PMI Policy) or released
to the Mortgagor in accordance with the procedures that the Master Servicer
would follow in servicing mortgage loans held for its own account, subject to
the terms and conditions of the related Mortgage Note and Mortgage.
"Insured Certificates": The Class A Certificates and the Class S1
Certificates.
"Insured NIM Notes": Net interest margin securities, if any, issued by
one or more Affiliates of the Depositor or by one or more entities sponsored by
an Affiliate of the Depositor which are backed by the cashflow on certain or all
35
of the Class S2 Certificates, Class C Certificates and Class P Certificates and
insured by the NIMS Insurer.
"Insured Payment": As of any Distribution Date, the sum of (i) any
Certificate Insurer Deficiency Amount and (ii) any Preference Amount.
"Insured Principal Amount": The sum of the Group I Insured Principal
Amount and the Group II Insured Principal Amount.
"Interest Determination Date": With respect to the Class A Certificates
and each Accrual Period, the second LIBOR Business Day preceding the
commencement of such Accrual Period.
"Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any related
Due Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late payments or
collections of principal and/or interest due (without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but delinquent on a
contractual basis for such Due Period and not previously recovered.
"Late Payment Rate": As defined in the Insurance Agreement.
"LIBOR": With respect to each Accrual Period, the rate determined by
the 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.
36
"LIBOR Business Day": Any day on which banks in London, England and The
City of New York are open for conducting transactions in foreign currency and
exchange.
"Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage
Loan in respect of which the Master Servicer has determined, in accordance with
the servicing procedures specified herein, as of the end of the related
Prepayment Period, that all Liquidation Proceeds which it expects to recover
with respect to the liquidation of the Mortgage Loan or disposition of the
related REO Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan or (iii) such Mortgage Loan is
removed from the Trust Fund by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03 or Section 9.01. With respect to
any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property or (ii) such REO Property is
removed from the Trust Fund by reason of its being sold or purchased pursuant to
Section 3.23 or Section 9.01.
"Liquidation Proceeds": The amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received by
the Master Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or condemnation,
(ii) the liquidation of a defaulted Mortgage Loan by means of a trustee's sale,
foreclosure sale or otherwise or (iii) the repurchase, substitution or sale of a
Mortgage Loan or an REO Property pursuant to or as contemplated by Section 2.03,
Section 3.23 or Section 9.01.
"Loan Group I": All of the Group I Mortgage Loans collectively.
"Loan Group II": All of the Group II Mortgage Loans collectively.
"Loan-to-Value Ratio": As of any date and as to any Mortgage Loan, the
fraction, expressed as a percentage, the numerator of which is the (x) Principal
Balance of the Mortgage Loan (if such Mortgage Loan is secured by a first lien
on the related Mortgaged Property) or the sum of the Principal Balance of the
Mortgage Loan and any other mortgage loan secured by a senior lien on the
related Mortgaged Property (if such Mortgage Loan is secured by a junior lien on
the related Mortgaged Property) and the denominator of which is (y) the Value of
the related Mortgaged Property.
"Lost Note Affidavit": With respect to any Mortgage Loan as to which
the original Mortgage Note has been permanently lost or destroyed and has not
been replaced, an affidavit from the Seller certifying that the original
Mortgage Note has been lost or destroyed (together with a copy of the related
Mortgage Note and indemnifying the Trust against any loss, cost or liability
resulting from the failure to deliver the original Mortgage Note) in the form of
Exhibit H hereto.
"Marker Rate 1": With respect to REMIC 4 Regular Interest LT4-IC and
any Distribution Date, a per annum rate equal to 2 times the weighted average of
the Uncertificated REMIC 3 Pass-Through Rates for REMIC 3 Regular Interest
LT3B-1 and REMIC 3 Regular Interest LT3C-1,
37
o with the rate on REMIC 3 Regular Interest LT3B-1 subject to a cap equal to
the lesser of (i) LIBOR plus the Certificate Margin of the Class I-A
Certificates and (ii) the lower of the Net WAC Rate and the Maximum Cap
Rate applicable to the Class I-A Certificates,
o with the rate on REMIC 3 Regular Interest LT3C-1 subject to a cap of zero
for the purpose of this calculation,
provided that in each case the rate used herein shall be multiplied by a
fraction the numerator of which is the actual number of days elapsed in the
Accrual Period and the denominator of which is 30.
"Marker Rate 2": With respect to REMIC 4 Regular Interest LT4-IIC and
any Distribution Date, a per annum rate equal to 2 times the weighted average of
the Uncertificated REMIC 3 Pass-Through Rates for REMIC 3 Regular Interest
LT3B-2 and REMIC 3 Regular Interest LT3C-2, calculated as follows:
o with the rate on REMIC 3 Regular Interest LT3B-2 subject to a cap equal to
the lesser of (i) LIBOR plus the Certificate Margin of the Class II-A
Certificates and (ii) the lower of the Net WAC Rate and the Maximum Cap
Rate applicable to the Class II-A Certificates;
o with the rate on REMIC 3 Regular Interest LT3C-2 subject to a cap of zero
for the purpose of this calculation,
provided that in each case the rate used herein shall be multiplied by a
fraction the numerator of which is the actual number of days in the Accrual
Period and the denominator of which is 30.
"Master Servicer": Long Beach Mortgage Company, a Delaware corporation,
or any successor servicer appointed as herein provided, in its capacity as
Master Servicer hereunder.
"Master Servicer Event of Default": One or more of the events described
in Section 7.01.
"Master Servicer Prepayment Charge Payment Amount": The amounts (i)
payable by the Master Servicer in respect of any Prepayment Charges waived other
than in accordance with the standard set forth in Section 2.04(a)(viii) or (ii)
collected from the Master Servicer in its capacity as Seller in respect of a
remedy for the breach of the representation and warranty made by the Master
Servicer in its capacity as Seller set forth in Section 2.04(a)(vii).
"Master Servicer Remittance Date": With respect to any Distribution
Date, 3:00 p.m. New York time on the Business Day preceding the Distribution
Date.
"Master Servicer Termination Test": With respect to any Distribution
Date, the Master Servicer Termination Test will be failed with respect to the
Master Servicer if the Cumulative Loss Percentage exceeds 6.125%.
"Maximum Cap Rate": For any Distribution Date and the Class I-A
Certificates, (a) a per annum rate equal to the excess, if any, of (i) the
weighted average of the Adjusted Net Maximum Mortgage Rates of the Group I
Mortgage Loans, weighted on the basis of the Stated Principal Balances thereof
as of the Due Date in the month preceding the month of such Distribution Date,
38
over (ii) the percentage equivalent of a fraction, (1) the numerator of which is
the sum of (A) the Group I Certificate Insurer Premium, (B) the Guaranty Fee,
(C) the product of (I) the Pass-Through Rate for the Class I-S1 Certificates for
such Distribution Date and (II) the Notional Amount with respect to the Class
I-S1 Certificates immediately prior to such Distribution Date, and (D) the
product of (I) the Pass-Through Rate for the Class I-S2 Certificates for such
Distribution Date and (II) the Notional Amount with respect to the Class I-S2
Certificates immediately prior to such Distribution Date, and (2) the
denominator of which is the aggregate Stated Principal Balance of the Group I
Mortgage Loans as of the Due Date in the month preceding the month of such
Distribution Date multiplied by (b) a fraction the numerator of which is 30 and
the denominator of which is the actual number of days elapsed in the related
Accrual Period.
For any Distribution Date and the Class II-A Certificates, (a) a per
annum rate equal to the excess, if any, of (i) the weighted average of the
Adjusted Net Maximum Mortgage Rates of the Group II Mortgage Loans, weighted on
the basis of the Stated Principal Balances thereof as of the Due Date in the
month preceding the month of such Distribution Date, over (ii) the percentage
equivalent of a fraction, (1) the numerator of which is the sum of (A) the Group
II Certificate Insurer Premium, (B) the product of (I) the Pass-Through Rate for
the Class II-S1 Certificates for such Distribution Date and (II) the Notional
Amount with respect to the Class II-S1 Certificates immediately prior to such
Distribution Date, and (C) the product of (I) the Pass-Through Rate for the
Class II-S2 Certificates for such Distribution Date and (II) the Notional Amount
with respect to the Class II-S2 Certificates immediately prior to such
Distribution Date, and (2) the denominator of which is the aggregate Stated
Principal Balance of the Group II Mortgage Loans as of the Due Date in the month
preceding the month of such Distribution Date multiplied by (b) a fraction the
numerator of which is 30 and the denominator of which is the actual number of
days elapsed in the related Accrual Period.
"Maximum LT3C-1 Uncertificated Accrued Interest Deferral Amount": With
respect to any Distribution Date, the sum of:
(A) the excess of (a) accrued interest at the Uncertificated REMIC 3
Pass-Through Rate applicable to REMIC 3 Regular Interest LT3C-1 for
such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 3 Regular Interest LT3C-1 minus the REMIC 3
Overcollateralized Amount 1, in each case for such Distribution Date,
over (b) Uncertificated Accrued Interest on REMIC 3 Regular Interest
LT3B-1 with the rate on REMIC 3 Regular Interest LT3B-1 subject to a
cap equal to the lesser of (i) LIBOR plus the Certificate Margin of
the Class I-A Certificates and (ii) the lower of the Net WAC Rate and
the Maximum Cap Rate applicable to the Class I-A Certificates,
provided, that in each case the rates set forth in clauses (i) above
shall be multiplied by a fraction the numerator of which is the actual
number of days elapsed in the Accrual Period and the denominator of
which is 30, and
(B) the REMIC 3 Group I Diverted Excess Spread.
"Maximum LT3C-2 Uncertificated Accrued Interest Deferral Amount": With
respect to any Distribution Date, the sum of:
(A) the excess of (a) accrued interest at the Uncertificated REMIC 3
Pass-Through Rate applicable to REMIC 3 Regular Interest LT3C-2 for
39
such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 3 Regular Interest LT3C-2 minus the REMIC 3
Overcollateralized Amount 2, in each case for such Distribution Date,
over (b) Uncertificated Accrued Interest on REMIC 3 Regular Interest
LT3B-2 with the rate on REMIC 3 Regular Interest LT3B-2 subject to a
cap equal to the lesser of (i) LIBOR plus the Certificate Margin of
the Class II-A Certificates and (ii) the lower of the Net WAC Rate and
the Maximum Cap Rate applicable to the Class II-A Certificates;
provided, that in each case the rates set forth in clauses (i) above
shall be multiplied by a fraction the numerator of which is the actual
number of days elapsed in the Accrual Period and the denominator of
which is 30, and
(B) the REMIC 3 Group II Diverted Excess Spread.
"Maximum Mortgage Rate": With respect to each Mortgage Loan, the
percentage set forth in the related Mortgage Note as the maximum Mortgage Rate
thereunder.
"Minimum Mortgage Rate": With respect to each Mortgage Loan, the
percentage set forth in the related Mortgage Note as the minimum Mortgage Rate
thereunder.
"Monthly Interest Distributable Amount": With respect to any
Distribution Date and the Class A Certificates, the Class S Certificates, REMIC
4 Regular Interest LT4-IC and REMIC 4 Regular Interest LT4-IIC and any
Distribution Date, the amount of interest accrued during the related Accrual
Period at the related Pass-Through Rate on the Certificate Principal Balance (or
Notional Amount in the case of the Class S Certificates, REMIC 4 Regular
Interest LT4-IC and REMIC 4 Regular Interest LT4-IIC) of such Class immediately
prior to such Distribution Date, in each case, reduced by any Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls and in each case as such
shortfall allocations are set forth in Section 1.03. With respect to the Class
I-C Certificates and any Distribution Date, the Monthly Interest Distributable
Amount shall equal the Monthly Interest Distributable Amounts for REMIC 4
Regular Interest LT4-IC for such Distribution Date. With respect to the Class
II-C Certificates and any Distribution Date, the Monthly Interest Distributable
Amount shall equal the Monthly Interest Distributable Amounts for REMIC 4
Regular Interest LT4-IIC for such Distribution Date.
Notwithstanding the foregoing, for federal income tax purposes and
under the REMIC Provisions, the Monthly Interest Distributable Amount for the
Class I-S1 Certificates and any Distribution Date will be equal to the
Uncertificated Accrued Interest for REMIC 3 Regular Interest LT3IS1 for such
Distribution Date; the Monthly Interest Distributable Amount for the Class II-S1
Certificates and any Distribution Date will be equal to the Uncertificated
Accrued Interest for REMIC 3 Regular Interest LT3IIS1 for such Distribution
Date; the Monthly Interest Distributable Amount for the Class I-S2 Certificates
and any Distribution Date will be equal to the sum of the Uncertificated Accrued
Interest for the REMIC 3 IS2 Interests for such Distribution Date; and the
Monthly Interest Distributable Amount for the Class II-S2 Certificates and any
Distribution Date will be equal to the sum of the Uncertificated Accrued
Interest for the REMIC 3 IIS2 Interests for such Distribution Date.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related Mortgagor from time to time under the related Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt
40
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 1 on such date, attached hereto as Exhibit D. The Mortgage
Loan Schedule shall be prepared by the Seller and shall set forth the following
information as of the Cut-off Date with respect to each Mortgage Loan, as
applicable:
(i) the Mortgagor's name and the originator's Mortgage Loan
identifying number;
(ii) the street address of the Mortgaged Property including the
state and zip code;
(iii) a code indicating whether the Mortgaged Property is
owner-occupied;
(iv) the type of Residential Dwelling constituting the Mortgaged
Property;
(v) the original months to maturity;
(vi) the Loan-to-Value Ratio and the combined Loan-to-Value Ratio
at origination;
(vii) the Mortgage Rate in effect immediately following the
Cut-off Date;
(viii) the date on which the first Monthly Payment was due on the
Mortgage Loan;
41
(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;
(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;
42
(xxvii) a code indicating the Index that is associated with such
Mortgage Loan (if such Mortgage Loan is an Adjustable Rate Mortgage Loan);
(xxviii) the rate adjustment frequency (if such Mortgage Loan is
an Adjustable Rate Mortgage Loan);
(xxix) the number of years the prepayment penalty is in effect;
and
(xxx) a code indicating that such Mortgage Loan is covered under
the PMI Policy.
The Mortgage Loan Schedule shall set forth the following information,
with respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1)
the number of Mortgage Loans; (2) the Cut-off Date Principal Balance of the
Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans and
(4) the weighted average maturity of the Mortgage Loans. The Mortgage Loan
Schedule shall be amended from time to time by the Master Servicer in accordance
with the provisions of this Agreement. With respect to any Qualified Substitute
Mortgage Loan, Cut-off Date shall refer to the related Cut-off Date for such
Mortgage Loan, determined in accordance with the definition of Cut-off Date
herein. The Mortgage Loan Schedule shall clearly identify the Mortgage Loans
that are included in Group I Mortgage Loans and those that are included in Group
II Mortgage Loans.
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on Exhibit D
from time to time, and any REO Properties acquired in respect thereof.
"Mortgage Rate": With respect to each Fixed Rate Mortgage Loan, the
annual rate set forth in the related Mortgage Note, as amended, modified or
supplemented from time to time. With respect to each Adjustable Rate Mortgage
Loan, the annual rate at which interest accrues on such Mortgage Loan from time
to time in accordance with the provisions of the related Mortgage Note, which
rate (A) as of any date of determination until the first Adjustment Date
following the Cut-off Date shall be the rate set forth in the Mortgage Loan
Schedule as the Mortgage Rate in effect immediately following the Cut-off Date
and (B) as of any date of determination thereafter shall be the rate as adjusted
on the most recent Adjustment Date, to equal the sum, rounded to the next
highest or nearest 0.125% (as provided in the Mortgage Note), of the Index,
determined as set forth in the related Mortgage Note, plus the related Gross
Margin subject to the limitations set forth in the related Mortgage Note. With
respect to each Mortgage Loan that becomes an REO Property, as of any date of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.
"Mortgaged Property": The underlying property securing a Mortgage Loan,
including any REO Property, consisting of a fee simple estate in a parcel of
real property improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
43
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property), the related Liquidation Proceeds net of Advances, Servicing Advances,
Servicing Fees and any other Servicing Fees received and retained in connection
with the liquidation of such Mortgage Loan or Mortgaged Property in accordance
with the terms of this Agreement.
"Net Monthly Excess Cashflow": With respect to each Distribution Date,
the Group I Net Monthly Excess Cashflow or Group II Net Monthly Excess Cashflow.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the related
REO Property), as of any date of determination, a per annum rate of interest
equal to the then applicable Mortgage Rate for such Mortgage Loan minus the
Servicing Fee Rate.
"Net Prepayment Interest Shortfall": With respect to any Distribution
Date, the excess, if any, of any Prepayment Interest Shortfalls for such date
over the related Compensating Interest.
"Net WAC Rate": For any Distribution Date and the Class I-A
Certificates, (a) a per annum rate equal to the excess, if any, of (i) the
weighted average of the Adjusted Net Mortgage Rates of the Group I Mortgage
Loans, weighted on the basis of the Stated Principal Balances thereof as of the
Due Date in the month preceding the month of such Distribution Date, over (ii)
the percentage equivalent of a fraction, (1) the numerator of which is the sum
of (A) the Group I Certificate Insurer Premium, (B) the Guaranty Fee, (C) the
product of (I) the Pass-Through Rate for the Class I-S1 Certificates for such
Distribution Date and (II) the Notional Amount with respect to the Class I-S1
Certificates immediately prior to such Distribution Date and (D) the product of
(I) the Pass-Through Rate for the Class I-S2 Certificates for such Distribution
Date and (II) the Notional Amount with respect to the Class I-S2 Certificates
immediately prior to such Distribution Date, and (2) the denominator of which is
the aggregate Stated Principal Balance of the Group I Mortgage Loans as of the
Due Date in the month preceding the month of such Distribution Date multiplied
by (b) a fraction the numerator of which is 30 and the denominator of which is
the actual number of days elapsed in the related Accrual Period.
For any Distribution Date and the Class II-A Certificates, (a) a per
annum rate equal to the excess, if any, of (i) the weighted average of the
Adjusted Net Mortgage Rates of the Group II Mortgage Loans, weighted on the
basis of the Stated Principal Balances thereof as of the Due Date in the month
preceding the month of such Distribution Date, over (ii) the percentage
equivalent of a fraction, (1) the numerator of which is the sum of (A) the Group
II Insurer Premium, (B) the product of (I) the Pass-Through Rate for the Class
II-S1 Certificates for such Distribution Date and (II) the Notional Amount with
respect to the Class II-S1 Certificates immediately prior to such Distribution
Date and (C) the product of (I) the Pass-Through Rate for the Class II-S2
Certificates for such Distribution Date and (II) the Notional Amount with
respect to the Class II-S2 Certificates immediately prior to such Distribution
Date, and (2) the denominator of which is the aggregate Stated Principal Balance
of the Group II Mortgage Loans as of the Due Date in the month preceding the
month of such Distribution Date multiplied by (b) a fraction the numerator of
which is 30 and the denominator of which is the actual number of days elapsed in
the related Accrual Period.
"Net WAC Rate Carryover Amount": With respect to the Class A
Certificates and any Distribution Date for which the Pass-Through Rate for such
44
Class of Certificates for such Distribution Date is the Net WAC Rate, the sum of
(i) the positive excess of (A) the amount of interest that would have been
payable to such Class of Certificates on such Distribution Date if the
Pass-Through Rate for such Class of Certificates for such Distribution Date were
calculated at the related Formula Rate over (B) the amount of interest payable
on such Class of Certificates at the Net WAC Rate for such Distribution Date and
(ii) the related Net WAC Rate Carryover Amount for the previous Distribution
Date not previously paid together with interest thereon at a rate equal to the
related Formula Rate for such Class of Certificates for the most recently ended
Accrual Period.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed or extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.
"NIM Notes": The Insured NIM Notes and the Other NIM Notes.
"NIMS Insurer": A Person, or any of its successors that shall be the
insurer under an insurance policy insuring certain payments on Insured NIM
Notes, if any, provided, however, upon the occurrence of certain events (as set
forth in the Indenture and/or any other agreement among such Person, Long Beach
Asset Holdings Corp., the Master Servicer, the Trust Administrator and other
Persons), the NIMS Insurer shall be the Person designated in the Indenture or
such other agreement. If none of the net interest margin securities have been
issued by one or more of the Affiliates of the Depositor or by one or more
entities which are sponsored by an Affiliate of the Depositor, that are insured
by an insurance policy, there shall be no NIMS Insurer under this Agreement, all
references to the NIMS Insurer or Insured NIM Notes in this agreement are for
administrative convenience only, shall be completely disregarded and no Person
shall have any rights of the NIMS Insurer under this Agreement.
"NIMS Insurer Default": The existence and continuation of a failure by
the NIMS Insurer to make a payment under an insurance policy or policies issued
in connection with the Indenture or any other event of default by the NIMS
Insurer under any documents relating to the Indenture.
"Nonrecoverable Advance": Any Advance or Servicing Advance previously
made or proposed to be made in respect of a Mortgage Loan or REO Property that,
in the good faith business judgment of the Master Servicer, will not or, in the
case of a proposed Advance or Servicing Advance, would not be ultimately
recoverable from related late payments, Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
"Notice of Claim": The notice required to be furnished by the Trust
Administrator to the Certificate Insurer in the event an Insured Payment is
required to be paid under the Certificate Insurance Policy with respect to any
Distribution Date, in the form set forth as an exhibit to the Certificate
Insurance Policy.
"Notional Amount": With respect to the Class I-S1 Certificates, the
lesser of (i) the following amounts:
45
Class I-S1
Distribution Date Notional Amount
---------------------------- ---------------
September 2002............... $119,300,000
October 2002................. 119,100,000
November 2002................ 118,900,000
December 2002................ 118,600,000
January 2003................. 118,300,000
February 2003................ 104,700,000
March 2003................... 104,400,000
April 2003................... 104,000,000
May 2003..................... 103,600,000
June 2003.................... 103,200,000
July 2003.................... 92,500,000
August 2003.................. 92,100,000
September 2003............... 91,500,000
October 2003................. 91,000,000
November 2003................ 90,500,000
December 2003................ 80,800,000
January 2004................. 80,200,000
February 2004................ 79,700,000
March 2004................... 79,200,000
April 2004................... 78,700,000
May 2004..................... 70,200,000
June 2004.................... 69,700,000
July 2004.................... 69,300,000
August 2004.................. 68,500,000
September 2004............... 67,800,000
October 2004................. 60,200,000
November 2004................ 59,600,000
December 2004................ 59,000,000
January 2005................. 58,500,000
February 2005................ 58,100,000
March 2005................... 49,200,000
April 2005................... 48,900,000
May 2005..................... 48,600,000
June 2005.................... 48,300,000
July 2005.................... 48,100,000
and (ii) the Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A-A
immediately prior to such Distribution Date.
With respect to the Class II-S1 Certificates, the lesser of (i) the
following amounts:
46
Class II-S1
Distribution Date Notional Amount
----------------------------- ---------------
September 2002............... $130,500,000
October 2002................. 130,400,000
November 2002................ 130,100,000
December 2002................ 129,700,000
January 2003................. 129,200,000
February 2003................ 118,000,000
March 2003................... 117,400,000
April 2003................... 116,700,000
May 2003..................... 116,000,000
June 2003.................... 115,300,000
July 2003.................... 104,400,000
August 2003.................. 103,600,000
September 2003............... 102,700,000
October 2003................. 101,900,000
November 2003................ 101,000,000
December 2003................ 91,000,000
January 2004................. 90,100,000
February 2004................ 89,200,000
March 2004................... 88,400,000
April 2004................... 87,600,000
May 2004..................... 78,700,000
June 2004.................... 77,900,000
July 2004.................... 77,200,000
August 2004.................. 76,000,000
September 2004............... 74,900,000
October 2004................. 66,800,000
November 2004................ 65,800,000
December 2004................ 64,900,000
January 2005................. 64,000,000
February 2005................ 63,500,000
March 2005................... 54,200,000
April 2005................... 53,600,000
May 2005..................... 53,300,000
June 2005.................... 52,200,000
July 2005.................... 50,500,000
and (ii) the Uncertificated Principal Balance of REMIC 1 Regular Interest LT1B-A
immediately prior to such Distribution Date.
With respect to the Class I-S2 Certificates, immediately prior to any
Distribution Date will be equal to the lesser of (i) $41,000,000 for the
September 2002 Distribution Date through the August 2004 Distribution Date and
$35,700,000 for the September 2004 Distribution Date through the February 2005
Distribution Date and (ii) the aggregate Uncertificated Principal Balance of
47
REMIC 1 Regular Interest LT1A-A, REMIC 1 Regular Interest LT1A-B, REMIC 1
Regular Interest LT1A-P, and the REMIC 1 IS2 Interests, in each case immediately
prior to such Distribution Date.
With respect to the Class II-S2 Certificates, immediately prior to any
Distribution Date will be equal to $41,000,000 for the September 2002
Distribution Date through the August 2004 Distribution Date and $34,000,000 for
the September 2004 Distribution Date through the February 2005 Distribution
Date, and (ii) the aggregate Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1B-A, REMIC 1 Regular Interest LT1B-P, and the REMIC 1 IIS2
Interests, in each case immediately prior to such Distribution Date.
With respect to REMIC 4 Regular Interest LT5-IC, immediately prior to
any Distribution Date, an amount equal to the aggregate of the Uncertificated
Principal Balances of the REMIC 3 Group I Regular Interests. With respect to the
REMIC 4 Regular Interest LT4-IIC, immediately prior to any Distribution Date, an
amount equal to the aggregate of the Uncertificated Principal Balances of the
REMIC 3 Group II Regular Interests. With respect to the Class I-C Certificates,
immediately prior to any Distribution Date, an amount equal to the Notional
Amount of REMIC 4 Regular Interest LT4-IC. With respect to the Class II-C
Certificates, immediately prior to any Distribution Date, an amount equal to the
Notional Amount of REMIC 4 Regular Interest LT4-IIC.
"Notional Regular Interest": Each of the Regular Interests described in
the Preliminary Statement as not having an Uncertificated Principal Balance.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Master Servicer, the Seller
or the Depositor, as applicable.
"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 and the Class P Certificate, the corresponding Certificate
Principal Balance on the Closing Date.
"Original Class Notional Amount": With respect to the Class I-S1
Certificates, $119,300,000. With respect to the Class II-S1 Certificates,
$130,500,000. With respect to the Class I-S2 Certificates, $41,000,000. With
respect to the Class II-S2 Certificates, $41,000,000. With respect to REMIC 4
Regular Interest LT4-IC, $28.51. With respect to REMIC 4 Regular Interest
LT4-IIC, $973.26.
"Order": As defined in Section 3.31(b) hereof.
48
"Other NIM Notes": Net Interest Margin Securities, if any, issued by
one or more Affiliates of the Depositor or by one or more entities sponsored by
an Affiliate of the Depositor, which are backed by the cashflow on certain Class
S2 Certificates, Class C Certificates and Class P Certificates and not insured
by any NIMS Insurer.
"Ownership Interest": As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
"Pass-Through Rate":
With respect to the Class A Certificates for any Distribution Date, the
lesser of (x) the related Formula Rate for such Distribution Date and (y) the
related Net WAC Rate for such Certificates for such Distribution Date.
With respect to the Class I-S1 Certificates and any Distribution Date,
a per annum rate equal to 5.25 % for the Distribution Date in September 2002
through the Distribution Date in July 2005 and 0.00% thereafter.
With respect to the Class II-S1 Certificates and any Distribution Date,
a per annum rate equal to 4.25% for the Distribution Date in September 2002
through the Distribution Date in July 2005 and 0.00% thereafter.
With respect to the Class I-S2 Certificates and any Distribution Date,
a per annum rate equal to the lesser of (x) 4.25% per annum and (y) the Class
I-S2 Cap Rate, for the Distribution Date in September 2002 through the
Distribution Date in February 2005 and 0.00% thereafter.
With respect to the Class II-S2 Certificates and any Distribution Date,
a per annum rate equal to the lesser of (x) 4.25% per annum and (y) the Class
II-S2 Cap Rate, for the Distribution Date in September 2002 through the
Distribution Date in February 2005 and 0.00% thereafter.
However, for federal income tax purposes and under the REMIC
Provisions, (A) the Class S Certificates will not have a Pass-Through Rate, and
(B) the Monthly Interest Distributable Amounts for the Class S Certificates and
any Distribution Date for federal income tax purposes will be as specified in
the definition of Monthly Interest Distributable Amount.
With respect to REMIC 4 Regular Interest LT4-IC and any Distribution
Date, a per annum rate equal to the percentage equivalent of a fraction, the
numerator of which is the excess of (a) the sum of the amounts calculated
pursuant to clauses (A) through (D) below over (b) the sum of the Guaranty Fee
and the Group I Certificate Insurer Premium for such Distribution Date, and the
denominator of which is the aggregate of the Uncertificated Principal Balances
of the REMIC 3 Group I Regular Interests. For purposes of calculating the
Pass-Through Rate for REMIC 4 Regular Interest LT4-IC, the numerator is equal to
the sum of the following components:
(A) the Uncertificated REMIC 3 Pass-Through Rate for REMIC 3
Regular Interest LT3A-1 minus Marker Rate 1, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 3 Regular Interest LT3A-1;
49
(B) the Uncertificated REMIC 3 Pass-Through Rate for REMIC 3
Regular Interest LT3B-1 minus Marker Rate 1, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 3 Regular Interest LT3B-1;
(C) the Uncertificated REMIC 3 Pass-Through Rate for REMIC 3
Regular Interest LT3C-1 minus Marker Rate 1, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 3 Regular Interest LT3C-1; and
(D) 100% of the interest on REMIC 4 Regular Interest LT4P-1.
With respect to REMIC 4 Regular Interest LT4-IIC and any Distribution
Date, a per annum rate equal to the percentage equivalent of a fraction, the
numerator of which is the excess of (a) the sum of the amounts calculated
pursuant to clauses (A) through (D) below over (b) the Group II Certificate
Insurer Premium for such Distribution Date, and the denominator of which is the
aggregate of the Uncertificated Principal Balances of the REMIC 4 Group II
Regular Interests. For purposes of calculating the Pass-Through Rate for REMIC 4
Regular Interest LT4-IIC, the numerator is equal to the sum of the following
components:
(A) the Uncertificated REMIC 3 Pass-Through Rate for REMIC 3
Regular Interest LT3A-2 minus Marker Rate 2, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 3 Regular Interest LT3A-2;
(B) the Uncertificated REMIC 3 Pass-Through Rate for REMIC 3
Regular Interest LT3B-2 minus Marker Rate 2, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 3 Regular Interest LT3B-2;
(C) the Uncertificated REMIC 3 Pass-Through Rate for REMIC 3
Regular Interest LT3C-2 minus Marker Rate 2, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 3 Regular Interest LT3C-2; and
(D) 100% of the interest on REMIC 4 Regular Interest LT4P-2.
The Class I-C Certificates and the Class II-C Certificates
will not have a Pass-Through Rate.
"Percentage Interest": With respect to any Certificate (other than a
Residual Certificate), a fraction, expressed as a percentage, the numerator of
which is the Initial Certificate Principal Balance or Initial Notional Amount
represented by such Certificate and the denominator of which is the Original
Class Certificate Principal Balance or Original Class Notional Amount of the
related Class. With respect to a Residual Certificate, the portion of the Class
evidenced thereby, expressed as a percentage, as stated on the face of such
Certificate; provided, however, with respect to each Class referred to in this
paragraph, that the sum of all such percentages for each such Class totals 100%.
"Periodic Rate Cap": With respect to each Adjustable Rate Mortgage Loan
and any Adjustment Date therefor, the fixed percentage set forth in the related
Mortgage Note, which is the maximum amount by which the Mortgage Rate for such
Mortgage Loan may increase or decrease (without regard to the Maximum Mortgage
50
Rate or the Minimum Mortgage Rate) on such Adjustment Date from the Mortgage
Rate in effect immediately prior to such Adjustment Date.
"Permitted Investments": Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued or managed by the Depositor, the Master Servicer, the NIMS
Insurer, the Certificate Insurer, the Trustee, the Trust Administrator or any of
their respective Affiliates or for which an Affiliate of the NIMS Insurer, the
Certificate 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;
(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;
51
(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": None of the Mortgage Loans are insured by a primary
mortgage insurance policy. References to the PMI Insurer, PMI Insurer Fee, PMI
Insurer Fee Rate, PMI Mortgage Loans and PMI Policy are left in this Agreement
for administrative convenience and shall be completely disregarded. There are no
PMI Mortgage Loans nor any PMI Insurer under this Agreement and no Person shall
have any rights of the PMI Insurer under this Agreement.
"PMI Insurer Fee": The amount payable to the PMI Insurer on each
Distribution Date, which amount shall equal one twelfth of the product of (i)
the PMI Insurer Fee Rate, multiplied by (ii) the aggregate Stated Principal
Balance of the PMI Mortgage Loans and any related REO Properties as of the first
day of the related Due Period.
"PMI Insurer Fee Rate": 0.00% per annum.
"PMI Mortgage Loans": The Mortgage Loans insured by the PMI Insurer set
forth on the list of Mortgage Loans attached hereto as Schedule IV. There are no
PMI Mortgage Loans under this Agreement.
"PMI Policy": Not applicable.
52
"Policy Payment Account": The trust account or accounts created and
maintained by the Trust Administrator pursuant to Section 3.31(a) which shall be
entitled "Policy Payment Account, Deutsche Bank National Trust Company, as Trust
Administrator for the benefit of Wachovia Bank, National Association, as
Trustee, in trust for the registered Certificateholders of Long Beach Mortgage
Loan Trust 2002-3, Asset-Backed Certificates, Series 2002-3" and which must at
all times be an Eligible Account.
"Preference Amount": Any amount previously distributed to a Holder of
an Insured Certificate (other than the portion of the Guaranteed Interest
Distribution Amount attributable to any Prepayment Interest Shortfalls or Relief
Act Interest Shortfalls) that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy in a proceeding under the United
States Bankruptcy Code (11 U.S.C. Section 101 et seq.), as amended from time to
time, or in any other applicable bankruptcy, insolvency, receivership,
readjustment of debt, reorganization, marshalling of assets and liabilities or
similar proceeding by or against the obligor on a Mortgage Loan, in accordance
with a final nonappealable order of a court having competent jurisdiction.
"Prepayment Assumption": The pricing prepayment assumption as described
in the Prospectus Supplement.
"Prepayment Charge": With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof (other than any Master
Servicer Prepayment Charge Payment Amount).
"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
53
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 July 1, 2002 through August 31, 2002, and with respect to any
Distribution Date thereafter, the calendar month immediately preceding the
calendar month in which such Distribution Date occurs.
"Prime Rate": The prime rate of United States money center commercial
banks as published in The Wall Street Journal.
"Principal Balance": As to any Mortgage Loan other than a Liquidated
Mortgage Loan, and any day, the related Cut-off Date Principal Balance, minus
all collections credited against the Cut-off Date Principal Balance of any such
Mortgage Loan. For purposes of this definition, a Liquidated Mortgage Loan shall
be deemed to have a Principal Balance equal to the Principal Balance of the
related Mortgage Loan as of the final recovery of related Liquidation Proceeds
and a Principal Balance of zero thereafter. As to any REO Property and any day,
the Principal Balance of the related Mortgage Loan shall equal the Principal
Balance of the related Mortgage Loan immediately prior to such Mortgage Loan
becoming REO Property minus any REO Principal Amortization received with respect
thereto on or prior to such day.
"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 July
30, 2002 relating to the public offering of the Class II-A Certificates and the
Class II-S1 Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO Property to
be purchased pursuant to or as contemplated by Section 2.03, Section 3.16(c) or
Section 9.01, and as confirmed by an Officers' Certificate from the Master
Servicer to the Trustee 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) (without giving effect to
clauses (a)(iv) and (b) of the first sentence and clause (b) of the second
sentence of the definition of the "Stated Principal Balance"), (ii) in the case
of (x) a Mortgage Loan, accrued interest on such Stated Principal Balance at the
applicable Net Mortgage Rate in effect from time to time from the Due Date as to
which interest was last paid by the Mortgagor or by an advance by the Master
Servicer through the end of the calendar month in which the purchase is to be
54
effected and (y) an REO Property, the sum of (1) accrued interest on such Stated
Principal Balance at the applicable Net Mortgage Rate in effect from time to
time from the Due Date as to which interest was last paid by the Mortgagor or by
an advance by the Master Servicer through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, plus (2) REO Imputed Interest for such REO Property for each calendar
month commencing with the calendar month in which such REO Property was acquired
and ending with the calendar month in which such purchase is to be effected, net
of the total of all net rental income, Insurance Proceeds, Liquidation Proceeds
and Advances that as of the date of purchase had been distributed in respect of
REO Imputed Interest pursuant to Section 4.01, (iii) any unreimbursed Servicing
Advances, Advances and Nonrecoverable Advances and any unpaid Servicing Fees
allocable to such Mortgage Loan or REO Property, (iv) any amounts previously
withdrawn from the Collection Account in respect of such Mortgage Loan or REO
Property pursuant to Section 3.11 (a)(ix) and Section 3.16(b), and (v) in the
case of a Mortgage Loan required to be purchased pursuant to Section 2.03,
enforcement expenses reasonably incurred or to be incurred by the Certificate
Insurer, the NIMS Insurer, the Master Servicer, the Guarantor, 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 2.00% of the aggregate
principal balance of the Closing Date Mortgage Loans as of the Cut-Off Date has
previously been repurchased (exclusive of any Mortgage Loans purchased by the
Master Servicer pursuant to Section 3.16(c)) or substituted for, then in
addition to those requirements set forth above, the Purchase Price shall include
the amount of any related Prepayment Charge (other than with respect to a
Purchase Price paid in connection with Section 9.01).
"Qualified Insurer": Any insurance company acceptable to ▇▇▇▇▇▇ ▇▇▇.
"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
55
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,
(xv) conform to each representation and warranty set forth in Section 6 of the
Mortgage Loan Purchase Agreement applicable to the Deleted Mortgage Loan, (xvi)
have a FICO score no lower than the FICO score of the Deleted Mortgage Loan,
(xvii) be an adjustable-rate Mortgage Loan if the Deleted Mortgage Loan is an
adjustable-rate Mortgage Loan or be a fixed-rate Mortgage Loan if the Deleted
Mortgage Loan is a fixed-rate Mortgage Loan; and (xviii) is not secured by
Mortgaged Property located in the State of California unless the Deleted
Mortgage Loan is secured by Mortgaged Property located in the State of
California. In the event that one or more mortgage loans are substituted for one
or more Deleted Mortgage Loans, the amounts described in clause (i) hereof shall
be determined on the basis of aggregate principal balances (applied separately
for the Group I Mortgage Loans and Group II Mortgage Loans), the Mortgage Rates
described in clauses (ii) through (v) hereof shall be satisfied for each such
mortgage loan, the risk gradings described in clause (ix) hereof shall be
satisfied as to each such mortgage loan, the terms described in clause (vi)
hereof shall be determined on the basis of weighted average remaining term to
maturity (provided that no such mortgage loan may have a remaining term to
maturity longer than the Deleted Mortgage Loan), the Loan-to-Value Ratios
described in clause (viii) hereof shall be satisfied as to each such mortgage
loan and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (xv) hereof must be satisfied
as to each Qualified Substitute Mortgage Loan or in the aggregate, as the case
may be.
Notwithstanding the foregoing, if an amount of Mortgage Loans (measured
by the aggregate principal balance) that is in excess of 2.00% of the aggregate
principal balance of the Closing Date Mortgage Loans as of the Cut-Off Date has
previously been repurchased (exclusive of any Mortgage Loans purchased by the
Master Servicer pursuant to Section 3.16(c)) or substituted for, then in
addition to clauses (i) through (xiv) above, each Qualified Substitute Mortgage
Loan shall also have a Prepayment Charge provision at least as favorable to the
Holders of the related Class P Certificates as the Prepayment Charge provisions
in the Deleted Mortgage Loan.
"Rate Change Date": The date specified in the Preliminary Statement on
which the Uncertificated Pass-Through Rate for certain REMIC Regular Interest
changes.
"Rating Agency or Rating Agencies": Fitch, ▇▇▇▇▇'▇ 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.
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"Record Date": With respect to (i) the Class S Certificates, the Class
P Certificates, the Class C Certificates, the Residual Certificates and any
Definitive Certificates, the Close of Business on the last Business Day of the
calendar month preceding the month in which the related Distribution Date occurs
and (ii) with respect to the Class A Certificates, the Close of Business on the
Business Day immediately preceding the related Distribution Date; provided,
however, that following the date on which Definitive Certificates for a Class A
Certificate are available pursuant to Section 5.02, the Record Date for such
Certificates shall be the last Business Day of the calendar month preceding the
month in which the related Distribution Date occurs.
"Recording Documents": As defined in Section 2.01 hereof.
"Reference Banks": Those banks (i) with an established place of
business in London, England, (ii) not controlling, under the control of or under
common control with the Depositor, the Seller or the Master Servicer or any
affiliate thereof and (iii) which have been designated as such by the Trust
Administrator with the consent of the Controlling Insurer; provided, however,
that if fewer than two of such banks provide a LIBOR rate, then any leading
banks selected by the Trust Administrator with the consent of the Controlling
Insurer which are engaged in transactions in United States dollar deposits in
the international Eurocurrency market.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of which were
not used to purchase the related Mortgaged Property.
"Regular Certificates": The Class A Certificates, the Class S
Certificates, the Class C Certificates and the Class P Certificates.
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
"Relief Act Interest Shortfall": With respect to any Distribution Date,
for any Mortgage Loan with respect to which there has been a reduction in the
amount of interest collectible thereon for the most recently ended Due Period as
a result of the application of the Relief Act, the amount by which (i) interest
collectible on such Mortgage Loan during such Due Period is less than (ii) one
month's interest on the Principal Balance of such Mortgage Loan at the Mortgage
Rate for such Mortgage Loan before giving effect to the application of the
Relief Act.
"REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
"REMIC 1": The segregated pool of assets subject hereto, constituting a
primary trust created hereby and to be administered hereunder, with respect to
which a REMIC election is to be made consisting of: (i) such Mortgage Loans as
from time to time are subject to this Agreement, together with the Mortgage
Files relating thereto, and together with all collections thereon and proceeds
thereof, (ii) any REO Property acquired with respect to a Mortgage Loan,
together with all collections thereon and proceeds thereof, (iii) the Trustee's
rights with respect to the Mortgage Loans under all insurance policies,
including the PMI Policy, required to be maintained pursuant to this Agreement
and any proceeds thereof, (iv) the Depositor's rights with respect to the
57
Mortgage Loans under the Mortgage Loan Purchase Agreement (including any
security interest created thereby), (v) the obligations of the Guarantor to the
Holders of the Guaranteed Certificates under the Guaranty, (vi) the obligations
of the Certificate Insurer to the Holders of the Insured Certificates under the
Certificate Insurance Policy and, (vii) the Collection Account, the Distribution
Account (subject to the last sentence of this definition), the Policy Payments
Account and any REO Account and such assets that are deposited therein from time
to time and any investments thereof, together with any and all income, proceeds
and payments with respect thereto. Notwithstanding the foregoing, however, a
REMIC election will not be made with respect to the Reserve Funds and Master
Servicer Prepayment Charge Payment Amounts.
"REMIC 1 IS1 Interests": The regular interests in REMIC 1 that are
described in the Preliminary Statement and designated as LT1IS1-1 through
LT1IS1-35. Each REMIC 1 IS1 Interest shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in effect from time to time, and shall
be entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement hereto.
"REMIC 1 IIS1 Interests": The regular interests in REMIC 1 that are
described in the Preliminary Statement and designated as LT1IIS1-1 through
LT1IIS1-35. Each REMIC 1 IIS1 Interest shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in effect from time to time, and shall
be entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement hereto.
"REMIC 1 Regular Interest LT1A-A": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A-A shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LT1A-B": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A-B shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LT1A-P": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A-P shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to any Prepayment Charges relating to the
Group I Mortgage Loans collected by the Master Servicer and to a distribution of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
"REMIC 1 Regular Interest LT1B-A": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1B-A shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
58
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LT1B-P": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1B-P shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to any Prepayment Charges relating to the
Group II Mortgage Loans collected by the Master Servicer and to a distribution
of principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
"REMIC 1 Regular Interests": REMIC 1 Regular Interest LT1A-A, REMIC 1
Regular Interest LT1A-B, REMIC 1 Regular Interest LT1A-P, REMIC 1 Regular
Interest LT1B-A, REMIC 1 Regular Interest LT1B-P, the REMIC 1 IS1 Interests and
the REMIC 1 IIS1 Interests.
"REMIC 2": The segregated pool of assets consisting of all of the REMIC
1 Regular Interests conveyed in trust to the Trustee, for the benefit of REMIC
3, as holder of the REMIC 2 Regular Interests, and the Class R
Certificateholders, as holders of the Class R-2 Interest, pursuant to Article II
hereunder, and all amounts deposited therein, with respect to which a separate
REMIC election is to be made.
"REMIC 2 IS1 Interests": The regular interests in REMIC 2 that are
described in the Preliminary Statement and designated as LT2IS1-1 through
LT2IS1-35. Each REMIC 2 IS1 Interest shall accrue interest at the related
Uncertificated REMIC 2 Pass-Through Rate in effect from time to time.
"REMIC 2 IIS1 Interests": The regular interests in REMIC 2 that are
described in the Preliminary Statement and designated as LT2IIS1-1 through
LT2IIS1-35. Each REMIC 2 IIS1 Interest shall accrue interest at the related
Uncertificated REMIC 2 Pass-Through Rate in effect from time to time.
"REMIC 2 IS2 Interests": The regular interests in REMIC 2 that are
described in the Preliminary Statement and designated as LT2IS2-1 and LT2IS2-2.
Each REMIC 2 IS2 Interest shall accrue interest at the related Uncertificated
REMIC 2 Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
"REMIC 2 IIS2 Interests": The regular interests in REMIC 2 that are
described in the Preliminary Statement and designated as LT2IIS2-1 and
LT2IIS2-2. Each REMIC 2 IIS2 Interest shall accrue interest at the related
Uncertificated REMIC 2 Pass-Through Rate in effect from time to time, and shall
be entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement hereto.
"REMIC 2 Regular Interest LT2A-A": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2A-A shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
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the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 2 Regular Interest LT2A-P": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2A-P shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to any amounts distributed to REMIC 1
Regular Interest LT1A-P.
"REMIC 2 Regular Interest LT2B-A": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2B-A shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 2 Regular Interest LT2B-P": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2B-P shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to any amounts distributed to REMIC 1
Regular Interest LT1B-P.
"REMIC 2 Regular Interests": REMIC 2 Regular Interest LT2A-A, REMIC 2
Regular Interest LT2B-A, REMIC 2 Regular Interest LT2A-P, REMIC 2 Regular
Interest LT2B-P, the REMIC 2 IS1 Interests, the REMIC 2 IIS1 Interests, the
REMIC 2 IS2 Interests, and the REMIC 2 IIS2 Interests.
"REMIC 3": The segregated pool of assets consisting of all of the REMIC
2 Regular Interests conveyed in trust to the Trustee, for the benefit of REMIC
4, as holder of the REMIC 3 Regular Interests, and the Class R
Certificateholders, as holders of the Class R-3 Interest, pursuant to Article II
hereunder, and all amounts deposited therein, with respect to which a separate
REMIC election is to be made.
"REMIC 3 IS2 Interests": The REMIC 3 Regular Interests described in the
Preliminary Statement and designated as LT3IS2-1 and LT3IS2-2. Each REMIC 3 IS2
Interest shall accrue interest at the related Uncertificated REMIC 3
Pass-Through Rate in effect from time to time.
"REMIC 3 IIS2 Interests": The regular interests in REMIC 3 that are
described in the Preliminary Statement and designated as LT3IIS2-1 and
LT3IIS2-2. Each REMIC 3 IIS2 Interest shall accrue interest at the related
Uncertificated REMIC 3 Pass-Through Rate in effect from time to time.
"REMIC 3 Regular Interest LT3A-1": One of the separate non-certified
beneficial ownership interests in REMIC 3 issued hereunder and designated as a
Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3A-1 shall accrue
interest at the unrelated Uncertificated REMIC 3 Pass-Through Rate in effect
from time to time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
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"REMIC 3 Regular Interest LT3B-1": One of the separate non-certified
beneficial ownership interests in REMIC 3 issued hereunder and designated as a
Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3B-1 shall accrue
interest at the unrelated Uncertificated REMIC 3 Pass-Through Rate in effect
from time to time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 3 Regular Interest LT3C-1": One of the separate non-certified
beneficial ownership interests in REMIC 3 issued hereunder and designated as a
Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3C-1 shall accrue
interest at the unrelated Uncertificated REMIC 3 Pass-Through Rate in effect
from time to time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 3 Regular Interest LT3A-P": One of the separate non-certificated
beneficial ownership interests in REMIC 3 issued hereunder and designated as a
Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3A-P shall accrue
interest at the related Uncertificated REMIC 3 Pass-Through Rate in effect from
time to time, and shall be entitled to any amounts distributed to REMIC 2 A
Regular Interest LT2A-P.
