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FINANCIAL ASSET SECURITIES CORP.,
Depositor
▇▇▇▇▇▇ LOAN SERVICING LP,
Servicer
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 2004
___________________________
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates, Series 2004-4
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 11
SECTION 1.01 Defined Terms..................................................................11
SECTION 1.02 Accounting.....................................................................61
SECTION 1.03 Allocation of Certain Interest Shortfalls......................................61
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES 63
SECTION 2.01 Conveyance of Mortgage Loans...................................................63
SECTION 2.02 Acceptance by Trustee..........................................................66
SECTION 2.03 Repurchase or Substitution of Mortgage Loans by the Originator.................68
SECTION 2.04 Intentionally Omitted..........................................................71
SECTION 2.05 Representations, Warranties and Covenants of the Servicer......................71
SECTION 2.06 Representations and Warranties of the Depositor................................73
SECTION 2.07 Issuance of Certificates.......................................................75
SECTION 2.08 Conveyance of Subsequent Mortgage Loans........................................75
SECTION 2.09 Acceptance of REMIC 1, REMIC 2, REMIC 3, REMIC 4, REMIC 5,
REMIC 6, REMIC 7, REMIC 8 and REMIC 9 by the Trustee;
Conveyance of REMIC 1 Regular Interests and Class M-8
Interest, Class M-9 Interest, Class M-10 Interest, Class B
Interest, Class C Interest and Class P Interest; Issuance of
Certificates...................................................................78
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS 83
SECTION 3.01 Servicer to Act as Servicer....................................................83
SECTION 3.02 Sub-Servicing Agreements Between Servicer and Sub-Servicers....................85
SECTION 3.03 Successor Sub-Servicers........................................................86
SECTION 3.04 Liability of the Servicer......................................................87
SECTION 3.05 No Contractual Relationship Between Sub-Servicers and the
Trustee or Certificateholders.87
SECTION 3.06 Assumption or Termination of Sub-Servicing Agreements by Trustee...............87
SECTION 3.07 Collection of Certain Mortgage Loan Payments...................................88
SECTION 3.08 Sub-Servicing Accounts.........................................................89
SECTION 3.09 Collection of Taxes, Assessments and Similar Items; Servicing Accounts.........89
SECTION 3.10 Collection Account and Distribution Account....................................90
SECTION 3.11 Withdrawals from the Collection Account and Distribution Account...............92
SECTION 3.12 Investment of Funds in the Collection Account, the
Distribution Account and the Pre-Funding Accounts..............................94
SECTION 3.13 [Reserved].....................................................................96
SECTION 3.14 Maintenance of Hazard Insurance and Errors and Omissions and
Fidelity Coverage..............................................................96
SECTION 3.15 Enforcement of Due-On-Sale Clauses; Assumption Agreements......................97
SECTION 3.16 Realization Upon Defaulted Mortgage Loans......................................98
SECTION 3.17 Trustee to Cooperate; Release of Mortgage Files...............................100
SECTION 3.18 Servicing Compensation........................................................102
i
SECTION 3.19 Reports to the Trustee; Collection Account Statements.........................102
SECTION 3.20 Statement as to Compliance....................................................102
SECTION 3.21 Independent Public Accountants' Servicing Report..............................103
SECTION 3.22 Access to Certain Documentation; Filing of Reports by Trustee.................103
SECTION 3.23 Title, Management and Disposition of REO Property.............................105
SECTION 3.24 Obligations of the Servicer in Respect of Prepayment Interest
Shortfalls....................................................................109
SECTION 3.25 [Reserved]....................................................................109
SECTION 3.26 Obligations of the Servicer in Respect of Mortgage Rates and
Monthly Payments..............................................................109
SECTION 3.27 Solicitations.................................................................109
SECTION 3.28 Net WAC Rate Carryover Reserve Account........................................110
SECTION 3.29 Advance Facility..............................................................111
ARTICLE IV FLOW OF FUNDS 115
SECTION 4.01 Distributions.................................................................115
SECTION 4.02 [Reserved]....................................................................121
SECTION 4.03 Statements....................................................................121
SECTION 4.04 Remittance Reports; Advances..................................................125
SECTION 4.05 Pre-Funding Accounts..........................................................126
SECTION 4.06 [Reserved]....................................................................127
SECTION 4.07 Distributions on the REMIC Regular Interests..................................127
SECTION 4.08 Allocation of Realized Losses.................................................130
ARTICLE V THE CERTIFICATES 133
SECTION 5.01 The Certificates..............................................................133
SECTION 5.02 Registration of Transfer and Exchange of Certificates.........................133
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.............................139
SECTION 5.04 Persons Deemed Owners.........................................................139
SECTION 5.05 Appointment of Paying Agent...................................................140
ARTICLE VI THE SERVICER AND THE DEPOSITOR 141
SECTION 6.01 Liability of the Servicer and the Depositor...................................141
SECTION 6.02 Merger or Consolidation of, or Assumption of the Obligations
of, the Servicer or the Depositor.............................................141
SECTION 6.03 Limitation on Liability of the Servicer and Others............................141
SECTION 6.04 Servicer Not to Resign........................................................142
SECTION 6.05 Delegation of Duties..........................................................143
SECTION 6.06 [Reserved]....................................................................143
SECTION 6.07 Inspection....................................................................143
ARTICLE VII DEFAULT 144
SECTION 7.01 Servicer Events of Termination................................................144
SECTION 7.02 Trustee to Act; Appointment of Successor......................................146
SECTION 7.03 Waiver of Defaults............................................................147
SECTION 7.04 Notification to Certificateholders............................................148
SECTION 7.05 Survivability of Servicer Liabilities.........................................148
ii
ARTICLE VIII THE TRUSTEE 149
SECTION 8.01 Duties of Trustee.............................................................149
SECTION 8.02 Certain Matters Affecting the Trustee.........................................150
SECTION 8.03 Trustee Not Liable for Certificates or Mortgage Loans.........................152
SECTION 8.04 Trustee May Own Certificates..................................................153
SECTION 8.05 Trustee Fee and Expenses......................................................153
SECTION 8.06 Eligibility Requirements for Trustee..........................................153
SECTION 8.07 Resignation or Removal of Trustee.............................................154
SECTION 8.08 Successor Trustee.............................................................154
SECTION 8.09 Merger or Consolidation of Trustee............................................155
SECTION 8.10 Appointment of Co-Trustee or Separate Trustee.................................155
SECTION 8.11 Limitation of Liability.......................................................156
SECTION 8.12 Trustee May Enforce Claims Without Possession of Certificates.................157
SECTION 8.13 Suits for Enforcement.........................................................157
SECTION 8.14 Waiver of Bond Requirement....................................................157
SECTION 8.15 Waiver of Inventory, Accounting and Appraisal Requirement.....................158
ARTICLE IX REMIC ADMINISTRATION 159
SECTION 9.01 REMIC Administration..........................................................159
SECTION 9.02 Prohibited Transactions and Activities........................................161
SECTION 9.03 Indemnification with Respect to Certain Taxes and Loss of
REMIC Status..................................................................161
ARTICLE X TERMINATION 163
SECTION 10.01 Termination...................................................................163
SECTION 10.02 Additional Termination Requirements...........................................165
ARTICLE XI MISCELLANEOUS PROVISIONS 166
SECTION 11.01 Amendment.....................................................................166
SECTION 11.02 Recordation of Agreement; Counterparts........................................167
SECTION 11.03 Limitation on Rights of Certificateholders....................................167
SECTION 11.04 Governing Law; Jurisdiction...................................................168
SECTION 11.05 Notices.......................................................................168
SECTION 11.06 Severability of Provisions....................................................169
SECTION 11.07 Article and Section References................................................169
SECTION 11.08 Notice to the Rating Agencies.................................................169
SECTION 11.09 Further Assurances............................................................170
SECTION 11.10 Benefits of Agreement.........................................................170
SECTION 11.11 Acts of Certificateholders....................................................170
iii
Exhibits:
---------
Exhibit A-1 Form of Class I-A1 Certificates
Exhibit A-2 Form of Class I-A2 Certificates
Exhibit A-3 Form of Class II-A1 Certificates
Exhibit A-4 Form of Class II-A2 Certificates
Exhibit A-5 Form of Class II-A3 Certificates
Exhibit A-6 Form of Class M-1 Certificates
Exhibit A-7 Form of Class M-2 Certificates
Exhibit A-8 Form of Class M-3 Certificates
Exhibit A-9 Form of Class M-4 Certificates
Exhibit A-10 Form of Class M-5 Certificates
Exhibit A-11 Form of Class M-6 Certificates
Exhibit A-12 Form of Class M-7 Certificates
Exhibit A-13 Form of Class M-8 Certificates
Exhibit A-14 Form of Class M-9 Certificates
Exhibit A-15 Form of Class M-10 Certificates
Exhibit A-16 Form of Class B Certificates
Exhibit A-17 Form of Class C Certificates
Exhibit A-18 Form of Class P Certificates
Exhibit A-19 Form of Class R Certificates
Exhibit A-20 Form of Class R-X Certificates
Exhibit B [Reserved]
Exhibit C Form of Assignment Agreement
Exhibit D Mortgage Loan Schedule
Exhibit E Request for Release
Exhibit F-1 Form of Trustee's Initial Certification
Exhibit F-2 Form of Trustee's Final Certification
Exhibit F-3 Form of Receipt of Mortgage Note
Exhibit G [Reserved]
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of Limited Power of Attorney
Exhibit J Form of Investment Letter
Exhibit K Form of Transfer Affidavit for Residual Certificates
Exhibit L Form of Transferor Certificate
Exhibit M Form of ERISA Representation Letter
Exhibit N-1 Form Certification to be Provided by the Depositor
with Form 10-K
Exhibit N-2 Form Certification to be Provided to the Depositor by
the Trustee
Exhibit N-3 Form Certification to be Provided to the Depositor by
the Servicer
Exhibit O Form of Cap Contract
Exhibit P Form of Annual Statement as to Compliance
Exhibit Q Form of Addition Notice
Exhibit R Form of Subsequent Transfer Instrument
Exhibit S Form of Servicing Side Letter
Schedule I Prepayment Charge Schedule
iv
This Pooling and Servicing Agreement is dated as of December
1, 2004 (the "Agreement"), among FINANCIAL ASSET SECURITIES CORP., as depositor
(the "Depositor"), ▇▇▇▇▇▇ LOAN SERVICING LP, as servicer (the "Servicer") and
DEUTSCHE BANK NATIONAL TRUST COMPANY, as trustee (the "Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Trust Fund created hereunder. The Certificates will consist of twenty
classes of certificates, designated as (i) the Class I-A1 Certificates, (ii) the
Class I-A2 Certificates, (iii) the Class II-A1 Certificates, (iv) the Class
II-A2 Certificates, (v) the Class II-A3 Certificates, (vi) the Class M-1
Certificates, (vii) the Class M-2 Certificates (viii) the Class M-3
Certificates, (ix) the Class M-4 Certificates, (x) the Class M-5 Certificates,
(xi) the Class M-6 Certificates, (xii) the Class M-7 Certificates, (xiii) the
Class M-8 Certificates, (xiv) the Class M-9 Certificates, (xv) the Class M-10
Certificates, (xvi) the Class B Certificates, (xvii) the Class C Certificates,
(xviii) the Class P Certificates, (xix) the Class R Certificates and (xx) the
Class R-X Certificates.
REMIC 1
-------
As provided herein, the Trustee shall elect to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement (exclusive of the Pre-Funding Accounts,
any Subsequent Mortgage Loan Interest, the Net WAC Rate Carryover Reserve
Account, any Servicer Prepayment Charge Payment Amounts and the Cap Contract) as
a REMIC for federal income tax purposes, and such segregated pool of assets
shall be designated as "REMIC 1." The Class R-1 Interest shall represent the
sole class of "residual interests" in REMIC 1 for purposes of the REMIC
Provisions (as defined herein). The following table irrevocably sets forth the
designation, the Uncertificated REMIC 1 Pass Through Rate, the initial
Uncertificated Principal Balance and, 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 (as defined herein). None of the REMIC 1
Regular Interests shall be certificated.
REMIC 1 Initial Uncertificated Latest Possible
Designation Remittance Rate Balance Maturity Date(1)
---------------------- ---------------------- ---------------------- ----------------------
I-LT1 Variable(2) $ 497,529,551.08 March 2035
I-LT1PF Variable(2) $ 209,283,999.00 March ▇▇▇▇
▇-▇▇▇ Variable(2) $ 452,933,526.47 March 2035
I-LT2PF Variable(2) $ 190,252,823.00 March ▇▇▇▇
▇-▇▇▇ Variable(2) $ 100.00 March 2035
________________
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each REMIC 1
Regular Interest.
(2) Calculated in accordance with the definition of "REMIC 1 Remittance
Rate" herein.
2
REMIC 2
-------
As provided herein, the Trustee shall elect 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 shall be
designated as "REMIC 2." The Class R-2 Interest shall represent the sole class
of "residual interests" in REMIC 2 for purposes of the REMIC Provisions under
federal income tax law. The following table irrevocably sets forth the
designation, the Uncertificated REMIC 2 Pass Through Rate, the initial
Uncertificated Principal Balance and, 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 (as defined herein) certificated. None of
the REMIC 2 Regular Interests will be certificated.
Uncertificated REMIC 2 Initial Uncertificated Assumed Final Maturity
Designation Pass-Through Rate Principal Balance Date(1)
---------------------- ---------------------- ---------------------- ----------------------
LTAA Variable(2) $ 1,322,999,901.56 March 2035
LTI-A1 Variable(2) $ 5,000,000.00 March 2035
LTI-A2 Variable(2) $ 555,560.00 March 2035
LTII-A1 Variable(2) $ 1,830,000.00 March 2035
LTII-A2 Variable(2) $ 2,750,000.00 March 2035
LTII-A3 Variable(2) $ 475,440.00 March 2035
LTM1 Variable(2) $ 749,250.00 March 2035
LTM2 Variable(2) $ 432,000.00 March 2035
LTM3 Variable(2) $ 263,250.00 March 2035
LTM4 Variable(2) $ 236,250.00 March 2035
LTM5 Variable(2) $ 229,500.00 March 2035
LTM6 Variable(2) $ 195,750.00 March 2035
LTM7 Variable(2) $ 189,000.00 March 2035
LTM8 Variable(2) $ 135,000.00 March 2035
LTM9 Variable(2) $ 108,000.00 March 2035
LTM10 Variable(2) $ 81,000.00 March 2035
LTB Variable(2) $ 135,000.00 March 2035
LTZZ Variable(2) $ 13,634,997.99 March 2035
LTP Variable(2) $ 100.00 March 2035
________________
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month immediately following
the maturity date for the Mortgage Loan with the latest possible
maturity date has been designated as the "latest possible maturity
date" for each REMIC 2 Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC 2
Pass-Through Rate" herein.
3
REMIC 3
-------
As provided herein, the Trustee shall elect 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 shall be
designated as "REMIC 3." The Class R-3 Interest shall evidence the sole class of
"residual interests" in REMIC 3 for purposes of the REMIC Provisions.
The following table irrevocably sets forth the designation,
the Pass-Through Rate, the Original Class Certificate Principal Balance and, for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each Class of Certificates that represents
one or more of the "regular interests" in REMIC 3 created hereunder.
Original Class Certificate Assumed Final Maturity
Designation Principal Balance Pass-Through Rate Date(1)
------------------------ -------------------------- ---------------------- ----------------------
Class I-A1.............. $ 500,000,000.00 Variable(2) March 2035
Class I-A2.............. $ 55,556,000.00 Variable(2) March 2035
Class II-A1............. $ 183,000,000.00 Variable(2) March 2035
Class II-A2............. $ 275,000,000.00 Variable(2) March 2035
Class II-A3............. $ 47,544,000.00 Variable(2) March 2035
Class M-1............... $ 74,925,000.00 Variable(2) March 2035
Class M-2............... $ 43,200,000.00 Variable(2) March 2035
Class M-3............... $ 26,325,000.00 Variable(2) March 2035
Class M-4............... $ 23,625,000.00 Variable(2) March 2035
Class M-5............... $ 22,950,000.00 Variable(2) March 2035
Class M-6............... $ 19,575,000.00 Variable(2) March 2035
Class M-7............... $ 18,900,000.00 Variable(2) March 2035
Class M-8 Interest...... $ 13,500,000.00 Variable(2) March 2035
Class M-9 Interest...... $ 10,800,000.00 Variable(2) March 2035
Class M-10 Interest..... $ 8,100,000.00 Variable(2) March 2035
Class B Interest........ $ 13,500,000.00 Variable(2) March 2035
Class C Interest........ $ 13,499,899.55(3) Variable(2) March 2035
Class P Interest........ $ 100.00 N/A(4) March 2035
________________
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month immediately following
the maturity date for the Mortgage Loan with the latest maturity date
has been designated as the "latest possible maturity date" for each
Class of Certificates that represents one or more of the "regular
interests" in REMIC 3.
(2) Calculated in accordance with the definition of "Pass-Through Rate"
herein.
(3) The Class C Interest will accrue interest at their variable
Pass-Through Rate on the Notional Amount of the Class C Interest
outstanding from time to time which shall equal the aggregate of the
Uncertificated Principal Balances of the REMIC 2 Regular Interests
(other than REMIC 2 Regular Interest LTP). The Class C Interest will
not accrue interest on its Certificate Principal Balance.
(4) The Class P Interest will not accrue interest.
4
REMIC 4
-------
As provided herein, the Trustee shall make an election to
treat the Class M-8 Interest as a REMIC for federal income tax purposes, and
such segregated pool of assets will be designated as "REMIC 4." The Class R-4
Interest represents the sole class of "residual interests" in REMIC 4 for
purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for the Class M-8 Certificates.
Original Class Certificate Assumed Final Maturity
Class Designation Principal Balance Pass-Through Rate Date(1)
---------------------- -------------------------- ---------------------- ----------------------
Class M-8 $ 13,500,000.00 Variable(2) March 2035
________________
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month immediately following
the maturity date for the Mortgage Loan with the latest maturity date
has been designated as the "latest possible maturity date" for the
Class M-8 Certificates.
(2) The Class M-8 Certificates will receive 100% of amounts received in
respect of the Class M-8 Interest.
5
REMIC 5
-------
As provided herein, the Trustee shall make an election to
treat the Class M-9 Interest as a REMIC for federal income tax purposes, and
such segregated pool of assets will be designated as "REMIC 5." The Class R-5
Interest represents the sole class of "residual interests" in REMIC 5 for
purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for the Class M-9 Certificates.
Original Class Certificate Assumed Final Maturity
Class Designation Principal Balance Pass-Through Rate Date(1)
---------------------- -------------------------- ---------------------- ----------------------
Class M-9 $ 10,800,000.00 Variable(2) March 2035
________________
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month immediately following
the maturity date for the Mortgage Loan with the latest maturity date
has been designated as the "latest possible maturity date" for the
Class M-9 Certificates.
(2) The Class M-9 Certificates will receive 100% of amounts received in
respect of the Class M-9 Interest. The Class C Certificates will also
be entitled to Subsequent Mortgage Loan Interest, as a right with
respect to a component of the Class C Certificates that will not be
treated as a REMIC regular interest but rather as separate interest
strips from the Subsequent Mortgage Loans for a specified period of
time.
6
REMIC 6
-------
As provided herein, the Trustee shall make an election to
treat the Class M-10 Interest as a REMIC for federal income tax purposes, and
such segregated pool of assets will be designated as "REMIC 6." The Class R-6
Interest represents the sole class of "residual interests" in REMIC 6 for
purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for the Class M-10 Certificates.
Original Class Certificate Assumed Final Maturity
Class Designation Principal Balance Pass-Through Rate Date(1)
---------------------- -------------------------- ---------------------- ----------------------
Class M-10 $ 8,100,000.00 Variable(2) March 2035
________________
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month immediately following
the maturity date for the Mortgage Loan with the latest maturity date
has been designated as the "latest possible maturity date" for the
Class M-10 Certificates.
(2) The Class M-10 Certificates will receive 100% of amounts received in
respect of the Class M-10 Interest.
7
REMIC 7
-------
As provided herein, the Trustee shall make an election to
treat the Class B Interest as a REMIC for federal income tax purposes, and such
segregated pool of assets will be designated as "REMIC 7." The Class R-7
Interest represents the sole class of "residual interests" in REMIC 7 for
purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for the Class B Certificates.
Original Class Certificate Assumed Final Maturity
Class Designation Principal Balance Pass-Through Rate Date(1)
---------------------- -------------------------- ---------------------- ----------------------
Class B $ 13,500,000.00 Variable(2) March 2035
________________
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month immediately following
the maturity date for the Mortgage Loan with the latest maturity date
has been designated as the "latest possible maturity date" for the
Class B Certificates.
(2) The Class B Certificates will receive 100% of amounts received in
respect of the Class B Interest.
8
REMIC 8
-------
As provided herein, the Trustee shall make an election to
treat the Class C Interest as a REMIC for federal income tax purposes, and such
segregated pool of assets will be designated as "REMIC 8." The Class R-8
Interest represents the sole class of "residual interests" in REMIC 8 for
purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for the Class C Certificates.
Original Class Certificate Assumed Final Maturity
Class Designation Principal Balance Pass-Through Rate Date(1)
---------------------- -------------------------- ---------------------- ----------------------
Class C $ 13,499,899.55 Variable(2) March 2035
________________
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month immediately following
the maturity date for the Mortgage Loan with the latest maturity date
has been designated as the "latest possible maturity date" for the
Class C Certificates.
(2) The Class C Certificates will receive 100% of amounts received in
respect of the Class C Interest. The Class Certificates will also be
entitled to Subsequent Mortgage Loan Interest, as a right with respect
to a compenent of the Class C Certificates that will not be treated as
a REMIC regular interest but rather as separate interest strips from
the Subsequent Mortgage Loans for a specified period of time.
9
REMIC 9
-------
As provided herein, the Trustee shall make an election to
treat the Class P Interest as a REMIC for federal income tax purposes, and such
segregated pool of assets will be designated as "REMIC 9." The Class R-9
Interest represents the sole class of "residual interests" in REMIC 9 for
purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for the Class P Certificates.
Original Class Certificate Assumed Final Maturity
Class Designation Principal Balance Pass-Through Rate Date(1)
---------------------- -------------------------- ---------------------- ----------------------
Class P $100.00 Variable(2) March 2035
________________
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month immediately following
the maturity date for the Mortgage Loan with the latest maturity date
has been designated as the "latest possible maturity date" for the
Class P Certificates.
(2) The Class P Certificates will receive 100% of amounts received in
respect of the Class P Interest.
10
ARTICLE I
DEFINITIONS
SECTION 1.01 Defined Terms.
Whenever used in this Agreement or in the Preliminary
Statement, the following words and phrases, unless the context otherwise
requires, shall have the meanings specified in this Article. Unless otherwise
specified, all calculations in respect of interest on the Floating Rate
Certificates shall be made on the basis of the actual number of days elapsed and
a 360-day year and all calculations in respect of interest on the Class C
Certificates and all other calculations of interest described herein shall be
made on the basis of a 360-day year consisting of twelve 30-day months. The
Class P Certificates and the Residual Certificates are not entitled to
distributions in respect of interest and, accordingly, will not accrue interest.
"1933 Act": The Securities Act of 1933, as amended.
"Account": Either of the Collection Account or Distribution
Account.
"Accrual Period": With respect to the Class C Certificates and
each Distribution Date, the calendar month prior to the month of such
Distribution Date. With respect to the Floating Rate Certificates and each
Distribution Date, the period commencing on the preceding Distribution Date (or
in the case of the first such Accrual Period, commencing on the Closing Date)
and ending on the day preceding such Distribution Date.
"Addition Notice": With respect to the transfer of Subsequent
Mortgage Loans to the Trust Fund pursuant to Section 2.08, a notice of the
Depositor's designation of the Subsequent Mortgage Loans to be sold to the Trust
Fund and the aggregate principal balance of such Subsequent Mortgage Loans as of
the Subsequent Cut-off Date. The Addition Notice shall be given not later than
three Business Days prior to the related Subsequent Transfer Date and shall be
substantially in the form attached hereto as Exhibit Q.
"Adjustable-Rate Mortgage Loan": A first lien Mortgage Loan
which provides at any period during the life of such loan for the adjustment of
the Mortgage Rate payable in respect thereto. The Adjustable Rate Mortgage Loans
are identified as such on the Mortgage Loan Schedule.
"Adjusted Net Maximum Mortgage Rate": With respect to any
Mortgage Loan (or the related REO Property), as of any date of determination, a
per annum rate of interest equal to the applicable Maximum Mortgage Rate for
such Mortgage Loan (or the Mortgage Rate in the case of any Fixed-Rate Mortgage
Loan) as of the first day of the month preceding the month in which the related
Distribution Date occurs minus the sum of (i) the Trustee Fee Rate and (ii) the
Servicing Fee Rate.
"Adjusted Net Mortgage Rate": With respect to any Mortgage
Loan (or the related REO Property), as of any date of determination, a per annum
rate of interest equal to the applicable Mortgage Rate for such Mortgage Loan as
of the first day of the month preceding the
11
month in which the related Distribution Date occurs minus the sum of (i) the
Trustee Fee Rate and (ii) the Servicing Fee Rate.
"Adjustment Date": With respect to each Adjustable-Rate
Mortgage Loan, each adjustment date, on which the Mortgage Rate of such Mortgage
Loan changes pursuant to the related Mortgage Note. The first Adjustment Date
following the Cut-off Date as to each Adjustable-Rate Mortgage Loan is set forth
in the Mortgage Loan Schedule.
"Advance": As to any Mortgage Loan or REO Property, any
advance made by the Servicer in respect of any Distribution Date pursuant to
Section 4.04.
"Advance Facility": As defined in Section 3.29 hereof.
"Advance Facility Notice": As defined in Section 3.29 hereof.
"Advance Financing Person": As defined in Section 3.29 hereof.
"Advance Reimbursement Amounts": As defined in Section 3.29
hereof.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise and "controlling" and "controlled"
shall have meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
"Allocated Realized Loss Amount": With respect to any
Distribution Date and any Class of Mezzanine Certificates or Class B
Certificates, the sum of (i) any Realized Losses allocated to such Class of
Certificates on such Distribution Date and (ii) the amount of any Allocated
Realized Loss Amount for such Class of Certificates remaining unpaid from the
previous Distribution Date as reduced by an amount equal to the increase in the
related Certificate Principal Balance due to the receipt of Subsequent
Recoveries.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect or
record the sale of the Mortgage.
"Assignment Agreement": The Assignment and Recognition
Agreement, dated December 16, 2004, among the Seller, the Originator and the
Depositor, pursuant to which certain of the Seller's rights under the Master
Agreement were assigned to the Depositor, substantially in the form attached
hereto as Exhibit C.
12
"Assumed Final Maturity Date": As to each Class of
Certificates, the date set forth as such in the Preliminary Statement.
"Available Funds": With respect to any Distribution Date, an
amount equal to the excess of (i) the sum of (a) the aggregate of the related
Monthly Payments received on the Mortgage Loans on or prior to the related
Determination Date, (b) Net Liquidation Proceeds, Insurance Proceeds, Subsequent
Recoveries, Principal Prepayments, proceeds from repurchases of and
substitutions for such Mortgage Loans and other unscheduled recoveries of
principal and interest in respect of the Mortgage Loans received during the
related Prepayment Period, (c) the aggregate of any amounts received in respect
of a related REO Property withdrawn from any REO Account and deposited in the
Collection Account for such Distribution Date, (d) the aggregate of any amounts
deposited in the Collection Account by the Servicer in respect of related
Prepayment Interest Shortfalls for such Distribution Date, (e) the aggregate of
any Advances made by the Servicer for such Distribution Date in respect of the
Mortgage Loans, (f) the aggregate of any related advances made by the Trustee in
respect of the Mortgage Loans for such Distribution Date pursuant to Section
7.02, (g) the amount of any Prepayment Charges collected by the Servicer in
connection with the full or partial prepayment of any of the Mortgage Loans and
any Servicer Prepayment Charge Payment Amount and (h) with respect to the
Distribution Date immediately following the end of the Funding Period, any
amounts in the Pre-Funding Accounts (exclusive of any investment income therein)
after giving effect to any purchase of Subsequent Mortgage Loans over (ii) the
sum of (a) amounts reimbursable or payable to the Servicer pursuant to Section
3.11(a) or the Trustee pursuant to Section 3.11(b), (b) amounts deposited in the
Collection Account or the Distribution Account pursuant to clauses (a) through
(g) above, as the case may be, in error, (c) the amount of any Prepayment
Charges collected by the Servicer in connection with the full or partial
prepayment of any of the Mortgage Loans and any Servicer Prepayment Charge
Payment Amount, (d) the Trustee Fee payable from the Distribution Account
pursuant to Section 8.05 and (e) any indemnification payments or expense
reimbursements made by the Trust Fund pursuant to Section 8.05.
"Balloon Mortgage Loan": A Mortgage Loan that provides for the
payment of the unamortized principal balance of such Mortgage Loan in a single
payment at the maturity of such Mortgage Loan that is substantially greater than
the preceding monthly payment.
"Balloon Payment": A payment of the unamortized principal
balance of a Mortgage Loan in a single payment at the maturity of such Mortgage
Loan that is substantially greater than the preceding Monthly Payment.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.
"Base Rate": For any Distribution Date and the Floating Rate
Certificates, the sum of (i) LIBOR plus (ii) the related Certificate Margin.
"Book-Entry Certificates": Any of the Certificates that shall
be registered in the name of the Depository or its nominee, the ownership of
which is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as
13
a "Depository Participant", or indirectly, as an indirect participant in
accordance with the rules of the Depository and as described in Section 5.02
hereof). On the Closing Date, the Floating Rate Certificates shall be Book-Entry
Certificates.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings institutions in the State of Delaware, the State
of New York, the State of Texas, the State of California or in the city in which
the Corporate Trust Office of the Trustee is located are authorized or obligated
by law or executive order to be closed.
"Cap Amount": The Cap Amount for any Class of the Floating
Rate Certificates is equal to (i) the aggregate amount received by the Trust
from the Cap Contract multiplied by (ii) a fraction equal to (a) the Certificate
Principal Balance of such Class immediately prior to the applicable Distribution
Date divided by (b) the aggregate Certificate Principal Balance of the Floating
Rate Certificates immediately prior to the applicable Distribution Date.
"Cap Contract": The Cap Contract between the Trustee and the
counterparty thereunder, a form of which is attached hereto as Exhibit O.
"Certificate": Any Regular Certificate or Residual
Certificate.
Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or non-U.S. Person shall not be a Holder of a Residual
Certificate for any purpose hereof and, solely for the purposes of giving any
consent pursuant to this Agreement, any Certificate registered in the name of
the Depositor or the Servicer or any Affiliate thereof shall be deemed not to be
outstanding and the Voting Rights to which it is entitled shall not be taken
into account in determining whether the requisite percentage of Voting Rights
necessary to effect any such consent has been obtained, except as otherwise
provided in Section 11.01. The Trustee may conclusively rely upon a certificate
of the Depositor or the Servicer in determining whether a Certificate is held by
an Affiliate thereof. All references herein to "Holders" or "Certificateholders"
shall reflect the rights of Certificate Owners as they may indirectly exercise
such rights through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Trustee shall be
required to recognize as a "Holder" or "Certificateholder" only the Person in
whose name a Certificate is registered in the Certificate Register.
"Certificate Margin": With respect to each Class of Adjustable
Rate Certificates and for purposes of the Marker Rate and the maximum II LTZZ
Uncertificated Interest Deferral Amount, the specified REMIC 2 Regular Interest,
as follows:
14
Certificate Margin
REMIC 2 Regular ---------------------------
Class Interest (1) (%) (2) (%)
---------------- --------------------- --------- ---------
I-A1 LTI-A1 0.380% 0.760%
I-A2 LTI-A2 0.350% 0.700%
II-A1 LTII-A1 0.160% 0.320%
II-A2 LTII-A2 0.280% 0.560%
II-A3 LTII-A3 0.450% 0.900%
M-1 LTM1 0.530% 0.795%
M-2 LTM2 0.560% 0.840%
M-3 LTM3 0.610% 0.915%
M-4 LTM4 0.950% 1.425%
M-5 LTM5 1.000% 1.500%
M-6 LTM6 1.150% 1.725%
M-7 LTM7 1.720% 2.580%
M-8 LTM8 1.820% 2.730%
M-9 LTM9 3.050% 4.575%
M-10 LTM10 3.250% 4.875%
B LTB 3.250% 4.875%
__________
(1) For the Accrual Period for each Distribution Date on or prior to the
Optional Termination Date.
(2) For each other Accrual Period.
"Certificate Owner": With respect to each Book-Entry
Certificate, any beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of
Regular Certificates (other than the Class C Certificates) immediately prior to
any Distribution Date, will be equal to the Initial Certificate Principal
Balance thereof plus any Subsequent Recoveries added to the Certificate
Principal Balance of such Certificate pursuant to Section 4.01, reduced by the
sum of all amounts actually distributed in respect of principal of such Class
and, in the case of a Mezzanine Certificate or Class B Certificate, Realized
Losses allocated thereto on all prior Distribution Dates. With respect to the
Class C Certificates as of any date of determination, an amount equal to the
excess, if any, of (A) the then aggregate Uncertificated Principal Balance of
the REMIC 2 Regular Interests over (B) the then aggregate Certificate Principal
Balance of the Floating Rate Certificates and the Class P Certificates then
outstanding.
"Certificate Register" and "Certificate Registrar": The
register maintained and registrar appointed pursuant to Section 5.02 hereof.
"Class": Collectively, Certificates which have the same
priority of payment and bear the same class designation and the form of which is
identical except for variation in the Percentage Interest evidenced thereby.
"Class I-A1 Certificate": Any one of the Class I-A1
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-1,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC 3.
15
"Class I-A2 Certificate": Any one of the Class I-A2
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-2,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC 3.
"Class II-A1 Certificate": Any one of the Class II-A1
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-3,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC 3.
"Class II-A2 Certificate": Any one of the Class II-A2
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-4,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC 3.
"Class II-A3 Certificate": Any one of the Class II-A3
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-5,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC 3.
"Class A Certificates": Any Class I-A1 Certificate, Class I-A2
Certificate, Class II-A1 Certificate, Class II-A2 Certificate or Class II-A3
Certificate.
"Class B Certificate": Any one of the Class B Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-16,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC 7.
"Class B Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the Holders of the Class B Certificates,
evidencing a Regular Interest in REMIC 3 for purposes of the REMIC Provisions.
"Class B Principal Distribution Amount": The excess of (x) the
sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Senior Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates
(after taking into account the
16
distribution of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the distribution of the Class M-7 Principal
Distribution Amount on such Distribution Date), (ix) the Certificate Principal
Balance of the Class M-8 Certificates (after taking into account the
distribution of the Class M-8 Principal Distribution Amount on such Distribution
Date), (x) the Certificate Principal Balance of the Class M-9 Certificates
(after taking into account the distribution of the Class M-9 Principal
Distribution Amount on such Distribution Date), (xi) the Certificate Principal
Balance of the Class B Certificates (after taking into account the distribution
of the Class B Principal Distribution Amount on such Distribution Date) and
(xii) the Certificate Principal Balance of the Class B Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
98.00% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) minus the related Overcollateralization
Floor.
"Class C Certificates": Any one of the Class C Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-17,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC 8.
"Class C Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the Holders of the Class C Certificates,
evidencing a Regular Interest in REMIC 3 for purposes of the REMIC Provisions.
"Class M-1 Certificate": Any one of the Class M-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-6, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"Class M-1 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Senior Principal
Distribution Amount on such Distribution Date) and (ii) the Certificate
Principal Balance of the Class M-1 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 68.30% and (ii)
the Stated Principal Balance of the Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the related Overcollateralization Floor.
17
"Class M-2 Certificate": Any one of the Class M-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-7, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"Class M-2 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Senior Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date) and (iii) the Certificate Principal Balance of the Class M-2 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 74.70% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the related
Overcollateralization Floor.
"Class M-3 Certificate": Any one of the Class M-3 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-8, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"Class M-3 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Senior Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date) and (iv) the Certificate
Principal Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 78.60% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the related Overcollateralization Floor.
"Class M-4 Certificate": Any one of the Class M-4 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form
18
annexed hereto as Exhibit A-9, representing the right to distributions as set
forth herein and therein and evidencing a regular interest in REMIC 3.
"Class M-4 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Senior Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date) (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date) and (iv) the Certificate Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 82.10% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the related
Overcollateralization Floor.
"Class M-5 Certificate": Any one of the Class M-5 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-10,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC 3.
"Class M-5 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Senior Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date) and (vi) the Certificate
Principal Balance of the Class M-5 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 85.50% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due
19
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) minus the related Overcollateralization Floor.
"Class M-6 Certificate": Any one of the Class M-6 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-11,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC 3.
"Class M-6 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Senior Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date) and (vii) the Certificate Principal Balance of the Class M-6 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 88.40% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the related
Overcollateralization Floor.
"Class M-7 Certificate": Any one of the Class M-7 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-12,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC 3.
"Class M-7 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Senior Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
20
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates
(after taking into account the distribution of the Class M-6 Principal
Distribution Amount on such Distribution Date) and (viii) the Certificate
Principal Balance of the Class M-7 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 91.20% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the related Overcollateralization Floor.
"Class M-8 Certificate": Any one of the Class M-8 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-13,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC 4.
"Class M-8 Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the Holders of the Class M-8 Certificates,
evidencing a Regular Interest in REMIC 3 for purposes of the REMIC Provisions.
"Class M-8 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Senior Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates
(after taking into account the distribution of the Class M-6 Principal
Distribution Amount on such Distribution Date), (viii) the Certificate Principal
Balance of the Class M-7 Certificates (after taking into account the
distribution of the Class M-7 Principal Distribution Amount on such Distribution
Date) and (ix) the Certificate Principal Balance of the Class M-8 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 93.20% and (ii) the aggregate
21
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) minus the related Overcollateralization Floor.
"Class M-9 Certificate": Any one of the Class M-9 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-14,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC 5.
"Class M-9 Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the Holders of the Class M-9 Certificates,
evidencing a Regular Interest in REMIC 3 for purposes of the REMIC Provisions.
"Class M-9 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Senior Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates
(after taking into account the distribution of the Class M-6 Principal
Distribution Amount on such Distribution Date), (viii) the Certificate Principal
Balance of the Class M-7 Certificates (after taking into account the
distribution of the Class M-7 Principal Distribution Amount on such Distribution
Date), (ix) the Certificate Principal Balance of the Class M-8 Certificates
(after taking into account the distribution of the Class M-8 Principal
Distribution Amount on such Distribution Date) and (x) the Certificate Principal
Balance of the Class M-9 Certificates immediately prior to such Distribution
Date over (y) the lesser of (A) the product of (i) 94.80% and (ii) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of
22
principal received during the related Prepayment Period) minus the related
Overcollateralization Floor.
"Class M-10 Certificate": Any one of the Class M-10
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-15,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC 6.
"Class M-10 Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the Holders of the Class M-10
Certificates, evidencing a Regular Interest in REMIC 3 for purposes of the REMIC
Provisions.
"Class M-10 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Senior Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates
(after taking into account the distribution of the Class M-6 Principal
Distribution Amount on such Distribution Date), (viii) the Certificate Principal
Balance of the Class M-7 Certificates (after taking into account the
distribution of the Class M-7 Principal Distribution Amount on such Distribution
Date), (ix) the Certificate Principal Balance of the Class M-8 Certificates
(after taking into account the distribution of the Class M-8 Principal
Distribution Amount on such Distribution Date), (x) the Certificate Principal
Balance of the Class M-9 Certificates (after taking into account the
distribution of the Class M-9 Principal Distribution Amount on such Distribution
Date) and (xi) the Certificate Principal Balance of the Class M-10 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 96.00% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the related
Overcollateralization Floor.
"Class P Certificate": Any one of the Class P Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed
23
hereto as Exhibit A-18, representing the right to distributions as set forth
herein and therein and evidencing a regular interest in REMIC 9.
"Class P Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the Holders of the Class P Certificates,
evidencing a Regular Interest in REMIC 3 for purposes of the REMIC Provisions.
"Class R Certificate": The Class R Certificate executed by the
Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-19 and evidencing the
ownership of the Class R-1 Interest, the Class R-2 Interest and the Class R-3
Interest.
"Class R-1 Interest": The uncertificated Residual Interest in
REMIC 1.
"Class R-2 Interest": The uncertificated Residual Interest in
REMIC 2.
"Class R-3 Interest": The uncertificated Residual Interest in
REMIC 3.
"Class R-4 Interest": The uncertificated Residual Interest in
REMIC 4.
"Class R-5 Interest": The uncertificated Residual Interest in
REMIC 5.
"Class R-6 Interest": The uncertificated Residual Interest in
REMIC 6.
"Class R-7 Interest": The uncertificated Residual Interest in
REMIC 7.
"Class R-8 Interest": The uncertificated Residual Interest in
REMIC 8.
"Class R-9 Interest": The uncertificated Residual Interest in
REMIC 9.
"Class R-X Certificate": The Class R-X Certificate executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-20 and evidencing the
ownership of the Class R-4 Interest, the Class R-5 Interest, the Class R-6
Interest, the Class R-7 Interest, the Class R-8 Interest and the Class R-9
Interest.
"Close of Business": As used herein, with respect to any
Business Day, 5:00 p.m. (New York time).
"Closing Date": December 16, 2004.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The account or accounts created and
maintained by the Servicer pursuant to Section 3.10(a), which shall be entitled
"Deutsche Bank National Trust Company, as Trustee, in trust for registered
Holders of Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4," which must be an Eligible Account.
"Compensating Interest": As defined in Section 3.24 hereof.
24
"Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, or at such other address as the Trustee may designate
from time to time by notice to the Certificateholders, the Depositor, the
Servicer, the Originator and the Seller.
"Corresponding Certificate": With respect to each REMIC 2
Regular Interest set forth below, the corresponding Regular Certificate set
forth in the table below:
REMIC 2 REGULAR INTEREST REGULAR CERTIFICATE
-------------------------------------------------------------------
LTIA1 Class I-A1
LTIA2 Class I-A2
LTIIA1 Class II-A1
LTIIA2 Class II-A2
LTIIA3 Class II-A3
LTM1 Class M-1
LTM2 Class M-2
LTM3 Class M-3
LTM4 Class M-4
LTM5 Class M-5
LTM6 Class M-6
LTM7 Class M-7
LTM8 Class M-8
LTM9 Class M-9
LTM10 Class M-10
LTB1 Class B-1
LTP Class P
"Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the sum of
the aggregate Certificate Principal Balance of the Mezzanine Certificates, the
Class B Certificates and the Class C Certificates, and the denominator of which
is the sum of (x) the aggregate Stated Principal Balance of the Mortgage Loans
and (y) any amounts remaining on deposit in the Pre-Funding Accounts (exclusive
of any investment income therein), calculated prior to taking into account
payments of principal on the Mortgage Loans and distribution of the Group I
Principal Distribution Amount and the Group II Principal Distribution Amount to
the Holders of the Certificates then entitled to distributions of principal on
such Distribution Date.
"Cumulative Loss Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Realized Losses incurred from the Cut-off Date to the last
day of the preceding calendar month and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.
"Custodian": Deutsche Bank National Trust Company, as
custodian of the Mortgage Files, or any successor thereto.
25
"Cut-off Date": With respect to each Initial Mortgage Loan,
December 1, 2004.
"Cut-off Date Principal Balance": With respect to any Mortgage
Loan, the unpaid Stated Principal Balance thereof as of the Cut-off Date of such
Mortgage Loan (or as of the applicable date of substitution with respect to a
Qualified Substitute Mortgage Loan), after giving effect to scheduled payments
due on or before the Cut-off Date, whether or not received.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding Stated Principal Balance of the
Mortgage Loan, which valuation results from a proceeding initiated under the
Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.02(c)
hereof.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by one or more Qualified Substitute Mortgage Loans.
"Delinquency Percentage": For any Distribution Date, the
percentage obtained by dividing (x) the aggregate Stated Principal Balance of
Mortgage Loans that are Delinquent 60 days or more (including Mortgage Loans
that are in foreclosure, that have been converted to REO Properties or that have
been discharged by reason of bankruptcy and are Delinquent 60 days or more) by
(y) the aggregate Principal Balance of the Mortgage Loans, in each case, as of
the last day of the previous calendar month.
"Delinquent": With respect to any Mortgage Loan and related
Monthly Payment, the Monthly Payment due on a Due Date which is not made by the
Close of Business on the next scheduled Due Date for such Mortgage Loan. For
example, a Mortgage Loan is 60 or more days Delinquent if the Monthly Payment
due on a Due Date is not made by the Close of Business on the second scheduled
Due Date after such Due Date.
"Depositor": Financial Asset Securities Corp., a Delaware
corporation, or any successor in interest.
"Depository": The initial Depository shall be The Depository
Trust Company, whose nominee is Cede & Co., or any other organization registered
as a "clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
26
"Depository Participant": A broker, dealer, bank or other
financial institution or other person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to any Distribution Date,
the 15th day of the calendar month in which such Distribution Date occurs or, if
such 15th day is not a Business Day, the Business Day immediately preceding such
15th day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by the REMIC other than
through an Independent Contractor; provided, however, that the Trustee (or the
Servicer on behalf of the Trustee) shall not be considered to Directly Operate
an REO Property solely because the Trustee (or the Servicer on behalf of the
Trustee) establishes rental terms, chooses tenants, enters into or renews
leases, deals with taxes and insurance, or makes decisions as to repairs or
capital expenditures with respect to such REO Property.
"Disqualified Organization": A "disqualified organization"
under Section 860E of the Code, which as of the Closing Date is any of: (i) the
United States, any state or political subdivision thereof, any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (ii) any organization (other than a cooperative described
in Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of
the Code unless such organization is subject to the tax imposed by Section 511
of the Code, (iii) any organization described in Section 1381(a)(2)(C) of the
Code or (iv) an "electing large partnership" within the meaning of Section 775
of the Code. A corporation will not be treated as an instrumentality of the
United States or of any state or political subdivision thereof, if all of its
activities are subject to tax and, a majority of its board of directors is not
selected by a governmental unit. The term "United States", "state" and
"international organizations" shall have the meanings set forth in Section 7701
of the Code.
"Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.10(b) which shall be
entitled "Distribution Account, Deutsche Bank National Trust Company, as
Trustee, in trust for the registered Certificateholders of Fremont Home Loan
Trust 2004-4, Asset-Backed Certificates, Series 2004-4" 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 January 2005.
"Due Date": With respect to each Mortgage Loan and any
Distribution Date, the first day of the calendar month in which such
Distribution Date occurs on which the Monthly Payment for such Mortgage Loan was
due (or, in the case of any Mortgage Loan under the terms of which the Monthly
Payment for such Mortgage Loan was due on a day other than the first day
27
of the calendar month in which such Distribution Date occurs, the day during the
related Due Period on which such Monthly Payment was due), exclusive of any days
of grace.
"Due Period": With respect to any Distribution Date, the
period commencing on the second day of the month preceding the month in which
such Distribution Date occurs and ending on the first day of the month in which
such Distribution Date occurs.
"Eligible Account": Any of (i) an account or accounts
maintained with a federal or state chartered depository institution or trust
company the short-term unsecured debt obligations of which (or, in the case of a
depository institution or trust company that is the principal subsidiary of a
holding company, the short-term unsecured debt obligations of such holding
company) are rated A-1+ by S&P, F-1 by Fitch and P-1 by ▇▇▇▇▇'▇ (or comparable
ratings if S&P, Fitch and ▇▇▇▇▇'▇ are not the Rating Agencies) at the time any
amounts are held on deposit therein, (ii) an account or accounts the deposits in
which are fully insured by the FDIC up to the insured amount, (iii) a trust
account or accounts maintained with the trust department of a federal or state
chartered depository institution, national banking association or trust company
acting in its fiduciary capacity or (iv) an account otherwise acceptable to each
Rating Agency without reduction or withdrawal of their then current ratings of
the Certificates as evidenced by a letter from each Rating Agency to the
Trustee. Eligible Accounts may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"Escrow Payments": The amounts constituting ground rents,
taxes, assessments, water rates, fire and hazard insurance premiums and other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant to
any Mortgage Loan.
"Excess Overcollateralized Amount": With respect to the
Floating Rate Certificates and any Distribution Date, the excess, if any, of (i)
the Overcollateralized Amount for such Distribution Date, assuming that 100% of
the Principal Remittance Amount is applied as a principal payment on such
Distribution Date over (ii) the Overcollateralization Target Amount for such
Distribution Date.
"Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (x) the Monthly Interest Distributable Amount
payable on the Class C Certificates on such Distribution Date as reduced by
Realized Losses allocated thereto with respect to such Distribution Date
pursuant to Section 4.08 and (y) the Overcollateralization Deficiency Amount for
such Distribution Date.
"▇▇▇▇▇▇ Mae": Federal National Mortgage Association or any
successor thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Originator or the Servicer pursuant to or as contemplated by
Section 2.03, 3.16(c) or 10.01), a determination made by the Servicer that all
Insurance Proceeds, Liquidation Proceeds and other payments or
28
recoveries which the Servicer, in its reasonable good faith judgment, expects to
be finally recoverable in respect thereof have been so recovered. The Servicer
shall maintain records, prepared by a Servicing Officer, of each Final Recovery
Determination made thereby.
"Fitch": Fitch Ratings, or its successor in interest.
"Fixed-Rate Mortgage Loan": A first lien or second lien
Mortgage Loan which provides for a fixed Mortgage Rate payable with respect
thereto. The Fixed-Rate Mortgage Loans are identified as such on the Mortgage
Loan Schedule.
"Floating Rate Certificates": Any Class A Certificate,
Mezzanine Certificate or Class B Certificate.
"Formula Rate": For any Distribution Date and any Class of the
Floating Rate Certificates, the lesser of (i) the Base Rate and (ii) the Maximum
Cap Rate.
"▇▇▇▇▇▇▇ Mac": The Federal Home Loan Mortgage Corporation, or
any successor thereto.
"Funding Period": The period beginning on the Closing Date and
ending on the earlier to occur of (a) the date upon which the amount on deposit
in the Pre-Funding Accounts (exclusive of any investment income therein) has
been reduced to zero or (b) March 11, 2005.
"Gross Margin": With respect to each Adjustable-Rate Mortgage
Loan, the fixed percentage set forth in the related Mortgage Note that is added
to the Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Mortgage Loan.
"Group I Allocation Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (i) the Group I Principal Remittance Amount for such Distribution Date,
and the denominator of which is (ii) the Principal Remittance Amount for such
Distribution Date.
"Group I Basic Principal Distribution Amount": With respect to
any Distribution Date, the excess of (i) the Group I Principal Remittance Amount
for such Distribution Date over (ii)(a) the Overcollateralization Release
Amount, if any, for such Distribution Date multiplied by (b) the Group I
Allocation Percentage.
"Group I Certificates": Any Class I-A1 Certificate or Class
I-A2 Certificate.
"Group I Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Funds for such Distribution
Date attributable to interest received or advanced with respect to the Group I
Mortgage Loans.
"Group I Mortgage Loan": A Mortgage Loan assigned to Loan
Group I with a Stated Principal Balance at origination that conforms to ▇▇▇▇▇▇
▇▇▇ and ▇▇▇▇▇▇▇ Mac loan limits.
29
"Group I Pre-Funding Account": The account established and
maintained pursuant to Section 4.05, as defined herein.
"Group I Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group I Basic Principal Distribution
Amount for such Distribution Date and (ii)(a) the Extra Principal Distribution
Amount for such Distribution Date multiplied by (b) the Group I Allocation
Percentage.
"Group I Principal Remittance Amount": With respect to any
Distribution Date, that portion of the Available Funds equal to the sum of (i)
each scheduled payment of principal collected or advanced on the Group I
Mortgage Loans by the Servicer that were due during the related Due Period, (ii)
the principal portion of all partial and full Principal Prepayments of the Group
I Mortgage Loans applied by the Servicer during the related Prepayment Period,
(iii) the principal portion of all related Net Liquidation Proceeds, Insurance
Proceeds and Subsequent Recoveries 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 related Substitution Adjustments deposited in the
Collection Account during the related Prepayment Period with respect to the
Group I Mortgage Loans, (vi) on the Distribution Date on which the Trust Fund is
to be terminated pursuant to Section 10.01, that portion of the Termination
Price, in respect of principal on the Group I Mortgage Loans and (vii) on the
Distribution Date immediately following the end of the Funding Period, any
remaining amounts in the Group I Pre-Funding Account (exclusive of any
investment income therein) after giving effect to any purchase of Subsequent
Group I Mortgage Loans.
"Group I Senior Principal Distribution Amount": The excess of
(x) the Certificate Principal Balance of the Group I Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
57.20% and (ii) the aggregate Stated Principal Balance of the Group I Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) and (B) the aggregate Stated Principal Balance of
the Group I Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the related
Overcollateralization Floor.
"Group II Allocation Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (i) the Group II Principal Remittance Amount for such Distribution
Date, and the denominator of which is (ii) the Principal Remittance Amount for
such Distribution Date.
"Group II Basic Principal Distribution Amount": With respect
to any Distribution Date, the excess of (i) the Group II Principal Remittance
Amount for such Distribution Date over (ii)(a) the Overcollateralization Release
Amount, if any, for such Distribution Date multiplied by (b) the Group II
Allocation Percentage.
30
"Group II Certificates": Any Class II-A1 Certificate, Class
II-A2 Certificate or Class II-A3 Certificate.
"Group II Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Funds for such Distribution
Date attributable to interest received or advanced with respect to the Group II
Mortgage Loans.
"Group II Mortgage Loan": A Mortgage Loan assigned to Loan
Group II with a Stated Principal Balance at origination that may or may not
conform to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac loan limits.
"Group II Pre-Funding Account": The account established and
maintained pursuant to Section 4.05, as defined herein.
"Group II Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group II Basic Principal Distribution
Amount for such Distribution Date and (ii)(a) the Extra Principal Distribution
Amount for such Distribution Date multiplied by (b) the Group II Allocation
Percentage.
"Group II Principal Remittance Amount": With respect to any
Distribution Date, that portion of Available Funds equal to the sum of (i) each
scheduled payment of principal collected or advanced on the Group II Mortgage
Loans by the Servicer that were due during the related Due Period, (ii) the
principal portion of all partial and full Principal Prepayments of the Group II
Mortgage Loans applied by the Servicer during the related Prepayment Period,
(iii) the principal portion of all related Net Liquidation Proceeds, Insurance
Proceeds and Subsequent Recoveries 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 related Substitution Adjustments deposited in the
Collection Account during the related Prepayment Period with respect to the
Group II Mortgage Loans, (vi) on the Distribution Date on which the Trust Fund
is to be terminated pursuant to Section 10.01, that portion of the Termination
Price, in respect of principal on the Group II Mortgage Loans and (vii) on the
Distribution Date immediately following the end of the Funding Period, any
remaining amounts in the Group II Pre-Funding Account (exclusive of any
investment income therein) after giving effect to any purchase of Subsequent
Group II Mortgage Loans.
"Group II Senior Principal Distribution Amount": The excess of
(x) the aggregate Certificate Principal Balance of the Group II Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 57.20% and (ii) the aggregate Stated Principal Balance of the
Group II Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Group II Mortgage Loans as of the last day of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled
31
collections of principal received during the related Prepayment Period) minus
the related Overcollateralization Floor.
"Highest Priority": As of any date of determination, the Class
of Mezzanine Certificates or Class B Certificates then outstanding with a
Certificate Principal Balance greater than zero, with the highest priority for
payments pursuant to Section 4.01, in the following order of decreasing
priority: Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6
Certificates, Class M-7 Certificates, Class M-8 Certificates, Class M-9
Certificates, Class M-10 Certificates and Class B Certificates.
"Indenture": An indenture relating to the issuance of notes
secured by the Class C Certificates, the Class P Certificates and/or the Class R
Certificates (or any portion thereof).
"Independent": When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Depositor, the Servicer
and their respective Affiliates, (b) does not have any direct financial interest
in or any material indirect financial interest in the Depositor or the Servicer
or any Affiliate thereof, and (c) is not connected with the Depositor or the
Servicer or any Affiliate thereof as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar functions;
provided, however, that a Person shall not fail to be Independent of the
Depositor or the Servicer or any Affiliate thereof merely because such Person is
the beneficial owner of 1% or less of any class of securities issued by the
Depositor or the Servicer or any Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than
the Servicer) that would be an "independent contractor" with respect to any of
the REMICs created hereunder within the meaning of Section 856(d)(3) of the Code
if such REMIC were a real estate investment trust (except that the ownership
tests set forth in that section shall be considered to be met by any Person that
owns, directly or indirectly, 35% or more of any Class of Certificates), so long
as each such REMIC does not receive or derive any income from such Person and
provided that the relationship between such Person and such REMIC is at arm's
length, all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or
(ii) any other Person (including the Servicer) if the Trustee has received an
Opinion of Counsel to the effect that the taking of any action in respect of any
REO Property by such Person, subject to any conditions therein specified, that
is otherwise herein contemplated to be taken by an Independent Contractor will
not cause such REO Property to cease to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for purposes of Section 860D(a) of the Code), or cause any
income realized in respect of such REO Property to fail to qualify as Rents from
Real Property.
"Index": With respect to each Adjustable-Rate Mortgage Loan
and with respect to each related Adjustment Date, the index as specified in the
related Mortgage Note.
"Initial Certificate Principal Balance": With respect to any
Regular Certificate, the amount designated "Initial Certificate Principal
Balance" on the face thereof.
32
"Initial Group I Mortgage Loan": Any of the Group I Mortgage
Loans included in the Trust Fund as of the Closing Date. The aggregate principal
balance of the Initial Group I Mortgage Loans as of the Cut-off Date is equal to
$497,529,651.08.
"Initial Group II Mortgage Loan": Any of the Group II Mortgage
Loans included in the Trust Fund as of the Closing Date. The aggregate principal
balance of the Initial Group II Mortgage Loans as of the Cut-off Date is equal
to $452,933,526.47.
"Initial Mortgage Loan": Any of the Initial Group I Mortgage
Loans or Initial Group II Mortgage Loans included in the Trust Fund as of the
Closing Date.
"Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan, to the extent such
proceeds are received by the Servicer and are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with the procedures that the Servicer would follow in servicing
mortgage loans held for its own account, subject to the terms and conditions of
the related Mortgage Note and Mortgage.
"Interest Determination Date": With respect to the Floating
Rate Certificates and each Accrual Period, the second LIBOR Business Day
preceding the commencement of such Accrual Period.
"Late Collections": With respect to any Mortgage Loan, all
amounts received subsequent to the Determination Date immediately following any
related Due Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late payments or
collections of principal and/or interest due (without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but delinquent on a
contractual basis for such Due Period and not previously recovered.
"LIBOR": With respect to each Accrual Period, the rate
determined by the Trustee on the related Interest Determination Date on the
basis of the London interbank offered rate for one-month United States dollar
deposits, as such rate appears on the Telerate Page 3750, as of 11:00 a.m.
(London time) on such Interest Determination Date. If such rate does not appear
on Telerate Page 3750, the rate for such Interest Determination Date will be
determined on the basis of the offered rates of the Reference Banks for
one-month United States dollar deposits, as of 11:00 a.m. (London time) on such
Interest Determination Date. The Trustee will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. On
such Interest Determination Date, LIBOR for the related Accrual Period will be
established by the Trustee as follows:
(i) If on such Interest Determination Date two or more
Reference Banks provide such offered quotations, LIBOR for the related
Accrual Period shall be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole multiple of 1/16 of
1%); and
33
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, LIBOR for the related
Accrual Period shall be the higher of (i) LIBOR as determined on the
previous Interest Determination Date and (ii) the Reserve Interest
Rate.
"LIBOR Business Day": Any day on which banks in London,
England and The City of New York are open and conducting transactions in foreign
currency and exchange.
"Liquidated Mortgage Loan": As to any Distribution Date, any
Mortgage Loan in respect of which the 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, Section 3.16(c) or
Section 10.01. With respect to any REO Property, either of the following events:
(i) a Final Recovery Determination is made as to such REO Property or (ii) such
REO Property is removed from the Trust Fund by reason of its being sold or
purchased pursuant to Section 3.23 or Section 10.01.
"Liquidation Proceeds": The amount (other than amounts
received in respect of the rental of any REO Property prior to REO Disposition)
received by the Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or condemnation,
(ii) the liquidation of a defaulted Mortgage Loan by means of a trustee's sale,
foreclosure sale or otherwise or (iii) the repurchase, substitution or sale of a
Mortgage Loan or an REO Property pursuant to or as contemplated by Section 2.03,
Section 3.16(c), Section 3.23 or Section 10.01.
"Loan-to-Value Ratio": As of any date and as to any Mortgage
Loan, the fraction, expressed as a percentage, the numerator of which is the
Principal Balance of the Mortgage Loan and the denominator of which is the Value
of the related Mortgaged Property.
"Loan Group": Either Loan Group I or Loan Group II, as the
context requires.
"Loan Group I": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Loan Group I.
"Loan Group II": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Loan Group II.
"Losses": As defined in Section 9.03.
"Lost Note Affidavit": With respect to any Mortgage Loan as to
which the original Mortgage Note has been permanently lost, misplaced or
destroyed and has not been
34
replaced, an affidavit from the Originator certifying that the original Mortgage
Note has been lost, misplaced or destroyed (together with a copy of the related
Mortgage Note) and indemnifying the Trust against any loss, cost or liability
resulting from the failure to deliver the original Mortgage Note in the form of
Exhibit H hereto.
"Majority Certificateholders": The Holders of Certificates
evidencing at least 51% of the Voting Rights.
"Marker Rate": With respect to the Class C Interest and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC 2 Pass-Through Rates for REMIC 2 Regular Interest
LTI-A1, REMIC 2 Regular Interest LTI-A2, REMIC 2 Regular Interest LTII-A1, REMIC
2 Regular Interest LTII-A2, REMIC 2 Regular Interest LTII-A3, REMIC 2 Regular
Interest LTM1, REMIC 2 Regular Interest LTM2, REMIC 2 Regular Interest LTM3,
REMIC 2 Regular Interest LTM4, REMIC 2 Regular Interest LTM5, REMIC 2 Regular
Interest LTM6, REMIC 2 Regular Interest LTM7, REMIC 2 Regular Interest LTM8,
REMIC 2 Regular Interest LTM9, REMIC 2 Regular Interest LTM10, REMIC 2 Regular
Interest LTB and REMIC 2 Regular Interest LTZZ, with the rate on each such REMIC
2 Regular Interest (other than REMIC 2 Regular Interest LTZZ) subject to a cap
equal to the lesser of (i) LIBOR plus the related Certificate Margin for the
related Corresponding Certificate and (ii) the Net WAC Rate for the purpose of
this calculation and with the rate on REMIC 2 Regular Interest LTZZ subject to a
cap of zero for the purpose of this calculation; provided, however, that for
this purpose, calculations of the Uncertificated REMIC 2 Pass-Through Rate and
the related caps with respect to each such REMIC 2 Regular Interest (other than
REMIC 2 Regular Interest LTZZ) 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 Agreement": The Master Mortgage Loan Purchase and
Interim Servicing Agreement, dated March 1, 2004, between the Originator and the
Seller.
"Maximum Cap Rate": For any Distribution Date and any Class of
the Floating Rate Certificates, a per annum rate equal to the product of (x) the
weighted average of the Adjusted Net Maximum Mortgage Rates of the Mortgage
Loans, weighted on the basis of the outstanding Principal Balances of the
Mortgage Loans as of the first day of the month preceding the month of such
Distribution Date and (y) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days elapsed in the related Accrual
Period.
"Maximum Uncertificated Accrued Interest Deferral Amount":
With respect to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 2 Pass-Through Rate applicable to REMIC 2 Regular Interest
LTZZ for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 2 Regular Interest LTZZ minus the REMIC 2
Overcollateralization Amount, in each case for such Distribution Date, over (b)
the sum of the Uncertificated Accrued Interest on REMIC 2 Regular Interest
LTI-A1, REMIC 2 Regular Interest LTI-A2, REMIC 2 Regular Interest LTII-A1, REMIC
2 Regular Interest LTII-A2, REMIC 2 Regular Interest LTII-A3, REMIC 2 Regular
Interest LTM1, REMIC 2 Regular Interest LTM2, REMIC 2 Regular Interest LTM3,
REMIC 2 Regular Interest LTM4, REMIC 2 Regular Interest LTM5, REMIC 2 Regular
Interest LTM6, REMIC 2 Regular
35
Interest LTM7, REMIC 2 Regular Interest LTM8, REMIC 2 Regular Interest LTM9,
REMIC 2 Regular Interest LTM10 and REMIC 2 Regular Interest LTB with the rate on
each such REMIC 2 Regular Interest subject to a cap equal to the lesser of (i)
LIBOR plus the related Certificate Margin for the related Corresponding
Certificate and (ii) the Net WAC Rate for the purpose of this calculation;
provided, however, that for this purpose, calculations of the Uncertificated
REMIC 2 Pass-Through Rate and the related caps with respect to each such REMIC 2
Regular Interest shall be multiplied by a fraction, the numerator of which is
the actual number of days in the Accrual Period and the denominator of which is
30.
"Maximum Mortgage Rate": With respect to each Adjustable-Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
maximum Mortgage Rate thereunder.
"MERS": Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
"MERS(R) System": The system of recording transfers of
Mortgages electronically maintained by MERS.
"MIN": The Mortgage Identification Number for Mortgage Loans
registered with MERS on the MERS(R) System.
"MOM Loan": With respect to any applicable Mortgage Loan,
MERS acting as the mortgagee of such Mortgage Loan, solely as nominee for the
originator of such Mortgage Loan and its successors and assigns, at the
origination thereof.
"Mezzanine Certificate": Any Class M-1 Certificate, Class M-2
Certificate, Class M-3 Certificate, Class M-4 Certificate, Class M-5
Certificate, Class M-6 Certificate, Class M-7 Certificate, Class M-8
Certificate, Class M-9 Certificate or Class M-10 Certificate.
"Minimum Mortgage Rate": With respect to each Adjustable-Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
minimum Mortgage Rate thereunder.
"Monthly Interest Distributable Amount": With respect to any
Class of the Floating Rate Certificates and Class C Certificates and any
Distribution Date, the amount of interest accrued during the related Accrual
Period at the related Pass-Through Rate on the Certificate Principal Balance (or
Notional Amount in the case of the Class C Certificates) of such Class
immediately prior to such Distribution Date, in each case, reduced by any Net
Prepayment Interest Shortfalls, Relief Act Interest Shortfalls.
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan, (ii) any
modifications to a Mortgage Loan pursuant to Section 3.07 and (iii) any
modifications to a Mortgage Loan pursuant to Section 3.07 and (iii) any
reduction in the amount
36
of interest collectible from the related Mortgagor pursuant to the Relief Act;
(b) without giving effect to any extension granted or agreed to by the Servicer
pursuant to clause (ii) of Section 3.07; and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.
"▇▇▇▇▇'▇": ▇▇▇▇▇'▇ Investors Service, Inc., or its successor
in interest.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first or second lien on, or first 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 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 Schedule": As of any date, the list of Mortgage
Loans included in REMIC 1 on such date, separately identifying the Group I
Mortgage Loans and the Group II Mortgage Loans, attached hereto as Exhibit D, as
supplemented by each schedule of Subsequent Mortgage Loans. The Mortgage Loan
Schedule shall be prepared by the Seller and shall set forth the following
information with respect to each Mortgage Loan, as applicable:
(1) the Mortgage Loan identifying number;
(2) [reserved];
(3) the state and zip code of the Mortgaged Property;
(4) a code indicating whether the Mortgaged Property was
represented by the borrower, at the time of origination, as
being owner-occupied;
(5) the type of Residential Dwelling constituting the
Mortgaged Property;
(6) the original months to maturity;
(7) the stated remaining months to maturity from the
Cut-off Date (or Subsequent Cut-off Date, with respect to a
Subsequent Mortgage Loan) based on the original amortization
schedule;
(8) the Loan-to-Value Ratio at origination;
(9) the Mortgage Rate in effect immediately following the
Cut-off Date (or Subsequent Cut-off Date, with respect to a
Subsequent Mortgage Loan);
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(10) the date on which the first Monthly Payment was due
on the Mortgage Loan;
(11) the stated maturity date;
(12) the amount of the Monthly Payment at origination;
(13) the amount of the Monthly Payment due on the first
Due Date after the Cut- off Date (or Subsequent Cut-off Date,
with respect to a Subsequent Mortgage Loan);
(14) the last Due Date on which a Monthly Payment was
actually applied to the unpaid Stated Principal Balance;
(15) the original principal amount of the Mortgage Loan;
(16) the Stated Principal Balance of the Mortgage Loan as
of the Close of Business on the Cut-off Date (or Subsequent
Cut-off Date, with respect to a Subsequent Mortgage Loan);
(17) a code indicating the purpose of the Mortgage Loan
(i.e., purchase financing, rate/term refinancing, cash-out
refinancing);
(18) the Mortgage Rate at origination;
(19) a code indicating the documentation program (i.e.,
full documentation, limited income verification, no income
verification, alternative income verification);
(20) the risk grade;
(21) the Value of the Mortgaged Property;
(22) the sale price of the Mortgaged Property, if
applicable;
(23) the actual unpaid principal balance of the Mortgage
Loan as of the Cut-off Date (or Subsequent Cut-off Date, with
respect to a Subsequent Mortgage Loan);
(24) the type and term of the related Prepayment Charge;
(25) with respect to any Adjustable-Rate Mortgage Loan,
the rounding code, the minimum Mortgage Rate, the maximum
Mortgage Rate, the Gross Margin, the next Adjustment Date and
the Periodic Rate Cap;
(26) the program code;
(27) the Loan Group; and
38
(28) the lien priority.
The Mortgage Loan Schedule shall set forth the following
information, with respect to the Mortgage Loans in the aggregate and for each
Loan Group as of the Cut-off Date (or Subsequent Cut-off Date, with respect to a
Subsequent Mortgage Loan): (1) the number of Mortgage Loans (separately
identifying the number of Fixed-Rate Mortgage Loans and the number of
Adjustable-Rate Mortgage Loans); (2) the current Principal Balance of the
Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans and
(4) the weighted average remaining term to maturity of the Mortgage Loans. The
Mortgage Loan Schedule shall be amended from time to time by the Servicer in
accordance with the provisions of this Agreement. With respect to any Qualified
Substitute Mortgage Loan, Cut-off Date shall refer to the related Cut-off Date
for such Mortgage Loan, determined in accordance with the definition of Cut-off
Date herein. On the Closing Date, the Depositor will deliver to the Servicer, as
of the Cut-off Date, an electronic copy of the Mortgage Loan Schedule.
"Mortgage Note": The original executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on
Exhibit D from time to time, and any REO Properties acquired in respect thereof
and as supplemented by any Subsequent Mortgage Loans identified on each schedule
of Subsequent Mortgage Loans attached to a Subsequent Transfer Instrument.
"Mortgage Rate": With respect to each Fixed-Rate Mortgage
Loan, the rate set forth in the related Mortgage Note. With respect to each
Adjustable-Rate Mortgage Loan, the annual rate at which interest accrues on such
Mortgage Loan from time to time in accordance with the provisions of the related
Mortgage Note, which rate (A) as of any date of determination until the first
Adjustment Date following the Cut-off Date (or Subsequent Cut-off Date, with
respect to a Subsequent Mortgage Loan) shall be the rate set forth in the
Mortgage Loan Schedule as the Mortgage Rate in effect immediately following the
Cut-off Date (or Subsequent Cut-off Date, with respect to a Subsequent Mortgage
Loan) 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.
39
"Net Liquidation Proceeds": With respect to any Liquidated
Mortgage Loan or any other disposition of related Mortgaged Property (including
REO Property) the related Liquidation Proceeds and Insurance Proceeds net of
Advances, Servicing Advances, Servicing Fees and any other accrued and unpaid
servicing fees or ancillary income received and retained in connection with the
liquidation of such Mortgage Loan or Mortgaged Property.
"Net Monthly Excess Cashflow": With respect to each
Distribution Date, the sum of (a) any Overcollateralization Release Amount for
such Distribution Date and (b) the excess of (x) Available Funds for such
Distribution Date over (y) the sum for such Distribution Date of (A) the Monthly
Interest Distributable Amounts for the Floating Rate Certificates, (B) the
Unpaid Interest Shortfall Amounts for the Class A Certificates and (C) the
Principal Remittance Amount.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property), as of any date of determination, a per annum rate of
interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus
the Servicing Fee Rate.
"Net Prepayment Interest Shortfall": With respect to any
Distribution Date, the excess, if any, of any Prepayment Interest Shortfalls for
such date over the related Compensating Interest.
"Net WAC Rate": For any Distribution Date and any Class of the
Floating Rate Certificates, a per annum rate equal to the product of (a) a
fraction, expressed as a percentage, the numerator of which is (i) the amount of
interest which accrued on the Mortgage Loans in the prior calendar month minus
(ii) the sum of the Trustee Fee and the Servicing Fee for such Distribution Date
and the denominator of which is the sum of (i) the aggregate Principal Balance
of the Mortgage Loans as of the last day of the immediately preceding Due Period
(or as of the Cut-off Date with respect to the first Distribution Date), after
giving effect to principal prepayments received during the related Prepayment
Period and (ii) any amounts on deposit in the Pre-Funding Accounts, and (b) a
fraction whose numerator is 30 and whose denominator is the actual number of
days in the related Accrual Period. For federal income tax purposes, the
economic equivalent of such rate shall be expressed as the weighted average of
the REMIC 2 Pass-Through Rates on the REMIC 2 Regular Interests, weighted on the
basis of the Uncertificated Principal Balance of each such REMIC 2 Regular
Interest.
"Net WAC Rate Carryover Amount": With respect to any Class of
the Floating Rate Certificates and any Distribution Date, the sum of (A) the
positive excess of (i) the amount of interest accrued on such Class of
Certificates on such Distribution Date calculated at the related Formula Rate,
over (ii) the amount of interest accrued on such Class of Certificates at the
Net WAC Rate for such Distribution Date and (B) the Net WAC Rate Carryover
Amount for the previous Distribution Date not previously paid, together with
interest thereon at a rate equal to the related Formula Rate for the most
recently ended Accrual Period.
"Net WAC Rate Carryover Reserve Account": The account
established and maintained pursuant to Section 3.28.
40
"New Lease": Any lease of REO Property entered into on behalf
of the Trust, including any lease renewed or extended on behalf of the Trust if
the Trust has the right to renegotiate the terms of such lease.
"Nonrecoverable Advance": Any Advance or Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Servicer, will not be
ultimately recoverable from Late Collections, Insurance Proceeds, Liquidation
Proceeds or condemnation proceeds on such Mortgage Loan or REO Property as
provided herein.
"Notional Amount": Immediately prior to any Distribution Date
with respect to the Class C Interest, the aggregate of the Uncertificated
Principal Balances of REMIC 2 Regular Interests (other than REMIC 2 Regular
Interest LTP).
"Offered Certificates": The Class A Certificates, the Class
M-1 Certificates, the Class M-2 Certificates, the Class M-3 Certificates, the
Class M-4 Certificates, the Class M-5 Certificates, the Class M-6 Certificates
and the Class M-7 Certificates offered to the public pursuant to the Prospectus
Supplement.
"Officers' Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), or by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Servicer, the Seller or the
Depositor, as applicable.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be a salaried counsel for the Depositor or the Servicer,
acceptable to the Trustee, except that any opinion of counsel relating to (a)
the qualification of any REMIC as a REMIC or (b) compliance with the REMIC
Provisions must be an opinion of Independent counsel.
"Optional Termination Date": The first Distribution Date on
which the Terminator may opt to terminate the Trust Fund pursuant to Section
10.01.
"Original Class Certificate Principal Balance": With respect
to the Floating Rate Certificates, the Class C Certificates, the Class C
Interest, the Class P Certificates and the Class P Interest, the corresponding
amounts set forth opposite such Class above in the Preliminary Statement.
"Original Group I Pre-Funded Amount": The amount deposited by
the Depositor in the Group I Pre-Funding Account on the Closing Date, which
amount is $209,283,998.96.
"Original Group II Pre-Funded Amount": The amount deposited by
the Depositor in the Group II Pre-Funding Account on the Closing Date, which
amount is $190,252,823.49.
"Original Pre-Funded Amounts": The Original Group I Pre-Funded
Amount and the Original Group II Pre-Funded Amount.
41
"Originator": Fremont Investment & Loan, a state chartered
industrial bank headquartered in Anaheim, California, or its successor in
interest.
"Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount on such Distribution Date (assuming
that 100% of the Principal Remittance Amount is applied as a principal
distribution on such Distribution Date).
"Overcollateralization Floor": With respect to the Group I
Senior Principal Distribution Amount, $3,534,068.25. With respect to the Group
II Senior Principal Distribution Amount, $3,215,931.75. With respect to each of
the Class M-1 Principal Distribution Amount, the Class M-2 Principal
Distribution Amount, the Class M-3 Principal Distribution Amount, the Class M-4
Principal Distribution Amount, the Class M-5 Principal Distribution Amount, the
Class M-6 Principal Distribution Amount, the Class M-7 Principal Distribution
Amount, the Class M-8 Principal Distribution Amount, the Class M-9 Principal
Distribution Amount, the Class M-10 Principal Distribution Amount and the Class
B Principal Distribution Amount, $6,750,000.
"Overcollateralization Release Amount": With respect to any
Distribution Date, the lesser of (x) the Principal Remittance Amount for such
Distribution Date and (y) the Excess Overcollateralized Amount.
"Overcollateralization Target Amount": With respect to any
Distribution Date, (i) prior to the Stepdown Date, 1.00% of the aggregate
Cut-off Date Principal Balance of all of the Mortgage Loans and the Original
Pre-Funded Amounts (ii) on or after the Stepdown Date provided a Trigger Event
is not in effect, the greater of (x) 2.00% of the aggregate Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (y) 0.50% of the aggregate
Cut-off Date Principal Balance of all of the Mortgage Loans and the Original
Pre-Funded Amounts and (iii) on or after the Stepdown Date if a Trigger Event is
in effect, the Overcollateralization Target Amount for the immediately preceding
Distribution Date. Notwithstanding the foregoing, on and after any Distribution
Date following the reduction of the aggregate Certificate Principal Balance of
the Floating Rate Certificates to zero, the Overcollateralization Target Amount
shall be zero.
"Overcollateralized Amount": For any Distribution Date, the
amount equal to (i) the sum of (a) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (b) any funds on deposit in the
Pre-Funding Accounts as of the related Determination Date (exclusive of any
investment income therein) minus (ii) the sum of the aggregate Certificate
Principal Balance of the Floating Rate Certificates and the Class P Certificates
as of such Distribution Date after giving effect to distributions to be made on
such Distribution Date.
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"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 any Class of the Floating
Rate Certificates and any Distribution Date, the lesser of (x) the related
Formula Rate for such Distribution Date and (y) the Net WAC Rate for such
Distribution Date. With respect to the Class C Interest and any Distribution
Date, a per annum rate equal to the percentage equivalent of a fraction, the
numerator of which is (x) the sum of (i) 100% of the interest on REMIC 2 Regular
Interest LTP and (ii) interest on the Uncertificated Balance of each REMIC 2
Regular Interest listed in clause (y) at a rate equal to the related
Uncertificated REMIC 2 Pass-Through Rate minus the Marker Rate and the
denominator of which is (y) the aggregate Uncertificated Balance of REMIC 2
Regular Interests ▇▇▇▇, ▇▇▇▇▇, LTIA2, LTIIA1, LTAII2, ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇, ▇▇▇▇,
▇▇▇▇, ▇▇▇▇, LTM6, LTM7, LTM8, LTM9, LTM10, LTB and LTZZ.
With respect to the Class C Certificates, 100% of the interest
distributable to the Class C Interest, expressed as a per annum rate.
"Paying Agent": Any paying agent appointed pursuant to Section
5.05.
"Percentage Interest": With respect to any Certificate (other
than a Residual Certificate), a fraction, expressed as a percentage, the
numerator of which is the Initial Certificate Principal Balance represented by
such Certificate and the denominator of which is the Original Class Certificate
Principal Balance of the related Class. With respect to a Residual Certificate,
the portion of the Class evidenced thereby, expressed as a percentage, as stated
on the face of such Certificate; provided, however, that the sum of all such
percentages for each such Class totals 100%.
"Periodic Rate Cap": With respect to each Adjustable-Rate
Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth
in the related Mortgage Note, which is the maximum amount by which the Mortgage
Rate for such Mortgage Loan may increase or decrease (without regard to the
Maximum Mortgage Rate or the Minimum Mortgage Rate) on such Adjustment Date from
the Mortgage Rate in effect immediately prior to such Adjustment Date.
"Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued or managed by the Depositor, the Servicer, the
Trustee or any of their respective Affiliates or for which an Affiliate of the
Trustee serves as an advisor:
(i) direct obligations of, or obligations fully
guaranteed as to timely payment of principal and interest by, the
United States or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United
States;
(ii) (A) demand and time deposits in, certificates of
deposit of, bankers' acceptances issued by or federal funds sold by any
depository institution or trust
43
company (including the Trustee or its agent acting in their respective
commercial capacities) incorporated under the laws of the United States
of America or any state thereof and subject to supervision and
examination by federal and/or state authorities, so long as, at the
time of such investment or contractual commitment providing for such
investment, such depository institution or trust company (or, if the
only Rating Agency is S&P, in the case of the principal depository
institution in a depository institution holding company, debt
obligations of the depository institution holding company) or its
ultimate parent has a short-term uninsured debt rating in one of the
two highest available ratings of ▇▇▇▇▇'▇ and the highest available
rating category of Fitch 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, P-1 by ▇▇▇▇▇'▇ and rated A-1+
or higher by S&P, provided, however, that collateral transferred
pursuant to such repurchase obligation must be of the type described in
clause (i) above and must (A) be valued daily at current market prices
plus accrued interest, (B) pursuant to such valuation, be equal, at all
times, to 105% of the cash transferred by the Trustee in exchange for
such collateral and (C) be delivered to the Trustee or, if the Trustee
is supplying the collateral, an agent for the Trustee, in such a manner
as to accomplish perfection of a security interest in the collateral by
possession of certificated securities;
(iv) securities bearing interest or sold at a discount
that are issued by any corporation incorporated under the laws of the
United States of America or any State thereof and that are rated by S&P
(and if rated by any other Rating Agency, also by such other Rating
Agency) in its highest long-term unsecured rating category at the time
of such investment or contractual commitment providing for such
investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than 30 days after the date of
acquisition thereof) that is rated by S&P (and if rated by any other
Rating Agency, also by such other Rating Agency) in its highest
short-term unsecured debt rating available at the time of such
investment;
(vi) units of money market funds, including those money
market funds managed or advised by the Trustee or its Affiliates, that
have been rated "AAA" by Fitch (if rated by Fitch), "Aaa" by ▇▇▇▇▇'▇
and "AAAm" or "AAAm-G" by S&P; and
44
(vii) if previously confirmed in writing to the Trustee,
any other demand, money market or time deposit, or any other
obligation, security or investment, as may be acceptable to the Rating
Agencies in writing as a permitted investment of funds backing
securities having ratings equivalent to its highest initial rating of
the Class A Certificates;
provided, that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any transferee of a Residual
Certificate other than a Disqualified Organization or a non-U.S. Person.
"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.
"Pool Balance": As of any date of determination, the aggregate
Stated Principal Balance of the Mortgage Loans in both Loan Groups as of such
date.
"Pre-Funding Accounts": The Group I Pre-Funding Account and
the Group II Pre-Funding Account.
"Prepayment Assumption": As defined in the Prospectus
Supplement.
"Prepayment Charge": With respect to any Mortgage Loan, the
charges or premiums, if any, due in connection with a full or partial Principal
Prepayment of such Mortgage Loan in accordance with the terms thereof (other
than any Servicer Prepayment Charge Payment Amount).
"Prepayment Charge Schedule": As of any date, the list of
Prepayment Charges on the Mortgage Loans included in the Trust Fund on such
date, attached hereto as Schedule I (including the prepayment charge summary
attached thereto). The Prepayment Charge Schedule shall set forth the following
information with respect to each Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination of the related Mortgage
Loan;
45
(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 (or Subsequent Cut-off Date, with respect to a
Subsequent Mortgage Loan).
"Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a Principal
Prepayment in full during the portion of the related Prepayment Period occurring
between the first day of the related Prepayment Period and the last day of the
calendar month preceding the month in which such Distribution Date occurs, an
amount equal to one month's interest at the Net Mortgage Rate on the Mortgage
Loan less any payments made by the Mortgagor. The obligations of the Servicer in
respect of any Prepayment Interest Shortfall are set forth in Section 3.24.
"Prepayment Period": With respect to any Distribution Date,
the calendar month preceding the calendar month in which such Distribution Date
occurs.
"Principal Balance": As to any Mortgage Loan other than a
Liquidated Mortgage Loan, and any day, the related Cut-off Date Principal
Balance, minus all collections credited against the Cut-off Date Principal
Balance of any such Mortgage Loan. For purposes of this definition, a Liquidated
Mortgage Loan shall be deemed to have a Principal Balance equal to the Principal
Balance of the related Mortgage Loan as of the final recovery of related
Liquidation Proceeds and a Principal Balance of zero thereafter. As to any REO
Property and any day, the Principal Balance of the related Mortgage Loan
immediately prior to such Mortgage Loan becoming REO Property minus any REO
Principal Amortization received with respect thereto on or prior to such day.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.
"Principal Remittance Amount": With respect to any
Distribution Date, the sum of the Group I Principal Remittance Amount and the
Group II Principal Remittance Amount.
"Prospectus Supplement": That certain Prospectus Supplement
dated December 13, 2004 relating to the public offering of the Class A
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6
Certificates and Class M-7 Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased by the Seller pursuant to or as contemplated by Section
2.03 or 10.01, and as confirmed by an Officers' Certificate from the Servicer to
the Trustee, an amount equal to the sum of (i) 100% of the Principal Balance
thereof as of the date of purchase (or such other price as provided in Section
10.01), (ii) in the case of (x) a Mortgage Loan, accrued interest on such
46
Principal Balance at the applicable Mortgage Rate in effect from time to time
from the Due Date as to which interest was last covered by a payment by the
Mortgagor or an advance by the Servicer, which payment or advance had as of the
date of purchase been distributed pursuant to Section 4.01, through the end of
the calendar month in which the purchase is to be effected, and (y) an REO
Property, the sum of (1) accrued interest on such Principal Balance at the
applicable Mortgage Rate in effect from time to time from the Due Date as to
which interest was last covered by a payment by the Mortgagor or an advance by
the Servicer through the end of the calendar month immediately preceding the
calendar month in which such REO Property was acquired, plus (2) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such purchase is to be effected, net of the total of all
net rental income, Insurance Proceeds, Liquidation Proceeds and Advances that as
of the date of purchase had been distributed as or to cover REO Imputed Interest
pursuant to Section 4.04, (iii) any unreimbursed Servicing Advances and Advances
and any unpaid Servicing Fees allocable to such Mortgage Loan or REO Property,
(iv) any amounts previously withdrawn from the Collection Account in respect of
such Mortgage Loan or REO Property pursuant to Section 3.23 and (v) in the case
of a Mortgage Loan required to be purchased pursuant to Section 2.03, expenses
reasonably incurred or to be incurred by the Servicer or the Trustee in respect
of the breach or defect giving rise to the purchase obligation including any
costs and damages incurred by the Trust Fund in connection with any violation by
such loan of any predatory or abusive lending law. With respect to the
Originator and any Mortgage Loan or REO Property to be purchased pursuant to or
as contemplated by Section 2.03 or 10.01, and as confirmed by a certificate of a
Servicing Officer to the Trustee, an amount equal to the amount set forth
pursuant to the terms of the Master Agreement.
"Qualified Insurer": Any insurance company acceptable to
▇▇▇▇▇▇ ▇▇▇.
"Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan by the Seller pursuant to the terms of
this Agreement or the Assignment Agreement which must, on the date of such
substitution, (i) have an outstanding Stated Principal Balance (or in the case
of a substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate Stated Principal Balance), after application of all scheduled payments
of principal and interest due during or prior to the month of substitution, not
in excess of, and not more than 5% less than, the outstanding Stated Principal
Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month
during which the substitution occurs, (ii) have a Mortgage Rate not less than
(and not more than one percentage point in excess of) the Mortgage Rate of the
Deleted Mortgage Loan, (iii) if the Qualified Substitute Mortgage Loan is an
Adjustable-Rate Mortgage Loan, have a Maximum Mortgage Rate not less than the
Maximum Mortgage Rate on the Deleted Mortgage Loan, (iv) if the Qualified
Substitute Mortgage Loan is an Adjustable-Rate Mortgage Loan, have a Minimum
Mortgage Rate not less than the Minimum Mortgage Rate of the Deleted Mortgage
Loan, (v) if the Qualified Substitute Mortgage Loan is an Adjustable-Rate
Mortgage Loan, have a Gross Margin equal to or greater than the Gross Margin of
the Deleted Mortgage Loan, (vi) if the Qualified Substitute Mortgage Loan is an
Adjustable-Rate Mortgage Loan, have a next Adjustment Date not more than two
months later than the next Adjustment Date on the Deleted Mortgage Loan, (vii)
[reserved], (viii) have a remaining term to maturity not greater than (and not
more than one year less than) that of the
47
Deleted Mortgage Loan, (ix) be current as of the date of substitution, (x) have
a Loan-to-Value Ratio as of the date of substitution equal to or lower than the
Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date, (xi) have a
risk grading determined by the Originator at least equal to the risk grading
assigned on the Deleted Mortgage Loan, (xii) have been underwritten or
reunderwritten by the Originator in accordance with the same underwriting
criteria and guidelines as the Deleted Mortgage Loan, (xiii) be a first lien
mortgage loan if the Deleted Mortgage Loan is a first lien mortgage loan; and
(xiv) conform to each representation and warranty assigned to the Depositor
pursuant to the Assignment Agreement applicable to the Deleted Mortgage Loan. In
the event that one or more mortgage loans are substituted for one or more
Deleted Mortgage Loans, the amounts described in clause (i) hereof shall be
determined on the basis of aggregate Stated Principal Balances, the Mortgage
Rates described in clauses (ii) through (vi) hereof shall be satisfied for each
such mortgage loan, the risk gradings described in clause (x) hereof shall be
satisfied as to each such mortgage loan, the terms described in clause (viii)
hereof shall be determined on the basis of weighted average remaining term to
maturity (provided that no such mortgage loan may have a remaining term to
maturity longer than the Deleted Mortgage Loan), the Loan-to-Value Ratios
described in clause (x) hereof shall be satisfied as to each such mortgage loan
and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (xiv) hereof must be
satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate, as
the case may be. With respect to the Originator, a mortgage loan substituted for
a Deleted Mortgage Loan pursuant to the terms of the Master Agreement which
must, on the date of such substitution conform to the terms set forth in the
Master Agreement.
"Rating Agency or Rating Agencies": ▇▇▇▇▇'▇ and S&P or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be such nationally recognized statistical rating
agencies, or other comparable Persons, designated by the Depositor, notice of
which designation shall be given to the Trustee and Servicer.
"Realized Loss": With respect to any Liquidated Mortgage Loan,
the amount of loss realized equal to the portion of the Stated Principal Balance
remaining unpaid after application of all Net Liquidation Proceeds in respect of
such Mortgage Loan. If the Servicer receives Subsequent Recoveries with respect
to any Mortgage Loan, the amount of the Realized Loss with respect to that
Mortgage Loan will be reduced to the extent such recoveries are applied to
principal distributions on any Distribution Date.
"Record Date": With respect to (i) the Class P Certificates,
the Class C Certificates and the Residual Certificates, the Close of Business on
the last Business Day of the calendar month preceding the month in which the
related Distribution Date occurs and (ii) the Floating Rate Certificates, the
Close of Business on the Business Day immediately preceding the related
Distribution Date; provided, however, that following the date on which
Definitive Certificates for any of the Floating Rate Certificates are available
pursuant to Section 5.02, the Record Date for such Certificates that are
Definitive Certificates shall be the last Business Day of the calendar month
preceding the month in which the related Distribution Date occurs.
"Reference Banks": Those banks (i) with an established place
of business in London, England, (ii) not controlling, under the control of or
under common control with the
48
Originator or the Servicer or any Affiliate thereof and (iii) which have been
designated as such by the Trustee after consultation with the Depositor;
provided, however, that if fewer than two of such banks provide a LIBOR rate,
then any leading banks selected by the Trustee after consultation with the
Depositor which are engaged in transactions in United States dollar deposits in
the international Eurocurrency market.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of
which were not used to purchase the related Mortgaged Property.
"Regular Certificate": Any of the Floating Rate Certificates,
Class C Certificates or Class P Certificates.
"Relief Act": The Servicemembers Civil Relief Act, 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 or any similar
state or local laws, 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 or such
state or local laws.
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"REMIC 1": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made consisting of: (i) such
Mortgage Loans as from time to time are subject to this Agreement, together with
the Mortgage Files relating thereto, and together with all collections thereon
and proceeds thereof, (ii) any REO Property, together with all collections
thereon and proceeds thereof, (iii) the Trustee's rights with respect to the
Mortgage Loans under all insurance policies, required to be maintained pursuant
to this Agreement and any proceeds thereof, (iv) the Depositor's rights under
the Assignment Agreement (including any security interest created thereby) and
(v) the Collection Account, the Distribution Account (subject to the last
sentence of this definition) and any REO Account and such assets that are
deposited therein from time to time and any investments thereof, together with
any and all income, proceeds and payments with respect thereto. Notwithstanding
the foregoing, however, a REMIC election will not be made with respect to the
Pre-Funding Accounts, any Subsequent Mortgage Loan Interest, the Net WAC Rate
Carryover Reserve Account, the Cap Contract, or any Servicer Prepayment Charge
Payment Amounts.
"REMIC 1 Regular Interests": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. Each REMIC 1 Regular 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
49
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto. The following is a list of each of the REMIC 1 Regular Interests: REMIC
1 Regular Interest LT1, REMIC 1 Regular Interest LT1PF, REMIC 1 Regular Interest
LT2, REMIC 1 Regular Interest LT2PF and REMIC 1 Regular Interest LTP.
"REMIC 2": The segregated pool of assets consisting of all of
the REMIC 1 Regular Interests and 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 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LTAA minus the Marker Rate, divided by (b) 12.
"REMIC 2 Overcollateralization Target Amount": 1.00% of the
Overcollateralization Target Amount.