"REMIC 3 Regular Interest LT3A-2": One of the separate non-certified
beneficial ownership interests in REMIC 3 issued hereunder and designated as a
Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3A-2 shall accrue
interest at the related Uncertificated REMIC 3 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 3 Regular Interest LT3B-2": One of the separate non-certified
beneficial ownership interests in REMIC 3 issued hereunder and designated as a
Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3B-2 shall accrue
interest at the unrelated Uncertificated REMIC 3 Pass-Through Rate in effect
from time to time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 3 Regular Interest LT3C-2": One of the separate non-certified
beneficial ownership interests in REMIC 3 issued hereunder and designated as a
Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3C-2 shall accrue
interest at the unrelated Uncertificated REMIC 3 Pass-Through Rate in effect
from time to time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 3 Regular Interest LT3B-P": One of the separate non-certificated
beneficial ownership interests in REMIC 3 issued hereunder and designated as a
Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3B-P shall accrue
interest at the related Uncertificated REMIC 3 Pass-Through Rate in effect from
time to time, and shall be entitled to any amounts distributed to REMIC 2B
Regular Interest LT2B-P.
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"REMIC 3 Regular Interest LT3IS1": The regular interest in REMIC 3 that
is described in the Preliminary Statement and designated as LT3IS1. The REMIC 3
Regular Interest LT3IS1 shall accrue interest at the related Uncertificated
REMIC 3 Pass-Through Rate in effect from time to time.
"REMIC 3 Regular Interest LT3IIS1": The regular interest in REMIC 3
that is described in the Preliminary Statement and designated as LT3IIS1. The
REMIC 3 Regular Interest LTIIS1 shall accrue interest at the related
Uncertificated REMIC 3 Pass-Through Rate in effect from time to time.
"REMIC 3 Regular Interests": REMIC 3 Regular Interest LT3A-1, REMIC 3
Regular Interest LT3B-1, REMIC 3 Regular Interest LT3C-1, REMIC 3 Regular
Interest LT3IS1, REMIC 3 IS2 Interests, REMIC 3 Regular Interest LT3A-2, REMIC 3
Regular Interest LT3B-2, REMIC 3 Regular Interest LT3C-2, REMIC 3 Regular
Interest LT3IIS1, the REMIC 3 IIS2 Interests, REMIC 3 Regular Interest LT3A-P
and REMIC 3 Regular Interest LT3B-P.
"REMIC 3 Group I Diverted Excess Spread": 1% of any amount of Group I
Net Monthly Excess Cash Flow that, pursuant to Section 4.01(d)(i)(f), is used to
make payments to the Class II-A Certificates.
"REMIC 3 Group I Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Principal Balance of the Group I Mortgage Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC 3 Pass-Through Rate for REMIC 3
Regular Interest LT3A-1 minus Marker Rate 1, divided by (b) 12.
"REMIC 3 Group I Regular Interests": REMIC 3 Regular Interest LT3A-1,
REMIC 3 Regular Interest LT3B-1, REMIC 3 Regular Interest LT3C-1, REMIC Regular
Interest LT3IS1, REMIC Regular Interest LT3A-P, and REMIC 3 IS2 Interests.
"REMIC 3 Group II Diverted Excess Spread": 1% of any amount of Group II
Net Monthly Excess Cash Flow that, pursuant to Section 4.01(d)(ii)(d), is used
to make payments to the Class I-A Certificates.
"REMIC 3 Group II Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Principal Balance of the Group II Mortgage Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC 3 Pass-Through Rate for REMIC 3
Regular Interest LT3A-2 minus Marker Rate 2, divided by (b) 12.
"REMIC 3 Group II Regular Interests": REMIC 3 Regular Interest LT3A-2,
REMIC 3 Regular Interest LT3B-2, REMIC 3 Regular Interest LT3C-2, REMIC Regular
Interest LT3B-P, REMIC 3 Regular Interest LT3IIS1 and the REMIC 3 IIS2 Interest.
"REMIC 3 Overcollateralization Target Amount 1": 1% of the Group I
Overcollateralization Target Amount.
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"REMIC 3 Overcollateralization Target Amount 2": 1% of the Group II
Overcollateralization Target Amount.
"REMIC 3 Overcollateralized Amount 1": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC 3 Regular Interest LT3A-1, REMIC 3 Regular Interest LT3B-1, REMIC 3
Regular Interest LT3C-1 and REMIC 3 Regular Interest LT3A-P, minus (ii) the
Uncertificated Principal Balance of REMIC 3 Regular Interest LT3B-1, in each
case as of such date of determination.
"REMIC 3 Overcollateralized Amount 2": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC 3 Regular Interest LT3A-2, REMIC 3 Regular Interest LT3B-2, REMIC 3
Regular Interest LT3C-2 and REMIC 3 Regular Interest LT3B-P minus (ii) the
Uncertificated Principal Balances of REMIC 3 Regular Interest LT3B-2, in each
case as of such date of determination.
"REMIC 3 Principal Loss Allocation Amount 1": With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Principal
Balance of the Group I Mortgage Loans and related REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is 2 times the
Uncertificated Principal Balance of REMIC 3 Regular Interest LT3B-1 and the
denominator of which is the aggregate of the Uncertificated Principal Balances
of REMIC 3 Regular Interest LT3B-1 and REMIC 3 Regular Interest LT3C-1.
"REMIC 3 Principal Loss Allocation Amount 2": With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Principal
Balance of the Group II Mortgage Loans and related REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is 2 times the
Uncertificated Principal Balances of REMIC 3 Regular Interest LT3B-2 and the
denominator of which is the aggregate of the Uncertificated Principal Balances
of REMIC 3 Regular Interest LT3B-2 and REMIC 3 Regular Interest LT3C-2.
"REMIC 4": The segregated pool of assets consisting of all of the REMIC
3 Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates (other than the Class C Certificates and the
Class P Certificates), REMIC CX, as the holder of the REMIC 4 Regular Interests
LT4-IC and REMIC 4 Regular Interest LT4-IIC, REMIC PX as holder of REMIC 4
Regular Interest LT4-IP and REMIC 4 Regular Interest LT4-IIP, and the Class R
Certificateholders, as holders of the Class R-4 Interest, pursuant to Article II
hereunder, and all amounts deposited therein, with respect to which a separate
REMIC election is to be made.
"REMIC 4 Regular Interest LT4-IC": One of the separate non-certificated
beneficial ownership interests in REMIC 4 issued hereunder and designated as a
Regular Interest in REMIC 4. REMIC 4 Regular Interest LT4-IC shall accrue
interest at the related Pass-Through Rate in effect from time to time on its
Notional Amount outstanding from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
"REMIC 4 Regular Interest LT4-IP": One of the separate non-certificated
beneficial ownership interests in REMIC 4 issued hereunder and designated as a
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Regular Interest in REMIC 4. REMIC 4 Regular Interest LT4-IP shall be entitled
to any amounts distributed to REMIC 3 Regular Interest LT3P-1.
"REMIC 4 Regular Interest LT4-IIC": One of the separate
non-certificated beneficial ownership interests in REMIC 4 issued hereunder and
designated as a Regular Interest in REMIC 4. REMIC 4 Regular Interest LT4-IIC
shall accrue interest at the related Pass-Through Rate in effect from time to
time on its Notional Amount outstanding from time to time, and shall be entitled
to distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
"REMIC 4 Regular Interest LT4-IIP": One of the separate
non-certificated beneficial ownership interests in REMIC 4 issued hereunder and
designated as a Regular Interest in REMIC 4. REMIC 4 Regular Interest LT4-IIP
shall be entitled to any amounts distributed to REMIC 3 Regular Interest LT3P-2.
"REMIC 4 Regular Interests": REMIC 4 Regular Interest LT4-IC, REMIC 4
Regular Interest LT4-IIC, REMIC 4 Regular Interest LT4-IP and REMIC 4 Regular
Interest LT4-IIP.
"REMIC Provisions": Provisions of the federal income tax law relating
to real estate mortgage investment conduits which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.
"REMIC Regular Interests": The REMIC 1 Regular Interests, the REMIC 2
Regular Interests, the REMIC 3 Regular Interests and the REMIC 4 Regular
Interests.
"REMIC CX": The segregated pool of assets consisting of the REMIC 4
Regular Interests LT4-IC and REMIC 4 Regular Interest LT4-IIC, conveyed in trust
to the Trustee, for the benefit of the Holders of the Class C Certificates and
the Class R-CX Certificates, pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC PX": The segregated pool of assets consisting of REMIC 4 Regular
Interest LT4-IP and REMIC 4 Regular Interest LT4-IIP, conveyed in trust to the
Trustee, for the benefit of the Holders of the Class P Certificates and the
Class R-PX Certificates, pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"Remittance Report": A report prepared by the Master Servicer and
delivered to the NIMS Insurer, the Certificate Insurer, the Guarantor, 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.
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"REO Disposition": The sale or other disposition of an REO Property on
behalf of the Trust Fund.
"REO Imputed Interest": As to any REO Property, for any calendar month
during which such REO Property was at any time part of the Trust Fund, one
month's interest at the applicable Net Mortgage Rate on the Principal Balance of
such REO Property (or, in the case of the first such calendar month, of the
related Mortgage Loan if appropriate) as of the Close of Business on the
Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO Property, for any
calendar month, the excess, if any, of (a) the aggregate of all amounts received
in respect of such REO Property during such calendar month, whether in the form
of rental income, sale proceeds (including, without limitation, that portion of
the Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 9.01 that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i) payable pursuant
to Section 3.23 in respect of the proper operation, management and maintenance
of such REO Property or (ii) payable or reimbursable to the Master Servicer
pursuant to Section 3.23 for unpaid Servicing Fees in respect of the related
Mortgage Loan and unreimbursed Servicing Advances and Advances in respect of
such REO Property or the related Mortgage Loan, over (b) the REO Imputed
Interest in respect of such REO Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Master Servicer on
behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.23.
"Request for Release": A release signed by a Servicing Representative,
in the form of Exhibit E-1 or E-2 attached hereto.
"Reserve 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 Controlling Insurer are quoting on the relevant Interest
Determination Date to the principal London offices of leading banks in the
London interbank market or (ii) in the event that the 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 Controlling Insurer are quoting on such
Interest Determination Date to leading European banks.
"Residential Dwelling": Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a ▇▇▇▇▇▇ ▇▇▇ eligible condominium project, (iv) a
manufactured home, or (v) a detached one-family dwelling in a planned unit
development, none of which is a co-operative or mobile home.
"Residual Certificates": The Class R Certificates, the Class R-CX
Certificates and the R-PX Certificates.
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"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.
"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.
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"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 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.
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"Sub-Servicing Account": An account or accounts established by a
Sub-Servicer which meets the requirements set forth in Section 3.08 and is
otherwise acceptable to the applicable Master Servicer.
"Sub-Servicing Agreement": The written contract between the Master
Servicer and a Sub-Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.02.
"Substitution Adjustment": An amount equal to the excess of the
Principal Balance of the related Deleted Mortgage Loan over the Principal
Balance of such Qualified Substitute Mortgage Loan that the Seller is required
to deposit in the Collection Account on or prior to the next succeeding
Determination Date in connection with a substitution of a Qualified Substitute
Mortgage Loan.
"Substitution Shortfall Amounts": As defined in Section 2.03(d) hereof.
"Tax Returns": The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit 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(b).
"Term of the Policy": The period from and including the date of
issuance of the Certificate Insurance Policy to and including the first date on
which the Certificate Principal Balance for each class of the Class A
Certificates is reduced to zero and interest ceased to accrue on the Class S1
Certificates, plus such additional period, to the extent specified in the
Certificate Insurance Policy, during which any Payment on the applicable class
of Insured Certificates could be avoided in whole or in part as a Preference
Amount.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
"Trigger Event": The Group I Trigger Event or the Group II Trigger
Event.
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"Trust": Long Beach Mortgage Loan Trust 2002-3, the trust created
hereunder.
"Trust Administrator": Deutsche Bank National Trust Company, a national
banking association, or its successor in interest, or any successor Trust
Administrator appointed as herein provided.
"Trust Administrator Fee": The Group I Trust Administrator Fee and the
Group II Trust Administrator Fee.
"Trust Administrator Fee Rate": 0.0020% per annum.
"Trust Fund": All of the assets of the Trust, which is the trust
created hereunder consisting of REMIC 1, REMIC 2, REMIC 3, REMIC 4, REMIC CX,
REMIC PX, the Reserve Funds and any Master Servicer Prepayment Charge Payment
Amounts and the Trust's rights under the Cap Agreements.
"Trust REMIC": Any of REMIC 1, REMIC 2, REMIC 3, REMIC 4, REMIC CX
and/or REMIC PX.
"Trustee": Wachovia Bank, National Association, 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 of such REMIC Regular Interest. In
each case, Uncertificated Accrued Interest will be reduced by any Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls allocated to such REMIC
Regular Interests pursuant to Section 1.03.
"Uncertificated Notional Amount":
(a) With respect to REMIC 3 Regular Interest LT3IS1 and any
Distribution Date, the sum of the Uncertificated Notional Amounts of the REMIC 2
IS1 Interests;
(b) With respect to REMIC 3 Regular Interest LT3IIS1 and any
Distribution Date, the sum of the Uncertificated Notional Amounts of the REMIC 2
IIS1 Interests;
(c) With respect to any REMIC 3 IS2 Interest and any Distribution Date,
the Uncertificated Principal Balance of the REMIC 2 IS2 Interest with the same
numerical designation for such Distribution Date; and
(d) With respect to any REMIC 3 IIS2 Interest and any Distribution
Date, the Uncertificated Principal Balance of the REMIC 2 IIS2 Interest with the
same numerical designation for such Distribution Date.
(e) With respect to any REMIC 2 IS1 Interest and any Distribution Date,
the Uncertificated Principal Balance of the REMIC 1 IS1 Interest with the same
numerical designation for such Distribution Date.
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(f) With respect to any REMIC 2 IIS1 Interest and any Distribution
Date, the Uncertificated Principal Balance of the REMIC 1 IIS1 Interest with the
same numerical designation for such Distribution Date.
"Uncertificated Pass-Through Rate": The Uncertificated REMIC 1
Pass-Through Rate, the Uncertificated REMIC 2 Pass-Through Rate, or the
Uncertificated REMIC 3 Pass-Through Rate.
"Uncertificated Principal Balance": With respect to each REMIC Regular
Interest (other than the Notional Regular Interests), the principal amount of
such REMIC Regular Interest outstanding as of any date of determination. As of
the Closing Date, the Uncertificated Principal Balance of each REMIC Regular
Interest (other than the Notional Regular Interests) shall equal the amount set
forth in the Preliminary Statement hereto as its initial Uncertificated
Principal Balance. On each Distribution Date, the Uncertificated Principal
Balance of each REMIC Regular Interest shall be reduced by all distributions of
principal made on such REMIC Regular Interest on such Distribution Date pursuant
to Section 4.05 and, if and to the extent necessary and appropriate, shall be
further reduced on such Distribution Date by Realized Losses as provided in
Section 4.06, and the Uncertificated Principal Balances of REMIC 3 Regular
Interest LT3C-1 and REMIC 3 Regular Interest LT3C-2 shall be increased by
interest deferrals as provided in Section 4.05. The Uncertificated Principal
Balance of each REMIC Regular Interest that has an Uncertificated Principal
Balance shall never be less than zero. Notwithstanding the foregoing, the
Uncertificated Principal Balance of (i) REMIC 4 Regular Interest LT4-IC shall
always be equal to the excess, if any, of (A) the then aggregate Uncertificated
Principal Balances of the REMIC 3 Group I Regular Interests over (B) the sum of
the Certificate Principal Balance of the Class I-A Certificates and the
Uncertificated Principal Balance of REMIC 4 Regular Interest LT4-IP and (ii)
REMIC 4 Regular Interest LT4-IIC shall always be equal to the excess, if any, of
(A) the then aggregate Uncertificated Principal Balances of the REMIC 3 Group II
Regular Interests over (B) the sum of the Certificate Principal Balances of the
Class II-A Certificates and the Uncertificated Principal Balance of REMIC 4
Regular Interest LT4-IIP.
"Uncertificated REMIC 1 Pass-Through Rate": With respect to each REMIC
1 Regular Interest (other than REMIC 1 Regular Interest LT1A-B) and any
Distribution Date, a per annum rate equal to the weighted average of the
Adjusted Net Mortgage Rates of those Group I Mortgage Loans that have Adjusted
Net Minimum Mortgage Rates of 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 1
Regular Interest LT1A-B and any Distribution Date, a per annum rate equal to the
weighted average of the Adjusted Net Mortgage Rates of those Group I Mortgage
Loans that have Adjusted Net Minimum Mortgage Rates of less than 5.25%, weighted
on the basis of the 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 2 Pass-Through Rate":
(a) With respect to REMIC 2 Regular Interest LT2A-A, the REMIC 2 IS2
Interests, and REMIC 2 Regular Interest LT3A-P, and any Distribution Date, a per
annum rate equal to the weighted average of (x) the Uncertificated REMIC 1
Pass-Through Rates with respect to REMIC 1 Regular Interest LT1A-A, REMIC 1
Regular Interest LT1A-B, and REMIC 1 Regular Interest LT1A-P for such
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Distribution Date, and (y) the excess, if any, of (i) the Uncertificated REMIC 1
Pass-Through Rate for each REMIC 1 IS1 Interest over (i) 5.25% per annum for
each Distribution Date in September 2002 through the Rate Change Date for such
REMIC 1 IS1 Interest, and (ii) 0.00% per annum for each Distribution Date after
the Rate Change Date for such REMIC 1 IS1 Interest, weighted on the basis of the
Uncertificated Principal Balances of the respective REMIC 1 Regular Interests;
(b) With respect to REMIC 2 Regular Interest LT2B-A, the REMIC 2 IIS2
Interests, and REMIC 2 Regular Interest LT2A-P, and any Distribution Date, a per
annum rate equal to the weighted average of (x) the Uncertificated REMIC 1
Pass-Through Rates with respect to REMIC 1 Regular Interest LT2B-A and REMIC 2
Regular Interest LT2B-P for such Distribution Date, and (y) the excess, if any,
of (i) the Uncertificated REMIC 1 Pass-Through Rate for each REMIC 1 IIS1
Interest over (i) 4.25% per annum for each Distribution Date in September 2002
through the Rate Change Date for such REMIC 1 IIS1 Interest, and (ii) 0.00% per
annum for each Distribution Date after the Rate Change Date for such REMIC 1
IIS1 Interest, weighted on the basis of the Uncertificated Principal Balances of
the respective REMIC 1 Regular Interests;
(c) With respect to each REMIC 2 IS1 Interest, 5.25% per annum for each
Distribution Date starting with the Distribution Date in September 2002 and
ending with the Rate Change Date for such REMIC 2 Regular Interest, and 0.00%
per annum for each Distribution Date thereafter;
(d) With respect to each REMIC 2 IIS1 Interest, 4.25% per annum for
each Distribution Date starting with the Distribution Date in September 2002 and
ending with the Rate Change Date for such REMIC 2 Regular Interest, and 0.00%
per annum for each Distribution Date thereafter;
"Uncertificated REMIC 3 Pass-Through Rate":
(a) With respect to REMIC 3 Regular Interest LT3A-1, REMIC 3 Regular
Interest LT3B-1, REMIC 3 Regular Interest LT3C-1, and REMIC 3 Regular Interest
LT3A-P and any Distribution Date, a per annum rate equal to the weighted average
of (x) the Uncertificated REMIC 2 Pass-Through Rates with respect to REMIC 2
Regular Interest LT2A-A and REMIC 2 Regular Interest LT2A-P for such
Distribution Date, and (y) the excess, if any, of (i) the Uncertificated REMIC 2
Pass-Through Rate for each REMIC 2 IS2 Interest over (i) 4.25% per annum for
each Distribution Date in September 2002 through the Rate Change Date for such
REMIC 2 IS2 Interest, and (ii) 0.00% per annum for each Distribution Date after
the Rate Change Date for such REMIC 2 IS2 Interest, weighted on the basis of the
Uncertificated Principal Balances of the respective REMIC 2 Regular Interests;
multiplied by a fraction, the numerator of which is 30 and the denominator of
which is the actual number of days in the related Accrual Period;
(b) With respect to REMIC 3 Regular Interest LT3A-2, REMIC 3 Regular
Interest LT3B-2, REMIC 3 Regular Interest LT3C-2, and REMIC 3 Regular Interest
LT3B-P and any Distribution Date, a per annum rate equal to the weighted average
of (x) the Uncertificated REMIC 2 Pass-Through Rates with respect to REMIC 2
Regular Interest LT2B-A and REMIC 2 Regular Interest LT2B-P for such
Distribution Date, and (y) the excess, if any, of (i) the Uncertificated REMIC 2
Pass-Through Rate for each REMIC 2 IIS2 Interest over (i) 4.25% per annum for
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each Distribution Date in September 2002 through the Rate Change Date for such
REMIC 2 IIS2 Interest, and (ii) 0.00% per annum for each Distribution Date after
the Rate Change Date for such REMIC 2 IIS2 Interest, weighted on the basis of
the Uncertificated Principal Balances of the respective REMIC 2 Regular
Interests; multiplied by a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the related Accrual Period;
(c) With respect to REMIC 3 Regular Interest LT3IS1, 5.25% per annum
for each Distribution Date starting with the Distribution Date in September 2002
and ending with the Distribution Date in July 2005, and 0.00% per annum for each
Distribution Date thereafter. For federal income tax purposes, REMIC 3 Regular
Interest LT3IS1 will be entitled to 100% of the interest paid on the REMIC 2 IS1
Interests;
(d) With respect to REMIC 3 Regular Interest LT3IIS1, 4.25% per annum
for each Distribution Date starting with the Distribution Date in September 2002
and ending with the Distribution Date in July 2005, and 0.00% per annum for each
Distribution Date thereafter. For federal income tax purposes, REMIC 3 Regular
Interest LTIIS1 will be entitled to 100% of the interest paid on the REMIC 2
IIS1 Interests;
(e) With respect to each REMIC 3 IS2 Interest and each Distribution
Date starting with the Distribution Date in September 2002 and ending with the
Rate Change Date for such REMIC 3 Regular Interest, the lesser of 4.25% per
annum and the Class I-S2 Cap Rate and, for each Distribution Date thereafter,
0.00% per annum. For federal income tax purposes, each REMIC 3 IS2 Interest will
be entitled to 100% of the interest paid on the REMIC 2 IS2 Interest with the
same numerical designation;
(f) With respect to each REMIC 3 IIS2 Interest and each Distribution
Date starting with the Distribution Date in September 2002 and ending with the
Rate Change Date for such REMIC 3 Regular Interest, the lesser of 4.25% per
annum and the Class II-S2 Cap Rate and, for each Distribution Date thereafter,
0.00% per annum. For federal income tax purposes, each REMIC 3 IIS2 Interest
will be entitled to 100% of the interest paid on the REMIC 2 IIS2 Interest with
the same numerical designation;
"Uninsured Cause": Any cause of damage to a Mortgaged Property such
that the complete restoration of such property is not fully reimbursable by the
hazard insurance policies required to be maintained pursuant to Section 3.14.
"United States Person" or "U.S. Person": (i) A citizen or resident of
the United States; (ii) a corporation, partnership or other entity classified as
a corporation or partnership for tax purposes created or organized in, or under
the laws of, the United States or any political subdivision thereof (except, in
the case of a partnership or entity treated as a partnership, to the extent
provided in regulations) provided that, solely for purposes of the restrictions
on the transfer of the Residual Certificates, no partnership or other entity
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
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Person. The term "United States" shall have the meaning set forth in Section
7701 of the Code or successor provisions.
"Unpaid Interest Shortfall Amount": With respect to the Class A
Certificates and the Class S Certificates and (i) the first Distribution Date,
zero, and (ii) any Distribution Date after the first Distribution Date, the
amount, if any, by which (a) the sum of (1) the Monthly Interest Distributable
Amount for such Class of Certificates for the immediately preceding Distribution
Date and (2) the outstanding Unpaid Interest Shortfall Amount, if any, for such
Class of Certificates for such preceding Distribution Date exceeds (b) the
aggregate amount distributed on such Class of Certificates in respect of
interest pursuant to clause (a) of this definition on such preceding
Distribution Date, plus interest on the amount of interest due but not paid on
such Class of Certificates on such preceding Distribution Date, to the extent
permitted by law, at the Pass-Through Rate for such Class of Certificates for
the related Accrual Period.
"Value": With respect to any Mortgaged Property, the lesser of (i) the
value thereof as determined by an appraisal made for the originator of the
Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser
who met the minimum requirements of ▇▇▇▇▇▇ ▇▇▇, 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.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. At all times the Class A
Certificates and the Class C Certificates shall have 97% of the Voting Rights
(allocated among the Holders of the Class A Certificates and the Class C
Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates), the Class S Certificates shall have
1% of the Voting Rights, the Class P Certificates shall have 1% of the Voting
Rights and the Class R Certificates shall have 1% of the Voting Rights, provided
that, if and for so long as the Class S2 Certificates, the Class C Certificates
and the Class P Certificates are held by one or more foreign entities and serve
as collateral for the NIM Notes, the total combined voting power of such Classes
of Certificates shall not exceed 9.9%. The Voting Rights allocated to any Class
of Certificates (other than the Class P Certificates and the Class R
Certificates) shall be allocated among all Holders of each such Class in
proportion to the outstanding Certificate Principal Balance or Notional Amount
of such Certificates and the Voting Rights allocated to the Class P Certificates
and the Class R Certificates shall be allocated among all Holders of each such
Class in proportion to such Holders' respective Percentage Interest; provided,
however, that when none of the Regular Certificates are outstanding, 100% of the
Voting Rights shall be allocated among Holders of the Class R Certificates in
accordance with such Holders' respective Percentage Interests in the
Certificates of such Class. Notwithstanding any of the foregoing, (i) unless a
Certificate Insurer Default is continuing, on any date on which any Insured
Certificates are outstanding or any amounts are owed to the Certificate Insurer
under the Insurance Agreement or this Agreement, the Certificate Insurer will
have all voting rights of the Insured Certificates, and (ii) unless the
Guarantor defaults on its obligation under the Guaranty, on any date on which a
Certificate Insurer Default is continuing and any amounts are owed to the
Guarantor under this Agreement, the Guarantor will have all voting rights of the
Guaranteed Certificates. So long as the Certificate Insurer and the Guarantor
have the Voting Rights pursuant to the preceding sentence, the reference to
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"holders of Certificates representing Voting Rights" shall be deemed to refer to
the Certificate Insurer or the Guarantor, as applicable.
"Washington Mutual Custodian": None of the Mortgage Loans are held by
the Washington Mutual Custodian as custodian. References to the Washington
Mutual Custodian and Washington Mutual Mortgage Loans are left in this Agreement
for administrative convenience and shall be completely disregarded. There are no
Washington Mutual Mortgage Loans nor is there any Washington Mutual Custodian
under this Agreement and no Person shall have any rights of the Washington
Mutual Custodian under this Agreement.
"Washington Mutual Mortgage Loans": There are no Washington Mutual
Mortgage Loans under this Agreement.
Section 1.02 Accounting.
Unless otherwise specified herein, for the purpose of any definition or
calculation, whenever amounts are required to be netted, subtracted or added or
any distributions are taken into account, such definition or calculation and any
related definitions or calculations shall be determined without duplication of
such functions.
Section 1.03 Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class I-A Certificates, the Class I-S Certificates
and REMIC 4 Regular Interest LT4-IC for any Distribution Date, the aggregate
amount of any Net Prepayment Interest Shortfalls and any Relief Act Interest
Shortfalls incurred in respect of the Group I Mortgage Loans for any
Distribution Date shall be allocated first to REMIC 4 Regular Interest LT4-IC to
the extent of one month's interest at the then applicable Pass-Through Rate on
the Notional Amount of such Regular Interest and, then, among the Class I-A
Certificates and the Class I-S Certificates on a pro rata basis based on, and to
the extent of, interest for the related Accrual Period at the then applicable
respective Pass-Through Rate on the respective Certificate Principal Balance or
Notional Amount of each such Certificate.
For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class II-A Certificates, the Class II-S
Certificates and REMIC 4 Regular Interest LT4-IIC for any Distribution Date, the
aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred in respect of the Group II Mortgage Loans for any
Distribution Date shall be allocated first to REMIC 4 Regular Interest LT4-IIC
to the extent of one month's interest at the then applicable Pass-Through Rate
on the Notional Amount of such Regular Interest and, then, among the Class II-A
Certificates and the Class II-S Certificates on a pro rata basis based on, and
to the extent of, interest for the related Accrual Period at the then applicable
respective Pass-Through Rate on the respective Certificate Principal Balance or
Notional Amount of each such Certificate.
For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class I-C Certificates for any Distribution Date,
the aggregate amount of any Net Prepayment Interest Shortfalls and any Relief
Act Interest Shortfalls allocated to REMIC 4 Regular Interest LT4-IC pursuant to
the paragraphs above shall be allocated among the Class I-C Certificates on a
pro rata basis based on one month's interest.
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For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class II-C Certificates for any Distribution Date,
the aggregate amount of any Net Prepayment Interest Shortfalls and any Relief
Act Interest Shortfalls allocated to REMIC 4 Regular Interest LT4-IIC pursuant
to the paragraphs above shall be allocated among the Class II-C Certificates on
a pro rata basis based on one month's interest.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC 1 Regular Interests for any Distribution Date, the
aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred for any Distribution Date (i) in respect of those
Group I Mortgage Loans with Adjusted Net Minimum Mortgage Rates of less than
5.25% shall be allocated to REMIC 1 Regular Interest LT1A-B, (ii) in respect of
those Group I Mortgage Loans with Adjusted Net Minimum Mortgage Rates of 5.25%
or greater shall be allocated first to REMIC 1 Regular Interest LT1A-A and then
to each of the REMIC 1 IS1 Interests in descending numerical order, in each case
to the extent of interest for the related Accrual Period at the then applicable
respective Uncertificated REMIC 1 Pass-Through Rate on the respective
Uncertificated Principal Balance of each such REMIC 1 Regular Interest.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC 1 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 in respect of the Group
II Mortgage Loans shall be allocated first to REMIC 1 Regular Interest LT1B-A,
and then to each of the REMIC 1 IIS1 Interests in descending numerical order, in
each case to the extent of interest for the related Accrual Period at the then
applicable respective Uncertificated REMIC 1 Pass-Through Rate on the respective
Uncertificated Principal Balance of each such REMIC 1 Regular Interest.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC 2 Regular Interests for any Distribution Date, the
aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred (i) in respect of the Group I Mortgage Loans shall
be allocated first to REMIC 2 Regular Interest LT2A-A and then to each REMIC 2
IS2 Interest in descending numerical order, in each case to the extent of
interest for the related Accrual Period at the then applicable respective
Uncertificated REMIC 2 Pass-Through Rate on the respective Uncertificated
Principal Balance or Uncertificated Notional Amount of each such REMIC 2 Regular
Interest.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC 2 Regular Interests for any Distribution Date, the
aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred in respect of the Group II Mortgage Loans shall be
allocated first to REMIC 2 Regular Interest LT2B-A and then to each REMIC 2 IIS2
Interest in descending numerical order, in each case to the extent of interest
for the related Accrual Period at the then applicable respective Uncertificated
REMIC 2 Pass-Through Rate on the respective Uncertificated Principal Balance or
Uncertificated Notional Amount of each such REMIC 2 Regular Interest.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC 3 Group I Regular Interests for any Distribution Date,
the aggregate amount of any Net Prepayment Interest Shortfalls and any Relief
Act Interest Shortfalls incurred in respect of the Group I Mortgage Loans shall
be allocated first, pro rata to REMIC 3 Regular Interest LT3A-1 and REMIC 3
Regular Interest LT3C-1, up to an aggregate amount equal to the REMIC 3 Group I
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Interest Loss Allocation Amount, with allocations between REMIC 3 Regular
Interest LT3A-1 and REMIC 3 Regular Interest LT3C-1 being made 98% and 2%,
respectively. Then, Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred in respect of the Group I Mortgage Loans for any
Distribution Date shall be allocated pro rata among REMIC 3 Regular Interest
LT3A-1, REMIC 3 Regular Interest LT3B-1, REMIC 3 Regular Interest LT3C-1, REMIC
3 Regular Interest LT3IS1 and the REMIC 3 IS2 Interests.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC 3 Group II Regular Interests for any Distribution Date,
the aggregate amount of any Net Prepayment Interest Shortfalls and any Relief
Act Interest Shortfalls incurred in respect of the Group II Mortgage Loans for
any Distribution Date shall be allocated first, pro rata to REMIC 3 Regular
Interest LT3A-2 and REMIC 3 Regular Interest LT3C-2, up to an aggregate amount
equal to the REMIC 3 Group II Interest Loss Allocation Amount, with allocations
between REMIC 3 Regular Interest LT3A-2 and REMIC 3 Regular Interest LT3C-2
being made 98% and 2%, respectively. Then, Net Prepayment Interest Shortfalls
and any Relief Act Interest Shortfalls incurred in respect of the Group II
Mortgage Loans for any Distribution Date shall be allocated pro rata among REMIC
3 Regular Interest LT3A-2, REMIC 3 Regular Interest LT3B-2, REMIC 3 Regular
Interest LT3C-2, REMIC 3 Regular Interest LT3IIS1 and the REMIC 3 IIS2
Interests.
For purposes of the preceding paragraphs, pro rata allocations shall be
based on interest for the related Accrual Period at the then applicable
respective Uncertificated REMIC 3 Pass-Through Rate, Uncertificated REMIC 2
Pass-Through Rate or Uncertificated REMIC 1 Pass-Through Rate on the respective
Uncertificated Principal Balance or Uncertificated Notional Amount of each such
REMIC 3 Group I Regular Interest, REMIC 3 Group II Regular Interest, REMIC 2
Regular Interest or REMIC 1 Regular Interest.
Section 1.04 Rights of the NIMS Insurer, the Certificate Insurer and the
Guarantor.
(a) Each of the rights of the NIMS Insurer set forth in this Agreement
shall exist so long as the Insured NIM Notes remain outstanding; provided,
however, the NIMS Insurer shall not have any rights hereunder (except as
provided in Section 9.01) so long as any NIMS Insurer Default is continuing.
(b) If and when (i) there is no Controlling Insurer, (ii) any
Guaranteed Certificates remain outstanding and (iii) no default under the
Guaranty shall have occurred and be continuing, the Guarantor shall be entitled
to exercise the rights of the Controlling Insurer set forth in this Agreement.
(c) Notwithstanding anything to the contrary anywhere in this
Agreement, all rights of the Guarantor hereunder, except any rights to
indemnification, shall permanently terminate upon the later to occur of (A) such
time as the Guaranteed Certificates shall no longer be outstanding and (B) the
payment in full to the Guarantor of any amounts owed to the Guarantor in respect
of its guarantee of payment on the Guaranteed Certificates; provided that the
Guarantor shall not have any rights hereunder, except indemnification rights, so
long as any default has occurred and is continuing under the Guaranty.
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(d) (i) Notwithstanding anything to the contrary anywhere in this
Agreement, all rights and benefits of the NIMS Insurer hereunder shall
permanently terminate upon such time as the Insured NIM Notes shall no longer be
outstanding.
(ii) Notwithstanding anything to the contrary anywhere in this
Agreement, all rights of the Certificate Insurer hereunder, except any rights to
indemnification, shall permanently terminate upon the later to occur of (A) such
time as the Insured Certificates shall no longer be outstanding and (B) the
payment in full to the Certificate Insurer of any amounts owed to the
Certificate Insurer hereunder or under the Insurance Agreement; provided that
the Certificate Insurer shall not have any rights hereunder, except
indemnification rights and the right to receive reports and distributions
pursuant to Article IV, so long as any Certificate Insurer Default has occurred
and is continuing.
(e) The rights of the NIMS Insurer or the Certificates Controlling
Person referenced in Sections 3.02(a), 3.03, 6.04, 7.01, 7.02(a), 7.04, 8.07 and
8.10 of this Agreement shall be applied as follows:
(i) If any Insured NIM Notes are outstanding, the NIMS Insurer
shall have the right to act, after consultation with the Certificates
Controlling Person; and
(ii) If no Insured NIM Notes have been issued or are outstanding,
the Certificates Controlling Person shall have the sole right to act provided
that for so long as the Certificate Insurer is the Certificates Controlling
Person, such rights shall be allocated as may be agreed between the NIMS Insurer
and the Certificates Controlling Person (with the Guarantor's consent which
cannot be unreasonably withheld or delayed) from time to time, and notified in
writing to the Trustee and the Trust Administrator.
The NIMS Insurer and the Certificates Controlling Person shall promptly
consult each other with regard to the rights referred to in this sub-section. If
this consultation would create a delay that would have a material adverse effect
on this transaction, each party may act individually with respect to their
rights and consult with the other party after such action has been taken. Any
consents required between the NIMS Insurer and the Certificates Controlling
Person shall not be unreasonably withheld or delayed.
If the Certificate Insurer is the Certificates Controlling Person
hereunder, prior to taking any action as the Certificates Controlling Person
under this Section 1.04(e), the Certificate Insurer shall (i) obtain the
Guarantor's prior written consent to such action if such action is taken
pursuant to Section 8.07 or 8.10 of this Agreement, which consent shall not be
unreasonably withheld by the Guarantor or (ii) consult with the Guarantor, if
such action is taken pursuant to Section 3.02(a), 3.03, 6.04, 7.01, 7.02(a) or
7.04 of this Agreement.
Section 1.05 Determination of Material Adverse Effect.
Whenever a determination is to be made under this Agreement as to
whether a given action, course of conduct, event or set of facts or
circumstances could or would have a material adverse effect on the Trust or the
Certificateholders (or any similar or analogous determination), such
determination shall be made without giving effect to the insurance provided by
the Certificate Insurance Policy.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee
without recourse for the benefit of the Certificateholders and the Certificate
Insurer all the right, title and interest of the Depositor, including any
security interest therein for the benefit of the Depositor, in and to the
Mortgage Loans identified on the Mortgage Loan Schedule, the rights of the
Depositor under the Mortgage Loan Purchase Agreement (other than the Depositor's
rights under Section 17 thereof) and all other assets included or to be included
in REMIC 1. Such assignment includes all scheduled payments on the Mortgage
Loans due after the Cut-off Date and all unscheduled collections in respect of
the Mortgage Loans received after July 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. The Depositor shall
cause the Certificate Insurer to deliver the Certificate Insurance Policy to the
Trust Administrator for the benefit of the Trustee and the Certificateholders.
If the assignment and transfer of the Mortgage Loans and the other
property specified in Section 2.01 from the Depositor to the Trustee pursuant to
this Agreement is held or deemed not to be a sale or is held or deemed to be a
pledge of security for a loan, the Depositor intends that the rights and
obligations of the parties shall be established pursuant to the terms of this
Agreement and that, in such event, (i) the Depositor shall be deemed to have
granted and does hereby grant to the Trustee as of the Closing Date a perfected,
first priority security interest in the entire right, title and interest of the
Depositor in and to the Mortgage Loans and all other property conveyed to the
Trust Fund pursuant to this Section 2.01 and all proceeds thereof and (ii) this
Agreement shall constitute a security agreement under applicable law.
In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with, (i) 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 (other than a Washington Mutual Loan) and (ii) the
Washington Mutual Custodian as custodian for the Trustee, the following
documents or instruments with respect to each Washington Mutual Mortgage Loan,
in each case, so transferred and assigned (with respect to each Mortgage Loan, a
"Mortgage File"):
(a) the original Mortgage Note, endorsed in blank or in the following
form: "Pay to the order of Deutsche Bank National Trust Company, as Trust
Administrator for the benefit of Wachovia Bank, National Association, 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;
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(b) the original Mortgage with evidence of recording thereon, and a
copy, certified by the appropriate recording office, of the recorded power of
attorney, if the Mortgage was executed pursuant to a power of attorney, with
evidence of recording thereon;
(c) an original Assignment in blank;
(d) the original recorded Assignment or Assignments showing a complete
chain of assignment from the originator to the Person assigning the Mortgage to
the Trustee or in blank;
(e) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(f) the original lender's title insurance policy, together with all
endorsements or riders issued with or subsequent to the issuance of such policy
(or a copy of the above, in the case of the Washington Mutual Mortgage Loans),
insuring the priority of the Mortgage as a first lien or second lien on the
Mortgaged Property represented therein as a fee interest vested in the
Mortgagor, or in the event such title policy is unavailable, a written
commitment or uniform binder or preliminary report of title issued by the title
insurance or escrow company.
The Master Servicer, in its capacity as Seller, shall promptly (and in
no event later than thirty (30) Business Days, subject to extension upon a
mutual agreement between the Master Servicer and the Trustee), following the
later of the Closing Date and the date of receipt by the Master Servicer of the
recording information for a Mortgage submit or cause to be submitted for
recording, at no expense to the Trust Fund, the Trustee, the Trust
Administrator, the Certificate Insurer, the NIMS Insurer, the Guarantor or the
Depositor, in the appropriate public office for real property records, each
Assignment referred to in Sections 2.01(c) and (d) above and shall execute each
original Assignment referred to in clause (c) above in the following form:
"Deutsche Bank National Trust Company, as Trust Administrator for the benefit of
Wachovia Bank, National Association, as Trustee under applicable agreement,
without recourse." In the event that any such Assignment is lost or returned
unrecorded because of a defect therein, the Master Servicer, in its capacity as
Seller, shall promptly prepare or cause to be prepared a substitute Assignment
or cure or cause to be cured such defect, as the case may be, and thereafter
cause each such Assignment to be duly recorded. Notwithstanding the foregoing,
the Assignments shall not be required to be completed and submitted for
recording with respect to any Mortgage Loan if each Rating Agency does not
require recordation in order for such Rating Agency to assign the initial
ratings to the Class II-A Certificates, the Class II-S1 Certificates (without
regard to the Certificate Insurance Policy) and the NIM Notes and the
Certificate Insurer does not require recordation in order for the Certificate
Insurer to issue the Certificate Insurance Policy; provided further, however,
each Assignment shall be submitted for recording by the Master Servicer, in its
capacity as Seller, in the manner described above, at no expense to the Trust
Fund, 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 (v) if the Seller is not the Master Servicer and with respect to any
one Assignment, the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Mortgagor under the related Mortgage. The Master Servicer shall
pay the cost of such recording. Notwithstanding the foregoing, if the Master
Servicer fails to pay the cost of recording the Assignments, such expense shall
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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 Master
Servicer, in its capacity as the Seller, to deliver such Recording Documents
shall be deemed to be satisfied upon (1) delivery to the Trust Administrator or
the applicable Custodian of a copy of each such Recording Document certified by
the Seller in the case of (x) above or the applicable public recording office in
the case of (y) above to be a true and complete copy of the original that was
submitted for recording and (2) if such copy is certified by the Seller,
delivery to the Trust Administrator or the applicable Custodian promptly upon
receipt thereof, and in any event no later than one year after the Closing Date,
of either the original or a copy of such Recording Document certified by the
applicable public recording office to be a true and complete copy of the
original. In instances where, due to a delay on the part of the recording office
where any such Recording Documents have been delivered for recordation, the
Recording Documents cannot be delivered to the Trust Administrator or the
applicable Custodian within one year after the Closing Date, the Master
Servicer, in its capacity as the Seller, shall deliver to the Trust
Administrator or the applicable Custodian within such time period an Officer's
Certificate stating the date by which the Master Servicer, in its capacity as
the Seller, expects to receive such Recording Documents from the applicable
recording office. In the event that Recording Documents have still not been
received by the Master Servicer, in its capacity as the Seller, and delivered to
the Trust Administrator or the applicable Custodian by the date specified in its
previous Officer's Certificate delivered to the Trust Administrator or the
applicable Custodian, as the case may be, the Master Servicer, in its capacity
as the Seller, shall deliver to the Trust Administrator or the applicable
Custodian by such date an additional Officer's Certificate stating a revised
date by which the Master Servicer, in its capacity as the Seller, expects to
receive the applicable Recording Documents. This procedure shall be repeated
until the Recording Documents have been received by the Master Servicer, in its
capacity as the Seller, and delivered to the Trust Administrator or the
applicable Custodian. If the original lender's title insurance policy (or a copy
thereof, in the case of the Washington Mutual Mortgage Loans) was not delivered
pursuant to Section 2.01(f) above, the Master Servicer, in its capacity as the
Seller, shall deliver or cause to be delivered to the Trust Administrator or the
applicable Custodian promptly after receipt thereof, and in any event within 120
days after the Closing Date, the original lender's title insurance policy (or a
copy thereof, in the case of the Washington Mutual Mortgage Loans). The Master
Servicer, in its capacity as the Seller, shall deliver or cause to be delivered
to the Trust Administrator or the applicable Custodian promptly upon receipt
thereof any other original documents constituting a part of a Mortgage File
received with respect to any Mortgage Loan, including, but not limited to, any
original documents evidencing an assumption or modification of any Mortgage
Loan.
All original documents relating to the Mortgage Loans that are not
delivered to the Trust Administrator or the applicable Custodian are and shall
be held by or on behalf of the Seller, the Depositor or the Master Servicer, as
the case may be, in trust for the benefit of the Trustee on behalf of the
Certificateholders and the Certificate Insurer. In the event that any such
original document is required pursuant to the terms of this Section to be a part
of a Mortgage File, such document shall be delivered promptly to the Trust
Administrator or the applicable Custodian. Any such original document delivered
to or held by the Depositor that is not required pursuant to the terms of this
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Section to be a part of a Mortgage File, shall be delivered promptly to the
Master Servicer.
Section 2.02 Acceptance of REMIC 1 by the Trustee.
Subject to the provisions of Section 2.01 and subject to any exceptions
noted on the exception report described in the next paragraph below, the Trust
Administrator or Custodian, as applicable, on behalf of the Trustee acknowledges
receipt of the documents referred to in Section 2.01 above and all other assets
included in the definition of "REMIC 1" under clauses (i), (iii), (iv) and (vii)
(to the extent of amounts deposited into the Distribution Account) and declares
that it holds and will hold such documents and the other documents delivered to
it constituting the Mortgage File, and all such assets and such other assets
included in the definition of "REMIC 1" in trust for the exclusive use and
benefit of all present and future Certificateholders and the Certificate
Insurer.
Except with respect to the Washington Mutual Mortgage Loans, the Trust
Administrator or Custodian, as applicable, agrees, for the benefit of the
Certificateholders and the Certificate Insurer, to review each Mortgage File on
or before the Closing Date, with respect to each Mortgage Loan and to certify to
the Trustee, the Guarantor, the NIMS Insurer, the Certificate Insurer, the
Depositor and the Master Servicer in substantially the form attached hereto as
Exhibit F-1 that, as to each Closing Date Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
specifically identified in the exception report annexed thereto as not being
covered by such certification), (i) all documents constituting part of such
Mortgage File (other than such documents described in Section 2.01(e)) required
to be delivered to it pursuant to this Agreement are in its possession, (ii)
such documents have been reviewed by the Trust Administrator or the Washington
Mutual Custodian, as applicable and are not mutilated, torn or defaced unless
initialed by the related borrower and relate to such Mortgage Loan and (iii)
based on the 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" accurately reflects information set forth
in the Mortgage File. It is herein acknowledged that, in conducting such review,
neither the Trust Administrator nor any Custodian is under any duty or
obligation (i) to inspect, review or examine any such documents, instruments,
certificates or other papers to determine whether they are genuine, enforceable,
or appropriate for the represented purpose (including with respect to Section
2.01(f), whether such title insurance policy (a) contains all necessary
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 (or, with respect to the Mortgage Loans held by
another Custodian, such Custodian shall deliver) to the Depositor, the Master
Servicer, the Trustee, the NIMS Insurer, the Certificate Insurer and the
Guarantor a final certification in the form annexed hereto as Exhibit F-2
evidencing the completeness of the Mortgage Files, with any applicable
exceptions noted thereon.
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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 holding such Mortgage Files or any Custodian holding such Mortgage
Files finds any document or documents constituting a part of a Mortgage File to
be missing or defective in any material respect, at the conclusion of its review
the Trust Administrator shall so notify or such other Custodian shall notify the
Depositor, the Seller, the Trustee, the Trust Administrator (if it is not
sending such notice), the Guarantor, the NIMS Insurer, the Certificate Insurer
and the Master Servicer. In addition, upon the discovery by the Depositor, the
Master Servicer, the Guarantor, the Trustee, the Custodian 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 or the Certificate Insurer in
such Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties.
Section 2.03 Cure, Repurchase or Substitution of Mortgage Loans by the Seller;
Remedies for Breaches by Depositor or Master Servicer; Remedies for Breaches
Relating to Prepayment Charges.