"REMIC 2 Overcollateralization Amount": With respect to any
date of determination, (i) 1.00% of the aggregate Uncertificated Principal
Balance of the REMIC 2 Regular Interests minus (ii) the aggregate Uncertificated
Principal Balance of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest
LTI-A1, REMIC 2 Regular Interest LTI-A2, REMIC 2 Regular Interest LTII-A1, REMIC
2 Regular Interest LTII-A2, REMIC 2 Regular Interest LTII-A3, REMIC 2 Regular
Interest LTM1, REMIC 2 Regular Interest LTM2, REMIC 2 Regular Interest LTM3,
REMIC 2 Regular Interest LTM4, REMIC 2 Regular Interest LTM5, REMIC 2 Regular
Interest LTM6, REMIC 2 Regular Interest LTM7, REMIC 2 Regular Interest LTM8,
REMIC 2 Regular Interest LTM9, REMIC 2 Regular Interest LTM10, REMIC 2 Regular
Interest LTB and REMIC 2 Regular Interest LTP, in each case as of such date of
determination.
"REMIC 2 Principal Loss Allocation Amount": With respect to
any Distribution Date, an amount equal to the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and related REO Properties then
outstanding and the amounts on deposit in the Pre-Funding Accounts (exclusive of
any investment income therein) and (ii) 1 minus a fraction, the numerator of
which is two times the aggregate Uncertificated Principal Balance of REMIC 2
Regular Interest LTI-A1, REMIC 2 Regular Interest LTI-A2, REMIC 2 Regular
Interest LTII-A1, REMIC 2 Regular Interest LTII-A2, REMIC 2 Regular Interest
LTII-A3, REMIC 2 Regular Interest LTM1, REMIC 2 Regular Interest LTM2, REMIC 2
Regular Interest LTM3, REMIC 2
50
Regular Interest LTM4, REMIC 2 Regular Interest LTM5, REMIC 2 Regular Interest
LTM6, REMIC 2 Regular Interest LTM7, REMIC 2 Regular Interest LTM8, REMIC 2
Regular Interest LTM9, REMIC 2 Regular Interest LTM10 and REMIC 2 Regular
Interest LTB and the denominator of which is the aggregate Uncertificated
Principal Balance of REMIC 2 Regular Interest LTI-A1, REMIC 2 Regular Interest
LTI-A2, REMIC 2 Regular Interest LTII-A1, REMIC 2 Regular Interest LTII-A2,
REMIC 2 Regular Interest LTII-A3, REMIC 2 Regular Interest LTM1, REMIC 2 Regular
Interest LTM2, REMIC 2 Regular Interest LTM3, REMIC 2 Regular Interest LTM4,
REMIC 2 Regular Interest LTM5, REMIC 2 Regular Interest LTM6, REMIC 2 Regular
Interest LTM7, REMIC 2 Regular Interest LTM8, REMIC 2 Regular Interest LTM9,
REMIC 2 Regular Interest LTM10, REMIC 2 Regular Interest LTB and REMIC 2 Regular
Interest LTZZ.
"REMIC 2 Regular Interests": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. Each REMIC 2 Regular 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. The following is a list of each of the REMIC 1 Regular
Interests: REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTIA1, REMIC
2 Regular Interest LTIA2, REMIC 2 Regular Interest LTIIA1, REMIC 2 Regular
Interest LTIIA2, REMIC 2 Regular Interest LTIIA3, REMIC 2 Regular Interest LTM1,
REMIC 2 Regular Interest LTM2, REMIC 2 Regular Interest LTM3, REMIC 2 Regular
Interest LTM4, REMIC 2 Regular Interest LTM5, REMIC 2 Regular Interest LTM6,
REMIC 2 Regular Interest LTM7, REMIC 2 Regular Interest LTM8, REMIC 2 Regular
Interest LTM9, REMIC 2 Regular Interest LTM10, REMIC 2 Regular Interest LTB,
REMIC 2 Regular Interest LTZZ and REMIC 2 Regular Interest LTP.
"REMIC 3": The segregated pool of assets consisting of all of
the REMIC 2 Regular Interests conveyed in trust to the Trustee, for the benefit
of the Holders of the Regular Certificates and the Class R Certificates (in
respect of the Class R-3 Interest), pursuant to Article II hereunder, and all
amounts deposited therein, with respect to which a separate REMIC election is to
be made.
"REMIC 3 Regular Interests": The Regular Certificates (other
than the Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, Class B Certificates, Class C Certificates and Class P
Certificates) and the Class M-8 Interests, Class M-9 Interests, Class M-10
Interests, Class B Interests, Class C Interests, and Class P Interests.
"REMIC 4": The segregated pool of assets consisting of the
Class M-8 Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Class M-8 Certificates and the Class R-X Certificates (in respect
of the Class R-4 Interest), pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC 5": The segregated pool of assets consisting of the
Class M-9 Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Class M-9 Certificates and the Class R-X Certificates (in respect
of the Class R-5 Interest), pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC 6": The segregated pool of assets consisting of the
Class M-10 Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Class M-10 Certificates and the Class R-X Certificates (in
respect of the Class R-6 Interest), pursuant to Article II hereunder,
51
and all amounts deposited therein, with respect to which a separate REMIC
election is to be made.
"REMIC 7": The segregated pool of assets consisting of the
Class B Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Class B Certificates and the Class R-X Certificates (in respect
of the Class R-7 Interest), pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC 8": The segregated pool of assets consisting of the
Class C Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Class C Certificates and the Class R-X Certificates (in respect
of the Class R-8 Interest), pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC 9": The segregated pool of assets consisting of the
Class P Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Class P Certificates and the Class R-X Certificates (in respect
of the Class R-9 Interest), pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits which appear at Section
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations and rulings promulgated thereunder, as the foregoing
may be in effect from time to time.
"REMIC Regular Interests": The REMIC 1 Regular Interests, the
Class M-8 Interest, the Class M-9 Interest, the Class M-10 Interest, the Class B
Interest, the Class C Interest and the Class P Interest.
"Remittance Report": A report prepared by the Servicer and
delivered to the Trustee pursuant to Section 4.04.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code.
"REO Account": The account or accounts maintained by the
Servicer in respect of an REO Property pursuant to Section 3.23.
"REO Disposition": The sale or other disposition of an REO
Property on behalf of the Trust Fund.
"REO Imputed Interest": As to any REO Property, for any
calendar month during which such REO Property was at any time part of the Trust
Fund, one month's interest at the applicable Net Mortgage Rate on the Principal
Balance of such REO Property (or, in the case of the first such calendar month,
of the related Mortgage Loan if appropriate) as of the Close of Business on the
Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO
Property, for any calendar month, the excess, if any, of (a) the aggregate of
all amounts received in respect of such
52
REO Property during such calendar month, whether in the form of rental income,
sale proceeds (including, without limitation, that portion of the Termination
Price paid in connection with a purchase of all of the Mortgage Loans and REO
Properties pursuant to Section 10.01 that is allocable to such REO Property) or
otherwise, net of any portion of such amounts (i) payable pursuant to Section
3.23 in respect of the proper operation, management and maintenance of such REO
Property or (ii) payable or reimbursable to the Servicer pursuant to Section
3.23 for unpaid Servicing Fees in respect of the related Mortgage Loan and
unreimbursed Servicing Advances and Advances in respect of such REO Property or
the related Mortgage Loan, over (b) the REO Imputed Interest in respect of such
REO Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Servicer
on behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure,
as described in Section 3.23.
"Request for Release": A release signed by a Servicing
Officer, in the form of Exhibit E attached hereto.
"Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Trustee determines to be either
(i) the arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 1/16 of 1%) of the one-month United States dollar lending rates
which banks in The City of New York selected by the Depositor are quoting on the
relevant Interest Determination Date to the principal London offices of leading
banks in the London interbank market or (ii) in the event that the Trustee can
determine no such arithmetic mean, in the case of any Interest Determination
Date after the initial Interest Determination Date, the lowest one-month United
States dollar lending rate which such New York banks selected by the Depositor
are quoting on such Interest Determination Date to leading European banks.
"Residential Dwelling": Any one of the following: (i) a
detached one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a one-family dwelling unit in a ▇▇▇▇▇▇ ▇▇▇ eligible condominium project,
(iv) a manufactured home, or (v) a detached one-family dwelling in a planned
unit development, none of which is a co-operative or mobile home.
"Residual Certificate": The Class R Certificates and the Class
R-X Certificates.
"Residual Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee,
any director, any vice president, any assistant vice president, the Secretary,
any assistant secretary, the Treasurer, any assistant treasurer or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and, with respect to a
particular matter, to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"S&P": Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or its successor in interest.
53
"Seller": Greenwich Capital Financial Products, Inc., a
Delaware corporation, in its capacity as Seller under the Assignment Agreement.
"Senior Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group I Senior Principal Distribution
Amount and (ii) the Group II Senior Principal Distribution Amount.
A "Sequential Trigger Event" is in effect on any Distribution
Date if, before the Stepdown Date, the aggregate amount of Realized Losses
incurred since the Cut-off Date through the last day of the related Due Period
(after giving effect to scheduled payments received or advanced on or before the
related Determination Date and principal prepayments received during the related
Prepayment Period) divided by the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date and the amounts on deposit in the Pre-funding
Accounts as of the Closing Date exceeds 3.00%, or if, on or after the Stepdown
Date, a Trigger Event is in effect.
"Servicer": ▇▇▇▇▇▇ Loan Servicing LP, a Delaware limited
partnership, or any successor servicer appointed as herein provided, in its
capacity as Servicer hereunder.
"Servicer's Assignee": As defined in Section 3.29 hereof.
"Servicer Certification": As defined in Section 3.22(b)
hereof.
"Servicer Event of Termination": One or more of the events
described in Section 7.01.
"Servicer Prepayment Charge Payment Amount": The amounts
payable by the Servicer in respect of any waived Prepayment Charges pursuant to
Section 2.05 or Section 3.01.
"Servicer Remittance Date": With respect to any Distribution
Date, the Business Day prior to such Distribution Date.
"Servicer Termination Test": With respect to any Distribution
Date, the Servicer Termination Test will be failed if the Cumulative Loss
Percentage the applicable percentages set forth below with respect to such
Distribution Date:
DISTRIBUTION DATE OCCURRING IN PERCENTAGE
------------------------------ ----------
January 2008 through December 2008 4.00%
January 2009 through December 2009 5.50%
January 2010 through December 2010 6.75%
January 2011 and thereafter 7.50%
"Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09.
"Servicing Advances": All customary, reasonable and necessary
"out of pocket" costs and expenses (including reasonable attorneys' fees and
expenses) incurred by the Servicer in the performance of its servicing
obligations, including, but not limited to, the cost of (i) the
54
preservation, restoration, inspection and protection of the Mortgaged Property,
(ii) any enforcement or judicial proceedings, including foreclosures related to
a Mortgage Loan and any such proceedings that result from the Mortgage Loan
being registered on the MERS(R) System, (iii) the management and liquidation of
the REO Property and (iv) compliance with the obligations under Sections 3.01,
3.09, 3.14, 3.16, and 3.23. The Servicer shall not be required to make any
Servicing Advance that would be a Nonrecoverable Advance.
"Servicing Rights Pledgee": One or more lenders, selected by
the Servicer, to which the Servicer will pledge and assign all of its right,
title and interest in, to and under this Agreement, including Wachovia Bank,
National Association, as the representative of certain lenders.
"Servicing Fee": With respect to each Mortgage Loan and for
any calendar month, an amount equal to one month's interest (or in the event of
any payment of interest which accompanies a Principal Prepayment in full made by
the Mortgagor during such calendar month, interest for the number of days
covered by such payment of interest) at the Servicing Fee Rate on the same
principal amount on which interest on such Mortgage Loan accrues for such
calendar month. A portion of such Servicing Fee may be retained by any
Sub-Servicer as its servicing compensation.
"Servicing Fee Rate": 0.50% per annum.
"Servicing Officer": Any officer of the Servicer involved in,
or responsible for, the administration and servicing of Mortgage Loans, whose
name and specimen signature appear on a list of servicing officers furnished by
the Servicer to the Trustee and the Depositor on the Closing Date, as such list
may from time to time be amended.
"Servicing Transfer Costs": Shall mean all reasonable costs
and expenses incurred by the Trustee in connection with the transfer of
servicing from a predecessor servicer, including, without limitation, any
reasonable costs or expenses associated with the complete transfer of all
servicing data and the completion, correction or manipulation of such servicing
data as may be required by the Trustee to correct any errors or insufficiencies
in the servicing data or otherwise to enable the Trustee (or any successor
servicer appointed pursuant to Section 7.02) to service the Mortgage Loans
properly and effectively and any fees associated with MERS.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the outstanding principal balance of such
Mortgage Loan as of the Cut-off Date as shown in the Mortgage Loan Schedule,
minus the sum of (i) the principal portion of each Monthly Payment due on a Due
Date subsequent to the Cut-off Date to the extent received from the Mortgagor or
advanced by the Servicer and distributed pursuant to Section 4.01 on or before
such date of determination, (ii) all Principal Prepayments received after the
Cut-off Date to the extent distributed pursuant to Section 4.01 on or before
such date of determination, (iii) all Liquidation Proceeds and Insurance
55
Proceeds to the extent distributed pursuant to Section 4.01 on or before such
date of determination, and (iv) any Realized Loss incurred with respect thereto
as a result of a Deficient Valuation made during or prior to the Due Period for
the most recent Distribution Date coinciding with or preceding such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such Mortgage Loan would be distributed, zero.
With respect to any REO Property: (a) as of any date of determination up to but
not including the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, an
amount (not less than zero) equal to the Stated Principal Balance of the related
Mortgage Loan as of the date on which such REO Property was acquired on behalf
of the Trust Fund, minus the aggregate amount of REO Principal Amortization in
respect of such REO Property for all previously ended calendar months, to the
extent distributed pursuant to Section 4.01 on or before such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.
"Stepdown Date": The earlier to occur of (i) the Distribution
Date on which the aggregate Certificate Principal Balance of the Class A
Certificates has been reduced to zero and (ii) the later to occur of (x) the
Distribution Date occurring in January 2008 and (y) the first Distribution Date
on which the Credit Enhancement Percentage (calculated for this purpose only
after taking into account payments of principal on the Mortgage Loans but prior
to distribution of the Group I Principal Distribution Amount and the Group II
Principal Distribution Amount to the Certificates then entitled to distributions
of principal on such Distribution Date) is equal to or greater than 42.80%.
"Sub-Servicer": Any Person with which the Servicer has entered
into a Sub- Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
"Sub-Servicing Account": An account established by a
Sub-Servicer which meets the requirements set forth in Section 3.08 and is
otherwise acceptable to the Servicer.
"Sub-Servicing Agreement": The written contract between the
Servicer and a Sub-Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.02.
"Subsequent Cut-off Date": With respect to those Subsequent
Mortgage Loans sold to the Trust Fund pursuant to a Subsequent Transfer
Instrument, the later of (i) first day of the month in which the related
Subsequent Transfer Date occurs or (ii) the date of origination of such Mortgage
Loan.
"Subsequent Group I Mortgage Loan": A Subsequent Mortgage Loan
to be included in Loan Group I.
"Subsequent Group II Mortgage Loan": A Subsequent Mortgage
Loan to be included in Loan Group II.
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"Subsequent Mortgage Loan": A Mortgage Loan sold by the
Depositor to the Trust Fund pursuant to Section 2.08, such Mortgage Loan being
identified on the Mortgage Loan Schedule attached to a Subsequent Transfer
Instrument.
"Subsequent Mortgage Loan Interest": Any amount constituting a
monthly payment of interest received or advanced at the Net Mortgage Rate (less
the Trustee Fee Rate) with respect to (i) a Subsequent Group I Mortgage Loan
during the Due Period relating to the first three Distribution Dates in excess
of 0.00% per annum and (ii) a Subsequent Group II Mortgage Loan during the Due
Period relating to the first three Distribution Dates in excess of 0.00% per
annum. The Subsequent Mortgage Loan Interest shall be distributable to the Class
C Certificates. The Subsequent Mortgage Loan Interest shall not be an asset of
any REMIC.
"Subsequent Mortgage Loan Purchase Agreement": The agreement
between the Depositor and the Seller, regarding the transfer of the Subsequent
Mortgage Loans by the Seller to the Depositor.
"Subsequent Recoveries": As of any Distribution Date, amounts
received by the Servicer (net of any related expenses permitted to be reimbursed
pursuant to Section 3.11) specifically related to a Mortgage Loan that was the
subject of a liquidation or an REO Disposition prior to the related Prepayment
Period that resulted in a Realized Loss.
"Subsequent Transfer Date": With respect to each Subsequent
Transfer Instrument, the date on which the related Subsequent Mortgage Loans are
sold to the Trust Fund.
"Subsequent Transfer Instrument": Each Subsequent Transfer
Instrument, dated as of a Subsequent Transfer Date, executed by the Trustee and
the Depositor substantially in the form attached hereto as Exhibit R, by which
Subsequent Mortgage Loans are transferred to the Trust Fund.
"Substitution Adjustment": As defined in Section 2.03(d)
hereof.
"Tax Matters Person": The tax matters person appointed
pursuant to Section 9.01(e) hereof.
"Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed by the Trustee on behalf of each REMIC, together with any and
all other information reports or returns that may be required to be furnished to
the Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.
"Termination Price": As defined in Section 10.01(a) hereof.
"Terminator": As defined in Section 10.01(a) hereof.
57
"Trigger Event": A Trigger Event is in effect with respect to
any Distribution Date on or after the Stepdown Date if:
(a) the Delinquency Percentage exceeds 37.25% of the
Credit Enhancement Percentage or
(b) the aggregate amount of Realized Losses incurred
since the Cut-off Date through the last day of the related Due Period (reduced
by the aggregate amount of Subsequent Recoveries received since the Cut-off Date
through the last day of the related Due Period) divided by the aggregate Stated
Principal Balance of the Initial Mortgage Loans as of the Cut-off Date and the
Original Pre-Funded Amounts exceeds the applicable percentages set forth below
with respect to such Distribution Date:
DISTRIBUTION DATE OCCURRING IN PERCENTAGE
------------------------------ ----------
January 2008 through December 2008 3.00% for the first month, plus an additional 1/12th of
1.50% for each month thereafter.
January 2009 through December 2009 4.50% for the first month, plus an additional 1/12th of
1.25% for each month thereafter.
January 2010 through December 2010 5.75% for the first month, plus an additional 1/12th of
0.75% for each month thereafter.
January 2011 and thereafter 6.50% for each month.
"Trust": Fremont Home Loan Trust 2004-4, the trust created
hereunder.
"Trust Fund": All of the assets of the Trust, which is the
trust created hereunder consisting of REMIC 1, REMIC 2, REMIC 3, REMIC 4, REMIC
5, REMIC, 6, REMIC 7, REMIC 8, REMIC 9, the Pre-Funding Accounts, any Subsequent
Mortgage Loan Interest, the Cap Contract and the right to receive any amounts
from the Net WAC Rate Carryover Reserve Account and any Servicer Prepayment
Charge Payment Amounts.
"Trustee": Deutsche Bank National Trust Company, a national
banking association, or any successor trustee appointed as herein provided.
"Trustee Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it in the execution of the trust hereby created and in the exercise
and performance of any of the powers and duties of the Trustee hereunder, which
amount shall equal one twelfth of the product of (i) the Trustee Fee Rate
(without regard to the words "per annum"), multiplied by (ii) (a) the aggregate
Principal Balance of the Mortgage Loans and any REO Properties (after giving
effect to scheduled payments of principal due during the Due Period relating to
the previous Distribution Date, to the extent received or advanced and
prepayments collected during the Prepayment Period relating to the previous
Distribution Date) and (b) any amounts in the Pre-Funding Accounts as of the
first day of the calendar month prior to the month of such Distribution Date
(or, in the case of the initial Distribution Date, as of the Cut-off Date).
"Trustee Fee Rate": 0.0018% per annum.
58
"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 REMIC Pass-Through Rate on the
Uncertificated Principal Balance of such REMIC Regular Interest. In each case,
Uncertificated Accrued Interest will be reduced by any Net Prepayment Interest
Shortfalls, Relief Act Interest Shortfalls (allocated to such REMIC Regular
Interests based on their respective entitlements to interest irrespective of any
Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls for such
Distribution Date).
"Uncertificated Principal Balance": With respect to each REMIC
Regular Interest, the amount of such REMIC Regular Interest outstanding as of
any date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 4.07 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.08, and the
Uncertificated Principal Balance of REMIC 2 Regular Interest LTZZ shall be
increased by interest deferrals as provided in Section 4.07. With respect to the
Class C Interest as of any date of determination, an amount equal to the excess,
if any, of (A) the then aggregate Uncertificated Principal Balance of the REMIC
2 Regular Interests over (B) the then aggregate Certificate Principal Balance of
the Floating Rate Certificates and the Class P Certificates then outstanding.
The Uncertificated Principal Balance of each REMIC Regular Interest that has an
Uncertificated Principal Balance shall never be less than zero.
"Uncertificated REMIC Pass-Through Rate": The Uncertificated
REMIC 1 Pass-Through Rate or Uncertificated REMIC 2 Pass-Through Rate, as
applicable.
"Uncertificated REMIC 1 Pass-Through Rate": With respect to
REMIC 1 Regular Interest LT1 and REMIC 1 Regular Interest LTP, and (i) the first
Distribution Date, the weighted average of the Adjusted Net Mortgage Rates of
the Initial Group I Mortgage Loans and (ii) thereafter, the weighted average of
the Adjusted Net Mortgage Rates of the Group I Mortgage Loans. With respect to
REMIC 1 Regular Interest LT2, and (i) the first Distribution Date, the weighted
average of the Adjusted Net Mortgage Rates of the Initial Group II Mortgage
Loans and (ii) thereafter, the weighted average of the Adjusted Net Mortgage
Rates of the Group II Mortgage Loans. With respect to REMIC 1 Regular Interest
LT1PF and (i) the first three Distribution Dates, 0.00% and (ii) thereafter, the
weighted average of the Adjusted Net Mortgage Rates of the Group I Mortgage
Loans. With respect to REMIC 1 Regular Interest LT2PF and (i) the first three
Distribution Dates, 0.00% and (ii) thereafter, the weighted average of the
Adjusted Net Mortgage Rates of the Group II Mortgage Loans.
"Uncertificated REMIC 2 Pass-Through Rate": For any
Distribution Date and each REMIC 2 Regular Interest, the weighted average of the
Uncertificated REMIC 1 Pass-Through Rate on the REMIC 1 Regular Interests,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
1 Regular Interest.
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"Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.14.
"United States Person" or "U.S. Person": A citizen or resident
of the United States, a corporation, partnership (or other entity treated as a
corporation or partnership for United States federal income tax purposes)
created or organized in, or under the laws of, the United States, any state
thereof, or the District of Columbia (except in the case of a partnership, to
the extent provided in Treasury regulations) provided that, for purposes solely
of the restrictions on the transfer of Residual Certificates, no partnership or
other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are required by
the applicable operative agreement to be United States Persons, or an estate the
income of which from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States, or
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have authority to control all substantial decisions of the trust. The
term "United States" shall have the meaning set forth in Section 7701 of the
Code or successor provisions.
"Unpaid Interest Shortfall Amount": With respect to any Class
of the Floating Rate Certificates and (i) the first Distribution Date, zero, and
(ii) any Distribution Date after the first Distribution Date, the amount, if
any, by which (a) the sum of (1) the Monthly Interest Distributable Amount for
such Class for the immediately preceding Distribution Date and (2) the
outstanding Unpaid Interest Shortfall Amount, if any, for such Class for such
preceding Distribution Date exceeds (b) the aggregate amount distributed on such
Class in respect of interest pursuant to clause (a) of this definition on such
preceding Distribution Date, plus interest on the amount of interest due but not
paid on the Certificates of such Class on such preceding Distribution Date, to
the extent permitted by law, at the Pass-Through Rate for such Class for the
related Accrual Period.
"Value": With respect to any Mortgaged Property, the lesser of
(i) the lesser of (a) the value thereof as determined by an appraisal made for
the originator of the Mortgage Loan at the time of origination of the Mortgage
Loan by an appraiser who met the minimum requirements of ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇
Mac, and (b) the value thereof as determined by a review appraisal conducted by
the Originator in the event any such review appraisal determines an appraised
value ten percent or more lower than the value thereof as determined by the
appraisal referred to in clause (i)(a) above and (ii) the purchase price paid
for the related Mortgaged Property by the Mortgagor with the proceeds of the
Mortgage Loan, provided, however, in the case of a Refinanced Mortgage Loan,
such value of the Mortgaged Property is based solely upon the lesser of (1) the
value determined by an appraisal made for the Originator of such Refinanced
Mortgage Loan at the time of origination of such Refinanced Mortgage Loan by an
appraiser who met the minimum requirements of ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac and (2)
the value thereof as determined by a review appraisal conducted by the
Originator in the event any
60
such review appraisal determines an appraised value ten percent or more lower
than the value thereof as determined by the appraisal referred to in clause
(ii)(1) above.
"Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. At all times the
Floating Rate Certificates and the Class C Certificates shall have 98% of the
Voting Rights (allocated among the Holders of the Floating Rate Certificates and
the Class C Certificates in proportion to the then outstanding Certificate
Principal Balances of their respective Certificates), the Class P Certificates
shall have 1% of the Voting Rights and the Residual Certificates shall have 1%
of the Voting Rights. The Voting Rights allocated to any Class of Certificates
(other than the Class P Certificates and the Residual Certificates) shall be
allocated among all Holders of each such Class in proportion to the outstanding
Certificate Principal Balance of such Certificates, and the Voting Rights
allocated to the Class P Certificates and the Residual Certificates shall be
allocated among all Holders of each such Class in proportion to such Holders'
respective Percentage Interest; provided, however that when none of the Regular
Certificates are outstanding, 100% of the Voting Rights shall be allocated among
Holders of the Residual Certificates in accordance with such Holders' respective
Percentage Interests in the Certificates of such Class.
SECTION 1.02 Accounting.
Unless otherwise specified herein, for the purpose of any
definition or calculation, whenever amounts are required to be netted,
subtracted or added or any distributions are taken into account such definition
or calculation and any related definitions or calculations shall be determined
without duplication of such functions.
SECTION 1.03 Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Floating Rate Certificates and the Class C
Certificates for any Distribution Date, (1) the aggregate amount of any Net
Prepayment Interest Shortfalls and any Relief Act Interest Shortfalls incurred
in respect of the Mortgage Loans for any Distribution Date shall be allocated
first, among the Class C Certificates on a pro rata basis based on, and to the
extent of, one month's interest at the then applicable Pass-Through Rate on the
Notional Amount of each such Certificate and, thereafter, among the Floating
Rate Certificates on a pro rata basis based on, and to the extent of, one
month's interest at the then applicable respective Pass-Through Rate on the
respective Certificate Principal Balance of each such Certificate and (2) the
aggregate amount of any Realized Losses and Net WAC Rate Carryover Amounts shall
be allocated among the Class C Certificates on a pro rata basis based on, and to
the extent of, one month's interest at the then applicable Pass-Through Rate on
the Notional Amount of each such Certificate.
For purposes of calculating the amount of Uncertificated
Accrued Interest for the REMIC 1 Regular Interests for any Distribution Date,
the aggregate amount of any Net Prepayment Interest Shortfalls and any Relief
Act Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated (i) with respect to the Group I Mortgage
Loans, to REMIC 1 Regular Interest LT1 and REMIC 1 Regular Interest LT1PF, in
each case to the extent of one month's interest at the then applicable
respective Uncertificated
61
REMIC 1 Pass-Through Rate on the respective Uncertificated Principal Balance of
each such Uncertificated REMIC 1 Interest; provided, however, with respect to
the first three Distribution Dates, such amounts relating to the Initial Group I
Mortgage Loans shall be allocated to REMIC 1 Regular Interest LT1 and such
amounts relating to the Subsequent Group I Mortgage Loans shall be allocated to
REMIC 1 Regular Interest LT1PF and (ii) with respect to the Group II Mortgage
Loans, to REMIC 1 Regular Interest LT2 and REMIC 1 Regular Interest LT2PF, in
each case to the extent of one month's interest at the then applicable
respective Uncertificated REMIC 1 Pass-Through Rate on the respective
Uncertificated Principal Balance of each such Uncertificated REMIC 1 Interest;
provided, however, with respect to the first three Distribution Dates, such
amounts relating to the Initial Group II Mortgage Loans shall be allocated to
REMIC 1 Regular Interest LT2 and such amounts relating to the Subsequent Group
II Mortgage Loans shall be allocated to REMIC 1 Regular Interest LT2PF.
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 Mortgage Loans for any
Distribution Date shall be allocated among REMIC 2 Regular Interest LTAA, REMIC
2 Regular Interest LTI-A1, REMIC 2 Regular Interest LTI-A2, REMIC 2 Regular
Interest LTII-A1, REMIC 2 Regular Interest LTII-A2, REMIC 2 Regular Interest
LTII-A3, REMIC 2 Regular Interest LTM1, REMIC 2 Regular Interest LTM2, REMIC 2
Regular Interest LTM3, REMIC 2 Regular Interest LTM4, REMIC 2 Regular Interest
LTM5, REMIC 2 Regular Interest LTM6, REMIC 2 Regular Interest LTM7, REMIC 2
Regular Interest LTM8, REMIC 2 Regular Interest LTM9, REMIC 2 Regular Interest
LTM10, REMIC 2 Regular Interest LTB and REMIC 2 Regular Interest LTZZ pro rata
based on, and to the extent of, one month's interest at the then applicable
respective Uncertificated REMIC 2 Pass-Through Rate on the respective
Uncertificated Principal Balance of each such REMIC 2 Regular Interest.
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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 in trust to
the Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to (i) each Mortgage Loan
identified on the Mortgage Loan Schedule, including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest in
any insurance policies in respect of the Mortgage Loans; (iv) the rights of the
Depositor under the Master Agreement (as assigned to the Depositor pursuant to
the terms of the Assignment Agreement), (v) the right to receive any amounts
payable under the Cap Contract, (vi) all other assets included or to be included
in the Trust Fund and (vii) all proceeds of any of the foregoing. Such
assignment includes all interest and principal due and collected by the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
The Depositor hereby directs the Trustee to execute, deliver
and perform its obligations under the Cap Contract on the Closing Date and
thereafter on behalf of the Holders of the Floating Rate Certificates. The
Depositor, the Servicer and the Holders of the Floating Rate Certificates by
their acceptance of such Certificates acknowledge and agree that the Trustee
shall execute, deliver and perform its obligations under the Cap Contract and
shall do so solely in its capacity as Trustee of the Trust Fund and not in its
individual capacity.
In connection with such transfer and assignment, the
Depositor, does hereby deliver to, and deposit with the Trustee, or its
designated agent (the "Custodian"), the following documents or instruments with
respect to each Initial Mortgage Loan so transferred and assigned, and in
accordance with Section 2.08, deliver or caused to be delivered to the Trustee
with respect to each Subsequent Mortgage Loan, the following documents or
instruments (with respect to each Mortgage Loan, a "Mortgage File"):
(i) the original Mortgage Note including any riders
thereto, endorsed either (A) in blank, in which case the Trustee shall
cause the endorsement to be completed or (B) in the following form:
"Pay to the order of Deutsche Bank National Trust Company, as Trustee,
without recourse" or with respect to any lost Mortgage Note, an
original Lost Note Affidavit stating that the original mortgage note
was lost, misplaced or destroyed, together with a copy of the related
mortgage note; provided, however, that such substitutions of Lost Note
Affidavits for original Mortgage Notes may occur only with respect to
Mortgage Loans, the aggregate Cut-off Date Principal Balance of which
is less than or equal to 1.00% of the Pool Balance as of the Cut-off
Date;
63
(ii) the original Mortgage (noting the presence of the MIN
of the Mortgage Loan and language indicating that the Mortgage Loan is
a MOM Loan if the Mortgage Loan is a MOM Loan), with evidence of
recording thereon, and the original recorded power of attorney, if the
Mortgage was executed pursuant to a power of attorney, with evidence of
recording thereon or, if such Mortgage or power of attorney has been
submitted for recording but has not been returned from the applicable
public recording office, has been lost or is not otherwise available, a
copy of such Mortgage or power of attorney, as the case may be,
certified to be a true and complete copy of the original submitted for
recording;
(iii) unless the Mortgage Loan is registered on the MERS(R)
System, an original Assignment, in form and substance acceptable for
recording. The Mortgage shall be assigned either (A) in blank or (B) to
"Deutsche Bank National Trust Company, as Trustee, without recourse";
(iv) an original of any intervening assignment of Mortgage
showing a complete chain of assignments (or to MERS if the Mortgage
Loan is registered on the MERS(R) System and noting the presence of
MIN);
(v) the original or a certified copy of lender's title
insurance policy; and
(vi) the original or copies of each assumption,
modification, written assurance or substitution agreement, if any.
The Depositor herewith also delivers to the Trustee an
executed copy of the Assignment Agreement and the Master Agreement.
If any of the documents referred to in Section 2.01(ii), (iii)
or (iv) above has as of the Closing Date (or Subsequent Transfer Date, with
respect to Subsequent Mortgage Loans) been submitted for recording but either
(x) has not been returned from the applicable public recording office or (y) has
been lost or such public recording office has retained the original of such
document, the obligations of the Depositor to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the Trustee or the Custodian no
later than the Closing Date (or Subsequent Transfer Date, with respect to
Subsequent Mortgage Loans), of a copy of each such document certified by the
Originator in the case of (x) above or the applicable public recording office in
the case of (y) above to be a true and complete copy of the original that was
submitted for recording and (2) if such copy is certified by the Originator,
delivery to the Trustee or the Custodian, promptly upon receipt thereof of
either the original or a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original. If the
original lender's title insurance policy, or a certified copy thereof, was not
delivered pursuant to Section 2.01(v) above, the Depositor shall deliver or
cause to be delivered to the Trustee or the Custodian, the original or a copy of
a written commitment or interim binder or preliminary report of title issued by
the title insurance or escrow company, with the original or a certified copy
thereof to be delivered to the Trustee or the Custodian, promptly upon receipt
thereof. The Servicer or the Depositor shall deliver or cause to be delivered to
the Trustee or the Custodian promptly upon receipt thereof any other documents
constituting a part of a Mortgage
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File received with respect to any Mortgage Loan, including, but not limited to,
any original documents evidencing an assumption or modification of any Mortgage
Loan.
Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File, the
Trustee shall notify the Servicer and the Servicer (or, to the extent provided
in Section 3.02, the Trustee) shall enforce the obligations of the Originator
under the Master Agreement to cure such defect or deliver such missing document
to the Trustee or the Custodian within 90 days. If the Originator does not cure
such defect or deliver such missing document within such time period, the
Servicer (or, to the extent provided in Section 3.02, the Trustee) shall enforce
the obligations of the Originator to either repurchase or substitute for such
Mortgage Loan in accordance with Section 2.03. In connection with the foregoing,
it is understood that the Trustee shall have no duty to discover any such
defects except in the course of performing its review of the Mortgage Files to
the extent set forth herein.
The Trustee shall enforce the obligations of the Originator
under the Master Agreement to cause the Assignments which were delivered in
blank to be completed and to record all Assignments referred to in Section
2.01(iii) hereof and, to the extent necessary, in Section 2.01(iv) hereof. The
Trustee shall enforce the obligations of the Originator under the Master
Agreement to deliver such assignments for recording within 180 days of the
Closing Date. In the event that any such Assignment is lost or returned
unrecorded because of a defect therein, the Trustee shall enforce the
obligations of the Originator under the Master Agreement to promptly have a
substitute Assignment prepared or have such defect cured, as the case may be,
and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, for administrative convenience
and facilitation of servicing and to reduce closing costs, the Assignments of
Mortgage shall not be required to be submitted for recording (except with
respect to any Mortgage Loan located in Maryland) unless the Trustee and the
Depositor receive notice that such failure to record would result in a
withdrawal or a downgrading by any Rating Agency of the rating on any Class of
Certificates; provided, however, each Assignment, except with respect to any
Mortgage Loan for which MERS is identified on the Mortgage, shall be submitted
for recording in the manner described above, at no expense to the Trust Fund or
Trustee, upon the earliest to occur of: (i) reasonable direction by the Holders
of Certificates entitled to at least 25% of the Voting Rights, (ii) the
occurrence of a Servicer Event of Termination, (iii) the occurrence of a
bankruptcy, insolvency or foreclosure relating to the Seller, (iv) the
occurrence of a servicing transfer as described in Section 7.02 hereof, (v) upon
receipt of notice from the Servicer, the occurrence of a bankruptcy, insolvency
or foreclosure relating to the Mortgagor under the related Mortgage and (vi)
upon receipt of notice from the Servicer, any Mortgage Loan that is 90 days or
more Delinquent. In the event of (i) through
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(vi) set forth in the immediately preceding sentence, the Trustee shall enforce
the obligations of the Seller to deliver such Assignments for recording as
provided above, promptly and in any event within 30 days following receipt of
notice by the Seller. Notwithstanding the foregoing, if the Seller fails to pay
the cost of recording the Assignments, such expense will be paid by the Trustee
and the Trustee shall be reimbursed for such expenses by the Trust. In the event
an Assignment is not recorded, the Servicer will not have any liability for its
failure to act on notices that were not received and would have been had such
Assignment been recorded, except with respect to Mortgage Loans that are subject
to provisions (i) through (vi) set forth in this paragraph, if the Servicer
shall have failed to timely request the Seller to cause such Assignments to be
recorded.
In the event that any Mortgage Note is endorsed in blank as of
the Closing Date, promptly following the Closing Date, the Trustee shall cause
(at the Seller's expense) such endorsements to be completed as follows: "Pay to
the order of Deutsche Bank National Trust Company, as Trustee, without
recourse."
The Servicer shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within two weeks of
their execution; provided, however, that the Servicer shall provide the
Custodian with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall provide the original of
any document submitted for recordation or a copy of such document certified by
the appropriate public recording office to be a true and complete copy of the
original within 365 days of its submission for recordation. In the event that
the Servicer cannot provide a copy of such document certified by the public
recording office within such 365 day period, the Servicer shall deliver to the
Custodian, within such 365 day period, an Officers' Certificate of the Servicer
which shall (A) identify the recorded document, (B) state that the recorded
document has not been delivered to the Custodian due solely to a delay caused by
the public recording office, (C) state the amount of time generally required by
the applicable recording office to record and return a document submitted for
recordation, if known and (D) specify the date the applicable recorded document
is expected to be delivered to the Custodian, and, upon receipt of a copy of
such document certified by the public recording office, the Servicer shall
immediately deliver such document to the Custodian. In the event the appropriate
public recording office will not certify as to the accuracy of such document,
the Servicer shall deliver a copy of such document certified by an officer of
the Servicer to be a true and complete copy of the original to the Custodian.
The parties hereto understand and agree that it is not
intended that any Mortgage Loan be included in the Trust that is a "High-Cost
Home Loan" as defined by the Homeownership and Equity Protection Act of 1994 or
any other applicable predatory or abusive lending laws.
SECTION 2.02 Acceptance by Trustee.
Subject to the provisions of Section 2.01 and subject to the
review described below and any exceptions noted on the exception report
described in the next paragraph below, the Trustee acknowledges receipt of the
documents referred to in Section 2.01 above and all other assets included in the
definition of "Trust Fund" and declares that it holds and will hold such
documents and the other documents delivered to it constituting a Mortgage File,
and that it holds or will hold all such assets and such other assets included in
the definition of "Trust Fund" in trust for the exclusive use and benefit of all
present and future Certificateholders.
The Trustee agrees to execute and deliver (or cause the
Custodian to execute and deliver) to the Depositor and the Servicer on or prior
to the Closing Date (or Subsequent Transfer
66
Date, with respect to Subsequent Mortgage Loans) an acknowledgment of receipt of
the related original Mortgage Note for each Mortgage Loan (with any exceptions
noted), substantially in the form attached as Exhibit F-3 hereto.
The Trustee agrees, for the benefit of the Certificateholders,
to review, or that it has reviewed pursuant to Section 2.01 (or to cause the
Custodian to review or that it has caused the Custodian to have reviewed) each
Mortgage File on or prior to the Closing Date, with respect to each Initial
Mortgage Loan (or, with respect to any document delivered after the Startup Day,
within 45 days of receipt and with respect to any Qualified Substitute Mortgage
Loan, within 45 days after the assignment thereof). The Trustee further agrees,
for the benefit of the Certificateholders, to certify to the Depositor and the
Servicer in substantially the form attached hereto as Exhibit F-1, within 45
days after the Closing Date, with respect to each Initial Mortgage Loan (or,
with respect to any document delivered after the Startup Day, within 45 days of
receipt and with respect to any Qualified Substitute Mortgage, within 45 days
after the assignment thereof) that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in the exception report annexed thereto as
not being covered by such certification), (i) all documents required to be
delivered to it pursuant to Section 2.01 of this Agreement are in its
possession, (ii) such documents have been reviewed by it and have not been
mutilated, damaged or torn and appear on their face to relate to such Mortgage
Loan and (iii) based on its examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule that corresponds to items
(1) and (2) of the Mortgage Loan Schedule accurately reflects information set
forth in the Mortgage File. It is herein acknowledged that, in conducting such
review, the Trustee (or the Custodian, as applicable) is under no duty or
obligation to inspect, review or examine any such documents, instruments,
certificates or other papers to determine that they are genuine, legally
enforceable, valid or binding or appropriate for the represented purpose or that
they have actually been recorded or that they are other than what they purport
to be on their face.
Prior to the first anniversary date of this Agreement the
Trustee shall deliver (or cause the Custodian to deliver) to the Depositor and
the Servicer a final certification in the form annexed hereto as Exhibit F-2,
with any applicable exceptions noted thereon.
If in the process of reviewing the Mortgage Files and making
or preparing, as the case may be, the certifications referred to above, the
Trustee (or the Custodian, as applicable) finds any document or documents
constituting a part of a Mortgage File to be missing or not to conform with
respect to any characteristics which are within the scope of the Trustee's (or
the Custodian's, as applicable) review as provided herein, at the conclusion of
its review, the Trustee shall so notify the Seller, the Depositor, the
Originator and the Servicer. In addition, upon the discovery by the Depositor or
the Servicer (or upon receipt by the Trustee of written notification of such
breach) of a breach of any of the representations and warranties made by the
Originator in the Master Agreement or the Seller in the Assignment Agreement in
respect of any Mortgage Loan which materially adversely affects such Mortgage
Loan or the interests of the related Certificateholders in such Mortgage Loan,
the party discovering such breach shall give prompt written notice to the other
parties to this Agreement.
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The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a sale of the Mortgage Loans, the
related Mortgage Notes and the related documents, conveying good title thereto
free and clear of any liens and encumbrances, from the Depositor to the Trustee
in trust for the benefit of the Certificateholders and that such property not be
part of the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee a first
priority perfected security interest in all of the Depositor's right, title and
interest in and to the Mortgage Loans, the related Mortgage Notes and the
related documents, and that this Agreement shall constitute a security agreement
under applicable law.
SECTION 2.03 Repurchase or Substitution of Mortgage Loans by
the Originator.
(a) Upon discovery or receipt of written notice of any
materially defective document in, or that a document is missing from, a Mortgage
File or of the breach by the Originator or the Seller, as applicable, of any
representation, warranty or covenant under the Master Agreement or Assignment
Agreement, as applicable, in respect of any Mortgage Loan which materially
adversely affects the value of such Mortgage Loan or the interest therein of the
Certificateholders, the Trustee shall promptly notify the Servicer of such
defect, missing document or breach and the Servicer shall request that the
Originator deliver such missing document or that the Originator cure such defect
or breach within 90 days from the date the Originator was notified of such
missing document, defect or breach, and if the Originator does not deliver such
missing document or if the Originator does not cure such defect or breach in all
material respects during such period, the Servicer (or, to the extent provided
in Section 3.02, the Trustee) shall enforce the Originator's obligation under
the Master Agreement or the Seller's obligation under the Assignment Agreement
and notify the Originator or the Seller, as applicable, of its obligation to
repurchase such Mortgage Loan from the Trust Fund at the Purchase Price on or
prior to the Determination Date following the expiration of such 90 day period
(subject to Section 2.03(e)). The Purchase Price for the repurchased Mortgage
Loan shall be remitted to the Servicer for deposit in the Collection Account,
and the Trustee, upon receipt of written certification from the Servicer of such
deposit, shall release to the Originator or the Seller, as applicable, the
related Mortgage File and shall execute and deliver such instruments of transfer
or assignment, in each case without recourse, as the Originator or the Seller,
as applicable, shall furnish to it and as shall be necessary to vest in the
Originator or Seller, as applicable, any Mortgage Loan released pursuant hereto
and the Trustee shall have no further responsibility with regard to such
Mortgage File (it being understood that the Trustee shall have no responsibility
for determining the sufficiency of such assignment for its intended purpose). In
lieu of repurchasing any such Mortgage Loan as provided above, the Originator or
the Seller, as applicable, may cause such Mortgage Loan to be removed from the
Trust Fund (in which case it shall become a Deleted Mortgage Loan) and
substitute one or more Qualified Substitute Mortgage Loans in the manner and
subject to the limitations set forth in Section 2.03(d); provided, however, the
Seller may not substitute for any Mortgage Loan which breaches a representation
or warranty regarding abusive or predatory lending laws. In furtherance of the
foregoing, if the Originator or the Seller, as applicable, is not a member of
MERS and repurchases a Mortgage Loan which is registered on the MERS(R) System,
the Originator or the
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Seller, as applicable, at its own expense and without any right of
reimbursement, shall cause MERS to execute and deliver an assignment of the
Mortgage in recordable form to transfer the Mortgage from MERS to the Seller and
shall cause such Mortgage to be removed from registration on the MERS(R) System
in accordance with MERS' rules and regulations. It is understood and agreed that
the obligation of the Originator or the Seller, as applicable, to cure or to
repurchase (or to substitute for) any Mortgage Loan as to which a document is
missing, a material defect in a constituent document exists or as to which such
a breach has occurred and is continuing shall constitute the sole remedy against
the Originator or the Seller, as applicable, respecting such omission, defect or
breach available to the Trustee on behalf of the Certificateholders.
(b) Within 90 days of the earlier of discovery by the
Depositor or receipt of notice by the Depositor of the breach of any
representation, warranty or covenant of the Depositor set forth in Section 2.06,
which materially and adversely affects the interests of the Certificateholders
in any Mortgage Loan, the Depositor shall cure such breach in all material
respects.
(c) Within 90 days of the earlier of discovery by the
Servicer or receipt of notice by the Servicer of the breach of any
representation, warranty or covenant of the Servicer set forth in Section 2.05
which materially and adversely affects the interests of the Certificateholders
in any Mortgage Loan, the Servicer shall cure such breach in all material
respects.
(d) Any substitution of Qualified Substitute Mortgage
Loans for Deleted Mortgage Loans made pursuant to Section 2.03(a) must be
effected prior to the last Business Day that is within two years after the
Closing Date. As to any Deleted Mortgage Loan for which the Originator or the
Seller, as applicable, substitutes a Qualified Substitute Mortgage Loan or
Loans, such substitution shall be effected by the Originator or the Seller, as
applicable, delivering to the Trustee, for such Qualified Substitute Mortgage
Loan or Loans, the Mortgage Note, the Mortgage and the Assignment to the
Trustee, and such other documents and agreements, with all necessary
endorsements thereon, as are required by Section 2.01, together with an
Officers' Certificate providing that each such Qualified Substitute Mortgage
Loan satisfies the definition thereof and specifying the Substitution Adjustment
(as described below), if any, in connection with such substitution. The Trustee
shall acknowledge receipt for such Qualified Substitute Mortgage Loan or Loans
and, within 45 days thereafter, shall review such documents as specified in
Section 2.02 and deliver to the Servicer, with respect to such Qualified
Substitute Mortgage Loan or Loans, a certification substantially in the form
attached hereto as Exhibit F-1, with any applicable exceptions noted thereon.
Within one year of the date of substitution, the Trustee shall deliver to the
Servicer a certification substantially in the form of Exhibit F-2 hereto with
respect to such Qualified Substitute Mortgage Loan or Loans, with any applicable
exceptions noted thereon. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution are not part of the Trust
Fund and will be retained by the Originator or the Seller, as applicable. For
the month of substitution, distributions to Certificateholders will reflect the
collections and recoveries in respect of such Deleted Mortgage Loan in the Due
Period preceding the month of substitution and the Originator or the Seller, as
applicable, shall thereafter be entitled to retain all amounts subsequently
received in respect of
69
such Deleted Mortgage Loan. The Servicer shall give or cause to be given written
notice to the Trustee, who shall forward such notice to the Certificateholders,
that such substitution has taken place, shall amend the Mortgage Loan Schedule
to reflect the removal of such Deleted Mortgage Loan from the terms of this
Agreement and the substitution of the Qualified Substitute Mortgage Loan or
Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the
Trustee. Upon such substitution by the Originator or the Seller, as applicable,
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 Assignment Agreement, including all applicable representations
and warranties thereof included in the Assignment Agreement as of the date of
substitution.
For any month in which the Originator or the Seller, as
applicable, substitutes one or more Qualified Substitute Mortgage Loans for one
or more Deleted Mortgage Loans, the Servicer will determine the amount (the
"Substitution Adjustment"), if any, by which the aggregate Purchase Price of all
such Deleted Mortgage Loans exceeds the aggregate, as to each such Qualified
Substitute Mortgage Loan, of the Stated Principal Balance thereof as of the date
of substitution, together with one month's interest on such Stated Principal
Balance at the applicable Mortgage Rate. On the date of such substitution, the
Originator or the Seller, as applicable, will deliver or cause to be delivered
to the Servicer for deposit in the Collection Account an amount equal to the
Substitution Adjustment, if any, and the Trustee, upon receipt of the related
Qualified Substitute Mortgage Loan or Loans and certification by the Servicer of
such deposit, shall release to the Originator the related Mortgage File or Files
and shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, as the Originator or the Seller, as applicable,
shall deliver to it and as shall be necessary to vest therein any Deleted
Mortgage Loan released pursuant hereto.
In addition, the Originator or the Seller, as applicable,
shall obtain at its own expense and deliver to the Trustee an Opinion of Counsel
to the effect that such substitution will not cause (a) any federal tax to be
imposed on the Trust Fund, including without limitation, any federal tax imposed
on "prohibited transactions" under Section 860F(a)(I) of the Code or on
"contributions after the startup date" under Section 860G(d)(I) of the Code or
(b) any REMIC to fail to qualify as a REMIC at any time that any Certificate is
outstanding. If such Opinion of Counsel can not be delivered, then such
substitution may only be effected at such time as the required Opinion of
Counsel can be given.
(e) Upon discovery by the Depositor, the Servicer or the
Trustee that any Mortgage Loan does not constitute a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code, the party discovering such fact
shall within two Business Days give written notice thereof to the other parties
hereto. In connection therewith, the Originator or the Depositor, as the case
may be, shall repurchase or, subject to the limitations set forth in Section
2.03(d), substitute one or more Qualified Substitute Mortgage Loans for the
affected Mortgage Loan within 90 days of the earlier of discovery or receipt of
such notice with respect to such affected Mortgage Loan. Such repurchase or
substitution shall be made (i) by the Originator if the affected Mortgage Loan's
status as a non-qualified mortgage is or results from a breach of any
representation, warranty or covenant made by the Originator under the Assignment
Agreement or (ii) the Depositor, if the affected Mortgage Loan's status as a
non-qualified
70
mortgage is a breach of any representation or warranty of the Depositor set
forth in Section 2.06, or if its status as a non-qualified mortgage is a breach
of no representation or warranty. Any such repurchase or substitution shall be
made in the same manner as set forth in Section 2.03(a) or 2.03(d), if made by
the Originator, or Section 2.03(b), if made by the Depositor. The Trustee shall
reconvey to the Depositor or the Originator, as the case may be, the Mortgage
Loan to be released pursuant hereto in the same manner, and on the same terms
and conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty.
(f) Upon discovery or receipt of written notice of a
breach by the Seller of any representation, warranty or covenant made by the
Seller under the Assignment Agreement in respect of any Mortgage Loan which
materially adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders, and if either (i) such Mortgage Loan is not
in breach of any representation, warranty or covenant of the Originator or (ii)
the Originator has failed to remedy such representation, warranty or covenant
with respect to such Mortgage Loan, then the Trustee shall promptly notify the
Servicer of such breach and the Servicer shall request that the Seller remedy
such breach by the Seller, to the extent provided in the Assignment Agreement,
in the manner and within the time periods set forth in the Assignment Agreement.
SECTION 2.04 Intentionally Omitted.
SECTION 2.05 Representations, Warranties and Covenants of the
Servicer.
The Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee and the Certificateholders and
to the Depositor that as of the Closing Date or as of such date specifically
provided herein:
(i) The Servicer is a limited partnership duly formed,
validly existing and in good standing as a limited partnership under
the laws of the State of Delaware and is duly authorized and qualified
to transact any and all business contemplated by this Agreement to be
conducted by the Servicer in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing
business laws of any such State, to the extent necessary to ensure its
ability to enforce each Mortgage Loan and to service the Mortgage Loans
in accordance with the terms of this Agreement;
(ii) The Servicer has the full power and authority to
conduct its business as presently conducted by it and to execute,
deliver and perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Servicer has duly authorized the
execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the Depositor and the Trustee,
constitutes a legal, valid and binding obligation of the Servicer,
enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity;
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(iii) The execution and delivery of this Agreement by the
Servicer, the servicing of the Mortgage Loans by the Servicer
hereunder, the consummation by the Servicer of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of the
Servicer and will not (A) result in a breach of any term or provision
of the limited partnership agreement of the Servicer or (B) conflict
with, result in a breach, violation or acceleration of, or result in a
default under, the terms of any other material agreement or instrument
to which the Servicer is a party or by which it may be bound, or any
statute, order or regulation applicable to the Servicer of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Servicer; and the Servicer is not a party to,
bound by, or in breach or violation of any indenture or other agreement
or instrument, or subject to or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it, which materially and
adversely affects or, to the Servicer's knowledge, would in the future
materially and adversely affect, (x) the ability of the Servicer to
perform its obligations under this Agreement, (y) the business,
operations, financial condition, properties or assets of the Servicer
taken as a whole or (z) the legality, validity or enforceability of
this Agreement;
(iv) The Servicer is a HUD approved mortgagee pursuant to
Section 203 and Section 211 of the National Housing Act. No event has
occurred, including but not limited to a change in insurance coverage,
that would make the Servicer unable to comply with HUD eligibility
requirements or that would require notification to HUD;
(v) The Servicer does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every
covenant made by it and contained in this Agreement;
(vi) No litigation is pending against the Servicer that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Servicer to
service the Mortgage Loans or to perform any of its other obligations
hereunder in accordance with the terms hereof;
(vii) There are no actions or proceedings against, or
investigations known to it of, the Servicer before any court,
administrative or other tribunal (A) that might prohibit its entering
into this Agreement, (B) seeking to prevent the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit
or materially and adversely affect the performance by the Servicer of
its obligations under, or the validity or enforceability of, this
Agreement;
(viii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Servicer of, or compliance by the
Servicer with, this Agreement or the consummation by it of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained
prior to the Closing Date;
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(ix) [reserved];
(x) Neither this Agreement nor any information,
certificate of an officer, statement furnished in writing or report
delivered to the Trustee by the Servicer in connection with the
transactions contemplated hereby contains or will contain any untrue
statement of a material fact;
(xi) The Servicer will not waive any Prepayment Charge
unless it is waived in accordance with the standard set forth in
Section 3.01; and
(xii) The Servicer has fully furnished and will continue to
fully furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian and Trans Union Credit Information Company or their successors
(the "Credit Repositories") in a timely manner.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive delivery
of the Mortgage Files to the Trustee and shall inure to the benefit of the
Trustee, the Depositor and the Certificateholders. Upon discovery by any of the
Depositor, the Servicer or the Trustee of a breach of any of the foregoing
representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan, Prepayment Charge or the interests therein of
the Certificateholders, the party discovering such breach shall give prompt
written notice (but in no event later than two Business Days following such
discovery) to the Servicer and the Trustee. Notwithstanding the foregoing,
within 90 days of the earlier of discovery by the Servicer or receipt of notice
by the Servicer of the breach of the representation or covenant of the Servicer
set forth in Section 2.05(xi) above which materially and adversely affects the
interests of the Holders of the Class P Certificates in any Prepayment Charge,
the Servicer must pay the amount of such waived Prepayment Charge, for the
benefit of the Holders of the Class P Certificates, by depositing such amount
into the Collection Account. The foregoing shall not, however, limit any
remedies available to the Certificateholders, the Depositor or the Trustee on
behalf of the Certificateholders, pursuant to the Master Agreement respecting a
breach of the representations, warranties and covenants of the Originator made
in its capacity as a party to the Master Agreement.
SECTION 2.06 Representations and Warranties of the Depositor.
The Depositor represents and warrants to the Trust and the
Trustee on behalf of the Certificateholders as follows:
(i) This agreement constitutes a legal, valid and binding
obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a
proceeding at law or in equity);
73
(ii) Immediately prior to the sale and assignment by the
Depositor to the Trustee on behalf of the Trust of each Mortgage Loan,
the Depositor had good and marketable title to each Mortgage Loan
(insofar as such title was conveyed to it by the Seller) subject to no
prior lien, claim, participation interest, mortgage, security interest,
pledge, charge or other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred
all right, title and interest in the Mortgage Loans to the Trustee on
behalf of the Trust;
(iv) The Depositor has not transferred the Mortgage Loans
to the Trustee on behalf of the Trust with any intent to hinder, delay
or defraud any of its creditors; (v) The Depositor has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of Delaware, with full corporate power and authority to
own its assets and conduct its business as presently being conducted;
(vi) The Depositor is not in violation of its articles of
incorporation or by-laws or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Depositor is a party or by which it or
its properties may be bound, which default might result in any material
adverse changes in the financial condition, earnings, affairs or
business of the Depositor or which might materially and adversely
affect the properties or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this
Agreement by the Depositor, and the consummation of the transactions
contemplated thereby, do not and will not result in a material breach
or violation of any of the terms or provisions of, or, to the knowledge
of the Depositor, constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Depositor is a party or by which the Depositor is bound or to which
any of the property or assets of the Depositor is subject, nor will
such actions result in any violation of the provisions of the articles
of incorporation or by-laws of the Depositor or, to the best of the
Depositor's knowledge without independent investigation, any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Depositor or any of its properties or
assets (except for such conflicts, breaches, violations and defaults as
would not have a material adverse effect on the ability of the
Depositor to perform its obligations under this Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body of the United States or any other jurisdiction is
required for the issuance of the Certificates, or the consummation by
the Depositor of the other transactions contemplated by this Agreement,
except such consents, approvals, authorizations, registrations or
qualifications as (a) may be required under State securities or Blue
Sky laws, (b) have been previously obtained or (c) the
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failure of which to obtain would not have a material adverse effect on
the performance by the Depositor of its obligations under, or the
validity or enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations
pending before or, to the Depositor's knowledge, threatened by any
court, administrative agency or other tribunal to which the Depositor
is a party or of which any of its properties is the subject: (a) which
if determined adversely to the Depositor would have a material adverse
effect on the business, results of operations or financial condition of
the Depositor; (b) asserting the invalidity of this Agreement or the
Certificates; (c) seeking to prevent the issuance of the Certificates
or the consummation by the Depositor of any of the transactions
contemplated by this Agreement, as the case may be; or (d) which might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this
Agreement.
SECTION 2.07 Issuance of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it of the Mortgage Files, subject to the provisions of
Sections 2.01 and 2.02, together with the assignment to it of all other assets
included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such assignment and delivery and in exchange therefor, the
Trustee, pursuant to the written request of the Depositor executed by an officer
of the Depositor, has executed, authenticated and delivered to or upon the order
of the Depositor, the Certificates in authorized denominations. The interests
evidenced by the Certificates constitute the entire beneficial ownership
interest in the Trust Fund.
SECTION 2.08 Conveyance of Subsequent Mortgage Loans.
(a) Subject to the conditions set forth in paragraph (b)
below in consideration of the Trustee's delivery on the Subsequent Transfer
Dates to or upon the order of the Depositor of all or a portion of the balance
of funds in the Pre-Funding Accounts, the Depositor shall on any Subsequent
Transfer Date sell, transfer, assign, set over and convey without recourse to
the Trust Fund but subject to the other terms and provisions of this Agreement
all of the right, title and interest of the Depositor in and to (i) the
Subsequent Mortgage Loans identified on the Mortgage Loan Schedule attached to
the related Subsequent Transfer Instrument delivered by the Depositor on such
Subsequent Transfer Date, (ii) all interest accruing thereon on and after the
Subsequent Cut-off Date and all collections in respect of interest and principal
due after the Subsequent Cut-off Date and (iii) all items with respect to such
Subsequent Mortgage Loans to be delivered pursuant to Section 2.01 and the other
items in the related Mortgage Files; provided, however, that the Depositor
reserves and retains all right, title and interest in and to principal received
and interest accruing on the Subsequent Mortgage Loans prior to the related
Subsequent Cut-off Date. The transfer to the Trustee for deposit in the Mortgage
Pool by the Depositor of the Subsequent Mortgage Loans identified on the
Mortgage Loan Schedule shall be absolute and is intended by the Depositor, the
Servicer, the Trustee and the Certificateholders to constitute and to be treated
as a sale of the Subsequent Mortgage Loans by the Depositor to the Trust Fund.
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The related Mortgage File for each Subsequent Mortgage Loan shall be delivered
to the Trustee at least three Business Days prior to the related Subsequent
Transfer Date.
The purchase price paid by the Trustee from amounts released
from the Group I Pre-Funding Account or the Group II Pre-Funding Account, as
applicable, shall be one-hundred percent (100%) of the aggregate Stated
Principal Balance of the related Subsequent Mortgage Loans so transferred (as
identified on the Mortgage Loan Schedule provided by the Depositor). This
Agreement shall constitute a fixed-price purchase contract in accordance with
Section 860G(a)(3)(A)(ii) of the Code.
(b) The Depositor shall transfer to the Trustee for
deposit in the Mortgage Pool the Subsequent Mortgage Loans and the other
property and rights related thereto as described in paragraph (a) above, and the
Trustee shall release funds from the Group I Pre-Funding Account or the Group II
Pre-Funding Account, as applicable, only upon the satisfaction of each of the
following conditions on or prior to the related Subsequent Transfer Date:
(i) the Depositor shall have provided the Trustee and the
Rating Agencies with a timely Addition Notice and shall have provided
any information reasonably requested by the Trustee with respect to the
Subsequent Mortgage Loans;
(ii) the Depositor shall have delivered to the Trustee a
duly executed Subsequent Transfer Instrument, which shall include a
Mortgage Loan Schedule listing the Subsequent Mortgage Loans, and the
Seller shall have delivered a computer file acceptable to the Trustee
containing such Mortgage Loan Schedule to the Trustee at least three
Business Days prior to the related Subsequent Transfer Date;
(iii) as of each Subsequent Transfer Date, as evidenced by
delivery of the Subsequent Transfer Instrument, substantially in the
form of Exhibit R, the Depositor shall not be insolvent nor shall it
have been rendered insolvent by such transfer nor shall it be aware of
any pending insolvency;
(iv) such sale and transfer shall not result in a material
adverse tax consequence to the Trust Fund or the Certificateholders;
(v) the Funding Period shall not have terminated;
(vi) the Depositor shall not have selected the Subsequent
Mortgage Loans in a manner that it believed to be adverse to the
interests of the Certificateholders;
(vii) the Depositor shall have delivered to the Trustee a
Subsequent Transfer Instrument confirming the satisfaction of the
conditions precedent specified in this Section 2.08 and, pursuant to
the Subsequent Transfer Instrument, assigned to the Trustee without
recourse for the benefit of the Certificateholders all the right, title
and interest of the Depositor, in, to and under the Subsequent Mortgage
Loan Purchase Agreement, to the extent of the Subsequent Mortgage
Loans; and
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(viii) the Depositor shall have delivered to the Trustee an
Opinion of Counsel addressed to the Trustee and the Rating Agencies
with respect to the transfer of the Subsequent Mortgage Loans
substantially in the form of the Opinion of Counsel delivered to the
Trustee on the Closing Date regarding the true sale of the Subsequent
Mortgage Loans.
(c) The obligation of the Trust Fund to purchase a
Subsequent Mortgage Loan on any Subsequent Transfer Date is subject to the
satisfaction of the conditions set forth in the immediately preceding paragraph
and the accuracy of the following representations and warranties with respect to
each such Subsequent Mortgage Loan determined as of the applicable Subsequent
Cut-off Date: (i) such Subsequent Mortgage Loan may not be 30 or more days
delinquent as of the last day of the month preceding the Subsequent Cut-off
Date; (ii) the original term to stated maturity of such Subsequent Mortgage Loan
will not be less than 180 months and will not exceed 360 months; (iii) the
Subsequent Mortgage Loan may not provide for negative amortization; (iv) such
Subsequent Mortgage Loan will not have a loan-to-value ratio greater than
100.00%; (v) such Subsequent Mortgage Loans will have, as of the Subsequent
Cut-off Date, a weighted average term since origination not in excess of 5
months; (vi) such Subsequent Mortgage Loan, if a Fixed Rate Mortgage Loan, shall
have a Mortgage Rate that is not less than 4.500% per annum or greater than
10.500% per annum; (vii) such Subsequent Mortgage Loan must have a first payment
date occurring on or before December 2004 and will include 30 days' interest
thereon; (viii) if the Subsequent Mortgage Loan is an Adjustable-Rate Mortgage
Loan, the Subsequent Mortgage Loan will have a Gross Margin not less than 1.000%
per annum; (ix) if the Subsequent Mortgage Loan is an Adjustable-Rate Mortgage
Loan, the Subsequent Mortgage Loan will have a Maximum Mortgage Rate not less
than 9.500% per annum; (x) if the Subsequent Mortgage Loan is an Adjustable-Rate
Mortgage Loan, the Subsequent Mortgage Loan will have a Minimum Mortgage Rate
not less than 3.500% per annum and (xi) such Subsequent Mortgage Loan shall have
been underwritten in accordance with the criteria set forth under "Fremont
Investment & Loan--Underwriting Standards" in the Prospectus Supplement.
(d) Following the purchase of any Subsequent Group I
Mortgage Loan by the Trust, the Group I Mortgage Loans (including such
Subsequent Group I Mortgage Loans) will: (i) have a weighted average original
term to stated maturity of not more than 360 months; (ii) have a weighted
average Mortgage Rate of not less than 6.000% per annum and not more than 7.750%
per annum; (iii) have a weighted average Loan-to-Value Ratio of not more than
86.00%; (iv) have no Mortgage Loan with a Stated Principal Balance at
origination which does not conform to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac loan limits;
(v) will consist of Mortgage Loans with Prepayment Charges representing no less
than 81.00% by aggregate Stated Principal Balance of the Group I Mortgage Loans;
and (vi) have no more than 20.00% of Fixed-Rate Mortgage Loans by aggregate
Stated Principal Balance of the Group I Mortgage Loans. In addition, the
Adjustable-Rate Group I Mortgage Loans will have a weighted average Gross Margin
not less than 4.00% per annum. For purposes of the calculations described in
this paragraph, percentages of the Group I Mortgage Loans will be based on the
Stated Principal Balance of the Initial Group I Mortgage Loans as of the Cut-off
Date and the Stated Principal Balance of the Subsequent Group I Mortgage Loans
as of the related Subsequent Cut-off Date.
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Following the purchase of any Subsequent Group II Mortgage Loan by the
Trust, the Group II Mortgage Loans (including such Subsequent Group II Mortgage
Loans) will: (i) have a weighted average original term to stated maturity of not
more than 360 months; (ii) have a weighted average Mortgage Rate of not less
than 5.750% per annum and not more than 7.750% per annum; (iii) have a weighted
average Loan-to-Value Ratio of not more than 86.00%; (iv) have no Mortgage Loan
with a principal balance in excess of $1,100,000; (v) will consist of Mortgage
Loans with Prepayment Charges representing no less than 81.00% by aggregate
Stated Principal Balance of the Group II Mortgage Loans; and (vi) have no more
than 17.000% of Fixed-Rate Mortgage Loans by aggregate Stated Principal Balance
of the Group II Mortgage Loans. In addition, the Adjustable-Rate Group II
Mortgage Loans will have a weighted average Gross Margin not less than 4.000%
per annum. For purposes of the calculations described in this paragraph,
percentages of the Group II Mortgage Loans will be based on the Stated Principal
Balance of the Initial Group II Mortgage Loans as of the Cut-off Date and the
Stated Principal Balance of the Subsequent Group II Mortgage Loans as of the
related Subsequent Cut-off Date.
(e) Notwithstanding the foregoing, any Subsequent
Mortgage Loan may be rejected by any Rating Agency if the inclusion of any such
Subsequent Mortgage Loan would adversely affect the ratings of any Class of
Certificates. At least one Business Day prior to the Subsequent Transfer Date,
each Rating Agency shall notify the Trustee as to which Subsequent Mortgage
Loans, if any, shall not be included in the transfer on the Subsequent Transfer
Date; provided, however, that the Seller shall have delivered to each Rating
Agency at least three Business Days prior to such Subsequent Transfer Date a
computer file acceptable to each Rating Agency describing the characteristics
specified in paragraphs (c) and (d) above.
SECTION 2.09 Acceptance of REMIC 1, REMIC 2, REMIC 3, REMIC 4,
REMIC 5, REMIC 6, REMIC 7, REMIC 8 and REMIC
9 by the Trustee; Conveyance of REMIC 1
Regular Interests and Class M-8 Interest,
Class M-9 Interest, Class M-10 Interest,
Class B Interest, Class C Interest and Class
P Interest; Issuance of Certificates.
(a) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the assets described in the definition of REMIC 1 for the
benefit of the holders of the REMIC 1 Regular Interests (which are
uncertificated) and the Class R Certificates (in respect of the Class R-1
Interest). The Trustee acknowledges receipt of the assets described in the
definition of REMIC 1 Regular Interests (which are uncertificated) and declares
that it holds and will hold the same in trust for the exclusive use and benefit
of the holders of the REMIC 1 Regular Interests and the Class R Certificates (in
respect of the Class R-1 Interest). The interests evidenced by the Class R-1
Interest, together with the REMIC 1 Regular Interests, constitute the entire
beneficial ownership interest in REMIC 1.
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(b) The Depositor concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the REMIC 1 Regular Interests for the benefit of the holders
of the REMIC 2 Regular Interests (which are uncertificated) and the Class R
Certificates (in respect of the Class R-2 Interest). The Trustee acknowledges
receipt of the REMIC 1 Regular Interests and declares that it holds and will
hold the same in trust for the exclusive use and benefit of the holders of the
REMIC 2 Regular Interests and the Class R Certificates (in respect of the Class
R-2 Interest). The interests evidenced by the Class R-2 Interest, together with
the REMIC 2 Regular Interests, constitute the entire beneficial ownership
interest in REMIC 2.
(c) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the REMIC 2 Regular Interests (which are uncertificated) for
the benefit of the Holders of the Regular Certificates and the Class R
Certificates (in respect of the Class R-3 Interest). The Trustee acknowledges
receipt of the REMIC 2 Regular Interests and declares that it holds and will
hold the same in trust for the exclusive use and benefit of the Holders of the
Regular Certificates and the Class R Certificates (in respect of the Class R-3
Interest). The interests evidenced by the Class R-3 Interest, together with the
Regular Certificates (other than the Class M-8 Certificates, Class M-9
Certificates, Class M-10 Certificates, Class B Certificates, Class C
Certificates and the Class P Certificates), the Class M-8 Interest, Class M-9
Interest, Class M-10 Interest, Class B Interest, Class C Interest and the Class
P Interest, constitute the entire beneficial ownership interest in REMIC 3.
(d) The Depositor concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the Class M-8 Interest (which is uncertificated) for the
benefit of the Holders of the Class M-8 Certificates and the Class R-X
Certificates (in respect of the Class R-4 Interest). The interests evidenced by
the Class R-4 Interest, together with the Class M-8 Certificates, constitute the
entire beneficial ownership interest in REMIC 4.
(e) The Depositor concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the Class M-9 Interest (which is uncertificated) for the
benefit of the Holders of the Class M-9 Certificates and the Class R-X
Certificates (in respect of the Class R-5 Interest). The interests evidenced by
the Class R-5 Interest, together with the Class M-9 Certificates, constitute the
entire beneficial ownership interest in REMIC 5.
(f) The Depositor concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the Class M-10 Interest (which is uncertificated) for the
benefit of the Holders of the Class M-10 Certificates and the Class R-X
Certificates (in respect of the Class R-6 Interest). The interests evidenced by
the Class R-6
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Interest, together with the Class M-10 Certificates, constitute the entire
beneficial ownership interest in REMIC 6.
(f) The Depositor concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the Class B Interest (which is uncertificated) for the
benefit of the Holders of the Class B Certificates and the Class R-X
Certificates (in respect of the Class R-7 Interest). The interests evidenced by
the Class R-7 Interest, together with the Class B Certificates, constitute the
entire beneficial ownership interest in REMIC 7.
(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 the Class C Interest (which is uncertificated) for the
benefit of the Holders of the Class C Certificates and the Class R-X
Certificates (in respect of the Class R-8 Interest). The interests evidenced by
the Class R-8 Interest, together with the Class C Certificates, constitute the
entire beneficial ownership interest in REMIC 8.
(h) The Depositor concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the Class P Interest (which is uncertificated) for the
benefit of the Holders of the Class P Certificates and the Class R-X
Certificates (in respect of the Class R-9Interest). The interests evidenced by
the Class R-9 Interest, together with the Class P Certificates, constitute the
entire beneficial ownership interest in REMIC 9.
(i) In exchange for the REMIC 2 Regular Interests and,
concurrently with the assignment to the Trustee thereof, pursuant to the written
request of the Depositor executed by an officer of the Depositor, the Trustee
has executed, authenticated and delivered to or upon the order of the Depositor,
the Regular Certificates (other than the Class M-8 Certificates, Class M-9
Certificates, Class M-10 Certificates, Class B Certificates, Class C
Certificates and Class P Certificates) in authorized denominations, which
Certificates, together with the Class M-8 Interests, Class M-9 Interests, Class
M-10 Interests, Class B Interests, Class C Interests and Class P Interests and
the Class R Certificates (in respect of the Class R-2 Interest), evidence the
entire beneficial ownership interest in REMIC 2.
(j) In exchange for the Class M-8 Interest and,
concurrently with the assignment to the Trustee thereof, pursuant to the written
request of the Depositor executed by an officer of the Depositor, the Trustee
has executed, authenticated and delivered to or upon the order of the Depositor,
the Class M-8 Certificates in authorized denominations, which Certificates,
together with the Class R-X Certificates (in respect of the Class R-4 Interest),
evidence the entire beneficial ownership interest in REMIC 4.
(k) In exchange for the Class M-9 Interest and,
concurrently with the assignment to the Trustee thereof, pursuant to the written
request of the Depositor executed by an officer of the Depositor, the Trustee
has executed, authenticated and delivered to or upon the order of the Depositor,
the Class M-9 Certificates in authorized denominations, which Certificates,
together
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with the Class R-X Certificates (in respect of the Class R-5 Interest), evidence
the entire beneficial ownership interest in REMIC 5.
(l) In exchange for the Class M-10 Interest and,
concurrently with the assignment to the Trustee thereof, pursuant to the written
request of the Depositor executed by an officer of the Depositor, the Trustee
has executed, authenticated and delivered to or upon the order of the Depositor,
the Class M-10 Certificates in authorized denominations, which Certificates,
together with the Class R-X Certificates (in respect of the Class R-6 Interest),
evidence the entire beneficial ownership interest in REMIC 6.
(m) In exchange for the Class B Interest and,
concurrently with the assignment to the Trustee thereof, pursuant to the written
request of the Depositor executed by an officer of the Depositor, the Trustee
has executed, authenticated and delivered to or upon the order of the Depositor,
the Class B Certificates in authorized denominations, which Certificates,
together with the Class R-X Certificates (in respect of the Class R-7 Interest),
evidence the entire beneficial ownership interest in REMIC 7.
(n) In exchange for the Class C Interest and,
concurrently with the assignment to the Trustee thereof, pursuant to the written
request of the Depositor executed by an officer of the Depositor, the Trustee
has executed, authenticated and delivered to or upon the order of the Depositor,
the Class C Certificates in authorized denominations, which Certificates,
together with the Class R-X Certificates (in respect of the Class R-8 Interest),
evidence the entire beneficial ownership interest in REMIC 8.
(o) In exchange for the Class P Interest and,
concurrently with the assignment to the Trustee thereof, pursuant to the written
request of the Depositor executed by an officer of the Depositor, the Trustee
has executed, authenticated and delivered to or upon the order of the Depositor,
the Class P Certificates in authorized denominations, which Certificates,
together with the Class R-X Certificates (in respect of the Class R-9 Interest),
evidence the entire beneficial ownership interest in REMIC 9.
(p) Concurrently with (i) the assignment and delivery to
the Trustee of REMIC 1 (including the Residual Interest therein represented by
the Class R-1 Interest) and the acceptance by the Trustee thereof, pursuant to
Section 2.01, Section 2.02 and Section 2.09(a), (ii) the assignment and delivery
to the Trustee of REMIC 2 (including the Residual Interest therein represented
by the Class R-2 Interest) and the acceptance by the Trustee thereof, pursuant
to Section 2.09(b), (iii) the assignment and delivery to the Trustee of REMIC 3
(including the Residual Interest therein represented by the Class R-3 Interest)
and the acceptance by the Trustee thereof, pursuant to Section 2.09(c), (iv) the
assignment and delivery to the Trustee of REMIC 4 (including the Residual
Interest therein represented by the Class R-4 Interest) and the acceptance by
the Trustee thereof, pursuant to Section 2.09(d), (v) the assignment and
delivery to the Trustee of REMIC 5 (including the Residual Interest therein
represented by the Class R-5 Interest) and the acceptance by the Trustee
thereof, pursuant to Section 2.09(e), (vi) the assignment and delivery to the
Trustee of REMIC 6 (including the Residual Interest therein represented by the
Class R-6 Interest) and the acceptance by the Trustee thereof, pursuant to
Section 2.09(f), (vii) the assignment and delivery to the Trustee of REMIC 7
(including the
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Residual Interest therein represented by the Class R-7 Interest) and the
acceptance by the Trustee thereof, pursuant to Section 2.09(g), (viii) the
assignment and delivery to the Trustee of REMIC 8 (including the Residual
Interest therein represented by the Class R-8 Interest) and the acceptance by
the Trustee thereof, pursuant to Section 2.09(h) and (ix) the assignment and
delivery to the Trustee of REMIC 9 (including the Residual Interest therein
represented by the Class R-9 Interest) and the acceptance by the Trustee
thereof, pursuant to Section 2.09(i), the Trustee, pursuant to the written
request of the Depositor executed by an officer of the Depositor, has executed,
authenticated and delivered to or upon the order of the Depositor, the Class R
Certificates (evidencing the Class R-1 Interest and the Class R-2 Interest) and
the Class R-X Certificates (evidencing the Class R-3, Class R-4, Class R-5,
Class R-6, Class R-7, Class R-8 and Class R-9 Interest) in authorized
denominations.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01 Servicer to Act as Servicer.
The Mortgage Loans shall be serviced and administered by the
Servicer on behalf of the Trust and in the best interests of and for the benefit
of the Certificateholders (as determined by the Servicer in its reasonable
judgment) in accordance with the terms of this Agreement, and serviced by the
Originator in accordance with the terms of the Servicing Side Letter, dated as
of December 7, 2004, among Greenwich Capital Financial Products, Inc., the
Orignator as servicer and the Servicer, which is attached hereto as Exhibit S,
and, to the extent consistent with such terms, in the same manner in which it
services and administers similar mortgage loans for its own portfolio, giving
due consideration to customary and usual standards of practice of mortgage
lenders and loan servicers administering similar mortgage loans but without
regard to:
(i) any relationship that the Servicer, any Sub-Servicer
or any Affiliate of the Servicer or any Sub-Servicer may have with the
related Mortgagor;
(ii) the ownership or non-ownership of any Certificate by
the Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make Advances or
Servicing Advances; or
(iv) the Servicer's or any Sub-Servicer's right to receive
compensation for its services hereunder or with respect to any
particular transaction.
To the extent consistent with the foregoing, the Servicer (a)
shall seek the timely and complete recovery of principal and interest on the
Mortgage Notes and (b) shall waive (or permit a Sub-Servicer to waive) a
Prepayment Charge only under the following circumstances: (i) such waiver is
standard and customary in servicing similar Mortgage Loans and (ii) such waiver
relates to a default or a reasonably foreseeable default and would, in the
reasonable judgment of the Servicer, maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and the related Mortgage Loan,
(iii) the collection of such Prepayment Charge is prohibited by applicable law
or (iv) the Prepayment Charge payable under the terms of the Mortgage Note is
less than the amount of the Prepayment Charge set forth in the Prepayment Charge
Schedule or other information provided to the Servicer. If a Prepayment Charge
is waived as permitted by meeting the standards described in clauses (iii) or
(iv) above, then the Servicer shall work with the Depositor to enforce the
obligations of the Originator under the Master Agreement to pay the amount of
such waived Prepayment Charge, for the benefit of the Holders of the Class P
Certificates. If a Prepayment Charge is waived other than as permitted by
meeting the standards described above, then as a remedy for the breach of such
covenant, the Servicer shall to pay the amount of such waived Prepayment Charge,
for the benefit of the Holders of the Class P Certificates, by depositing such
amount into the Collection Account
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together with and at the time that the amount prepaid on the related Mortgage
Loan is required to be deposited into the Collection Account. Notwithstanding
any other provisions of this Agreement, any payments made by the Servicer in
respect of any Prepayment Charges waived other than as permitted above shall be
deemed to be paid outside of the Trust Fund.
Subject only to the above-described servicing standards and
the terms of this Agreement and of the Mortgage Loans, the Servicer shall have
full power and authority, acting alone or through Sub-Servicers as provided in
Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer in its own name
or in the name of a Sub-Servicer is hereby authorized and empowered by the
Trustee when the Servicer believes it appropriate in its best judgment in
accordance with the servicing standards set forth above, to execute and deliver,
on behalf of the Certificateholders and the Trustee, and upon notice to the
Trustee, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, and all other comparable instruments, with respect
to the Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee and Certificateholders. The Servicer shall
service and administer the Mortgage Loans in accordance with applicable state
and federal law and shall provide to the Mortgagors any reports required to be
provided to them thereby. The Servicer shall also comply in the performance of
this Agreement with all reasonable rules and requirements of each insurer under
any standard hazard insurance policy. Subject to Section 3.17, within 15 days of
the Closing Date, the Trustee shall execute, at the written request of the
Servicer, and furnish to the Servicer and any Sub-Servicer a limited power of
attorney in the form of Exhibit I, executed by each payee or last endorsee, as
applicable, of each of the Mortgage Notes and each mortgagee or last assignee,
as applicable, of each of the Mortgages and other documents necessary or
appropriate to enable the Servicer or any Sub-Servicer to carry out their
servicing and administrative duties hereunder; PROVIDED, such limited powers of
attorney or other documents shall be prepared by the Servicer and submitted to
the Trustee for execution. The Trustee shall not be liable for the actions of
the Servicer or any Sub-Servicers under such powers of attorney.
The Servicer further is authorized and empowered by the
Trustee, on behalf of the Certificateholders and the Trustee, in its own name,
when the Servicer believes it is appropriate in its best judgment to register
any Mortgage Loan on the MERS(R) System, or cause the removal from the
registration of any Mortgage Loan on the MERS(R) System, to execute and deliver,
on behalf of the Trustee and the Certificateholders or any of them, any and all
instruments of assignment and other comparable instruments with respect to such
assignment or re-recording of a Mortgage in the name of MERS, solely as nominee
for the Trustee and its successors and assigns. Any reasonable expenses incurred
in connection with the actions described in the preceding sentence or as a
result of MERS discontinuing or becoming unable to continue operations in
connection with the MERS(R) System, shall be subject to withdrawal by the
Servicer from the Collection Account.
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Subject to Section 3.09 hereof, in accordance with the
standards of the preceding paragraph, the Servicer, on escrowed accounts, shall
advance or cause to be advanced funds as necessary for the purpose of effecting
the payment of taxes and assessments on the Mortgaged Properties, which advances
shall be Servicing Advances reimbursable in the first instance from related
collections from the Mortgagors pursuant to Section 3.09, and further as
provided in Section 3.11. Any cost incurred by the Servicer or by Sub-Servicers
in effecting the payment of taxes and assessments on a Mortgaged Property shall
not, for the purpose of calculating distributions to Certificateholders, be
added to the unpaid Principal Balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit.
Notwithstanding anything in this Agreement to the contrary,
the Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.04) and the Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Rate, reduce or increase the Principal Balance (except for reductions resulting
from actual payments of principal) or change the final maturity date on such
Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in default
with respect to the Mortgage Loan or such default is, in the judgment of the
Servicer, reasonably foreseeable) or (ii) permit any modification, waiver or
amendment of any term of any Mortgage Loan that would both (A) effect an
exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or
Treasury regulations promulgated thereunder) and (B) cause any REMIC created
hereunder to fail to qualify as a REMIC under the Code or the imposition of any
tax on "prohibited transactions" or "contributions after the startup date" under
the REMIC Provisions.
SECTION 3.02 Sub-Servicing Agreements Between Servicer and
Sub-Servicers.
(a) The Servicer may enter into Sub-Servicing Agreements
with Sub-Servicers for the servicing and administration of the Mortgage Loans;
provided, however, that such agreements would not result in a withdrawal or a
downgrading by any Rating Agency of the rating on any Class of Certificates. The
Trustee is hereby authorized to acknowledge, at the request of the Servicer, any
Sub-Servicing Agreement that meets the requirements applicable to Sub-Servicing
Agreements set forth in this Agreement and that is otherwise permitted under
this Agreement. No such acknowledgment shall be deemed to imply that the Trustee
has consented to any such Sub-Servicing Agreement, has passed upon whether such
Sub-Servicing Agreement meets the requirements applicable to Sub-Servicing
Agreements set forth in this Agreement or has passed upon whether such
Sub-Servicing Agreement is otherwise permitted under this Agreement.
Each Sub-Servicer shall be (i) authorized to transact business
in the state or states where the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing
Agreement and (ii) a ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae approved mortgage servicer. Each
Sub-Servicing Agreement must impose on the Sub-Servicer requirements conforming
to the provisions set forth in Section 3.08 and provide for servicing of the
Mortgage Loans consistent with the terms of this Agreement. The Servicer will
examine each Sub-Servicing Agreement and will be familiar with the terms
thereof. The terms of any Sub-Servicing
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Agreement will not be inconsistent with any of the provisions of this Agreement.
The Servicer and the Sub-Servicers may enter into and make amendments to the
Sub-Servicing Agreements or enter into different forms of Sub-Servicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the
Certificateholders without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights; provided, further, that the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights shall not
be required (i) to cure any ambiguity or defect in a Sub-Servicing Agreement,
(ii) to correct, modify or supplement any provisions of a Sub- Servicing
Agreement, or (iii) to make any other provisions with respect to matters or
questions arising under a Sub-Servicing Agreement, which, in each case, shall
not be inconsistent with the provisions of this Agreement. Any variation without
the consent of the Holders of Certificates entitled to at least 66% of the
Voting Rights from the provisions set forth in Section 3.08 relating to
insurance or priority requirements of Sub-Servicing Accounts, or credits and
charges to the Sub- Servicing Accounts or the timing and amount of remittances
by the Sub-Servicers to the Servicer, are conclusively deemed to be inconsistent
with this Agreement and therefore prohibited. The Servicer shall deliver to the
Trustee copies of all Sub-Servicing Agreements, and any amendments or
modifications thereof, promptly upon the Servicer's execution and delivery of
such instruments.
(b) As part of its servicing activities hereunder, the
Servicer, for the benefit of the Trustee and the Certificateholders, shall
enforce the obligations of each Sub-Servicer under the related Sub-Servicing
Agreement and (except as otherwise provided in Section 2.01) of the Originator
and the Seller under the Assignment Agreement, including, without limitation,
any obligation to make advances in respect of delinquent payments as required by
a Sub-Servicing Agreement, or to purchase a Mortgage Loan on account of missing
or defective documentation or on account of a breach of a representation,
warranty or covenant, as described in Section 2.03(a). Such enforcement,
including, without limitation, the legal prosecution of claims, termination of
Sub-Servicing Agreements, and the pursuit of other appropriate remedies, shall
be in such form and carried out to such an extent and at such time as the
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Servicer shall pay the costs of such
enforcement at its own expense, and shall be reimbursed therefor only (i) from a
general recovery resulting from such enforcement, to the extent, if any, that
such recovery exceeds all amounts due in respect of the related Mortgage Loans,
or (ii) from a specific recovery of costs, expenses or attorneys' fees against
the party against whom such enforcement is directed. Except as otherwise
provided in Section 2.01, enforcement of the Assignment Agreement against the
Originator and the Seller shall be effected by the Servicer to the extent it is
not the Originator or the Seller and otherwise by the Trustee in accordance with
the foregoing provisions of this paragraph.
SECTION 3.03 Successor Sub-Servicers.
The Servicer shall be entitled to terminate any Sub-Servicing
Agreement and the rights and obligations of any Sub-Servicer pursuant to any
Sub-Servicing Agreement in accordance with the terms and conditions of such
Sub-Servicing Agreement. In the event of
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termination of any Sub-Servicer, all servicing obligations of such Sub-Servicer
shall be assumed simultaneously by the Servicer without any act or deed on the
part of such Sub-Servicer or the Servicer, and the Servicer either shall service
directly the related Mortgage Loans or shall enter into a Sub- Servicing
Agreement with a successor Sub-Servicer which qualifies under Section 3.02.
Any Sub-Servicing Agreement shall include the provision that
such agreement may be immediately terminated by the Servicer or the Trustee (if
the Trustee is acting as Servicer) without fee, in accordance with the terms of
this Agreement, in the event that the Servicer (or the Trustee, if such party is
then acting as Servicer) shall, for any reason, no longer be the Servicer
(including termination due to a Servicer Event of Termination).
SECTION 3.04 Liability of the Servicer.
Notwithstanding any Sub-Servicing Agreement or the provisions
of this Agreement relating to agreements or arrangements between the Servicer
and a Sub-Servicer or reference to actions taken through a Sub-Servicer or
otherwise, the Servicer shall remain obligated and primarily liable to the
Trustee and the Certificateholders for the servicing and administering of the
Mortgage Loans in accordance with the provisions of Section 3.01 without
diminution of such obligation or liability by virtue of such Sub-Servicing
Agreements or arrangements or by virtue of indemnification from the Sub-Servicer
and to the same extent and under the same terms and conditions as if the
Servicer alone were servicing and administering the Mortgage Loans. The Servicer
shall be entitled to enter into any agreement with a Sub-Servicer for
indemnification of the Servicer by such Sub-Servicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
SECTION 3.05 No Contractual Relationship Between Sub-Servicers
and the Trustee or Certificateholders.
Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Servicer alone, and the Trustee or Certificateholders shall not be deemed
parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section
3.06. The Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Servicer's compensation pursuant to
this Agreement is sufficient to pay such fees.
SECTION 3.06 Assumption or Termination of Sub-Servicing
Agreements by Trustee.
In the event the Servicer shall for any reason no longer be
the servicer (including by reason of the occurrence of a Servicer Event of
Termination), the Trustee shall thereupon assume all of the rights and
obligations of the Servicer under each Sub-Servicing Agreement that the Servicer
may have entered into, unless the Trustee elects to terminate any Sub-Servicing
Agreement in accordance with its terms as provided in Section 3.03. Upon such
assumption, the Trustee (or the successor servicer appointed pursuant to Section
7.02) shall be deemed, subject to
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Section 3.03, to have assumed all of the departing Servicer's interest therein
and to have replaced the departing Servicer as a party to each Sub-Servicing
Agreement to the same extent as if each Sub-Servicing Agreement had been
assigned to the assuming party, except that (i) the departing Servicer shall not
thereby be relieved of any liability or obligations under any Sub-Servicing
Agreement that arose before it ceased to be the Servicer and (ii) neither the
Trustee nor any successor Servicer shall be deemed to have assumed any liability
or obligation of the Servicer that arose before it ceased to be the Servicer.
The Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records relating to
each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the
Sub-Servicing Agreements to the assuming party. All Servicing Transfer Costs
shall be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs, and if such predecessor Servicer defaults in its
obligation to pay such costs, such costs shall be paid by the successor Servicer
or the Trustee (in which case the successor Servicer or the Trustee, as
applicable, shall be entitled to reimbursement therefor from the assets of the
Trust).
SECTION 3.07 Collection of Certain Mortgage Loan Payments.
The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Servicer may in its discretion (i) waive any late payment
charge or, if applicable, any penalty interest, or (ii) extend the due dates for
the Monthly Payments due on a Mortgage Note for a period of not greater than 180
days; provided, however, that any extension pursuant to clause (ii) above shall
not affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, the Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to Section 4.04
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangement. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Servicer, such default is reasonably foreseeable, the Servicer,
consistent with the standards set forth in Section 3.01, may also waive, modify
or vary any term of such Mortgage Loan (including modifications that would
change the Mortgage Rate, forgive the payment of principal or interest or extend
the final maturity date of such Mortgage Loan), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan, or consent to the postponement of strict
compliance with any such term or otherwise grant indulgence to any Mortgagor
(any and all such waivers, modifications, variances, forgiveness of principal or
interest, postponements, or indulgences collectively referred to herein as
"forbearance"). The Servicer's analysis supporting any forbearance and the
conclusion that any forbearance meets the standards of Section 3.01 shall be
reflected in writing in the Mortgage File.
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SECTION 3.08 Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required
to establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
comply with all requirements of this Agreement relating to the Collection
Account. The Sub-Servicer shall deposit in the clearing account in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Sub-Servicer's receipt thereof, all
proceeds of Mortgage Loans received by the Sub-Servicer less its servicing
compensation to the extent permitted by the Sub-Servicing Agreement, and shall
thereafter deposit such amounts in the Sub-Servicing Account, in no event more
than two Business Days after the receipt of such amounts. The Sub-Servicer shall
thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Servicer for deposit in the Collection Account not later than
two Business Days after the deposit of such amounts in the Sub-Servicing
Account. For purposes of this Agreement, the Servicer shall be deemed to have
received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.
SECTION 3.09 Collection of Taxes, Assessments and Similar
Items; Servicing Accounts.