(a) Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, the Mortgage File or of the
breach by the Seller of any representation, warranty or covenant under the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially and adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders or the Certificate Insurer (in the case of any
such representation or warranty made to the knowledge or the best of knowledge
of the Seller, as to which the Seller has no knowledge, without regard to the
Seller's lack of knowledge with respect to the substance of such representation
or warranty being inaccurate at the time it was made), the Trust Administrator
shall promptly notify the Depositor, the Seller, the NIMS Insurer, the
Guarantor, the Certificate Insurer and the Master Servicer of such defect,
missing document or breach and request that the Seller deliver such missing
document or cure such defect or breach within 90 days from the date the Seller
was notified of such missing document, defect or breach, 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 1 at the Purchase Price within 90 days after the date
on which the Seller was notified (subject to Section 2.03(e)) of such missing
document, defect or breach, if and to the extent that the Seller is obligated to
do so under the Mortgage Loan Purchase Agreement. The Purchase Price for the
repurchased Mortgage Loan shall be deposited in the Collection Account, and the
Trust Administrator, or a Custodian, as applicable, upon receipt of written
certification from the Master Servicer of such deposit, shall release to the
Seller the related Mortgage File, and the Trust Administrator, or Custodian, as
applicable, on behalf of the Trustee, shall execute and deliver such instruments
of transfer or assignment, in each case without recourse, as the Seller shall
furnish to it or such Custodian, as applicable, and as shall be necessary to
vest in the Seller any Mortgage Loan released pursuant hereto, and none of the
Trustee, the Trust Administrator or any Custodian shall have any further
responsibility with regard to such Mortgage File. In lieu of repurchasing any
such Mortgage Loan as provided above, if so provided in the Mortgage Loan
Purchase Agreement, the Seller may cause such Mortgage Loan to be removed from
REMIC 1 (in which case it shall become a Deleted Mortgage Loan) and substitute
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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 Certificate
Insurer, and the NIMS Insurer, the Certificate Insurer and the Guarantor.
(b) Within 90 days of the earlier of discovery by the Depositor or
receipt of notice by the Depositor of the breach of any representation or
warranty of the Depositor set forth in Section 2.05 with respect to any Mortgage
Loan (in the case of any such representation or warranty made to the knowledge
or the best of knowledge of the Seller, as to which the Seller has no knowledge,
without regard to the Seller's lack of knowledge with respect to the substance
of such representation or warranty being inaccurate at the time it was made),
which materially adversely affects the value of such Mortgage Loan or the
interest therein of the Certificateholders or the Certificate Insurer, the
Depositor shall cure such breach in all material respects.
(c) As promptly as practicable (and no later than 90 days) after the
earlier of discovery by the Master Servicer or receipt of notice by the Master
Servicer of the breach of any representation, warranty or covenant of the Master
Servicer set forth in Section 2.04 which materially and adversely affects the
value of any Mortgage Loan or the interests of the Certificateholders or the
Certificate Insurer in any Mortgage Loan, the Master Servicer shall cure such
breach in all material respects.
Within 90 days of the earlier of discovery by the Master Servicer or
receipt of notice by the Master Servicer of the breach of any representation,
warranty or covenant of the Master Servicer set forth in Section 2.04(a)(vii) or
(viii) which materially and adversely affects the interests of the Holders of
the Class P Certificates to any Prepayment Charge, the Master Servicer shall
cure such breach in all material respects. If the representation made by the
Master Servicer in its capacity as Seller in Section 2.04(a)(vii) is breached,
the Master Servicer in its capacity as Seller shall pay into the Collection
Account the amount of the scheduled Prepayment Charge, less any amount
previously collected and deposited by, or paid by, the Master Servicer into the
Collection Account; and if the covenant made by the Master Servicer in Section
2.04(a)(viii) is breached, the Master Servicer shall pay into the Collection
Account the amount of the waived Prepayment Charge.
(d) Any substitution of Qualified Substitute Mortgage Loans for Deleted
Mortgage Loans made pursuant to Section 2.03(a) shall be effected prior to the
date which is two years after the Startup Date for REMIC 1.
As to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, such substitution shall be effected
by the Seller delivering to the Trust Administrator (or, with respect to the
Mortgage Loans held by another Custodian, to such Custodian) on behalf of the
Trustee, for such Qualified Substitute Mortgage Loan or Loans, the Mortgage
Note, the Mortgage, the Assignment to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, as are required by Section
2.01, together with an Officers' Certificate providing that each such Qualified
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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 or with respect to
the Mortgage Loans held by another Custodian such other Custodian shall
acknowledge receipt for such Qualified Substitute Mortgage Loan or Loans and,
within ten Business Days thereafter, review such documents as specified in
Section 2.02 and deliver to the Depositor, the Master Servicer, the Trustee, the
NIMS Insurer, the Certificate Insurer and the Guarantor, with respect to such
Qualified Substitute Mortgage Loan or Loans, a certification substantially in
the form attached hereto as Exhibit F-1, with any applicable exceptions noted
thereon. Within one year of the date of substitution, the Trust Administrator
shall deliver or with respect to the Mortgage Loans held by another Custodian,
such other Custodian shall deliver to the Depositor, the Seller, the Trustee,
the NIMS Insurer, the Certificate Insurer, the Guarantor and the Master Servicer
a certification substantially in the form of Exhibit F-2 hereto with respect to
such Qualified Substitute Mortgage Loan or Loans, with any applicable exceptions
noted thereon. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution are not part of REMIC 1 and will be
retained by the Seller. For the month of substitution, distributions to
Certificateholders will reflect the Monthly Payment due on such Deleted Mortgage
Loan on or before the Due Date in the month of substitution, and the Seller
shall thereafter be entitled to retain all amounts subsequently received in
respect of such Deleted Mortgage Loan. The Trust Administrator or the applicable
Custodian shall give written notice to the Guarantor, the Trustee, the NIMS
Insurer, the Certificate Insurer and the Certificateholders that such
substitution has taken place, and the Master Servicer shall amend or cause to be
amended the Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan from the terms of this Agreement and the substitution of the
Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of such
amended Mortgage Loan Schedule to the Guarantor, the NIMS Insurer, the
Certificate Insurer, 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 (or
acknowledgement of such receipt by another Custodian) and certification by the
Master Servicer of such deposit, shall release or, if such Mortgage File is held
by another Custodian, such Custodian shall release to the Seller the related
Mortgage File or Files and the Trust Administrator, on behalf of the Trustee, or
the Trustee shall execute and deliver or, if such Mortgage File is held by
another Custodian, such Custodian shall execute and deliver such instruments of
transfer or assignment, without recourse, as the Seller shall deliver to it or
such Custodian, as applicable, and as shall be necessary to vest therein any
Deleted Mortgage Loan released pursuant hereto.
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In addition, the Master Servicer in its capacity as Seller shall obtain
at its own expense and deliver to the NIMS Insurer, the Certificate Insurer, the
Guarantor, 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 1, created hereunder, including without limitation, any federal tax
imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code, or
(b) any Trust REMIC hereunder to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
(e) Upon discovery by the Depositor, the Seller, the Master Servicer,
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
the Certificate Insurer and the Depositor, that as of the Closing Date or as of
such date specifically provided herein:
(i) The Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
is duly authorized and qualified to transact any and all business contemplated
by this Agreement and has all licenses necessary to carry on its business as now
being conducted and is licensed, qualified and in good standing in the states
where the Mortgaged Properties are located if the laws of such state require
licensing or qualification in order to conduct business of the type conducted by
the Master Servicer or to ensure the enforceability or validity of each Mortgage
Loan and, in any event, is in compliance with the doing business laws of any
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 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.
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(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 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
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(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 or a Custodian, as the case may be,
and shall inure to the benefit of the Trust Administrator, the Trustee, the
Depositor, the Guarantor, the Certificate Insurer 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 or the Certificate Insurer, the party discovering such
breach shall give prompt written notice (but in no event later than two Business
Days following such discovery) to the other of such parties. The obligation of
the Master Servicer set forth in Section 2.03(c) to cure breaches (or, in the
case of (a)(vii) or (a)(viii) above, to pay a Master Servicer Prepayment Charge
Payment Amount) shall constitute the sole remedy against the Master Servicer
available to the Certificateholders, the Depositor, the Guarantor, the NIMS
Insurer, the Trust Administrator or the Trustee on behalf of the
Certificateholders and the Certificate Insurer respecting a breach of the
representations, warranties and covenants contained in this Section 2.04. The
preceding sentence shall not, however, limit any remedies available to the
Certificateholders, the Certificate Insurer, the Depositor, the Guarantor, the
NIMS Insurer, 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, the Certificate
Insurer and the Master Servicer, that as of the Closing Date or as of such date
specifically provided herein:
(i) Each of this Agreement and the Mortgage Loan Purchase
Agreement constitutes a legal, valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity);
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(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 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;
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(ix) There are no actions, proceedings or investigations pending
before or, to the Depositor's knowledge, threatened by any court, administrative
agency or other tribunal to which the Depositor is a party or of which any of
its properties is the subject: (a) which if determined adversely to the
Depositor would have a material adverse effect on the business, results of
operations or financial condition of the Depositor; (b) asserting the invalidity
of this Agreement, the Mortgage Loan Purchase Agreement or the Certificates; (c)
seeking to prevent the issuance of the Certificates or the consummation by the
Depositor of any of the transactions contemplated by this Agreement or the
Mortgage Loan Purchase Agreement, as the case may be; or (d) which might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement or the
Mortgage Loan Purchase Agreement; and
(x) The Depositor has the full power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary action
on the part of the Depositor the execution, delivery and performance of this
Agreement and this Agreement, assuming the due authorization, execution and
delivery thereof by the parties thereto other than the Depositor, constitutes a
legal, valid and binding obligation of the Depositor, enforceable against the
Depositor in accordance with its terms, except to the extent that (a) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
Section 2.06 Issuance of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery to it, the Trust Administrator or a Custodian of the Mortgage
Files, subject to the provisions of Sections 2.01 and 2.02, together with the
assignment to it of all other assets included in the Trust Fund, receipt of
which is hereby acknowledged. Concurrently with such assignment and delivery and
in exchange therefor, the 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 1 by the Trustee; Issuance of Certificates.
(a) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC 1 Regular Interests for the benefit of the holders of the REMIC
2 Regular Interests and the Class R-2 Interest. The Trustee acknowledges receipt
of the REMIC 1 Regular Interests (which are uncertificated) and declares that it
holds and will hold the same in trust for the exclusive use and benefit of the
holders of the REMIC 2 Regular Interests and the Class R-2 Interest. The
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interests evidenced by the Class R-2 Interest, together with the REMIC 2 Regular
Interests, constitute the entire beneficial ownership interest in REMIC 2.
(b) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC 2 Regular Interests for the benefit of the holders of the REMIC
3 Regular Interests and the Class R-3 Interest. The Trustee acknowledges receipt
of the REMIC 2 Regular Interests (which are uncertificated) and declares that it
holds and will hold the same in trust for the exclusive use and benefit of the
holders of the REMIC 3 Regular Interests and the Class R-3 Interest. The
interests evidenced by the Class R-3 Interest, together with the REMIC 3 Regular
Interests, constitute the entire beneficial ownership interest in REMIC 3.
(c) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC 3 Regular Interests for the benefit of the holders of the
Certificates (other than the Class C Certificates, the Class P Certificates, the
Class R-CX Certificates and the Class R-PX Certificates), REMIC CX, as holder of
REMIC 4 Regular Interest LT4-IC and REMIC 4 Regular Interest LT4-IIC, and REMIC
PX, as holder of REMIC 4 Regular Interest LT4-IP and REMIC 4 Regular Interest
LT4-IIP. The Trustee acknowledges receipt of the REMIC 3 Regular Interests
(which are uncertificated) and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the Certificates
(other than the Class C Certificates, the Class P Certificates, the Class R-CX
Certificates and the Class R-PX Certificates), and REMIC CX, as holder of REMIC
4 Regular Interests LT4-IC and REMIC 4 Regular Interest LT4-IIC, and REMIC PX,
as holder of REMIC 4 Regular Interest LT4-IP and REMIC 4 Regular Interest
LT4-IIP. The interests evidenced by the Class R-4 Interest, the Regular
Certificates (other than the Class C Certificates and the Class P Certificates),
and the REMIC 4 Regular Interests, constitute the entire beneficial ownership
interest in REMIC 4.
(d) In exchange for the REMIC 3 Regular Interests and, concurrently
with the assignment to the Trustee thereof, pursuant to the written request of
the Depositor executed by an officer of the Depositor, the 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-4 Interest and the REMIC 4 Regular Interests) the entire beneficial ownership
interest in REMIC 4.
(e) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC 4 Regular Interest LT4-IC and REMIC 4 Regular Interest LT4-IIC
for the benefit of the holders of the Class C Certificates and the Class R-CX
Interest. The Trustee acknowledges receipt of the REMIC 4 Regular Interest
LT4-IC and REMIC 4 Regular Interest LT4-IIC and declares that it holds and will
hold the same in trust for the exclusive use and benefit of the holders of the
Class C Certificates and the Class R-CX Interest. The interests evidenced by the
Class C Certificates and the Class R-CX Interest constitute the entire
beneficial ownership interest in REMIC CX.
(f) In exchange for REMIC 4 Regular Interest LT4-IC and REMIC 4 Regular
Interest LT4-IIC and, concurrently with the assignment to the Trustee thereof,
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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 in authorized
denominations evidencing (together with the Class R-CX Interest) the entire
beneficial ownership interest in REMIC CX.
(g) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to REMIC 4 Regular Interest LT4-IP and REMIC 4 Regular Interest LT4-IIP for
the benefit of the holders of the Class P Certificates and the Class R-PX
Interest. The Trustee acknowledges receipt of REMIC 4 Regular Interest LT4-IP
and REMIC 4 Regular Interest LT4-IIP and declares that it holds and will hold
the same in trust for the exclusive use and benefit of the holders of the Class
P Certificates and the Class R-PX Interest. The interests evidenced by the Class
P Certificates and the Class R-PX Interest constitute the entire beneficial
ownership interest in REMIC PX.
(h) In exchange for REMIC 4 Regular Interest LT4-IP and REMIC 4 Regular
Interest LT4-IIP and, concurrently with the assignment to the Trustee thereof,
pursuant to the written request of the Depositor executed by an officer of the
Depositor, the Trust Administrator has executed, authenticated and delivered to
or upon the order of the Depositor, the Class P Certificates in authorized
denominations evidencing (together with the Class R-PX Interest) the entire
beneficial ownership interest in REMIC PX.
(i) Concurrently with (i) the assignment and delivery to the Trustee of
REMIC 1 (including the Residual Interest therein represented by the Class R-1
Interest) and the acceptance by the Trustee thereof, pursuant to Section 2.01,
Section 2.02 and Section 2.08(a), (ii) the assignment and delivery to the
Trustee of REMIC 2 (including the Residual Interest therein represented by the
Class R-2 Interest) and the acceptance by the Trustee thereof, pursuant to
Section 2.08(b), (iii) the assignment and delivery to the Trustee of REMIC 3
(including the Residual Interest therein represented by the Class R-3 Interest)
and the acceptance by the Trustee thereof, pursuant to Section 2.08(c), (iv) the
assignment and delivery to the Trustee of the REMIC 4 Regular Interests
(including the Residual Interest in REMIC 4 represented by the Class R-4
Interest) and the acceptance by the Trustee thereof, pursuant to Sections
2.08(e) and 2.08(g), the 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-1 Interest, the
Class R-2 Interest, the Class R-3 Interest, and the Class R-4 Interest, the
Class R-CX Certificates evidencing the Class R-CX Interest and the Class R-PX
Certificates evidencing the Class R-PX Interest.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
Section 3.01 Master Servicer to Act as Master Servicer.
The Master Servicer shall service and administer the Mortgage Loans on
behalf of the Trustee and the Trust Administrator and in the best interests of
and for the benefit of the Certificateholders and the Certificate Insurer (as
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determined by the Master Servicer in its reasonable judgment) in accordance with
the terms of this Agreement and the respective Mortgage Loans and, to the extent
consistent with such terms, in the same manner in which it services and
administers similar mortgage loans for its own portfolio, giving due
consideration to customary and usual standards of practice of mortgage lenders
and loan servicers administering similar mortgage loans in the local areas where
the related Mortgaged Property is located but without regard to:
(i) any relationship that the Master Servicer, any Sub-Servicer
or any Affiliate of the Master Servicer or any Sub-Servicer may have with the
related Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Master Servicer or any Affiliate of the Master Servicer;
(ii) the Master Servicer's obligation to make Advances or
Servicing Advances; or
(iv) the Master Servicer's or any Sub-Servicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, the Master Servicer shall
seek to maximize the timely and complete recovery of principal and interest on
the Mortgage Notes. Subject only to the above-described servicing standards and
the terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration in accordance with
policies and procedures generally accepted in the mortgage banking industry.
Without limiting the generality of the foregoing, the Master Servicer in its own
name or in the name of a Sub-Servicer is hereby authorized and empowered by the
Trustee 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
Certificate Insurer, 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,
Certificateholders and the Certificate Insurer. The Master Servicer shall
service and administer the Mortgage Loans in accordance with applicable state
and federal law and shall provide to the Mortgagors any reports required to be
provided to them thereby. The Master Servicer shall also comply in the
performance of this Agreement with all reasonable rules and requirements of each
insurer under any standard hazard insurance policy. Subject to Section 3.17,
each of the Trust Administrator and the Trustee, shall execute, at the written
direction of the Master Servicer, and furnish to the Master Servicer and any
Sub-Servicer such documents as are necessary or appropriate to enable the Master
Servicer or any Sub-Servicer to carry out their servicing and administrative
duties hereunder, and the Trustee 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 Trustee, the Certificateholders and the
Certificate Insurer. The Trustee and the Trust Administrator, at the direction
of the Master Servicer, shall execute a separate power of attorney in favor of
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(and furnish such power of attorney to) the Master Servicer and/or each
Sub-Servicer for the purposes described herein to the extent necessary or
desirable to enable the Master Servicer to perform its duties hereunder. 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 to a Mortgagor with respect to a
Mortgage Loan (except as provided in Section 4.04) and the Master Servicer shall
not (i) permit any modification with respect to any Mortgage Loan that would
change the Mortgage Rate, reduce or increase the principal balance (except for
reductions resulting from actual payments of principal) or change the final
maturity date on such Mortgage Loan (unless, as provided in Section 3.07, the
Mortgagor is in default with respect to the Mortgage Loan or such default is, in
the judgment of the Master Servicer, reasonably foreseeable) or (ii) permit any
modification, waiver or amendment of any term of any Mortgage Loan that would
both (A) effect an exchange or reissuance of such Mortgage Loan under Section
1001 of the Code (or final, temporary or proposed Treasury regulations
promulgated thereunder) and (B) cause any Trust REMIC to fail to qualify as a
REMIC under the Code or the imposition of any tax on "prohibited transactions"
or "contributions after the startup date" under the REMIC Provisions.
The Master Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Master
Servicer from the responsibilities or liabilities arising under this Agreement.
For each Mortgage Loan, the Master Servicer will accurately and fully
report its borrower credit files to each of the Credit Repositories in a timely
manner.
Section 3.02 Sub-Servicing Agreements Between the Master Servicer and
Sub-Servicers.
(a) The Master Servicer may enter into Sub-Servicing Agreements
provided (i) that such agreements would not result in a withdrawal or a
downgrading by any Rating Agency of the ratings on any Class of Certificates or
any of the NIM Notes, as evidenced by a letter to that effect delivered by each
Rating Agency to the Depositor, the Certificate Insurer, the NIMS Insurer and
the Guarantor and (ii) that, except in the case of any Sub-Servicing Agreements
the Master Servicer may enter into with Washington Mutual, Inc. or any Affiliate
thereof, the NIMS Insurer or the Certificates Controlling Person (as provided in
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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 or the Certificate Insurer,
without the consent of the Holders of Certificates entitled to at least 66% of
the Voting Rights. Any variation without the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights from the provisions
set forth in Section 3.08 relating to insurance or priority requirements of
Sub-Servicing Accounts, or credits and charges to the Sub-Servicing Accounts or
the timing and amount of remittances by the Sub-Servicers to the Master
Servicer, are conclusively deemed to be inconsistent with this Agreement and
therefore prohibited. The Master Servicer shall deliver to the Guarantor, the
NIMS Insurer, the Certificate Insurer, 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, the Certificateholders and the
Certificate Insurer, shall enforce the obligations of each Sub-Servicer under
the related Sub-Servicing Agreement and, subject to the last sentence of this
paragraph, of the Seller under the Mortgage Loan Purchase Agreement including,
without limitation, any obligation to make advances in respect of delinquent
payments as required by a Sub-Servicing Agreement, or to purchase or otherwise
remedy as contemplated herein a Mortgage Loan on account of missing or defective
documentation or on account of a breach of a representation, warranty or
covenant, as described in Section 2.03(a). Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Sub-Servicing
Agreements, and the pursuit of other appropriate remedies, shall be in such form
and carried out to such an extent and at such time as the Master Servicer, in
its good faith business judgment, would require were it the owner of the related
Mortgage Loans. The Master Servicer shall pay the costs of such enforcement at
its own expense, and shall be reimbursed therefor only (i) from a general
recovery resulting from such enforcement, to the extent, if any, that such
recovery exceeds all amounts due in respect of the related Mortgage Loans or
(ii) from a specific recovery of costs, expenses or attorneys' fees against the
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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 Certificates Controlling Person (as provided in Section 1.04), shall be
entitled to terminate any Sub-Servicing Agreement and the rights and obligations
of any Sub-Servicer pursuant to any Sub-Servicing Agreement in accordance with
the terms and conditions of such Sub-Servicing Agreement. In the event of
termination of any Sub-Servicer, all servicing obligations of such Sub-Servicer
shall be assumed simultaneously by the Master Servicer without any act or deed
on the part of such Sub-Servicer or the Master Servicer, and the Master Servicer
either shall service directly the related Mortgage Loans or shall enter into a
Sub-Servicing Agreement with a successor Sub-Servicer which qualifies under
Section 3.02.
Any Sub-Servicing Agreement shall include the provision that such
agreement may be immediately terminated by the Trustee 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 Certificates Controlling
Person (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).
Section 3.04 Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer and a Sub-Servicer or reference to actions taken through a Sub-Servicer
or otherwise, the Master Servicer shall remain obligated and primarily liable to
the Trustee, the Certificateholders and the Certificate Insurer for the
servicing and administering of the Mortgage Loans in accordance with the
provisions of Section 3.01 without diminution of such obligation or liability by
virtue of such Sub-Servicing Agreements or arrangements or by virtue of
indemnification from the Sub-Servicer and to the same extent and under the same
terms and conditions as if the Master Servicer alone were servicing and
administering the Mortgage Loans. The Master Servicer shall be entitled to enter
into any agreement with a Sub-Servicer for indemnification of the Master
Servicer by such Sub-Servicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification and no such indemnification shall
be an expense of the Trust.
Section 3.05 No Contractual Relationship Between Sub-Servicers and the NIMS
Insurer, the Certificate Insurer, the Guarantor, the Trustee,
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 Certificate Insurer, the Guarantor and the Certificateholders shall
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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.
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
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event that any Mortgage Loan is in default or, in the judgment of the Master
Servicer, such default is reasonably foreseeable, the Master Servicer,
consistent with the standards set forth in Section 3.01, may also waive, modify
or vary any term of such Mortgage Loan (including modifications that would
change the Mortgage Rate, forgive the payment of principal or interest or extend
the final maturity date of such Mortgage Loan no later than two years with
respect to a Group I Mortgage Loan), accept payment from the related Mortgagor
of an amount less than the Stated Principal Balance in final satisfaction of
such Mortgage Loan (such payment, a "Short Pay-off") or consent to the
postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor; provided, that in the judgment of the Master
Servicer, any such modification, waiver or amendment could reasonably be
expected to result in collections and other recoveries in respect of such
Mortgage Loans in excess of Net Liquidation Proceeds that would be recovered
upon the foreclosure of, or other realization upon, such Mortgage Loan and
provided further, that the Controlling Insurer's prior written consent shall be
required for any modification, waiver or amendment if the aggregate number of
outstanding Mortgage Loans which have been modified, waived or amended exceeds
5% of the number of Closing Date Mortgage Loans as of the Cut-off Date. If the
Class C Certificates are no longer outstanding, the Master Servicer shall not
take any action pursuant to the preceding sentence with respect to a Group I
Mortgage Loan without obtaining the prior written consent of the Guarantor to
such modification. The Master Servicer shall submit to the Guarantor with its
request for consent, such information related to the proposed modification as
can be expected to be needed by the Guarantor to evaluate the Master Servicer's
request, including the terms of the proposed modification and the reasons for
the Master Servicer's decision that such Group I Mortgage Loan should be
modified. The Guarantor shall be deemed to have consented to the Master
Servicer's request in the event that the Guarantor does not either provide the
Master Servicer with its written consent to such requested modification or
written notice of its objection to such modification within five Business Days
of its receipt of the Master Servicer's request. Requests for modification shall
be sent to the Guarantor at: ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attn: Vice President-Loss Mitigation. With respect to
each Group I Mortgage Loan which is modified with the consent of the Guarantor,
the Master Servicer shall give written notice to the NIMS Insurer and the
Certificate Insurer to the addresses set forth in Section 11.05 and to the
Guarantor to the following address: ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, 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 "Deutsche Bank National Trust Company, as Trust Administrator for the
benefit of Wachovia Bank, National Association, as Trustee, in trust for
registered Holders of Long Beach Mortgage Loan Trust 2002-3, Asset-Backed
Certificates, Series 2002-3. 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
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thereafter deposit such amounts in the Sub-Servicing Account, in no event more
than two Business Days after the deposit of such funds into the clearing
account. The Sub-Servicer shall thereafter be required to deposit such proceeds
in the Collection Account or remit such proceeds to the Master Servicer for
deposit in the Collection Account not later than two Business Days after the
deposit of such amounts in the Sub-Servicing Account. For purposes of this
Agreement, the Master Servicer shall be deemed to have received payments on the
Mortgage Loans when the Sub-Servicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.
The Master Servicer shall establish and maintain, or cause to be
established and maintained, one or more accounts (the "Servicing Accounts").
Servicing Accounts shall be Eligible Accounts. The Master Servicer shall deposit
in the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Master Servicer's receipt thereof, all
collections from the Mortgagors (or related advances from Sub-Servicers) for the
payment of taxes, assessments, hazard insurance premiums and comparable items
for the account of the Mortgagors ("Escrow Payments") collected on account of
the Mortgage Loans and shall thereafter deposit such Escrow Payments in the
Servicing Accounts, in no event more than two Business Days after the deposit of
such funds in the clearing account, for the purpose of effecting the payment of
any such items as required under the terms of this Agreement. Withdrawals of
amounts from a Servicing Account may be made only to (i) effect payment of
taxes, assessments, hazard insurance premiums, and comparable items; (ii)
reimburse the Master Servicer (or a Sub-Servicer to the extent provided in the
related Sub-Servicing Agreement) out of related collections for any advances
made pursuant to Section 3.01 (with respect to taxes and assessments) and
Section 3.14 (with respect to hazard insurance); (iii) refund to Mortgagors any
sums as may be determined to be overages; (iv) pay interest, if required and as
described below, to Mortgagors on balances in the Servicing Account; (v) clear
and terminate the Servicing Account upon the termination of the Master
Servicer's obligations and responsibilities in respect of the Mortgage Loans
under this Agreement in accordance with Article IX or (vi) recover amounts
deposited in error. As part of its servicing duties, the Master Servicer or
Sub-Servicers shall pay to the Mortgagors interest on funds in Servicing
Accounts, to the extent required by law and, to the extent that interest earned
on funds in the Servicing Accounts is insufficient, to pay such interest from
its or their own funds, without any reimbursement therefor. To the extent that a
Mortgage does not provide for Escrow Payments, the Master Servicer shall
determine whether any such payments are made by the Mortgagor in a manner and at
a time that avoids the loss of the Mortgaged Property due to a tax sale or the
foreclosure of a tax lien. The Master Servicer assumes full responsibility for
the payment of all such bills within such time and shall effect payments of all
such bills irrespective of the Mortgagor's faithful performance in the payment
of same or the making of the Escrow Payments and shall make advances from its
own funds to effect such payments; provided, however, that such advances shall
constitute Servicing Advances.
Section 3.10 Collection Account and Distribution Account.
(a) On behalf of the Trust Fund, the Master Servicer shall establish
and maintain, or cause to be established and maintained, one or more accounts
(such account or accounts, the "Collection Account"), held in trust for the
benefit of the Trustee, the Certificateholders and the Certificate Insurer. On
behalf of the Trust Fund, the Master Servicer shall deposit or cause to be
deposited in the clearing account (which account must be an Eligible Account) in
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which it customarily deposits payments and collections on mortgage loans in
connection with its mortgage loan servicing activities on a daily basis, and in
no event more than one Business Day after the Master Servicer's receipt thereof,
and shall thereafter deposit in the Collection Account, in no event more than
two Business Days after the deposit of such funds into the clearing account, as
and when received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the related Mortgage Loans due on or before
the Cut-off Date or payments (other than Principal Prepayments) received by it
on or prior to the Cut-off Date but allocable to a Due Period subsequent
thereto):
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds (other than
proceeds collected in respect of any particular REO Property and amounts paid by
the Master Servicer in connection with a purchase of Mortgage Loans and REO
Properties pursuant to Section 9.01);
(iv) any amounts required to be deposited pursuant to Section
3.12 in connection with any losses realized on Permitted Investments with
respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Master Servicer
pursuant to the second paragraph of Section 3.14(a) in respect of any blanket
policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased
in accordance with Section 2.03, Section 3.16 or Section 9.01 and all Master
Servicer Prepayment Charge Payment Amounts required to be deposited in the
Collection Account pursuant to Section 2.03;
(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
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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, the Certificateholders and the Certificate Insurer. 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 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, the Certificate Insurer and the
Depositor of the location of the Collection Account maintained by it when
established and prior to any change thereof. The Trust Administrator shall give
notice to the Master Servicer, the Trustee, the NIMS Insurer, the Guarantor, the
Certificate Insurer and the Depositor of the location of the Distribution
Account when established and prior to any change thereof.
(d) Funds held in the Collection Account at any time may be delivered
by the Master Servicer to the 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
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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 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;
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(v) to pay to the Master Servicer or the Seller, as the case may
be, with respect to each Mortgage Loan that has previously been purchased or
replaced pursuant to Section 2.03 or Section 3.16(c) all amounts received
thereon subsequent to the date of purchase or substitution, as the case may be;
(vi) to reimburse the Master Servicer for any Advance or
Servicing Advance previously made which the Master Servicer has determined to be
a Nonrecoverable Advance in accordance with the provisions of Section 4.04;
(vii) to reimburse the Master Servicer or the Depositor for
expenses incurred by or reimbursable to the Master Servicer or the Depositor, as
the case may be, pursuant to Section 6.03;
(viii) to reimburse the Guarantor (with respect to Group I
Mortgage Loans only), the NIMS Insurer, the Certificate Insurer, the Master
Servicer, 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;
(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, the Certificate 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, the Certificate
Insurer and the Guarantor in accordance with Section 4.01;
(ii) to pay to itself and the Trustee amounts to which it is
entitled pursuant to Section 8.05 or to pay any other Extraordinary Trust Fund
Expenses;
(iii) to pay to itself any interest income earned on funds
deposited in the Distribution Account pursuant to Section 3.12(c);
(iv) to reimburse itself and the Trustee pursuant to Section 7.02
or pursuant to Section 7.01 to the extent such amounts in Section 7.01 were not
reimbursed by the Master Servicer;
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(v) to pay any amounts in respect of taxes pursuant to Section
10.01(g);
(vi) to remit to the Master Servicer any amount deposited in the
Distribution Account by the Master Servicer but not required to be deposited
therein in accordance with Section 3.10(d);
(vii) to pay to an Advancing Person reimbursements for Advances
and/or Servicing Advances pursuant to Section 3.27;
(viii) to clear and terminate the Distribution Account pursuant
to Section 9.01;
(ix) to pay the PMI Insurer the PMI Insurer Fee based on
information received from the Master Servicer; and
(x) to pay itself the Trust Administrator Fee.
Section 3.12 Investment of Funds in the Collection Account and the
Distribution Account.
(a) The Master Servicer may direct any depository institution
maintaining the Collection Account and any REO Account (for purposes of this
Section 3.12, an "Investment Account"), and the 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
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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.
(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 (with the consent of the Certificate Insurer, which
consent shall not be unreasonably withheld) may require the Master Servicer to
enter into a special subservicing agreement with a servicer with expertise in
servicing delinquent mortgage loans as designated by the Guarantor (the "Special
Servicer") on or after the earliest Distribution Date with respect to which the
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);
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(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;
(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, the Certificate
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;
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(12) the Guarantor may remove the Special Servicer if the
Special Servicer at any time fails to meet any of the above criteria or
otherwise, in the judgment of the Guarantor, fails to perform according to the
terms of the subservicing agreement and the provisions of this Section 3.13;
provided that prior to any such removal the Guarantor shall designate a
successor Special Servicer meeting the requirements of this Section 3.13, and no
removal of a Special Servicer shall be effective until a successor Special
Servicer has entered into a special subservicing agreement meeting the
requirements of this Section 3.13 and agreed to assume the duties of the Special
Servicer or the Master Servicer has undertaken such duties; and
(13) in connection with any transfer of a Group I Mortgage
Loan to the Special Servicer as a Specially Serviced Mortgage Loan, the Master
Servicer shall execute any appropriate assignments or other documents reasonable
and necessary to further the prosecution of the Special Servicer obligations
under the special subservicing agreement.
Section 3.14 Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage.
(a) The Master Servicer shall cause to be maintained for each Mortgage
Loan fire insurance with extended coverage on the related Mortgaged Property in
an amount which is at least equal to the least of (i) the then current principal
balance of such Mortgage Loan, (ii) the amount necessary to fully compensate for
any damage or loss to the improvements that are a part of such property on a
replacement cost basis and (iii) the maximum insurable value of the improvements
which are a part of such Mortgaged Property, in each case in an amount not less
than such amount as is necessary to avoid the application of any coinsurance
clause contained in the related hazard insurance policy. The Master Servicer
shall also cause to be maintained fire insurance with extended coverage on each
REO Property in an amount which is at least equal to the lesser of (i) the
maximum insurable value of the improvements which are a part of such property
and (ii) the outstanding principal balance of the related Mortgage Loan at the
time it became an REO Property, plus accrued interest at the Mortgage Rate and
related Servicing Advances. The Master Servicer will comply in the performance
of this Agreement with all reasonable rules and requirements of each insurer
under any such hazard policies. Any amounts to be collected by the Master
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
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Loan and (ii) the maximum amount of such insurance available for the related
Mortgaged Property under the national flood insurance program (assuming that the
area in which such Mortgaged Property is located is participating in such
program).
In the event that the Master Servicer shall obtain and maintain a
blanket policy with an insurer having a General Policy Rating of A:X or better
in Best's Key Rating Guide (or such other rating that is comparable to such
rating) insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first two sentences of this Section 3.14, it being understood and agreed that
such policy may contain a deductible clause, in which case the Master Servicer
shall, in the event that there shall not have been maintained on the related
Mortgaged Property or REO Property a policy complying with the first two
sentences of this Section 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection Account
from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
prepare and present, on behalf of itself, the Trustee, the Trust Administrator,
the Certificateholders and the Certificate Insurer, claims under any such
blanket policy in a timely fashion in accordance with the terms of such policy.
(b) The Master Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of ▇▇▇▇▇▇ ▇▇▇ 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, the Certificate Insurer and
the Guarantor (upon such party's reasonable request) with copies of any such
insurance policies and fidelity bond. The Master Servicer shall be deemed to
have complied with this provision if an Affiliate of the Master Servicer has
such errors and omissions 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
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to be maximized if the Mortgage Loan were not accelerated, and the Master
Servicer shall not exercise any such rights if prohibited by law from doing so.
If the Master Servicer reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, or if any of the other conditions set forth
in the proviso to the preceding sentence apply, the Master Servicer will enter
into an assumption and modification agreement from or with the person to whom
such property has been conveyed or is proposed to be conveyed, pursuant to which
such person becomes liable under the Mortgage Note and, to the extent permitted
by applicable state law, the Mortgagor remains liable thereon. The Master
Servicer may also enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note, provided that no such substitution shall be effective unless such
person satisfies the underwriting criteria of the Master Servicer and has a
credit risk rating at least equal to that of the original Mortgagor. In
connection with any assumption, modification or substitution, the Master
Servicer shall apply such underwriting standards and follow such practices and
procedures as shall be normal and usual in its general mortgage servicing
activities and as it applies to other mortgage loans owned solely by it. The
Master Servicer shall not take or enter into any assumption and modification
agreement, however, unless (to the extent practicable under the circumstances)
it shall have received confirmation, in writing, of the continued effectiveness
of any applicable hazard insurance policy, or a new policy meeting the
requirements of this Section is obtained. Any fee collected by the Master
Servicer in respect of any assumption, modification or substitution of liability
agreement will be retained by the Master Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the related Mortgage Rate and the
amount of the Monthly Payment) may be amended or modified, except as otherwise
required pursuant to the terms thereof. The Master Servicer shall notify the
Trustee, the Trust Administrator, the NIMS Insurer, the Certificate 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, the NIMS Insurer and the Certificate Insurer) the executed original of
such substitution, modification or assumption agreement, which document shall be
added to the related Mortgage File and shall, for all purposes, be considered a
part of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof. If the Class C Certificates are no
longer outstanding, the Master Servicer shall not take or enter into any
substitution, assumption or modification agreement with respect to a Group I
Mortgage Loan without obtaining the prior written consent of the Guarantor to
such substitution, assumption or modification agreement. The Master Servicer
shall submit to the Guarantor with its request for consent, such information
related to the proposed substitution, assumption or modification agreement as
can be expected to be needed by the Guarantor to evaluate the Master Servicer's
request, including the terms of the proposed substitution, assumption or
modification and the reasons for the Master Servicer's decision that such
substitution, assumption or modification agreement should be taken or entered
into with respect to such Group I Mortgage Loan. The Guarantor shall be deemed
to have consented to the Master Servicer's request in the event that the
Guarantor does not either provide the Master Servicer with its written consent
to such requested substitution, assumption or modification agreement or written
notice of its objection to such substitution, assumption or modification
agreement within five Business Days of its receipt of the Master Servicer's
request. Such requests shall be sent to the Guarantor at: ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attn: Vice President-Loss
Mitigation. With respect to each substitution, assumption or modification
agreement which is entered into with the consent of the Guarantor, the Master
Servicer shall give written notice to the NIMS Insurer and the Certificate
Insurer to the addresses set forth in Section 11.05, to the Guarantor to the
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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.
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, the Certificateholders or
the Certificate Insurer would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless the Master Servicer has also previously
determined, based on its reasonable judgment and a report prepared by an
Independent Person who regularly conducts environmental audits using customary
industry standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best
economic interest of the Trust Fund to take such actions as
are necessary to bring the Mortgaged Property into compliance
therewith; and
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(2) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any
hazardous substances, hazardous materials, hazardous wastes,
or petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be
required under any federal, state or local law or regulation,
or that if any such materials are present for which such
action could be required, that it would be in the best
economic interest of the Trust Fund to take such actions with
respect to the affected Mortgaged Property.
Notwithstanding the foregoing, if such environmental audit reveals, or
if the Master Servicer has knowledge or notice, that the Mortgaged Property
securing such Mortgage Loan contains such wastes or substances or is within one
mile of the site of such wastes or substances, the Master Servicer shall not
foreclose or accept a deed in lieu of foreclosure without the prior written
consent of the Guarantor (with respect to the Group I Mortgage Loans) and the
Certificate Insurer.
The cost of the environmental audit report contemplated by this Section
3.16 shall be advanced by the Master Servicer, subject to the Master Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.11(a)(ix), such right of reimbursement being prior to the rights of
Certificateholders, the Certificate Insurer or the Guarantor to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans. It is understood by the parties hereto that any
such advance will constitute a Servicing Advance.
If the Master Servicer determines, as described above, that it is in
the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(ix), such right of
reimbursement being prior to the rights of Certificateholders, the Certificate
Insurer or the Guarantor to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans. It is
understood by the parties hereto that any such advance will constitute a
Servicing Advance.
(c) The Master Servicer may at its option purchase from REMIC 1, as
applicable, any Mortgage Loan or related REO Property that is 90 days or more
delinquent or that has been otherwise in default for 90 days or more, which the
Master Servicer determines in good faith will otherwise become subject to
foreclosure proceedings (evidence of such determination to be delivered in
writing to the Trust Administrator and the Trustee prior to purchase), at a
price equal to the Purchase Price; provided, however, that the Master Servicer
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shall purchase any such Mortgage Loans or related REO Properties on the basis of
delinquency or default, purchasing first the Mortgage Loans or related REO
Properties that became delinquent or otherwise in default on an earlier date;
and provided, further, that such option shall expire as of the last day of the
calendar quarter during which such Mortgage Loan or related REO Property became
90 days delinquent or otherwise in default for 90 days or more. In the event the
Master Servicer does not exercise its option to purchase from REMIC 1 any such
Mortgage Loan or related REO Property prior to the expiration of such option,
the NIMS Insurer shall be entitled to purchase such Mortgage Loan or related REO
Property at any time thereafter. In the event neither the Master Servicer nor
the NIMS Insurer exercises its option to purchase from REMIC 1 any such Mortgage
Loan or related REO Property prior to the expiration of such option, the
Certificate Insurer shall be entitled to purchase such Mortgage Loan or related
REO Property at any time thereafter. In the event none of the Master Servicer,
the NIMS Insurer or the Controlling Insurer exercises its option to purchase
from REMIC 1 any such Group I Mortgage Loan or related REO Property prior to the
expiration of such option, the Guarantor shall be entitled to purchase such
Group I Mortgage Loan or related REO Property at any time thereafter. The
Purchase Price for any Mortgage Loan or related REO Property purchased hereunder
shall be deposited in the Collection Account, and the 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 Controlling 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 Servicer, the Controlling Insurer or the Guarantor, as applicable, shall
furnish and as shall be necessary to vest in the Master Servicer, the
Controlling Insurer or the Guarantor, as applicable, title to any Mortgage Loan
or related REO Property released pursuant hereto.
(d) Proceeds received (other than any Prepayment Charges received) in
connection with any Final Recovery Determination, as well as any recovery
resulting from a partial collection of Insurance Proceeds or Liquidation
Proceeds, in respect of any Mortgage Loan, will be applied in the following
order of priority: first, to reimburse the Master Servicer or any Sub-Servicer
for any related unreimbursed Servicing Advances and Advances, pursuant to
Section 3.11(a)(ii) or (a)(iii); second, to accrued and unpaid interest on the
Mortgage Loan, to the date of the Final Recovery Determination, or to the Due
Date prior to the Distribution Date on which such amounts are to be distributed
if not in connection with a Final Recovery Determination; and third, as a
recovery of principal of the Mortgage Loan. If the amount of the recovery so
allocated to interest is less than the full amount of accrued and unpaid
interest due on such Mortgage Loan, the amount of such recovery will be
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, Trust Administrator and the applicable Custodian holding the
related Mortgage File by a certification in the form of Exhibit E-2 (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the Collection Account pursuant to Section 3.10 have been or will
be so deposited) of a Servicing Representative and shall request delivery to it
of the related Mortgage File. Upon receipt of such certification and request,
the Trust Administrator or such Custodian, as applicable, shall promptly release
the related Mortgage File to the Master Servicer. No expenses incurred in
connection with any instrument of satisfaction or deed of reconveyance shall be
chargeable to the Collection Account or the Distribution Account.
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(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 or
the applicable Custodian shall, upon request of the Master Servicer and delivery
to the Trust Administrator or the applicable Custodian of a Request for Release
in the form of Exhibit E-l, release the related Mortgage File to the Master
Servicer, and the Trustee or the Trust Administrator or the applicable
Custodian, on behalf of the Trustee, shall, at the direction of the Master
Servicer, execute such documents as shall be necessary to the prosecution of any
such proceedings and the Master Servicer shall retain such Mortgage File in
trust for the benefit of the Certificateholders and the Certificate Insurer.
Such Request for Release shall obligate the Master Servicer to return each and
every document previously requested from the Mortgage File to the Trust
Administrator or the applicable Custodian when the need therefor by the Master
Servicer no longer exists, unless the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Collection Account or the Mortgage File or such document has been delivered to
an attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Master Servicer has delivered to the Trust Administrator or the applicable
Custodian a certificate of a Servicing Representative certifying as to the name
and address of the Person to which such Mortgage File or such document was
delivered and the purpose or purposes of such delivery. Upon receipt of a
certificate of a Servicing Representative stating that such Mortgage Loan was
liquidated and that all amounts received or to be received in connection with
such liquidation that are required to be deposited into the Collection Account
have been so deposited, or that such Mortgage Loan has become an REO Property, a
copy of the Request for Release shall be released by the Trust Administrator or
the applicable Custodian to the Master Servicer or its designee.
(c) At the direction of the Master Servicer and upon written
certification of a Servicing Representative, each of the Trustee, the applicable
Custodian or 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 execute and
deliver to the Master Servicer a power of attorney sufficient to authorize the
Master Servicer or the Sub-Servicer to execute such documents on its behalf,
provided that each of the Trustee and the Trust Administrator or the applicable
Custodian shall be obligated to execute the documents identified above if
necessary to enable the Master Servicer or the Sub-Servicer to perform their
respective duties hereunder or under the Sub-Servicing Agreement. Each such
certification shall include a request that such pleadings or documents be
executed by the Trust Administrator or the applicable Custodian and a statement
as to the reason such documents or pleadings are required.
Section 3.18 Servicing Compensation.
As compensation for the activities of the Master Servicer hereunder,
the Master Servicer shall be entitled to the Servicing Fee with respect to each
Mortgage Loan payable solely from payments of interest in respect of such
Mortgage Loan, subject to Section 3.24. In addition, the Master Servicer shall
be entitled to recover unpaid Servicing Fees out of Late Collections, Insurance
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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 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, the Certificate Insurer and the Depositor (and, upon request, the
Guarantor) a statement prepared by the Master Servicer setting forth the status
of the Collection Account as of the close of business on such Distribution Date
and showing, for the period covered by such statement, the aggregate amount of
deposits into and withdrawals from 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, the Certificate Insurer
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
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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 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 Certificate 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 or
the Certificate Insurer access to the documentation regarding the Mortgage Loans
serviced by the Master Servicer under this Agreement, as may be required by
applicable laws and regulations. Such access shall be afforded without charge,
but only upon reasonable request and during normal business hours at the offices
of the Master Servicer designated by it. In addition, access to the
documentation regarding the Mortgage Loans serviced by the Master Servicer under
this Agreement will be provided to any Certificateholder, the Guarantor (with
respect to Group I Mortgage Loans only), the NIMS Insurer, the Certificate
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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 and the Certificate Insurer. The Master Servicer, on behalf
of REMIC 1 (and on behalf of the Trustee for the benefit of the
Certificateholders and the Certificate Insurer), shall sell any REO Property as
soon as practicable and, in any event, shall either sell any REO Property before
the close of the third taxable year after the year REMIC 1 acquires ownership of
such REO Property for purposes of Section 860G(a)(8) of the Code or request from
the Internal Revenue Service, no later than 60 days before the day on which the
three-year grace period would otherwise expire, an extension of the three-year
grace period, unless the Master Servicer shall have delivered to the Trust
Administrator, Trustee, the NIMS Insurer, the Certificate Insurer, the Guarantor
and the Depositor an Opinion of Counsel, addressed to the Trust Administrator,
the Trustee, the NIMS Insurer, the Certificate Insurer, the Guarantor and the
Depositor, to the effect that the holding by REMIC 1 of such REO Property
subsequent to three years after its acquisition will not result in the
imposition on any Trust REMIC of taxes on "prohibited transactions" thereof, as
defined in Section 860F of the Code, or cause any Trust REMIC to fail to qualify
as a REMIC under Federal law at any time that any Certificates are outstanding.
If an extension of the three-year period is granted, the Master Servicer shall
sell the related REO Property no later than 60 days prior to the expiration of
such extension period. The Master Servicer shall manage, conserve, protect and
operate each REO Property for the Certificateholders and the Certificate Insurer
solely for the purpose of its prompt disposition and sale in a manner which does
not cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code or result in the receipt by any
Trust REMIC of any "income from non-permitted assets" within the meaning of
Section 860F(a)(2)(B) of the Code, or any "net income from foreclosure property"
which is subject to taxation under the REMIC Provisions.