The Servicer shall establish and maintain, or cause to be
established and maintained, one or more accounts (the "Servicing Accounts"),
into which all Escrow Payments shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The Servicer shall deposit in the clearing
account in which it customarily deposits payments and collections on mortgage
loans in connection with its mortgage loan servicing activities on a daily
basis, and in no event more than one Business Day after the Servicer's receipt
thereof, all Escrow Payments collected on account of the Mortgage Loans and
shall thereafter deposit such Escrow Payments in the Servicing Accounts, in no
event more than two Business Days after the receipt of such Escrow Payments, all
Escrow Payments collected on account of the Mortgage Loans for the purpose of
effecting the payment of any such items as required under the terms of this
Agreement. Withdrawals of amounts from a Servicing Account may be made only to
(i) effect payment of taxes, assessments, hazard insurance premiums, and
comparable items in a manner and at a time that assures that the lien priority
of the Mortgage is not jeopardized (or, with respect to the payment of taxes, in
a manner and at a time that avoids the loss of the Mortgaged Property due to a
tax sale or the foreclosure as a result of a tax lien); (ii) reimburse the
Servicer (or a Sub-Servicer to the extent provided in the related Sub-Servicing
Agreement) out of related collections for any Servicing Advances made pursuant
to Section 3.01 (with respect to taxes and assessments) and Section 3.14 (with
respect to hazard insurance); (iii) refund to Mortgagors any sums as may be
determined to be overages; (iv) pay interest, if required and as described
below, to Mortgagors on balances in the Servicing Account; or (v) clear and
terminate the Servicing Account at the termination of the Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article X. In the event the Servicer shall deposit in a
Servicing Account any amount not required to be deposited therein, it may at any
time withdraw such amount from such Servicing Account, any provision herein to
the contrary notwithstanding. The Servicer will be responsible for the
administration of the
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Servicing Accounts and will be obligated to make Servicing Advances to such
accounts when and as necessary to avoid the lapse of insurance coverage on the
Mortgaged Property, or which the Servicer knows, or in the exercise of the
required standard of care of the Servicer hereunder should know, is necessary to
avoid the loss of the Mortgaged Property due to a tax sale or the foreclosure as
a result of a tax lien. If any such payment has not been made and the Servicer
receives notice of a tax lien with respect to the Mortgage being imposed, the
Servicer will, promptly and to the extent required to avoid loss of the
Mortgaged Property, advance or cause to be advanced funds necessary to discharge
such lien on the Mortgaged Property. As part of its servicing duties, the
Servicer or Sub-Servicers shall pay to the Mortgagors interest on funds in the
Servicing Accounts, to the extent required by law and, to the extent that
interest earned on funds in the Servicing Accounts is insufficient, to pay such
interest from its or their own funds, without any reimbursement therefor. The
Servicer may pay to itself any excess interest on funds in the Servicing
Accounts, to the extent such action is in conformity with the servicing standard
set forth in Section 3.01, is permitted by law and such amounts are not required
to be paid to Mortgagors or used for any of the other purposes set forth above.
SECTION 3.10 Collection Account and Distribution Account.
(a) On behalf of the Trust Fund, the Servicer shall
establish and maintain, or cause to be established and maintained, one or more
accounts (such account or accounts, the "Collection Account"), held in trust for
the benefit of the Trustee and the Certificateholders. On behalf of the Trust
Fund, the Servicer shall deposit or cause to be deposited in the clearing
account in which it customarily deposits payments and collections on mortgage
loans in connection with its mortgage loan servicing activities on a daily
basis, and in no event more than one Business Day after the Servicer's receipt
thereof, and shall thereafter deposit in the Collection Account, in no event
more than two Business Days after the Servicer's receipt thereof, as and when
received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the Mortgage Loans due on or before the
Cut-off Date) or payments (other than Principal Prepayments) received by it on
or prior to the Cut-off Date but allocable to a Due Period subsequent thereto:
(i) all payments on account of principal, including
Principal Prepayments (but not Prepayment Charges), on the Mortgage
Loans;
(ii) all payments on account of interest (net of the
related Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds, Liquidation Proceeds,
Subsequent Recoveries and condemnation proceeds (other than proceeds
collected in respect of any particular REO Property and amounts paid in
connection with a purchase of Mortgage Loans and REO Properties
pursuant to Section 10.01);
(iv) any amounts required to be deposited pursuant to
Section 3.12 in connection with any losses realized on Permitted
Investments with respect to funds held in the Collection Account;
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(v) any amounts required to be deposited by the Servicer
pursuant to the second paragraph of Section 3.14(a) in respect of any
blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or
purchased in accordance with Section 2.03 or Section 10.01;
(vii) all amounts required to be deposited in connection
with Substitution Adjustments pursuant to Section 2.03;
(viii) all Prepayment Charges collected by the Servicer and
any Servicer Prepayment Charge Payment Amounts in connection with the
Principal Prepayment of any of the Mortgage Loans; and
(ix) [reserved].
The foregoing requirements for deposit in the Collection
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of Servicing
Fees, late payment charges, assumption fees, insufficient funds charges and
ancillary income (other than Prepayment Charges) need not be deposited by the
Servicer in the Collection Account and may be retained by the Servicer as
additional compensation. In the event the Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision herein
to the contrary notwithstanding.
(b) On behalf of the Trust Fund, the Trustee shall
establish and maintain one or more accounts (such account or accounts, the
"Distribution Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Servicer shall deliver to
the Trustee in immediately available funds for deposit in the Distribution
Account on or before 3:00 p.m. New York time (i) on the Servicer Remittance
Date, that portion of the Available Funds (calculated without regard to the
references in the definition thereof to amounts that may be withdrawn from the
Distribution Account) for the related Distribution Date then on deposit in the
Collection Account, the amount of all Prepayment Charges collected during the
applicable Prepayment Period by the Servicer and Servicer Prepayment Charge
Payment Amounts in connection with the Principal Prepayment of any of the
Mortgage Loans then on deposit in the Collection Account and (ii) on each
Business Day as of the commencement of which the balance on deposit in the
Collection Account exceeds $75,000 following any withdrawals pursuant to the
next succeeding sentence, the amount of such excess, but only if the Collection
Account constitutes an Eligible Account solely pursuant to clause (ii) of the
definition of "Eligible Account." If the balance on deposit in the Collection
Account exceeds $75,000 as of the commencement of business on any Business Day
and the Collection Account constitutes an Eligible Account solely pursuant to
clause (ii) of the definition of "Eligible Account," the Servicer shall, on or
before 3:00 p.m. New York time on such Business Day, withdraw from the
Collection Account any and all amounts payable or reimbursable to the Servicer,
the Trustee or any Sub-Servicer pursuant to Section 3.11 and shall pay such
amounts to the Persons entitled thereto.
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(c) Funds in the Collection Account and the Distribution
Account may be invested in Permitted Investments in accordance with the
provisions set forth in Section 3.12. The Servicer shall give written notice to
the Trustee of the location of the Collection Account maintained by it when
established and prior to any change thereof. The Trustee shall give notice to
the Servicer and the Depositor of the location of the Distribution Account when
established and prior to any change thereof.
(d) Funds held in the Collection Account at any time may
be delivered by the Servicer to the Trustee for deposit in an account (which may
be the Distribution Account and must satisfy the standards for the Distribution
Account as set forth in the definition thereof) and for all purposes of this
Agreement shall be deemed to be a part of the Collection Account; provided,
however, that the Trustee shall have the sole authority to withdraw any funds
held pursuant to this subsection (d). In the event the Servicer shall deliver to
the Trustee for deposit in the Distribution Account any amount not required to
be deposited therein, it may at any time request that the Trustee withdraw such
amount from the Distribution Account and remit to it any such amount, any
provision herein to the contrary notwithstanding. In addition, the Servicer,
with respect to items (i) through (iv) below, shall deliver to the Trustee from
time to time for deposit, and the Trustee, with respect to items (i) through
(iv) below, shall so deposit, in the Distribution Account:
(i) any Advances, as required pursuant to Section 4.04;
(ii) any amounts required to be deposited pursuant to
Section 3.23(d) or (f) in connection with any REO Property;
(iii) any amounts to be paid in connection with a purchase
of Mortgage Loans and REO Properties pursuant to Section 10.01;
(iv) any Compensating Interest to be deposited pursuant to
Section 3.24 in connection with any Prepayment Interest Shortfall; and
(v) any amounts required to be paid to the Trustee
pursuant to the Agreement, including, but not limited to Section 3.06
and Section 7.02.
SECTION 3.11 Withdrawals from the Collection Account and
Distribution Account.
(a) The Servicer shall, from time to time, make
withdrawals from the Collection Account for any of the following purposes or as
described in Section 4.04:
(i) to remit to the Trustee for deposit in the
Distribution Account the amounts required to be so remitted pursuant to
Section 3.10(b) or permitted to be so remitted pursuant to the first
sentence of Section 3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Servicer
for (a) any unreimbursed Advances to the extent of amounts received
which represent Late Collections (net of the related Servicing Fees),
Liquidation Proceeds and Insurance
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Proceeds on Mortgage Loans with respect to which such Advances were
made in accordance with the provisions of Section 4.04; (b) any
unreimbursed Advances with respect to the final liquidation of a
Mortgage Loan that are Nonrecoverable Advances, but only to the extent
that Late Collections, Liquidation Proceeds and Insurance Proceeds
received with respect to such Mortgage Loan are insufficient to
reimburse the Servicer for such unreimbursed Advances; or (c) subject
to Section 4.04(b), any unreimbursed Advances to the extent of funds
held in the Collection Account for future distribution that were not
included in Available Funds for the preceding Distribution Date;
(iii) subject to Section 3.16(d), to pay the Servicer or
any Sub-Servicer (a) any unpaid Servicing Fees, (b) any unreimbursed
Servicing Advances with respect to each Mortgage Loan, but only to the
extent of any Late Collections, Liquidation Proceeds and Insurance
Proceeds received with respect to such Mortgage Loan, and (c) any
Servicing Advances made with respect to a Mortgage Loan that, upon a
Final Recovery Determination with respect to such Mortgage Loan are
Nonrecoverable Advances, but only to the extent that Late Collections,
Liquidation Proceeds, Insurance Proceeds and condemnation proceeds
received with respect to such Mortgage Loan are insufficient to
reimburse the Servicer or any Sub-Servicer for Servicing Advances;
(iv) to pay to the Servicer as servicing compensation (in
addition to the Servicing Fee) on the Servicer Remittance Date any
interest or investment income earned on funds deposited in the
Collection Account;
(v) to pay the Originator with respect to each Mortgage
Loan that has previously been purchased or replaced pursuant to Section
2.03 all amounts received thereon subsequent to the date of purchase or
substitution, and to pay the Servicer with respect to each Mortgage
Loan that has previously been purchased pursuant to Section 3.16(c) all
amounts received thereon subsequent to the date of purchase;
(vi) to reimburse the Servicer for any Advance or
Servicing Advance previously made which the Servicer has determined to
be a Nonrecoverable Advance in accordance with the provisions of
Section 4.04;
(vii) to pay, or to reimburse the Servicer for Servicing
Advances in respect of, expenses incurred in connection with any
Mortgage Loan pursuant to Section 3.16(a);
(viii) to reimburse the Servicer for expenses incurred by or
reimbursable to the Servicer pursuant to Section 6.03;
(ix) [reserved];
(x) [reserved];
(xi) [reserved]; and
(xii) to clear and terminate the Collection Account
pursuant to Section 10.01.
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The foregoing requirements for withdrawal from the Collection
Account shall be exclusive. In the event the Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision herein
to the contrary notwithstanding.
The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (ii), (iii), (iv), (v), (vi) and (vii) above. The
Servicer shall provide written notification to the Trustee, on or prior to the
next succeeding Servicer Remittance Date, upon making any withdrawals from the
Collection Account pursuant to subclause (vi) above; provided that an Officers'
Certificate in the form described under Section 4.04(d) shall suffice for such
written notification to the Trustee in respect hereof.
(b) The Trustee shall, from time to time, make
withdrawals from the Distribution Account, for any of the following purposes,
without priority:
(i) to make distributions in accordance with Section
4.01;
(ii) to pay itself the Trustee Fee pursuant to Section
8.05;
(iii) to pay any amounts in respect of taxes pursuant to
Section 9.01(g);
(iv) to clear and terminate the Distribution Account
pursuant to Section 10.01;
(v) to pay any amounts required to be paid to the Trustee
pursuant to this Agreement, including but not limited to funds required
to be paid pursuant to Section 3.06, Section 7.02 and Section 8.05;
(vi) to pay to the Trustee, any interest or investment
income earned on funds deposited in the Distribution Account; and
(vii) [reserved].
SECTION 3.12 Investment of Funds in the Collection Account,
the Distribution Account and the Pre-Funding
Accounts.
(a) The Servicer may direct any depository institution
maintaining the Collection Account to invest the funds on deposit in such
account, the Depositor may direct any depository institution maintaining the
Pre-Funding Accounts and the Trustee may direct any depository institution
maintaining the Distribution Account to invest the funds on deposit in such
account or to hold such funds uninvested (each such account, for the purposes of
this Section 3.12, an "Investment Account"). All investments pursuant to this
Section 3.12 shall be in one or more Permitted Investments bearing interest or
sold at a discount, and maturing, unless payable on demand, (i) no later than
the Business Day immediately preceding the date on which such funds are required
to be withdrawn from such account pursuant to this Agreement, if a Person other
than the Trustee is the obligor thereon or if such investment is managed or
advised by a
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Person other than the Trustee or an Affiliate of the Trustee, and (ii) no later
than the date on which such funds are required to be withdrawn from such account
pursuant to this Agreement, if the Trustee is the obligor thereon or if such
investment is managed or advised by the Trustee or any Affiliate. All such
Permitted Investments shall be held to maturity, unless payable on demand. Any
investment of funds in an Investment Account shall be made in the name of the
Trustee (in its capacity as such), or in the name of a nominee of the Trustee.
The Trustee shall be entitled to sole possession (except with respect to
investment direction of funds held in the Collection Account and the Pre-Funding
Accounts, and any income and gain realized thereon) over each such investment,
and any certificate or other instrument evidencing any such investment shall be
delivered directly to the Trustee or its agent, together with any document of
transfer necessary to transfer title to such investment to the Trustee or its
nominee. In the event amounts on deposit in an Investment Account are at any
time invested in a Permitted Investment payable on demand, the Trustee shall:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an amount equal
to the lesser of (1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly
upon determination by a Responsible Officer of the Trustee that such
Permitted Investment would not constitute a Permitted Investment in
respect of funds thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of
funds deposited in the Collection Account and any REO Account held by or on
behalf of the Servicer shall be for the benefit of the Servicer and shall be
subject to its withdrawal in accordance with Section 3.11, Section 3.31 or
Section 3.23, as applicable. The Servicer shall deposit in the Collection
Account or any REO Account, as applicable, the amount of any loss of principal
incurred in respect of any such Permitted Investment made with funds in such
Account immediately upon realization of such loss.
All income and gain realized from the investment of funds deposited in
the Pre-Funding Accounts held by or on behalf of the Depositor shall be for the
benefit of the Depositor and shall be subject to its withdrawal in accordance
with Section 4.05. The Depositor shall deposit in the Pre-Funding Accounts 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 shall be for the benefit of the
Trustee. The Trustee shall deposit in the Distribution Account the amount of any
loss of principal incurred in respect of any such Permitted Investment made with
funds in such Account immediately upon realization of such loss. Notwithstanding
the foregoing, the Trustee may at its discretion, and without liability, hold
the funds in the Distribution Account uninvested.
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(d) Except as otherwise expressly provided in this
Agreement, if any default occurs in the making of a payment due under any
Permitted Investment, or if a default occurs in any other performance required
under any Permitted Investment, the Trustee may and, subject to Section 8.01 and
Section 8.02(a)(v), upon the request of the Holders of Certificates representing
more than 50% of the Voting Rights allocated to any Class of Certificates, shall
take such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.
SECTION 3.13 [Reserved].
SECTION 3.14 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage.
(a) The Servicer shall cause to be maintained for each
first lien Mortgage Loan hazard insurance with extended coverage on the
Mortgaged Property in an amount which is at least equal to the least of (i) the
current Principal Balance of such Mortgage Loan, (ii) the amount necessary to
fully compensate for any damage or loss to the improvements that are a part of
such property on a replacement cost basis, in each case in an amount not less
than such amount as is necessary to avoid the application of any coinsurance
clause contained in the related hazard insurance policy and (iii) the maximum
insurable value of the improvements which are a part of such Mortgaged Property.
The Servicer shall also cause to be maintained hazard insurance with extended
coverage on each REO Property in an amount which is at least equal to the lesser
of (i) the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding Principal Balance of the related Mortgage Loan
at the time it became an REO Property. The Servicer will comply in the
performance of this Agreement with all reasonable rules and requirements of each
insurer under any such hazard policies. Any amounts to be collected by the
Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with the procedures that the
Servicer would follow in servicing loans held for its own account, subject to
the terms and conditions of the related Mortgage and Mortgage Note) shall be
deposited in the Collection Account, subject to withdrawal pursuant to Section
3.11, if received in respect of a Mortgage Loan, or in the REO Account, subject
to withdrawal pursuant to Section 3.23, if received in respect of an REO
Property. Any cost incurred by the Servicer in maintaining any such insurance
shall not, for the purpose of calculating distributions to Certificateholders,
be added to the unpaid Principal Balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit. It is understood
and agreed that no earthquake or other additional insurance is to be required of
any Mortgagor other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require any Mortgagor to obtain such
additional insurance. If the Mortgaged Property or REO Property is at any time
in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards and flood insurance has been
made available, the Servicer will cause to be maintained a flood insurance
policy in respect thereof. Such flood insurance shall be in an amount equal to
the lesser of (i) the unpaid Principal Balance of the related Mortgage Loan and
(ii) the maximum amount of such insurance available for the related Mortgaged
Property under the national flood insurance
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program (assuming that the area in which such Mortgaged Property is located is
participating in such program).
In the event that the Servicer shall obtain and maintain a
blanket policy with an insurer having a General Policy Rating of B:VI or better
in Best's Key Rating Guide (or such other rating that is comparable to such
rating) insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first two sentences of this Section 3.14, it being understood and agreed that
such policy may contain a deductible clause, in which case the Servicer shall,
in the event that there shall not have been maintained on the related Mortgaged
Property or REO Property a policy complying with the first two sentences of this
Section 3.14, and there shall have been one or more losses which would have been
covered by such policy, deposit to the Collection Account from its own funds the
amount not otherwise payable under the blanket policy because of such deductible
clause. In connection with its activities as administrator and servicer of the
Mortgage Loans, the Servicer agrees to prepare and present, on behalf of itself,
the Trustee and Certificateholders, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy.
(b) The Servicer shall keep in force during the term of
this Agreement a policy or policies of insurance covering errors and omissions
for failure in the performance of the Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac if it were the purchaser of
the Mortgage Loans, unless the Servicer has obtained a waiver of such
requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Servicer shall also maintain a
fidelity bond in the form and amount that would meet the requirements of ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac, unless the Servicer has obtained a waiver of such
requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Servicer shall be deemed to
have complied with this provision if an Affiliate of the Servicer has such
errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Servicer. Any such errors and omissions policy and fidelity bond shall by
its terms not be cancelable without thirty days' prior written notice to the
Trustee. The Servicer shall also cause each Sub-Servicer to maintain a policy of
insurance covering errors and omissions and a fidelity bond which would meet
such requirements.
SECTION 3.15 Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
The Servicer will, to the extent it has actual knowledge of
any conveyance or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains or is to remain liable under the Mortgage Note and/or
the Mortgage), exercise its rights to accelerate the maturity of such Mortgage
Loan under the "due-on-sale" clause, if any, applicable thereto; provided,
however, that the Servicer shall not be required to take such action if in its
sole business judgment the Servicer believes it is not in the best interests of
the Trust Fund and shall not exercise any such rights if prohibited by law from
doing so. If the Servicer reasonably believes it is unable under applicable law
to enforce such "due-on-sale" clause, or if any of the other conditions set
forth in the proviso to the preceding sentence apply, the Servicer will enter
into an assumption and modification agreement from or with the person to whom
such property
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has been conveyed or is proposed to be conveyed, pursuant to which such person
becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. The Servicer is also
authorized to enter into a substitution of liability agreement with such person,
pursuant to which the original Mortgagor is released from liability and such
person is substituted as the Mortgagor and becomes liable under the Mortgage
Note, provided that no such substitution shall be effective unless such person
satisfies the underwriting criteria of the Servicer and has a credit risk rating
at least equal to that of the original Mortgagor. In connection with any
assumption or substitution, the Servicer shall apply such underwriting standards
and follow such practices and procedures as shall be normal and usual in its
general mortgage servicing activities and as it applies to other mortgage loans
owned solely by it. The Servicer shall not take or enter into any assumption and
modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable hazard insurance policy. Any fee collected by
the Servicer in respect of an assumption, modification or substitution of
liability agreement shall be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the related Mortgage Rate and the
amount of the Monthly Payment) may be amended or modified, except as otherwise
required pursuant to the terms thereof. The Servicer shall notify the Trustee
that any such substitution, modification or assumption agreement has been
completed by forwarding to the Trustee the executed original of such
substitution, modification or assumption agreement, which document shall be
added to the related Mortgage File and shall, for all purposes, be considered a
part of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.15, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
SECTION 3.16 Realization Upon Defaulted Mortgage Loans.
(a) The Servicer shall use its best efforts, consistent
with the servicing standards set forth in Section 3.01, to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07. The Servicer shall be responsible for all costs and
expenses incurred by it in any such proceedings; provided, however, that such
costs and expenses will be recoverable as Servicing Advances by the Servicer as
contemplated in Section 3.11(a) and Section 3.23. The foregoing is subject to
the provision that, in any case in which a Mortgaged Property shall have
suffered damage from an Uninsured Cause, the Servicer shall not be required to
expend its own funds toward the restoration of such property unless it shall
determine in its discretion that such restoration will increase the proceeds of
liquidation of the related Mortgage Loan after reimbursement to itself for such
expenses.
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(b) Notwithstanding the foregoing provisions of this
Section 3.16 or any other provision of this Agreement, with respect to any
Mortgage Loan as to which the Servicer has received actual notice of, or has
actual knowledge of, the presence of any toxic or hazardous substance on the
related Mortgaged Property, the Servicer shall not, on behalf of the Trustee,
either (i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property, if, as a result of any
such action, the Trustee, the Trust Fund or the Certificateholders would be
considered to hold title to, to be a "mortgagee-in-possession" of, or to be an
"owner" or "operator" of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless the Servicer has also
previously determined, based on its reasonable judgment and a report prepared by
a Person who regularly conducts environmental audits using customary industry
standards, that:
(1) such Mortgaged Property is in compliance with
applicable environmental laws or, if not, that it would be in the best
economic interest of the Trust Fund to take such actions as are
necessary to bring the Mortgaged Property into compliance therewith;
and
(2) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based
materials for which investigation, testing, monitoring, containment,
clean-up or remediation could be required under any federal, state or
local law or regulation, or that if any such materials are present for
which such action could be required, that it would be in the best
economic interest of the Trust Fund to take such actions with respect
to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by
this Section 3.16 shall be advanced by the Servicer, subject to the Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.11(a)(vii), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received in
respect of the affected Mortgage Loan or other Mortgage Loans.
For the purposes of this Section 3.16(b), actual notice and
actual knowledge of the Servicer means actual notice to or actual knowledge of a
Responsible Officer of the Servicer involved in the servicing of the relevant
Mortgage Loan. Actual knowledge of the Servicer does not include knowledge
imputable by virtue of the availability of or accessibility to information
relating to environmental or hazardous waste sites or the locations thereof.
If the Servicer determines, as described above, that it is in
the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Servicer shall take such action as it deems to be in the best economic
interest of the Trust Fund; provided that any amounts disbursed by the Servicer
pursuant to this Section 3.16(b) shall
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constitute Servicing Advances, subject to Section 4.04(d). The cost of any such
compliance, containment, clean-up or remediation shall be advanced by the
Servicer, subject to the Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(vii), such right of
reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.
(c) The Servicer may, at its option, purchase a Mortgage
Loan which has become 90 or more days delinquent or for which the Servicer has
accepted a deed in lieu of foreclosure. Prior to purchase pursuant to this
Section 3.16(c), the Servicer shall be required to continue to make Advances
pursuant to Section 4.04. The Servicer shall not use any procedure in selecting
Mortgage Loans to be repurchased which is materially adverse to the interests of
the Certificateholders. The Servicer shall purchase such delinquent Mortgage
Loan at a price equal to the Purchase Price of such Mortgage Loan. Any such
purchase of a Mortgage Loan pursuant to this Section 3.16(c) shall be
accomplished by deposit in the Collection Account of the amount of the Purchase
Price. Upon the satisfaction of the requirements set forth in Section 3.17(a),
the Trustee shall immediately deliver the Mortgage File and any related
documentation to the Servicer and will execute such documents provided to it as
are necessary to convey the Mortgage Loan to the Servicer.
(d) Proceeds received in connection with any Final
Recovery Determination, as well as any recovery resulting from a partial
collection of Insurance Proceeds, Liquidation Proceeds or condemnation proceeds,
in respect of any Mortgage Loan, will be applied in the following order of
priority: first, to unpaid Servicing Fees; second, to reimburse the Servicer or
any Sub-Servicer for any related unreimbursed Servicing Advances pursuant to
Section 3.11(a)(iii) and Advances pursuant to Section 3.11(a)(ii); third, to
accrued and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery Determination, or to the Due Date prior to the Distribution Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and fourth, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the amount
of such recovery will be allocated by the Servicer as follows: first, to unpaid
Servicing Fees; and second, to the balance of the interest then due and owing.
The portion of the recovery so allocated to unpaid Servicing Fees shall be
reimbursed to the Servicer or any Sub-Servicer pursuant to Section 3.11(a)(iii).
SECTION 3.17 Trustee to Cooperate; Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Servicer of a notification that payment in full shall be escrowed
in a manner customary for such purposes, the Servicer shall deliver to the
Trustee, in written (with two executed copies) or electronic format, a Request
for Release in the form of Exhibit E hereto (which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.10 have been or will be so deposited)
signed by a Servicing Officer (or in a mutually agreeable electronic format that
will, in lieu of a signature on its face, originate from a Servicing Officer)
and shall request delivery to it of the Mortgage File. Upon receipt of any
Request for Relase or
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such certification and request under this Agreement, the Trustee shall, within
three Business Days, release and send by overnight mail, at the expense of the
Servicer, the related Mortgage File to the Servicer. No expenses incurred in
connection with any instrument of satisfaction or deed of reconveyance shall be
chargeable to the Collection Account or the Distribution Account.
(b) From time to time and as appropriate for the
servicing or foreclosure of any Mortgage Loan, including, for this purpose,
collection under any insurance policy relating to the Mortgage Loans, the
Trustee shall, upon any request made by or on behalf of the Servicer and
delivery to the Trustee, in written (with two executed copies) or electronic
format, of a Request for Release in the form of Exhibit E hereto signed by a
Servicing Officer (or in a mutually agreeable electronic format that will, in
lieu of a signature on its face, originate from a Servicing Officer), release
the related Mortgage File to the Servicer within three Business Days, and the
Trustee shall, at the written direction of the Servicer, execute such documents
as shall be necessary to the prosecution of any such proceedings. Such Request
for Release shall obligate the Servicer to return each and every document
previously requested from the Mortgage File to the Trustee when the need
therefor by the Servicer no longer exists, unless the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Collection Account or the Mortgage File or such document has
been delivered to an attorney, or to a public trustee or other public official
as required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Servicer has delivered, or caused to be delivered, to
the Trustee an additional Request for Release certifying as to such liquidation
or action or proceedings. Upon the request of the Trustee, the Servicer shall
provide notice to the Trustee of the name and address of the Person to which
such Mortgage File or such document was delivered and the purpose or purposes of
such delivery. Upon receipt of a Request for Release, in written (with two
executed copies) or electronic format, from a Servicing Officer stating that
such Mortgage Loan was liquidated and that all amounts received or to be
received in connection with such liquidation that are required to be deposited
into the Collection Account have been so deposited, or that such Mortgage Loan
has become an REO Property, such Mortgage Loan shall be released by the Trustee
to the Servicer or its designee within three Business Days.
(c) Upon written certification of a Servicing Officer,
the Trustee shall execute and deliver to the Servicer or the Sub-Servicer, as
the case may be, copies of, any court pleadings, requests for trustee's sale or
other documents necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment,
or to enforce any other remedies or rights provided by the Mortgage Note or
Mortgage or otherwise available at law or in equity. Each such certification
shall include a request that such pleadings or documents be executed by the
Trustee and a statement as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee will not
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee's sale.
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SECTION 3.18 Servicing Compensation.
As compensation for the activities of the Servicer hereunder,
the Servicer shall be entitled to the Servicing Fee with respect to each
Mortgage Loan payable solely from payments of interest in respect of such
Mortgage Loan, subject to Section 3.24. In addition, the Servicer shall be
entitled to recover unpaid Servicing Fees out of Insurance Proceeds, Liquidation
Proceeds or condemnation proceeds to the extent permitted by Section
3.11(a)(iii) and out of amounts derived from the operation and sale of an REO
Property to the extent permitted by Section 3.23. Except as provided in Section
3.29 or Section 6.04, the right to receive the Servicing Fee may not be
transferred in whole or in part except in connection with the transfer of all of
the Servicer's responsibilities and obligations under this Agreement; provided,
however, that the Servicer may pay from the Servicing Fee any amounts due to a
Sub-Servicer pursuant to a Sub-Servicing Agreement entered into under Section
3.02.
Additional servicing compensation in the form of assumption
fees, late payment charges, insufficient funds charges, ancillary income or
otherwise (other than Prepayment Charges) shall be retained by the Servicer only
to the extent such fees or charges are received by the Servicer. The Servicer
shall also be entitled pursuant to Section 3.11(a)(iv) to withdraw from the
Collection Account and pursuant to Section 3.23(b) to withdraw from any REO
Account, as additional servicing compensation, interest or other income earned
on deposits therein, subject to Section 3.12 and Section 3.24. The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder (including premiums for the insurance required by
Section 3.14, to the extent such premiums are not paid by the related Mortgagors
or by a Sub-Servicer and servicing compensation of each Sub-Servicer) and shall
not be entitled to reimbursement therefor except as specifically provided
herein.
SECTION 3.19 Reports to the Trustee; Collection Account
Statements.
Not later than twenty days after each Distribution Date, the
Servicer shall forward, upon request, to the Trustee and the Depositor the most
current available bank statement for the Collection Account. Copies of such
statement shall be provided by the Trustee to any Certificateholder and to any
Person identified to the Trustee as a prospective transferee of a Certificate,
upon request at the expense of the requesting party, provided such statement is
delivered by the Servicer to the Trustee.
SECTION 3.20 Statement as to Compliance.
The Servicer will deliver to the Trustee and the Depositor not
later than the 15th day of March following the end of each calendar year of the
Servicer (which, as of the Closing Date, ends on the last day of December),
commencing in 2005, an Officers' Certificate in the form attached hereto as
Exhibit P stating, as to each signatory thereof, that (i) a review of the
activities of the Servicer during the preceding year and of performance under
this Agreement has been made under such officers' supervision and (ii) to the
best of such officers' knowledge, based on such review, the Servicer has
fulfilled all of its obligations under this Agreement throughout such year, or,
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. Copies of
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any such statement shall be provided by the Trustee to any Certificateholder and
to any Person identified to the Trustee as a prospective transferee of a
Certificate, upon request at the expense of the requesting party, provided such
statement is delivered by the Servicer to the Trustee.
SECTION 3.21 Independent Public Accountants' Servicing Report.
Not later than the 15th day of March following the end of each
calendar year of the Servicer (which, as of the Startup Day, ends on the last
day of December), commencing in 2005, the Servicer, at its expense, shall cause
a nationally recognized firm of independent certified public accountants to
furnish to the Servicer a report stating that (i) it has obtained a letter of
representation regarding certain matters from the management of the Servicer
which includes an assertion that the Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed calendar year and (ii) on the basis of
an examination conducted by such firm in accordance with standards established
by the American Institute of Certified Public Accountants, such representation
is fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Sub-Servicers, upon comparable reports of firms of independent
certified public accountants rendered on the basis of examinations conducted in
accordance with the same standards (rendered within one year of such report)
with respect to those Sub-Servicers. Immediately upon receipt of such report,
the Servicer shall furnish a copy of such report to the Trustee and each Rating
Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Servicer's expense, provided that such
statement is delivered by the Servicer to the Trustee.
SECTION 3.22 Access to Certain Documentation; Filing of
Reports by Trustee.
(a) The Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder,
access to the documentation regarding the Mortgage Loans required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and during normal business hours at the offices of the
Servicer designated by it. In addition, access to the documentation regarding
the Mortgage Loans will be provided to the Trustee and to any Person identified
to the Servicer as a prospective transferee of a Certificate, upon reasonable
request during normal business hours at the offices of the Servicer designated
by it at the expense of the Person requesting such access.
(b) (i) The Trustee and the Servicer shall reasonably
cooperate with the Depositor in connection with the Trust's satisfying the
reporting requirements under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). The Trustee shall prepare on behalf of the Trust any Forms
8-K and 10-K customary for similar securities as required by the Exchange Act
and the Rules and Regulations of the Securities and Exchange Commission
thereunder, and the Depositor shall sign (or shall cause another entity
acceptable to the Securities
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and Exchange Commission to sign) and the Trustee shall file (via the Securities
and Exchange Commission's Electronic Data Gathering and Retrieval System) such
forms on behalf of the Depositor (or such other entity). The Depositor hereby
grants to the Trustee a limited power of attorney to execute any Form 8-K and
file each such document on behalf of the Depositor. Such power of attorney shall
continue until the earlier of (i) receipt by the Trustee from the Depositor of
written termination of such power of attorney and (ii) the termination of the
Trust. Notwithstanding anything herein to the contrary, the Depositor, and not
the Trustee, shall be responsible for executing each Form 10-K filed on behalf
of the Trust.
(ii) Each Form 8-K shall be filed by the Trustee within 10
days after each Distribution Date, with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto.
Prior to March 30th of each year (or such earlier date as may be
required by the Exchange Act and the Rules and Regulations of the
Securities and Exchange Commission), the Trustee shall file a Form
10-K, in substance as required by applicable law or applicable Security
and Exchange Commission staff's interpretations. The Servicer shall
provide the Servicer Certification (defined in Section 3.22(b)(iii)) to
the Trustee and the Depositor on March 15th of each year (which occurs
each year fifteen days prior to March 30th of such year). The Trustee
shall prepare such Form 10-K and provide the Depositor with such Form
10-K not later than March 20th of each year. Following its receipt
thereof, the Depositor shall execute such Form 10-K and provide the
original of such Form 10-K to the Trustee not later than March 25th
(or, if the applicable March 25th is not a Business Day, the next
succeeding Business Day) of each year; provided, however, that if the
filing of such Form 10-K shall be required to occur on a date earlier
than March 30th of each year as may be required by the Exchange Act and
the Rules and Regulations of the Securities and Exchange Commission,
then the time periods for preparation and execution of such Form 10-K
set forth in this sentence shall be adjusted accordingly). Such Form
10-K when filed shall include as exhibits the Servicer's annual
statement of compliance described under Section 3.20 and the
accountant's report described under Section 3.21, in each case to the
extent they have been timely delivered to the Trustee. If they are not
so timely delivered, the Trustee shall file an amended Form 10-K
including such documents as exhibits reasonably promptly after they are
delivered to the Trustee. The Trustee shall have no liability with
respect to any failure to properly prepare or file such periodic
reports resulting from or relating to the Trustee's inability or
failure to obtain any information not resulting from its own negligence
or willful misconduct. The Form 10-K shall also include a certification
in the form attached hereto as Exhibit N-1 (the "Certification"), which
shall be signed by the senior officer of the Depositor in charge of
securitization.
(iii) In addition, (x) the Trustee shall sign a
certification (in the form attached hereto as Exhibit N-2) for the
benefit of the Depositor and its officers, directors and Affiliates
regarding certain aspects of items 1 through 3 of the Certification
(provided, however, that the Trustee shall not undertake an analysis of
the accountant's report attached as an exhibit to the Form 10-K), and
(y) the Servicer shall sign a certification (in the form attached
hereto as Exhibit N-3) for the benefit of the Depositor, the Trustee
and their officers, directors and Affiliates regarding certain aspects
of items 1, 2, 3, 4 and 5 of the Certification (the "Servicer
Certification").
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In addition, (A) the Trustee shall indemnify and hold harmless
the Depositor and its officers, directors and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon a breach of the Trustee's obligations under this Section 3.22(b)
caused by the Trustee's negligence, bad faith or willful misconduct in
connection therewith, and (B) the Servicer shall indemnify and hold harmless the
Depositor, the Trustee and their respective officers, directors and Affiliates
from and against any actual losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other costs
and expenses arising out of or based upon (I) the failure of the Servicer to
timely deliver the Servicer Certification or (II) any material misstatement in
the Servicer Certification. If the indemnification provided for herein is
unavailable or insufficient to hold harmless the Depositor, then (i) the Trustee
agrees that it shall contribute to the amount paid or payable by the Depositor
as a result of the losses, claims, damages or liabilities of the Depositor in
such proportion as is appropriate to reflect the relative fault of the Depositor
on the one hand and the Trustee on the other in connection with a breach of the
Trustee's obligations under this Section 3.22(b) caused by the Trustee's
negligence, bad faith or willful misconduct in connection therewith and (ii) the
Servicer agrees that it shall contribute to the amount paid or payable by the
Depositor as a result of the losses, claims, damages or liabilities of the
Depositor in such proportion as is appropriate to reflect the relative fault of
the Depositor on the one hand and the Servicer on the other in connection with
the Servicer Certification and the related obligations of the Servicer under
this Section 3.22(b).
(iv) Upon any filing with the Securities and Exchange
Commission, the Trustee shall promptly deliver to the Depositor a copy
of any executed report, statement or information.
(v) Prior to January 30 of the first year in which the
Trustee is able to do so under applicable law, the Trustee shall file a
Form 15D Suspension Notification with respect to the Trust.
(vi) To the extent that, following the Closing Date, the
Depositor certifies that reports and certifications differing from
those required under this Section 3.22(b) comply with the reporting
requirements under the Exchange Act, the Trustee and the Servicer
hereby agree that they will reasonably cooperate to amend the
provisions of this Section 3.22(b) in order to comply with such amended
reporting requirements and such amendment of this Section 3.22(b);
provided, however, that the Trustee shall not be responsible for
executing any Form 10-K or the Certification. Any such amendment may
result in the reduction of the reports filed by the Depositor under the
Exchange Act.
SECTION 3.23 Title, Management and Disposition of REO
Property.
(a) The deed or certificate of sale of any REO Property
shall be taken in the name of the Trustee, or its nominee, in trust for the
benefit of the Certificateholders. The Servicer, on behalf of REMIC 1, shall
sell any REO Property as soon as practicable and in any event no later than the
end of the third full taxable year after the taxable year in which such REMIC
acquires ownership of such REO Property for purposes of Section 860G(a)(8) of
the
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Code or request from the Internal Revenue Service, no later than 60 days before
the day on which the three-year grace period would otherwise expire, an
extension of such three-year period, unless the Servicer shall have delivered to
the Trustee an Opinion of Counsel, addressed to the Trustee and the Depositor,
to the effect that the holding by the REMIC of such REO Property subsequent to
three years after its acquisition will not result in the imposition on the REMIC
of taxes on "prohibited transactions" thereof, as defined in Section 860F of the
Code, or cause any of the REMICs created hereunder to fail to qualify as a REMIC
under Federal law at any time that any Certificates are outstanding. The
Servicer shall manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any of the REMICs created hereunder of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code,
or any "net income from foreclosure property" which is subject to taxation under
the REMIC Provisions.
(b) The Servicer shall separately account for all funds
collected and received in connection with the operation of any REO Property and
shall establish and maintain, or cause to be established and maintained, with
respect to REO Properties an account held in trust for the Trustee for the
benefit of the Certificateholders (the "REO Account"), which shall be an
Eligible Account. The Servicer shall be permitted to allow the Collection
Account to serve as the REO Account, subject to separate ledgers for each REO
Property. The Servicer shall be entitled to retain or withdraw any interest
income paid on funds deposited in the REO Account.
(c) The Servicer shall have full power and authority,
subject only to the specific requirements and prohibitions of this Agreement, to
do any and all things in connection with any REO Property as are consistent with
the manner in which the Servicer manages and operates similar property owned by
the Servicer or any of its Affiliates, all on such terms and for such period
(subject to the requirement of prompt disposition set forth in Section
3.23(a))as the Servicer deems to be in the best interests of Certificateholders.
In connection therewith, the Servicer shall deposit, or cause to be deposited in
the clearing account in which it customarily deposits payments and collections
on mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Servicer's
receipt thereof, and shall thereafter deposit in the REO Account, in no event
more than two Business Days after the Servicer's receipt thereof, all revenues
received by it with respect to an REO Property and shall withdraw therefrom
funds necessary for the proper operation, management and maintenance of such REO
Property including, without limitation:
(i) all insurance premiums due and payable in respect of
such REO Property;
(ii) all real estate taxes and assessments in respect of
such REO Property that may result in the imposition of a lien thereon;
and
(iii) all costs and expenses necessary to maintain such REO
Property.
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
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respect to such REO Property, the Servicer shall advance from its own funds such
amount as is necessary for such purposes if, but only if, the Servicer would
make such advances if the Servicer owned the REO Property and if in the
Servicer's judgment, the payment of such amounts will be recoverable from the
rental or sale of the REO Property.
Notwithstanding the foregoing, neither the Servicer nor the
Trustee shall:
(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 the completion of a building or other improvement thereon, and
then only if more than ten percent of the construction of such building
or other improvement was completed before default on the related
Mortgage Loan became imminent, all within the meaning of Section
856(e)(4)(B) of the Code; or
(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 Servicer has obtained an Opinion of Counsel,
provided to the Trustee, to the effect that such action will not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code at any time that it is held by the REMIC, in
which case the Servicer may take such actions as are specified in such Opinion
of Counsel.
The Servicer may contract with any Independent Contractor for
the operation and management of any REO Property, provided that:
(1) the terms and conditions of any such contract shall
not be inconsistent herewith;
(2) any such contract shall require, or shall be
administered to require, that the Independent Contractor pay all costs
and expenses incurred in connection with the operation and management
of such REO Property, including those listed above and remit all
related revenues (net of such costs and expenses) to the Servicer as
soon as practicable, but in no event later than thirty days following
the receipt thereof by such Independent Contractor;
(3) none of the provisions of this Section 3.23(c)
relating to any such contract or to actions taken through any such
Independent Contractor shall be deemed to relieve the Servicer of any
of its duties and obligations to the Trustee on behalf of the
Certificateholders with respect to the operation and management of any
such REO Property; and
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(4) the Servicer shall be obligated with respect thereto
to the same extent as if it alone were performing all duties and
obligations in connection with the operation and management of such REO
Property.
The Servicer shall be entitled to enter into any agreement
with any Independent Contractor performing services for it related to its duties
and obligations hereunder for indemnification of the Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Servicer shall be solely liable for all fees
owed by it to any such Independent Contractor, irrespective of whether the
Servicer's compensation pursuant to Section 3.18 is sufficient to pay such fees;
provided, however, that to the extent that any payments made by such Independent
Contractor would constitute Servicing Advances if made by the Servicer, such
amounts shall be reimbursable as Servicing Advances made by the Servicer.
(d) In addition to the withdrawals permitted under
Section 3.23(c), the Servicer may from time to time make withdrawals from the
REO Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and Advances made
in respect of such REO Property or the related Mortgage Loan. On the Servicer
Remittance Date, the Servicer shall withdraw from each REO Account maintained by
it and deposit into the Distribution Account in accordance with Section
3.10(d)(ii), for distribution on the related Distribution Date in accordance
with Section 4.01, the income from the related REO Property received during the
prior calendar month, net of any withdrawals made pursuant to Section 3.23(c) or
this Section 3.23(d).
(e) Subject to the time constraints set forth in Section
3.23(a), each REO Disposition shall be carried out by the Servicer in a manner,
at such price and upon such terms and conditions as shall be normal and usual in
the servicing standard set forth in Section 3.01.
(f) The proceeds from the REO Disposition, net of any
amount required by law to be remitted to the Mortgagor under the related
Mortgage Loan and net of any payment or reimbursement to the Servicer or any
Sub-Servicer as provided above, shall be deposited in the Distribution Account
in accordance with Section 3.10(d)(ii) on the Servicer Remittance Date in the
month following the receipt thereof for distribution on the related Distribution
Date in accordance with Section 4.01. Any REO Disposition shall be for cash only
(unless changes in the REMIC Provisions made subsequent to the Startup Day allow
a sale for other consideration).
(g) The Servicer shall file information returns with
respect to the receipt of mortgage interest received in a trade or business,
reports of foreclosures and abandonments of any Mortgaged Property and
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code, respectively. Such
reports shall be in form and substance sufficient to meet the reporting
requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.
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SECTION 3.24 Obligations of the Servicer in Respect of
Prepayment Interest Shortfalls.
Not later than 1:00 p.m. New York time on each Servicer
Remittance Date, the Servicer shall remit to the Distribution Account an amount
("Compensating Interest") equal to the lesser of (A) the aggregate of the
Prepayment Interest Shortfalls for the related Distribution Date and (B) 50% of
its aggregate Servicing Fee received in the related Due Period. The Servicer
shall not have the right to reimbursement for any amounts remitted to the
Trustee in respect of Compensating Interest. Such amounts so remitted shall be
included in the Available Funds and distributed therewith on the next
Distribution Date. The Servicer shall not be obligated to pay Compensating
Interest with respect to Relief Act Interest Shortfalls.
SECTION 3.25 [Reserved].
SECTION 3.26 Obligations of the Servicer in Respect of
Mortgage Rates and Monthly Payments.
In the event that a shortfall in any collection on or
liability with respect to the Mortgage Loans in the aggregate results from or is
attributable to adjustments to Mortgage Rates, Monthly Payments or Stated
Principal Balances that were made by the Servicer in a manner not consistent
with the terms of the related Mortgage Note and this Agreement, the Servicer,
upon discovery or receipt of notice thereof, immediately shall deposit in the
Collection Account from its own funds the amount of any such shortfall and shall
indemnify and hold harmless the Trust Fund, the Trustee, the Depositor and any
successor servicer in respect of any such liability. Such indemnities shall
survive the termination or discharge of this Agreement. Notwithstanding the
foregoing, this Section 3.26 shall not limit the ability of the Servicer to seek
recovery of any such amounts from the related Mortgagor under the terms of the
related Mortgage Note, as permitted by law.
SECTION 3.27 Solicitations.
From and after the Closing Date, the Servicer agrees that it
will not take any action or permit or cause any action to be taken by any of its
agents and Affiliates, or by any independent contractors or independent mortgage
brokerage companies on the Servicer's behalf, to personally, by telephone or
mail, solicit the Mortgagor under any Mortgage Loan for the purpose of
refinancing such Mortgage Loan; provided, that the Servicer may solicit any
Mortgagor for whom the Servicer has received a request for verification of
mortgage, a request for demand for payoff, a mortgagor initiated written or
verbal communication indicating a desire to prepay the related Mortgage Loan,
another mortgage company has pulled a credit report on the mortgagor or the
mortgagor initiates a title search; provided further, it is understood and
agreed that promotions undertaken by the Servicer or any of its Affiliates which
(i) concern optional insurance products or other additional products or (ii) are
directed to the general public at large, including, without limitation, mass
mailings based on commercially acquired mailing lists, newspaper, radio,
telephone and television advertisements shall not constitute solicitation under
this Section, nor is the Servicer prohibited from responding to unsolicited
requests or inquiries made by a Mortgagor or an agent of a Mortgagor.
Furthermore, the Servicer shall be permitted to
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include in its monthly statements to borrowers or otherwise, statements
regarding the availability of the Servicer's counseling services with respect to
refinancing mortgage loans.
SECTION 3.28 Net WAC Rate Carryover Reserve Account.
No later than the Closing Date, the Trustee shall establish
and maintain with itself a separate, segregated trust account titled, "Net WAC
Rate Carryover Reserve Account, Deutsche Bank National Trust Company, as
Trustee, in trust for registered Holders of Fremont Home Loan Trust 2004-4,
Asset-Backed Certificates, Series 2004-4."
On each Distribution Date, the Trustee has been directed by
the Class C Certificateholders to, and therefore shall, deposit into the Net WAC
Rate Carryover Reserve Account the amounts described in Section 4.01(d)(iv),
rather than distributing such amounts to the Class C Certificateholders. In
addition, any payments received by the Trustee under the Cap Contract on each
Distribution Date will be deposited into the Net WAC Rate Carryover Reserve
Account. On each such Distribution Date, the Trustee shall hold all such amounts
for the benefit of the Holders of the Floating Rate Certificates, and shall
distribute such amounts from the Net WAC Rate Carryover Reserve Account to the
Holders of the Floating Rate Certificates in the amounts and priorities set
forth in Section 4.01(e).
On each Distribution Date, any amounts remaining in the Net
WAC Rate Reserve Account (representing payments received by the Trustee under
the Cap Contract) after the payment of any Net WAC Rate Carryover Amounts on the
Floating Rate Certificates for such Distribution Date, shall be payable to the
Trustee.
For federal and state income tax purposes, the Class C
Certificateholders will be deemed to be the owners of the Net WAC Rate Carryover
Reserve Account and all amounts deposited into the Net WAC Rate Carryover
Reserve Account (other than any amounts deposited pursuant to the Cap Contract)
shall be treated as amounts distributed by REMIC 2 to the Holders of the Class C
Interest and by the Class C Interest to the Class C Certificates. The Net WAC
Rate Carryover Reserve Account will be an "outside reserve fund" within the
meaning of Treasury regulation Section 1.860G-2(h). The Net WAC Rate Carryover
Reserve Account will be part of the Trust but not part of any REMIC and any
payments to the Holders of the Floating Rate Certificates of Net WAC Rate
Carryover Amounts will not be payments with respect to a "regular interest" in a
REMIC within the meaning of Code Section 860(G)(a)(1).
By accepting a Class C Certificate, each Class C
Certificateholder hereby agrees to direct the Trustee, and the Trustee hereby is
directed, to deposit into the Net WAC Rate Carryover Reserve Account the amounts
described in Section 4.01(d)(xxiv) on each Distribution Date as to which there
is any Net WAC Rate Carryover Amount (in excess of the amount received under the
Cap Contract) rather than distributing such amounts to the Class C
Certificateholders. By accepting a Class C Certificate, each Class C
Certificateholder further agrees that such direction is given for good and
valuable consideration, the receipt and sufficiency of which is acknowledged by
such acceptance.
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All amounts on deposit in the Net WAC Rate Carryover Reserve
Account shall remain uninvested.
For federal tax return and information reporting, the right of
the Holders of the Floating Rate Certificates to receive payments from the Net
WAC Rate Carryover Reserve Account in respect of any Net WAC Rate Carryover
Amount shall be assigned a value of zero.
SECTION 3.29 Advance Facility.
(a) The Servicer is hereby authorized to enter into a
financing or other facility (any such arrangement, an "Advance Facility"), the
documentation for which complies with Section 3.29(e) below, under which (1) the
Servicer assigns or pledges its rights under this Agreement to be reimbursed for
any or all Advances and/or Servicing Advances to (i) a Person, which may be a
special-purpose bankruptcy-remote entity (an "SPV"), (ii) a Person, which may
simultaneously assign or pledge such rights to an SPV or (iii) a lender (a
"Lender"), which, in the case of any Person or SPV of the type described in
either of the preceding clauses (i) or (ii), may directly or through other
assignees and/or pledgees, assign or pledge such rights to a Person, which may
include a trustee acting on behalf of holders of debt instruments (any such
Person or any such Lender, an "Advance Financing Person"), and/or (2) an Advance
Financing Person agrees to fund all the Advances and/or Servicing Advances
required to be made by the Servicer pursuant to this Agreement. No consent of
the Trustee, Certificateholders or any other party shall be required before the
Servicer may enter into an Advance Facility nor shall the Trustee or the
Certificateholders be a third party beneficiary of any obligation of an Advance
Financing Person to the Servicer. Notwithstanding the existence of any Advance
Facility under which an Advance Financing Person agrees to fund Advances and/or
Servicing Advances, (A) the Servicer (i) shall remain obligated pursuant to this
Agreement to make Advances and/or Servicing Advances pursuant to and as required
by this Agreement and (ii) shall not be relieved of such obligations by virtue
of such Advance Facility and (B) neither the Advance Financing Person nor any
Servicer's Assignee (as hereinafter defined) shall have any right to proceed
against or otherwise contact any Mortgagor for the purpose of collecting any
payment that may be due with respect to any related Mortgage Loan or enforcing
any covenant of such Mortgagor under the related Mortgage Loan documents.
(b) If the Servicer enters into an Advance Facility, the
Servicer and the related Advance Financing Person shall deliver to the Trustee
at the address set forth in Section 11.05 hereof a written notice (an "Advance
Facility Notice"), stating (a) the identity of the Advance Financing Person and
(b) the identity of the Person (the "Servicer's Assignee") that will, subject to
Section 3.29(c) hereof, have the right to make withdrawals from the Collection
Account pursuant to Section 3.11(a) clauses (ii)(a), (ii)(b), (iii), (vi) and
(vii) hereof to reimburse previously unreimbursed Advances and/or Servicing
Advances ("Advance Reimbursement Amounts"). Advance Reimbursement Amounts (i)
shall consist solely of amounts in respect of Advances and/or Servicing Advances
for which the Servicer would be permitted to reimburse itself in accordance with
Section 3.11(a) clauses (ii)(a), (ii)(b), (iii), (vi) and (vii) hereof, assuming
the Servicer had made the related Advance(s) and/or Servicing Advance(s) and
(ii) shall not consist of amounts payable to a successor Servicer in accordance
with Section 3.11(a)
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clauses (ii)(a), (ii)(b), (iii), (vi) and (vii) hereof to the extent permitted
under Section 3.29(e) below.
(c) Notwithstanding the existence of an Advance Facility,
the Servicer, on behalf of the Advance Financing Person, shall be entitled to
receive reimbursements of Advances and/or Servicing Advances in accordance with
Section 3.11(a) clauses (ii)(a), (ii)(b), (iii), (vi) and (vii) hereof, which
entitlement may be terminated by the Advance Financing Person pursuant to a
written notice to the Trustee in the manner set forth in Section 11.05 hereof.
Upon receipt of such written notice, the Servicer shall no longer be entitled to
receive reimbursement for any Advance Reimbursement Amounts and the Servicer's
Assignee shall immediately have the right to receive from the Collection Account
all Advance Reimbursement Amounts. Notwithstanding the foregoing, and for the
avoidance of doubt, (i) the Servicer and/or the Servicer's Assignee shall only
be entitled to reimbursement of Advance Reimbursement Amounts hereunder from
withdrawals from the Collection Account pursuant to Section 3.11(a) clauses
(ii)(a), (ii)(b), (iii), (vi) and (vii) of this Agreement and shall not
otherwise be entitled to make withdrawals of, or receive, amounts that shall be
on deposit in the Distribution Account or that are required to be deposited in
the Distribution Account pursuant to any provision hereunder, and (ii) none of
the Trustee or the Certificateholders shall have any right to, or otherwise be
entitled to, receive any Advance Reimbursement Amounts to which the Servicer or
Servicer's Assignee, as applicable, shall be entitled pursuant to Section
3.11(a) clauses (ii)(a), (ii)(b), (iii), (vi) and (vii). An Advance Facility may
be terminated by the joint written direction of the Servicer and the related
Advance Financing Person. Written notice of such termination shall be delivered
to the Trustee in the manner set forth in Section 11.05 hereof. None of the
Depositor or the Trustee shall, as a result of the existence of any Advance
Facility, have any additional duty or liability with respect to the calculation
or payment of any Advance Reimbursement Amount, nor, as a result of the
existence of any Advance Facility, shall the Depositor or the Trustee have any
additional responsibility to track or monitor the administration of the Advance
Facility or the payment of Advance Reimbursement Amounts to the Servicer's
Assignee.
The Servicer shall indemnify the Depositor, any successor
Servicer, the Trustee and the Trust Fund for any claim, loss, liability or
damage resulting from any claim by the related Advance Financing Person, except
to the extent that such claim, loss, liability or damage (i) in the case of the
Depositor, was incurred by reason of the Depositor's willful misfeasance, bad
faith or negligence in the performance of duties hereunder or by reason of its
reckless disregard of obligations and duties hereunder, (ii) in the case of a
successor Servicer, was incurred by reason of such successor Servicer's willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of its reckless disregard of obligations and duties hereunder or by
reason of a breach of such successor Servicer's obligations and duties under
this Agreement or (iii) in the case of the Trustee or the Trust Fund, (A)
resulted from a breach of the Servicer's or a successor Servicer's obligations
and duties under this Agreement for which the Trustee is indemnified under
Section 8.05(b) or (B) was incurred by reason of willful misfeasance, bad faith
or negligence of the Trustee in the performance of its duties hereunder or by
reason of the Trustee's reckless disregard of obligations and duties hereunder
or as a result of a breach of the Trustee's obligations under Article X hereof.
Notwithstanding the foregoing, the exclusions set forth in clauses (i), (ii) and
(iii) above from the Servicer's
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obligation to indemnify the Depositor, any successor Servicer, the Trustee and
the Trust Fund shall not be applicable, in any case, to the extent the
applicable claim, loss, liability or damage was incurred by reason of the
Servicer's willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of its reckless disregard of obligations and
duties hereunder or by reason of a breach of the Servicer's obligations and
duties under this Agreement.
The Servicer shall maintain and provide to any successor
Servicer and, upon request, the Trustee a detailed accounting on a loan-by-loan
basis as to amounts advanced by, pledged or assigned to, and reimbursed to any
Advancing Financing Person. The successor Servicer shall be entitled to rely on
any such information provided by the predecessor Servicer, and the successor
Servicer shall not be liable for any errors in such information.
(d) An Advance Financing Person who receives an
assignment or pledge of rights to receive Advance Reimbursement Amounts and/or
whose obligations are limited to the funding of Advances and/or Servicing
Advances pursuant to an Advance Facility shall not be required to meet the
criteria for qualification as a Sub-Servicer.
(e) As between a predecessor Servicer and its Advance
Financing Person, on the one hand, and a successor Servicer and its Advance
Financing Person, if any, on the other hand, Advance Reimbursement Amounts on a
loan-by-loan basis with respect to each Mortgage Loan as to which an Advance
and/or Servicing Advance shall have been made and be outstanding shall be
allocated on a "first-in, first out" basis. In the event the Servicer's Assignee
shall have received some or all of an Advance Reimbursement Amount related to
Advances and/or Servicing Advances that were made by a Person other than such
predecessor Servicer or its related Advance Financing Person in error, then such
Servicer's Assignee shall be required to remit any portion of such Advance
Reimbursement Amount to each Person entitled to such portion of such Advance
Reimbursement Amount. Without limiting the generality of the foregoing, the
Servicer shall remain entitled to be reimbursed by the Advance Financing Person
for all Advances and/or Servicing Advances funded by the Servicer to the extent
the related Advance Reimbursement Amounts have not been assigned or pledged to
such Advance Financing Person or Servicer's Assignee.
(f) For purposes of any Officer's Certificate of the
Servicer made pursuant to Section 4.04(d), any Nonrecoverable Advance referred
to therein may have been made by such Servicer or any predecessor Servicer. In
making its determination that any Advance or Servicing Advance theretofore made
has become a Nonrecoverable Advance, the Servicer shall apply the same criteria
in making such determination regardless of whether such Advance or Servicing
Advance shall have been made by the Servicer or any predecessor Servicer.
(g) Any amendment to this Section 3.29 or to any other
provision of this Agreement that may be necessary or appropriate to effect the
terms of an Advance Facility as described generally in this Section 3.29,
including amendments to add provisions relating to a successor Servicer, may be
entered into by the Trustee, the Depositor and the Servicer without the consent
of any Certificateholder, provided such amendment complies with Section 11.01
hereof. All reasonable costs and expenses (including attorneys' fees) of each
party hereto of any such amendment shall be borne solely by the Servicer. The
parties hereto hereby acknowledge
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and agree that: (a) the Advances and/or Servicing Advances financed by and/or
pledged to an Advance Financing Person under any Advance Facility are
obligations owed to the Servicer payable only from the cash flows and proceeds
received under this Agreement for reimbursement of Advances and/or Servicing
Advances only to the extent provided herein, and the Trustee and the Trust are
not, as a result of the existence of any Advance Facility, obligated or liable
to repay any Advances and/or Servicing Advances financed by the Advance
Financing Person; (b) the Servicer will be responsible for remitting to the
Advance Financing Person the applicable amounts collected by it as reimbursement
for Advances and/or Servicing Advances funded by the Advance Financing Person,
subject to the provisions of this Agreement; and (c) the Trustee shall not have
any responsibility to track or monitor the administration of the financing
arrangement between the Servicer and any Advance Financing Person.
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ARTICLE IV
FLOW OF FUNDS
SECTION 4.01 Distributions.
(a)
(I) On each Distribution Date, the Trustee shall withdraw
from the Distribution Account that portion of Available Funds for such
Distribution Date consisting of the Group I Interest Remittance Amount
for such Distribution Date, and make the following disbursements and
transfers in the order of priority described below, in each case to the
extent of the Group I Interest Remittance Amount remaining for such
Distribution Date:
(i) concurrently, to the Holders of the Group I
Certificates, on a pro rata basis based on the entitlement of each such
Class, the Monthly Interest Distributable Amount and the Unpaid
Interest Shortfall Amount, if any, for such Class; and
(ii) concurrently, to the Holders of the Group II
Certificates, on a pro rata basis based on the entitlement of each such
Class, an amount equal to the excess, if any, of (x) the amount
required to be distributed pursuant to Section 4.01(a)(II)(i) below for
such Distribution Date over (y) the amount actually distributed
pursuant to such clause from the Group II Interest Remittance Amount.
(II) On each Distribution Date the Trustee shall withdraw
from the Distribution Account that portion of Available Funds for such
Distribution Date consisting of the Group II Interest Remittance Amount for such
Distribution Date, and make the following disbursements and transfers in the
order of priority described below, in each case to the extent of the Group II
Interest Remittance Amount remaining for such Distribution Date.
(i) concurrently, to the Holders of the Group II
Certificates, on a pro rata basis based on the entitlement of each such
Class, the Monthly Interest Distributable Amount and the Unpaid
Interest Shortfall Amount, if any, for each such Class; and
(ii) concurrently, to the Holders of the Group I
Certificates, on a pro rata basis based on the entitlement of each such
Class, an amount equal to the excess, if any, of (x) the amount
required to be distributed pursuant to Section 4.01(a)(I)(i) above for
such Distribution Date over (y) the amount actually distributed
pursuant to such clause from the Group I Interest Remittance Amount.
(III) On each Distribution Date, distributions to the
extent of the sum of the Group I Interest Remittance Amount and the Group II
Interest Remittance Amount remaining undistributed for such Distribution Date
shall be distributed sequentially to the Holders of the Class M-1 Certificates,
the Class M-2 Certificates, the Class M-3 Certificates, the Class M-4
Certificates, the Class M-5 Certificates, the Class M-6 Certificates, the Class
M-7 Certificates, the Class M-8 Certificates, the Class M-9 Certificates, the
Class M-10 Certificates and the Class
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B Certificates, in that order, in an amount equal to the Monthly Interest
Distributable Amount for each such Class.
(b)
(I) On each Distribution Date (a) prior to the Stepdown
Date or (b) on which a Trigger Event is in effect, distributions in respect of
principal to the extent of the Group I Principal Distribution Amount shall be
made in the following amounts and order of priority:
(i) first, to the Holders of the Group I Certificates
(allocated among Group I Certificates in the priority described below),
until the Certificate Principal Balances thereof have been reduced to
zero; and
(ii) second, after taking into account the amount
distributed to the Holders of the Group II Certificates pursuant to
Section 4.01(b)(II)(i) below on such Distribution Date, to the Holders
of the Group II Certificates (allocated among Group II Certificates in
the priority described below), until the Certificate Principal Balances
thereof have been reduced to zero.
(II) On each Distribution Date (a) prior to the Stepdown
Date or (b) on which a Trigger Event is in effect, distributions in respect of
principal to the extent of the Group II Principal Distribution Amount shall be
made in the following amounts and order of priority:
(i) first, to the Holders of the Group II Certificates
(allocated among Group II Certificates in the priority described
below), until the Certificate Principal Balances thereof have been
reduced to zero; and
(ii) second, after taking into account the amount
distributed to the Holders of the Group I Certificates pursuant to
Section 4.01(b)(I)(i) above on such Distribution Date, to the Holders
of the Group I Certificates (allocated among Group I Certificates in
the priority described below), until the Certificate Principal Balances
thereof have been reduced to zero.
(III) On each Distribution Date (a) prior to the Stepdown
Date or (b) on which a Trigger Event is in effect, distributions in respect of
principal to the extent of the sum of the Group I Principal Distribution Amount
and the Group II Principal Distribution Amount remaining undistributed for such
Distribution Date shall be distributed sequentially, to the Holders of the Class
M-1 Certificates, the Class M-2 Certificates, the Class M-3 Certificates, the
Class M-4 Certificates, the Class M-5 Certificates, the Class M-6 Certificates,
the Class M-7 Certificates, the Class M-8 Certificates, the Class M-9
Certificates, the Class M-10 Certificates and the Class B Certificates, in that
order, in each case, until the Certificate Principal Balance thereof has been
reduced to zero.
(IV) On each Distribution Date (a) on or after the
Stepdown Date and (b) on which a Trigger Event is not in effect, distributions
in respect of principal to the extent of the Group I Principal Distribution
Amount shall be made in the following amounts and order of priority:
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(i) first, to the Holders of the Group I Certificates
(allocated among Group I Certificates in the priority described below),
the Group I Senior Principal Distribution Amount until the Certificate
Principal Balances thereof have been reduced to zero; and
(ii) second, to the Holders of the Group II Certificates
(allocated among Group II Certificates in the priority described
below), an amount equal to the excess, if any, of (x) the amount
required to be distributed pursuant to Section 4.01(b)(V)(i) below for
such Distribution Date over (y) the amount actually distributed
pursuant to Section 4.0(b)(V)(i) below from the Group II Principal
Distribution Amount on such Distribution Date.
(V) On each Distribution Date (a) on or after the
Stepdown Date and (b) on which a Trigger Event is not in effect, distributions
in respect of principal to the extent of the Group II Principal Distribution
Amount shall be made in the following amounts and order of priority:
(i) first, to the Holders of the Group II Certificates
(allocated among Group II Certificates in the priority described
below), the Group II Senior Principal Distribution Amount until the
Certificate Principal Balances thereof have been reduced to zero; and
(ii) second, to the Holders of the Group I Certificates
(allocated among Group I Certificates in the priority described below),
an amount equal to the excess, if any, of (x) the amount required to be
distributed pursuant to Section 4.01(b)(IV)(i) above for such
Distribution Date over (y) the amount actually distributed pursuant to
Section(b)(IV)(i) above from the Group I Principal Distribution Amount
on such Distribution Date.
(VI) On each Distribution Date (a) on or after the
Stepdown Date and (b) on which a Trigger Event is not in effect, distributions
in respect of principal to the extent of the sum of the Group I Principal
Distribution Amount and the Group II Principal Distribution Amount remaining
undistributed for such Distribution Date shall be made in the following amounts
and order of priority:
(i) first, to the Holders of the Class M-1 Certificates,
the Class M-1 Principal Distribution Amount until the Certificate
Principal Balance thereof has been reduced to zero;
(ii) second, to the Holders of the Class M-2 Certificates,
the Class M-2 Principal Distribution Amount until the Certificate
Principal Balance thereof has been reduced to zero;
(iii) third, to the Holders of the Class M-3 Certificates,
the Class M-3 Principal Distribution Amount until the Certificate
Principal Balance thereof has been reduced to zero;
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(iv) fourth, to the Holders of the Class M-4 Certificates,
the Class M-4 Principal Distribution Amount until the Certificate
Principal Balance thereof has been reduced to zero;
(v) fifth, to the Holders of the Class M-5 Certificates,
the Class M-5 Principal Distribution Amount until the Certificate
Principal Balance thereof has been reduced to zero;
(vi) sixth, to the Holders of the Class M-6 Certificates,
the Class M-6 Principal Distribution Amount until the Certificate
Principal Balance thereof has been reduced to zero;
(vii) seventh, to the Holders of the Class M-7
Certificates, the Class M-7 Principal Distribution Amount until the
Certificate Principal Balance thereof has been reduced to zero;
(viii) eighth, to the Holders of the Class M-8 Certificates,
the Class M-8 Principal Distribution Amount until the Certificate
Principal Balance thereof has been reduced to zero;
(ix) ninth, to the Holders of the Class M-9 Certificates,
the Class M-9 Principal Distribution Amount until the Certificate
Principal Balance thereof has been reduced to zero;
(x) tenth, to the Holders of the Class M-10 Certificates,
the Class M-10 Principal Distribution Amount until the Certificate
Principal Balance thereof has been reduced to zero; and
(xi) eleventh, to the Holders of the Class B Certificates,
the Class B Principal Distribution Amount until the Certificate
Principal Balance thereof has been reduced to zero.
With respect to the Group I Certificates, all principal distributions
will be distributed on a pro rata basis based on the Certificate Principal
Balance of each such class, with the exception that if a Sequential Trigger
Event is in effect, principal distributions will be distributed sequentially,
first, to the holders of the Class I-A1 until the Certificate Principal Balance
of the Class I-A1 Certificates has been reduced to zero; and second, to the
holders of the Class I-A2 Certificates, until the Certificate Principal Balance
of the Class I-A2 Certificates has been reduced to zero.
With respect to the Group II Certificates, all principal distributions
will be distributed sequentially, first, to the Holders of the Class II-A1
Certificates, until the Certificate Principal Balance of the Class II-A1
Certificates has been reduced to zero; second, to the Holders of the Class II-A2
Certificates, until the Certificate Principal Balance of the Class II-A2
Certificates has been reduced to zero; and third, to the Holders of the Class
II-A3 Certificates, until the Certificate Principal Balance of the Class II-A3
Certificates has been reduced to zero.
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(c) On each Distribution Date, the Net Monthly Excess
Cashflow shall be distributed as follows:
(i) to the Holders of the Class or Classes of
Certificates then entitled to receive distributions in respect of
principal, in an amount equal to any Extra Principal Distribution
Amount, distributable to such Holders as part of the Group I Principal
Distribution Amount and/or the Group II Principal Distribution Amount
as described under Section 4.01(b) above;
(ii) sequentially, to the Holders of the Class I-A2
Certificates, with respect to Allocated Realized Loss Amounts only, and
the Class M-1 Certificates, the Class M-2 Certificates, the Class M-3
Certificates, the Class M-4 Certificates, the Class M-5 Certificates,
the Class M-6 Certificates, the Class M-7 Certificates, the Class M-8
Certificates, the Class M-9 Certificates, the Class M-10 Certificates
and the Class B Certificates, in that order, in each case, first up to
the Unpaid Interest Shortfall Amount for each such class and second up
to the Allocated Realized Loss Amount, for each such class;
(iii) to the Net WAC Rate Carryover Reserve Account, the
aggregate of any Net WAC Rate Carryover Amounts for the Floating Rate
Certificates which exceed the amounts received under the Cap Contract;
(iv) [reserved];
(v) to the Holders of the Class C Certificates, (a) the
Monthly Interest Distributable Amount and any Overcollateralization
Release Amount for such Distribution Date and (b) on any Distribution
Date on which the Certificate Principal Balances of the Floating Rate
Certificates have been reduced to zero, any remaining amounts in
reduction of the Certificate Principal Balance of the Class C
Certificates, until the Certificate Principal Balance thereof has been
reduced to zero;
(vi) if such Distribution Date follows the Prepayment
Period during which occurs the latest date on which a Prepayment Charge
may be required to be paid in respect of any Mortgage Loans, to the
Holders of the Class P Certificates, in reduction of the Certificate
Principal Balance thereof, until the Certificate Principal Balance
thereof is reduced to zero; and
(vii) any remaining amounts to the Holders of the Residual
Certificates (in respect of the Class R-3 Interest.
(d) On each Distribution Date, after making the
distributions of the Available Funds as set forth in Section 4.01(a) through (d)
above, the Trustee shall withdraw from the Net WAC Rate Carryover Reserve
Account, to the extent of amounts remaining on deposit therein, the aggregate of
any Net WAC Rate Carryover Amounts for such Distribution Date and distribute
such amount in the following order of priority:
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(i) concurrently, to each Class of Class A Certificates,
the related Cap Amount, from payments made under the Cap Contract, in
each case up to a maximum amount equal to the related Net WAC Rate
Carryover Amount for such Distribution Date;
(ii) sequentially, to the Class M-1 Certificates, the
Class M-2 Certificates the Class M-3 Certificates, the Class M-4
Certificates, the Class M-5 Certificates, the Class M-6 Certificates,
the Class M-7 Certificates, the Class M-8 Certificates, the Class M-9
Certificates, the Class M-10 Certificates and the Class B Certificates,
in that order, the related Cap Amount, from payments made under the Cap
Contract, in each case up to a maximum amount equal to the related Net
WAC Rate Carryover Amount for such Distribution Date;
(iii) concurrently, to each Class of Class A Certificates,
the related Net WAC Rate Carryover Amount remaining undistributed
pursuant to clause (i) above, on a pro rata basis based on such
respective remaining Net WAC Rate Carryover Amounts; and
(iv) sequentially, to the Class M-1 Certificates, the
Class M-2 Certificates, the Class M-3 Certificates, the Class M-4
Certificates, the Class M-5 Certificates, the Class M-6 Certificates,
the Class M-7 Certificates, the Class M-8 Certificates, the Class M-9
Certificates, the Class M-10 Certificates and the Class B Certificates,
in that order, the related Net WAC Rate Carryover Amount remaining
undistributed pursuant to clause (ii) above.
(e) On each Distribution Date, all amounts representing
Prepayment Charges in respect of the Mortgage Loans received during the related
Prepayment Period and any Servicer Prepayment Charge Amounts paid by the
Servicer during the related Prepayment Period will be withdrawn from the
Distribution Account and distributed by the Trustee to the Holders of the Class
P Certificates and shall not be available for distribution to the Holders of any
other Class of Certificates. The payment of the foregoing amounts to the Holders
of the Class P Certificates shall not reduce the Certificate Principal Balances
thereof.
(f) The Trustee shall make distributions in respect of a
Distribution Date to each Certificateholder of record on the related Record Date
(other than as provided in Section 10.01 respecting the final distribution), in
the case of Certificateholders of the Regular Certificates, by check or money
order mailed to such Certificateholder at the address appearing in the
Certificate Register, or by wire transfer. Distributions among
Certificateholders shall be made in proportion to the Percentage Interests
evidenced by the Certificates held by such Certificateholders.
(g) 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
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the Certificate Owners that it represents. All such credits and disbursements
with respect to a Book-Entry Certificate are to be made by the Depository and
the Depository Participants in accordance with the provisions of the
Certificates. None of the Trustee, the Depositor or the Servicer shall have any
responsibility therefor except as otherwise provided by applicable law.
On each Distribution Date, following the foregoing
distributions, an amount equal to the amount of Subsequent Recoveries deposited
into the Collection Account pursuant to Section 3.10 shall be applied to
increase the Certificate Principal Balance of the Class of Certificates with the
Highest Priority up to the extent of such Realized Losses previously allocated
to that Class of Certificates pursuant to Section 4.08. An amount equal to the
amount of any remaining Subsequent Recoveries shall be applied to increase the
Certificate Principal Balance of the Class of Certificates with the next Highest
Priority, up to the amount of such Realized Losses previously allocated to that
Class of Certificates pursuant to Section 4.08. Holders of such Certificates
will not be entitled to any distribution in respect of interest on the amount of
such increases for any Interest Accrual Period preceding the Distribution Date
on which such increase occurs. Any such increases shall be applied to the
Certificate Principal Balance of each Certificate of such Class in accordance
with its respective Percentage Interest.
(i) It is the intention of all of the parties hereto that
the Class C Certificates receive all principal and interest received by
the Trust on the Mortgage Loans that is not otherwise distributable to
any other Class of Regular Certificates or REMIC Regular Interests and
that the Residual Certificates are to receive no principal and
interest. If the Trustee determines that the Residual Certificates are
entitled to any distributions, the Trustee, prior to any such
distribution to any Residual Certificate, shall notify the Depositor of
such impending distribution but shall make such distribution in
accordance with the terms of this Agreement until this Agreement is
amended as specified in the following sentence. Upon such notification,
the Depositor will request an amendment to the Pooling and Servicing
Agreement to revise such mistake in the distribution provisions. The
Residual Certificate Holders, by acceptance of their Certificates, and
the Servicer(s), hereby agree to any such amendment and no further
consent shall be necessary, notwithstanding anything to the contrary in
Section 11.01 of this Pooling and Servicing Agreement; provided,
however, that such amendment shall otherwise comply with Section 11.01
hereof.
SECTION 4.02 [Reserved].
SECTION 4.03 Statements.
(a) On each Distribution Date, based, as applicable, on
information provided to it by the Servicer, the Trustee shall prepare and make
available to each Holder of the Regular Certificates, the Servicer and the
Rating Agencies, a statement as to the distributions made on such Distribution
Date:
(i) the amount of the distribution made on such
Distribution Date to the Holders of each Class of Regular Certificates,
separately identified, allocable to principal and the amount of the
distribution made to the Holders of the Class P Certificates allocable
to Prepayment Charges and Servicer Prepayment Charge Payment Amounts;
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(ii) the amount of the distribution made on such
Distribution Date to the Holders of each Class of Regular Certificates
(other than the Class P Certificates) allocable to interest, separately
identified;
(iii) the Overcollateralized Amount, the
Overcollateralization Release Amount, the Overcollateralization
Deficiency Amount and the Overcollateralization Target Amount as of
such Distribution Date and the Excess Overcollateralized Amount for the
Mortgage Pool for such Distribution Date;
(iv) the aggregate amount of servicing compensation
received by the Servicer with respect to the related Due Period and
such other customary information as the Trustee deems necessary or
desirable, or which a Certificateholder reasonably requests, to enable
Certificateholders to prepare their tax returns;
(v) the aggregate amount of Advances for the related Due
Period;
(vi) the Pool Balance at the Close of Business at the end
of the related Due Period;
(vii) the number, aggregate Stated Principal Balance,
weighted average remaining term to maturity and weighted average
Mortgage Rate of the Mortgage Loans as of the related Determination
Date and the number and aggregate Stated Principal Balance of all
Subsequent Mortgage Loans added during the Funding Period;
(viii) the number and aggregate unpaid Stated Principal
Balance of Mortgage Loans that were (A) Delinquent (exclusive of
Mortgage Loans in bankruptcy or foreclosure and REO Properties) (1) 30
to 59 days, (2) 60 to 89 days and (3) 90 or more days, (B) as to which
foreclosure proceedings have been commenced and Delinquent (1) 30 to 59
days, (2) 60 to 89 days and (3) 90 or more days, (C) in bankruptcy and
Delinquent (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more
days, in each case as of the Close of Business on the last day of the
calendar month preceding such Distribution Date and (D) REO Properties,
as well as the aggregate principal balance of Mortgage Loans that were
liquidated and the net proceeds resulting therefrom;
(ix) [reserved];
(x) the total number and cumulative Stated Principal
Balance of all REO Properties as of the Close of Business of the last
day of the preceding Prepayment Period;
(xi) the aggregate amount of Principal Prepayments made
during the related Prepayment Period, separately indicating Principal
Prepayments in full and Principal Prepayments in part;
(xii) the aggregate amount of Realized Losses incurred
during the related Prepayment Period and the cumulative amount of
Realized Losses and the aggregate amount of Subsequent Recoveries
received during the related Prepayment Period and the cumulative amount
of Subsequent Recoveries received since the Closing Date;
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(xiii) the aggregate amount of extraordinary Trust Fund
expenses withdrawn from the Collection Account for such Distribution
Date;
(xiv) the Certificate Principal Balance of each Class of
Floating Rate Certificates and the Class C Certificates, after giving
effect to the distributions made on such Distribution Date;
(xv) the Monthly Interest Distributable Amount in respect
of each Class of Floating Rate Certificates and the Class C
Certificates for such Distribution Date and the Unpaid Interest
Shortfall Amount, if any, with respect to each Class of Floating Rate
Certificates and the Class C Certificates for such Distribution Date;
(xvi) the aggregate amount of any Prepayment Interest
Shortfalls for such Distribution Date, to the extent not covered by
payments by the Servicer pursuant to Section 3.26;
(xvii) the Credit Enhancement Percentage for such
Distribution Date;
(xviii) the Net WAC Rate Carryover Amount for each Class of
Floating Rate Certificates, if any, for such Distribution Date and the
amount remaining unpaid after reimbursements therefor on such
Distribution Date;
(xix) any Overcollateralization Target Amount,
Overcollateralized Amount and Overcollateralization Deficiency Amount
after giving effect to the distribution of principal on such
Distribution Date;
(xx) when the Stepdown Date or a Trigger Event has
occurred;
(xxi) the Available Funds;
(xxii) the respective Pass-Through Rates applicable to each
Class of Floating Rate Certificates and the Class C Certificates for
such Distribution Date and the Pass-Through Rate applicable to each
Class of Floating Rate Certificates for the immediately succeeding
Distribution Date;
(xxiii) payments, if any, made under the Cap Contract;
(xxiv) the amount on deposit in the Pre-Funding Accounts;
and
(xxv) for the distribution occurring on the Distribution
Date immediately following the end of the Funding Period, the balance
on deposit in the Group I Pre-Funding Account and/or the Group II
Pre-Funding Account that has not been used to purchase Subsequent Group
I Mortgage Loans and/or Subsequent Group II Mortgage Loans, as
applicable, and that is being distributed to the related Class A
Certificates as a mandatory distribution of principal, if any, on such
Distribution Date.
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The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders and the Rating Agencies via the
Trustee's internet website. The Trustee's internet website shall initially be
located at "▇▇▇▇▇://▇▇▇.▇▇▇.▇▇.▇▇▇/▇▇▇▇". Assistance in using the website can be
obtained by calling the Trustee's customer service desk at (▇▇▇) ▇▇▇-▇▇▇▇.
Parties that are unable to use the above distribution option are entitled to
have a paper copy mailed to them via first class mail by calling the customer
service desk and indicating such. The Trustee shall have the right to change the
way such statements are distributed in order to make such distribution more
convenient and/or more accessible to the above parties and the Trustee shall
provide timely and adequate notification to all above parties regarding any such
changes. As a condition to access to the Trustee's internet website, the Trustee
may require registration and the acceptance of a disclaimer. The Trustee will
not be liable for the dissemination of information in accordance with this
Agreement. The Trustee shall also be entitled to rely on but shall not be
responsible for the content or accuracy of any information provided by third
parties for purposes of preparing the Distribution Date statement and may affix
thereto any disclaimer it deems appropriate in its reasonable discretion
(without suggesting liability on the part of any other party thereto).
In the case of information furnished pursuant to subclauses
(i) through (iii) above, the amounts shall be expressed in a separate section of
the report as a dollar amount for each Class for each $1,000 original dollar
amount as of the Cut-off Date.
(b) Within a reasonable period of time after the end of
each calendar year, the Trustee shall, upon written request, furnish to each
Person who at any time during the calendar year was a Certificateholder of a
Regular Certificate, if requested in writing by such Person, such information as
is reasonably necessary to provide to such Person a statement containing the
information set forth in subclauses (i) and (ii) above, aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
prepared and furnished by the Trustee to Certificateholders pursuant to any
requirements of the Code as are in force from time to time.
(c) On each Distribution Date, the Trustee shall make
available to the Residual Certificateholders a copy of the reports forwarded to
the Regular Certificateholders in respect of such Distribution Date with such
other information as the Trustee deems necessary or appropriate.
(d) Within a reasonable period of time after the end of
each calendar year, the Trustee shall deliver to each Person who at any time
during the calendar year was a Residual Certificateholder, if requested in
writing by such Person, such information as is reasonably necessary to provide
to such Person a statement containing the information provided pursuant to the
previous paragraph aggregated for such calendar year or applicable portion
thereof during which such Person was a Residual Certificateholder. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be prepared and furnished to
Certificateholders by the Trustee pursuant to any requirements of the Code as
from time to time in force.
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SECTION 4.04 Remittance Reports; Advances.
(a) By the second Business Day following each
Determination Date, the Servicer shall deliver or cause to be delivered to the
Trustee by telecopy or electronic mail (or by such other means as the Servicer
and the Trustee may agree from time to time) up to two Remittance Reports with
respect to the related Distribution Date, which Remittance Reports the Trustee
shall use in preparing the statement pursuant to Section 4.03. No later than the
second Business Day following each Determination Date, the Servicer shall
deliver or cause to be delivered to the Trustee in addition to the information
provided on the Remittance Report, such other information reasonably available
to it with respect to the Mortgage Loans as the Trustee may reasonably require
to perform the calculations necessary to make the distributions contemplated by
Section 4.01 and to prepare the statements to Certificateholders contemplated by
Section 4.03. The Trustee shall not be responsible to recompute, recalculate or
verify any information provided to it by the Servicer.
(b) The amount of Advances to be made by the Servicer for
any Distribution Date shall equal, subject to Section 4.04(d), the sum of (i)
the aggregate amount of Monthly Payments (net of the related Servicing Fee), due
during the related Due Period in respect of the Mortgage Loans, which Monthly
Payments were delinquent on a contractual basis as of the Close of Business on
the related Determination Date and (ii) with respect to each REO Property, which
REO Property was acquired during or prior to the related Due Period and as to
which REO Property an REO Disposition did not occur during the related Due
Period, an amount equal to the excess, if any, of the REO Imputed Interest on
such REO Property for the most recently ended calendar month, over the net
income from such REO Property transferred to the Distribution Account pursuant
to Section 3.23 for distribution on such Distribution Date. For purposes of the
preceding sentence, the Monthly Payment on each Balloon Mortgage Loan with a
delinquent Balloon Payment is equal to the assumed monthly payment that would
have been due on the related Due Date based on the original principal
amortization schedule for such Balloon Mortgage Loan.
On or before 3:00 p.m. New York time on the Servicer
Remittance Date, the Servicer shall remit in immediately available funds to the
Trustee for deposit in the Distribution Account an amount equal to the aggregate
amount of Advances, if any, to be made in respect of the Mortgage Loans and REO
Properties for the related Distribution Date either (i) from its own funds or
(ii) from the Collection Account, to the extent of funds held therein for future
distribution (in which case it will cause to be made an appropriate entry in the
records of Collection Account that amounts held for future distribution have
been, as permitted by this Section 4.04, used by the Servicer in discharge of
any such Advance) or (iii) in the form of any combination of (i) and (ii)
aggregating the total amount of Advances to be made by the Servicer with respect
to the Mortgage Loans and REO Properties. Any amounts held for future
distribution used by the Servicer to make an Advance as permitted in the
preceding sentence shall be appropriately reflected in the Servicer's records
and replaced by the Servicer by deposit in the Collection Account on or before
any future Servicer Remittance Date to the extent that the Available Funds for
the related Distribution Date (determined without regard to Advances to be made
on the Servicer Remittance Date) shall be less than the total amount that would
be distributed to the Classes of Certificateholders pursuant to Section 4.01 on
such Distribution
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Date if such amounts held for future distributions had not been so used to make
Advances. The Trustee will provide notice to the Servicer by telecopy by the
Close of Business on any Servicer Remittance Date in the event that the amount
remitted by the Servicer to the Trustee on such date is less than the Advances
required to be made by the Servicer for the related Distribution Date, as set
forth in the related Remittance Report.
(c) The obligation of the Servicer to make such Advances
is mandatory, notwithstanding any other provision of this Agreement but subject
to (d) below, and, with respect to any Mortgage Loan, shall continue until the
Mortgage Loan is paid in full or until all Liquidation Proceeds thereon have
been recovered, or a Final Recovery Determination has been made thereon.
(d) Notwithstanding anything herein to the contrary, no
Advance or Servicing Advance shall be required to be made hereunder by the
Servicer if such Advance or Servicing Advance would, if made, constitute a
Nonrecoverable Advance. The determination by the Servicer that it has made a
Nonrecoverable Advance or that any proposed Advance or Servicing Advance, if
made, would constitute a Nonrecoverable Advance, shall be evidenced by an
Officers' Certificate of the Servicer delivered to the Depositor and the
Trustee.
SECTION 4.05 Pre-Funding Accounts.
(a) No later than the Closing Date, the Trustee shall
establish and maintain two segregated trust accounts that are each Eligible
Accounts, which shall be titled "Group I Pre-Funding Account, Deutsche Bank
National Trust Company, as trustee for the registered holders of Fremont Home
Loan Trust 2004-4, Asset-Backed Certificates, Series 2004-4" (the "Group I
Pre-Funding Account") and "Group II Pre-Funding Account, Deutsche Bank National
Trust Company, as trustee for the registered holders of Fremont Home Loan Trust
2004-4, Asset-Backed Certificates, Series 2004-4" (the "Group II Pre-Funding
Account"). The Trustee shall, promptly upon receipt, deposit in the applicable
Pre-Funding Account and retain therein the Original Group I Pre-Funded Amount
and the Original Group II Pre-Funded Amount, as applicable, remitted on the
Closing Date to the Trustee by the Depositor. Funds deposited in the Pre-Funding
Accounts shall be held in trust by the Trustee for the Certificateholders for
the uses and purposes set forth herein.
(b) The Trustee will invest funds deposited in the
Pre-Funding Accounts as directed by the Depositor in Permitted Investments with
a maturity date (i) no later than the Business Day immediately preceding the
date on which such funds are required to be withdrawn from such account pursuant
to this Agreement, if a Person other than the Trustee or an Affiliate manages or
advises such investment, (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement, if the
Trustee or an Affiliate manages or advises such investment or (iii) within one
Business Day of the Trustee's receipt thereof. For federal income tax purposes,
the Depositor shall be the owner of the Pre-Funding Accounts and shall report
all items of income, deduction, gain or loss arising therefrom. All income and
gain realized from investment of funds deposited in the Pre-Funding Accounts
shall be transferred to the Depositor. The Depositor shall deposit in the
Pre-Funding Accounts the amount of any net loss incurred in respect of any such
Permitted Investment immediately upon
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realization of such loss without any right of reimbursement therefor. At no time
will the Pre-Funding Accounts be assets of any REMIC created hereunder.
(c) Amounts on deposit in the Pre-Funding Accounts shall
be withdrawn by the Trustee as follows:
(i) On any Subsequent Transfer Date, the Trustee shall
withdraw from the Group I Pre-Funding Account or the Group II
Pre-Funding Account, as applicable, an amount equal to 100% of the
Stated Principal Balances of the Subsequent Group I Mortgage Loans or
the Subsequent Group II Mortgage Loans, as applicable, transferred and
assigned to the Trustee for deposit in the Mortgage Pool on such
Subsequent Transfer Date and pay such amount to or upon the order of
the Depositor upon satisfaction of the conditions set forth in Section
2.08 with respect to such transfer and assignment;
(ii) If the amount on deposit in the Pre-Funding Accounts
(exclusive of any investment income therein) has not been reduced to
zero during the Funding Period, on the day immediately following the
termination of the Funding Period, the Trustee shall deposit into the
Distribution Account any amounts remaining in the Pre-Funding Accounts
(exclusive of any investment income therein) for distribution in
accordance with the terms hereof;
(iii) To withdraw any amount not required to be deposited
in the Pre-Funding Accounts or deposited therein in error; and
(iv) To clear and terminate the Pre-Funding Accounts upon
the earlier to occur of (A) the Distribution Date immediately following
the end of the Funding Period and (B) the termination of this
Agreement, with any amounts remaining on deposit therein being paid to
the Holders of the Certificates then entitled to distributions in
respect of principal.
Withdrawals pursuant to clauses (i), (ii) and (iii) shall be treated as
contributions of cash to REMIC 1 on the date of withdrawal.
SECTION 4.06 [Reserved].
SECTION 4.07 Distributions on the REMIC Regular Interests.
(a) On each Distribution Date, the Trustee shall cause in
the following order of priority, the following amounts which shall be deemed 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:
With respect to the Group I Mortgage Loans:
(i) (A) to the Holders of REMIC 1 Regular Interest LT1,
REMIC 1 Regular Interest LT1PF and REMIC 1 Regular Interest LTP in an
amount equal to (A) the Uncertificated Accrued Interest for each REMIC
1 Regular Interest for such
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Distribution Date, plus (B) any amounts in respect thereof remaining
unpaid from previous Distribution Dates; and
(B) to the Holders of REMIC 1 Regular Interest LTP, 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;
(ii) to the Holders of REMIC 1 Regular Interest LT1 and
REMIC 1 Regular Interest LT1PF, in an amount equal to the remainder of
the Available Funds for such Distribution Date after the distributions
made pursuant to clause (1) above, allocated as follows:
(A) to the Holders of REMIC 1 Regular Interest LT1, until
the Uncertificated Principal Balance of REMIC 1 Regular Interest LT1 is reduced
to zero;
(B) to the Holders of REMIC 1 Regular Interest LT1PF,
until the Uncertificated Principal Balance of REMIC 1 Regular Interest LT1PF is
reduced to zero; and
(C) any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-1 Interest).
With respect to the Group II Mortgage Loans:
(i) to the Holders of REMIC 1 Regular Interest LT2 and
REMIC 1 Regular Interest LT2PF in an amount equal to (A) the
Uncertificated Accrued Interest for each REMIC 1 Regular Interest for
such Distribution Date, plus (B) any amounts in respect thereof
remaining unpaid from previous Distribution Dates;
(ii) to the Holders of REMIC 1 Regular Interest LT2 and
REMIC 1 Regular Interest LT2PF, in an amount equal to the remainder of
the Available Funds for such Distribution Date after the distributions
made pursuant to clause (1) above, allocated as follows:
(A) to the Holders of REMIC 1 Regular Interest LT2, until
the Uncertificated Principal Balance of REMIC 1 Regular Interest LT2 is reduced
to zero;
(B) to the Holders of REMIC 1 Regular Interest LT2PF,
until the Uncertificated Principal Balance of REMIC 1 Regular Interest LT2PF is
reduced to zero; and
(C) 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 Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC 1 to the Holders of REMIC 1 Regular Interest
LTP. The payment of the foregoing
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amounts to the Holders of REMIC 1 Regular Interest LTP shall not reduce the
Uncertificated Principal Balance thereof.
On each Distribution Date, the Trustee shall cause in the
following order of priority, the following amounts which shall be deemed 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:
first, to the extent of Available Funds, to Holders of REMIC 2
Regular Interest LTAA, REMIC 2 Regular Interest LTI-A1, REMIC 2 Regular Interest
LTI-A2, REMIC 2 Regular Interest LTII-A1, REMIC 2 Regular Interest LTII-A2,
REMIC 2 Regular Interest LTII-A3, REMIC 2 Regular Interest LTM1, REMIC 2 Regular
Interest LTM2, REMIC 2 Regular Interest LTM3, REMIC 2 Regular Interest LTM4,
REMIC 2 Regular Interest LTM5, REMIC 2 Regular Interest LTM6, REMIC 2 Regular
Interest LTM7, REMIC 2 Regular Interest LTM8, REMIC 2 Regular Interest LTM9,
REMIC 2 Regular Interest LTM10, REMIC 2 Regular Interest LTB, REMIC 2 Regular
Interest LTZZ and REMIC 2 Regular Interest LTP, pro rata, in an amount equal to
(A) the Uncertificated Accrued Interest for such Distribution Date, plus (B) any
amounts in respect thereof remaining unpaid from previous Distribution Dates.