(b) The Master Servicer shall segregate and hold all funds collected
and received in connection with the operation of any REO Property separate and
apart from its own funds and general assets and shall establish and maintain, or
cause to be established and maintained, with respect to REO Properties an
account held in trust for the Trustee for the benefit of the Certificateholders
and the Certificate Insurer (the "REO Account"), which shall be an Eligible
Account. The Master Servicer may allow the Collection Account to serve as the
REO Account, subject to separate ledgers for each REO Property. The Master
Servicer may retain or withdraw any interest income paid on funds deposited in
the REO Account.
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(c) The Master Servicer shall have full power and authority, subject
only to the specific requirements and prohibitions of this Agreement, to do any
and all things in connection with any REO Property as are consistent with the
manner in which the Master Servicer manages and operates similar property owned
by the Master Servicer or any of its Affiliates, all on such terms and for such
period as the Master Servicer deems to be in the best interests of
Certificateholders and the Certificate Insurer. In connection therewith, the
Master Servicer shall deposit, or cause to be deposited in the clearing account
(which account must be an Eligible Account) in which it customarily deposits
payments and collections on mortgage loans in connection with its mortgage loan
servicing activities on a daily basis, and in no event more than one Business
Day after the Master Servicer's receipt thereof and shall thereafter deposit in
the REO Account, in no event more than two Business Days after the deposit of
such funds into the clearing account, all revenues received by it with respect
to an REO Property and shall withdraw therefrom funds necessary for the proper
operation, management and maintenance of such REO Property including, without
limitation:
(i) all insurance premiums due and payable in respect of such REO
Property;
(ii) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the REO Account with respect
to an REO Property are insufficient for the purposes set forth in clauses (i)
through (iii) above with respect to such REO Property, the Master Servicer shall
advance from its own funds as Servicing Advances such amount as is necessary for
such purposes if, but only if, the Master Servicer would make such advances if
the Master Servicer owned the REO Property and if such Servicing Advance would
not constitute a Nonrecoverable Advance.
Notwithstanding the foregoing, 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 Certificate 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
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1, in which case the Master Servicer may take such actions as are specified in
such Opinion of Counsel.
The Master Servicer may contract with any Independent Contractor for
the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered to
require, that the Independent Contractor pay all costs and expenses incurred in
connection with the operation and management of such REO Property, including
those listed above, and remit all related revenues (net of such costs and
expenses) to the Master Servicer as soon as practicable, but in no event later
than thirty days following the receipt thereof by such Independent Contractor;
(iii) none of the provisions of this Section 3.23(c) relating to
any such contract or to actions taken through any such Independent Contractor
shall be deemed to relieve the Master Servicer of any of its duties and
obligations to the Trustee on behalf of the Certificateholders and the
Certificate Insurer with respect to the operation and management of any such REO
Property; and
(iv) the Master Servicer shall be obligated with respect thereto
to the same extent as if it alone were performing all duties and obligations in
connection with the operation and management of such REO Property.
The Master Servicer shall be entitled to enter into any agreement with
any Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of whether
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).
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(e) Subject to the time constraints set forth in Section 3.23(a), each
REO Disposition shall be carried out by the Master Servicer at such price and
upon such terms and conditions as the Master Servicer shall deem necessary or
advisable, as shall be normal and usual in its general servicing activities for
similar properties.
(f) The proceeds from the REO Disposition, net of any amount required
by law to be remitted to the Mortgagor under the related Mortgage Loan and net
of any payment or reimbursement to the Master Servicer or any Sub-Servicer as
provided above, shall be deposited in the Distribution Account in accordance
with Section 3.10(d)(ii) on the Master Servicer Remittance Date in the month
following the receipt thereof for distribution on the related Distribution Date
in accordance with Section 4.01. Any REO Disposition shall be for cash only.
(g) The Master Servicer shall file information returns with respect to
the receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of any Mortgaged Property and cancellation of
indebtedness income with respect to any Mortgaged Property as required by
Sections 6050H, 6050J and 6050P of the Code, respectively. Such reports shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 6050J and 6050P of the Code.
Section 3.24 Obligations of the Master Servicer in Respect of
Prepayment Interest Shortfalls.
The Master Servicer shall deliver to the 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 Certificate Insurer, the
Guarantor and any successor master servicer in respect of any such liability;
provided, that in the case of the Guarantor such indemnity shall only apply with
respect to Group I Mortgage Loans. Such indemnities shall survive the
termination or discharge of this Agreement. Notwithstanding the foregoing, this
Section 3.25 shall not limit the ability of the Master Servicer to seek recovery
of any such amounts from the related Mortgagor under the terms of the related
Mortgage Note, as permitted by law and shall not be an expense of the Trust.
Section 3.26 Reserve Funds.
(a) No later than the Closing Date, the Trust Administrator, on behalf
of the Trustee, on behalf of the Certificateholders and the Certificate Insurer,
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shall establish and maintain with itself two separate, segregated trust accounts
titled, "Group I Reserve Fund, Deutsche Bank National Trust Company, as Trust
Administrator for the benefit of Wachovia Bank, National Association, as
Trustee, in trust for registered Holders of Long Beach Mortgage Loan Trust
2002-3, Asset-Backed Certificates, Series 2002-3" and "Group II Reserve Fund,
Deutsche Bank National Trust Company, as Trust Administrator for the benefit of
Wachovia Bank, National Association, as Trustee, in trust for registered Holders
of Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates, Series
2002-3," respectively.
(b) The Trust Administrator shall deposit into the Reserve Funds the
following amounts:
(i) On each Distribution Date, the Trust Administrator shall
deposit all amounts received with respect to the Group I Cap Agreement in the
Group I Reserve Fund and all amounts received with respect to the Group II Cap
Agreement in the Group II Reserve Fund;
(ii) On the Closing Date, the Depositor shall deposit, or cause
to be deposited, into each of the Reserve Funds $1,000;
(iii) On each Distribution Date as to which there is a Net WAC
Rate Carryover Amount payable to the Class I-A Certificates, the 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)(i). On each Distribution Date as to which there is a Net WAC
Rate Carryover Amount payable to the Class II-A 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)(g); and
(iv) On each Distribution Date as to which there are no Net WAC
Rate Carryover Amounts, 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.
(c) Each Reserve Fund shall be segregated into two separate portions,
for which the Trust Administrator shall keep separate accounts. "Portion 1" of
each Reserve Fund will consist of amounts deposited pursuant to Section
3.26(b)(i), above, plus any amounts earned on any such funds while on deposit in
the Reserve Fund. "Portion 2" of each Reserve Fund will consist of amounts
deposited pursuant to Sections 3.26(b)(ii), (b)(iii), and (b)(iv), above, plus
any amounts earned on any such funds while on deposit in the Reserve Fund.
Amounts distributed from the Reserve Funds under Sections 4.01(d) and 3.26(c)
shall be deemed to be distributed first from Portion 1 of such Reserve Fund to
the extent thereof and then from Portion 2.
(d) Each Portion of each Reserve Fund shall be treated as an "outside
reserve fund" under applicable Treasury regulations and will not be part of any
REMIC created hereunder. For federal and state income tax purposes, the Trust
Administrator shall be deemed to be the owner of Portion 1 of each Reserve Fund
and no amount will be transferred by any REMIC to Portion 1 of either Reserve
Fund. For federal and state income tax purposes, the Class I-C
Certificateholders shall be deemed to be the owners of Portion 2 of the Group I
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Reserve Fund and all amounts deposited into such Portion 2 of the Group I
Reserve Fund (other than the initial deposit therein of $1,000) shall be treated
as amounts distributed by REMIC 4 to REMIC CX in respect of the REMIC 4 Regular
Interest LT4-IC, and then distributed by REMIC CX to the Holders of the Class
I-C Certificates. For federal and state income tax purposes, the Class II-C
Certificateholders shall be deemed to be the owners of Portion 2 of the Group II
Reserve Fund and all amounts deposited into such Portion 2 of the Group 2
Reserve Fund (other than the initial deposit therein of $1,000) shall be treated
as amounts distributed by REMIC 4 to REMIC CX in respect of REMIC 4 Regular
Interest LT4-IIC and then distributed by REMIC CX to the Holders of the Class
II-C Certificates. For federal and state income tax purposes, payments in
respect of the Class A Certificates of Net WAC Rate Carryover Amounts will not
be payments with respect to a "regular interest" in a REMIC within the meaning
of Code Section 860G(a)(1).
(e) By accepting a Class C Certificate, each Class C Certificateholder
shall be deemed to have directed the Trust Administrator to, and the Trust
Administrator shall pursuant to such direction, deposit into the Reserve Funds
the amounts described in Section 3.26(b)(iii) and (b)(iv) above on each
Distribution Date. By accepting a Class C Certificate, each Class C
Certificateholder further agrees that such direction is given for good and
valuable consideration, the receipt and sufficiency of which is acknowledged by
such acceptance.
(f) At the direction of the Holders of a majority in Percentage
Interest in the Class C Certificates, the Trust Administrator shall direct any
depository institution maintaining Portion 2 of the Group I Reserve Fund or
Portion 2 of the Group II Reserve Fund, as applicable, to invest the funds in
such account in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, (i) no later than the Business
Day immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if a Person other than
the 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 Portion 2 of the Reserve Fund is received by the Trust Administrator,
the Trust Administrator shall invest the funds in such Portion 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 Portion 2 of each 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 Portion 2 of the related Reserve Fund.
The Trust Administrator shall hold the funds in Portion 1 of each
Reserve Fund uninvested in an Eligible Account.
(g) For federal tax return and information reporting, the right of the
Certificateholders to receive payment on account of the Class A Certificates
from the related Reserve Fund in respect of any Net WAC Rate Carryover Amount
shall be assigned a value of zero.
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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
Controlling Insurer, after consultation with the Guarantor (or, if there is no
Controlling Insurer, with the consent of the Guarantor), is hereby authorized to
enter into a facility with any Person which provides that such Person (an
"Advancing Person") may make all or a portion of the Advances and/or Servicing
Advances to the Trust Fund under this Agreement, although no such facility shall
reduce or otherwise affect the Master Servicer's obligation to fund such
Advances and/or Servicing Advances. To the extent that an Advancing Person makes
all or a portion of any Advance or any Servicing Advance and provides the 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 Controlling Insurer or the Guarantor, if applicable,
shall not withhold its consent, after consultation with the Guarantor, if
applicable, to the Trust Fund's entering into such facility.
(b) If an advancing facility is entered into, then the Master Servicer
shall not be permitted to reimburse itself under any Section specified or for
any amount specified by the Advancing Person in the notice described under
Section 3.27(a) above and acknowledged by the Master Servicer prior to the
remittance to the Trust Fund, but instead the Master Servicer shall include such
amounts in the applicable remittance to the Trustee made pursuant to Section
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
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could result in denial of coverage under the PMI Policy. The Master Servicer
shall notify the PMI Insurer that the Trustee, as trustee on behalf of the
Certificateholders and the Certificate Insurer, is the insured, as that term is
defined in the PMI Policy, of each PMI Mortgage Loan. The Master Servicer shall,
on behalf of the Trustee, prepare and file on a timely basis with the PMI
Insurer, with a copy to the Trustee 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.
Section 3.30 Cap Agreements.
(a) The Depositor hereby directs the Trustee to execute and deliver on
behalf of the Trust each of the Cap Contracts and authorizes the Trustee to
perform its obligations thereunder on behalf of the Trust in accordance with the
respective terms of each Cap Agreement. The Trustee hereby directs the Trust
Administrator to execute and deliver on behalf of the Trust each of the Cap
Contracts and authorizes the Trust Administrator to perform its obligations
thereunder on behalf of the Trust in accordance with the respective terms of
each Cap Agreement.
(b) If the Cap Provider no longer has a short-term certificates of
deposit rating of at least "A-1" from S&P or "P-1" from ▇▇▇▇▇'▇ (or their
equivalent) (the "Approved Rating Thresholds"), the Trust Administrator shall,
promptly after a Responsible Officer of the Trust Administrator has received
actual knowledge or written notice of the reduction or withdrawal of the rating
(it being understood that the Trust Administrator has no duty to monitor the
ratings of the Cap Provider), request the Cap Provider to (i) obtain replacement
Cap Agreements with a counterparty that is a bank or other financial institution
with the Approved Rating Thresholds or (ii) post collateral with the Trustee in
an amount sufficient to restore the immediately prior ratings of the
Certificates.
(c) In the event that either of the Cap Agreements is canceled or
otherwise terminated for any reason (other than the exhaustion of the interest
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rate protection provided thereby or replacement of the applicable Cap Agreement
by the Cap Provider in accordance with Section 3.30(b)), the Depositor shall, to
the extent a replacement contract is available, direct the Trust Administrator
to obtain from a counterparty designated by the Depositor a replacement contract
comparable to the related Cap Agreement (which both such counterparty and such
replacement contract shall be acceptable to the Trust Administrator, the Trustee
and the Holders of the Certificates entitled to at least 50% of the Voting
Rights) providing interest rate protection which is equal to the then-existing
protection provided by the related Cap Agreement, provided, however, that if the
cost of any such replacement contract providing the same interest rate
protection would be greater than the amount of any early termination payment
received by the Trust Administrator under such Cap Agreement, the amount of
interest rate protection provided by such replacement contract may be reduced to
a level such that the cost of such replacement contract shall not exceed the
amount of such early termination payment.
Section 3.31 Payments on the Certificate Insurance Policy.
(a) On behalf of the Trust Fund the Trust Administrator shall establish
and maintain, or cause to be established and maintained, one or more accounts
(such account or accounts, the "Policy Payments Account"), held in trust for the
benefit of the Trustee, the Certificateholders, the Guarantor and the
Certificate Insurer. On behalf of the Trust Fund, the Trust Administrator shall
deposit or cause to be deposited any Insured Payments paid under the Certificate
Insurance Policy and received by the Trust Administrator in the Policy Payments
Account and distribute such amounts only for the purpose of payment to the
Holders of the related Insured Certificates of the related Insured Payments and
such amounts may not be used to satisfy any costs, expenses or liabilities of
the Master Servicer, the Trustee, the Trust Administrator, the Guarantor, the
NIMS Insurer or the Trust. Insured Payments deposited in the Policy Payments
Account shall not be invested in Permitted Investments or otherwise, and shall
be disbursed by the Trust Administrator to the Holders of the related Insured
Certificates in accordance with Section 4.01(c).
As soon as possible, and in no event later than 9:00 a.m. (Santa Ana,
California time) on the fourth Business Day (as defined in the Insurance
Agreement) immediately preceding the related Distribution Date, the Trust
Administrator shall determine whether a Certificate Insurer Deficiency Amount is
required to be paid under the Certificate Insurance Policy with respect to such
Distribution Date and, if so, shall immediately notify the Master Servicer by
telephone, which notice shall be confirmed in writing by facsimile transmission,
of the Trust Administrator's intention so to file the applicable Notice of
Claim. If by the close of business in Santa Ana, California on such date a
Certificate Insurer Deficiency Amount is still required to be paid under the
Certificate Insurance Policy with respect to such Distribution Date, the Trust
Administrator shall furnish the Certificate Insurer (or an agent of the
Certificate Insurer designated to the Trust Administrator in writing) with a
completed Notice of Claim in respect of such Certificate Insurer Deficiency
Amount by 12:00 noon New York City time on the next succeeding Business Day (as
defined in the Insurance Agreement) and shall provide a copy thereof to the
Master Servicer at or prior to the time such Notice of Claim is received by the
Certificate Insurer. The Notice of Claim shall constitute a claim therefor
pursuant to the Certificate Insurance Policy. In the event any funds are
received by the Trust Administrator from the Master Servicer prior to the close
of business in Santa Ana, California on the Business Day (as defined in the
Insurance Agreement) following the transmission of a Notice of Claim to the
Certificate Insurer (or an agent of the Certificate Insurer designated to the
Trust Administrator in writing), and such funds reduce the amount of the
Certificate Insurer Deficiency Amount to which such Notice of Claim relates, the
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Certificate Insurer Deficiency Amount to which such Notice of Claim relates
shall be reduced by a corresponding amount, and the Notice of Claim shall be
deemed to have been rescinded to the extent of the reduction of the Certificate
Insurer Deficiency Amount. Notification of any such reduction in the Insured
Payment shall be given to the Certificate Insurer (or an agent of the
Certificate Insurer designated to the Trust Administrator in writing) by the
Trust Administrator by no later than 12:00 p.m., New York time, on the related
Distribution Date.
(b) If the Trust Administrator receives a certified copy of an order of
the appropriate court (an "Order") that any prior distribution made on the
Insured Certificates constitutes a Preference Amount, the Trust Administrator
shall so notify the Certificate Insurer, shall comply with the provisions of the
Certificate Insurance Policy to obtain payment by the Certificate Insurer of
such Preference Amount and shall, at the time it provides notice to the
Certificate Insurer, notify each Holder of the affected Insured Certificates by
mail that (i) subject to the terms of the Certificate Insurance Policy, the
Certificate Insurer will disburse the Preference Amount directly to the
receiver, conservator, debtor-in-possession or trustee in bankruptcy named in
the Order on the fourth Business Day following such Certificateholder's making
timely delivery to the Trust Administrator of (a) a certificate of such
Certificateholder that such Order has been entered and is not subject to any
stay, (b) an opinion of counsel satisfactory to the Certificate Insurer that
such Order is final and is not subject to appeal and (c) an assignment duly
executed and delivered by such Certificateholder, in such form as is reasonably
required by the Certificate Insurer and provided to such Certificateholder by
the Certificate Insurer, irrevocably assigning to the Certificate Insurer all
rights and claims of such Certificateholder relating to or arising under the
affected Insured Certificates against the debtor that made a payment of such
Preference Amount, or otherwise with respect to such payment, provided that if
such documents are received after 10:00 a.m., New York time, on such Business
Day, they will be deemed to be received on the following Business Day, and (ii)
if any such Preference Amount payment is recovered from such Certificateholder
pursuant to such Order, such Certificateholder will be entitled to payment
pursuant to the Certificate Insurance Policy. A copy of the Certificate
Insurance Policy shall be made available to each affected Certificateholder
through the Trust Administrator, and the Trust Administrator shall furnish to
the Certificate Insurer or its fiscal agent, if any, its records evidencing the
payments that have been made by the Trust Administrator and subsequently
recovered from Certificateholders and the dates on which such payments were
made.
(c) The Trust Administrator shall receive, as attorney-in-fact for each
Holder of the Insured Certificates, any Insured Payment allocable to such
Insured Certificates, from the Certificate Insurer and disburse the same in
accordance with the provisions of Section 4.01(c). Any portion of the
distributions made by the Trust Administrator in respect of any Insured Payment,
from proceeds of the Certificate Insurance Policy shall not be considered
payment by the Trust, nor shall such payments discharge the obligation of the
Trust with respect to such Insured Certificates, and the Certificate Insurer
shall become the owner of such unpaid amounts in respect of such Insured
Certificates. The Trust Administrator hereby agrees on behalf of the Trustee and
each Holder of an Insured Certificate for the benefit of the Certificate Insurer
that it recognizes that: to the extent the Certificate Insurer pays any Insured
Payments in respect of the Insured Certificates, either directly or indirectly
124
(as by paying through the Trust Administrator or the Trustee), to the Holders of
the Insured Certificates, the Certificate Insurer will be subrogated to the
rights of such Holders of Insured Certificates with respect to such Insured
Payments paid in respect of such Insured Certificates, shall be deemed to the
extent of the Insured Payments so paid in respect of such Insured Certificates,
to be a Certificate Owner of such Insured Certificates and shall be entitled to
receive all future distributions on such Insured Certificates until all such
Insured Payments (together with interest thereon at the related Late Payment
Rate from the date paid until the date of reimbursement thereof) have been fully
reimbursed, in each case subject to the following paragraph. Except as otherwise
described herein, the Certificate Insurer shall not acquire any Voting Rights
hereunder as a result of such subrogation.
(d) Each of the Trust Administrator and the Trustee shall be entitled
to enforce on behalf of the Holders of the Insured Certificates the obligations
of the Certificate Insurer under the Certificate Insurance Policy. The Holders
of the Insured Certificates are not entitled to institute proceedings directly
against the Certificate Insurer. Each Holder of the Insured Certificates, by its
purchase of Insured Certificates, the Master Servicer, the Trustee, the Trust
Administrator and the Guarantor hereby agree that the Certificate Insurer may at
any time during the continuation of any proceeding relating to a preference
claim direct all matters relating to such preference claim, including, without
limitation, the direction of any appeal of any order relating to such preference
claim and the posting of any surety, supersedeas or performance bond pending any
such appeal. In addition and without limitation of the foregoing, the
Certificate Insurer shall be subrogated to the rights of the Master Servicer,
the Trustee, the Trust Administrator and the Guarantor and each Holder of the
Insured Certificates in the conduct of any such preference claim, including,
without limitation, all rights of any party to an adversary proceeding action
with respect to any court order issued in connection with any such preference
claim.
(e) The Trust Administrator shall keep a complete and accurate record
of the amount of interest and principal paid in respect of any Insured
Certificate from monies received under the Certificate Insurance Policy. The
Certificate Insurer shall have the right to inspect such records at reasonable
times during normal business hours upon one Business Day's notice to the Trust
Administrator.
(f) If on any Distribution Date, the Certificate Insurer has failed to
make a required Insured Payment, the Certificate Insurer Premiums shall be set
off against such Insured Payment. If the Insured Payment is less than the sum of
the Certificate Insurer Premiums for such Distribution Date, the Group I
Certificate Insurer Premium shall be set-off against the portion of such Insured
Payment attributable to the Class I-A Certificates or the Class I-S1
Certificates and the Group II Certificate Insurer Premium shall be set-off
against the portion of the Insured Payment attributable to the Class II-A
Certificates or the Class II-S1 Certificates. Notwithstanding anything to the
contrary in this Agreement, each of the Group I Certificate Insurer Premium, the
Group II Certificate Insurer Premium and the Insured Payment shall be reduced by
the amount of such set-off.
(g) Any payments to the Certificate Insurer shall be made by wire
transfer of immediately available funds to the following Federal Reserve
Account:
XL Capital Assurance, Inc.
Account Number: ▇▇▇-▇▇▇-▇▇▇▇
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Reference: Long Beach 2002-3, Policy No. CA00292A
125
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 Certificate Insurer, the Group I Certificate
Insurer Premium;
second, to the Guarantor, the Guaranty Fee;
third, concurrently, to the Class I-A Certificates and the Class
I-S1 Certificates, the Monthly Interest Distributable Amount and
any Unpaid Interest Shortfall Amount for such Classes, allocated
between the Class I-A Certificates and the Class I-S1
Certificates, pro rata, based on their respective entitlements;
fourth, to the Guarantor, any Guarantor Reimbursement Amount then
due other than the portion thereof attributable to the Guaranteed
Interest Distribution Amount with respect to any Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls;
fifth, to the Certificate Insurer, any Group I Certificate
Insurer Reimbursement Amount then due;
sixth, to the Guarantor, that portion of any Guarantor
Reimbursement Amount then due, which is attributable to the
Guaranteed Interest Distribution Amount with respect to any
Prepayment Interest Shortfalls and Relief Act Interest
Shortfalls;
seventh, to the Certificate Insurer, any Group II Certificate
Insurer Reimbursement Amount then due to the extent remaining
unpaid after distributions of the Group II Interest Remittance
Amount and the Group II Net Monthly Excess Cashflow on such
Distribution Date; and
eighth, to the Class I-S2 Certificates, the Monthly Interest
Distributable Amount for such Class.
(ii) Any Group I Interest Remittance Amount remaining
undistributed pursuant to clause (i) above shall be used in determining the
amount of Group I Net Monthly Excess Cashflow, if any, for such Distribution
Date.
(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
126
Amount remaining for such Distribution Date:
first, to the Certificate Insurer, the Group II Certificate
Insurer Premium;
second, concurrently, to the Class II-A Certificates and the
Class II-S1 Certificates, the Monthly Interest Distributable
Amount and any Unpaid Interest Shortfall Amount for such Classes,
allocated among the Class II-A Certificates and the Class II-S1
Certificates, pro rata, based on their respective entitlements;
third, to the Certificate Insurer, any Group II Certificate
Insurer Reimbursement Amount then due;
fourth, to the Certificate Insurer, any Group I Certificate
Insurer Reimbursement Amount then due to the extent remaining
unpaid after distributions of the Group I Interest Remittance
Amount and the Group I Net Monthly Excess Cashflow on such
Distribution Date; and
fifth, to the Class II-S2 Certificates, the Monthly Interest
Distributable Amount for such Class.
(iv) Any Group II Interest Remittance Amount remaining
undistributed pursuant to clause (iii) above shall be used in determining the
amount of Group II Net Monthly Excess Cashflow, if any, for such Distribution
Date.
(b) (i) On each Distribution Date, the 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 distribute it to the Class I-A Certificates, until the Certificate
Principal Balance thereof has been reduced to zero, to the extent of the Group I
Principal Distribution Amount remaining for such Distribution Date. Any
principal remaining undistributed following this distribution will be used in
determining the amount of Group I Net Monthly Excess Cashflow, if any, for such
Distribution Date.
(ii) On each Distribution Date, the Trust Administrator shall
withdraw from the Distribution Account that portion of the Group II Available
Funds equal to the Group II Principal Distribution Amount for such Distribution
Date, and distribute it to the Class II-A Certificates until the Certificate
Principal Balance thereof has been reduced to zero, to the extent of the Group
II Principal Distribution Amount remaining for such Distribution Date. Any
principal remaining undistributed following this distribution will be used in
determining the amount of Group II Net Monthly Excess Cashflow, if any, for such
Distribution Date.
(c) (i) On any Distribution Date, in the event of an Insured Payment,
the Trust Administrator shall make such payment from the amount drawn under the
Certificate Insurance Policy for such Distribution Date pursuant to Section
3.31. Any portion of the Insured Payment not required to be distributed pursuant
to this Section 4.01 shall be returned to the Certificate Insurer. The Trust
127
Administrator shall allocate any Insured Payment (after giving effect to all
distributions pursuant to Sections 4.01(a), 4.01(b) and 4.01(d) on such
Distribution Date) as follows:
first, concurrently, to the Class I-A Certificates, the Class
II-A Certificates, the Class I-S1 Certificates and the Class
II-S1 Certificates in the amount equal to the sum of the Monthly
Interest Distributable Amount and the Unpaid Interest Shortfall
Amount, if any, for such classes, allocated among the Class I-A
Certificates, the Class II-A Certificates, the Class I-S1
Certificates and the Class II-S1 Certificates, pro rata, based on
their respective entitlements; and
second, concurrently, to the Class I-A Certificates and the Class
II-A Certificates, in reduction of the Certificate Principal
Balances thereof allocated, between the Class I-A Certificates
and the Class II-A Certificates, pro rata, based on the Group I
Insured Principal Amount and the Group II Insured Principal
Amount, respectively.
(ii) On the next Business Day after the Trust Administrator's
receipt of any payment disbursed to it by the Certificate Insurer in respect of
any Preference Amount recovered from the Holders of the Insured Certificates,
the Trust Administrator shall distribute such payment to such
Certificateholders. If any such distribution is to be made on a Distribution
Date, it shall be so made before giving effect to any distribution to be made on
such date pursuant to Sections 4.01(a), 4.01(b) and 4.01(d). The Trust
Administrator shall distribute to the respective Holders of the Insured
Certificates any payment disbursed to it by the Certificate Insurer in respect
of any Preference Amount and that such Certificateholder has previously repaid
to the receiver, conservator, debtor-in-possession or trustee in bankruptcy, as
the case may be.
(d) (i) On each Distribution Date, any Group I Net Monthly Excess
Cashflow shall be paid in the following order or priority, in each case to the
extent of the Group I Net Monthly Excess Cashflow remaining undistributed:
(a) to the Class I-A Certificates, in an amount equal to any
Group I Extra Principal Distribution Amount, payable to such Class of
Certificates as part of the Group I Principal Distribution Amount pursuant to
Section 4.01(b)(i);
(b) concurrently, to the Class I-A Certificates and the
Class I-S1 Certificates, in an amount equal to the Unpaid Interest Shortfall
Amount, if any, for such Classes for such Distribution Date to the extent
remaining unpaid after distribution of the Group I Interest Remittance Amount on
such Distribution Date, allocated between the Class I-A Certificates and the
Class I-S1 Certificates, pro rata, based on their respective entitlements;
(c) to the Guarantor, any Guarantor Reimbursement Amount,
other than the portion thereof attributable to the Guaranteed Interest
Distribution Amount with respect to any Prepayment Interest Shortfalls and
Relief Act Interest Shortfalls to the extent remaining unpaid after distribution
of the Group I Interest Remittance Amount on such Distribution Date;
(d) to the Certificate Insurer, any Group I Certificate
Insurer Reimbursement Amount to the extent remaining unpaid after distribution
of the Group I Interest Remittance Amount on such Distribution Date;
128
(e) to the Guarantor, that portion of any Guarantor
Reimbursement Amount which is attributable to the Guaranteed Interest
Distribution Amount with respect to any Prepayment Interest Shortfalls and
Relief Act Interest Shortfalls to the extent remaining unpaid after distribution
of the Group I Interest Remittance Amount on such Distribution Date;
(f) to the Class II-A Certificates, in an amount equal to
any positive excess of the Group II Overcollateralization Deficiency Amount over
the Group II Net Monthly Excess Cashflow for such Distribution Date (after
giving effect to the distribution of the Group II Principal Distribution Amount
to be made on such Distribution Date), payable to the Class II-A Certificates in
reduction of the Certificate Principal Balances thereof;
(g) to the Certificate Insurer, any Group II Certificate
Insurer Reimbursement Amount to the extent remaining unpaid after distributions
of the Group II Interest Remittance Amount, the Group II Net Monthly Excess
Cashflow and the Group I Interest Remittance Amount on such Distribution Date;
(h) to the Class I-S2 Certificates, in an amount equal to
the Unpaid Interest Shortfall Amount, if any, for such class for such
Distribution Date;
(i) to the Group I Reserve Fund, the amount by which any Net
WAC Rate Carryover Amounts with respect to the Class I-A Certificates for such
Distribution Date exceed the sum of any amounts received by the Trust
Administrator with respect to the Group I Cap Agreement plus any amounts paid
from the Group II Reserve Fund with respect to the Class I-A Certificates for
such Distribution Date (or, if no Net WAC Rate Carryover Amounts are payable to
such Class of Certificates on such Distribution Date, to the Group I Reserve
Fund, an amount such that when added to other amounts already on deposit in the
Group I Reserve Fund, the aggregate amount on deposit therein is equal to
$1,000);
(j) if such Distribution Date follows the Prepayment Period
during which occurs the latest date on which a Prepayment Charge may be required
to be paid in respect of any Group I Mortgage Loans, to REMIC PX, as holder of
REMIC 4 Regular Interest LT4-IP, in reduction of the Uncertificated Principal
Balance thereof, until the Uncertificated Principal Balance thereof is reduced
to zero; and
(k) to REMIC CX, as holder of REMIC 4 Regular Interest
LT4-IC, the Monthly Interest Distributable Amount for REMIC 4 Regular Interest
LT4-IC plus, until the Uncertificated Principal Balance of REMIC 4 Regular
Interest LT4-IC is reduced to zero, any Group I Overcollateralization Release
Amount for such Distribution Date (in both cases, net of such portion of amounts
payable pursuant to this clause (k) that were paid pursuant to clause (i)
above);
(l) to REMIC CX, as holder of REMIC 4 Regular Interest
LT4-IIC, the Monthly Interest Distributable Amount for REMIC 4 Regular Interest
LT4-IIC for such Distribution Date to the extent not distributed pursuant to
Section 4.01(d)(ii)(i) plus, until the Uncertificated Principal Balance of REMIC
4 Regular Interest LT4-IIC is reduced to zero, the amount, if any, equal to the
amount of any Realized Losses that reduced the Group II Overcollateralization
Release Amount, if any, on such Distribution Date;
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(m) 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 and the Group II Available Funds as provided in this Section
4.01(d) and after depositing in the Reserve Funds any payments received under
the related Cap Agreement, the Trust Administrator shall withdraw from the Group
I Reserve Fund the amount on deposit therein and shall distribute such amounts
in the following order of priority to the extent of amounts remaining in the
Group I Reserve Fund:
(i) to the Class I-A Certificates, the Net WAC Rate Carryover
Amount for such Class; and
(ii) to the Class II-A Certificates, the Net WAC Rate Carryover
Amount for such Class to the extent remaining unpaid after distribution from the
Group II Reserve Fund.
On the Distribution Date in February 2005, after making all other
distributions on such Distribution Date (including to the Class A Certificates
out of the Reserve Funds), the Trust Administrator shall distribute to itself
all remaining amounts on deposit in Portion 1 of the Group I Reserve Fund, and
shall distribute all remaining amounts in Portion 2 of the Group I Reserve Fund
to the related Class C Certificateholders.
(ii) On each Distribution Date, any Group II Net Monthly Excess
Cashflow shall be paid in the following order of priority, in each case to the
extent of the Group II Net Monthly Excess Cashflow remaining undistributed:
(a) to the Class II-A Certificates, in an amount equal to
any Group II Extra Principal Distribution Amount, payable to such Class of
Certificates as part of the Group II Principal Distribution Amount pursuant to
Section 4.01(b)(ii) above;
(b) concurrently, to the Class II-A Certificates and the
Class II-S1 Certificates, in an amount equal to the Unpaid Interest Shortfall
Amount, if any, for such Classes for such Distribution Date to the extent
remaining unpaid after distribution of the Group II Interest Remittance Amount
on such Distribution Date, allocated between the Class II-A Certificates and the
Class II-S1 Certificates pro rata, based on their respective entitlements;
(c) to the Certificate Insurer, any Group II Certificate
Insurer Reimbursement Amount to the extent remaining unpaid after distribution
of the Group II Interest Remittance Amount on such Distribution Date;
(d) to the Class I-A Certificates, in an amount equal to any
positive excess of the Group I Overcollateralization Deficiency Amount over the
Group I Net Monthly Excess Cashflow for such Distribution Date (after giving
effect to the distribution of the Group I Principal Distribution Amount to be
made on such Distribution Date), payable to the Class I-A Certificates in
reduction of the Certificate Principal Balance thereof;
(e) to the Certificate Insurer, any Group I Certificate
Insurer Reimbursement Amount to the extent remaining unpaid after distributions
130
of the Group I Interest Remittance Amount, the Group I Net Monthly Excess
Cashflow and the Group II Interest Remittance Amount on such Distribution Date;
(f) to the Class II-S2 Certificates, in an amount equal to
the Unpaid Interest Shortfall Amount, if any, for such class for such
Distribution Date;
(g) to the Group II Reserve Fund, the amount by which any
Net WAC Rate Carryover Amounts with respect to the Class II-A Certificates for
such Distribution Date exceed the sum of any amounts received by the Trust
Administrator with respect to the Group II Cap Agreement plus any amounts paid
from the Group I Reserve Fund with respect to the Class II-A Certificates for
such Distribution Date (or, if no Net WAC Rate Carryover Amounts are payable to
such Class of Certificates on such Distribution Date, to the Group II Reserve
Fund, an amount such that when added to other amounts already on deposit in the
Group II Reserve Fund, the aggregate amount on deposit therein is equal to
$1,000);
(h) if such Distribution Date follows the Prepayment Period
during which occurs the latest date on which a Prepayment Charge may be required
to be paid in respect of any Mortgage Loans, to REMIC PX, as holder of REMIC 4
Regular Interest LT4-IIP, in reduction of the Uncertificated Principal Balance
thereof, until the Uncertificated Principal Balance thereof is reduced to zero;
and
(i) to REMIC CX, as holder of REMIC 4 Regular Interest
LT4-IIC, the Monthly Interest Distributable Amount for REMIC 4 Regular Interest
LT4-IIC plus, until the Uncertificated Principal Balance of REMIC 4 Regular
Interest LT4-IIC is reduced to zero, any Group II Overcollateralization Release
Amount for such Distribution Date (in both cases, net of such portion of amounts
payable pursuant to this clause (i) that were paid pursuant to clause (g)
above);
(j) to REMIC CX, as holder of REMIC 4 Regular Interest
LT4-IC, the Monthly Interest Distributable Amount for REMIC 4 Regular Interest
LT4-IC for such Distribution Date to the extent not distributed pursuant to
Section 4.01(d)(i)(k) plus, until the Uncertificated Principal Balance of REMIC
4 Regular Interest LT4-IC is reduced to zero, the amount, if any, equal to the
amount of any Realized Losses that reduced the Group I Overcollateralization
Release Amount, if any, on such Distribution Date;
(k) any remaining amounts to the Class R Certificates (in
respect of the appropriate Class R-3 Interest).
On each Distribution Date, after making the distributions of the Group
I Available Funds and the Group II Available Funds as provided in this Section
4.01(d) and after depositing in the Reserve Funds any payments received under
the related Cap Agreement, the Trust Administrator shall withdraw from the Group
II Reserve Fund the amount on deposit therein and shall distribute such amounts
in the following order of priority to the extent of amounts remaining in the
Group II Reserve Fund:
(i) to the Class II-A Certificates, the Net WAC Rate Carryover
Amount for such Class; and
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(ii) to the Class I-A Certificates, the Net WAC Rate Carryover
Amount for such Class to the extent remaining unpaid after distribution from the
Group I Reserve Fund.
On the Distribution Date in February 2005, after making all other
distributions on such Distribution Date (including to the Class A Certificates
out of the Reserve Funds), the Trust Administrator shall distribute to itself
all remaining amounts on deposit in Portion 1 of the Group II Reserve Fund, and
shall distribute all remaining amounts in Portion 2 of the Group II Reserve
Funds to the related Class C Certificateholders.
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Group I Mortgage Loans and Group II Mortgage Loans received
during the related Prepayment Period and any Master Servicer Prepayment Charge
Amounts paid by or collected by the Master Servicer during the related
Prepayment Period will be withdrawn from the Distribution Account and
distributed by the Trust Administrator to REMIC 4 Regular Interest LT4-IP (in
respect of Group I Mortgage Loans) or REMIC 4 Regular Interest LT4-IIP (in
respect of Group II Mortgage Loans), respectively, and shall not be available
for distribution to any other Class of Certificates. The payment of the
foregoing amounts in respect of such Regular Interests shall not reduce the
Uncertificated Principal Balance thereof.
(e) Without limiting the provisions of Section 9.01(b), by acceptance
of the Class R Certificates the Holders of the Class R Certificates agree, and
it is the understanding of the parties hereto, for so long as the Cap Agreements
or any of the NIM Notes are outstanding, to assign and transfer their rights to
receive any amounts otherwise distributable to the Holders of the Class R
Certificates (and such rights are hereby assigned and transferred) to the
Holders of the Class C Certificates, to be paid to the Holders of the Class I-C
Certificates and Class II-C Certificates, respectively.
(f) All distributions made with respect to each Class of Certificates
on each Distribution Date shall be allocated pro rata among the outstanding
Certificates in such Class based on their respective Percentage Interests.
Payments in respect of each Class of Certificates on each Distribution Date will
be made to the Holders of the respective Class of record on the related Record
Date (except as otherwise provided in this Section 4.01 or Section 9.01
respecting the final distribution on such Class), based on the aggregate
Percentage Interest represented by their respective Certificates, and shall be
made by wire transfer of immediately available funds to the account of any such
Holder at a bank or other entity having appropriate facilities therefor, if such
Holder shall have so notified the 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-S1 Certificates shall
receive all distributions pursuant to this Section 4.01(f) by wire transfer of
immediately available funds. The final distribution on each Certificate will be
made in like manner, but only upon presentment and surrender of such Certificate
at the Corporate Trust Office of the Trust Administrator or such other location
specified in the notice to Certificateholders of such final distribution.
132
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-T7
Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. All such credits
and disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the Certificates. None of the Trustee, the Trust Administrator, the Depositor,
the Master Servicer or the Seller shall have any responsibility therefor except
as otherwise provided by applicable law.
(g) The rights of the Certificateholders to receive distributions in
respect of the Certificates, and all interests of the Certificateholders in such
distributions, shall be as set forth in this Agreement. None of the Holders of
any Class of Certificates, the Trustee or the Master Servicer shall in any way
be responsible or liable to the Holders of any other Class of Certificates in
respect of amounts properly previously distributed on the Certificates.
(h) Except as otherwise provided in Section 9.01, whenever the 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 Certificate 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(h) 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
133
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
Greenwich Capital Markets and Deutsche Bank Securities Inc., pro rata, all such
amounts, and all rights of non-tendering Certificateholders in or to such
amounts shall thereupon cease. No interest shall accrue or be payable to any
Certificateholder on any amount held in trust by the 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(h).
(i) [Reserved].
(j) Any amounts distributed to REMIC CX on any Distribution Date under
Section 4.01(d) shall, on such Distribution Date, be distributed by REMIC CX as
follows: (i) amounts received in respect of REMIC 4 Regular Interest LT4-IC
shall be distributed pro rata to the Holders of the Class I-C Certificates; and
(ii) amounts received in respect of REMIC 4 Regular Interest LT4-IIC shall be
distributed pro rata to the Holders of the Class II-C Certificates. Any amounts
remaining in REMIC CX shall be distributed to the Holders of the Class R-CX
Certificates in respect of the Class R-CX Interest. Any amounts distributed to
REMIC PX on any Distribution Date under Section 4.01(d)(i)(j) shall, on such
Distribution Date, be distributed by REMIC PX as follows: (i) amounts received
in respect of REMIC 4 Regular Interest LT4-IP shall be distributed pro rata to
the Holders of the Class I-P Certificates; and (ii) amounts received in respect
of REMIC 4 Regular Interest LT4-IIP shall be distributed pro rata to the Holders
of the Class II-P Certificates. Any amounts remaining in REMIC PX shall be
distributed to the Holders of the Class R-PX Certificates in respect of the
Class R-PX Interest. For the avoidance of doubt, the provisions of Sections
4.01(f), 4.01(g) and 4.01(h) shall apply to the Class C Certificates and the
Class P Certificates.
Section 4.02 Preference Claims.
The Trustee 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 S2 Certificates, the
Class C Certificates or the Class P Certificates. Each Holder of the Class S2
Certificates, the Class C Certificates or the Class P Certificates, by its
purchase of such Certificates, the Master Servicer, 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 S2 Certificates, the Class C
Certificates and the 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
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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 S2 Certificates, the Class C Certificates, the
Class P Certificates or the Insured NIM Notes, as applicable, and the NIMS
Insurer made a payment in respect of such relinquished amount.
Section 4.03 Statements.
(a) On each Distribution Date, based, as applicable, on information
provided to it by the Master Servicer, the 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 Certificate Insurer, the
Guarantor and the Rating Agencies, a statement as to the distributions made on
such Distribution Date:
(i) the amount of the distribution made on such Distribution Date
to the Holders of each Class of Regular Certificates (other than the Class S
Certificates), separately identified, allocable to principal and the amount of
the distribution made to the Holders of the Class P Certificates allocable to
Prepayment Charges and Master Servicer Prepayment Charge Payment Amounts;
(ii) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Regular Certificates (other than the Class
P Certificates), allocable to interest, separately identified;
(iii) the Group I Overcollateralized Amount, the Group II
Overcollateralized Amount, the Group I Overcollateralization Release Amount, the
Group II Overcollateralization Release Amount, the Group I Overcollateralization
Deficiency Amount, the Group II Overcollateralization Deficiency Amount, the
Group I Overcollateralization Target Amount and the Group II
Overcollateralization Target Amount as of such Distribution Date and the Group I
Excess Overcollateralized Amount and the Group II Excess Overcollateralized
Amount, for such Distribution Date;
(iv) the aggregate amount of servicing compensation received by
the Master Servicer with respect to the related Due Period and such other
customary information as the Trust Administrator deems necessary or desirable,
or which a Certificateholder reasonably requests, to enable Certificateholders
to prepare their tax returns;
(v) the Guarantor Deficiency Amount, the Guarantor Payments and
the Guarantor Reimbursement Amount for such Distribution Date;
(vi) the aggregate amount of Advances for the related Due Period;
(vii) the aggregate Stated Principal Balance of the Mortgage
Loans at the Close of Business at the end of the related Due Period;
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(viii) the number, aggregate principal balance, weighted average
remaining term to maturity and weighted average Mortgage Rate of the Mortgage
Loans as of the related Determination Date;
(ix) the number and aggregate unpaid principal balance of
Mortgage Loans (a) delinquent 30-59 days, (b) delinquent 60-89 days, (c)
delinquent 90 or more days in each case, as of the last day of the preceding
calendar month provided, however that any aggregate unpaid principal balance of
Mortgage Loans shall be reported as of the last day of the related Due Period,
(d) as to which foreclosure proceedings have been commenced and (e) with respect
to which the related Mortgagor has filed for protection under applicable
bankruptcy laws, with respect to whom bankruptcy proceedings are pending or with
respect to whom bankruptcy protection is in force;
(x) with respect to any Mortgage Loan that became an REO Property
during the preceding Prepayment Period, the unpaid principal balance and the
Principal Balance of such Mortgage Loan as of the date it became an REO
Property;
(xi) the total number and cumulative principal balance of all REO
Properties as of the Close of Business of the last day of the preceding
Prepayment Period;
(xii) the aggregate amount of Principal Prepayments made during
the related Prepayment Period;
(xiii) the aggregate amount of Realized Losses incurred during
the related Prepayment Period and the cumulative amount of Realized Losses;
(xiv) the aggregate amount of Extraordinary Trust Fund expenses
withdrawn from the Collection Account or the Distribution Account for such
Distribution Date;
(xv) the Certificate Principal Balance of the Class A
Certificates and the Class C Certificates, after giving effect to the
distributions made on such Distribution Date, the Notional Amount of the Class S
Certificates and the Class C Certificates, after giving effect to the
distributions made on such Distribution Date;
(xvi) the Monthly Interest Distributable Amount in respect of the
Class A Certificates, the Class S Certificates and the Class C Certificates for
such Distribution Date and the Unpaid Interest Shortfall Amount, if any, with
respect to the Class A Certificates and the Class S Certificates for such
Distribution Date;
(xvii) the aggregate amount of any Prepayment Interest Shortfalls
for such Distribution Date, to the extent not covered by payments by the Master
Servicer pursuant to Section 3.24, and the aggregate amount of any Relief Act
Interest Shortfalls for such Distribution Date;
(xviii) [reserved];
(xix) the Net WAC Rate Carryover Amount for the Class A
Certificates, if any, for such Distribution Date and the amount remaining unpaid
after reimbursements therefor on such Distribution Date;
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(xx) the Group I Trust Administrator Fee and the Group II Trust
Administrator Fee on such Distribution Date;
(xxi) whether a Stepdown Date or a Trigger Event has occurred;
(xxii) the Group I Available Funds and Group II Available Funds;
(xxiii) the respective Pass-Through Rates applicable to the Class
A Certificates, the Class S Certificates and the Class C Certificates for such
Distribution Date and the Pass-Through Rate applicable to the Class A
Certificates for the immediately succeeding Distribution Date;
(xxiv) the Guaranty Fee to be paid to the Guarantor with respect
to the Guaranteed Certificates for such Distribution Date;
(xxv) such other information as the Guarantor or the Certificate
Insurer may reasonably request in such format as reasonably required by the
Guarantor or the Certificate Insurer and any other information that is required
by the Code and regulations thereunder to be made available to
Certificateholders;
(xxvi) the amount on deposit in each of the Reserve Funds;
(xxvii) (A) the dollar amount of payments received related to
claims under the PMI Policy during the related Prepayment Period (and the number
of Mortgage Loans to which such payments related) and (B) the aggregate dollar
amount of payments received related to claims under the PMI Policy since the
Cut-off Date (and the number of Mortgage Loans to which such payments related);
(xxviii) (A) the dollar amount of claims made under the PMI
Policy that were denied during the related Prepayment Period (and the number of
Mortgage Loans to which such denials related) and (B) the aggregate dollar
amount of claims made under the PMI Policy that were denied since the Cut-off
Date (and the number of Mortgage Loans to which such denials related);
(xxix) for such Distribution Date, the amount of any payment made
by the Cap Provider under each Cap Agreement;
(xxx) the amount, if any, of Insured Payments distributable to
each Class of Insured Certificates on such Distribution Date, the Certificate
Insurer Premiums and the Certificate Insurer Reimbursement Amounts paid on such
Distribution Date, and the aggregate amount of Insured Payments, interest
thereon and previously unpaid Certificate Insurer Premiums and the Certificate
Insurer Reimbursement Amounts paid on such Distribution Date and remaining to be
paid on such Distribution Date or any future Distribution Date;
(xxxi) the Group I Delinquency Percentage, the Group II
Delinquency Percentage and the actual numbers used to calculate such
percentages, as calculated pursuant to (x) and (y) of the definitions of Group I
Delinquency Percentage and Group II Delinquency Percentage;
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(xxxii) each of the percentages calculated pursuant to the
definitions of Group I Cumulative Loss Trigger Event and Group II Cumulative
Loss Trigger Event and the actual numbers used to calculate such percentages, as
calculated pursuant to (x) and (y) of the definitions of Group I Cumulative Loss
Trigger Event and the Group II Cumulative Loss Trigger Event; and
(xxxiii) the LIBOR rate for the related Accrual Period.