Amounts payable as Uncertificated Accrued Interest in respect of REMIC 2 Regular
Interest LTZZ shall be reduced and deferred when the REMIC 2
Overcollateralization Amount is less than the REMIC 2 Overcollateralization
Target Amount, by the lesser of (x) the amount of such difference and (y) the
Maximum Uncertificated Accrued Interest Deferral Amount and such amount will be
payable to the Holders of REMIC 2 Regular Interest LTIA1, REMIC 2 Regular
Interest LTIA2, REMIC 2 Regular LTIIA1, REMIC 2 Regular Interest LTIIA2, REMIC 2
Regular Interest LTIIA3, REMIC 2 Regular Interest LTM1, REMIC 2 Regular Interest
LTM2, REMIC 2 Regular Interest LTM3, REMIC 2 Regular Interest LTM4, REMIC 2
Regular Interest LTM5, REMIC 2 Regular Interest LTM6, REMIC 2 Regular Interest
LTM7, REMIC 2 Regular Interest LTM8, REMIC 2 Regular Interest LTM9, REMIC 2
Regular Interest LTM10 and REMIC 2 Regular Interest LTB in the same proportion
as the Overcollaterization Deficiency Amount is allocated to the Corresponding
Certificates and the Uncertificated Principal Balance of the REMIC 2 Regular
Interest LTZZ shall be increased by such amount; and
second, to the Holders of REMIC 2 Regular Interests, in an
amount equal to the remainder of the Available Funds for such Distribution Date
after the distributions made pursuant to clause (i) above, allocated as follows:
98.00% of such remainder to the Holders of REMIC 2 Regular
Interest LTAA and REMIC 2 Regular Interest LTP, until the Uncertificated
Principal Balance of such Uncertificated REMIC 2 Regular Interest is reduced to
zero; provided, however, that REMIC 2 Regular Interest LTP shall not be reduced
until the Distribution Date immediately following the expiration of the latest
Prepayment Charge as identified on the Prepayment Charge Schedule or any
Distribution Date thereafter, at which point such amount shall be distributed to
REMIC 2 Regular Interest LTP, until $100 has been distributed pursuant to this
clause;
2.00% of such remainder, first, to the Holders of REMIC 2
Regular Interest LTI-A1, REMIC 2 Regular Interest LTI-A2, REMIC 2 Regular
Interest LTII-A1, REMIC 2 Regular
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Interest LTII-A2, REMIC 2 Regular Interest LTII-A3, REMIC 2 Regular Interest
LTM1, REMIC 2 Regular Interest LTM2, REMIC 2 Regular Interest LTM3, REMIC 2
Regular Interest LTM4, REMIC 2 Regular Interest LTM5, REMIC 2 Regular Interest
LTM6, REMIC 2 Regular Interest LTM7, REMIC 2 Regular Interest LTM8, REMIC 2
Regular Interest LTM9, REMIC 2 Regular Interest LTM10 and REMIC 2 Regular
Interest LTB, and in the same proportion as principal payments are allocated to
the Corresponding Certificates, until the Uncertificated Principal Balances of
such REMIC 2 Regular Interests are reduced to zero and second; to the Holders of
REMIC 2 Regular Interest LTZZ, until the Uncertificated Principal Balances of
such REMIC 2 Regular Interest is reduced to zero; and
any remaining amount to the Holders of the Class R Certificates (in
respect of the Class R-1 Interest);
provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Release Amount shall be allocated
to Holders of (i) REMIC 2 Regular Interest LTAA and REMIC 2 Regular Interest
LTP, in that order and (ii) REMIC 2 Regular Interest LTZZ, respectively;
provided that REMIC 2 Regular Interest LTP shall not be reduced until the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter, at which point such amount shall be distributed to REMIC 2 Regular
Interest LT1P, until $100 has been distributed pursuant to this clause.
SECTION 4.08 Allocation of Realized Losses.
(a) All Realized Losses on the Mortgage Loans allocated
to any Regular Certificate shall be allocated by the Trustee on each
Distribution Date as follows: first, to Net Monthly Excess Cashflow; second, to
the Class C Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; third, to the Class B Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; fourth, to the Class M-10
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; fifth, to the Class M-9 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; sixth, to the Class M-8 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero;
seventh, to the Class M-7 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; eighth, to the Class M-6 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero; ninth, to
the Class M-5 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; tenth, to the Class M-4 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; eleventh, to the
Class M-3 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; twelfth, to the Class M-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; thirteenth, to the Class M-1
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; and fourteenth, with respect to any remaining realized losses on the
Group I Mortgage Loans, to the Class I-A2 Certificates. All Realized Losses to
be allocated to the Certificate Principal Balances on any Distribution Date
shall be so allocated after the actual distributions to be made on such date as
provided above. All references above to the Certificate Principal Balance of any
Class of Certificates shall be to the Certificate Principal Balance of such
Class immediately prior to the relevant Distribution Date, before reduction
thereof by any
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Realized Losses, in each case to be allocated to such Class of Certificates, on
such Distribution Date.
Any allocation of Realized Losses to a Class I-A2 Certificates
or a Mezzanine Certificate on any Distribution Date shall be made by reducing
the Certificate Principal Balance thereof by the amount so allocated; any
allocation of Realized Losses to a Class C Certificates shall be made first by
reducing the amount otherwise payable in respect thereof pursuant to Section
4.01(d)(xxvi). No allocations of any Realized Losses shall be made to the
Certificate Principal Balances of the Class A Certificates (except for the Class
I-A2 Certificates) or the Class P Certificates.
(b) All Realized Losses on the Group I Mortgage Loans
shall be allocated by the Trustee on each Distribution Date to the REMIC 1
Regular Interest LT1 and REMIC 1 Regular Interest LT1PF until the Uncertificated
Principal Balance of each such REMIC 1 Regular Interest has been reduced to
zero; provided however, with respect to the first Distribution Date, all
Realized Losses on the Initial Group I Mortgage Loans shall be allocated to
REMIC 1 Regular Interest LT1 until the Uncertificated Principal Balance of each
such REMIC 1 Regular Interest has been reduced to zero, and all Realized Losses
on the Subsequent Group I Mortgage Loans shall be allocated to REMIC 1 Regular
Interest LT1PF until the Uncertificated Principal Balance thereof has been
reduced to zero. All Realized Losses on the Group II Mortgage Loans shall be
allocated by the Trustee on each Distribution Date to the REMIC 1 Regular
Interest LT2 and REMIC 1 Regular Interest LT2PF until the Uncertificated
Principal Balance of each such REMIC 1 Regular Interest has been reduced to
zero; provided however, with respect to the first Distribution Date, all
Realized Losses on the Initial Group II Mortgage Loans shall be allocated to
REMIC 1 Regular Interest LT2 until the Uncertificated Principal Balance of each
such REMIC 1 Regular Interest has been reduced to zero, and all Realized Losses
on the Subsequent Group II Mortgage Loans shall be allocated to REMIC 1 Regular
Interest LT2PF until the Uncertificated Principal Balance thereof has been
reduced to zero.
(c) All Realized Losses on the Mortgage Loans shall be
deemed to have been allocated in the specified percentages, as follows: first,
to Uncertificated Accrued Interest payable to the REMIC 2 Regular Interest LTAA
and REMIC 2 Regular Interest LTZZ up to an aggregate amount equal to the REMIC 2
Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA and REMIC 2
Regular Interest LTZZ up to an aggregate amount equal to the REMIC 2 Principal
Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest
LTB and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LTB has been
reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LTAA, REMIC 2 Regular Interest LTM10 and REMIC 2 Regular
Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 2 Regular Interest LTM10 has been reduced to zero; fifth, to
the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2
Regular Interest LTM9 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest LTM9 has been reduced to zero; sixth, to the Uncertificated Principal
Balances of REMIC 2 Regular Interest LTAA,
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REMIC 2 Regular Interest LTM8 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest LTM8 has been reduced to zero; seventh, to the Uncertificated Principal
Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM7 and
REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LTM7 has been
reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LTAA, REMIC 2 Regular Interest LTM6 and REMIC 2 Regular
Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 2 Regular Interest LTM6 has been reduced to zero; ninth, to the
Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2
Regular Interest LTM5 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest LTM5 has been reduced to zero; tenth, to the Uncertificated Principal
Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM4 and
REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LTM4 has been
reduced to zero; eleventh, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LTAA, REMIC 2 Regular Interest LTM3 and REMIC 2 Regular
Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 2 Regular Interest LTM3 has been reduced to zero; twelfth, to
the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2
Regular Interest LTM2 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest LTM2 has been reduced to zero; and thirteenth, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest
LTM1 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LTM1 has been
reduced to zero.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01 The Certificates.
Each of the Floating Rate Certificates, the Class P
Certificates, the Class C Certificates and the Residual Certificates shall be
substantially in the forms annexed hereto as exhibits, and shall, on original
issue, be executed, authenticated and delivered by the Trustee to or upon the
order of the Depositor concurrently with the sale and assignment to the Trustee
of the Trust Fund. The Floating Rate Certificates shall be initially evidenced
by one or more Certificates representing a Percentage Interest with a minimum
dollar denomination of $25,000 and integral dollar multiples of $1.00 in excess
thereof, except that one Certificate of each such Class of Certificates may be
in a different denomination so that the sum of the denominations of all
outstanding Certificates of such Class shall equal the Certificate Principal
Balance of such Class on the Closing Date. The Class P Certificates, the Class C
Certificates and the Residual Certificates are issuable in any Percentage
Interests; provided, however, that the sum of all such percentages for each such
Class totals 100% and no more than ten Certificates of each Class may be issued
and outstanding at any one time.
The Certificates shall be executed on behalf of the Trust by
manual or facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless such Certificate shall have been
manually authenticated by the Trustee substantially in the form provided for
herein, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Subject to Section 5.02(c), the Floating Rate
Certificates shall be Book-Entry Certificates. The other Classes of Certificates
shall not be Book-Entry Certificates.
SECTION 5.02 Registration of Transfer and Exchange of
Certificates.
(a) The Certificate Registrar shall cause to be kept at
the Corporate Trust Office a Certificate Register in which, subject to such
reasonable regulations as it may prescribe, the Certificate Registrar shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. The Trustee shall initially serve as
Certificate Registrar for the purpose of registering Certificates and transfers
and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate
at any office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph which office shall initially be the offices
of the Trustee's agent located at c/o DTC
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Transfer Agent Services, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ Entrance, New York, New
York 10041 and, in the case of a Residual Certificate, upon satisfaction of the
conditions set forth below, the Trustee on behalf of the Trust shall execute,
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same aggregate Percentage
Interest.
At the option of the Certificateholders, Certificates may be
exchanged for other Certificates in authorized denominations and the same
aggregate Percentage Interests, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute on behalf of the Trust and
authenticate and deliver the Certificates which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
registration of transfer or exchange shall (if so required by the Trustee or the
Certificate Registrar) be duly endorsed by, or be accompanied by a written
instrument of transfer satisfactory to the Trustee and the Certificate Registrar
duly executed by, the Holder thereof or his attorney duly authorized in writing.
In addition, (i) with respect to each Class R Certificate, the holder thereof
may exchange, in the manner described above, such Class R Certificate for three
separate certificates, each representing such holder's respective Percentage
Interest in the Class R-1 Interest, the Class R-2 Interest and the Class R-3
Interest that was evidenced by the Class R Certificate being exchanged and (ii)
with respect to each Class R-X Certificate, the holder thereof may exchange, in
the manner described above, such Class R-X Certificate for six separate
certificates, each representing such holder's respective Percentage Interest in
the Class R-4 Interest, Class R-5 Interest, Class R-6 Interst, Class R-7
Interest, the Class R-8 Interest and the Class R-9 Interest that was evidenced
by the Class R-X Certificate being exchanged.
(b) Except as provided in paragraph (c) below, the
Book-Entry Certificates shall at all times remain registered in the name of the
Depository or its nominee and at all times: (i) registration of such
Certificates may not be transferred by the Trustee except to another Depository;
(ii) the Depository shall maintain book-entry records with respect to the
Certificate Owners and with respect to ownership and transfers of such
Certificates; (iii) ownership and transfers of registration of such Certificates
on the books of the Depository shall be governed by applicable rules established
by the Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee shall for
all purposes deal with the Depository as representative of the Certificate
Owners of the Certificates for purposes of exercising the rights of Holders
under this Agreement, and requests and directions for and votes of such
representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; (vi) the Trustee may rely and shall be
fully protected in relying upon information furnished by the Depository with
respect to its Depository Participants and furnished by the Depository
Participants with respect to indirect participating firms and Persons shown on
the books of such indirect participating firms as direct or indirect Certificate
Owners; and (vii) the direct participants of the Depository shall have no rights
under this Agreement under or with respect to any of the Certificates held on
their behalf by the Depository, and the Depository may be treated by the Trustee
and its agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
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All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures. The parties hereto
are hereby authorized to execute a Letter of Representations with the Depository
or take such other action as may be necessary or desirable to register a
Book-Entry Certificate to the Depository. In the event of any conflict between
the terms of any such Letter of Representation and this Agreement, the terms of
this Agreement shall control.
(c) If (i)(x) the Depository or the Depositor advises the
Trustee in writing that the Depository is no longer willing or able to discharge
properly its responsibilities as Depository and (y) the Trustee or the Depositor
is unable to locate a qualified successor or (ii) after the occurrence of a
Servicer Event of Termination, the Certificate Owners of the Book-Entry
Certificates representing Percentage Interests of such Classes aggregating not
less than 51% advise the Trustee and Depository through the Financial
Intermediaries and the Depository Participants in writing that the continuation
of a book-entry system through the Depository to the exclusion of definitive,
fully registered certificates (the "Definitive Certificates") to Certificate
Owners is no longer in the best interests of the Certificate Owners. Upon
surrender to the Certificate Registrar of the Book-Entry Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall, in the case of (i) and (ii) above, execute on
behalf of the Trust and authenticate the Definitive Certificates. Neither the
Depositor nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates, the Trustee,
the Certificate Registrar, the Servicer, any Paying Agent and the Depositor
shall recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
(d) No transfer, sale, pledge or other disposition of any
Class M-8 Certificate, Class M-9 Certificate, Class M-10 Certificate, Class B
Certificate, Class C Certificate, Class P Certificate or Residual Certificate
(the "Private Certificates") 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 (i) the initial transfer of any such Certificate by the
Depositor to an Affiliate of the Depositor, (ii) the transfer of any such Class
C, Class P or Residual Certificate to the issuer under the Indenture or the
indenture trustee under the Indenture or (iii) a transfer of any such Class C,
Class P or Residual Certificate from the issuer under the Indenture or the
indenture trustee under the Indenture to the Depositor or an Affiliate of the
Depositor) (i) unless such transfer is made in reliance upon Rule 144A (as
evidenced by the investment letter delivered to the Trustee, in substantially
the form attached hereto as Exhibit J) under the 1933 Act, the Trustee and the
Depositor shall require a written Opinion of Counsel (which may be in-house
counsel) acceptable to and in form and substance reasonably satisfactory to the
Trustee and the Depositor that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall not be an expense of the Trustee or the Depositor or (ii) the Trustee
135
shall require the transferor to execute a transferor certificate (in
substantially the form attached hereto as Exhibit L) and the transferee to
execute an investment letter (in substantially the form attached hereto as
Exhibit J) acceptable to and in form and substance reasonably satisfactory to
the Depositor and the Trustee certifying to the Depositor and the Trustee the
facts surrounding such transfer, which investment letter shall not be an expense
of the Trustee or the Depositor. The Holder of a Private Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee and
the Depositor against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
Notwithstanding the foregoing, in the event of any such
transfer of any Ownership Interest in any Private Certificate that is a
Book-Entry Certificate, except with respect to the initial transfer of any such
Ownership Interest by the Depositor, such transfer shall be required to be made
in reliance upon Rule 144A under the 1933 Act, and the transferor will be deemed
to have made each of the transferor representations and warranties set forth
Exhibit L hereto in respect of such interest as if it was evidenced by a
Definitive Certificate and the transferee will be deemed to have made each of
the transferee representations and warranties set forth Exhibit J hereto in
respect of such interest as if it was evidenced by a Definitive Certificate. The
Certificate Owner of any such Ownership Interest in any such Book-Entry
Certificate desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee and the Depositor against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.
Notwithstanding the foregoing, no certification or Opinion of
Counsel described above in this Section 5.02(d) will be required in connection
with the transfer, on the Closing Date, of any Residual Certificate by the
Depositor to an "accredited investor" within the meaning of Rule 501 of the 1933
Act.
No transfer of a Class C Certificate, Class P Certificate or
Residual Certificate or any interest therein shall be made to any Plan subject
to ERISA or Section 4975 of the Code, any Person acting, directly or indirectly,
on behalf of any such Plan or any Person acquiring such Certificates with "Plan
Assets" of a Plan within the meaning of the Department of Labor regulation
promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets"), as certified by such
transferee in the form of Exhibit M, unless the Trustee is provided with an
Opinion of Counsel for the benefit of the Depositor, the Trustee and the
Servicer and on which they may rely which establishes to the satisfaction of the
Trustee that the purchase of such Certificates is permissible under applicable
law, will not constitute or result in any prohibited transaction under ERISA or
Section 4975 of the Code and will not subject the Depositor, the Servicer, the
Trustee or the Trust Fund to any obligation or liability (including obligations
or liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Depositor, the Servicer, the Trustee or the Trust Fund. Neither a
certification nor an Opinion of Counsel will be required in connection with (i)
the initial transfer of any such Certificate by the Depositor to an affiliate of
the Depositor, (ii) the transfer of any such Class C Certificate, Class P
Certificate or Residual Certificate to the issuer under the Indenture or the
indenture trustee under the Indenture or (iii) a transfer of any such Class C
Certificate, Class P Certificate or Residual Certificate from the issuer under
the Indenture or the indenture trustee under the Indenture to the Depositor or
an Affiliate of the
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Depositor (in which case, the Depositor or any Affiliate thereof shall have
deemed to have represented that such Affiliate is not a Plan or a Person
investing Plan Assets) and the Trustee shall be entitled to conclusively rely
upon a representation (which, upon the request of the Trustee, shall be a
written representation) from the Depositor of the status of such transferee as
an affiliate of the Depositor.
Each Transferee of a Mezzanine Certificate or Class B
Certificate will be deemed to have represented by virtue of its purchase or
holding of such Certificate (or interest therein) (or in the case a Class B
Certificate, must represent) that either (a) such Transferee is not a Plan or
purchasing such Certificate with Plan Assets, (b) in the case of Certificates
other than the Class B Certificates it has acquired and is holding such
Certificate in reliance on Prohibited Transaction Exemption ("PTE") 90-59, 55
Fed. Reg. 36724 (September 6, 1990), as amended by PTE 97-34, 62 Fed. Reg. 39021
(July 21, 1997), PTE 2000-58, 65 Fed. Reg. 67765 (November 13, 2000) and PTE
2002-41, 67 Fed. Reg. 54487 (August 22, 2002) (the "Exemption"), and that it
understands that there are certain conditions to the availability of the
Exemption including that such Certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by a Rating Agency or (c)
the following conditions are satisfied: (i) such Transferee is an insurance
company, (ii) the source of funds used to purchase or hold such Certificate (or
interest therein) is an "insurance company general account" (as defined in U.S.
Department of Labor Prohibited Transaction Class Exemption ("PTCE") 95-60, and
(iii) the conditions set forth in Sections I and III of PTCE 95-60 have been
satisfied.
If any Mezzanine Certificate or Private Certificate or any
interest therein is acquired or held in violation of the provisions of the two
preceding paragraphs, the next preceding permitted beneficial owner will be
treated as the beneficial owner of that Certificate retroactive to the date of
transfer to the purported beneficial owner. Any purported beneficial owner whose
acquisition or holding of any such Certificate or interest therein was effected
in violation of the provisions of the two preceding paragraphs shall indemnify
and hold harmless the Depositor, the Servicer, the Trustee and the Trust from
and against any and all liabilities, claims, costs or expenses incurred by those
parties as a result of that acquisition or holding.
Each Person who has or who acquires any Ownership Interest in
a Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Depositor or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (v) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in a Residual Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall be a Permitted Transferee and
shall promptly notify the Trustee of any change or impending change in
its status as a Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in a
Residual Certificate unless such Ownership Interest is a pro rata
undivided interest.
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(iii) In connection with any proposed transfer of any
Ownership Interest in a Residual Certificate, the Trustee shall as a
condition to registration of the transfer, require delivery to it, in
form and substance satisfactory to it, of each of the following:
(A) an affidavit in the form of Exhibit K hereto from the
proposed transferee to the effect that such transferee is a Permitted Transferee
and that it is not acquiring its Ownership Interest in the Residual Certificate
that is the subject of the proposed transfer as a nominee, trustee or agent for
any Person who is not a Permitted Transferee; and
(B) a covenant of the proposed transferee to the effect
that the proposed transferee agrees to be bound by and to abide by the transfer
restrictions applicable to the Residual Certificates.
(iv) Any attempted or purported transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of
this Section shall be absolutely null and void and shall vest no rights
in the purported transferee. If any purported transferee shall, in
violation of the provisions of this Section, become a Holder of a
Residual Certificate, then the prior Holder of such Residual
Certificate that is a Permitted Transferee shall, upon discovery that
the registration of transfer of such Residual Certificate was not in
fact permitted by this Section, be restored to all rights as Holder
thereof retroactive to the date of registration of transfer of such
Residual Certificate. The Trustee shall be under no liability to any
Person for any registration of transfer of a Residual Certificate that
is in fact not permitted by this Section or for making any
distributions due on such Residual Certificate to the Holder thereof or
taking any other action with respect to such Holder under the
provisions of this Agreement so long as the Trustee received the
documents specified in clause (iii). The Trustee shall be entitled to
recover from any Holder of a Residual Certificate that was in fact not
a Permitted Transferee at the time such distributions were made all
distributions made on such Residual Certificate. Any such distributions
so recovered by the Trustee shall be distributed and delivered by the
Trustee to the prior Holder of such Residual Certificate that is a
Permitted Transferee.
(v) If any Person other than a Permitted Transferee
acquires any Ownership Interest in a Residual Certificate in violation
of the restrictions in this Section, then the Trustee shall have the
right but not the obligation, without notice to the Holder of such
Residual Certificate or any other Person having an Ownership Interest
therein, to notify the Depositor to arrange for the sale of such
Residual Certificate. The proceeds of such sale, net of commissions
(which may include commissions payable to the Depositor or its
affiliates in connection with such sale), expenses and taxes due, if
any, will be remitted by the Trustee to the previous Holder of such
Residual Certificate that is a Permitted Transferee, except that in the
event that the Trustee determines that the Holder of such Residual
Certificate may be liable for any amount due under this Section or any
other provisions of this Agreement, the Trustee may withhold a
corresponding amount from such remittance as security for such claim.
The terms and conditions of any sale under this clause (v) shall be
determined in the sole discretion of the Trustee and it shall not be
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liable to any Person having an Ownership Interest in a Residual
Certificate as a result of its exercise of such discretion.
(vi) If any Person other than a Permitted Transferee
acquires any Ownership Interest in a Residual Certificate in violation
of the restrictions in this Section, then the Trustee upon receipt of
reasonable compensation will provide to the Internal Revenue Service,
and to the persons specified in Sections 860E(e)(3) and (6) of the
Code, information needed to compute the tax imposed under Section
860E(e)(5) of the Code on transfers of residual interests to
disqualified organizations.
The foregoing provisions of this Section shall cease to apply
to transfers occurring on or after the date on which there shall have been
delivered to the Trustee, in form and substance satisfactory to the Trustee, (i)
written notification from each Rating Agency that the removal of the
restrictions on transfer set forth in this Section will not cause such Rating
Agency to downgrade its rating of the Certificates and (ii) an Opinion of
Counsel to the effect that such removal will not cause any REMIC created
hereunder to fail to qualify as a REMIC.
(e) No service charge shall be made for any registration
of transfer or exchange of Certificates of any Class, but the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
All Certificates surrendered for registration of transfer or
exchange shall be canceled by the Certificate Registrar and disposed of pursuant
to its standard procedures.
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the
Certificate Registrar or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (ii) there
is delivered to the Trustee, the Depositor and the Certificate Registrar such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Trustee or the Certificate Registrar that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute on behalf of the Trust, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Trustee or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee and the Certificate Registrar) in
connection therewith. Any duplicate Certificate issued pursuant to this Section,
shall constitute complete and indefeasible evidence of ownership in the Trust,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
SECTION 5.04 Persons Deemed Owners.
The Servicer, the Depositor, the Trustee, the Certificate
Registrar, any Paying Agent and any agent of the Servicer, the Depositor, the
Trustee, the Certificate Registrar or any
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Paying Agent may treat the Person, including a Depository, in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 4.01 and for all other purposes
whatsoever, and none of the Servicer, the Trust, the Trustee nor any agent of
any of them shall be affected by notice to the contrary.
SECTION 5.05 Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to
Certificateholders from the Distribution Account pursuant to Section 4.01 and
shall report the amounts of such distributions to the Trustee. The duties of the
Paying Agent may include the obligation (i) to withdraw funds from the
Collection Account pursuant to Section 3.11(a) and for the purpose of making the
distributions referred to above and (ii) to distribute statements and provide
information to Certificateholders as required hereunder. The Paying Agent
hereunder shall at all times be an entity duly organized and validly existing
under the laws of the United States of America or any state thereof, authorized
under such laws to exercise corporate trust powers and subject to supervision or
examination by federal or state authorities. The Paying Agent shall initially be
the Trustee. The Trustee may appoint a successor to act as Paying Agent, which
appointment shall be reasonably satisfactory to the Depositor.
(b) The Trustee shall cause the Paying Agent (if other
than the Trustee) to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee that such Paying Agent shall hold
all sums, if any, held by it for payment to the Certificateholders in trust for
the benefit of the Certificateholders entitled thereto until such sums shall be
paid to such Certificateholders and shall agree that it shall comply with all
requirements of the Code regarding the withholding of payments in respect of
Federal income taxes due from Certificate Owners and otherwise comply with the
provisions of this Agreement applicable to it.
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ARTICLE VI
THE SERVICER AND THE DEPOSITOR
SECTION 6.01 Liability of the Servicer and the Depositor.
The Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically imposed upon and undertaken by
Servicer herein. The Depositor shall be liable in accordance herewith only to
the extent of the obligations specifically imposed upon and undertaken by the
Depositor.
SECTION 6.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer or the Depositor.
Any entity into which the Servicer or Depositor may be merged
or consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Servicer or the Depositor shall be a party, or any
corporation succeeding to the business of the Servicer or the Depositor, shall
be the successor of the Servicer or the Depositor, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor Servicer shall satisfy
all the requirements of Section 7.02 with respect to the qualifications of a
successor Servicer.
SECTION 6.03 Limitation on Liability of the Servicer and
Others.
Neither the Servicer or the Depositor nor any of the directors
or officers or employees or agents of the Servicer or the Depositor shall be
under any liability to the Trust or the Certificateholders for any action taken
or for refraining from the taking of any action by the Servicer or the Depositor
in good faith pursuant to this Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Servicer, the Depositor or
any such Person against any liability which would otherwise be imposed by reason
of its willful misfeasance, bad faith or negligence in the performance of duties
of the Servicer or the Depositor, as the case may be, or by reason of its
reckless disregard of its obligations and duties of the Servicer or the
Depositor, as the case may be, hereunder; provided, further, that this provision
shall not be construed to entitle the Servicer to indemnity in the event that
amounts advanced by the Servicer to retire any senior lien exceed Liquidation
Proceeds (in excess of related liquidation expenses) realized with respect to
the related Mortgage Loan. The Servicer and any director or officer or employee
or agent of the Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Servicer and the Depositor, and any director or officer
or employee or agent of the Servicer or the Depositor, shall be indemnified by
the Trust and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense related to any specific Mortgage Loan
or Mortgage Loans (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) and any loss, liability or
expense incurred by reason of its willful misfeasance, bad faith or negligence
in the performance of duties
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hereunder or by reason of its reckless disregard of obligations and duties
hereunder. The Servicer or the Depositor may undertake any such action which it
may deem necessary or desirable in respect of this Agreement, and the rights and
duties of the parties hereto and the interests of the Certificateholders
hereunder. In such event, unless the Depositor or the Servicer acts without the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights, the reasonable legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust and
the Servicer shall be entitled to be reimbursed therefor from the Collection
Account as and to the extent provided in Section 3.11, any such right of
reimbursement being prior to the rights of the Certificateholders to receive any
amount in the Collection Account. The Servicer's right to indemnity or
reimbursement pursuant to this Section shall survive any resignation or
termination of the Servicer pursuant to Section 6.04 or 7.01 with respect to any
losses, expenses, costs or liabilities arising prior to such resignation or
termination (or arising from events that occurred prior to such resignation or
termination). This paragraph shall apply to the Servicer solely in its capacity
as Servicer hereunder and in no other capacities.
SECTION 6.04 Servicer Not to Resign.
The Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination pursuant to the
preceding sentence permitting the resignation of the Servicer shall be evidenced
by an Opinion of Counsel to such effect obtained at the expense of the Servicer
and delivered to the Trustee. No resignation of the Servicer shall become
effective until the Trustee or a successor servicer shall have assumed the
Servicer's responsibilities, duties, liabilities (other than those liabilities
arising prior to the appointment of such successor) and obligations under this
Agreement.
Except as expressly provided herein, the Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract with, or authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by the Servicer hereunder. The foregoing prohibition on assignment
shall not prohibit the Servicer from designating a Sub-Servicer as payee of any
indemnification amount payable to the Servicer hereunder; provided, however, no
Sub-Servicer shall be a third-party beneficiary hereunder and the parties hereto
shall not be required to recognize any Subservicer as an indemnitee under this
Agreement.
The Trustee and the Depositor hereby specifically (i) consent
to the pledge and assignment by the Servicer of all of the Servicer's right,
title and interest in, to and under this Agreement to the Servicing Rights
Pledgee, for the benefit of certain lenders and (ii) provided that no Servicer
Event of Termination exists, agree that upon delivery to the Trustee by the
Servicing Rights Pledgee of a letter signed by the Servicer whereunder the
Servicer shall resign as Servicer under this Agreement, the Trustee shall, in
accordance with Section 7.02, appoint the Servicing Rights Pledgee or its
designee as successor Servicer, provided that at the time of such appointment,
the Servicing Rights Pledgee or such designee meets the requirements of a
successor Servicer pursuant to Section 7.02(a) hereof and agrees to be subject
to the terms of this Agreement. If, pursuant to any provision hereof, the duties
of the Servicer are transferred to a
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successor servicer, the entire amount of the Servicing Fee and other
compensation payable to the Servicer pursuant hereto shall thereafter be payable
to such successor servicer.
SECTION 6.05 Delegation of Duties.
In the ordinary course of business, the Servicer at any time
may delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01. Such delegation shall not relieve
the Servicer of its liabilities and responsibilities with respect to such duties
and shall not constitute a resignation within the meaning of Section 6.04.
Except as provided in Section 3.02, no such delegation is permitted that results
in the delegee subservicing any Mortgage Loans. The Servicer shall provide the
Trustee with 60 days prior written notice prior to the delegation of any of its
duties to any Person other than any of the Servicer's Affiliates or their
respective successors and assigns.
SECTION 6.06 [Reserved].
SECTION 6.07 Inspection.
The Servicer, in its capacity as Servicer, shall afford the
Trustee, upon reasonable notice, during normal business hours, access to all
records maintained by the Servicer in respect of its rights and obligations
hereunder and access to officers of the Servicer responsible for such
obligations. Upon request, the Servicer shall furnish to the Trustee its most
recent publicly available financial statements and such other information
relating to its capacity to perform its obligations under this Agreement.
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ARTICLE VII
DEFAULT
SECTION 7.01 Servicer Events of Termination.
(a) If any one of the following events ("Servicer Events
of Termination") shall occur and be continuing:
(i) (A) The failure by the Servicer to make any Advance;
or (B) any other failure by the Servicer to deposit in the Collection
Account or Distribution Account any deposit required to be made under
the terms of this Agreement which continues unremedied for a period of
one Business Day after the date upon which written notice of such
failure shall have been given to the Servicer by the Trustee or to the
Servicer and the Trustee by any Holders of a Regular Certificate
evidencing at least 25% of the Voting Rights; or
(ii) The failure by the Servicer to make any required
Servicing Advance which failure continues unremedied for a period of 30
days, or the failure by the Servicer duly to observe or perform, in any
material respect, any other covenants, obligations or agreements of the
Servicer as set forth in this Agreement, which failure continues
unremedied for a period of 30 days, after the date (A) on which written
notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Trustee or to the Trustee by any
Holders of a Regular Certificate evidencing at least 25% of the Voting
Rights or (B) of actual knowledge of such failure by a Servicing
Officer of the Servicer; or
(iii) The entry against the Servicer of a decree or order
by a court or agency or supervisory authority having jurisdiction in
the premises for the appointment of a trustee, conservator, receiver or
liquidator in any insolvency, conservatorship, receivership,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for
a period of 60 days; or
(iv) The Servicer shall voluntarily go into liquidation,
consent to the appointment of a conservator or receiver or liquidator
or similar person in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating to the
Servicer or of or relating to all or substantially all of its property;
or a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a
conservator, receiver, liquidator or similar person in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer and such decree or order shall
have remained in force undischarged, unbonded or unstayed for a period
of 60 days; or the Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make
an
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assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations; or
(v) Any failure by the Servicer of the Servicer
Termination Test;
(b) then, and in each and every such case, so long as a
Servicer Event of Termination shall not have been remedied within the applicable
grace period, (x) with respect solely to clause (i)(A) above, if such Advance is
not made by 11:00 A.M., New York time, on the Business Day immediately following
the Servicer Remittance Date (provided the Trustee shall give the Servicer
notice of such failure to advance by 5:00 P.M. New York time on the Servicer
Remittance Date), the Trustee shall terminate all of the rights and obligations
of the Servicer under this Agreement, to the extent permitted by law, and in and
to the Mortgage Loans and the proceeds thereof and the Trustee, or a successor
servicer appointed in accordance with Section 7.02, shall immediately make such
Advance and assume, pursuant to Section 7.02, the duties of a successor Servicer
and (y) in the case of (i)(B), (ii), (iii), (iv) and (v) above, the Trustee
shall, at the direction of the Holders of each Class of Regular Certificates
evidencing Percentage Interests aggregating not less than 51%, by notice then
given in writing to the Servicer (and to the Trustee if given by Holders of
Certificates), terminate all of the rights and obligations of the Servicer as
servicer under this Agreement. Any such notice to the Servicer shall also be
given to each Rating Agency, the Depositor and the Servicer. On or after the
receipt by the Servicer (and by the Trustee if such notice is given by the
Holders) of such written notice, all authority and power of the Servicer under
this Agreement, whether with respect to the Certificates or the Mortgage Loans
or otherwise, shall pass to and be vested in the Trustee pursuant to and under
this Section; and, without limitation, and the Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of each Mortgage Loan and related documents or otherwise. The
Servicer agrees to cooperate with the Trustee (or the applicable successor
Servicer) in effecting the termination of the responsibilities and rights of the
Servicer hereunder, including, without limitation, the delivery to the Trustee
of all documents and records requested by it to enable it to assume the
Servicer's functions under this Agreement within ten Business Days subsequent to
such notice, the transfer within one Business Day subsequent to such notice to
the Trustee (or the applicable successor Servicer) for the administration by it
of all cash amounts that shall at the time be held by the Servicer and to be
deposited by it in the Collection Account, the Distribution Account, any REO
Account or any Servicing Account or that have been deposited by the Servicer in
such accounts or thereafter received by the Servicer with respect to the
Mortgage Loans or any REO Property received by the Servicer. All reasonable
costs and expenses (including attorneys' fees) incurred in connection with
transferring the Mortgage Files to the successor Servicer and amending this
Agreement to reflect such succession as Servicer pursuant to this Section shall
be paid by the predecessor Servicer (or if the predecessor Servicer is the
Trustee, the initial Servicer) upon presentation of reasonable documentation of
such costs and expenses and to the extent not paid by the Servicer, by the
Trust.
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SECTION 7.02 Trustee to Act; Appointment of Successor.
(a) Within 90 days of the time the Servicer (and the
Trustee, if notice is sent by the Holders) receives a notice of termination
pursuant to Section 7.01 or 6.04, the Trustee (or such other successor Servicer
as is approved in accordance with this Agreement) shall be the successor in all
respects to the Servicer in its capacity as servicer under this Agreement and
the transactions set forth or provided for herein and shall be subject to all
the responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof arising on and after its succession.
Notwithstanding the foregoing, the parties hereto agree that the Trustee, in its
capacity as successor Servicer, immediately will assume all of the obligations
of the Servicer to make advances. Notwithstanding the foregoing, the Trustee, in
its capacity as successor Servicer, shall not be responsible for the lack of
information and/or documents that it cannot obtain through reasonable efforts.
As compensation therefor, the Trustee (or such other successor Servicer) shall
be entitled to such compensation as the Servicer would have been entitled to
hereunder if no such notice of termination had been given. Notwithstanding the
above, (i) if the Trustee is unwilling to act as successor Servicer or (ii) if
the Trustee is legally unable so to act, the Trustee shall appoint or petition a
court of competent jurisdiction to appoint, any established housing and home
finance institution, bank or other mortgage loan or home equity loan servicer
having a net worth of not less than $50,000,000 as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder; provided, that the appointment of any
such successor Servicer will not result in the qualification, reduction or
withdrawal of the ratings assigned to the Certificates by the Rating Agencies as
evidenced by a letter to such effect from the Rating Agencies. Pending
appointment of a successor to the Servicer hereunder, the Trustee shall act in
such capacity as hereinabove provided. In connection with such appointment and
assumption, the successor shall be entitled to receive compensation out of
payments on Mortgage Loans in an amount equal to the compensation which the
Servicer would otherwise have received pursuant to Section 3.18 (or such other
compensation as the Trustee and such successor shall agree, not to exceed the
Servicing Fee). The appointment of a successor Servicer shall not affect any
liability of the predecessor Servicer which may have arisen under this Agreement
prior to its termination as Servicer to pay any deductible under an insurance
policy pursuant to Section 3.14 or to reimburse the Trustee pursuant to Section
3.06), nor shall any successor Servicer be liable for any acts or omissions of
the predecessor Servicer or for any breach by such Servicer of any of its
representations or warranties contained herein or in any related document or
agreement. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
All Servicing Transfer Costs shall be paid by the predecessor Servicer upon
presentation of reasonable documentation of such costs, and if such predecessor
Servicer defaults in its obligation to pay such costs, such costs shall be paid
by the successor Servicer or the Trustee (in which case the successor Servicer
or the Trustee, as applicable, shall be entitled to reimbursement therefor from
the assets of the Trust).
(b) Any successor to the Servicer, including the Trustee,
shall during the term of its service as servicer continue to service and
administer the Mortgage Loans for the benefit of Certificateholders, and
maintain in force a policy or policies of insurance covering errors and
omissions in the performance of its obligations as Servicer hereunder and a
fidelity bond in
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respect of its officers, employees and agents to the same extent as the Servicer
is so required pursuant to Section 3.14.
(c) In the event of a Servicer Event of Termination,
notwithstanding anything to the contrary above, the Trustee and the Depositor
hereby agree that upon delivery to the Trustee by the Servicing Rights Pledgee
of a letter signed by the Servicer within ten Business Days of when notification
of such event shall have been provided to the Trustee, whereunder the Servicer
shall resign as Servicer under this Agreement, the Trustee shall, in accordance
with Section 7.02, appoint the Servicing Rights Pledgee or its designee as
successor Servicer, provided that at the time of such appointment, the Servicing
Rights Pledgee or such designee meets the requirements of a successor Servicer
set forth above (including, but not limited to the requirement that the
appointment of any such successor Servicer will not result in the qualification,
reduction or withdrawal of the ratings assigned to the Certificates by the
Rating Agencies as evidenced by a letter to such effect from the Rating
Agencies) and the Servicing Rights Pledgee or such designee agrees to be subject
to the terms of this Agreement.
(d) In connection with the resignation, removal or
expiration of the term of the Servicer hereunder, or in connection with the
resignation or removal of any successor to the Servicer (or any other successor
to the Servicer appointed hereunder) acting as successor Servicer hereunder,
either (i) the successor Servicer, (or any other successor to the Servicer
appointed hereunder) acting as successor Servicer hereunder, shall represent and
warrant that it is a member of MERS in good standing and shall agree to comply
in all material respects with the rules and procedures of MERS in connection
with the servicing of the Mortgage Loans that are registered with MERS, in which
case the predecessor Servicer shall cooperate with the successor Servicer in
causing MERS to revise its records to reflect the transfer of servicing to the
successor Servicer as necessary under MERS' rules and regulations or (ii) the
predecessor Servicer shall cooperate with the successor Servicer in causing MERS
to execute and deliver an assignment of Mortgage in recordable form to transfer
the Mortgage from MERS to the Trustee and to execute and deliver such other
notices, documents and other instruments as may be necessary or desirable to
effect a transfer of such Mortgage Loan or servicing of such Mortgage Loan on
the MERS(R) System to the successor Servicer. The predecessor Servicer shall
file or cause to be filed any such assignment in the appropriate recording
office. The predecessor Servicer shall bear any and all fees of MERS, costs of
preparing any assignments of Mortgage, and fees and costs of filing any
assignments of Mortgage that may be required under this paragraph.
SECTION 7.03 Waiver of Defaults.
The Majority Certificateholders may, on behalf of all
Certificateholders, waive any events permitting removal of the Servicer as
servicer pursuant to this Article VII, provided, however, that the Majority
Certificateholders may not waive a default in making a required distribution on
a Certificate without the consent of the Holder of such Certificate. Upon any
waiver of a past default, such default shall cease to exist and any Servicer
Event of Termination arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereto except to the extent
expressly so waived. Notice of any such waiver shall be given by the Trustee to
the Rating Agencies.
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SECTION 7.04 Notification to Certificateholders.
(a) Upon any termination or appointment of a successor to
the Servicer pursuant to this Article VII or Section 6.04, the Trustee shall
give prompt written notice thereof to the Certificateholders at their respective
addresses appearing in the Certificate Register and each Rating Agency.
(b) No later than 60 days after the occurrence of any
event which constitutes or which, with notice or a lapse of time or both, would
constitute a Servicer Event of Termination for five Business Days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to all Certificateholders notice of
such occurrence unless such default or Servicer Event of Termination shall have
been waived or cured.
SECTION 7.05 Survivability of Servicer Liabilities.
Notwithstanding anything herein to the contrary, upon
termination of the Servicer hereunder, any liabilities of the Servicer which
accrued prior to such termination shall survive such termination.
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ARTICLE VIII
THE TRUSTEE
SECTION 8.01 Duties of Trustee.
The Trustee, prior to the occurrence of a Servicer Event of
Termination and after the curing of all Servicer Events of Termination which may
have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If a Servicer Event of Termination has
occurred (which has not been cured) of which a Responsible Officer has
knowledge, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that the
Trustee will not be responsible for the accuracy or content of any such
resolutions, certificates, statements, opinions, reports, documents or other
instruments. If any such instrument is found not to conform to the requirements
of this Agreement in a material manner the Trustee shall take such action as it
deems appropriate to have the instrument corrected, and if the instrument is not
corrected to the Trustee's satisfaction, the Trustee will provide notice thereof
to the Certificateholders.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own misconduct; provided, however, that:
(i) prior to the occurrence of a Servicer Event of
Termination, and after the curing of all such Servicer Events of
Termination which may have occurred, the duties and obligations of the
Trustee shall be determined solely by the express provisions of this
Agreement, the Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee and, in the absence of bad faith on the
part of the Trustee, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement;
(ii) the Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible Officer of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of the
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Majority Certificateholders relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising or omitting to exercise any trust or power conferred upon
the Trustee, under this Agreement; and
(iv) the Trustee shall not be charged with knowledge of
any failure by the Servicer to comply with the obligations of the
Servicer referred to in clauses (i) and (ii) of Section 7.01(a) or of
the existence of any Servicer Termination Event unless a Responsible
Officer of the Trustee at the Corporate Trust Office obtains actual
knowledge of such failure or the Trustee receives written notice of
such failure from the Depositor, the Servicer or the Majority
Certificateholders.
The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Servicer in accordance with the
terms of this Agreement.
SECTION 8.02 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon, and shall be
protected in acting or refraining from acting upon, any resolution,
Officers' Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by
the proper party or parties, and the manner of obtaining consents and
of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as
the Trustee may prescribe;
(ii) the Trustee may consult with counsel and any Opinion
of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; the right of the
Trustee to perform any discretionary act enumerated in this Agreement
shall
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not be construed as a duty, and the Trustee shall not be answerable for
other than its negligence or willful misconduct in the performance of
any such act;
(iv) the Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and believed by
it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(v) prior to the occurrence of a Servicer Event of
Termination and after the curing of all Servicer Events of Termination
which may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or documents, unless
requested in writing to do so by the Majority Certificateholder;
provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such cost, expense or liability as a
condition to such proceeding. The reasonable expense of every such
examination shall be paid by the Servicer or, if paid by the Trustee,
shall be reimbursed by the Servicer upon demand and, if not reimbursed
by the Servicer, shall be reimbursed by the Trust. Nothing in this
clause (v) shall derogate from the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information
regarding the Mortgagors;
(vi) the Trustee shall not be accountable, shall have no
liability and makes no representation as to any acts or omissions
hereunder of the Servicer until such time as the Trustee may be
required to act as Servicer pursuant to Section 7.02 and thereupon only
for the acts or omissions of the Trustee as successor Servicer;
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, custodians or nominees;
(viii) the right of the Trustee to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty, and
the Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of such act;
(ix) the Trustee shall not be personally liable for any
loss resulting from the investment of funds held in the Collection
Account or the REO Account made at the direction of the Servicer
pursuant to Section 3.12; and
(x) The Trustee or its Affiliates are permitted to
receive compensation that could be deemed to be in the Trustee's
economic self-interest for (i) serving as investment adviser,
administrator, shareholder, servicing agent, custodian or sub-custodian
with respect to certain of the Permitted Investments, (ii) using
Affiliates to effect transactions in certain Permitted Investments and
(iii) effecting transactions in
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certain Permitted Investments. Such compensation shall not be
considered an amount that is reimbursable or payable pursuant to
Section 3.11.
In order to comply with its duties under the U.S. Patriot Act,
the Trustee shall obtain and verify certain information and documentation from
the other parties hereto, including, but not limited to, such parties' name,
address and other identifying information.
SECTION 8.03 Trustee Not Liable for Certificates or Mortgage
Loans.