Subject to Section 4.03(f) below, the 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 Certificate
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 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
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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; 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, or to the Certificate Insurer
under the Certificate Insurance Policy, the Master Servicer shall deliver to the
NIMS Insurer, the Certificate 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 Certificate 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. All
such reports shall be delivered to the Guarantor at
▇▇▇▇▇▇_▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇. 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
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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
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 Certificate 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
Certificate 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 1 to REMIC 2 on account of the REMIC 1 Regular Interests or withdrawn
from the Distribution Account and distributed to the Holders of the Class R
Certificates (in respect of the Class R-1 Interest), as the case may be:
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(i) first, with respect to the Group I Mortgage Loans with
Adjusted Net Minimum Mortgage Rates of less than 5.25%, to the Holders of REMIC
1 Regular Interest LT1A-B in an amount equal to (A) the Uncertificated Accrued
Interest for such REMIC 1 Regular Interest for such Distribution Date, plus (B)
any amounts in respect thereof remaining unpaid from previous Distribution
Dates, and with respect to the Group I Mortgage Loans with Adjusted Net Minimum
Mortgage Rates of 5.25% or greater, in the following order: first to the Holders
of each REMIC 1 IS1 Interest in ascending numerical order, then to the Holders
of REMIC 1 Regular Interest LT1A-A and REMIC 1 Regular Interest LT1A-P, in each
case in an amount equal to (A) the Uncertificated Accrued Interest for such
REMIC 1 Regular Interest for such Distribution Date, plus (B) any amounts in
respect thereof remaining unpaid from previous Distribution Dates;
(ii) second, to the Holders of REMIC 1 Regular Interest LT1A-P,
on the Distribution Date immediately following the expiration of the latest
Prepayment Charge as identified on the Prepayment Charge Schedule or any
Distribution Date thereafter until $100 has been distributed pursuant to this
clause;
(iii) third, the remainder of the Group I Available Funds for
such Distribution Date with respect to those Group I Mortgage Loans with
Adjusted Net Minimum Mortgage Rates of less than 5.25%, to the Holders of REMIC
1 Regular Interest LT1A-B until the Uncertificated Principal Balance of such
REMIC 1 Regular Interest is reduced to zero and with respect to those Group I
Mortgage Loans with Adjusted Net Minimum Mortgage Rates of 5.25% or greater, in
the following order, first to the Holders of REMIC 1 Regular Interest LT1A-A,
then to the Holders of each REMIC 1 IS1 Interest, in descending numerical order
until the Uncertificated Principal Balance of each such REMIC 1 Regular Interest
is reduced to zero; and
(iv) fourth, any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-1 Interest).
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Group I Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC 1 to the Holders of REMIC 1 Regular Interest
LT1A-P. The payment of the foregoing amounts to the Holders of REMIC 1 Regular
Interest LT1A-P shall not reduce the Uncertificated Principal Balance thereof.
(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 1 to REMIC 2 on account of the REMIC 1 Regular Interests or withdrawn
from the Distribution Account and distributed to the Holders of the Class R
Certificates (in respect of the Class R-1B Interest), as the case may be:
(1) first, pro rata, to the Holders of each REMIC 1 IIS1
Interest in ascending numerical order, and second to the Holders of REMIC 1
Regular Interest LT1B-A and REMIC 1 Regular Interest LT1B-P, in each case in an
amount equal to (A) the Uncertificated Accrued Interest for such REMIC 1 Regular
Interest for such Distribution Date, plus (B) any amounts in respect thereof
remaining unpaid from previous Distribution Dates;
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(2) second, to the Holders of REMIC 1 Regular Interest
LT1B-P, on the Distribution Date immediately following the expiration of the
latest Prepayment Charge as identified on the Prepayment Charge Schedule or any
Distribution Date thereafter until $100 has been distributed pursuant to this
clause;
(3) third, to the Holders of REMIC 1 Regular Interest
LT1B-A, and then to the Holders of each REMIC 1 IIS1 Interest in descending
numerical order until the Uncertificated Principal Balance of each such REMIC 1
Regular Interest is reduced to zero; and
(4) fourth, any remaining amount to the Holders of the Class
R Certificates (in respect of the Class R-1 Interest).
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Group II Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC 1 to the Holders of REMIC 1 Regular Interest
LT1B-P. The payment of the foregoing amounts to the Holders of REMIC 1 Regular
Interest LT1B-P shall not reduce the Uncertificated Principal Balance thereof.
(c) On each Distribution Date, the Trust Administrator shall cause the
Group I Available Funds, in the following order of priority, to be distributed
by REMIC 2 to REMIC 3 on account of the REMIC 2 Regular Interests or withdrawn
from the Distribution Account and distributed to the holders of the Class R
Certificates (in respect of the Class R-2 Interest), as the case may be:
(1) first, to the Holders of each REMIC 2 IS1 Interest in
ascending numerical order, then to the Holders of each REMIC 2 IS2 Interest in
ascending numerical order, in each case in an amount equal to (A) the
Uncertificated Accrued Interest for each such REMIC 2 Regular Interest for such
Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from
previous Distribution Dates, and then, pro rata, to the Holders of REMIC 2
Regular Interest LT2A-A and REMIC 2 Regular Interest LT2A-P in an amount equal
to (A) the Uncertificated Accrued Interest for such REMIC 1 Regular Interest for
such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid
from previous Distribution Dates;
(2) second, to the Holders of REMIC 2 Regular Interest
LT2A-P, on the Distribution Date immediately following the expiration of the
latest Prepayment Charge as identified on the Prepayment Charge Schedule or any
Distribution Date thereafter until $100 has been distributed pursuant to this
clause;
(3) third, to the Holders of REMIC 2 Regular Interest
LT2A-A, then to the Holders of each REMIC 2 IS2 Interest in descending numerical
order, until the Uncertificated Principal Balance of each such REMIC 2 Regular
Interest is reduced to zero; and
(4) fourth, any remaining amount to the Holders of the Class
R Certificates (in respect of the Class R-2 Interest).
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Group I Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC 2 to the Holders of REMIC 2 Regular Interest
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LT2A-P. The payment of the foregoing amounts to the Holders of REMIC 2 Regular
Interest LT2A-P shall not reduce the Uncertificated Principal Balance thereof.
(d) On each Distribution Date, the Trust Administrator shall cause the
Group II Available Funds, in the following order of priority, to be distributed
by REMIC 2 to REMIC 3 on account of the REMIC 2 Regular Interests or withdrawn
from the Distribution Account and distributed to the Holders of the Class R
Certificates (in respect of the Class R-2 Interest), as the case may be:
(1) first, to the Holders of each REMIC 2 BS1 Interest in
ascending numerical order, then to the Holders of each REMIC 2 IIS2 Interest in
ascending numerical order, and then, pro rata, to the Holders of REMIC 2 Regular
Interest LT2B-A and REMIC 1 Regular Interest LT1B-P, in each case in an amount
equal to (A) the Uncertificated Accrued Interest for such REMIC 2 Regular
Interest for such Distribution Date, plus (B) any amounts in respect thereof
remaining unpaid from previous Distribution Dates;
(2) second, to the Holders of REMIC 2 Regular Interest
LT2B-P, on the Distribution Date immediately following the expiration of the
latest Prepayment Charge as identified on the Prepayment Charge Schedule or any
Distribution Date thereafter until $100 has been distributed pursuant to this
clause;
(3) third, to the Holders of REMIC 2 Regular Interest
LT2B-A, and then to the Holders of each REMIC 2 IIS2 Interest in descending
numerical order, until the Uncertificated Principal Balance of each such REMIC 2
Regular Interest is reduced to zero; and
(4) fourth, any remaining amount to the Holders of the Class
R Certificates (in respect of the Class R-2 Interest).
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Group II Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC 2 to the Holders of REMIC 2 Regular Interest
LT2B-P. The payment of the foregoing amounts to the Holders of REMIC 2 Regular
Interest LT2B-P shall not reduce the Uncertificated Principal Balance thereof.
(e) On each Distribution Date, the Trust Administrator shall cause in
the following order of priority, the following amounts to be distributed by
REMIC 3 to REMIC 4 on account of the REMIC 4 Regular Interests or withdrawn from
the Distribution Account and distributed to the holders of the Class R
Certificates (in respect of the Class R-4 Interest), as the case may be:
(1) first, Group I Available Funds equal to the Group I
Interest Remittance Amount shall be distributed (i) first, pro rata to the
Holders of REMIC 3 Regular Interest LT3IS-1, (ii) second, pro rata to the
Holders of each REMIC 3 IS2 Interest, and (iii) third, pro rata to the Holders
of REMIC 3 Regular Interest LT3A-1, REMIC 3 Regular Interest LT3B-1, REMIC 3
Regular Interest LT3C-1, and REMIC 3 Regular Interest LT3P-1, in each case in an
amount equal to (A) the Uncertificated Accrued Interest for such Distribution
Date, plus (B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates; provided, however, that amounts payable as Uncertificated
Accrued Interest in respect of REMIC 3 Regular Interest LT3C-1 shall be reduced,
when the REMIC 3 Overcollateralized Amount 2 is less than the REMIC 3
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Overcollateralization Target Amount 2, by the lesser of (x) the amount of such
difference and (y) the Maximum LT3C-1 Uncertificated Accrued Interest Deferral
Amount;
(2) second, Group II Available Funds equal to the Group II
Interest Remittance Amount shall be distributed (i) first, pro rata to the
Holders of REMIC 3 Regular Interest LT3IIS-1 Interest, (ii) second, pro rata to
the Holders of each REMIC 3 IIS2 Interest, and (iii) third, pro rata to Holders
of REMIC 3 Regular Interest LT3A-2, REMIC 3 Regular Interest LT3B-2, REMIC 3
Regular Interest LT3C-2, and REMIC 3 Regular Interest LT3P-2, in each case in an
amount equal to (A) the Uncertificated Accrued Interest for such Distribution
Date, plus (B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates; provided, however, that amounts payable as Uncertificated
Accrued Interest in respect of REMIC 3 Regular Interest LT3C-2 shall be reduced,
when the REMIC 3 Overcollateralized Amount 2 is less than the REMIC 3
Overcollateralization Target Amount 2, by the lesser of (x) the amount of such
difference and (y) the Maximum LT3C-2 Uncertificated Accrued Interest Deferral
Amount;
(3) third, to the Holders of REMIC 4 Regular Interests, in
an amount equal to the remainder of the Group I Available Funds for such
Distribution Date after the distributions made pursuant to clause (1) above,
allocated as follows:
(A) (i) 98% to the Holders of REMIC 4 Regular
Interest LT4A-1, (ii) 1.00% to the Holders of REMIC 4 Regular
Interest LT4B-1 and (iii) 1.00% to the Holders of REMIC 4
Regular Interest LT4C-1, until the Uncertificated Principal
Balance of all such Uncertificated REMIC 4 Regular Interests
is reduced to zero;
(B) then, to the Holders of REMIC 4 Regular Interest
LT4P-1, on the Distribution Date immediately following the
expiration of the latest Prepayment Charge with respect to
Group I Mortgage Loans as identified on the Prepayment Charge
Schedule or any Distribution Date thereafter until $100 has
been distributed pursuant to this clause; and
(C) then, any remaining amount to the
Holders of the Class R Certificates (in respect of the
Class R-3 Interest);
(4) fourth, to the Holders of REMIC 3 Regular Interests, in
an amount equal to the remainder of the Group II Available Funds for such
Distribution Date after the distributions made pursuant to clause (2) above,
allocated as follows:
(A) (i) 98% to the Holders of REMIC 3 Regular
Interest LT3A-2, (ii) 1.00% to the Holders of REMIC 3 Regular
Interest LT3B-2, and (iii) 1.00% to the Holders of REMIC 3
Regular Interest LT3C-2, until the Uncertificated Principal
Balance of all such Uncertificated REMIC 3 Regular Interests
is reduced to zero;
(B) then, to the Holders of REMIC 3 Regular Interest
LT3P-2, on the Distribution Date immediately following the
expiration of the latest Prepayment Charge with respect to
Group II Mortgage Loans as identified on the Prepayment Charge
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Schedule or any Distribution Date thereafter until $100 has
been distributed pursuant to this clause;
(C) then, any remaining amount to the Holders of
the Class R Certificates (iN respect of the Class R-3
Interest); and
(5) fifth, to REMIC 3 Regular Interest LT3P-1, 100% of the
amount of Prepayment Charges paid in respect of REMIC 2 Regular Interest LT2A-P,
and to REMIC 3 Regular Interest LT3P-2, 100% of the amount of Prepayment Charges
paid in respect of REMIC 2 Regular Interest LT2B-P
provided, however, that 98% and 2% of any principal payments that are
attributable to Group I Overcollateralization Release Amount shall be allocated
to Holders of REMIC 3 Regular Interest LT3A-1 and REMIC 3 Regular Interest
LT3C-1, respectively, and 98% and 2% of any principal payments that are
attributable to Group II Overcollateralization Release Amount shall be allocated
to Holders of REMIC 3 Regular Interest LT3A-2 and REMIC 4 Regular Interest
LT3C-2, respectively.
Section 4.06 Allocation of Realized Losses.
(a) Prior to each Determination Date, the Master Servicer shall
determine as to each Mortgage Loan and REO Property: (i) the total amount of
Realized Losses, if any, incurred in connection with any Final Recovery
Determinations made during the related Prepayment Period; (ii) whether and the
extent to which such Realized Losses constituted Bankruptcy Losses; and (iii)
the respective portions of such Realized Losses allocable to interest and
allocable to principal. Prior to each Determination Date, the Master Servicer
shall also determine as to each Mortgage Loan: (i) the total amount of Realized
Losses, if any, incurred in connection with any Deficient Valuations made during
the related Prepayment Period; and (ii) the total amount of Realized Losses, if
any, incurred in connection with Debt Service Reductions in respect of Monthly
Payments due during the related Due Period. The information described in the two
preceding sentences that is to be supplied by the Master Servicer shall be
evidenced by an Officers' Certificate delivered to the NIMS Insurer, the
Certificate Insurer, 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.
(b) No allocations of any Realized Losses shall be made to the Class A
Certificates, the Class S Certificates or the Class P Certificates. Any Realized
Losses that reduce the distributions in respect of and/or the Uncertificated
Principal Balance of REMIC 4 Regular Interest LT4-IC or REMIC 4 Regular Interest
LT4-IIC, shall be allocated by the 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
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of less than 5.25%, to REMIC 1 Regular Interest LT1A-B until the Uncertificated
Principal Balance thereof has been reduced to zero, and with respect to those
Group I Mortgage Loans with Adjusted Net Minimum Mortgage Rates of 5.25% or
greater, first to REMIC 1 Regular Interest LT1A-A until the Uncertificated
Principal Balance thereof has been reduced to zero, then to each REMIC 1 IS1
Interest in descending numerical order until the Uncertificated Principal
Balance of each has been reduced to zero. All Realized Losses on the Group II
Mortgage Loans shall be allocated by the Trust Administrator on each
Distribution Date as follows: first to REMIC 1 Regular Interest LT1B-A until the
Uncertificated Principal Balance thereof has been reduced to zero, then to each
REMIC 1 IIS1 Interest in descending numerical order until the Uncertificated
Principal Balance thereof has been reduced to zero.
(d) All Realized Losses on the Group I Mortgage Loans shall be
allocated by the Trust Administrator on each Distribution Date as follows: first
to REMIC 2 Regular Interest LT2A-A until the Uncertificated Principal Balance
thereof has been reduced to zero, then to each REMIC 2 IS2 Interest in
descending numerical order until the Uncertificated Principal Balance of each
has been reduced to zero. All Realized Losses on the Group II Mortgage Loans
shall be allocated by the Trust Administrator on each Distribution Date as
follows: first to REMIC 2 Regular Interest LT2B until the Uncertificated
Principal Balance thereof has been reduced to zero, then to each REMIC 2 IIS2
Interest in descending numerical order until the Uncertificated Principal
Balance of each has been reduced to zero.
(e) All Realized Losses on the Group I Mortgage Loans shall be deemed
to have been allocated in the specified percentages, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC 3 Regular Interest LT3A-1
and REMIC 3 Regular Interest LT3C-1 up to an aggregate amount equal to the REMIC
3 Group I Interest Loss Allocation Amount, 98% and 2%, respectively; and second,
to the Uncertificated Principal Balances of REMIC 3 Regular Interest LT3A-1 and
REMIC 3 Regular Interest LT3C-1 up to an aggregate amount equal to the REMIC 3
Principal Loss Allocation Amount 1, 98% and 2%, respectively.
(f) All Realized Losses on the Group II Mortgage Loans shall be deemed
to have been allocated in the specified percentages, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC 3 Regular Interest LT3A-2
and REMIC 3 Regular Interest LT3C-2 up to an aggregate amount equal to the REMIC
3 Group II Interest Loss Allocation Amount, 98% and 2%, respectively; and
second, to the Uncertificated Principal Balances of REMIC 3 Regular Interest
LT3A-2 and REMIC 3 Regular Interest LT3C-2 up to an aggregate amount equal to
the REMIC 3 Principal Loss Allocation Amount 2, 98% and 2%, respectively.
Section 4.07 Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the 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.
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Section 4.08 Commission Reporting.
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, in the year
following the year of execution of this Agreement, the Trust Administrator shall
in accordance with industry standards file a Form 15 Suspension Notification
with respect to the Trust Fund, if applicable. Prior to July 31, in the year
following the year of execution of this Agreement, 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 Guarantor Deficiency Amount for such
Distribution Date, the Guarantor shall distribute to the Trust Administrator a
Guarantor Payment, in an aggregate amount equal to the Guarantor Deficiency
Amount for such Distribution Date directly to the Holders of the Guaranteed
Certificates, without first depositing such amount in the Distribution Account,
as follows: (i) the Guaranteed Interest Distribution Amount shall be distributed
as interest with respect to the Class I-A Certificates and Class I-S1
Certificates as provided in Section 4.01(a)(i); and (ii) the Guaranteed
Principal Distribution Amount shall be distributed as principal with respect to
the Class I-A Certificates as provided in Section 4.01(b)(i).
Section 4.10 Replacement Credit Enhancement
If the Certificate Insurer's failure to make a payment required under
the Certificate Insurance Policy continues for a period of 60 days or if the
financial strength of the Certificate Insurer is downgraded to or below the
levels specified in the Insurance Agreement, the Depositor may, but shall not be
obligated to substitute a new credit enhancement for the existing Certificate
Insurance Policy, provided, that in the event of the Certificate Insurer's
failure to make a required payment under the Certificate Insurance Policy, the
Depositor shall use its commercially reasonable efforts to substitute such new
credit enhancement, but the Depositor shall not be liable hereunder if it is
unable to substitute a new credit enhancement using its commercially reasonable
efforts. Any cancellation or substitution of the Certificate Insurance Policy
pursuant to this Section 4.10 shall be in accordance with and upon satisfaction
of the conditions set forth in the Certificate Insurance Policy, including,
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without limitation, payment in full by the provider of such new credit
enhancement of all amounts owed to the Certificate Insurer hereunder and under
the Insurance Agreement. It shall be a condition to any substitution of any new
credit enhancement that (i) after such substitution the Insured Certificates
shall be rated no lower than the rating assigned by each Rating Agency to such
Certificates immediately prior to such Certificate Insurer Default or downgrade
(without regard to the Guaranty with respect to the Guaranteed Certificates),
(ii) there be delivered to the Trustee, the Trust Administrator, the NIMS
Insurer, the Master Servicer, the Depositor and the Guarantor an Opinion of
Counsel, acceptable in form and substance to the Trustee, the Trust
Administrator, the NIMS Insurer, the Master Servicer, the Depositor and the
Guarantor from counsel to the provider of such new credit enhancement with
respect to the enforceability thereof and such other matters as the Trustee, the
Trust Administrator, the NIMS Insurer, the Master Servicer, the Depositor or the
Guarantor may require including, that such credit enhancement will qualify as a
"similar commercially available credit enhancement contract" within the meaning
of Treas. Reg. ss. 1.1001-3(e)(4)(iv)(B), that such substitution will not be
treated as a significant modification within the meaning of Treas. Reg. ss.
1.1001-3 and that the substitution does not cause any REMIC created by this
Agreement to fail to qualify as a REMIC or to be subject to the prohibited
transactions tax of Code Section 860F(a), (iii) the provider of the new credit
enhancement be reasonably acceptable to the Guarantor as evidenced by its
written consent and (iv) the cost of such new credit enhancement for the Class
I-A Certificates and the Class I-S1 Certificates shall not exceed the Group I
Certificate Insurer Premium and for the Class II-A Certificates and the Class
II-S1 Certificates shall not exceed the Group II Certificate Insurer Premium.
Upon receipt of the items referred to above and the taking of physical
possession of the new credit enhancement, the Trust Administrator shall, within
five Business Days following receipt of such items and such taking of physical
possession, deliver the replaced Certificate Insurance Policy to the Certificate
Insurer. Upon substitution of such new credit enhancement, the provider of such
new credit enhancement shall have all the rights and obligations of the
Certificate Insurer hereunder, including the right to receive the Certificate
Insurer Premiums and any Certificate Insurer Reimbursement Amounts.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
(a) The Certificates in the aggregate will represent the entire
beneficial ownership interest in the Mortgage Loans and all other assets
included in REMIC 1.
The Certificates will be substantially in the forms annexed hereto as
Exhibits A-1 through A-13. The Certificates of each Class will be issuable in
registered form only, in denominations of authorized Percentage Interests as
described in the definition thereof. Each Certificate will share ratably in all
rights of the related Class.
Upon original issue, the Certificates shall be executed by the 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
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offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates. No Certificate shall be
entitled to any benefit under this Agreement or be valid for any purpose, unless
there appears on such Certificate a certificate of authentication substantially
in the form provided herein executed by the Trustee 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
Certificate Insurer, the NIMS Insurer and the Depositor may for all purposes
(including the making of payments due on the Book-Entry Certificates) deal with
the Depository as the authorized representative of the Certificate Owners with
respect to the Book-Entry Certificates for the purposes of the exercise by
Certificateholders of the rights of Certificateholders hereunder. The rights of
Certificate Owners with respect to the Book-Entry Certificates shall be limited
to those established by law and agreements between such Certificate Owners and
the Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Depository as
Holder of the Book-Entry Certificates with respect to any particular matter
shall not be deemed inconsistent if they are made with respect to different
Certificate Owners. The Trust Administrator may establish a reasonable record
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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 S2
Certificate, Class C Certificate, Class P Certificate or Residual Certificate
shall be made unless such disposition is exempt from the registration
requirements of the Securities Act of 1933, as amended (the "1933 Act"), and any
applicable state securities laws or is made in accordance with the 1933 Act and
laws. In the event of any such transfer (other than in connection with the
initial transfer of any Class S2 Certificate, Class C Certificate, Class P
Certificate or Residual Certificates by the Depositor to the Seller or the
transfer of any Class S2 Certificate, Class C Certificate, Class P Certificate
or Residual Certificates by the Seller to an Affiliate of the Seller or to a
trust, the depositor of which is an Affiliate of the Seller or the transfer of
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any Class S2 Certificate, Class C Certificate, Class P Certificate or Residual
Certificates by an Affiliate of the Seller to one or more entities sponsored by
such Affiliate or to a trust the depositor of which is one or more entities
sponsored by such Affiliate) (i) unless such transfer is made in reliance upon
Rule 144A (as evidenced by the investment letter delivered to the Trustee 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) No transfer of a Class S2 Certificate, Class C Certificate, Class P
Certificate or Residual Certificate or any interest therein shall be made to any
Plan subject to ERISA or Section 4975 of the Code, any Person acting, directly
or indirectly, on behalf of any such Plan or any Person acquiring such
Certificates with "Plan Assets" of a Plan within the meaning of the Department
of Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets")
unless the Depositor, the Trustee, 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 S2 Certificate, Class C Certificate, Class P
Certificate or Residual Certificates by the Depositor to the Seller or the
transfer of any Class S2 Certificate, Class C Certificate, Class P Certificate
or Residual Certificates by the Seller to an Affiliate of the Seller or to a
trust, the depositor of which is an Affiliate of the Seller or the transfer of
any Class S2 Certificate, Class C Certificates, Class P Certificates or Residual
Certificates by an Affiliate of the Seller to one or more entities sponsored by
such Affiliate or to a trust the depositor of which is one or more entities
sponsored by such Affiliate (in which case, the Depositor, the Seller, any such
Affiliate and such entities sponsored by such Affiliate shall have deemed to
have represented that the applicable transferee is not a Plan or a Person
investing Plan Assets) and the Trustee 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 S2 Certificate, Class C Certificate, Class P
Certificate or Residual Certificate shall sign a letter substantially in the
form of Exhibit I to demonstrate its compliance with this Section 5.02(c) (other
than in connection with the initial transfer of any Class C Certificate, Class P
Certificate or Residual Certificates by the Depositor to the Seller or the
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transfer of any Class S2 Certificate, Class C Certificate, Class P Certificate
or Residual Certificates by the Seller to an Affiliate of the Seller or to a
trust, the depositor of which is an Affiliate of the Seller or the transfer of
any Class C Certificates, Class P Certificates or Residual Certificates by an
Affiliate of the Seller to one or more entities sponsored by such Affiliate or
to a trust the depositor of which is one or more entities sponsored by such
Affiliate).
If any Class S2 Certificate, Class C Certificate, Class P Certificate
or Residual Certificate or any interest therein is acquired or held in violation
of the provisions of the preceding paragraphs, the next preceding permitted
beneficial owner will be treated as the beneficial owner of that Certificate
retroactive to the date of transfer to the purported beneficial owner. Any
purported beneficial owner whose acquisition or holding of any such Certificate
or interest therein was effected in violation of the provisions of the preceding
paragraph shall indemnify and hold harmless the Depositor, the Master Servicer,
the Trustee, 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.
(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.
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(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 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,
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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 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, the Depositor (in the case of an
Insured Certificate), the Certificate Insurer and (in the case of a Class S2
Certificate, Class C Certificate or Class P Certificate) the NIMS Insurer such
security or indemnity as may be required by them to save each of them, and the
Trust Fund, harmless, then, in the absence of notice to the 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
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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 Certificate 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
Certificate 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.
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
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▇▇▇▇▇▇ Mae; and provided further that the Rating Agencies' ratings of the NIM
Notes and the Class II-A Certificates (without regard to the Certificate
Insurance Policy) in effect immediately prior to such merger or consolidation
will not be qualified, reduced or withdrawn as a result thereof (as evidenced by
a letter to such effect from the Rating Agencies to the 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, the
Certificate Insurer and any director, officer, employee or agent of the
Depositor, the Guarantor or the Master Servicer shall be indemnified and held
harmless by the Trust Fund against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense relating to any specific Mortgage Loan
or Mortgage Loans (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) or any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. None of the Depositor, the Guarantor or the
Master Servicer shall be under any obligation to appear in, prosecute or defend
any legal action unless such action is related to its respective duties under
this Agreement and, in its opinion, does not involve it in any expense or
liability; provided, however, that each of the Depositor, the Guarantor and the
Master Servicer may in its discretion undertake any such action which it may
deem necessary or desirable with respect to this Agreement and the rights and
duties of the parties hereto and the interests of the Certificateholders
hereunder. In such event, unless the Depositor, the Guarantor or the Master
Servicer acts without the consent of Holders of Certificates entitled to at
least 51% of the Voting Rights (which consent shall not be necessary in the case
of litigation or other legal action by either to enforce their respective rights
or defend themselves hereunder), the legal expenses and costs of such action and
any liability resulting therefrom (except any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder) shall be expenses, costs and liabilities of
the Trust Fund, and the Depositor, the Guarantor and the Master Servicer shall
be entitled to be reimbursed therefor from the Collection Account as and to the
extent provided in Section 3.11, any such right of reimbursement being prior to
the rights of the Certificateholders to receive any amount in the Collection
Account.
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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, the Certificate Insurer or the Trust
Fund may sustain in any way related to the failure of the Master Servicer to
perform its duties and service the Mortgage Loans in compliance with the terms
of this Agreement. The Master Servicer shall immediately notify the Trust
Administrator, the Trustee, the NIMS Insurer, the Certificate Insurer, the
Guarantor and the Depositor if a claim is made that may result in such claims,
losses, penalties, fines, forfeitures, legal fees or related costs, judgments,
or any other costs, fees and expenses, and the Master Servicer shall assume
(with the consent of the 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 Certificates Controlling
Person (as provided in Section 1.04) and written confirmation from each Rating
Agency (which confirmation shall be furnished to the Depositor and the Trust
Administrator) that such resignation will not cause such Rating Agency to reduce
the then current rating of any of the NIM Notes or the Class II-A Certificates
(without regard to the Certificate Insurance Policy). Any such determination
pursuant to clause (i) of the preceding sentence permitting the resignation of
the Master Servicer shall be evidenced by an Opinion of Counsel to such effect
obtained at the expense of the Master Servicer and delivered to the Trustee 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 Certificates Controlling Person (as
provided in Section 1.04) shall have assumed the Master Servicer's
responsibilities, duties, liabilities (other than those liabilities arising
prior to the appointment of such successor) and obligations under this
Agreement.
Except as expressly provided herein, the Master Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, nor delegate to or subcontract with, nor authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer hereunder. The foregoing prohibition on
assignment shall not prohibit the Master Servicer from designating a
Sub-Servicer as payee of any indemnification amount payable to the Master
Servicer hereunder; provided, however, that as provided in Section 3.06 hereof,
no Sub-Servicer shall be a third-party beneficiary hereunder and the parties
hereto shall not be required to recognize any Sub-Servicer as an indemnitee
under this Agreement. If, pursuant to any provision hereof, the duties of the
Master Servicer are transferred to a successor master servicer, the entire
amount of the Servicing Fee and other compensation payable to the Master
Servicer pursuant hereto shall thereafter be payable to such successor master
servicer.
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Section 6.05 Rights of the Depositor, the NIMS Insurer, the Certificate
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 Certificate 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 Certificate 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 or any Sub-Servicer's capacity to perform its
obligations under this Agreement that it possesses; provided, that any such
information furnished to the Guarantor shall be limited to that which is related
to Group I Mortgage Loans. To the extent such information is not otherwise
available to the public, the Depositor, the NIMS Insurer, the Certificate
Insurer, the Guarantor, 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 Certificate 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 each of the Certificate Insurer and the NIMS Insurer
shall be deemed to have agreed with the parties hereto to use, its best efforts
to assure the confidentiality of any such disseminated non-public information.
The Depositor may, but is not obligated to, enforce the obligations of the
Master Servicer under this Agreement and may, but is not obligated to, perform,
or cause a designee to perform, any defaulted obligation of the Master Servicer
under this Agreement or exercise the rights of the Master Servicer under this
Agreement; provided that the Master Servicer shall not be relieved of any of its
obligations under this Agreement by virtue of such performance by the Depositor
or its designee. The Depositor shall not have any responsibility or liability
for any action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.
ARTICLE VII
DEFAULT
Section 7.01 Master Servicer Events of Default.
"Master Servicer Event of Default," wherever used herein, means any one
of the following events:
(i) any failure by the Master Servicer to remit to the Trust
Administrator for distribution to the Certificateholders, the Certificate
Insurer or the Guarantor any payment (other than an Advance required to be made
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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 Certificate Insurer, the Guarantor or the Holders of
Certificates entitled to at least 25% of the Voting Rights; or
(ii) any failure on the part of the Master Servicer duly to
observe or perform in any material respect any of the covenants or agreements on
the part of the Master Servicer contained in this Agreement which continues
unremedied for a period of 45 days (30 days in the case of any failure to
maintain a Sub-Servicing Agreement with an eligible Sub-Servicer to the extent
required in accordance with Section 3.02(c)) after the earlier of (i) the date
on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Master Servicer by the Depositor, the Trust
Administrator or the Trustee, or to the Master Servicer, the Depositor, the
Trust Administrator and the Trustee by the NIMS Insurer, the Certificate
Insurer, the Guarantor or the Holders of Certificates entitled to at least 25%
of the Voting Rights and (ii) actual knowledge of such failure by a Servicing
Representative of the Master Servicer; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or similar law or the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceeding, or for the winding-up or liquidation of its affairs, shall have been
entered against the Master Servicer and if such proceeding is being contested by
the Master Servicer in good faith, such decree or order shall have remained in
force undischarged or unstayed for a period of 60 days or results in the entry
of an order for relief or any such adjudication or appointment; or
(iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to it
or of or relating to all or substantially all of its property; or
(v) the Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors; or
(vi) any failure by the Master Servicer of the Master Servicer
Termination Test; or
(vii) any failure of the Master Servicer to make, or cause an
Advancing Person to make, any Advance on any Master Servicer Remittance Date
required to be made from its own funds pursuant to Section 4.04 which continues
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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 Certificates Controlling Person (as provided in Section 1.04) or the Holders
of Certificates entitled to at least 51% of Voting Rights, the Trustee shall, by
notice in writing to the NIMS Insurer, the Certificate Insurer, the Guarantor
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 Certificate Insurer, the Guarantor
and the Depositor, terminate all of the rights and obligations of the Master
Servicer in its capacity as Master Servicer under this Agreement and in and to
the Mortgage Loans and the proceeds thereof. On or after the receipt by the
Master Servicer of such written notice, all authority and power of the Master
Servicer under this Agreement, whether with respect to the Certificates (other
than as a Holder of any Certificate) or the Mortgage Loans or otherwise, shall
pass to and be vested in the 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, 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
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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 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 Certificates Controlling
Person 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 Certificates Controlling Person, as provided in Section 1.04, as the
successor to the Master Servicer under this Agreement in the assumption of all
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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 (unless
otherwise directed by Certificates Controlling Person or the Controlling
Insurer) solicit bids for a successor Master Servicer as described below and (y)
pending the appointment of a successor Master Servicer as a result of soliciting
such bids, shall serve as Master Servicer of the Mortgage Loans serviced by such
predecessor Master Servicer. The 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 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, the Certificate Insurer or the
Guarantor any payment required to be made under the terms of this Agreement (for
purposes of this Section 7.02(b), a "Remittance") because the Master Servicer is
the subject of a proceeding under the Bankruptcy Code and the making of such
Remittance is prohibited by Section 362 of the Bankruptcy Code, the 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
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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, to the Certificate Insurer and to the
Guarantor.
(b) Not later than the later of 60 days after the occurrence of any
event, which constitutes or which, with notice or lapse of time or both, would
constitute a Master Servicer Event of Default or five days after a Responsible
Officer of the Trustee 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, to the Certificate Insurer and
to the Guarantor notice of each such occurrence, unless such default or Master
Servicer Event of Default shall have been cured or waived.
Section 7.04 Waiver of Master Servicer Events of Default.
The Holders representing at least 66% of the Voting Rights evidenced by
all Classes of Certificates affected by any default or Master Servicer Event of
Default hereunder may, with the consent of the NIMS Insurer or the Certificates
Controlling Person, as provided in Section 1.04, waive such default or Master
Servicer Event of Default; provided, however, that a default or Master Servicer
Event of Default under clause (i) or (vii) of Section 7.01 may be waived only by
all of the Holders of the Regular Certificates and the NIMS Insurer or the
Certificates Controlling Person, as provided in Section 1.04 (as evidenced by
the written consent of the NIMS Insurer or the Certificates Controlling Person,
as the case may be). Upon any such waiver of a default or Master Servicer Event
of Default, such default or Master Servicer Event of Default shall cease to
exist and shall be deemed to have been remedied for every purpose hereunder. No
such waiver shall extend to any subsequent or other default or Master Servicer
Event of Default or impair any right consequent thereon except to the extent
expressly so waived.
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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 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,
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the Certificate Insurer, the Guarantor or the Holders of Certificates entitled
to at least 25% of the Voting Rights relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee or 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 Certificate Insurer, the Guarantor or the Certificateholders, pursuant to
the provisions of this Agreement, unless the NIMS Insurer, the Certificate
Insurer, the Guarantor or such Certificateholders shall have offered to the
Trustee or the Trust Administrator, as applicable, security or indemnity
satisfactory to it against the costs, expenses and liabilities which may be
incurred therein or thereby; nothing contained herein shall, however, relieve
the Trustee 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,
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request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by the NIMS Insurer, the Certificate Insurer, the
Guarantor or the Holders of Certificates entitled to at least 25% of the Voting
Rights; provided, however, that if the payment within a reasonable time to the
Trustee 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 Certificate 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 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
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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) On the Closing Date, the Depositor shall pay to the Trust
Administrator as specified in a separate agreement between the Depositor and the
Trust Administrator. The Trust Administrator shall withdraw from the
Distribution Account on each Distribution Date and pay to itself the Trust
Administrator Fee for such Distribution Date and one day's interest earnings
(net of losses) on amounts on deposit in the Distribution Account. The Group I
Trust Administrator Fee shall be payable solely from the Group I Interest
Remittance Amount and the Group II Trust Administrator Fee shall be payable
solely from the Group II Interest Remittance Amount. The right to receive the
Trust Administrator Fee may not be transferred in whole or in part except in
connection with the transfer of all of the Trust Administrator's
responsibilities and obligations under this Agreement. 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.
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) in any way relating to the failure of the Master Servicer to perform
the duties and service the Mortgage Loans in compliance with the terms of this
Agreement, (ii) that constitutes a specific liability of the Trustee 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
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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.
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.
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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 Certificate 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 Certificates Controlling Person, as provided in Section
1.04, and to the Holders of Certificates entitled to at least 51% of the Voting
Rights. A copy of such instrument shall be delivered to the Certificateholders,
the Trustee 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 Certificates Controlling Person, 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 Certificates
Controlling Person, 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
Certificates Controlling Person, as provided in Section 1.04, and to the Holders
of Certificates entitled to at least 51% of the Voting Rights, by written
instrument, in duplicate, which instrument shall be delivered to the Trustee 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 Certificates Controlling
Person, 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 Certificates Controlling Person or such Holders, as applicable, or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Depositor, one complete set to the Trustee 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 Certificate Insurer, the Certificateholders and the
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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 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.
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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 1, or property securing the same may at the time be located, the Master
Servicer and the Trustee, acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee and the NIMS Insurer or the Certificates Controlling Person (as provided
in Section 1.04), to act as co-trustee or co-trustees, jointly with the Trustee,
or separate trustee or separate trustees, of all or any part of REMIC 1, and to
vest in such Person or Persons, in such capacity, such title to REMIC 1, or any
part thereof and, subject to the other provisions of this Section 8.10, such
powers, duties, obligations, rights and trusts as the Master Servicer and the
Trustee may consider necessary or desirable. If the Master Servicer shall not
have joined in such appointment or the NIMS Insurer or the Certificates
Controlling Person shall (as provided in Section 1.04) not have approved such
appointment within 15 days after the receipt by it of a request so to do, or in
case a Master Servicer Event of Default shall have occurred and be continuing,
the Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 8.06 hereunder and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 8.08 hereof. If such appointment is at the request of the
Master Servicer then any expense of the Trustee shall be deemed a Servicing
Advance for all purpose of this Agreement, otherwise it will be an expense of
the Trustee and will be payable out of the Trustee's funds.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee
shall be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of title to
REMIC 1, or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
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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, the
Master Servicer, and the Certificate Controlling Person, appoint one or more
Custodians to hold all or a portion of the Mortgage Files as agent for the Trust
Administrator, by entering into a Custodial Agreement. Except with respect to
the Washington Mutual Mortgage Loans, the Trust Administrator shall initially
serve as the Custodian and this Agreement shall serve as the Custodial
Agreement. Washington Mutual Bank fsb is hereby appointed to serve as the
Custodian with respect to the Washington Mutual Mortgage Loans pursuant to the
related Custodial Agreement, and the Master Servicer and the Depositor hereby
consents to such appointment. The appointment of any Custodian may at any time
be terminated and a substitute Custodian appointed therefor upon the reasonable
request of the Master Servicer to the Trust Administrator and the consent of the
Controlling 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 and the Certificate Insurer having an interest in any
Mortgage File held by such Custodian. Each Custodian shall be a depository
institution or trust company subject to supervision by federal or state
authority, shall have combined capital and surplus of at least $10,000,000 and
shall be qualified to do business in the jurisdiction in which it holds any
Mortgage File. Each Custodial Agreement may be amended only as provided in
Section 11.01. In no event shall the appointment of any Custodian pursuant to a
Custodial Agreement diminish the obligations of the Trust Administrator
hereunder. The Trustee and the Trust Administrator shall at all times remain
responsible under the terms of this Agreement only to the extent each of the
Trustee and the Trust Administrator is responsible for its own acts hereunder;
neither the Trustee nor the Trust Administrator shall be responsible for the
acts or omissions of a Custodian. Any documents delivered by the Depositor or
the Master Servicer to a Custodian other than the Trust Administrator, if any,
shall be deemed to have been delivered to the Trust Administrator for all
purposes hereunder; and any documents held by such a Custodian, if any, shall be
deemed to be held by the Trust Administrator for all purposes 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
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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 NIMS Insurer, the Certificate Insurer, 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.
Section 8.14 Cap Agreement.
The Trustee shall not designate a Group I Early Termination Date under
the Group I Cap Agreement without the consent of the Group I Cap Controlling
Person. The Trustee shall not designate a Group II Early Termination Date under
the Group II Cap Agreement without the consent of the Group II Cap Controlling
Person.
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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 1 Regular Interests,
REMIC 2 Regular Interests, REMIC 3 Regular Interests, REMIC 4 Regular Interests,
and the Classes of Certificates as hereinafter set forth) shall terminate upon
the latest of (A) the payment in full of all amounts owing to the Guarantor
hereunder unless the Guarantor shall otherwise consent, (B) the payment in full
of all amounts owing to the Certificate Insurer hereunder and under the
Insurance Agreement unless the Certificate Insurer shall otherwise consent and
(C) payment to the Certificateholders and the deposit of all amounts held by or
on behalf of the Trustee and required hereunder to be so paid or deposited on
the Distribution Date coinciding with or following the earlier to occur of (i)
the purchase by the Terminator (as defined below) of all Mortgage Loans and each
REO Property remaining in REMIC 1 pursuant to (b) below and (ii) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or REO Property remaining in REMIC 1; provided, however, that in
no event shall the trust created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, 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 1 shall be at a price (the "Termination
Price") equal to (a) if the Terminator is the Master Servicer, 100% of the
aggregate Stated Principal Balance of all the Mortgage Loans included in REMIC 1
and accrued interest on the Stated Principal Balance of each such Mortgage Loan
at the applicable Net Mortgage Rate in effect from time to time from the Due
Date as to which interest was last paid by the related Mortgagor or by an
advance by the Master Servicer to but not including the first day of the month
in which such purchase is to be effected, plus the appraised value of each REO
Property, if any, included in REMIC 1, such appraisal to be conducted by an
appraiser selected by the Terminator in its reasonable discretion and (b) if the
Terminator is the Controlling Insurer, the greater of (A) the aggregate Purchase
Price of all the Mortgage Loans included in REMIC 1, plus the appraised value of
each REO Property, if any, included in REMIC 1, such appraisal to be conducted
by an appraiser selected by the Terminator in its reasonable discretion and (B)
the aggregate fair market value of all of the assets of REMIC 1 (as determined
by the Terminator, as of the close of business on the third Business Day next
preceding the date upon which notice of any such termination is furnished to
Certificateholders pursuant to the third paragraph of this Section 9.01), and in
the case of both clauses (b)(A) and (b)(B) of this sentence, any unpaid
Guarantor Reimbursement Amount, Guaranty Fees, Certificate Insurer Premiums and
Certificate Insurer Reimbursement Amounts and any additional amounts necessary
to pay all interest accrued on, as well as amounts necessary to pay in full the
principal balance of, the NIM Notes and any amounts necessary to reimburse the
NIMS Insurer for all amounts paid under the NIMs insurance policy and any other
amounts reimbursable or otherwise payable to the NIMS Insurer, in each case,
with interest thereon at the applicable rate set forth in the Indenture and to
the extent not previously reimbursed or paid.
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(b) The Master Servicer shall have the right and, if the Master
Servicer does not exercise such right, the Controlling Insurer, shall have the
right (the party exercising such right, the "Terminator") to purchase all of the
Mortgage Loans and each REO Property in both Loan Groups remaining in REMIC 1
pursuant to clause (i) of the preceding paragraph no later than the
Determination Date in the month immediately preceding the Distribution Date on
which the Certificates will be retired; provided, however, that the Terminator
may elect to purchase all of the Mortgage Loans and each REO Property remaining
in REMIC 1 pursuant to clause (i) of the preceding paragraph only if (A) the
aggregate Stated Principal Balance of the Mortgage Loans and each REO Property
remaining in the Trust Fund at the time of such election is equal to or less
than 10% of the Cut-off Date Principal Balance of the Closing Date Mortgage
Loans. Additionally, if the Terminator is the Master Servicer, the Terminator
may elect to purchase all of the Mortgage Loans and each REO Property in REMIC
pursuant to clause (i) of the preceding paragraph only if the Termination Price
(A) is equal to or less than the aggregate fair market value of all of the
assets of REMIC 1 (as determined by the Terminator, as of the close of business
on the third Business Day next preceding the date upon which notice of any such
termination is furnished to Certificateholders pursuant to Section 9.01(c)) and
(B) will result in distributions on the Certificates sufficient to pay (a) all
unpaid Guarantor Reimbursement Amounts and unpaid Guaranty Fees to the Guarantor
(unless the Guarantor consents to the purchase), (b) all unpaid Certificate
Insurer Premiums and Certificate Insurer Reimbursement Amounts to the
Certificate Insurer (unless the Certificate Insurer consents to the purchase),
and (c) all interest accrued on, as well as amounts necessary to pay in full the
principal balance of, the NIM Notes and any amounts necessary to reimburse the
NIMS Insurer for all amounts paid under the NIMs insurance policy and any other
amounts reimbursable or otherwise payable to the NIMS Insurer, in each case,
with interest thereon at the applicable rate set forth in the Indenture and to
the extent not previously reimbursed or paid (unless the NIMS Insurer consents
to the purchase). The Terminator shall not be entitled to exercise a purchase
right under this Section 9.01, without the Certificate Insurer's or the
Guarantor's consent, if the distribution of the Termination Price according to
such priorities would result in the Certificate Insurer being required to make
an Insured Payment or the Guarantor being required to make a Guarantor Payment,
respectively, on the applicable Distribution Date. By acceptance of the Residual
Certificates, the Holders of the Residual Certificates agree, in connection with
any termination hereunder, to assign and transfer any amounts in excess of par,
and to the extent received in respect of such termination, to pay any such
amounts to the Holders of the Class C Certificates.
(c) Notice of the liquidation of the REMIC 1 Regular Interests shall be
given promptly by the 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 1 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 1 Regular Interests or the related Certificates from and
after the Accrual Period relating to the final Distribution Date therefor and
(iv) that the Record Date otherwise applicable to such Distribution Date is not
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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. 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 Certificate Insurer and the Guarantor the respective
amounts otherwise payable to the Certificate Insurer and the Guarantor on such
Distribution Date in accordance with Section 4.01. Any funds not distributed to
any Holder or Holders of Certificates being retired on such Distribution Date
because of the failure of such Holder or Holders to tender their Certificates
shall, on such date, be set aside and held in trust by the 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 Greenwich Capital Markets, Inc. and Deutsche Bank Securities 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 1 pursuant to Section 9.01, the
Trust Fund shall be terminated in accordance with the following additional
requirements:
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(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 1 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.
(b) 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).
(c) 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 the
Certificates are issued, copies of which forms and returns shall promptly be
furnished by the Trust Administrator to the NIMS Insurer and the Certificate
Insurer. For the purposes of the REMIC election in respect of REMIC 1, the REMIC
1 Regular Interests shall be designated as the Regular Interests in REMIC 1 and
the Class R-1 Interest shall be designated as the Residual Interest in REMIC 1.
For the purposes of the REMIC election in respect of REMIC 2, the REMIC 2
Regular Interests shall be designated as the Regular Interests in REMIC 2 and
the Class R-2 Interest shall be designated as the Residual Interest in REMIC 2.
For the purposes of the REMIC election in respect of REMIC 3, the REMIC 3
Regular Interests shall be designated as the Regular Interests in REMIC 3 and
the Class R-3 Interest shall be designated as the Residual Interest in REMIC 3.
For the purposes of the REMIC election in respect of REMIC 4, (i) the Regular
Certificates (other than the Class C Certificates and the Class P Certificates)
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and the REMIC 4 Regular Interests shall be designated as the Regular Interests
in REMIC 4 and (ii) the Class R-4 Interest shall be designated as the Residual
Interest in REMIC 4. For the purposes of the REMIC election in respect of REMIC
CX, the Class C Certificates shall be designated as the Regular Interests in
REMIC CX and the Class R-CX Interest shall be designated as the Residual
Interest in REMIC CX. For purposes of the REMIC election in respect of REMIC PX,
the Class P Certificates shall be designated as the Regular Interests in REMIC
PX and the Class R-PX Interest shall be designated as the Residual Interest in
REMIC PX. Neither the Trustee nor the Trust Administrator shall permit the
creation of any "interests" in REMIC 1, REMIC 2, REMIC 3, REMIC 4, REMIC CX or
REMIC PX (within the meaning of Section 860G of the Code) other than the REMIC 1
Regular Interests, the REMIC 2 Regular Interests, the REMIC 3 Regular Interests,
the REMIC 4 Group I Regular Interests, the REMIC 4 Group II Regular Interests,
the REMIC 4 Regular Interests and the interests represented by the Certificates.
(b) The Closing Date is hereby designated as the "Startup Day" of each
Trust REMIC within the meaning of Section 860G(a)(9) of the Code.
(c) The 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 CX and REMIC PX. The holder of the
largest Percentage Interest of the Class R-CX Certificates shall be designated,
in the manner provided under Treasury regulations Section 1.860F-4(d) and
Treasury regulations Section 301.6231(a)(7)-1, as the tax matters person of
REMIC CX. The holder of the largest Percentage Interest of the Class R-PX
Certificates shall be designated, in the manner provided under Treasury
regulations Section 1.860F-4(d) and Treasury regulations Section
301.6231(a)(7)-1, as the tax matters person of REMIC PX. By its acceptance
thereof, each such holder hereby agrees to irrevocably appoint the Trust
Administrator or an Affiliate as its agent to perform all of the duties of the
tax matters person of each respective REMIC.
(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 and the Certificate
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
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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 and the Certificate
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, the Certificate Insurer and the Guarantor have received an
Opinion of Counsel, addressed to the Trustee, the Trust Administrator, the NIMS
Insurer, the Certificate 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 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
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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, the Certificate Insurer and the
Guarantor a copy of any such advice or opinion. In addition, prior to taking any
action with respect to any Trust REMIC or the assets thereof, or causing any
Trust REMIC to take any action, which is not contemplated under the terms of
this Agreement, the Master Servicer will consult with the Trustee 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 REMIC 1 will consist of "qualified mortgages"
as defined in Section 860G(a)(3) of the Code and "permitted investments" as
defined in Section 860G(a)(5) of the Code.
(g) If any tax is imposed on prohibited transactions of any Trust REMIC
created hereunder pursuant to Section 860F(a) of the Code, on the net income
from foreclosure property of any such REMIC pursuant to Section 860G(c) of the
Code, or on any contributions to any such REMIC after the Startup Day therefor
pursuant to Section 860G(d) of the Code, or if any other tax is imposed by the
Code or any applicable provisions of state or local tax laws, such tax shall be
charged (i) to the 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 Certificate 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 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.
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(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 1, (iii) the termination of
REMIC 1 pursuant to Article IX of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a purchase of Mortgage Loans pursuant to
Article II or III of this Agreement), nor acquire any assets for any Trust REMIC
(other than REO Property acquired in respect of a defaulted Mortgage Loan), nor
sell or dispose of any investments in the Collection Account or the Distribution
Account for gain, nor accept any contributions to any Trust REMIC after the
Closing Date (other than a Qualified Substitute Mortgage Loan delivered in
accordance with Section 2.03), unless it, the NIMS Insurer, the Certificate
Insurer and the Guarantor have received an Opinion of Counsel, addressed to the
Trust Administrator, the Trustee, the NIMS Insurer, the Certificate Insurer and
the Guarantor (at the expense of the party seeking to cause such sale,
disposition, substitution, acquisition or contribution but in no event at the
expense of the Trustee 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 Certificate Insurer,
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.
(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.
181
(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 the Certificate Insurer, and without the consent of any
of the Certificateholders, (i) to cure any ambiguity or defect, (ii) to correct,
modify or supplement any provisions herein (including to give effect to the
expectations of Certificateholders), or in any Custodial Agreement, (iii) to
modify, eliminate or add to any of its provisions to such extent as shall be
necessary or desirable to maintain the qualification of the Trust Fund as a
REMIC at all times that any Certificate is outstanding or to avoid or minimize
the risk of the imposition of any tax on the Trust Fund pursuant to the Code
that would be a claim against the Trust Fund, provided that the Trustee, the
Trust Administrator, the NIMS Insurer, the Certificate Insurer, the Guarantor,
the Depositor and the Master Servicer have received an Opinion of Counsel to the
effect that (A) such action is necessary or desirable to maintain such
qualification or to avoid or minimize the risk of the imposition of any such tax
and (B) such action will not adversely affect the status of the Trust Fund as a
REMIC or adversely affect in any material respect the interest of any
Certificateholder or (iv) to make any other provisions with respect to matters
or questions arising under this Agreement or in any Custodial Agreement which
shall not be inconsistent with the provisions of this Agreement or such
Custodial Agreement, provided that, in each case, such action shall not, as
evidenced by an Opinion of Counsel delivered to the parties hereto, the
Certificate Insurer and the NIMS Insurer, adversely affect in any material
respect the interests of any Certificateholder or the Certificate Insurer and,
provided, further, that (A) such action will not affect in any material respect
the permitted activities of the Trust and (B) such action will not increase in
any material respect the degree of discretion which the Master Servicer is
allowed to exercise in servicing the Mortgage Loans. No amendment shall be
deemed to adversely affect in any material respect the interests of any
Certificateholder who shall have consented thereto, and no Opinion of Counsel
shall be required to address the effect of any such amendment on any such
consenting Certificateholder.
This Agreement or any Custodial Agreement may also be amended from time
to time by the Depositor, the Master Servicer, the Trustee, the Trust
Administrator, the Guarantor and, if applicable, the Custodian, with the consent
of the NIMS Insurer, if any, and the Certificate Insurer, and with the consent
of the Holders of Certificates entitled to at least 66% of the Voting Rights,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or any Custodial Agreement
or of modifying in any manner the rights of the Holders of Certificates;
182
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, the Certificate Insurer and the
Guarantor shall be entitled to receive an Opinion of Counsel to the effect that
such amendment will not result in the imposition of any tax on any Trust REMIC
pursuant to the REMIC Provisions or cause any Trust REMIC to fail to qualify as
a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any such amendment the Trust
Administrator shall furnish a copy of such amendment to each Certificateholder,
the Certificate Insurer and the NIMS Insurer.
It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee 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 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.
183
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.
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, 1100
▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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, Deutsche Bank
National Trust Company, ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Trust Administration Services LB0203 (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 (▇▇▇) ▇▇▇-▇▇▇▇), 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, (f) in the case of the
Certificate Insurer, XL Capital Assurance, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel (telecopy number: (646)
658-5955), or such other addresses or telecopy number as may be furnished to the
other parties hereto in writing by the Certificate Insurer, and (g) in the case
of the Trustee, Wachovia Bank, National Association, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 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.
Section 11.07 Notice to the Rating Agencies, the NIMS Insurer,
the Certificate Insurer and the Guarantor.
The Trust Administrator shall use its best efforts promptly to provide
notice to the Rating Agencies, the NIMS Insurer, the Certificate Insurer and the
Guarantor with respect to each of the following of which it has actual
knowledge:
1. Any amendment to this Agreement;
2. The occurrence of any Master Servicer Event of Default that has not
been cured or waived;
185
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 2002-3; Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Standard & Poor's Rating Services, Inc., ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and the NIMS Insurer, the Certificate
Insurer and the Guarantor at the address provided in Section 11.05.
In addition, each party hereto agrees that it will furnish or make
available to the NIMS Insurer and the Certificate Insurer a copy of any
opinions, notices, reports, schedules, certificates, statements, rating
confirmation letters or other information that are furnished hereunder to the
Trustee, the Trust Administrator, the Rating Agencies or the Certificateholders.
Section 11.08 Article and Section References.
All Article and Section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
186
Section 11.09 Third-Party Beneficiaries.
Subject to Section 1.04, each of the NIMS Insurer and the Certificate
Insurer shall be deemed a third-party beneficiary of this Agreement, and shall
be entitled to enforce such rights, in each case, as if it were a party hereto.
Section 11.10 Grant of Security Interest.
It is the express intent of the parties hereto that the conveyance of
the Mortgage Loans by the Depositor to the Trustee be, and be construed as, a
sale of the Mortgage Loans by the Depositor and not a pledge of the Mortgage
Loans by the Depositor to secure a debt or other obligation of the Depositor.
However, in the event that, notwithstanding the aforementioned intent of the
parties, the Mortgage Loans are held to be property of the Depositor, then, (a)
it is the express intent of the parties that such conveyance be deemed a pledge
of the Mortgage Loans by the Depositor to the Trustee to secure a debt or other
obligation of the Depositor and (b)(1) this Agreement shall also be deemed to be
a security agreement within the meaning of Articles 8 and 9 of the Uniform
Commercial Code as in effect from time to time in the State of New York; (2) the
conveyance provided for in Section 2.01 hereof shall be deemed to be a grant by
the Depositor to the Trustee of a security interest in all of the Depositor's
right, title and interest in and to the Mortgage Loans and all amounts payable
to the holders of the Mortgage Loans in accordance with the terms thereof and
all proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the Collection Account, the Distribution Account and Policy Payments Account,
whether in the form of cash, instruments, securities or other property; (3) the
obligations secured by such security agreement shall be deemed to be all of the
Depositor's obligations under this Agreement, including the obligation to
provide to the Certificateholders the benefits of this Agreement relating to the
Mortgage Loans and the Trust Fund; and (4) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Trustee for the purpose of perfecting such security interest under
applicable law. Accordingly, the Depositor hereby grants to the Trustee a
security interest in the Mortgage Loans and all other property described in
clause (2) of the preceding sentence, for the purpose of securing to the Trustee
the performance by the Depositor of the obligations described in clause (3) of
the preceding sentence. Notwithstanding the foregoing, the parties hereto intend
the conveyance pursuant to Section 2.01 to be a true, absolute and unconditional
sale of the Mortgage Loans and assets constituting the Trust Fund by the
Depositor to the Trustee.
Section 11.11 Non-Petition.
Each of the parties hereto hereby covenants and agrees that, prior to
the date which is one year and one day after the date on which the last
Certificate ceases to be outstanding, it will not institute against, cooperate
with, encourage or join with any other Person in instituting against the
Depositor or Long Beach Asset Holdings Corp. in any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other proceedings under
any Federal or state bankruptcy or similar law; provided, however, that nothing
in this section shall constitute a waiver of any right to indemnification,
reimbursement or other payment under this Agreement.
187
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: First Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trust Administrator
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Associate
By:
-----------------------------------
Name:
-----------------------------
Title:
-----------------------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION,
as Guarantor (with respect to the
Class I-A Certificates and the
Class I-S1 Certificates)
By:
-------------------------------------
Name:
-----------------------------
Title:
-----------------------------
190
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF KING )
On the ___th day of [___________], 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 [___________], 2002 before me, a notary public in
and for said State, personally appeared ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ known to me to be a
First Vice President of Long Beach Mortgage Company, a corporation that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
__________________________________
Notary Public
193
STATE OF )
) ss.:
COUNTY OF )
-----------------------------------
On the ___th day of [___________], 2002 before me, a notary public in
and for said State, personally appeared ▇▇▇▇▇▇▇ ▇▇▇▇▇, known to me to be an
Associate of Deutsche Bank National Trust Company, a national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said association, and acknowledged to me
that such association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
__________________________________
Notary Public
194
STATE OF )
) ss.:
COUNTY OF )
-----------------------------------
On the ___th day of [___________], 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
195
STATE OF )
) ss.:
COUNTY OF )
-----------------------------------
On the ___th day of [___________], 2002 before me, a notary public in
and for said State, personally appeared ____________, known to me to be a
____________ of Wachovia Bank, National 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
196
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, August 1, 2002
First Distribution Date : September 25, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : [ ]
Pass-Through Rate : Variable
CUSIP : [____]
Class : I-A
Assumed Maturity Date : September, 2032
I-A-1
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
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 August __, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates, Deutsche Bank
National Trust Company, as trust administrator (the "Trust Administrator"), and
Wachovia Bank, National Association, as trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Class 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
I-A-2
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.
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: August___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-3
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
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
Deutsche Bank National Trust Company,
as Trust Administrator on behalf of the Trustee
I-A-4
[Reverse of Class I-A Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-3
Asset-Backed Certificates,
Series 2002-3
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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
I-A-5
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, if any, the Certificate Insurer, and the Trustee
and any agent of the Depositor, the Master Servicer, the Trust Administrator,
the Guarantor, the NIMS Insurer, if any, the Certificate 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, if any, the Certificate
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 the NIMS Insurer, if any, or the Certificate Insurer may purchase,
in whole, from the Trust the Mortgage Loans in the manner and at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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
September, 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, August 1, 2002
First Distribution Date : September 25, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination")
: $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : [________]
Pass-Through Rate : Variable
CUSIP : [____]
Class : I-A
Assumed Maturity Date : September, 2032
I-A-1
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
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 August __, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates, Deutsche Bank
National Trust Company, as trust administrator (the "Trust Administrator"), and
Wachovia Bank, National Association, as trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Class 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
1-A-2
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.
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.
1-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: August___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-3
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
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
Deutsche Bank National Trust Company,
as Trust Administrator on behalf of the Trustee
I-A-4
[Reverse of Class I-A Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-3
Asset-Backed Certificates,
Series 2002-3
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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
1-A-5
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, if any, the Certificate Insurer, and the Trustee
and any agent of the Depositor, the Master Servicer, the Trust Administrator,
the Guarantor, the NIMS Insurer, if any, the Certificate 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, if any, the Certificate
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 the NIMS Insurer, if any, or the Certificate Insurer may purchase,
in whole, from the Trust the Mortgage Loans in the manner and at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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
September, 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
EXHIBIT A-2
CLASS II-A CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan,
August 1, 2002
First Distribution Date : September 25, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : [____]
Pass-Through Rate : Variable
CUSIP : [____]
Class : II-A
Assumed Maturity Date : September, 2032
II-A-1
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
Class II-A
evidencing the Percentage Interest in the distributions
allocable to the Certificates of the above-referenced Class
with respect to the Trust consisting of first lien and
second lien, fixed rate and adjustable rate mortgage loans
(the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
II-A Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class II-A
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, 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-A Certificate (obtained by
dividing the Denomination of this Class II-A Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of August __, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates, Deutsche Bank
National Trust Company, as trust administrator (the "Trust Administrator"), and
Wachovia Bank, National Association, as trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Class II-A Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Class II-A Certificate by virtue of the acceptance hereof assents
and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class II-A
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class II-A Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator on behalf of the Trustee.
II-A-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: August___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-3
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trust Administrator on behalf of the Trustee
By ____________________________________
This is one of the Class II-A Certificates
referenced in the within-mentioned Agreement
By __________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trust Administrator on behalf of the Trustee
II-A-3
[Reverse of Class II-A Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-3
Asset-Backed Certificates,
Series 2002-3
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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
II-A-4
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, if any, the Certificate Insurer, and the Trustee
and any agent of the Depositor, the Master Servicer, the Trust Administrator,
the Guarantor, the NIMS Insurer, if any, the Certificate 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, if any, the Certificate
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 the NIMS Insurer, if any, or the Certificate Insurer may purchase,
in whole, from the Trust the Mortgage Loans in the manner and at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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
September, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
II-A-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the 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-A-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
II-A-7
CLASS II-A CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan,
August 1, 2002
First Distribution Date : September 25, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : [____]
Pass-Through Rate : Variable
CUSIP : [____]
Class : II-A
Assumed Maturity Date : September, 2032
II-A-1
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
Class II-A
evidencing the Percentage Interest in the distributions
allocable to the Certificates of the above-referenced Class
with respect to the Trust consisting of first lien and
second lien, fixed rate and adjustable rate mortgage loans
(the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
II-A Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class II-A
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, 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-A Certificate (obtained by
dividing the Denomination of this Class II-A Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of August __, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates, Deutsche Bank
National Trust Company, as trust administrator (the "Trust Administrator"), and
Wachovia Bank, National Association, as trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Class II-A Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Class II-A Certificate by virtue of the acceptance hereof assents
and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class II-A
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class II-A Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator on behalf of the Trustee.
II-A-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: August___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-3
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trust Administrator on behalf of the Trustee
By ____________________________________
This is one of the Class II-A Certificates
referenced in the within-mentioned Agreement
By __________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trust Administrator on behalf of the Trustee
II-A-3
[Reverse of Class II-A Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-3
Asset-Backed Certificates,
Series 2002-3
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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
II-A-4
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, if any, the Certificate Insurer, and the Trustee
and any agent of the Depositor, the Master Servicer, the Trust Administrator,
the Guarantor, the NIMS Insurer, if any, the Certificate 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, if any, the Certificate
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 the NIMS Insurer, if any, or the Certificate Insurer may purchase,
in whole, from the Trust the Mortgage Loans in the manner and at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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
September, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
II-A-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the 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-A-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
II-A-7
EXHIBIT A-3
CLASS I-S1 CERTIFICATES
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan,
August 1, 2002
First Distribution Date : September 25, 2002
Initial Certificate Notional Amount of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Notional
Amount of this Class : $[_______]
Percentage Interest : 100.00%
CUSIP : [____]
Pass-Through Rate : 5.25%
Class : I-S1
Assumed Maturity Date : July, 2005
I-S1-1
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
Class I-S1
evidencing the Percentage Interest in the distributions
allocable to the Certificates of the above-referenced Class
with respect to the Trust consisting of first lien and
second lien, fixed rate and adjustable rate mortgage loans
(the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Class I-S1 Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Master Servicer, 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-S1 Certificate (obtained by
dividing the Denomination of this Class I-S1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of August __, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates, Deutsche Bank
National Trust Company, as trust administrator (the "Trust Administrator"), and
Wachovia Bank, National Association, as trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Class I-S1 Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Class I-S1 Certificate by virtue of the acceptance hereof assents
and by which such Holder is bound.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee, 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-S1-2
Reference is hereby made to the further provisions of this Class I-S1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class I-S1 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator on behalf of the Trustee.
I-S1-3
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: August___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-3
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trust Administrator on behalf of the Trustee
By ____________________________________
This is one of the Class I-S1 Certificates
referenced in the within-mentioned Agreement
By __________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trust Administrator on behalf of the Trustee
I-S1-4
[Reverse of Class I-S1 Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-3
Asset-Backed Certificates,
Series 2002-3
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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
I-S1-5
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 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, if any, the Certificate Insurer, and the Trustee
and any agent of the Depositor, the Master Servicer, the Trust Administrator,
the Guarantor, the NIMS Insurer, if any, the Certificate 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, if any, the Certificate
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 the NIMS Insurer, if any, or the Certificate Insurer may purchase,
in whole, from the Trust the Mortgage Loans in the manner and at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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
September, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
I-S1-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the 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-S1-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
I-S1-8
EXHIBIT A-4
CLASS I-S2 CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS I-A CERTIFICATES AND THE CLASS I-S1
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan,
August 1, 2002
First Distribution Date : September 25, 2002
Initial Certificate Notional Amount of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Notional
Amount of this Class : $[_______]
Percentage Interest : 100.00%
Pass-Through Rate : 4.25%
Class : I-S2
Assumed Maturity Date : July, 2005
I-S2-1
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
Class I-S2
evidencing the Percentage Interest in the distributions
allocable to the Certificates of the above-referenced Class
with respect to the Trust consisting of first lien and
second lien, fixed rate and adjustable rate mortgage loans
(the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Class I-S2 Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Master Servicer, 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-S2 Certificate
(obtained by dividing the Denomination of this Class I-S2 Certificate by the
Original Class Certificate Principal Balance) in certain monthly distributions
with respect to a Trust consisting primarily of the Mortgage Loans deposited by
Long Beach Securities Corp. (the "Depositor"). The Trust was created pursuant to
a Pooling and Servicing Agreement dated as of August __, 2002 (the "Agreement")
among the Depositor, Long Beach Mortgage Company, as master servicer (the
"Master Servicer"), Federal National Mortgage Association, as guarantor with
respect to the Class I-A Certificates and the Class I-S1 Certificates, Deutsche
Bank National Trust Company, as trust administrator (the "Trust Administrator"),
and Wachovia Bank, National Association, as trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Class I-S2 Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Class I-S2 Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee, 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-S2-2
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
Reference is hereby made to the further provisions of this Class I-S2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class I-S2 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator on behalf of the Trustee.
I-S2-3
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: August___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-3
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trust Administrator on behalf of the Trustee
By ____________________________________
This is one of the Class I-S2 Certificates
referenced in the within-mentioned Agreement
By __________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trust Administrator on behalf of the Trustee
I-S2-4
[Reverse of Class I-S2 Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-3
Asset-Backed Certificates,
Series 2002-3
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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
I-S2-5
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 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, if any, the Certificate Insurer, and the Trustee
and any agent of the Depositor, the Master Servicer, the Trust Administrator,
the Guarantor, the NIMS Insurer, if any, the Certificate 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, if any, the Certificate
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 the NIMS Insurer, if any, or the Certificate Insurer may purchase,
in whole, from the Trust the Mortgage Loans in the manner and at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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
September, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
I-S2-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the 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-S2-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
I-S2-8
EXHIBIT A-5
CLASS II-S1 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan,
August 1, 2002
First Distribution Date : September 25, 2002
Initial Certificate Notional Amount of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Notional
Amount of this Class : $[_______]
Percentage Interest : 100.00%
Pass-Through Rate : 4.25%
CUSIP : [____]
Class : II-S1
Assumed Maturity Date : July, 2005
II-S1-1
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
Class II-S1
evidencing the Percentage Interest in the distributions
allocable to the Certificates of the above-referenced Class
with respect to the Trust consisting of first lien and
second lien, fixed rate and adjustable rate mortgage loans
(the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Class II-S1 Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Master Servicer, 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-S1 Certificate (obtained by
dividing the Denomination of this Class II-S1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of August __, 2002 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates, Deutsche Bank
National Trust Company, as trust administrator (the "Trust Administrator"), and
Wachovia Bank, National Association, as trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Class II-S1 Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Class II-S1 Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class II-S1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class II-S1 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator on behalf of the Trustee.
II-S1-2
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: August___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-3
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trust Administrator on behalf of the Trustee
By ____________________________________
This is one of the Class II-S1 Certificates
referenced in the within-mentioned Agreement
By __________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trust Administrator on behalf of the Trustee
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: August___, 2002
II-S1-3
[Reverse of Class II-S1 Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-3
Asset-Backed Certificates,
Series 2002-3
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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
II-S1-4
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 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, if any, the Certificate Insurer, and the Trustee
and any agent of the Depositor, the Master Servicer, the Trust Administrator,
the Guarantor, the NIMS Insurer, if any, the Certificate 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, if any, the Certificate
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 the NIMS Insurer, if any, or the Certificate Insurer may purchase,
in whole, from the Trust the Mortgage Loans in the manner and at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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
September, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
II-S1-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the 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-S1-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
II-S1-7
EXHIBIT A-6
CLASS II-S2 CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS II-A CERTIFICATES AND THE CLASS
II-S1 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan,
August 1, 2002
First Distribution Date : September 25, 2002
Initial Certificate Notional Amount of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Notional
Amount of this Class : $[_______]
Percentage Interest : 100.00%
Pass-Through Rate : 4.25%
Class : II-S2
Assumed Maturity Date : July, 2005
II-S2-1
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
Class II-S2
evidencing the Percentage Interest in the distributions
allocable to the Certificates of the above-referenced Class
with respect to the Trust consisting of first lien and
second lien, fixed rate and adjustable rate mortgage loans
(the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Class II-S2 Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Master Servicer, 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-S2 Certificate
(obtained by dividing the Denomination of this Class II-S2 Certificate by the
Original Class Certificate Principal Balance) in certain monthly distributions
with respect to a Trust consisting primarily of the Mortgage Loans deposited by
Long Beach Securities Corp. (the "Depositor"). The Trust was created pursuant to
a Pooling and Servicing Agreement dated as of August __, 2002 (the "Agreement")
among the Depositor, Long Beach Mortgage Company, as master servicer (the
"Master Servicer"), Federal National Mortgage Association, as guarantor with
respect to the Class I-A Certificates and the Class I-S1 Certificates, Deutsche
Bank National Trust Company, as trust administrator (the "Trust Administrator"),
and Wachovia Bank, National Association, as trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Class II-S2 Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Class II-S2 Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee, 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.
II-S2-2
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
Reference is hereby made to the further provisions of this Class II-S2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class II-S2 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trust Administrator on behalf of the Trustee.
II-S2-3
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: August___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-3
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trust Administrator on behalf of the Trustee
By ____________________________________
This is one of the Class II-S2 Certificates
referenced in the within-mentioned Agreement
By __________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trust Administrator on behalf of the Trustee
II-S2-4
[Reverse of Class II-S2 Certificate]
LONG BEACH MORTGAGE LOAN TRUST 2002-3
Asset-Backed Certificates,
Series 2002-3
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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
II-S2-5
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 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, if any, the Certificate Insurer, and the Trustee
and any agent of the Depositor, the Master Servicer, the Trust Administrator,
the Guarantor, the NIMS Insurer, if any, the Certificate 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, if any, the Certificate
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 the NIMS Insurer, if any, or the Certificate Insurer may purchase,
in whole, from the Trust the Mortgage Loans in the manner and at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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
September, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
II-S2-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the 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-S2-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
II-S2-8
EXHIBIT A-7
CLASS I-C CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS I-A CERTIFICATES, THE CLASS II-A
CERTIFICATES, THE CLASS I-S1 CERTIFICATES, THE CLASS II-S1 CERTIFICATES, THE
CLASS I-S2 CERTIFICATES AND THE CLASS II-S2 CERTIFICATES TO THE EXTENT DESCRIBED
IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan,
August 1, 2002
First Distribution Date : September 25, 2002
Original Certificate Principal Balance : $[_______]
Initial Notional Amount of this
Certificate ("Denomination") : $[_______]
Original Notional Amount of this Class : $[_______]
Percentage : 100.00%
Pass-Through Rate : Variable
Class : I-C
I-C-1
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
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 August __, 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-S1 Certificates, Deutsche
Bank National Trust Company, as trust administrator (the "Trust Administrator"),
and Wachovia Bank, National Association, as trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Class 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
I-C-2
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-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: August___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-3
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
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
Deutsche Bank National Trust Company,
as Trust Administrator on behalf of the Trustee
I-C-4
[Reverse of Class I-C Certificate]
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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, if any, the Certificate Insurer, and the Trustee
and any agent of the Depositor, the Master Servicer, the Trust Administrator,
the Guarantor, the NIMS Insurer, if any, the Certificate 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, if any, the Certificate
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 the NIMS Insurer, if any, or the Certificate Insurer may purchase,
in whole, from the Trust the Mortgage Loans in the manner and at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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
September, 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-8
CLASS II-C CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS I-A CERTIFICATES, THE CLASS II-A
CERTIFICATES, THE CLASS I-S1 CERTIFICATES, THE CLASS II-S1 CERTIFICATES, THE
CLASS I-S2 CERTIFICATES AND THE CLASS II-S2 CERTIFICATES TO THE EXTENT DESCRIBED
IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan,
August 1, 2002
First Distribution Date : September 25, 2002
Original Certificate Principal Balance : $[_______]
Initial Notional Amount of this
Certificate ("Denomination") : $[_______]
Original Notional Amount of this Class : $[_______]
Percentage : 100.00%
Pass-Through Rate : Variable
Class : II-C
II-C-1
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
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 August __, 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-S1 Certificates, Deutsche
Bank National Trust Company, as trust administrator (the "Trust Administrator"),
and Wachovia Bank, National Association, as trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Class 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
II-C-2
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-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: August___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-3
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
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
Deutsche Bank National Trust Company,
as Trust Administrator on behalf of the Trustee
II-C-4
[Reverse of Class II-C Certificate]
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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, if any, the Certificate Insurer, and the Trustee
and any agent of the Depositor, the Master Servicer, the Trust Administrator,
the Guarantor, the NIMS Insurer, if any, the Certificate 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, if any, the Certificate
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 the NIMS Insurer, if any, or the Certificate Insurer may purchase,
in whole, from the Trust the Mortgage Loans in the manner and at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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
September, 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-9
CLASS I-P CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan,
August 1, 2002
First Distribution Date : September 25, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $100.00
Original Class Certificate Principal
Balance of this Class : $100.00
Percentage Interest : 100.00%
Class : ▇-▇
▇-▇-▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇-▇
Asset-Backed Certificates,
Series 2002-3
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 August __, 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-S1 Certificates, Deutsche
Bank National Trust Company, as trust administrator (the "Trust Administrator"),
and Wachovia Bank, National Association, as trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Class 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
I-P-2
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.
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: August___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-3
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
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
Deutsche Bank National Trust Company,
as Trust Administrator on behalf of the Trustee
I-P-4
[Reverse of Class I-P Certificate]
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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
I-P-5
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 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, if any, the Certificate 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, if any, the Certificate 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 the NIMS Insurer, if any, or the Certificate Insurer may purchase,
in whole, from the Trust the Mortgage Loans in the manner and at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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
September, 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-10
CLASS II-P CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan,
August 1, 2002
First Distribution Date : September 25, 2002
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $100.00
Original Class Certificate Principal
Balance of this Class : $100.00
Percentage Interest : 100.00%
Class : II-P
II-P-1
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
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 August __, 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-S1 Certificates, Deutsche
Bank National Trust Company, as trust administrator (the "Trust Administrator"),
and Wachovia Bank, National Association, as trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Class 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
II-P-2
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.
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: August___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-3
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
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
Deutsche Bank National Trust Company,
as Trust Administrator on behalf of the Trustee
II-P-4
[Reverse of Class II-P Certificate]
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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
II-P-5
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 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, if any, the Certificate 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, if any, the Certificate 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 the NIMS Insurer, if any, or the Certificate Insurer may purchase,
in whole, from the Trust the Mortgage Loans in the manner and at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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
September, 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-11
CLASS R CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
"RESIDUAL INTERESTS" IN FOUR SEPARATE "REAL ESTATE MORTGAGE INVESTMENT
CONDUITS," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
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,
August 1, 2002
First Distribution Date : September 25, 2002
Percentage Interest : 100.00%
Class : R
▇-▇
▇▇▇▇ ▇▇▇▇▇ Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
Class R
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting primarily of a pool of first lien 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 August __,
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-S1
Certificates, Deutsche Bank National Trust Company, as trust administrator (the
"Trust Administrator"), and Wachovia Bank, National Association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Corporate Trust Office or the office or agency maintained by
the 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
R-2
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.
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: August___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-3
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
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
Deutsche Bank National Trust Company,
as Trust Administrator on behalf of the Trustee
R-4
[Reverse of Class R Certificate]
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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
R-5
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 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, if any, the Certificate 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, if any, the Certificate 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 the NIMS Insurer, if any, or the Certificate Insurer may purchase,
in whole, from the Trust the Mortgage Loans in the manner and at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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
September, 2032.
By acceptance of the Class R Certificates the Holders of the Class R
Certificates agree that for so long as any of the NIM Notes are outstanding or
any amounts are reimbursable or payable to the NIMS Insurer, if any, in
accordance with the terms of the Indenture, in connection with any amounts
distributable to the Holders of the Class R Certificates pursuant to clauses
(i)(l) and (ii)(p) of Section 4.01(d) of the Agreement, their rights to receive
the amounts so distributable are assigned and transferred and any such amounts
shall be paid by the Trust Administrator, and to the extent received by the
R-6
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-12
CLASS R-CX CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R-CX CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
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,
August 1, 2002
First Distribution Date : September 25, 2002
Percentage Interest : 100.00%
Class : R-CX
R-CX-1
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
Class R-CX
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting primarily of a pool of first lien and second lien,
fixed rate and adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Master Servicer, 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 August __,
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-S1
Certificates, Deutsche Bank National Trust Company, as trust administrator (the
"Trust Administrator"), and Wachovia Bank, National Association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Corporate Trust Office or the office or agency maintained by
the 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
R-CX-2
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.
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-CX Certificate in violation of the
restrictions mentioned above.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trust Administrator on behalf of the Trustee.
R-CX-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: August___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-3
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trust Administrator on behalf of the Trustee
By ____________________________________
This is one of the Class R-CX Certificates
referenced in the within-mentioned Agreement
By __________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trust Administrator on behalf of the Trustee
R-CX-4
[Reverse of Class R-CX Certificate]
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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
R-CX-5
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 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, if any, the Certificate 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, if any, the Certificate 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 the NIMS Insurer, if any, or the Certificate Insurer may purchase,
in whole, from the Trust the Mortgage Loans in the manner and at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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
September, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
R-CX-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the 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-CX-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
R-CX-8
EXHIBIT A-13
CLASS R-PX CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R-PX CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
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,
August 1, 2002
First Distribution Date : September 25, 2002
Percentage Interest : 100.00%
Class : R-PX
R-PX-1
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
Class R-PX
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting primarily of a pool of first lien and second lien,
fixed rate and adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Master Servicer, 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 August __,
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-S1
Certificates, Deutsche Bank National Trust Company, as trust administrator (the
"Trust Administrator"), and Wachovia Bank, National Association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Corporate Trust Office or the office or agency maintained by
the 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
R-PX-2
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.
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-PX Certificate in violation of the
restrictions mentioned above.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trust Administrator on behalf of the Trustee.
R-PX-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: August___, 2002
LONG BEACH MORTGAGE LOAN TRUST 2002-3
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as
Trust Administrator on behalf of the Trustee
By ____________________________________
This is one of the Class R-PX Certificates
referenced in the within-mentioned Agreement
By __________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trust Administrator on behalf of the Trustee
R-PX-4
[Reverse of Class R-PX Certificate]
Long Beach Mortgage Loan Trust 2002-3
Asset-Backed Certificates,
Series 2002-3
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that 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
R-PX-5
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 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, if any, the Certificate 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, if any, the Certificate 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 the NIMS Insurer, if any, or the Certificate Insurer may purchase,
in whole, from the Trust the Mortgage Loans in the manner and at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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
September, 2032.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
R-PX-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the 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-PX-7
EXHIBIT B-1
FORM OF GROUP I CAP AGREEMENT
B-1-1
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel ▇▇▇-▇▇▇-▇▇▇▇
Fax ▇▇▇-▇▇▇-▇▇▇▇
Bank of America N.A.
TO: Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3
ATTN: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
TEL: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
FROM: Bank of America, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ / ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Date: 02AUG02
Our Reference No. 37385
Internal Tracking Nos. 413785 417032
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between Bank of America, N.A and Long Beach
Mortgage Loan Trust 2002-3, Asset-Backed Certificates, Series 2002-3 (each a
`party" and together "the parties") on the Trade Date specified below (the
"Transaction").
This letter agreement constitutes a "Confirmation" and the definitions and
provisions contained in the 2000 ISDA Definitions, as published by the
International Swaps and Derivatives Association, Inc. (the "Definitions') are
incorporated into this Confirmation. In the event of any inconsistency between
the Definitions and this Confirmation, this Confirmation will govern.
1 This Confirmation evidences a complete binding agreement between the parties
as to the terms of the Transaction to which this Confirmation relates. In
addition, the patties agree that for the purposes of this Transaction, this
Confirmation will supplement, form a part of, and be subject to an agreement in
the form of the 1992 ISDA Master Agreement (Multicurrency-Cross Border) as if
the patties had executed an agreement (the "Agreement") in such form (but
without any Schedule except for the election of (i) the laws of the State of New
York (without reference to choice of law doctrine) as the governing law and (ii)
USD as the Termination Currency) on the Trade Date of the Transaction, In the
event of any inconsistency between the provisions of that agreement and this
Confirmation, this Confirmation will prevail for the purpose of this
Transaction.
Each party represents to the other party and will be deemed to represent to the
other party on the date on which it enters into a Transaction that (absent a
written agreement between the parties that expressly imposes affirmative
obligations to the contrary for that Transaction).
B-1-2
(i) Non-Reliance. It is acting for its own account, and it has made its
own independent decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisors as it has deemed necessary, except as specifically set
forth in paragraph 8 of this Confirmation as to Party B. It is not relying on
any communication (written or oral) of the other party as investment advice or
as a recommendation to enter into that Transaction; it being understood that
information and explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a recommendation to
enter into that Transaction. Further, such party has not received from the other
pasty any assurance or guarantee as to the expected results of that Transaction.
(ii) Evaluation and Understanding. It is capable of evaluation and
understanding (on its own behalf or Through independent professional advice),
and understands and accepts, the terms, conditions and risks of that
Transaction. It is also capable of assuming, and assumes, the financial and
other risks of that Transaction.
(iii) Status of Parties. The other party is not acting as an agent,
fiduciary or advisor for it in respect of that Transaction.
In this Confirmation "Party A" means Bank of America, NA and `Party B'
means Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3.
2 The particular Transaction to which this Confirmation relates is an Interest
Rate Corridor and the terms of the Transaction to which this Confirmation
relates are as follows:
Notional Amount: USD 486,119,312.65
Trade Date: 29JUL02
Effective Date: 25SEP02
Termination Date: 25FEB05, subject to adjustment in accordance with the
Modified Following Business Day Convention
Amortization: APPLICABLE (See Schedule A attached hereto)
Fixed Amounts:
Fixed Rate Payer: Party B
Fixed Rate Payer
Payment Dates: 02AUG02, subject to adjustment in accordance with the
Modified Following Business Day Convention.
Fixed Amount: USD 440,000.00
Floating Amounts I:
Floating Rate
Payer: Party A
Cap Rate: 6.50000%
B-1-3
Floating Rate Payer
Payment Dates: The 25th of each Month, commencing 25OCT02 and ending
25FEB05, subject to adjustment in accordance with the
Modified Following Business Day Convention.
Floating Rate for the
Initial Calculation Period: TO BE SET
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 Month
Spread: None
Floating Rate Day Count
Fraction: Actual/360
Reset Dates: The first day of each Calculation Period
Floating Amounts II:
Floating Rate
Payer: Party B
Cap Rate: 8.25000%
Floating Rate Payer
Payment Dates: The 25th of each Month, commencing 25OCT02 and ending
25FEB05, subject to adjustment in accordance with the
Following Business Day Convention.
Floating Rate for the
Initial Calculation Period: TO BE SET
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 Month
Spread: None
Floating Rate Day
Count Fraction: Actual/36O
B-1-4
Reset Dates: The first day of each Calculation Period
Business Days: New York, London
Calculation Agent: Party A
3 Recording of Conversations:
Each party to this Transaction acknowledges and agrees to the tape
recording of conversations between the parties to this Transaction
whether by one or other or both of the parties or their agents, and
that any such tape recordings may be submitted in evidence in any
Proceedings relating to the Agreement and/or this Transaction.
4 Account Details:
Payments to Bank of America, N.A.:
USD
NAME: BANK OF AMERICA NA
CITY: NEW YORK
ABA#: ▇▇▇▇▇▇▇▇▇
ATTN: BOFAUS3N
NAME: BANK OF AMERICA NA
CITY: CHARLOTTE
ACCT: 6550219386
ATTN: RATE DERIVATIVE SETTLEMENTS
ATTN: ▇▇▇▇▇▇▇▇▇▇▇
Payments to Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3:
USD
Bankers Trust Company
ABA# ▇▇▇▇▇▇▇▇▇
LA Asset Backed Account
Acct# ▇▇▇▇▇▇▇▇
Ref: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇-▇, cap payment
5 Offices:
The Office of Party A for this
Transaction is: Charlotte, NC
Please send reset notices to fax no. (▇▇▇-▇▇▇-▇▇▇▇)
The Office of Party B for this
Transaction is: Santa Ana, California, USA
B-1-5
6 Governing Law:
The Laws of the State of New York (without reference to the conflict of
laws provisions thereof other Than Section 5.1401 of the New York General
Obligations Law.)
7 Additional Provisions:
Notwithstanding the terms of Sections 5 and 6 of the Agreement, if Party B
has satisfied its payment obligations under Section 2(a)(i) of the
Agreement, then unless Party A is required pursuant to appropriate
proceedings to return to Party B or otherwise returns to Party B upon
demand of Party B any portion of such payment, (a) the occurrence of an
event described in Section 5(a) of the Agreement with respect to Party B
shall not constitute an Event of Default or Potential Event of Default with
respect to Party B or Asset-Backed Certificates, Series 2002-3 as the
Defaulting Party and (b) Party A shall be entitled to designate an Early
Termination Event pursuant to Section 6 of the Agreement only as a result
of a Termination Event set forth in either Section 5(b)(i) or Section
5(b)(ii) of the Agreement with respect to Party A as the Affected Party or
Section S(b)(iii) of the Agreement with respect to Party A as the Burdened
Party, In addition, the grace period set forth in Section 5(a)(i) of the
Agreement shall be one Business Day rather than three Business Days.
8 Trust Administrator Capacity:
It is expressly understood and agreed by the parties hereto that insofar as
this Confirmation is executed by the Trust Administrator defined herein as
Deutsche Bank National Trust Company ("Deutsche Bank"), not in its
individual capacity but solely as Trust Administrator on behalf of Long
Beach Mortgage Loan Trust 2002-3 under the Pooling and Servicing Agreement,
dated August 1, 2002 among Long Beach Securities Corp. as depositor, Long
Beach Mortgage Company as seller, ▇▇▇▇▇▇ ▇▇▇, Wachovia Bank National
Association as trustee and Deutsche Bank as trust administrator. (i) this
Confirmation is executed and delivered by Deutsche Bank not in its
individual capacity but solely as Trust Administrator under the Pooling and
Servicing Agreement referred to in this Confirmation in the exercise of the
powers and authority conferred and vested in it thereunder and (ii) under
no circumstances shall Deutsche Bank in its individual capacity be
personally liable for the payment of any indebtedness or expenses or be
personally liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken under this
Confirmation.
B-1-6
9 Transfer, Amendment and Assignment:
No transfer, amendment, waiver, supplement, assignment or other
modification of this Transaction shall be permitted by either party unless
each of ▇▇▇▇▇'▇ Investor Services, Inc. and Standard & Poors, a Division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. has been provided notice of the same and
confirms in writing (including by facsimile transmission) within five
Business Days after such notice is given that it will not downgrade,
withdraw, qualify or otherwise modify its then-current rating of the
certificates issued pursuant to the Pooling and Servicing Agreement
referenced above (the "Certificates ").
10 Proceedings:
Party A shall not institute against or cause any other person to institute
against, or join any other person in instituting against Asset-Backed
Certificates, Series 2002-3 any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any
federal or state bankruptcy, dissolution or similar law for a period of one
year and one day following (i) payment in full of the Notes and (ii)
satisfaction and discharge of the Pooling and Servicing Agreement.
11 Set-off:
The provisions for Set-offset forth in Section 6(e) of the Agreement shall
not apply for purposes of this Transaction.
12 Section 1(c):
For purposes of section 1(c) of the Agreement, this Transaction shall be
the sole Transaction under the Agreement.
13 Rating Agency Downgrade:
If a Ratings Event (as defined below) occurs with respect to Party A, then
Party A shall, at its own expense, (i) assign this Transactions hereunder
to a third party within thirty (30) days of such Ratings Event that meets
or exceeds, or as to which any applicable credit support provider meets or
exceeds, the Approved Ratings Thresholds (as defined below) on terms
substantially similar to this Confirmation or (ii) deliver collateral, in
an amount equal to the Exposure (as defined below), and an executed ISDA
Credit Support Annex within thirty (30) days of such Ratings Event and
subject to S&P's and Moody's written confirmation that delivery of such
collateral in the context of such downgrade will not result in a
withdrawal, qualification or downgrade of the then current ratings assigned
to the Certificates. For avoidance of doubt, a downgrade of the rating on
the Certificates could occur in the event that Party A does not post
sufficient collateral. For purposes of this Transaction, a "Ratings Event"
shall occur with respect to Party A, if short-term certificates of deposit
cease to be rated at least "A-1" by S&P, and at least "P-1" by Moody's
(including in connection with a merger, consolidation or other similar
transaction by Party A) such ratings being referred to herein as the
"Approved Ratings Thresholds," (unless, within 30 days after such
withdrawal or downgrade, each of Moody's and S&P has reconfirmed the rating
of the Certificates, which was in effect immediately prior to such
withdrawal or downgrade) Only with respect to such Ratings Event,
"Exposure" shall mean the greater of the following: (i) the ▇▇▇▇-to-market
value of the Transaction as of the Valuation Date (as such term is defined
in the ISDA Credit Support Annex); (ii) the amount of the next payment due
under the Transaction and (iii) one percent of the Notional Amount for the
respective Calculation Period.
B-1-7
14 Additional Termination Events:
Additional Termination Events will apply. If a Ratings Event has occurred
and Party A has not, within 30 days, complied with Section 14 above, then
an Additional Termination Event shall have occurred with respect to Party A
and Party A shall be the sole Affected Party with respect to such an
Additional Termination Event.
15 Representations:
With respect in Section 3 of the Agreement, each party represents to the
other party (which representations will be deemed to be repeated by each
party on each date on which a transaction is entered into) that:
(i) This Confirmation constitutes a "swap agreement' within the meaning of
Commodity Futures Trading Commission ("CFTC") Regulations (the "CFTC
Regulations") Section 35. 1(b)(l), Section 101 (53)(B) of the U.S.
Bankruptcy Code and the CFTC Policies Statement concerning Swap
Transactions, 54 Fed Reg. 30694 (July 21, 1989) (the "CFTC Swap Policies
Statement"). (ii) It is an "eligible contract participant" as defined in
Section la(12) of the Commodity Exchange Act (7 U.S.C. la), as amended by
the Commodity Futures Modernization Act of 2000.
(iii) it has entered into this Confirmation in conjunction with its line of
business (including financial intermediation services) or the financing of
its business, within the meaning of the CFTC Swap Policies Statement.
16 Payer Tax Representation:
With respect to Section 3(e) of the Agreement, Party A will make the foil
owing representation and Party B will make the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of the
Agreement) to be made by it to the other party under this Confirmation. In
making this representation, it may rely on (I) the accuracy of any
representations made by the other party pursuant to Section 3(f) of the
Agreement, (ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of the Agreement and the accuracy and effectiveness of
any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of the Agreement and (iii) the satisfaction of the agreement of
the other party contained in Section 4(d) of the Agreement, provided that
it shall not be a breach of this representation where reliance is placed on
clause (ii) and the other party does not deliver a form or document under
Section 4(a)(iii) by reason of material prejudice to its legal or
commercial position.
▇-▇-▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇:
With respect to Section 4(a)(i) and 4(a)(ii) of the Agreement, ▇▇▇▇▇ A will
deliver annual audited financial statements prepared in accordance with
generally accepted accounting principles in the country in which the party
is organized promptly after request. Party A will also deliver certified
copies of the resolution(s) of its board of directors or other documents
authorizing the execution and delivery of this Confirmation concurrently
with the execution of this Confirmation. Party A will also deliver an
incumbency certificate or other documents evidencing the authority of the
party entering into this Confirmation or any other document executed in
connection with this Confirmation concurrently with the execution of this
Confirmation or any other documents executed in connection with this
Confirmation.
18 Events of Default:
Sections 5(a)(u), 5(a)(iv), 5(a)(v), 5(a)(vi) of the Agreement shall not
apply to Party B, provided, however, Party B shall have satisfied in full
all its payment obligations under the Agreement and shall at the time have
no future payment obligations, whether absolute or contingent, under the
Agreement to Party A.
B-1-9
Please confirm that the foregoing correctly sets forth the terms and
conditions of our agreement by responding within three (3) Business Days by
returning via telecopier an executed copy of this Confirmation to the attention
of Global Derivative Operations at (fax no.(▇▇▇) ▇▇▇-▇▇▇▇).
Failure to respond within such period shall not affect the validity or
enforceability of this Transaction, and shall be deemed to be an affirmation of
the terms and conditions contained herein, absent manifest error.
Yours Sincerely,
Bank of America, N.A.
Authorized Signatory
Accepted and confirmed as of the date first written:
Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates, Series 2002-3
By: Deutsche Bank National Trust Company, not in its individual capacity but
solely as the Trust Administrator
By:
---------------------------------------
Name:
-----------------------------
Title:
------------------------------------
By:
---------------------------------------
Name:
-----------------------------
Title:
------------------------------------
Our Reference # 37385
B-1-10
SCHEDULE A TO CONFIRMATION
AMORTIZATION SCHEDULE
CALCULATION PERIOD NOTIONAL AMOUNT
25SEP02 25OCT02 486,119,312.65
25OCT02 25NOV02 471,911,500.69
25NOV02 27DEC02 458,038,146.05
27DEC02 27JAN03 444,439,665.81
27JAN03 25FEB03 431,157,523.26
25FEB03 25MAR03 419,232,162.09
25MAR03 25APR03 408,244,544.69
25APR03 27MAY03 397,472,083.81
27MAY03 25JUN03 386,910,037.96
25JUN03 25JUL03 376,576,754.48
25JUL03 26AUG03 366,511,182.41
26AUG03 25SEP03 356,706,445.71
25SEP03 27OCT03 347,155,802.82
27OCT03 25NOV03 337,852,686.18
25NOV03 29DEC03 328,790,697.76
29DEC03 26JAN04 319,963,604.68
26JAN04 25FEB04 311,365,334.93
25FEB04 25MAR04 302,989,973.27
25MAR04 26APR04 294,831,757.12
26APR04 25MAY04 286,885,072.67
25MAY04 25JUN04 279,144,451.04
25JUN04 26JUL04 271,604,564.50
26J1.TL04 25AUG04 264,260,224.15
B-1-11
25AUG04 27SEP04 257,106,372.48
27SEP04 25OCT04 250,138,083.82
25OCT04 26NOV04 243,350,559.69
26NOV04 29DEC04 236,739,125.49
29DEC04 25JAN05 230,299,227.30
25JAN05 25FEB05 224,026,428.78
▇-▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF GROUP II CAP AGREEMENT
B-2-1
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel ▇▇▇-▇▇▇-▇▇▇▇
Fax ▇▇▇-▇▇▇-▇▇▇▇
Bank of America N.A.
TO: Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3
ATTN: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
TEL: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
FROM: Bank of America, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ / ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Date: 02AUG02
Our Reference No. 37384
Internal Tracking Nos. 417143 417148
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between Bank of America, N.A and Long Beach
Mortgage Loan Trust 2002-3, Asset-Backed Certificates, Series 2002-3 (each a
`party" and together "the parties") on the Trade Date specified below (the
"Transaction").
This letter agreement constitutes a "Confirmation" and the definitions and
provisions contained in the 2000 ISDA Definitions, as published by the
International Swaps and Derivatives Association, Inc. (the "Definitions') are
incorporated into this Confirmation. In the event of any inconsistency between
the Definitions and this Confirmation, this Confirmation will govern.
1 This Confirmation evidences a complete binding agreement between the parties
as to the terms of the Transaction to which this Confirmation relates. In
addition, the patties agree that for the purposes of this Transaction, this
Confirmation will supplement, form a part of, and be subject to an agreement in
the form of the 1992 ISDA Master Agreement (Multicurrency-Cross Border) as if
the patties had executed an agreement (the "Agreement") in such form (but
without any Schedule except for the election of (i) the laws of the State of New
York (without reference to choice of law doctrine) as the governing law and (ii)
USD as the Termination Currency) on the Trade Date of the Transaction, In the
event of any inconsistency between the provisions of that agreement and this
Confirmation, this Confirmation will prevail for the purpose of this
Transaction.
Each party represents to the other party and will be deemed to represent to the
other party on the date on which it enters into a Transaction that (absent a
written agreement between the parties that expressly imposes affirmative
obligations to the contrary for that Transaction).
B-2-2
(i) Non-Reliance. It is acting for its own account, and it has made its
own independent decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisors as it has deemed necessary, except as specifically set
forth in paragraph 8 of this Confirmation as to Party B. It is not relying on
any communication (written or oral) of the other party as investment advice or
as a recommendation to enter into that Transaction; it being understood that
information and explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a recommendation to
enter into that Transaction. Further, such party has not received from the other
pasty any assurance or guarantee as to the expected results of that Transaction.
(ii) Evaluation and Understanding. It is capable of evaluation and
understanding (on its own behalf or Through independent professional advice),
and understands and accepts, the terms, conditions and risks of that
Transaction. It is also capable of assuming, and assumes, the financial and
other risks of that Transaction.
(iii) Status of Parties. The other party is not acting as an agent,
fiduciary or advisor for it in respect of that Transaction.
In this Confirmation "Party A" means Bank of America, NA and `Party B'
means Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3.
2 The particular Transaction to which this Confirmation relates is an Interest
Rate Corridor and the terms of the Transaction to which this Confirmation
relates are as follows:
Notional Amount: USD 486,9992,055.15
Trade Date: 29JUL02
Effective Date: 25SEP02
Termination Date: 25FEB05, subject to adjustment in accordance with the
Modified Following Business Day Convention
Amortization: APPLICABLE (See Schedule A attached hereto)
Fixed Amounts:
Fixed Rate Payer: Party B
Fixed Rate Payer
Payment Dates: 02AUG02, subject to adjustment in accordance with the
Modified Following Business Day Convention.
Fixed Amount: USD 450,000.00
Floating Amounts I:
Floating Rate
Payer: Party A
Cap Rate: 6.50000%
B-2-3
Floating Rate Payer
Payment Dates: The 25th of each Month, commencing 25OCT02 and ending
25FEB05, subject to adjustment in accordance with the
Modified Following Business Day Convention.
Floating Rate for the
Initial Calculation Period: TO BE SET
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 Month
Spread: None
Floating Rate Day Count
Fraction: Actual/360
Reset Dates: The first day of each Calculation Period
Floating Amounts II:
Floating Rate
Payer: Party B
Cap Rate: 8.25000%
Floating Rate Payer
Payment Dates: The 25th of each Month, commencing 25OCT02 and ending
25FEB05, subject to adjustment in accordance with the
Following Business Day Convention.
Floating Rate for the
Initial Calculation Period: TO BE SET
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 Month
Spread: None
Floating Rate Day
Count Fraction: Actual/36O
Reset Dates: The first day of each Calculation Period
Business Days: New York, London
Calculation Agent: Party A
B-2-4
3 Recording of Conversations:
Each party to this Transaction acknowledges and agrees to the tape
recording of conversations between the parties to this Transaction
whether by one or other or both of the parties or their agents, and
that any such tape recordings may be submitted in evidence in any
Proceedings relating to the Agreement and/or this Transaction.
4 Account Details:
Payments to Bank of America, N.A.:
USD
NAME: BANK OF AMERICA NA
CITY: NEW YORK
ABA#: ▇▇▇▇▇▇▇▇▇
ATTN: BOFAUS3N
NAME: BANK OF AMERICA NA
CITY: CHARLOTTE
ACCT: 6550219386
ATTN: RATE DERIVATIVE SETTLEMENTS
ATTN: ▇▇▇▇▇▇▇▇▇▇▇
Payments to Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates,
Series 2002-3:
USD
Bankers Trust Company
ABA# ▇▇▇▇▇▇▇▇▇
LA Asset Backed Account
Acct# ▇▇▇▇▇▇▇▇
Ref: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇-▇, cap payment
5 Offices:
The Office of Party A for this
Transaction is: Charlotte, NC
Please send reset notices to fax no. (▇▇▇-▇▇▇-▇▇▇▇)
The Office of Party B for this
Transaction is: Santa Ana, California, USA
B-2-5
6 Governing Law:
The Laws of the State of New York (without reference to the conflict of
laws provisions thereof other Than Section 5.1401 of the New York General
Obligations Law.)
7 Additional Provisions:
Notwithstanding the terms of Sections 5 and 6 of the Agreement, if Party B
has satisfied its payment obligations under Section 2(a)(i) of the
Agreement, then unless Party A is required pursuant to appropriate
proceedings to return to Party B or otherwise returns to Party B upon
demand of Party B any portion of such payment, (a) the occurrence of an
event described in Section 5(a) of the Agreement with respect to Party B
shall not constitute an Event of Default or Potential Event of Default with
respect to Party B or Asset-Backed Certificates, Series 2002-3 as the
Defaulting Party and (b) Party A shall be entitled to designate an Early
Termination Event pursuant to Section 6 of the Agreement only as a result
of a Termination Event set forth in either Section 5(b)(i) or Section
5(b)(ii) of the Agreement with respect to Party A as the Affected Party or
Section S(b)(iii) of the Agreement with respect to Party A as the Burdened
Party, In addition, the grace period set forth in Section 5(a)(i) of the
Agreement shall be one Business Day rather than three Business Days.
8 Trust Administrator Capacity:
It is expressly understood and agreed by the parties hereto that insofar as
this Confirmation is executed by the Trust Administrator defined herein as
Deutsche Bank National Trust Company ("Deutsche Bank"), not in its
individual capacity but solely as Trust Administrator on behalf of Long
Beach Mortgage Loan Trust 2002-3 under the Pooling and Servicing Agreement,
dated August 1, 2002 among Long Beach Securities Corp. as depositor, Long
Beach Mortgage Company as seller, ▇▇▇▇▇▇ ▇▇▇, Wachovia Bank National
Association as trustee and Deutsche Bank as trust administrator. (i) this
Confirmation is executed and delivered by Deutsche Bank not in its
individual capacity but solely as Trust Administrator under the Pooling and
Servicing Agreement referred to in this Confirmation in the exercise of the
powers and authority conferred and vested in it thereunder and (ii) under
no circumstances shall Deutsche Bank in its individual capacity be
personally liable for the payment of any indebtedness or expenses or be
personally liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken under this
Confirmation.
B-2-6
9 Transfer, Amendment and Assignment:
No transfer, amendment, waiver, supplement, assignment or other
modification of this Transaction shall be permitted by either party unless
each of ▇▇▇▇▇'▇ Investor Services, Inc. and Standard & Poors, a Division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. has been provided notice of the same and
confirms in writing (including by facsimile transmission) within five
Business Days after such notice is given that it will not downgrade,
withdraw, qualify or otherwise modify its then-current rating of the
certificates issued pursuant to the Pooling and Servicing Agreement
referenced above (the "Certificates ").
10 Proceedings:
Party A shall not institute against or cause any other person to institute
against, or join any other person in instituting against Asset-Backed
Certificates, Series 2002-3 any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any
federal or state bankruptcy, dissolution or similar law for a period of one
year and one day following (i) payment in full of the Notes and (ii)
satisfaction and discharge of the Pooling and Servicing Agreement.
11 Set-off:
The provisions for Set-offset forth in Section 6(e) of the Agreement shall
not apply for purposes of this Transaction.
12 Section 1(c):
For purposes of section 1(c) of the Agreement, this Transaction shall be
the sole Transaction under the Agreement.
13 Rating Agency Downgrade:
If a Ratings Event (as defined below) occurs with respect to Party A, then
Party A shall, at its own expense, (i) assign this Transactions hereunder
to a third party within thirty (30) days of such Ratings Event that meets
or exceeds, or as to which any applicable credit support provider meets or
exceeds, the Approved Ratings Thresholds (as defined below) on terms
substantially similar to this Confirmation or (ii) deliver collateral, in
an amount equal to the Exposure (as defined below), and an executed ISDA
Credit Support Annex within thirty (30) days of such Ratings Event and
subject to S&P's and Moody's written confirmation that delivery of such
collateral in the context of such downgrade will not result in a
withdrawal, qualification or downgrade of the then current ratings assigned
to the Certificates. For avoidance of doubt, a downgrade of the rating on
the Certificates could occur in the event that Party A does not post
sufficient collateral. For purposes of this Transaction, a "Ratings Event"
shall occur with respect to Party A, if short-term certificates of deposit
cease to be rated at least "A-1" by S&P, and at least "P-1" by Moody's
(including in connection with a merger, consolidation or other similar
transaction by Party A) such ratings being referred to herein as the
"Approved Ratings Thresholds," (unless, within 30 days after such
withdrawal or downgrade, each of Moody's and S&P has reconfirmed the rating
of the Certificates, which was in effect immediately prior to such
withdrawal or downgrade) Only with respect to such Ratings Event,
"Exposure" shall mean the greater of the following: (i) the ▇▇▇▇-to-market
value of the Transaction as of the Valuation Date (as such term is defined
in the ISDA Credit Support Annex); (ii) the amount of the next payment due
under the Transaction and (iii) one percent of the Notional Amount for the
respective Calculation Period.
B-2-7
14 Additional Termination Events:
Additional Termination Events will apply. If a Ratings Event has occurred
and Party A has not, within 30 days, complied with Section 14 above, then
an Additional Termination Event shall have occurred with respect to Party A
and Party A shall be the sole Affected Party with respect to such an
Additional Termination Event.
15 Representations:
With respect in Section 3 of the Agreement, each party represents to the
other party (which representations will be deemed to be repeated by each
party on each date on which a transaction is entered into) that:
(i) This Confirmation constitutes a "swap agreement' within the meaning of
Commodity Futures Trading Commission ("CFTC") Regulations (the "CFTC
Regulations") Section 35. 1(b)(l), Section 101 (53)(B) of the U.S.
Bankruptcy Code and the CFTC Policies Statement concerning Swap
Transactions, 54 Fed Reg. 30694 (July 21, 1989) (the "CFTC Swap Policies
Statement"). (ii) It is an "eligible contract participant" as defined in
Section la(12) of the Commodity Exchange Act (7 U.S.C. la), as amended by
the Commodity Futures Modernization Act of 2000.
(iii) it has entered into this Confirmation in conjunction with its line of
business (including financial intermediation services) or the financing of
its business, within the meaning of the CFTC Swap Policies Statement.
16 Payer Tax Representation:
With respect to Section 3(e) of the Agreement, Party A will make the foil
owing representation and Party B will make the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of the
Agreement) to be made by it to the other party under this Confirmation. In
making this representation, it may rely on (I) the accuracy of any
representations made by the other party pursuant to Section 3(f) of the
Agreement, (ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of the Agreement and the accuracy and effectiveness of
any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of the Agreement and (iii) the satisfaction of the agreement of
the other party contained in Section 4(d) of the Agreement, provided that
it shall not be a breach of this representation where reliance is placed on
clause (ii) and the other party does not deliver a form or document under
Section 4(a)(iii) by reason of material prejudice to its legal or
commercial position.
▇-▇-▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇:
With respect to Section 4(a)(i) and 4(a)(ii) of the Agreement, ▇▇▇▇▇ A will
deliver annual audited financial statements prepared in accordance with
generally accepted accounting principles in the country in which the party
is organized promptly after request. Party A will also deliver certified
copies of the resolution(s) of its board of directors or other documents
authorizing the execution and delivery of this Confirmation concurrently
with the execution of this Confirmation. Party A will also deliver an
incumbency certificate or other documents evidencing the authority of the
party entering into this Confirmation or any other document executed in
connection with this Confirmation concurrently with the execution of this
Confirmation or any other documents executed in connection with this
Confirmation.
18 Events of Default:
Sections 5(a)(u), 5(a)(iv), 5(a)(v), 5(a)(vi) of the Agreement shall
not apply to Party B, provided, however, Party B shall have satisfied
in full all its payment obligations under the Agreement and shall at
the time have no future payment obligations, whether absolute or
contingent, under the Agreement to Party A.
B-2-9
Please confirm that the foregoing correctly sets forth the terms and
conditions of our agreement by responding within three (3) Business Days by
returning via telecopier an executed copy of this Confirmation to the attention
of Global Derivative Operations at (fax no.(▇▇▇) ▇▇▇-▇▇▇▇).
Failure to respond within such period shall not affect the validity or
enforceability of this Transaction, and shall be deemed to be an affirmation of
the terms and conditions contained herein, absent manifest error.
Yours Sincerely,
Bank of America, N.A.
Authorized Signatory
Accepted and confirmed as of the date first written:
Long Beach Mortgage Loan Trust 2002-3, Asset-Backed Certificates, Series 2002-3
By: Deutsche Bank National Trust Company, not in its individual capacity but
solely as the Trust Administrator
By:
---------------------------------------
Name:
-----------------------------
Title:
------------------------------------
By:
---------------------------------------
Name:
-----------------------------
Title:
------------------------------------
Our Reference # 37384
B-2-10
SCHEDULE A TO CONFIRMATION
AMORTIZATION SCHEDULE
CALCULATION PERIOD NOTIONAL AMOUNT
25SEP02 25OCT02 486,992,055.15
25OCT02 25NOV02 473,509,236.41
25NOV02 27DEC02 460,283,321.20
27DEC02 27JAN03 447,251,283.93
27JAN03 25FEB03 434,461,666.26
25FEB03 25MAR03 421,657,022.84
25MAR03 25APR03 410,841,120.19
25APR03 27MAY03 400,179,296.07
27MAY03 25JUN03 389,669,122.46
25JUN03 25JUL03 379,344,565.03
25JUL03 26AUG03 369,285,420.58
26AUG03 25SEP03 359,484,880.12
25SEP03 27OCT03 349,936,309.22
27OCT03 25NOV03 340,633,243.56
25NOV03 29DEC03 331,569,384.58
29DEC03 26JAN04 322,738,595.18
26JAN04 25FEB04 314,134,895.66
25FEB04 25MAR04 305,752,459.60
25MAR04 26APR04 297,585,609.99
26APR04 25MAY04 289,628,815.36
25MAY04 25JUN04 281,876,686.07
25JUN04 26JUL04 274,323,972.81
26J1.TL04 25AUG04 266,965,559.89
B-2-11
25AUG04 27SEP04 259,796,458.15
27SEP04 25OCT04 252,811,809.81
25OCT04 26NOV04 246,006,881.62
26NOV04 29DEC04 239,377,061.71
29DEC04 25JAN05 232,917,856.42
25JAN05 25FEB05 226,624,887.34
B-2-12
EXHIBIT C
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT
This is a Mortgage Loan Purchase Agreement (the "Agreement"), dated
July 30, 2002, between Long Beach Securities Corp., a Delaware corporation (the
"Purchaser") and Long Beach Mortgage Company, a Delaware corporation (the
"Seller").
Preliminary Statement
The Seller intends to sell certain mortgage loans to the Purchaser on
the terms and subject to the conditions set forth in this Agreement. The
Purchaser intends to deposit the mortgage loans into a mortgage pool
constituting the trust fund. The trust fund will issue fixed rate and adjustable
rate asset backed certificates designated as Long Beach Mortgage Loan Trust
2002-3 Asset-Backed Certificates, Series 2002-3 (the "Certificates"). The
Certificates will consist of thirteen classes of certificates. The Certificates
will be issued pursuant to a Pooling and Servicing Agreement, dated as of August
1, 2002 (the "Pooling and Servicing Agreement"), among the Purchaser, as
depositor, Wachovia Bank, National Association, as trustee (the "Trustee"),
Deutsche Bank National Trust Company, as trust administrator (the "Trust
Administrator"), ▇▇▇▇▇▇ Mae, as guarantor with respect to the Class I-A
Certificates and the Class I-S1 Certificates (the "Guarantor"), and the Seller,
as master servicer (in such capacity, the "Master Servicer"). Pursuant to a
Commitment Letter, dated as of July 3, 2002, among the Purchaser, the Seller,
Greenwich Capital Markets, Inc. and the Guarantor, the Class I-A Certificates
and the Class I-S1 Certificates will be exchanged for Class A1 and Class S1
Guaranteed Grantor Trust Pass-Through Certificates to be issued by the Guarantor
(the "Guarantor Certificates"). Capitalized terms used but not defined herein
shall have the meanings set forth in the Pooling and Servicing Agreement.
The parties hereto agree as follows:
SECTION 1. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase, on or
before August 2, 2002 (the "Closing Date"), certain fixed-rate and
adjustable-rate conventional residential mortgage loans (the "Mortgage Loans").
SECTION 2. Mortgage Loan Schedule.
The Purchaser and the Seller have agreed upon which of the mortgage
loans owned by the Seller are to be purchased by the Purchaser pursuant to this
Agreement on the Closing Date and the Seller will prepare or cause to be
prepared on or prior to the Closing Date a final schedule (the "Closing
Schedule") that shall describe such Mortgage Loans and set forth all of the
Mortgage Loans to be purchased under this Agreement. The Closing Schedule will
conform to the requirements set forth in this Agreement and to the definition of
"Mortgage Loan Schedule" under the Pooling and Servicing Agreement. The Closing
C-1
Schedule shall be the Mortgage Loan Schedule under the Pooling and Servicing
Agreement.
SECTION 3. Consideration.
In consideration for the Mortgage Loans to be purchased hereunder, the
Purchaser shall on the Closing Date, as described in Section 8 hereof, (i) pay
to or upon the order of the Seller in immediately available funds an amount (the
"Purchase Price") equal to the net cash sale proceeds of the Class II-A
Certificates, the Class II-S1 Certificates and the Guarantor Certificates and
(ii) deliver to Long Beach Asset Holdings Corp., upon the order of the Seller,
the Class C Certificates, the Class P Certificates, the Class S2 Certificates,
the Class R Certificates, the Class R-CX Certificates and the Class R-PX
Certificates (the "Long Beach Certificates").
The Purchaser or any assignee, transferee or designee of the Purchaser
shall be entitled to (i) all scheduled payments of principal due after August 1,
2002 (the "Cut-off Date"), (ii) all unscheduled collections in respect of the
Mortgage Loans received after July 1, 2002 (other than the portion of such
collections due on or prior to the Cut-off Date), (iii) all other payments of
principal due and collected after the Cut-off Date, and (iv) all payments of
interest on the Mortgage Loans due after the Cut-off Date. All scheduled
payments of principal and interest due on or before the Cut-off Date and
collected after the Cut-off Date shall belong to the Seller.
Pursuant to the Pooling and Servicing Agreement, the Purchaser will
transfer, assign, set over and otherwise convey to the Trustee without recourse
for the benefit of the Certificateholders, all the right, title and interest of
the Purchaser in and to the Mortgage Loans, together with its rights under this
Agreement (other than Section 17 hereof).
SECTION 4. Transfer of the Mortgage Loans.
(a) Possession of Mortgage Files. The Seller does hereby sell,
transfer, assign, set over and convey to the Purchaser, without recourse, but
subject to the terms of this Agreement, all of its right, title and interest in,
to and under the Mortgage Loans. The contents of each Mortgage File related to a
Mortgage Loan not delivered to the Purchaser or to any assignee, transferee or
designee of the Purchaser on or prior to the Closing Date are and shall be held
in trust by the Seller for the benefit of the Purchaser or any assignee,
transferee or designee of the Purchaser and promptly transferred to the Trustee.
Upon the sale of the Mortgage Loans, the ownership of each related Mortgage
Note, the related Mortgage and the other contents of the related Mortgage File
shall be vested in the Purchaser and the ownership of all records and documents
with respect to the related Mortgage Loan prepared by or that come into the
possession of the Seller on or after the Closing Date shall immediately vest in
the Purchaser and shall be delivered promptly to the Purchaser or as otherwise
directed by the Purchaser.
(b) Delivery of Mortgage Loan Documents. The Seller will, on or prior
to the Closing Date deliver or cause to be delivered to the Purchaser, the Trust
Administrator or their designee each of the following documents for each
Mortgage Loan:
C-2
(i) the original Mortgage Note, endorsed in blank or in the
following form: "Pay to the order of Deutsche Bank National Trust Company, as
Trust Administrator for the benefit of Wachovia Bank, National Association, 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;
(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, (or, in the
case of any Washington Mutual Mortgage Loan, a copy thereof) together with all
endorsements or riders issued with or subsequent to the issuance of such policy,
insuring the priority of the Mortgage as a first lien or second lien on the
Mortgaged Property represented therein as a fee interest vested in the
Mortgagor, or in the event such title policy is unavailable, a written
commitment or uniform binder or preliminary report of the title issued by the
title insurance or escrow company.
The Seller shall promptly (and in no event later than thirty (30)
Business Days, subject to extension upon a mutual agreement between the Seller
and the Purchaser) following the later of the Closing Date and the date of
receipt by the Seller of the recording information for a Mortgage, submit or
cause to be submitted for recording, at no expense to the Purchaser, in the
appropriate public office for real property records, each Assignment referred to
in (iii) and (iv) above and shall execute each original Assignment referred to
in clause (iii) above in the following form: "Deutsche Bank National Trust
Company, as Trust Administrator for the benefit of Wachovia Bank, National
Association, as Trustee under the applicable agreement, without recourse." In
the event that any such Assignment is lost or returned unrecorded because of a
defect therein, the Seller shall promptly prepare or cause to be prepared a
substitute Assignment or cure or cause to be cured such defect, as the case may
be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, the Assignments referred to in (iii) and (iv)
above shall not be required to be completed and submitted for recording with
respect to any Mortgage Loan if each Rating Agency shall have determined that no
recordation is required for such Rating Agency to assign the initial ratings to
Class II-A Certificates, the Class II-S1 Certificates (without regard to the
Certificate Insurance Policy) and the NIM Notes and the Certificate Insurer does
C-3
not require recordation in order for the Certificate Insurer to issue the
Certificate Insurance Policy; provided, however, that each Assignment referred
to in (iii) and (iv) above shall be submitted for recording by the Seller, in
the manner described above, at no expense to the Trust Fund, the Trust
Administrator or the Trustee, upon the earliest to occur of: (i) reasonable
direction by Holders of Certificates entitled to at least 25% of the Voting
Rights, (ii) the occurrence of a Master Servicer Event of Default, (iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Seller,
(iv) the occurrence of a servicing transfer as described in Section 7.02 of the
Pooling and Servicing Agreement and (v) if the Seller is not the Master Servicer
and with respect to any one Assignment, the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgagor under the related Mortgage.
If any document referred to in Section 4(b)(ii), Section 4(b)(iii),
Section 4(b)(iv), or Section 4(b)(v) above (collectively, the "Recording
Documents") has as of the Closing Date been submitted for recording but either
(x) has not been returned from the applicable public recording office or (y) has
been lost or such public recording office has retained the original of such
document, the obligations of the Seller to deliver such Recording Documents
shall be deemed to be satisfied upon (1) delivery to the Purchaser, Trust
Administrator or their designee of a copy of each such Recording Document
certified by the Seller in the case of (x) above or the applicable public
recording office in the case of (y) above to be a true and complete copy of the
original that was submitted for recording and (2) if such copy is certified by
the Seller, delivery to the Purchaser, Trust Administrator or their designee
upon receipt thereof, and in any event no later than one year after the Closing
Date (except as provided below), of either the original or a copy of such
document certified by the applicable public recording office to be a true and
complete copy of the original. In instances where, due to a delay on the part of
the applicable recording office where any such Recording Documents have been
delivered for recordation, the Recording Documents cannot be delivered to the
Purchaser, Trust Administrator or their designee within one year after the
Closing Date, the Seller shall deliver to the Purchaser, Trust Administrator or
their designee within such time period an Officer's Certificate stating the date
by which the Seller expects to receive such Recording Documents from the
applicable recording office. If the Recording Documents have still not been
received by the Seller and delivered to the Purchaser, Trust Administrator or
their designee by such date, the Seller shall deliver to the Purchaser, Trust
Administrator or their designee by such date an additional Officer's Certificate
stating a revised date by which Seller expects to receive the applicable
Recording Documents. This procedure shall be repeated until the Recording
Documents have been received by the Seller and delivered to the Purchaser, Trust
Administrator or their designee. If the original or copy of the lender's title
insurance policy was not delivered pursuant to Section 4(b)(vi) above, the
Seller shall deliver or cause to be delivered to the Purchaser, Trust
Administrator or their designee promptly after receipt thereof, and in any event
within 120 days after the Closing Date such title insurance policy. The Seller
shall deliver or cause to be delivered to the Purchaser, Trust Administrator or
their designee promptly upon receipt thereof any other original documents
constituting a part of a Mortgage File received with respect to any Mortgage
Loan, including, but not limited to, any original documents evidencing an
assumption or modification of any Mortgage Loan.
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Each original document relating to a Mortgage Loan which is not
delivered to the Purchaser, Trust Administrator or their designee, if held by
the Seller, shall be so held for the benefit of the Purchaser or its assignee,
transferee or designee. In the event that any such original document is required
pursuant to the terms of this Section to be a part of a Mortgage File, such
document shall be delivered promptly to the Purchaser, Trust Administrator or
their designee. Any such original document that is not required pursuant to the
terms of this Section to be a part of a Mortgage File shall be held by the
Seller in its capacity as Master Servicer.
(c) Acceptance of Mortgage Loans. The documents delivered pursuant to
Section 4(b) hereof shall be reviewed by the Purchaser or any assignee,
transferee or designee of the Purchaser at any time before, on and after the
Closing Date (and with respect to each document permitted to be delivered after
the Closing Date within seven days of its delivery) to ascertain that all
required documents have been executed and received and that such documents
relate to the Mortgage Loans identified on the Mortgage Loan Schedule.
(d) Transfer of Interest in Agreements. The Purchaser has the right to
assign its interest under this Agreement (other than Section 17 hereof), in
whole or in part, to the Trustee, as may be required to effect the purposes of
the Pooling and Servicing Agreement, without the consent of the Seller, and the
Trustee shall succeed to the rights and obligations hereunder of the Purchaser.
Any expense reasonably incurred by or on behalf of the Purchaser, the Trust
Administrator, the Trustee, or the Certificate Insurer, if any, in connection
with enforcing any obligations of the Seller under this Agreement will be
promptly reimbursed by the Seller.
(e) Examination of Mortgage Files. Prior to the Closing Date the Seller
shall either (i) deliver in escrow to the Purchaser or to any assignee,
transferee or designee of the Purchaser, for examination, the Mortgage File
pertaining to each Mortgage Loan, or (ii) make such Mortgage Files available to
the Purchaser or to any assignee, transferee or designee of the Purchaser for
examination. Such examination may be made by the Purchaser, the Trust
Administrator or the Trustee, and their respective designees, upon reasonable
notice to the Seller during normal business hours at any time before or after
the Closing Date. If any such person makes such examination prior to the Closing
Date or and identifies any Mortgage Loans with respect to which the Seller's
representations and warranties contained in this Agreement are not correct, such
Mortgage Loans shall be deleted from the Mortgage Loan Schedule. The Purchaser
may, at its option and without notice to the Seller, purchase all or part of the
Mortgage Loans without conducting any partial or complete examination. The fact
that the Purchaser or any person has conducted or has failed to conduct any
partial or complete examination of the related Mortgage Files shall not affect
the rights of the Purchaser or any assignee, transferee or designee of the
Purchaser to demand repurchase or other relief as provided herein or under the
Pooling and Servicing Agreement.
SECTION 5. Representations, Warranties and Covenants of the Seller.
The Seller hereby represents and warrants and covenants to the
Purchaser, as of the date hereof and as of the Closing Date:
(i) The Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and is duly
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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;
(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
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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 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;
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(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 with respect to each Mortgage Loan:
(i) The information set forth on the Mortgage Loan Schedule with
respect to each Mortgage Loan is complete, true and correct in all material
respects as of the Cut-off Date, unless another date is set forth on the
Mortgage Loan Schedule;
(ii) [reserved];
(iii) Each Mortgage is a valid and enforceable first lien or
second lien on the Mortgaged Property, including all improvements thereon,
subject only to (a) the lien of non-delinquent current real property taxes and
assessments, (b) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording of such
Mortgage, such exceptions appearing of record being acceptable to mortgage
lending institutions generally or specifically reflected in the appraisal made
in connection with the origination of the related Mortgage Loan and which do not
materially interfere with the benefits of the security intended to be provided
by such Mortgage, (c) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the security
intended to be provided by such Mortgage and (d) in the case of a second lien,
only to a first lien on such Mortgaged Property;
(iv) Immediately prior to the assignment of the Mortgage Loans to
the Purchaser, the Seller had good title to, and was the sole legal and
beneficial owner of, each Mortgage Loan, free and clear of any pledge, lien,
encumbrance or security interest and has full right and authority, subject to no
interest or participation of, or agreement with, any other party to sell and
assign the same. The form of endorsement of each Mortgage Note satisfied the
requirement, if any, of endorsement in order to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and to
that Mortgage Note; and each Assignment to be delivered hereunder is in
recordable form and is sufficient to effect the assignment of and to transfer to
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the assignee thereunder the benefits of the assignor, as mortgagee or assignee
thereof, under each Mortgage to which that Assignment relates;
(v) To the best of the Seller's knowledge, there is no delinquent
tax or assessment lien against any Mortgaged Property;
(vi) There is no valid offset, defense or counterclaim to any
Mortgage Note (including any obligation of the Mortgagor to pay the unpaid
principal of or interest on such Mortgage Note) or the Mortgage, including but
not limited to claims, offsets, rights of set-off or defenses of the type
asserted in ▇▇▇▇▇▇▇▇ v. Long Beach Mortgage Company (176 F.Supp.2d 714), 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;
(vii) To the best of the Seller's knowledge, there are no
mechanics' liens or claims for work, labor or material affecting any Mortgaged
Property which are or may be a lien prior to, or equal with, the lien of the
related Mortgage, except those which are insured against by the title insurance
policy referred to in (xi) below;
(viii) To the best of the Seller's knowledge, each Mortgaged
Property is free of material damage and is at least in average repair;
(ix) Each Mortgage Loan at origination complied in all material
respects with applicable local, state and federal laws, including, without
limitation, usury, equal credit opportunity, real estate settlement procedures,
truth-in-lending and disclosure laws, and consummation of the transactions
contemplated hereby, including without limitation the receipt of interest does
not involve the violation of any such laws;
(x) Neither the Seller nor any prior holder of any Mortgage has
modified the Mortgage in any material respect, satisfied, canceled or
subordinated such Mortgage in whole or in part; released the related Mortgaged
Property in whole or in part from the lien of such Mortgage; or executed any
instrument of release, cancellation, modification or satisfaction with respect
thereto (except that a Mortgage Loan may have been modified by a written
instrument signed by the Seller or a prior holder of the Mortgage Loan which has
been recorded, if necessary, to protect the interests of the Seller and the
Purchaser and which has been delivered to the Purchaser or any assignee,
transferee or designee of the Purchaser as part of the Mortgage File, and the
terms of which are reflected in the Mortgage Loan Schedule);
(xi) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if applicable, and,
with respect to each Adjustable Rate Mortgage Loan, an adjustable rate mortgage
endorsement in an amount at least equal to the balance of the Mortgage Loan as
of the Cut-off Date or a commitment (binder) to issue the same was effective on
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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 title insurer qualified to do
business in the jurisdiction where the Mortgaged Property is located and
acceptable to ▇▇▇▇▇▇ ▇▇▇ and in a form acceptable to ▇▇▇▇▇▇ Mae on the date of
origination of such Mortgage Loan, which policy insures the Seller and successor
owners of indebtedness secured by the insured Mortgage, as to the first or
second, as the case may be, priority lien of the Mortgage; to the best of the
Seller's knowledge, no claims have been made under such mortgage title insurance
policy and no prior holder of the related Mortgage, including the Seller, has
done, by act or omission, anything which would impair the coverage of such
mortgage title insurance policy;
(xii) Each Mortgage Loan was originated by, or generated on
behalf of, the Seller, or originated by a savings and loan association, savings
bank, commercial bank, credit union, insurance company or similar institution
which is supervised and examined by a federal or state authority, or by a
mortgagee approved by the Secretary of Housing and Urban Development pursuant to
Sections 203 and 211 of the National Housing Act;
(xiii) With respect to each Adjustable Rate Mortgage Loan, on
each Adjustment Date, the Mortgage Rate will be adjusted to equal the Index plus
the Gross Margin, rounded to the nearest 0.125%, subject to the Periodic Rate
Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate. The related
Mortgage Note is payable on the first day of each month in self-amortizing
monthly installments of principal and interest, with interest payable in
arrears, and requires a Monthly Payment which is sufficient to fully amortize
the outstanding principal balance of the Mortgage Loan over its remaining term
and to pay interest at the applicable Mortgage Rate. No Mortgage Loan is subject
to negative amortization. All rate adjustments have been performed in accordance
with the terms of the related Mortgage Note or subsequent modifications, if any;
(xiv) To the best of the Seller's knowledge, all of the
improvements which were included for the purpose of determining the Value of the
Mortgaged Property lie wholly within the boundaries and building restriction
lines of such property, and no improvements on adjoining properties encroach
upon the Mortgaged Property;
(xv) All inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of the Mortgaged Property
and, with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy, have been made or obtained from the
appropriate authorities and to the best of the Seller's knowledge, the Mortgaged
Property is lawfully occupied under applicable law;
(xvi) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) in compliance with any
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and all applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located;
(xvii) The Mortgage Note and the related Mortgage are genuine,
and each is the legal, valid and binding obligation of the Mortgagor enforceable
against the Mortgagor by the mortgagee or its representative in accordance with
its terms, except only as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by law. To the best of the
Seller's knowledge, all parties to the Mortgage Note and the Mortgage had full
legal capacity to execute all Mortgage Loan documents and to convey the estate
purported to be conveyed by the Mortgage and each Mortgage Note and Mortgage
have been duly and validly executed by such parties;
(xviii) The proceeds of each Mortgage Loan have been fully
disbursed, there is no requirement for future advances thereunder and any and
all requirements as to completion of any on-site or off-site improvements and as
to disbursements of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making, closing or recording the Mortgage
Loans were paid;
(xix) The related Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof adequate
for the realization against the Mortgaged Property of the benefits of the
security, including, (i) in the case of a Mortgage designated as a deed of
trust, by trustee's sale, and (ii) otherwise by judicial foreclosure. There is
no homestead or other exemption available to the Mortgagor which would interfere
with the right to sell the Mortgaged Property at a trustee's sale or the right
to foreclose the Mortgage;
(xx) With respect to each Mortgage constituting a deed of trust,
a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(xxi) There exist no deficiencies with respect to escrow deposits
and payments, if such are required, for which customary arrangements for
repayment thereof have not been made, and no escrow deposits or payments of
other charges or payments due the Seller have been capitalized under the
Mortgage or the related Mortgage Note;
(xxii) The origination, underwriting and collection practices
used by the Seller with respect to each Mortgage Loan have been in all respects
legal, proper, prudent and customary in the subprime mortgage servicing
business. Each Mortgage Loan is currently being serviced by Washington Mutual
Bank, FA;
(xxiii) There is no pledged account or other security other than
real estate securing the Mortgagor's obligations;
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(xxiv) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature;
(xxv) None of the Group I Mortgage Loans provide for primary
mortgage insurance;
(xxvi) The improvements upon each Mortgaged Property are covered
by a valid and existing hazard insurance policy with a generally acceptable
carrier that provides for fire extended coverage and coverage of such other
hazards as are customarily covered by hazard insurance policies with extended
coverage in the area where the Mortgaged Property is located representing
coverage not less than the lesser of the outstanding principal balance of the
related Mortgage Loan or the minimum amount required to compensate for damage or
loss on a replacement cost basis. All individual insurance policies and flood
policies referred to in this clause (xxvi) and in clause (xxvii) below contain a
standard mortgagee clause naming the Seller or the original mortgagee, and its
successors in interest, as mortgagee, and the Seller has received no notice that
any premiums due and payable thereon have not been paid; the Mortgage obligates
the Mortgagor thereunder to maintain all such insurance, including flood
insurance, at the Mortgagor's cost and expense, and upon the Mortgagor's failure
to do so, authorizes the holder of the Mortgage to obtain and maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement therefor
from the Mortgagor;
(xxvii) If the Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as subject to
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance Administration is
in effect with respect to such Mortgaged Property with a generally acceptable
carrier in an amount representing coverage not less than the least of (A) the
original outstanding principal balance of the Mortgage Loan, (B) the minimum
amount required to compensate for damage or loss on a replacement cost basis or
(C) the maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973;
(xxviii) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the related Mortgage Note; and
neither the Seller nor any other entity involved in originating or servicing the
Mortgage Loan has waived any default, breach, violation or event of
acceleration;
(xxix) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and dwelling units
in planned unit developments, which, to the best of the Seller's knowledge, does
not include cooperatives and does not constitute property other than real
property under state law. Each manufactured housing constituting any portion of
any Mortgaged Property is a "single family residence" as defined in Section
25(e)(10) of the Code;
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(xxx) There is no obligation on the part of the Seller or any
other party under the terms of the Mortgage or related Mortgage Note to make
payments in addition to those made by the Mortgagor;
(xxxi) Any future advances made prior to the Cut-off Date have
been consolidated with the outstanding principal amount secured by the Mortgage,
and the secured principal amount, as consolidated, bears a single interest rate
and single repayment term reflected on the related Mortgage Loan Schedule. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;
(xxxii) Each Mortgage Loan was underwritten in accordance with
the Seller's underwriting guidelines as described in the Prospectus Supplement
and Information Supplement as applicable to its credit grade;
(xxxiii) Each appraisal of a Mortgage Loan that was used to
determine the appraised value of the related Mortgaged Property was conducted
generally in accordance with the Seller's underwriting guidelines, and included
an assessment of the fair market value of the related Mortgaged Property at the
time of the appraisal. The Mortgage File contains an appraisal of the applicable
Mortgaged Property;
(xxxiv) None of the Mortgage Loans is a graduated payment
Mortgage Loan, nor is any Mortgage Loan subject to a temporary buydown or
similar arrangement;
(xxxv) As of the Cut-off Date, there were no Group I Mortgage
Loans or Group II Mortgage Loans with respect to which the monthly payment due
thereon in June, 2002 had not been made, none of the Mortgage Loans has been
contractually delinquent for more than 30 days more than once during the
preceding twelve months and, no Mortgage Loan has ever experienced a delinquency
of 60 or more days since the origination thereof;
(xxxvi) Each Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder;
(xxxvii) To the best of the Seller's knowledge no
misrepresentation, negligence, fraud or similar occurrence with respect to a
Mortgage Loan has taken place on the part of any person, including, without
limitation, the Mortgagor, any appraiser, any builder or developer, or any other
party involved in the origination of the Mortgage Loan or in the application of
any insurance in relation to such Mortgage Loan;
(xxxviii) Each Mortgage Loan constitutes a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(xxxix) The information set forth in the Prepayment Charge
Schedule is complete, true and correct in all material respects at the date or
dates respecting which such information is furnished and each Prepayment Charge
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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;
(xl) The Loan-to-Value Ratio for each Mortgage Loan was no
greater than 100% at the time of origination;
(xli) The first date on which each Mortgagor must make a payment
on the related Mortgage Note is no later than 60 days from the date of this
Agreement;
(xlii) With respect to each Mortgage Loan, the related Mortgagor
shall not fail to make the first Monthly Payment due under the terms of the
Mortgage Loan by the second succeeding Due Date after the Due Date on which such
Monthly Payment was due;
(xliii) The transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by the Seller pursuant to this Agreement are not subject
to the bulk transfer or any similar statutory provisions in effect in any
relevant jurisdiction, except any as may have been complied with;
(xliv) There are no defaults in complying with the terms of the
Mortgage, and either (1) any taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges or ground rents which previously
became due and owing have been paid, or (2) an escrow of funds has been
established in an amount sufficient to pay for every such item which remains
unpaid and which has been assessed but is not yet due and payable. Except for
payments in the nature of escrow payments, including without limitation, taxes
and insurance payments, the Seller has not advanced funds, or induced, solicited
or knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required by the Mortgage
Note, except for interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage proceeds, whichever is greater, to the day which
precedes by one month the Due Date of the first installment of principal and
interest;
(xlv) There is no proceeding pending, or to best of the Seller's
knowledge threatened, for the total or partial condemnation of the Mortgaged
Property or the taking by eminent domain of any Mortgaged Property;
(xlvi) None of the Mortgage Loans is subject to the Home
Ownership and Equity Protection Act of 1994 or any comparable state law and any
breach of this representation will be deemed to materially and adversely affect
the value of the related loan;
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(xlvii) No proceeds from any Mortgage Loans were used to finance
single-premium credit insurance policies;
(xlviii) The Seller did not select the Mortgage Loans with the
intent to adversely affect the interests of the Purchaser;
(xlix) The Seller has not received any notice that any Mortgagor
has field for any bankruptcy or similar legal protection;
(l) Each Mortgage Loan was originated in compliance with the
following anti-predatory lending guidelines:
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(i) Each Mortgage Loan satisfies the eligibility for purchase
requirements and was originated in compliance with Lender Letter # LL03-00 dated
April 11, 2000 for ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (the "Lender Letter");
(ii) No borrower was encouraged or required by the Seller to
select a Mortgage Loan product offered by the Mortgage Loan's originator which
is a higher cost product designed for less creditworthy borrowers, unless at the
time of the Mortgage Loan's origination, such borrower did not qualify taking
into account credit history and debt-to-income ratios for a lower-cost credit
product then offered by the Mortgage Loan's originator or any affiliate of the
Mortgage Loan's originator;
(iii) The methodology used in underwriting the extension of
credit for each Mortgage Loan employs objective mathematical principles which
relate the borrower's income, assets and liabilities to the proposed payment and
such underwriting methodology does not rely on the extent of the borrower's
equity in the collateral as the principal determining factor in approving such
credit extension. Such underwriting methodology provided reasonable assurance
that at the time of origination (application/approval) the borrower had a
reasonable ability to make timely payments on the Mortgage Loan;
(iv) With respect to any Mortgage Loan that contains a provision
permitting imposition of a premium upon a prepayment prior to maturity, (i) the
Seller's pricing methods include mortgage loans with and without prepayment
premiums; borrowers selecting Mortgage Loans which include such prepayment
premiums receive a monetary benefit, including but not limited to a rate or fee
reduction, in exchange for selecting a Mortgage Loan with a prepayment premium,
(ii) prior to the Mortgage Loan's origination, the borrower had the opportunity
to choose between an array of mortgage loan products which included mortgage
loan products with prepayment premiums and mortgage loan products that did not
require payment of such a premium, (iii) the prepayment premium is disclosed to
the borrower in the loan documents pursuant to applicable state and federal law,
and (iv) notwithstanding any state or federal law to the contrary, the Master
Servicer shall not impose such prepayment premium in any instance when the
mortgage debt is accelerated as the result of the borrower's default in making
the loan payments;
(v) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition of obtaining the
extension of credit. No borrower obtained a prepaid single-premium credit life,
disability, accident or health insurance policy in connection with the
origination of the Mortgage Loan;
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(vi) No Mortgage Loan is subject to the Home Ownership and Equity
Protection Act of 1994 (15 USC ss. 1602(aa)), Regulation Z (12 CFR 226.32) or
any similar state law or regulation including those relating to "high cost
mortgages" and "high LTV mortgages";
(vii) All points and fees related to each Mortgage Loan were
disclosed in writing to the borrower in accordance with applicable state and
federal law. Except in the case of a Mortgage Loan in an original principal
amount of less than $60,000 which would have resulted in an unprofitable
origination, no borrower was charged "points and fees" (whether or not financed)
in an amount greater than 5% of the principal amount of such loan, such 5%
limitation calculated in accordance with the Lender Letter; and
(viii) All fees and charges (including finance charges) and
whether or not financed, assessed, collected or to be collected in connection
with the origination and servicing of each Mortgage Loan have been disclosed in
writing to the borrower in accordance with applicable state and federal law and
regulation.
(li) No Group I Mortgage Loan had a principal balance at
origination in excess of the Guarantor's conforming loan balance limitations for
single family loans set forth in the ▇▇▇▇▇▇ ▇▇▇ Charter Act and the ▇▇▇▇▇▇ Mae
Selling Guide in effect at the time of such Group I Mortgage Loan's origination.
(lii) Each Group I Mortgage Loan is secured by a first lien on
the related Mortgaged Property.
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.
With respect to the representations and warranties contained herein which are
made to the knowledge or the best of knowledge of the Seller, or as to which the
Seller has no knowledge, if it is discovered that the substance of any such
representation and warranty was inaccurate as of the date such representation
and warranty was made or deemed to be made, and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan or the interest therein
of the Purchaser or the Purchaser's assignee, transferee or designee, then
notwithstanding the lack of knowledge by the Seller with respect to the
substance of such representation and warranty being inaccurate at the time the
representation and warranty was made, the Seller shall take such action
described in the following paragraph in respect of such Mortgage Loan.
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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 Trust Administrator'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 and
warranty, the Seller promptly shall deliver such missing document or cure such
defect or breach in all material respects, or in the event the Seller cannot
deliver such missing document or such defect or breach cannot be cured, the
Seller shall, within 90 days of its discovery or receipt of notice, either (i)
repurchase the affected Mortgage Loan at a price equal to the Purchase Price (as
defined in the Pooling and Servicing Agreement) or (ii) pursuant to the
provisions of the Pooling and Servicing Agreement, cause the removal of such
Mortgage Loan from the Trust Fund and substitute one or more Qualified
Substitute Mortgage Loans; provided, however, that in the case of a breach of
the representation and warranty concerning the Mortgage Loan Schedule contained
in Section 6(i), if such breach relates to any field on the Mortgage Loan
Schedule which identifies any Prepayment Charge and such Prepayment Charge has
been triggered pursuant to the terms of the related Mortgage Note, then in lieu
of purchasing such Mortgage Loan from the Trust Fund at the Purchase Price (as
defined in the Pooling and Servicing Agreement), the Seller shall pay the amount
of the incorrectly identified Prepayment Charge (net of any amount previously
collected by or paid to the Trust Fund in respect of such Prepayment Charge),
and the Seller shall have no obligation to repurchase or substitute for such
Mortgage Loan. In the event of a substitution permitted hereunder, the Seller
shall amend the Closing Schedule to reflect the withdrawal of each removed
Mortgage Loan from the terms of this Agreement and the Pooling and Servicing
Agreement and the addition of the Qualified Substitute Mortgage Loan(s). The
Seller shall deliver to the Purchaser such amended Closing Schedule and shall
deliver such other documents as are required by this Agreement or the Pooling
and Servicing Agreement within five (5) days of any such amendment. Any
repurchase pursuant to this Section 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.
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SECTION 8. Closing; Payment for the Mortgage Loans.
The closing of the purchase and sale of the Mortgage Loans shall be
held at the Seattle office of ▇▇▇▇▇▇ ▇▇▇▇▇▇ White & ▇▇▇▇▇▇▇▇▇ LLP at 9:30 am New
York time on the Closing Date (or such other location or time as is mutually
agreeable to the parties).
The Purchaser's obligation to close the transactions contemplated by
this Agreement shall be subject to each of the following conditions:
(a) All of the representations and warranties of the Seller under this
Agreement shall be true and correct in all material respects as of the date as
of which they are made and no event shall have occurred which, with notice or
the passage of time, would constitute a default under this Agreement;
(b) The Purchaser shall have received, or the attorneys of the
Purchaser shall have received in escrow (to be released from escrow at the time
of closing), all Closing Documents as specified in Section 9 of this Agreement,
in such forms as are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required pursuant to the
respective terms thereof;
(c) The Seller shall have delivered or caused to be delivered and
released to the Purchaser or to its designee, all documents (including without
limitation, the Mortgage Loans) required to be so delivered by the Purchaser
pursuant to Section 2.01 of the Pooling and Servicing Agreement; and
(d) All other terms and conditions of this Agreement to be complied
with by Seller, shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall deliver or
cause to be delivered to the Seller on the Closing Date, against delivery and
release by the Seller to the Trustee of all documents required pursuant to the
Pooling and Servicing Agreement, 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. and Deutsche Bank
Securities Inc. (together, Greenwich Capital Markets, Inc. and Deutsche Bank
Securities Inc. are the "Co-Representatives"), the Certificate Insurer, if any,
and the Guarantor may rely and attached thereto copies of the certificate of
incorporation, bylaws and certificate of good standing of the Seller under the
laws of the State of Delaware;
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(b) An Officers' Certificate of the Seller, dated the Closing Date,
upon which the Purchaser, the Co-Representatives, the Certificate Insurer, if
any, and the Guarantor may rely, with respect to certain facts regarding the
sale of the Mortgage Loans, by the Seller to the Purchaser;
(c) An Opinion of Counsel of the Seller (which may be in-house counsel
of the Seller), dated the Closing Date and addressed to the Purchaser, the
Co-Representatives, the Certificate Insurer, if any, and the Guarantor;
(d) Such opinions of counsel as the Rating Agencies, the
Co-Representatives, the Trustee, the Certificate Insurer, if any, or the
Guarantor may reasonably request in connection with the sale of the Mortgage
Loans by the Seller to the Purchaser or the Seller's execution and delivery of,
or performance under, this Agreement;
(e) A letter from Deloitte & Touche L.L.P., certified public
accountants, dated the date hereof and to the effect that they have performed
certain specified procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature set forth in the
Prospectus Supplement under the captions "Summary of Terms--Mortgage Loans,"
"Risk Factors," "The Mortgage Pool," and "Long Beach Mortgage Company," agrees
with the records of the Seller;
(f) The Seller shall deliver to the Purchaser for inclusion in the
Prospectus Supplement under the caption "Long Beach Mortgage Company" or for
inclusion in other offering materials, such publicly available information
regarding the Seller, its financial condition and its mortgage loan delinquency,
foreclosure and loss experience, underwriting standards, lending activities and
loan sales, production, and servicing and collection practices, and any similar
nonpublic, unaudited financial information and a computer tape with respect to
the pool information, as the Co-Representatives may reasonably request;
(g) Letters from at least two nationally recognized statistical rating
agencies rating the Offered Certificates (as defined in the Prospectus
Supplement); and
(h) Such further information, certificates, opinions and documents as
the Purchaser, the Guarantor or the Co-Representatives may reasonably request.
SECTION 10. Costs.
The Seller shall pay (or shall reimburse the Purchaser or any other
Person to the extent that the Purchaser or such other Person shall pay) all
costs and expenses incurred in connection with the transfer and delivery of the
Mortgage Loans, including without limitation, recording fees, fees for title
policy endorsements and continuations and the fees for recording Assignments,
the fees and expenses of the Seller's in-house accountants and in-house
attorneys, the costs and expenses incurred in connection with determining the
Seller's loan loss, foreclosure and delinquency experience, the costs and
expenses incurred in connection with obtaining the documents referred to in
Sections 9(d) and 9(e), the cost of an opinion of counsel regarding the true
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sale and non-consolidation of the Mortgage Loans, the costs and expenses of
printing (or otherwise reproducing) and delivering this Agreement, the Pooling
and Servicing Agreement, the Certificates, the prospectus, the Prospectus
Supplement, the Information Supplement, any blue sky filings and private
placement memorandum relating to the Certificates and other related documents,
costs and expenses of the Trustee, the fees and expenses of the Purchaser's
counsel in connection with the preparation of all documents relating to the
securitization of the Mortgage Loans, the filing fee charged by the Securities
and Exchange Commission for registration of the Certificates, the cost of any
opinions of outside special counsel that may be required for the Seller and the
fees charged by any Rating Agency to rate the Certificates. All other costs and
expenses in connection with the transactions contemplated hereunder shall be
borne by the party incurring such expense.
SECTION 11. Servicing.
The Seller has represented to the Purchaser that the Mortgage Loans are
being serviced in accordance with the terms of the Pooling and Servicing
Agreement, and it is understood and agreed by and between the Seller and the
Purchaser that any interim servicing arrangements with the Seller will be
superseded by the servicing arrangements set forth in the Pooling and Servicing
Agreement.
SECTION 12. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the Closing Date of the Mortgage Loans in
accordance with the terms and conditions of this Agreement is mandatory. It is
specifically understood and agreed that each Mortgage Loan is unique and
identifiable on the Closing Date and that an award of money damages would be
insufficient to compensate the Purchaser for the losses and damages incurred by
the Purchaser in the event of the Seller's failure to deliver the Mortgage Loans
on or before the Closing Date.
The Seller hereby grants to the Purchaser a lien on and a continuing
security interest in the Seller's interest in each Mortgage Loan, and each
document and instrument evidencing each such Mortgage Loan to secure the
performance by the Seller of its obligation hereunder, and the Seller agrees
that it holds such Mortgage Loans in custody for the Purchaser, subject to (i)
the Purchaser's right, prior to the Closing Date, to reject any Mortgage Loan to
the extent permitted by this Agreement and (ii) the Purchaser's obligation to
deliver or cause to be delivered the consideration for the Mortgage Loans
pursuant to Section 8 hereof. Any Mortgage Loan rejected by the Purchaser shall
concurrently therewith be automatically released from the security interest
created hereby. The Seller agrees that, upon acceptance of the Mortgage Loans by
the Purchaser or its designee and delivery of payment to the Seller, that any
security interest held by the Seller in such Mortgage Loans shall be released.
All rights and remedies of the Purchaser under this Agreement are
distinct from, and cumulative with, any other rights or remedies under this
Agreement or afforded by law or equity and all such rights and remedies may be
exercised concurrently, independently or successively. Notwithstanding the
foregoing, if on the Closing Date, each of the conditions set forth in Section 8
hereof shall have been satisfied and the Purchaser shall not have paid or caused
to be paid the Purchase Price, or shall not have delivered or caused to be
delivered the Long Beach Certificates to Long Beach Asset Holding Corp., or any
such condition shall not have been waived or satisfied and the Purchaser
determines not to pay or cause to be paid the Purchase Price or not to deliver
or cause to be delivered the Long Beach Certificates to Long Beach Asset Holding
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Corp, the Purchaser shall immediately effect the re-delivery of the Mortgage
Loans, if delivery to the Purchaser has occurred and any security interest
created by this Section 12 shall be deemed to have been released.
SECTION 13. Notices.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered to or mailed
by registered mail, postage prepaid, or transmitted by telex or telegraph and
confirmed by a similar mailed writing, if to the Purchaser, addressed to the
Purchaser at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: LBSC
Legal Counsel, or such other address as may hereafter be furnished to the Seller
in writing by the Purchaser; if to the Seller, addressed to the Seller at ▇▇▇▇
▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: LBMC Legal Counsel, or to
such other address as the Seller may designate in writing to the Purchaser.
SECTION 14. Severability of Provisions.
Any part, provision, representation or warranty of this Agreement which
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof.
SECTION 15. Agreement of Parties.
The Seller and the Purchaser each agree to execute and deliver such
instruments (including UCC financing statements and continuation statements) and
take such actions as either of the others may, from time to time, reasonably
request in order to effectuate the purpose and to carry out the terms of this
Agreement and the Pooling and Servicing Agreement.
SECTION 16. Survival.
The Seller agrees that the representations, warranties and agreements
made by it herein and in any certificate or other instrument delivered pursuant
hereto shall be deemed to be relied upon by the Purchaser and its successors and
assigns, notwithstanding any investigation heretofore or hereafter made by the
Purchaser or on its behalf, and that the representations, warranties and
agreements made by the Seller herein or in any such certificate or other
instrument shall survive the delivery of and payment for the Mortgage Loans and
shall continue in full force and effect, notwithstanding any restrictive or
qualified endorsement on the Mortgage Notes and notwithstanding subsequent
termination of this Agreement, the Pooling and Servicing Agreement or the Trust
Fund.
SECTION 17. Indemnification, Representative.
(a) The Seller indemnifies and holds harmless the Purchaser, the
Purchaser's officers and directors and each person, if any, who controls the
Purchaser within the meaning of Section 15 of the Securities Act of 1933, as
amended (the "1933 Act") or Section 20 of the Exchange Act of 1934, as amended,
(the "Exchange Act"), as follows:
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(i) against any and all losses, claims, expenses, damages or
liabilities, joint or several, to which the Purchaser or such controlling person
may become subject under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof including, but not
limited to, any loss, claim, expense, damage or liability related to purchases
and sales of the Class II-A Certificates and the Class II-S1 Certificates arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Prospectus Supplement, or any amendment or
supplement thereto, or arise out of, or are based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements made therein not misleading; and will
reimburse, as incurred, the Purchaser and each such controlling person for any
legal or other expenses reasonably incurred by the Purchaser or such controlling
person in connection with investigating, defending against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Seller will
be liable in any such case only to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or omission, or
alleged untrue statement or omission, made therein in reliance upon and in
conformity with written information furnished to the Purchaser by the Seller
specifically for use in the preparation thereof (the "Seller's Prospectus
Supplement Information");
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, to the extent of the aggregate amount paid in settlement of
any litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
if such settlement is effected with the written consent of the Seller; and
(iii) against any and all expense whatsoever (including the fees
and disbursements of counsel chosen by the Purchaser, subject to Section 17(c)
below), reasonably incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under clause (i) or clause (ii) above.
This indemnity agreement will be in addition to any liability which the
Seller may otherwise have.
(b) The Purchaser agrees to indemnify and hold harmless the Seller,
each of its directors, each of its officers and each person, if any, who
controls the Seller within the meaning of Section 15 of the 1933 Act or Section
20 of the Exchange Act, against any and all losses, claims, expenses, damages or
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liabilities to which the Seller or any such director, officer or controlling
person may become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Prospectus Supplement, other than in the Seller's
Prospectus Supplement Information, or arise out of, or are based upon, the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made therein not misleading,
and will reimburse any legal or other expenses reasonably incurred by the Seller
or any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action.
This indemnity agreement will be in addition to any liability which the
Purchaser may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
17 of notice of the commencement of any action described therein, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 17, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve the indemnifying party from any liability that it may have to any
indemnified party under this Section 17 unless the indemnifying party is
materially prejudiced by such omission to notify and in any event the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to the indemnified party otherwise than under this Agreement. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
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entitled to participate therein, and, to the extent that it may wish to do so,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party (such consent not to be
unreasonably withheld, conditioned or delayed), be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
under this Section 17, such indemnifying party shall not be liable for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation and
preparation for a defense.
Any indemnified party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; (iii) a
conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (iv) the indemnifying
party has failed to assume the defense of such action and employ counsel
reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing (i) by the Seller if the indemnified parties
under this Section 17 consist of the Seller or any of its officers, directors or
controlling persons, or (ii) the Purchaser, if the indemnified party under this
Section 17 consist of the Purchaser or any of the Purchaser's directors,
officers or controlling persons.
Each indemnified party, as a condition of the indemnity agreements
contained in Section 17(a) and Section 17(b), shall use its reasonable efforts
to cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld, conditioned or delayed), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability (to the extent set forth in Section
17(a) or Section 17(b) as applicable) by reason of such settlement or judgment.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party unless such
settlement (i) includes an unconditional release of such indemnified party from
all liability on any claims that are the subject of such action and (ii) does
not include a statement as to, or an admission of, fault, culpability or failure
to act by or on behalf of an indemnified party.
Notwithstanding the foregoing paragraph, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement.
(d) If the indemnification provided for in Section 17(a) or 17(b) is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Purchaser on the one hand and the Seller on the other from the offering of
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the Underwritten Certificates (as defined in the Prospectus Supplement) or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Purchaser on the one hand and the Seller on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. If the
indemnification provided for in Section 17(b) is unavailable or insufficient to
hold harmless the indemnified party under Section 17(b), then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of the losses, claims, damages or liabilities referred to in Section
17(b) in such proportion as appropriate to reflect the relative fault of the
Purchaser on one hand and the Seller on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Purchaser on the one hand and the Seller on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Purchaser bear to the total
underwriting discounts and commissions received by the Underwriters (as defined
in the Prospectus Supplement). The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Purchaser or by the Seller and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to above in the first sentence of this subsection (d) shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
SECTION 18. [RESERVED]
SECTION 19. Governing Law.
THIS AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES
OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF
LAW PRINCIPLES. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.
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
C-26
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns. This Agreement supersedes all prior
agreements and understandings relating to the subject matter hereof. Neither
this Agreement nor any term hereof may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought. The headings in this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof.
It is the express intent of the parties hereto that the conveyance of
the Mortgage Loans by the Seller to the Purchaser as provided in Section 4
hereof be, and be construed as, a sale of the Mortgage Loans by the Seller to
the Purchaser and not as a pledge of the Mortgage Loans by the Seller to the
Purchaser to secure a debt or other obligation of the Seller. However, in the
event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Seller, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller and (b) (1) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code; (2) the conveyance provided for in Section 4 hereof
shall be deemed to be a grant by the Seller to the Purchaser of a security
interest in all of the Seller's right, title and interest in and to the Mortgage
Loans, all amounts payable to the holders of the Mortgage Loans in accordance
with the terms thereof and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account whether
in the form of cash, instruments, securities or other property; (3) the
possession by the Purchaser or its agent of the Mortgage Notes, the related
Mortgages and such other items of property that constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession by the
secured party" for purposes of perfecting the security interest pursuant to
Section 9-305 of the New York Uniform Commercial Code; and (4) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Purchaser for the purpose of perfecting
such security interest under applicable law. Any assignment of the interest of
the Purchaser pursuant to Section 4(d) hereof shall also be deemed to be an
assignment of any security interest created hereby. The Seller and the Purchaser
shall, to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement and the Pooling and
Servicing Agreement.
SECTION 21. Third Party Beneficiary.
Each of the Trustee, the Trust Administrator and the Certificate
Insurer, if any, shall be a third-party beneficiary hereof (except with respect
to Section 17) and shall be entitled to enforce the provisions hereof as if a
party hereto, except the provisions of Section 17 hereof. The
Co-Representatives, on behalf of the Underwriters (as defined in the Prospectus
Supplement), shall be a third-party beneficiary hereof solely with respect to
Section 17 and shall be entitled to enforce the provisions of Section 17 as if
it were a party hereto.
C-27
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
C-28
EXHIBIT D
MORTGAGE LOAN SCHEDULE
[FILED BY PAPER]
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 2002-3.
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 2002-3, Asset-Backed Certificates, Series 2002-3,
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 August __, 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.
E-2
(3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the Trustee when the need
therefor no longer exists, unless the Mortgage Loan relating to the Documents
has been liquidated and the proceeds thereof have been remitted to the
Collection Account and except as expressly provided in the Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the Master
Servicer shall at all times be ear-marked for the account of the Trustee, and
the Master Servicer shall keep the Documents and any proceeds separate and
distinct from all other property in the Master Servicer's possession, custody or
control.
Dated:
LONG BEACH MORTGAGE COMPANY
By:___________________________
Name:
Title:
E-3
EXHIBIT E-2
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full]
OFFICERS' CERTIFICATE AND TRUST RECEIPT
MORTGAGE LOAN PASS-THROUGH CERTIFICATES
SERIES 2002-3
____________________________________________________ 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 August __, 2002 among Long Beach
Securities Corp., Long Beach Mortgage Company, Federal National
Mortgage Association, Wachovia Bank, National Association and
Deutsche Bank National Trust Company, Long Beach Mortgage Loan
Trust 2002-3, Asset-Backed Certificates, Series 2002-3
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
DEUTSCHE BANK NATIONAL TRUST COMPANY,
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 August __, 2002 among Long Beach Securities
Corp., Long Beach Mortgage Company, Federal National Mortgage
Association, Wachovia Bank, National Association and Deutsche Bank
National Trust Company, Long Beach Mortgage Loan Trust 2002-3,
Asset-Backed Certificates, Series 2002-3
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 Deutsche Bank National Trust Company, as Trust
Administrator for the benefit of Wachovia Bank, National Association, 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.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trust Administrator
on behalf of the Trustee
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
F-4
G-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
----------------------------------------------------------------------------------------------------------------------
By reason of the foregoing, the Mortgagor represents to the Federal National
Mortgage Association (hereinafter referred to as the "Mortgagee"), that he or
she is unable to meet the regular monthly installments or other obligations, if
any, now due on the mortgage to the Mortgagee, or to become due during the
period of military service (as defined by the Soldiers' and Sailors' Civil
Relief Act, as amended,) and requests indulgence to the extent of being
permitted during such period, unless previously notified to the contrary by the
Mortgagee or the servicer of the Mortgage, to make monthly payments of
$_______________ commencing on _____________________ to apply on such mortgage
indebtedness, inclusive of any sums required to be paid to the Tax and Insurance
Account.
The Mortgagor will (1) promptly notify the servicer of the Mortgage of any
increase in his or her income from the property or from any other source, or any
increase in the income of members of his or her household, or of other persons
liable for the payment of the Mortgage, and pay a commensurate portion of such
increases toward the reduction of the balance due upon the Mortgage; (2)
increase the monthly payments proposed hereby to the extent that the Mortgagee
or said servicer may hereafter determine to be necessary to cover any increase
of taxes, assessments, insurance and other similar items; and (3) promptly
notify said servicer, in writing, of the data of termination of such period of
military service.
It is clearly understood that by the submission of the "Request for Military
Indulgence", the Mortgagor does not waive any rights or benefits under the
provision of the Soldiers' & Sailors' Civil Relief Act of 1940, as amended.
______________________________________
Mortgagor
______________________________________
Mortgagor
Dated_________________________________________
Approved for Federal National Mortgage Association
By:____________________________________________
(Servicer's Authorized Representative)
____________________________________________
(Servicer's Name)
____________________________________________
(Servicer's Address)
____________________________________________
G-4
EXHIBIT H
FORM OF LOST NOTE AFFIDAVIT
Personally appeared before me the undersigned authority to administer oaths
__________________________, who first being duly sworn deposes and says:
Deponent is __________ of _______________, successor by merger to
______________________ ("Seller") and who has personal knowledge of the facts
set out in this affidavit.
On __________________, __________________________ did execute and deliver a
promissory note in the principal amount of $ ___________________________.
That said note has been misplaced or lost through causes unknown and is
presently lost and unavailable after diligent search has been made. Seller's
records show that an amount of principal and interest on said note is still
presently outstanding, due, and unpaid, and Seller is still owner and holder in
due course of said lost note.
Seller executes this Affidavit for the purpose of inducing Deutsche Bank
National Trust Company, as Trust Administrator on behalf of Long Beach Mortgage
Loan Trust 2002-3, to accept the transfer of the above described loan from
Seller.
Seller agrees to indemnify Deutsche Bank National Trust Company, Wachovia
Bank, National Association, 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
I-2
EXHIBIT I
FORM OF ERISA REPRESENTATION
[DATE]
Long Beach Securities Corp.
▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Long Beach Mortgage Company
▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Federal National Mortgage Association
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Re: Long Beach Mortgage Loan Trust 2002-3,
Asset-Backed Certificates, Series 2002-3
Ladies and Gentlemen:
___________________ (the "Transferee") intends to acquire from
__________________ (the "Transferor") $____________ Initial Certificate
Principal Balance of the Class [____] Certificate of Long Beach Mortgage Loan
Trust 2002-3, Asset-Backed Certificates, Series 2002-3, (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement dated as of August __, 2002
(the "Agreement") among Long Beach Securities Corp., as depositor (the
"Depositor"), Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates, Wachovia Bank,
National Association, as trustee (the "Trustee") and Deutsche Bank National
Trust Company, 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
I-1
("ERISA"), or other retirement arrangement, 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 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.
▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Long Beach Mortgage Loan Trust 2002-3,
Asset-Backed Certificates Series 2002-3
Ladies and Gentlemen:
In connection with our acquisition of $______ Initial Certificate
Principal Balance of the Class [__] Certificate of Long Beach Mortgage Loan
Trust 2002-3 Asset-Backed Certificates, Series 2002-3 (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement dated as of August __, 2002
(the "Agreement") among Long Beach Securities Corp., as depositor (the
"Depositor"), Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates, Wachovia Bank,
National Association, as trustee (the "Trustee") and Deutsche Bank National
Trust Company, 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 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
J-1
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.
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company
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▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Long Beach Mortgage Loan Trust 2002-3,
Asset-Backed Certificates Series 2002-3
Ladies and Gentlemen:
In connection with our acquisition of $______ Initial Certificate
Principal Balance of the Class [__] Certificate of Long Beach Mortgage Loan
Trust 2002-3 Asset-Backed Certificates, Series 2002-3 (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement dated as of August __, 2002
(the "Agreement") among Long Beach Securities Corp., as depositor (the
"Depositor"), Long Beach Mortgage Company, as master servicer (the "Master
Servicer"), Federal National Mortgage Association, as guarantor with respect to
the Class I-A Certificates and the Class I-S1 Certificates, Wachovia Bank,
National Association, as trustee (the "Trustee") and Deutsche Bank National
Trust Company, 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 to act, in such manner with
respect to the Certificates, (e) we are a "qualified institutional buyer" as
J-3
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 2002-3,
ASSET-BACKED CERTIFICATES, SERIES 2002-3
STATE OF ____________ )
) ss.:
COUNTY OF __________ )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of ________________________, the
proposed Transferee of an Ownership Interest in the Class [___] Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement") among Long Beach Securities Corp., as depositor (the "Depositor"),
Long Beach Mortgage Company, as master servicer (the "Master Servicer"), Federal
National Mortgage Association, as guarantor with respect to the Class I-A
Certificates and Class I-S1 Certificates, Wachovia Bank, National Association,
as trustee (the "Trustee") and Deutsche Bank National Trust Company, 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 partnership, trust or estate, and
K-1
certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of Section 5.02(d) of the
Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(d) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit L to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect
to the Certificate.
8. The Transferee's taxpayer identification number is _____________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be "noneconomic
residual interests" within the meaning of Treasury regulations promulgated
pursuant to the Code and that the transferor of a noneconomic residual interest
will remain liable for any taxes due with respect to the income on such residual
interest, if a significant purpose of the transfer was to impede the assessment
or collection of tax. The Transferee understands that, as the holder of a
noneconomic residual interest, the Transferee may incur tax liabilities in
excess of any cash flows generated by the Certificate. The Transferee intends to
pay taxes associated with holding the Certificate as they become due.
11. The Transferee is not an employee benefit plan that is subject to
ERISA or a plan that is subject to Section 4975 of the Code, nor is it acting on
behalf of such a plan.
K-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
Vice President, attested by its Assistant Secretary, this ___ day of August,
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 August, 2002.
_______________________________________________
NOTARY PUBLIC
My Commission expires the __ day of ____, 20__.
K-3
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Long Beach Securities Corp.
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Long Beach Mortgage Loan Trust 2002-3,
Asset-Backed Certificates Series 2002-3
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 August __, 2002 (the "Agreement") among Long Beach Securities Corp., as
depositor (the "Depositor"), Long Beach Mortgage Company, as master servicer
(the "Master Servicer"), Federal National Mortgage Association, as guarantor
with respect to the Class I-A Certificates and the Class I-S1 Certificates,
Wachovia Bank, National Association, as trustee (the "Trustee") and Deutsche
Bank National Trust Company, 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:__________________________________________
L-1
EXHIBIT M
CERTIFICATE INSURANCE POLICY
M-1
[Capital Assurance Logo]
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FINANCIAL GUARANTY
INSURANCE POLICY
Insured Obligations: Long Beach Mortgage Loan Trust 2002-3 Policy No: CA00292A
U.S. $500,000,000 Class I-A Asset-Backed
Certificates Series 2002-3 Effective Date: August 2, 2002
U.S. $500,000,000 Class II-A Asset-Backed
Certificates Series 2002-3
U.S. $119,300,000 Class I-S1 5.25%
Asset-Backed Certificates Series 2002-3
U.S. $130,500,000 Class II-S1 4.25%
Asset-Backed Certificates Series 2002-3
XL Capital Assurance Inc. (XLCA), a New York stock insurance company,
in consideration of the payment of the premium and subject to the terms of this
Policy (which includes the Endorsement attached hereto), hereby unconditionally
and irrevocably guarantees to the Trustee for the benefit of the Owners of the
Insured Obligations, the full and complete payment by the Obligor of that
portion of the Scheduled Payments which shall become Due for Payment but shall
be unpaid by reason of Nonpayment (the "Insured Amount").
XLCA will pay the Insured Amount to the Trust Administrator upon the
presentation of a Payment Notice to XLCA (which Payment Notice shall include an
irrevocable assignment to XLCA of all rights and claims in respect of the
relevant Insured Obligation, including the right to receive principal, if
applicable, and interest in respect of the Insured Obligation, free of any
adverse claim), on the later of (a) one (1) Business Day following receipt by
XLCA of a Payment Notice or (b) the Business Day on which Scheduled Payments are
Due for Payment. XLCA shall be subrogated to the Owners' rights to payment on
the Insured Obligations to the extent of any payment by XLCA hereunder. The
obligations of XLCA with respect to a Scheduled Payment will be discharged to
the extent funds to pay such Scheduled Payment are legally available to the
Trustee, whether such funds are properly applied by the Trustee, the Trust
Administrator or claimed by an Owner.
In the event that any Scheduled Payment which has become Due for
Payment and which is made to an Owner by or on behalf of the Trustee is
recovered or is recoverable from the Owner pursuant to a final judgment by a
court of competent jurisdiction in an Insolvency Proceeding that such payment
constitutes an Avoided Payment to such Owner within the meaning of any
applicable bankruptcy law, XLCA shall pay the amount of such recovery if
sufficient funds are not otherwise available.
This Policy sets forth in full the undertaking of XLCA and shall not be
cancelled, revoked, further endorsed or modified by XLCA for any reason,
including failure to receive payment of any premium due hereunder or under the
Insurance Agreement. The premium on this Policy is not refundable for any
reason. This Policy does not insure against loss of any prepayment or other
acceleration payment which at any time may become due in respect of any Insured
Obligation, other than at the sole option of XLCA, nor against any risk other
than Nonpayment, including any shortfalls, if any, attributable to the liability
of the Obligor for withholding taxes if any, including interest and penalties in
respect of such liability.
THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY
FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.
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Any capitalized terms not defined herein shall have the meaning given
such terms in the Endorsement attached hereto and forming a part hereof, or in
the Insurance Agreement referenced therein. In witness whereof, XLCA has caused
this Policy to be executed as of the Effective Date.
Name:___________________ Name:________________________
Title:__________________ Title:_______________________
M-3
Financial Guaranty Insurance Policy
Endorsement Effective Date August 2, 2002 attached to
and forming part of
Financial Guaranty Insurance Policy No. CA00292A
Obligor: Long Beach Mortgage Loan Trust 2002-3 (the "Trust")
Insured Obligations: U.S. $500,000,000 Class I-A Asset-Backed Certificates Series 2002-3
U.S. $500,000,000 Class II-A Asset-Backed Certificates Series 2002-3
U.S. $119,300,000 Class I-S1 5.25 % Asset-Backed Certificates Series 2002-3
U.S. $130,500,000 Class II-S1 4.25% Asset-Backed Certificates Series 2002-3
Beneficiary: Wachovia Bank, National Association, not in its individual capacity, but solely as the
Trustee of the Trust, for the benefit of the owners of the Insured Obligations
Capitalized terms used herein and not otherwise defined herein or in the Policy
shall have the meanings assigned to them in the Insurance Agreement or, if not
defined therein, in the Pooling and Servicing Agreement dated as of August 1,
2002 among Long Beach Mortgage Company, Long Beach Securities Corp., Federal
National Mortgage Association, Wachovia Bank, National Association, as trustee,
and Deutsche Bank National Trust Company, as trust administrator, as the same
may be amended from time to time (the "Pooling and Servicing Agreement").
As used herein the term "Business Day" means any day other
than a Saturday, Sunday or a day on which XLCA or banking institutions in New
York City or in the city in which the corporate trust office of the Trust
Administrator or the Trustee is located are authorized or obligated by law or
executive order to close.
As used herein the term "Deficiency Amount" means with respect
to Scheduled Payments on the Insured Obligations and any Distribution Date, the
excess, if any, of (A) the sum of (i) the Monthly Interest Distributable Amount
for each class of the Insured Obligations plus any Unpaid Interest Shortfall
Amount for each class of the Insured Obligations, (ii) the Insured Principal
Amount, (iii) the Group I Certificate Insurer Premium, (iv) the Group II
Certificate Insurer Premium and (v) the Guaranty Fee over (B) the sum of the
Group I Available Funds and the Group II Available Funds.
As used herein the term "Due for Payment" means, with respect
to a Scheduled Payment, the Distribution Date on which such Scheduled Payment is
due.
As used herein the term "Group I Certificate Insurer Premium"
means for any Distribution Date and with respect to the Class I-A Certificates
and the Class I-S1 Certificates, the premium due to XLCA on such Distribution
Date in accordance with the terms of the Insurance Agreement including any
Premium Supplement.
As used herein the term "Group I Insured Principal Amount"
means (a) for any Distribution Date (other than the Distribution Date in
September 2032), the amount, if any, by which the aggregate Certificate
Principal Balance of the Class I-A Certificates (after giving effect to all
M-4
other distributions is respect of principal to be made on such Distribution Date
other than payments by XLCA) exceeds the aggregate Stated Principal Balance of
the Group I Mortgage Loans on the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (b) for the
Distribution Date in September 2032, an amount equal to the aggregate
Certificate Principal Balance of the Class I-A Certificates (after giving effect
to distributions in respect of principal to be made on such Distribution Date
and without regard to any payment by XLCA).
As used herein the term "Group II Certificate Insurer Premium"
means for any Distribution Date and with respect to the Class II-A Certificates
and the Class II-S1 Certificates, the premium due to XLCA on such Distribution
Date in accordance with the terms of the Insurance Agreement including any
Premium Supplement.
As used herein the term "Group II Insured Principal Amount"
means (a) for any Distribution Date (other than the Distribution Date in
September 2032), the amount, if any, by which the aggregate Certificate
Principal Balance of the Class II-A Certificates (after giving effect to all
other distributions is respect of principal to be made on such Distribution Date
other than payments by XLCA) exceeds the aggregate Stated Principal Balance of
the Group II Mortgage Loans on the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (b) for the
Distribution Date in September 2032, an amount equal to the aggregate
Certificate Principal Balance of the Class II-A Certificates (after giving
effect to distributions in respect of principal to be made on such Distribution
Date and without regard to any payment by XLCA).
As used herein the term "Insolvency Proceeding" means the
commencement, after the date hereof, of any bankruptcy, insolvency,
receivership, readjustment of debt, reorganization, marshalling of assets and
liabilities or similar proceedings by or against a Mortgage Loan obligor, the
commencement, after the date hereof, of any proceedings by or against a Mortgage
Loan obligor for the winding up or liquidation of its affairs, or the consent,
after the date hereof, to the appointment of a trustee, conservator, receiver or
liquidator in any bankruptcy, insolvency, receivership, readjustment of debt,
reorganization, marshalling of assets and liabilities or similar proceedings of
or relating to a Mortgage Loan obligor.
As used herein the term "Insurance Agreement" means the
Insurance and Indemnity Agreement dated as of August 2, 2002 among XLCA, Long
Beach Securities Corp. and Long Beach Mortgage Company.
As used herein the term "Insured Principal Amount" means the
sum of the Group I Insured Principal Amount and the Group II Insured Principal
Amount.
As used herein the term "Nonpayment" means, with respect to
any Distribution Date, the failure of the Obligor to make funds legally
available to the Trust Administrator or the Trustee to pay all or a portion of a
Scheduled Payment with respect to such date.
As used herein the term "Owner" means the registered owner of
any Insured Obligation as indicated in the registration books maintained by or
on behalf of the Obligor for such purpose or, if the Insured Obligation is in
bearer form, the holder of the Insured Obligation.
M-5
As used herein the term "Scheduled Payment" means for any
Distribution Date with respect to the Insured Obligations during the Term of
this Policy, (i) the Monthly Interest Distributable Amount due and payable in
respect of each class of Insured Obligations on such Distribution Date and (ii)
if such Distribution Date is in September 2032, the aggregate Certificate
Principal Balance of the Class I-A Certificates and the Class II-A Certificates
outstanding on such Distribution Date, in each case, in accordance with the
original terms of the Insured Obligations when issued and without regard to any
subsequent amendment or modification of the Insured Obligations or the Pooling
and Servicing Agreement that has not been consented to in writing by XLCA.
Payments which become due on an accelerated basis as a result of an optional
termination or any other cause do not constitute "Scheduled Payments," unless
XLCA elects, in its sole discretion, to pay such amounts in whole or in part (in
which event Scheduled Payments shall include such accelerated payments as, when
and to the extent so elected by XLCA). In the event that XLCA does not so elect,
XLCA shall continue to be required under the Policy to make Scheduled Payments
on the Insured Obligations in accordance with the original scheduled terms. In
addition, "Scheduled Payments" shall not include, nor shall coverage be provided
under the Policy in respect of, (i) any amounts due in respect of the Insured
Obligations attributable to any increase in interest rate, penalty or other sum
payable by the Issuer by reason of any default or event of default in respect of
the Insured Obligations, (ii) any Relief Act Interest Shortfalls, (iii) any Net
WAC Rate Carryover Amounts, (iv) any Prepayment Interest Shortfalls or (v) any
taxes, withholding or other charge imposed by any governmental authority due in
connection with the payment of any Scheduled Payment to any Owner.
As used herein the term "Scheduled Payment Deficiency" means
with respect to any Distribution Date during the Term of this Policy the sum of
(i) any Deficiency Amount and (ii) any Avoided Payment.
As used herein the term "Term of this Policy" means the period
from and including the Effective Date to and including the first date on which
(i) all Scheduled Payments have been paid that are required to be paid under the
Pooling and Servicing Agreement; (ii) any period during which any Scheduled
Payment could have been avoided in whole or in part as a preference payment
under applicable bankruptcy, insolvency, receivership or similar law has
expired, and (iii) if any proceedings requisite to avoidance as a preference
payment have been commenced prior to the occurrence of (i) and (ii) above, a
final and nonappealable order in resolution of each such proceeding has been
entered.
To make a claim under the Policy, the Trust Administrator or
the Trustee shall deliver to XLCA Payment Notice in the form of Exhibit A hereto
(a "Payment Notice"), appropriately completed and executed by the Trust
Administrator or the Trustee. A Payment Notice under this Policy may be
presented to XLCA by (i) delivery of the original Payment Notice to XLCA at its
address set forth below, or (ii) facsimile transmission of the original Payment
Notice to XLCA at its facsimile number set forth below. If presentation is made
by facsimile transmission, the Trust Administrator or the Trustee shall (x)
simultaneously confirm transmission by telephone to XLCA at its telephone number
set forth below, and (y) as soon as reasonably practicable, deliver the original
Payment Notice to XLCA at its address set forth below. Any Payment Notice
received by XLCA after 10:00 a.m., New York City time, on a Business Day, or on
any day that is not a Business Day, will be deemed to be received by XLCA at
9:00 a.m., New York City time, on the next succeeding Business Day.
Following receipt by XLCA of a Payment Notice from the Trust
Administrator, XLCA will unconditionally and irrevocably pay any amount payable
M-6
hereunder in respect of a Scheduled Payment Deficiency (other than a Scheduled
Payment Deficiency resulting from an Avoided Payment) out of the funds of XLCA
on the later to occur of (a) 12:00 noon, New York City time, on the first
Business Day following such receipt and (b) 12:00 noon, New York City time, on
the Distribution Date to which such Scheduled Payment Deficiency relates.
Payments due hereunder in respect of a Scheduled Payment Deficiency will be
disbursed by wire transfer of immediately available funds to the Policy Payments
Account established pursuant to the Pooling and Servicing Agreement or, if no
such Policy Payments Account has been established, to the Trust Administrator.
Subject to the foregoing, if the payment of any Scheduled
Payment is voided (a "Preference Event") as a result of an Insolvency Proceeding
and as a result of such Preference Event, the Owner is required to return such
voided payment, or any portion of such voided payment, made in respect of the
Insured Obligation (an "Avoided Payment"), XLCA will irrevocable, absolutely and
unconditionally pay an amount equal to the full and complete amount of such
Avoided Payment following receipt by XLCA from the Trust Administrator or the
Trustee on behalf of such Owner of (x) a certified copy of a final order of a
court exercising jurisdiction in such Insolvency Proceeding to the effect that
the Owner, the Trust Administrator or the Trustee on behalf of the Owner is
required to return any such payment or portion thereof because such payment was
voided under applicable law (the "Final Order"), and an opinion of counsel
satisfactory to XLCA that such order is final and not subject to appeal, (y) an
assignment, substantially in the form attached hereto as Exhibit B, properly
completed and executed by such Owner irrevocably assigning to XLCA all rights
and claims of such Owner relating to or arising under such Avoided Payment and
(z) a Payment Notice in the form of Exhibit A hereto appropriately completed and
executed by the Trustee or the Trust Administrator.
XLCA shall make payments due in respect of Avoided Payments
prior to 2:00 p.m. New York City time on the fourth Business Day following
XLCA's receipt of the documents required under clauses (x) through (z) of the
preceding paragraph. Any such documents received by XLCA after 10:00 a.m. New
York City time on any Business Day or on any day that is not a Business Day
shall be deemed to have been received by XLCA at 9:00 a.m., New York City time,
on the next succeeding Business Day. Such payments shall be disbursed to the
receiver, conservator, debtor-in-possession or trustee in bankruptcy named in
the Final Order and not to the Trustee, the Trust Administrator or any Owner
directly (unless an Owner has provided evidence satisfactory to XLCA that it has
previously paid such amount to the receiver, conservator, debtor-in-possession
or trustee in bankruptcy named in the Final Order, in which case such payment
shall be disbursed to the Trust Administrator.)
No defenses, set-offs or counterclaims of any kind available
to XLCA so as to deny payment of any amount due in respect of this Policy in
accordance with the express provisions of the Policy will be valid and XLCA
hereby waives to the fullest extent permitted by law for the benefit of each
Owner and agrees not to assert any and all such defenses (including, without
limitation, defenses based on fraud and defenses based on suretyship), set-offs
and counterclaims, including, without limitation, any such rights acquired by
subrogation, assignment or otherwise. Upon any payment hereunder, in furtherance
and not in limitation of XLCA's equitable right of subrogation and XLCA's rights
under the Insurance Agreement, XLCA will be subrogated to the rights of the
Owner in respect of which such payment was made to receive any and all amounts
due in respect of the obligations in respect of which XLCA has made a payment
hereunder. Any rights of subrogation acquired by XLCA as a result of any payment
made under this Policy shall, in all respects, be subordinate and junior in
right of payment to the prior indefeasible payment in full of any amounts due
the Owner on account of payments due under the Insured Obligation.
M-7
This Policy is neither transferable nor assignable, in whole
or in part, except to a successor trustee duly appointed and qualified under the
Pooling and Servicing Agreement. All notices, presentations, transmissions,
deliveries and communications made by the Trust Administrator or the Trustee to
XLCA with respect to this Policy shall specifically refer to the number of this
Policy and shall be made to XLCA at:
XL Capital Assurance Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Surveillance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address, telephone number or facsimile number as XLCA may
designate to the Trust Administrator or the Trustee in writing from time to
time. Each such notice, presentation, transmission, delivery and communication
shall be effective only upon actual receipt by XLCA.
The obligations of XLCA under this Policy are irrevocable,
primary, absolute and unconditional, subject to satisfaction of the conditions
for making a claim under the Policy, and neither the failure of the Obligor, the
Trustee, the Trust Administrator or any other person to perform any covenant or
obligation in favor of XLCA (or otherwise), nor the failure of any assignment or
grant of any security interest, nor the commencement of any bankruptcy, debtor
or other insolvency proceeding by or against the Obligor, the Trust
Administrator or the Trustee or any other person shall in any way affect or
limit XLCA's obligations under this Policy. If a successful action or proceeding
to enforce this Policy is brought by the Trust Administrator or the Trustee, the
Trust Administrator or the Trustee, as applicable, shall be entitled to recover
from XLCA costs and expenses reasonably incurred, including, without limitation,
reasonable fees and expenses of counsel.
This Policy shall be returned to XLCA by the Trustee or the
Trust Administrator upon the earlier of (i) the expiration of the Term of this
Policy or (ii) the date on which replacement credit enhancement is substituted
for this Policy under and in accordance with the terms of Section 4.10 of the
Pooling and Servicing Agreement.
THIS POLICY SHALL BE CONSTRUED, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED, IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
WHICH WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
If any term or provision of the face of this Policy is
inconsistent with the provisions of this Endorsement, the provisions of this
Endorsement shall take precedence and be binding.
[Remainder of Page Intentionally Left Blank]
M-8
IN WITNESS WHEREOF, XL Capital Assurance Inc. has caused
this Endorsement to the Policy to be executed on the ___ day of
__________, 2002.
_______________________ _____________________________
Name: Name:
Title: Title:
M-9
Exhibit A to Financial Guaranty Policy No. CA00292A
XL Capital Assurance Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Surveillance
PAYMENT NOTICE
UNDER Financial Guaranty Policy No. CA00292A
Deutsche Bank National Trust Company as Trust Administrator (the "Trust
Administrator"), hereby certifies to XL Capital Assurance Inc. ("XLCA") with
reference to that certain Financial Guaranty Policy, No. CA00292A, dated August
2, 2002 (the "Policy"), issued by XLCA in favor of the Trustee on behalf of the
Owner under the Pooling and Servicing Agreement, as follows:
1. The Trust Administrator is the trust administrator under the Pooling
and Servicing Agreement and the beneficiary on behalf of each Owner of the
Policy.
2. The Trust Administrator is entitled to make a demand under the
Policy pursuant to Section 3.31 of the Pooling and Servicing Agreement.
3. This notice relates to the [insert date] Distribution Date. The
amount demanded is to be paid in immediately available funds to the [Specify
Account] at [Identify Financial Institution Holding Account] account number[
_____].
[For a Payment Notice in respect of a Scheduled Payment Deficiency
(other than a Scheduled Payment Deficiency resulting from an Avoided Payment)
use paragraph 4.]
4. The Trust Administrator demands payment of $________ which is an
amount equal to the amount by which the [Describe calculation of Scheduled
Payment Deficiency (other than a Scheduled Payment Deficiency resulting from an
Avoided Payment) under Policy].
[For a Payment Notice in respect of an Avoided Payment use the
following paragraphs [4] or [5].]
[4.] or [5.] The Trust Administrator hereby represents and warrants,
based upon information available to it, that (i) the amount entitled to be drawn
under the Policy on the date hereof in respect of Avoided Payments is the amount
paid or to be paid simultaneously with such draw on the Policy, by the Owner on
account of a Preference Event [$________] (the "Avoided Payment Amount") and
(ii) the documents required by the Policy to be delivered in connection with
such Avoided Payment and Avoided Payment Amount have previously been presented
to XLCA or are attached hereto.
[6] The Trust Administrator agrees that, following payment of funds by
XLCA, it shall use reasonable efforts to procure (a) that such amounts are
applied directly to the payment of any Insured Amount which is Due for Payment;
(b) that such funds are not applied for any other purpose; and (c) the
maintenance of accurate record of such payments in respect of each Insured
Obligation and the corresponding claim on the Policy and the proceeds thereof.
M-10
[7] The Trust Administrator, on behalf of itself, the Trustee and the
Owners, hereby assigns to XLCA the rights of [the Trustee] and the Owners with
respect to the Insured Obligation to the extent of any payments under the
Policy. The foregoing assignment is in addition to, and not in limitation of,
rights of subrogation otherwise available to XLCA in respect of such payments.
The Trust Administrator shall take such action and deliver such instruments as
may be reasonably requested or required by XLCA to effectuate the purpose of
provisions of this clause [7].
[8] The Trust Administrator, on behalf of itself, the Trustee and the
Owners, hereby appoints XLCA as agent and attorney-in-fact for the Trust
Administrator, the Trustee and the Owners in any legal proceeding in respect of
the Insured Obligation. The Trust Administrator, on behalf of itself, the
Trustee and the Owners, thereby (and without limiting the generality of the
preceding sentence) agrees that XLCA may at any time during the continuation of
any proceeding by or against any debtor with respect to which a Preference Claim
(as defined below) or other claim with respect to the Insured Obligation is
asserted under any Insolvency Proceeding, direct all matters relating to such
Insolvency Proceeding, including, without limitation, (a) all matters relating
to any claim in connection with a Insolvency Proceeding seeking the avoidance as
a preferential transfer of any payment made with respect to the obligations (a
"Preference Claim"), (b) the direction of any appeal of any order relating to
any Preference Claim and (c) the posting of any surety, supersedes or
performance bond pending any such appeal. In addition, the Trust Administrator,
on behalf of itself, the Trustee and the Owners, hereby agrees that XLCA shall
be subrogated to, and the Trust Administrator, on behalf of itself, the Trustee
and the Owners, hereby delegates and assigns, to the fullest extent permitted by
law, the rights of itself, the Trustee and the Owners in the conduct of any
Insolvency Proceeding, including, without limitation, all rights of any party to
an adversary proceeding or action with respect to any court order issued in
connection with any such Insolvency Proceeding.
M-11
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Policy or the Pooling and Servicing
Agreement.
IN WITNESS WHEREOF, this notice has been executed this ____ day of
________, ____.
___________________, as Trust Administrator
By: _________________________________________
Authorized Officer
Any Person Who Knowingly And With Intent To Defraud Any Insurance Company Or
Other Person Files An Application For Insurance Or Statement Of Claim Containing
Any Materially False Information, Or Conceals For The Purpose Of Misleading
Information Concerning Any Fact Material Thereof, Commits A Fraudulent Insurance
Act, Which Is A Crime, And Shall Also Be Subject To A Civil Penalty Not To
Exceed Five Thousand Dollars And The Stated Value Of The Claim For Each Such
Violation
M-12
Exhibit B to Financial Guaranty Insurance Policy, No. CA00292A
Form of Assignment
Reference is made to the Financial Guaranty Insurance Policy ▇▇.
▇▇▇▇▇▇▇▇, dated August 2, 2002 (together with the Endorsement attached thereto,
the "Policy") issued by XL Capital Assurance Inc. ("XLCA") relating to the
Insured Obligations. Unless otherwise defined herein, capitalized terms used in
this Assignment shall have the meanings assigned thereto in the Policy as
incorporated by reference therein. In connection with the Avoided Payment of [$
] paid by the undersigned (the "Owner") on [ ] and the payment by XLCA in
respect of such Avoided Payment pursuant to the Policy, the Owner hereby
irrevocably and unconditionally, without recourse, representation or warranty
(except as provided below), sells, assigns, transfers, conveys and delivers all
of such Owner's rights, title and interest in and to any rights or claims,
whether accrued, contingent or otherwise, which the Owner now has or may
hereafter acquire, against any person relating to, arising out of or in
connection with such Avoided Payment. The Owner represents and warrants that
such claims and rights are free and clear of any lien or encumbrance created or
incurred by such Owner.(2)
____________________________________
Owner
(2) In the event that the terms of this form of assignment are reasonably
determined to be insufficient solely as a result of a change of law or
applicable rules after the date of the Policy to fully vest all of the Owner's
right, title and interest in such rights and claims, the Owner and XLCA shall
agree on such other form as is reasonably necessary to effect such assignment,
which assignment shall be without recourse, representation or warranty except
as provided above.
M-13
SCHEDULE I
PREPAYMENT CHARGE SCHEDULE
AVAILABLE UPON REQUEST
SCHEDULE II
CAP PREMIUM SCHEDULES
NOT APPLICABLE
SCHEDULE III
[RESERVED]
SCHEDULE IV
PMI MORTGAGE LOAN SCHEDULE
NOT APPLICABLE