The recitals contained herein and in the Certificates (other
than the authentication of the Trustee on the Certificates) shall be taken as
the statements of the Depositor, and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or related document or MERS or the MERS System other than with
respect to the Trustee's execution and authentication of the Certificates. The
Trustee shall not be accountable for the use or application by the Servicer, or
for the use or application of any funds paid to the Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account by the
Servicer. The Trustee shall at no time have any responsibility or liability for
or with respect to the legality, validity and enforceability of any Mortgage or
any Mortgage Loan, or the perfection and priority of any Mortgage or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust or its ability to generate the payments to be
distributed to Certificateholders under this Agreement, including, without
limitation: the existence, condition and ownership of any Mortgaged Property;
the existence and enforceability of any hazard insurance thereon (other than if
the Trustee shall assume the duties of the Servicer pursuant to Section 7.02);
the validity of the assignment of any Mortgage Loan to the Trustee or of any
intervening assignment; the completeness of any Mortgage Loan; the performance
or enforcement of any Mortgage Loan (other than if the Trustee shall assume the
duties of the Servicer pursuant to Section 7.02); the compliance by the
Depositor, the Originator, the Seller or the Servicer with any warranty or
representation made under this Agreement or in any related document or the
accuracy of any such warranty or representation prior to the Trustee's receipt
of notice or other discovery of any non-compliance therewith or any breach
thereof; any investment of monies by or at the direction of the Servicer or any
loss resulting therefrom, it being understood that the Trustee shall remain
responsible for any Trust property that it may hold in its individual capacity;
the acts or omissions of any of the Servicer (other than if the Trustee shall
assume the duties of the Servicer pursuant to Section 7.02), any Sub-Servicer or
any Mortgagor; any action of the Servicer (other than if the Trustee shall
assume the duties of the Servicer pursuant to Section 7.02), or any Sub-
Servicer taken in the name of the Trustee; the failure of the Servicer or any
Sub-Servicer to act or perform any duties required of it as agent of the Trustee
hereunder; or any action by the Trustee taken at the instruction of the Servicer
(other than if the Trustee shall assume the duties of the Servicer pursuant to
Section 7.02); provided, however, that the foregoing shall not relieve the
Trustee of its obligation to perform its duties under this Agreement, including,
without limitation, the Trustee's duty to review the Mortgage Files pursuant to
Section 2.01. The Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the
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perfection of any security interest or lien granted to it hereunder (unless the
Trustee shall have become the successor Servicer).
SECTION 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights as it would have if it
were not Trustee and may transact any banking and trust business with the
Originator, the Servicer, the Depositor or their Affiliates.
SECTION 8.05 Trustee Fee and Expenses.
(a) The Trustee shall withdraw from the Distribution
Account on each Distribution Date and pay to itself the Trustee Fee prior to
making any distributions to Certificateholders. The Trustee, or any director,
officer, employee or agent of the Trustee, shall be indemnified by the Trust
Fund and held harmless against any loss, liability or expense (not including
expenses and disbursements incurred or made by the Trustee, including the
compensation and the expenses and disbursements of its agents and counsel, in
the ordinary course of the Trustee's performance in accordance with the
provisions of this Agreement) incurred by the Trustee arising out of or in
connection with the acceptance or administration of its obligations and duties
under this Agreement, other than any loss, liability or expense (i) resulting
from a breach of the Servicer's obligations and duties under this Agreement for
which the Trustee is indemnified under Section 8.05(b) or (ii) any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence of the Trustee in the performance of its duties hereunder or by
reason of the Trustee's reckless disregard of obligations and duties hereunder
or as a result of a breach of the Trustee's obligations under Article X hereof.
Any amounts payable to the Trustee, or any director, officer, employee or agent
of the Trustee, in respect of the indemnification provided by this Section
8.05(a), or pursuant to any other right of reimbursement from the Trust Fund
that the Trustee, or any director, officer, employee or agent of the Trustee,
may have hereunder in its capacity as such, may be withdrawn by the Trustee from
the Distribution Account at any time. The foregoing indemnity shall survive the
resignation or removal of the Trustee.
(b) The Servicer agrees to indemnify the Trustee or any
director, officer, employee or agent of the Trustee from, and hold it harmless
against, any loss, liability or expense resulting from a breach of the
Servicer's obligations and duties under this Agreement. Such indemnity shall
survive the termination or discharge of this Agreement and the resignation or
removal of the Trustee and the Servicer for actions prior to such resignation or
removal. Any payment hereunder made by the Servicer to the Trustee shall be from
the Servicer's own funds, without reimbursement from the Trust Fund therefor.
SECTION 8.06 Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be an entity duly
organized and validly existing under the laws of the United States of America or
any state thereof, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least
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$50,000,000 and subject to supervision or examination by federal or state
authority. If such entity publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 8.06, the combined capital and
surplus of such entity shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. The principal
office of the Trustee (other than the initial Trustee) shall be in a state with
respect to which an Opinion of Counsel has been delivered to such Trustee at the
time such Trustee is appointed Trustee to the effect that the Trust will not be
a taxable entity under the laws of such state. In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
8.06, the Trustee shall resign immediately in the manner and with the effect
specified in Section 8.07.
SECTION 8.07 Resignation or Removal of Trustee.
The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Depositor, the
Servicer and each Rating Agency. Upon receiving such notice of resignation, the
Depositor shall promptly appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor Trustee. If no successor Trustee shall
have been so appointed and having accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor or if at any time the Trustee shall be
legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor or the Servicer may remove the Trustee. If the Depositor or the
Servicer removes the Trustee under the authority of the immediately preceding
sentence, the Depositor shall promptly appoint a successor Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee.
The Majority Certificateholders may at any time remove the
Trustee by written instrument or instruments delivered to the Servicer, the
Depositor and the Trustee; the Depositor shall thereupon use its best efforts to
appoint a successor trustee in accordance with this Section.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 8.07 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 8.08.
SECTION 8.08 Successor Trustee.
Any successor Trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor, the Servicer and to its
predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of
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the predecessor Trustee shall become effective, and such successor Trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
like effect as if originally named as Trustee. The Depositor, the Servicer and
the predecessor Trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for fully and certainly vesting and
confirming in the successor Trustee all such rights, powers, duties and
obligations.
No successor Trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor Trustee
shall be eligible under the provisions of Section 8.06 and the appointment of
such successor Trustee shall not result in a downgrading of the Regular
Certificates by either Rating Agency, as evidenced by a letter from each Rating
Agency.
Upon acceptance of appointment by a successor Trustee as
provided in this Section 8.08, the successor Trustee shall mail notice of the
appointment of a successor Trustee hereunder to all Holders of Certificates at
their addresses as shown in the Certificate Register and to each Rating Agency.
SECTION 8.09 Merger or Consolidation of Trustee.
Any entity into which the Trustee may be merged or converted
or with which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder, provided such entity shall be eligible under the provisions of
Section 8.06 and 8.08, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
SECTION 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust or any Mortgaged Property may at the time be
located, the Depositor and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust, or any part thereof,
and, subject to the other provisions of this Section 8.10, such powers, duties,
obligations, rights and trusts as the Servicer and the Trustee may consider
necessary or desirable. Any such co-trustee or separate trustee shall be subject
to the written approval of the Servicer. If the Servicer shall not have joined
in such appointment within 15 days after the receipt by it of a request so to
do, or in the case a Servicer Event of Termination shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06, and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08. The Servicer shall be responsible for the
fees of any co-trustee or separate trustee appointed hereunder.
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Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable
by reason of any act or omission of any other trustee hereunder; and
(iii) the Servicer and the Trustee, acting jointly, may at
any time accept the resignation of or remove any separate trustee or
co-trustee except that following the occurrence of a Servicer Event of
Termination, the Trustee acting alone may accept the resignation or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Depositor and the Servicer.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
SECTION 8.11 Limitation of Liability.
The Certificates are executed by the Trustee, not in its
individual capacity but solely as Trustee of the Trust, in the exercise of the
powers and authority conferred and vested in it by the Trust Agreement. Each of
the undertakings and agreements made on the part of the
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Trustee in the Certificates is made and intended not as a personal undertaking
or agreement by the Trustee but is made and intended for the purpose of binding
only the Trust.
SECTION 8.12 Trustee May Enforce Claims Without Possession of
Certificates.
(a) All rights of action and claims under this Agreement
or the Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this Agreement. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.
(b) The Trustee shall afford the Seller, the Depositor,
the Servicer and each Certificateholder upon reasonable prior notice during
normal business hours, access to all records maintained by the Trustee in
respect of its duties hereunder and access to officers of the Trustee
responsible for performing such duties. Upon request, the Trustee shall furnish
the Depositor, the Servicer and any requesting Certificateholder with its most
recent financial statements. The Trustee shall cooperate fully with the Seller,
the Servicer, the Depositor and such Certificateholder and shall make available
to the Seller, the Servicer, the Depositor and such Certificateholder for review
and copying such books, documents or records as may be requested with respect to
the Trustee's duties hereunder. The Seller, the Depositor, the Servicer and the
Certificateholders shall not have any responsibility or liability for any action
or failure to act by the Trustee and are not obligated to supervise the
performance of the Trustee under this Agreement or otherwise.
SECTION 8.13 Suits for Enforcement.
In case a Servicer Event of Termination or other default by
the Servicer or the Depositor hereunder shall occur and be continuing, the
Trustee, shall, at the direction of the Majority Certificateholders, or may,
proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel, and subject
to the foregoing, shall deem most effectual to protect and enforce any of the
rights of the Trustee and the Certificateholders.
SECTION 8.14 Waiver of Bond Requirement.
The Trustee shall be relieved of, and each Certificateholder
hereby waives, any requirement of any jurisdiction in which the Trust, or any
part thereof, may be located that the Trustee post a bond or other surety with
any court, agency or body whatsoever.
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SECTION 8.15 Waiver of Inventory, Accounting and Appraisal
Requirement.
The Trustee shall be relieved of, and each Certificateholder
hereby waives, any requirement of any jurisdiction in which the Trust, or any
part thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
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ARTICLE IX
REMIC ADMINISTRATION
SECTION 9.01 REMIC Administration.
(a) REMIC elections as set forth in the Preliminary
Statement shall be made by the Trustee on Form 1066 or other appropriate federal
tax or information return for the taxable year ending on the last day of the
calendar year in which the Certificates are issued. The regular interests and
residual interest in each REMIC shall be as designated in the Preliminary
Statement.
(b) The Closing Date is hereby designated as the "Startup
Day" of each REMIC within the meaning of section 860G(a)(9) of the Code.
(c) The Trustee shall pay any and all expenses relating
to any tax audit of any REMIC (including, but not limited to, any professional
fees or any administrative or judicial proceedings with respect to any Trust
REMIC that involve the Internal Revenue Service or state tax authorities),
including the expense of obtaining any tax related Opinion of Counsel. The
Trustee shall be entitled to reimbursement of expenses incurred pursuant to this
Section 9.01(c) to the extent provided in Section 8.05.
(d) The Trustee shall prepare, sign and file, all of the
REMICs' federal and state tax and information returns (including Form 8811) as
the direct representative each REMIC created hereunder. The expenses of
preparing and filing such returns shall be borne by the Trustee.
(e) The Holder of the Class R Certificate at any time
holding the largest Percentage Interest thereof shall be the "tax matters
person" as defined in the REMIC Provisions (the related "Tax Matters Person")
with respect to REMIC 1, REMIC 2 and REMIC 3 and shall act as Tax Matters Person
for REMIC 1, REMIC 2 and REMIC 3. The Holder of the Class R-X Certificate at any
time holding the largest Percentage Interest thereof shall be the "tax matters
person" as defined in the REMIC Provisions (the related "Tax Matters Person")
with respect to REMIC 4, REMIC 5, REMIC 6, REMIC 7, REMIC 8 and REMIC 9 and
shall act as Tax Matters Person for REMIC 4, REMIC 5, REMIC 6, REMIC 7, REMIC 8
and REMIC 9. The Trustee, as agent for the Tax Matters Person, shall perform on
behalf of each REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, if required by the Code, the REMIC
Provisions, or other such guidance, the Trustee, as agent for the Tax Matters
Person, shall provide (i) to the Treasury or other governmental authority such
information as is necessary for the application of any tax relating to the
transfer of a Residual Certificate to any disqualified person or organization
and (ii) to the Certificateholders such information or reports as are required
by the Code or REMIC Provisions. The Trustee, as agent for the Tax Matters
Person, shall represent each REMIC 1n any administrative or judicial proceedings
relating to an examination or audit by any governmental taxing authority,
request an administrative adjustment as to any taxable year of any
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REMIC, enter into settlement agreements with any government taxing agency,
extend any statute of limitations relating to any item of any REMIC and
otherwise act on behalf of any REMIC in relation to any tax matter involving the
Trust.
(f) The Trustee, the Servicer and the Holders of
Certificates shall take any action or cause the REMIC to take any action
necessary to create or maintain the status of each REMIC as a REMIC under the
REMIC Provisions and shall assist each other as necessary to create or maintain
such status. Neither the Trustee, the Servicer nor the Holder of any Residual
Certificate shall take any action, cause any REMIC created hereunder to take any
action or fail to take (or fail to cause to be taken) any action that, under the
REMIC Provisions, if taken or not taken, as the case may be, could (i) endanger
the status of such REMIC as a REMIC or (ii) result in the imposition of a tax
upon such REMIC (including but not limited to the tax on prohibited transactions
as defined in Code Section 860F(a)(2) and the tax on prohibited contributions
set forth on Section 860G(d) of the Code) (either such event, an "Adverse REMIC
Event") unless the Trustee and the Servicer have received an Opinion of Counsel
(at the expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such status or result in the imposition of
such a tax. In addition, prior to taking any action with respect to any REMIC
created hereunder or the assets therein, or causing such REMIC to take any
action, which is not expressly permitted under the terms of this Agreement, any
Holder of a Residual Certificate will consult with the Trustee and the Servicer,
or their respective designees, in writing, with respect to whether such action
could cause an Adverse REMIC Event to occur with respect to any REMIC, and no
such Person shall take any such action or cause any REMIC to take any such
action as to which the Trustee or the Servicer has advised it in writing that an
Adverse REMIC Event could occur.
(g) Each Holder of a Residual Certificate shall pay when
due any and all taxes imposed on each REMIC created hereunder by federal or
state governmental authorities. To the extent that such Trust taxes are not paid
by a Residual Certificateholder, the Trustee shall pay any remaining REMIC taxes
out of current or future amounts otherwise distributable to the Holder of the
Residual Certificate in the REMICs or, if no such amounts are available, out of
other amounts held in the Distribution Account, and shall reduce amounts
otherwise payable to Holders of regular interests in the related REMIC. Subject
to the foregoing, in the event that a REMIC incurs a state or local tax,
including franchise taxes, as a result of a determination that such REMIC is
domiciled in the State of California for state tax purposes by virtue of the
location of the Servicer, the Servicer agrees to pay on behalf of such REMIC
when due, any and all state and local taxes imposed as a result of such a
determination, in the event that the Holder of the related Residual Certificate
fails to pay such taxes, if any, when imposed.
(h) The Trustee, as agent for the Tax Matters Person,
shall, for federal income tax purposes, maintain books and records with respect
to each REMIC created hereunder on a calendar year and on an accrual basis.
(i) No additional contributions of assets shall be made to any
REMIC created hereunder, except as expressly provided in this Agreement with
respect to eligible substitute mortgage loans.
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(j) Neither the Trustee nor the Servicer shall enter into
any arrangement by which any REMIC created hereunder will receive a fee or other
compensation for services.
(k) On or before April 15 of each calendar year beginning
in 2005, the Servicer shall deliver to the Trustee and each Rating Agency an
Officers' Certificate stating the Servicer's compliance with the provisions of
this Section 9.01.
(l) The Trustee will apply for an Employee Identification
Number from the Internal Revenue Service via a Form SS-4 or other acceptable
method for all tax entities and shall complete the Form 8811.
SECTION 9.02 Prohibited Transactions and Activities.
Neither the Depositor, the Servicer nor the Trustee shall
sell, dispose of, or substitute for any of the Mortgage Loans, except in a
disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the
bankruptcy of the Trust Fund, (iii) the termination of any REMIC created
hereunder pursuant to Article X of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a repurchase of Mortgage Loans pursuant
to Article II of this Agreement, nor acquire any assets for any REMIC, nor sell
or dispose of any investments in the Distribution Account for gain, nor accept
any contributions to either REMIC after the Closing Date, unless it has received
an Opinion of Counsel (at the expense of the party causing such sale,
disposition, or substitution) that such disposition, acquisition, substitution,
or acceptance will not (a) affect adversely the status of any REMIC created
hereunder as a REMIC or of the interests therein other than the Residual
Certificates as the regular interests therein, (b) affect the distribution of
interest or principal on the Certificates, (c) result in the encumbrance of the
assets transferred or assigned to the Trust Fund (except pursuant to the
provisions of this Agreement) or (d) cause any REMIC created hereunder to be
subject to a tax on prohibited transactions or prohibited contributions pursuant
to the REMIC Provisions.
SECTION 9.03 Indemnification with Respect to Certain Taxes and
Loss of REMIC Status.
(a) In the event that any REMIC fails to qualify as a
REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Servicer of its duties and
obligations set forth herein, the Servicer shall indemnify the Trustee and the
Trust Fund against any and all losses, claims, damages, liabilities or expenses
("Losses") resulting from such negligence; provided, however, that the Servicer
shall not be liable for any such Losses attributable to the action or inaction
of the Trustee, the Depositor or the Holder of such Residual Certificate, as
applicable, nor for any such Losses resulting from misinformation provided by
the Holder of such Residual Certificate on which the Servicer has relied. The
foregoing shall not be deemed to limit or restrict the rights and remedies of
the Holder of such Residual Certificate now or hereafter existing at law or in
equity. Notwithstanding the foregoing, however, in no event shall the Servicer
have any liability (1) for any action or omission that is taken in accordance
with and in compliance with the express terms of, or which is expressly
permitted by the terms of, this Agreement, (2) for any Losses other than arising
out of a
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negligent performance by the Servicer of its duties and obligations set forth
herein, and (3) for any special or consequential damages to Certificateholders
(in addition to payment of principal and interest on the Certificates).
(b) In the event that any REMIC fails to qualify as a
REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Trustee of its duties and
obligations set forth herein, the Trustee shall indemnify the Trust Fund against
any and all Losses resulting from such negligence; provided, however, that the
Trustee shall not be liable for any such Losses attributable to the action or
inaction of the Servicer, the Depositor or the Holder of such Residual
Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Residual Certificate on which the
Trustee has relied. The foregoing shall not be deemed to limit or restrict the
rights and remedies of the Holder of such Residual Certificate now or hereafter
existing at law or in equity. Notwithstanding the foregoing, however, in no
event shall the Trustee have any liability (1) for any action or omission that
is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than arising out of a negligent performance by the Trustee of its duties
and obligations set forth herein, and (3) for any special or consequential
damages to Certificateholders (in addition to payment of principal and interest
on the Certificates).
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ARTICLE X
TERMINATION
SECTION 10.01 Termination.
(a) The respective obligations and responsibilities of
the Servicer, the Depositor and the Trustee created hereby (other than the
obligation of the Trustee to make certain payments to Certificateholders after
the final Distribution Date and the obligation of the Servicer to send certain
notices as hereinafter set forth) shall terminate upon notice to the Trustee
upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
(iii) the optional purchase by the Terminator of the Mortgage Loans as described
below and (iv) the Distribution Date in March 2035. Notwithstanding the
foregoing, in no event shall the trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to the Court of St.
James's, living on the date hereof.
The Holders of a majority in Percentage Interest in the Class
C Certificates (unless any such Holder constituting such majority is the Seller,
Greenwich Capital Markets, Inc. or an Affiliate of either of them), or if such
Holders fail to exercise such option or if any such Holder constituting such
majority is the Seller, Greenwich Capital Markets, Inc. or an Affiliate of
either of them, the Servicer (with the written consent of the Depositor or an
Affiliate thereof, such consent not to be unreasonably withheld) (either such
majority Holders or the Servicer, as applicable, the "Terminator"), may, at its
option, terminate this Agreement on any date on which the aggregate of the
Principal Balances of the Mortgage Loans (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) on such date is equal to or less than 10% of the
aggregate Principal Balances of the Initial Mortgage Loans on the Cut-off Date,
by purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of (i) the
Principal Balance of the Mortgage Loans (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and the appraised value of the REO Properties and
(ii) fair market value of the Mortgage Loans and REO Properties (as determined
and as agreed upon as of the close of business on the third Business Day next
preceding the date upon which notice of any such termination is furnished to the
related Certificateholders pursuant to Section 10.01(c) by (x) the Servicer, if
it is the Terminator, (y) the Holders of a majority in Percentage Interest in
the Class C Certificates and (z) if the Floating Rate Certificates will not
receive all amounts owed to it as a result of the termination, the Trustee,
provided that if this clause (z) applies to such determination, such
determination shall be based solely upon an appraisal obtained as provided in
the last sentence of this paragraph), plus accrued and unpaid interest thereon
at the weighted average of the Mortgage Rates through the end of the Due Period
preceding the final Distribution Date plus unreimbursed Servicing Advances,
Advances, any unpaid Servicing Fees allocable to such Mortgage Loans and REO
Properties and any accrued and unpaid Net WAC Rate Carryover Amounts (the
"Termination Price"); provided, however,
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such option may only be exercised if the Termination Price is sufficient to
result in the payment of all interest accrued on, as well as amounts necessary
to retire the principal balance of, each class of notes issued pursuant to the
Indenture. If the determination of the fair market value of the Mortgage Loans
and REO Properties shall be required to be made and agreed upon by the Servicer,
if it is the Terminator, the Holders of a majority in Percentage Interest in the
Class C Certificates and the Trustee as provided in (ii) above, such
determination shall be based on an appraisal of the value of the Mortgage Loans
and REO Properties conducted by an independent appraiser mutually agreed upon by
the Servicer, if it is the Terminator, the Holders of a majority in Percentage
Interest in the Class C Certificates and the Trustee in their reasonable
discretion, and (A) such appraisal shall be obtained at no expense to the
Trustee and (B) the Trustee may conclusively rely on, and shall be protected in
relying on, such appraisal.
In connection with any such purchase pursuant to the preceding
paragraph, the Terminator shall deposit in the Distribution Account all amounts
then on deposit in the Collection Account, which deposit shall be deemed to have
occurred immediately preceding such purchase.
Any such purchase shall be accomplished by deposit into the
Distribution Account on the Determination Date before such Distribution Date of
the Termination Price.
(b) Notice of any termination, specifying the
Distribution Date (which shall be a date that would otherwise be a Distribution
Date) upon which the Certificateholders may surrender their Certificates to the
Trustee for payment of the final distribution and cancellation, shall be given
promptly by the Trustee upon the Trustee receiving notice of such date from the
Terminator, by letter to the Certificateholders mailed not earlier than the 15th
day and not later than the 25th day of the month next preceding the month of
such final distribution specifying (1) the Distribution Date upon which final
distribution of the Certificates will be made upon presentation and surrender of
such Certificates at the office or agency of the Trustee therein designated, (2)
the amount of any such final distribution and (3) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office or agency
of the Trustee therein specified.
(c) Upon presentation and surrender of the Certificates,
the Trustee shall cause to be distributed to the Holders of the Certificates on
the Distribution Date for such final distribution, in proportion to the
Percentage Interests of their respective Class and to the extent that funds are
available for such purpose, an amount equal to the amount required to be
distributed to such Holders in accordance with the provisions of Section 4.01
for such Distribution Date. By acceptance of the Residual Certificates, the
Holders of the Residual Certificates agree, in connection with any termination
hereunder, to assign and transfer any amounts in excess of the par value of the
Mortgage Loans, and to the extent received in respect of such termination, to
pay any such amounts to the Holders of the Class C Certificates.
(d) In the event that all Certificateholders shall not
surrender their Certificates for final payment and cancellation on or before
such final Distribution Date, the Trustee shall promptly following such date
cause all funds in the Distribution Account not distributed in final
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distribution to Certificateholders to be withdrawn therefrom and credited to the
remaining Certificateholders by depositing such funds in a separate Servicing
Account for the benefit of such Certificateholders, and the Servicer (if the
Servicer has exercised its right to purchase the Mortgage Loans) or the Trustee
(in any other case) shall give a second written notice to the remaining
Certificateholders, to surrender their Certificates for cancellation and receive
the final distribution with respect thereto. If within nine months after the
second notice all the Certificates shall not have been surrendered for
cancellation, the Residual Certificateholders shall be entitled to all unclaimed
funds and other assets which remain subject hereto, and the Trustee upon
transfer of such funds shall be discharged of any responsibility for such funds,
and the Certificateholders shall look to the Residual Certificateholders for
payment.
SECTION 10.02 Additional Termination Requirements.
(a) In the event that the Terminator exercises its
purchase option as provided in Section 10.01, each REMIC shall be terminated in
accordance with the following additional requirements, unless the Trustee shall
have been furnished with an Opinion of Counsel to the effect that the failure of
the Trust to comply with the requirements of this Section will not (i) result in
the imposition of taxes on "prohibited transactions" of the Trust as defined in
Section 860F of the Code or (ii) cause any REMIC constituting part of the Trust
Fund to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(i) Within 90 days prior to the final Distribution Date,
the Terminator shall adopt and the Trustee shall sign a plan of
complete liquidation of each REMIC created hereunder meeting the
requirements of a "Qualified Liquidation" under Section 860F of the
Code and any regulations thereunder; and
(ii) At or after the time of adoption of such a plan of
complete liquidation and at or prior to the final Distribution Date,
the Trustee shall sell all of the assets of the Trust Fund to the
Terminator for cash pursuant to the terms of the plan of complete
liquidation.
(b) By their acceptance of Certificates, the Holders
thereof hereby agree to appoint the Trustee as their attorney in fact to: (i)
adopt such a plan of complete liquidation (and the Certificateholders hereby
appoint the Trustee as their attorney in fact to sign such plan) as appropriate
and (ii) to take such other action in connection therewith as may be reasonably
required to carry out such plan of complete liquidation all in accordance with
the terms hereof.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01 Amendment.
This Agreement may be amended from time to time by the
Depositor, the Servicer and the Trustee; and without the consent of the
Certificateholders (i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be defective or inconsistent with any other
provisions herein (iii) to amend the provisions of Section 3.22(b) or (iv) to
make any other provisions with respect to matters or questions arising under
this Agreement which shall not be inconsistent with the provisions of this
Agreement; provided that such action shall not, as evidenced by either (a) an
Opinion of Counsel delivered to the Trustee or (b) written notice to the
Depositor, the Servicer and the Trustee from each Rating Agency that such action
will not result in the reduction or withdrawal of the rating of any outstanding
Class of Certificates with respect to which it is a Rating Agency, adversely
affect in any material respect the interests of any Certificateholder. No
amendment shall be deemed to adversely affect in any material respect the
interests of any Certificateholder who shall have consented thereto, and no
Opinion of Counsel or Rating Agency confirmation shall be required to address
the effect of any such amendment on any such consenting Certificateholder.
Notwithstanding the foregoing, neither an Opinion of Counsel or written notice
to the Depositor, the Servicer and the Trustee from the Rating Agencies will be
required in connection with an amendment to the provisions of Section 3.22(b).
In addition, this Agreement may be amended from time to time
by the Depositor, the Servicer and the Trustee with the consent of the Majority
Certificateholders for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment or waiver shall (x) reduce in any manner the
amount of, or delay the timing of, payments on the Certificates or distributions
which are required to be made on any Certificate without the consent of the
Holder of such Certificate, (y) adversely affect in any material respect the
interests of the Holders of any Class of Certificates (as evidenced by either
(i) an Opinion of Counsel delivered to the Trustee or (ii) written notice to the
Depositor, the Servicer and the Trustee from each Rating Agency that such action
will not result in the reduction or withdrawal of the rating of any outstanding
Class of Certificates with respect to which it is a Rating Agency) in a manner
other than as described in clause (x) above, without the consent of the Holders
of Certificates of such Class evidencing at least a 66% Percentage Interest in
such Class, or (z) reduce the percentage of Voting Rights required by clause (y)
above without the consent of the Holders of all Certificates of such Class then
outstanding. Upon approval of an amendment, a copy of such amendment shall be
sent to the Rating Agencies.
Notwithstanding any provision of this Agreement to the
contrary, the Trustee shall not consent to any amendment to this Agreement
unless it shall have first received an Opinion of Counsel, delivered by (and at
the expense of) the Person seeking such Amendment, to the effect that such
amendment will not result in the imposition of a tax on any REMIC created
hereunder constituting part of the Trust Fund pursuant to the REMIC Provisions
or cause
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any REMIC created hereunder constituting part of the Trust to fail to qualify as
a REMIC at any time that any Certificates are outstanding and that the amendment
is being made in accordance with the terms hereof.
Promptly after the execution of any such amendment the Trustee
shall furnish, at the expense of the Person that requested the amendment if such
Person is the Servicer (but in no event at the expense of the Trustee),
otherwise at the expense of the Trust, a copy of such amendment and the Opinion
of Counsel referred to in the immediately preceding paragraph to the Servicer
and each Rating Agency.
It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment; instead it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable regulations as the Trustee may prescribe.
The Trustee may, but shall not be obligated to, enter into any
amendment pursuant to this Section 11.01 that affects its rights, duties and
immunities under this Agreement or otherwise.
SECTION 11.02 Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer at the expense of the Trust, but only upon direction of
Certificateholders accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
together constitute but one and the same instrument.
SECTION 11.03 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not (i)
operate to terminate this Agreement or the Trust, (ii) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust, or (iii) otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
Except as expressly provided for herein, no Certificateholder
shall have any right to vote or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
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partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 11.04 Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws
of the State of New York, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws. With respect
to any claim arising out of this Agreement, each party irrevocably submits to
the exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of or
relating hereto brought in any such courts, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum and further irrevocably waives the right to object,
with respect to such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.
SECTION 11.05 Notices.
All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, by facsimile or by express
delivery service, to (a) in the case of the Servicer, ▇▇▇▇▇▇ Loan Servicing LP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇), or such other address or telecopy number as
may hereafter
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be furnished to the Depositor and the Trustee in writing by the Servicer, (b) in
the case of the Trustee, Deutsche Bank National Trust Company, ▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Trust Administration
GC04F4 (telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇), or such other address or telecopy
number as may hereafter be furnished to the Depositor and the Servicer in
writing by the Trustee, and (c) in the case of the Depositor, Financial Asset
Securities Corp., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Legal, or such other address as may be furnished to the Servicer and the Trustee
in writing by the Depositor. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Notice of any
Servicer Event of Termination shall be given by telecopy and by certified mail.
Any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have duly been given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder shall also be mailed to the appropriate party in the manner
set forth above.
SECTION 11.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall for any reason whatsoever be held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 11.07 Article and Section References.
All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.
SECTION 11.08 Notice to the Rating Agencies.
(a) Each of the Trustee and the Servicer shall be
obligated to use its best reasonable efforts promptly to provide notice to the
Rating Agencies with respect to each of the following of which a Responsible
Officer of the Trustee or Servicer, as the case may be, has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Servicer Event of Termination
that has not been cured or waived;
(iii) the resignation or termination of the Servicer or the
Trustee;
(iv) the final payment to Holders of the Certificates of
any Class;
(v) any change in the location of any Account; and
169
(vi) if the Trustee is acting as successor Servicer
pursuant to Section 7.02 hereof, any event that would result in the
inability of the Trustee to make Advances.
(b) In addition, the Trustee shall promptly make
available to each Rating Agency copies of each Statement to Certificateholders
described in Sections 4.03 and 3.19 hereof and the Servicer shall promptly
furnish to each Rating Agency copies of the following:
(i) each annual statement as to compliance described in
Section 3.20 hereof;
(ii) each annual independent public accountants' servicing
report described in Section 3.21 hereof; and
(iii) each notice delivered pursuant to Section 7.01(a)
hereof which relates to the fact that the Servicer has not made an
Advance.
Any such notice pursuant to this Section 11.08 shall be in
writing and shall be deemed to have been duly given if personally delivered or
mailed by first class mail, postage prepaid, or by express delivery service to
(i) ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and (ii) Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Residential Mortgage
Surveillance Group.
SECTION 11.09 Further Assurances.
Notwithstanding any other provision of this Agreement, neither
the Regular Certificateholders nor the Trustee shall have any obligation to
consent to any amendment or modification of this Agreement unless they have been
provided reasonable security or indemnity against their out-of-pocket expenses
(including reasonable attorneys' fees) to be incurred in connection therewith.
SECTION 11.10 Benefits of Agreement.
Nothing in this Agreement or in the Certificates, expressed or
implied, shall give to any Person, other than the Certificateholders and the
parties hereto and their successors hereunder, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
SECTION 11.11 Acts of Certificateholders.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Agreement to be given
or taken by the Certificateholders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such
Certificateholders in person or by agent duly appointed in writing, and such
action shall become effective when such instrument or instruments are delivered
to the Trustee and the Servicer. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"act" of the Certificateholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing
170
any such agent shall be sufficient for any purpose of this Agreement and
conclusive in favor of the Trustee and the Trust, if made in the manner provided
in this Section 11.11.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit of a witness of
such execution or by the certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof. Whenever such execution is by a signer acting in a capacity other than
his or her individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority.
(c) Any request, demand, authorization, direction,
notice, consent, waiver or other action by any Certificateholder shall bind
every future Holder of such Certificate and the Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Trustee or the Trust in reliance thereon, whether or not notation of such action
is made upon such Certificate.
171
IN WITNESS WHEREOF, the Depositor, the Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized, all as of the day and year first above written.
FINANCIAL ASSET SECURITIES CORP.,
as Depositor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
▇▇▇▇▇▇ LOAN SERVICING LP, as Servicer
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Associate
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
STATE OF Connecticut )
) ss.:
COUNTY OF Fairfield )
On the 15th day of December, 2004 before me, a notary public
in and for said State, personally appeared ▇▇▇▇▇ ▇▇▇▇▇ known to me to be a
MANAGING DIRECTORof Financial Asset Securities Corp., a Delaware corporation
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
Notary Public
STATE OF Texas )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 15th day of December, 2004 before me, a notary public
in and for said State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ known to me
to be a SENIOR VICE PRESIDENT of ▇▇▇▇▇▇ Loan Servicing LP, a
corporation that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ ▇. ▇▇▇▇▇▇
------------------------------
Notary Public - State of Texas
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORGANGE )
On the 14th day of December, 2004 before me, a notary public in and for
said State, personally appeared ▇▇▇▇ ▇▇▇▇▇▇▇, known to me to be
a(n) Associate and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, known to me to be
a(n) A.V.P. of Deutsche Bank National Trust Company, one of the
entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of said association, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------
Notary Public
EXHIBIT A-1
FORM OF CLASS I-A1 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : December 1, 2004
First Distribution Date : January 25, 2005
Initial Certificate Principal Balance : $500,000,000.00
of this Certificate ("Denomination")
Original Class Certificate : $500,000,000.00
Principal Balance of this Class
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P GN 4
Class : I-A1
Assumed Maturity Date : March 2035
A-1-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class I-A1
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
I-A1 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class I-A1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class I-A1 Certificate (obtained by
dividing the Denomination of this Class I-A1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2004 (the "Agreement") among the
Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the "Servicer"), and Deutsche
Bank National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class I-A1 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class I-A1 Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class I-A1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class I-A1 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-1-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-1-3
[Reverse of Class I-A1 Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-1-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-1-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-1-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
___________________________________________________________________________
______________________________________________________________________________
for the account of
_______________________________________________________________ account number
______________, or, if mailed by check, to ________________________
______________________________________________________________________________
Applicable statements should be mailed to
__________________________________________
________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CLASS I-A2 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : December 1, 2004
First Distribution Date : January 25, 2005
Initial Certificate Principal Balance : $55,556,000.00
of this Certificate ("Denomination")
Original Class Certificate : $55,556,000.00
Principal Balance of this Class
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729 GP 9
Class : I-A2
Assumed Maturity Date : March 2035
A-2-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class I-A2
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
I-A2 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class I-A2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class I-A2 Certificate (obtained by
dividing the Denomination of this Class I-A1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2004 (the "Agreement") among the
Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the "Servicer"), and Deutsche
Bank National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class I-A2 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class I-A2 Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class I-A2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class I-A2 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-2-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-2-3
[Reverse of Class I-A2 Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-2-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-2-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-2-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
___________________________________________________________________________
______________________________________________________________________________
for the account of
_______________________________________________________________ account number
______________, or, if mailed by check, to ________________________
______________________________________________________________________________
Applicable statements should be mailed to
__________________________________________
________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CLASS II-A1 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : December 1, 2004
First Distribution Date : January 25, 2005
Initial Certificate Principal Balance : $183,000,000.00
of this Certificate ("Denomination")
Original Class Certificate : $183,000,000.00
Principal Balance of this Class
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P GQ 7
Class : II-A1
Assumed Maturity Date : March 2035
A-2-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class II-A1
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
II-A1 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class II-A1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class II-A1 Certificate (obtained by
dividing the Denomination of this Class II-A1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2004 (the "Agreement") among the
Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the "Servicer"), and Deutsche
Bank National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class II-A1 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class II-A1 Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class II-A1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class II-A1 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-2-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-2-3
[Reverse of Class II-A1 Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-2-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-2-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-2-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
___________________________________________________________________________
______________________________________________________________________________
for the account of
_______________________________________________________________ account number
______________, or, if mailed by check, to ________________________
______________________________________________________________________________
Applicable statements should be mailed to
__________________________________________
________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CLASS II-A2 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : December 1, 2004
First Distribution Date : January 25, 2005
Initial Certificate Principal Balance : $275,000,000.00
of this Certificate ("Denomination")
Original Class Certificate : $275,000,000.00
Principal Balance of this Class
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P GR 5
Class : II-A2
Assumed Maturity Date : March 2035
A-3-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class II-A2
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
II-A2 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class II-A2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class II-A2 Certificate (obtained by
dividing the Denomination of this Class II-A2 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2004 (the "Agreement") among the
Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the "Servicer"), and Deutsche
Bank National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class II-A2 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class II-A2 Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class II-A2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class II-A2 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-3-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-3-3
[Reverse of Class II-A2 Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-3-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-3-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-3-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
___________________________________________________________________________
______________________________________________________________________________
for the account of
_______________________________________________________________ account number
______________, or, if mailed by check, to ________________________
______________________________________________________________________________
Applicable statements should be mailed to
__________________________________________
________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CLASS II-A3 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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 : December 1, 2004
First Distribution Date : January 25, 2005
Initial Certificate Principal Balance : $ 47,544,000.00
of this Certificate ("Denomination")
Original Class Certificate : $ 47,544,000.00
Principal Balance of this Class
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P GS 3
Class : II-A3
Assumed Maturity Date : March 2035
A-4-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class II-A3
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
II-A3 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class II-A3
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class II-A3 Certificate (obtained by
dividing the Denomination of this Class II-A3 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2004 (the "Agreement") among the
Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the "Servicer"), and Deutsche
Bank National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class II-A3 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class II-A3 Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class II-A3
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class II-A3 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-4-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-4-3
[Reverse of Class II-A3 Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-4-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-4-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-4-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
___________________________________________________________________________
______________________________________________________________________________
for the account of
_______________________________________________________________ account number
______________, or, if mailed by check, to ________________________
______________________________________________________________________________
Applicable statements should be mailed to
__________________________________________
________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CLASS M-1 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS I-A1 CERTIFICATES, THE CLASS I-A2
CERTIFICATES, THE CLASS II-A1 CERTIFICATES, THE CLASS II-A2 CERTIFICATES AND THE
CLASS II-A3 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.
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 : December 1, 2004
First Distribution Date : January 25, 2005
Initial Certificate Principal Balance of this : $ 74,925,000.00
Certificate ("Denomination")
Original Class Certificate Principal Balance : $ 74,925,000.00
of this Class
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P GT 1
Class : M-1
Assumed Maturity Date : March 2035
A-5-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class M-1
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-1 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-1 Certificate (obtained by
dividing the Denomination of this Class M-1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2004 (the "Agreement") among the
Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the "Servicer"), and Deutsche
Bank National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class M-1 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-1 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class M-1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-1 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-5-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-5-3
[Reverse of Class M-1 Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-5-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-5-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-5-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
___________________________________________________________________________
______________________________________________________________________________
for the account of
_______________________________________________________________ account number
______________, or, if mailed by check, to ________________________
______________________________________________________________________________
Applicable statements should be mailed to
__________________________________________
________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CLASS M-2 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS I-A1 CERTIFICATES, THE CLASS I-A2
CERTIFICATES, THE CLASS II-A1 CERTIFICATES, THE CLASS II-A2 CERTIFICATES, THE
CLASS II-A3 CERTIFICATES AND THE CLASS M-1 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.
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 : December 1, 2004
First Distribution Date : January 25, 2005
Initial Certificate Principal Balance of this : $ 43,200,000.00
Certificate ("Denomination")
Original Class Certificate : $ 43,200,000.00
Principal Balance of this Class
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P GU 8
Class : M-2
Assumed Maturity Date : March 2035
A-6-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class M-2
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-2 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-2 Certificate (obtained by
dividing the Denomination of this Class M-2 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2004 (the "Agreement") among the
Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the "Servicer"), and Deutsche
Bank National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class M-2 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-2 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class M-2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-2 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-6-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-6-3
[Reverse of Class M-2 Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-6-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-6-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-6-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
___________________________________________________________________________
______________________________________________________________________________
for the account of
_______________________________________________________________ account number
______________, or, if mailed by check, to ________________________
______________________________________________________________________________
Applicable statements should be mailed to
__________________________________________
________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CLASS M-3 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS I-A1 CERTIFICATES, THE CLASS I-A2
CERTIFICATES, THE CLASS II-A1 CERTIFICATES, THE CLASS II-A2 CERTIFICATES, THE
CLASS II-A3 CERTIFICATES, THE CLASS M-1 CERTIFICATES AND THE CLASS M-2
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
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.
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 : December 1, 2004
First Distribution Date : January 25, 2005
Initial Certificate Principal Balance of this : $ 26,325,000.00
Certificate ("Denomination")
Original Class Certificate Principal Balance : $ 26,325,000.00
of this Class
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P GV 6
Class : M-3
Assumed Maturity Date : March 2035
A-7-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class M-3
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-3 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-3
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-3 Certificate (obtained by
dividing the Denomination of this Class M-3 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2004 (the "Agreement") among the
Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the "Servicer"), and Deutsche
Bank National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class M-3 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-3 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class M-3
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-3 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-7-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-7-3
[Reverse of Class M-3 Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-7-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-7-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-7-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
___________________________________________________________________________
______________________________________________________________________________
for the account of
_______________________________________________________________ account number
______________, or, if mailed by check, to ________________________
______________________________________________________________________________
Applicable statements should be mailed to
__________________________________________
________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CLASS M-4 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS I-A1 CERTIFICATES, THE CLASS I-A2
CERTIFICATES, THE CLASS II-A1 CERTIFICATES, THE CLASS II-A2 CERTIFICATES, THE
CLASS II-A3 CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2
CERTIFICATES, AND THE CLASS M-3 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
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 : December 1, 2004
First Distribution Date : January 25, 2005
Initial Certificate Principal Balance of this : $ 23,625,000.00
Certificate ("Denomination")
Original Class Certificate Principal Balance : $ 23,625,000.00
of this Class
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P GW 4
Class : M-4
Assumed Maturity Date : March 2035
A-8-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class M-4
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-4 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-4
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-4 Certificate (obtained by
dividing the Denomination of this Class M-4 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2004 (the "Agreement") among the
Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the "Servicer"), and Deutsche
Bank National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class M-4 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-4 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class M-4
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-4 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-8-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-8-3
[Reverse of Class M-4 Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-8-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-8-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-8-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
___________________________________________________________________________
______________________________________________________________________________
for the account of
_______________________________________________________________ account number
______________, or, if mailed by check, to ________________________
______________________________________________________________________________
Applicable statements should be mailed to
__________________________________________
________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
A-8-7
EXHIBIT A-10
FORM OF CLASS M-5 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS I-A1 CERTIFICATES, THE CLASS I-A2
CERTIFICATES, THE CLASS II-A1 CERTIFICATES, THE CLASS II-A2 CERTIFICATES, THE
CLASS II-A3 CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2
CERTIFICATES, THE CLASS M-3 CERTIFICATES AND THE CLASS M-4 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
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.
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 : December 1, 2004
First Distribution Date : January 25, 2005
Initial Certificate Principal Balance of this : $ 22,950,000.00
Certificate ("Denomination")
Original Class Certificate Principal Balance : $ 22,950,000.00
of this Class
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P GX 2
Class : M-5
Assumed Maturity Date : March 2035
A-9-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class M-5
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-5 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-5
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-5 Certificate (obtained by
dividing the Denomination of this Class M-5 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2004 (the "Agreement") among the
Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the "Servicer"), and Deutsche
Bank National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class M-5 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-5 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class M-5
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-5 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-9-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-9-3
[Reverse of Class M-5 Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-9-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-9-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-9-6
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.
A-9-7
EXHIBIT A-11
FORM OF CLASS M-6 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS I-A1 CERTIFICATES, THE CLASS I-A2
CERTIFICATES, THE CLASS II-A1 CERTIFICATES, THE CLASS II-A2 CERTIFICATES, THE
CLASS II-A3 CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2
CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE CLASS M-4 CERTIFICATES AND THE
CLASS M-5 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
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 : December 1, 2004
First Distribution Date : January 25, 2005
Initial Certificate Principal Balance of this : $ 19,575,000.00
Certificate ("Denomination")
Original Class Certificate Principal Balance : $ 19,575,000.00
of this Class
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P GY 0
Class : M-6
Assumed Maturity Date : March 2035
A-10-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class M-6
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-6 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-6
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-6 Certificate (obtained by
dividing the Denomination of this Class M-6 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2004 (the "Agreement") among the
Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the "Servicer"), and Deutsche
Bank National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class M-6 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-6 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class M-6
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-6 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-10-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-10-3
[Reverse of Class M-6 Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-10-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-10-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-10-6
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.
A-10-7
EXHIBIT A-12
FORM OF CLASS M-7 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS I-A1 CERTIFICATES, THE CLASS I-A2
CERTIFICATES, THE CLASS II-A1 CERTIFICATES, THE CLASS II-A2 CERTIFICATES, THE
CLASS II-A3 CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2
CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE CLASS M-4 CERTIFICATES, THE CLASS
M-5 CERTIFICATES AND THE CLASS M-6 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
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.
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 : December 1, 2004
First Distribution Date : January 25, 2005
Initial Certificate Principal Balance of this : $ 18,900,000.00
Certificate ("Denomination")
Original Class Certificate Principal Balance : $ 18,900,000.00
of this Class
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P GZ 7
Class : M-7
Assumed Maturity Date : March 2035
A-11-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class M-7
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-7 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-7
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-7 Certificate (obtained by
dividing the Denomination of this Class M-7 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2004 (the "Agreement") among the
Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the "Servicer"), and Deutsche
Bank National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class M-7 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-7 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class M-7
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-7 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-11-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-11-3
[Reverse of Class M-7 Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-11-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-11-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-11-6
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.
A-11-7
EXHIBIT A-13
FORM OF CLASS M-8 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS I-A1 CERTIFICATES, THE CLASS I-A2
CERTIFICATES, THE CLASS II-A1 CERTIFICATES, THE CLASS II-A2 CERTIFICATES, THE
CLASS II-A3 CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2
CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE CLASS M-4 CERTIFICATES, THE CLASS
M-5 CERTIFICATES, THE CLASS M-6 CERTIFICATES AND THE CLASS M-7 CERTIFICATES TO
THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
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.
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 : December 1, 2004
First Distribution Date : January 25, 2005
Initial Certificate Principal Balance of this : $13,500,000.00
Certificate ("Denomination")
Original Class Certificate Principal Balance : $13,500,000.00
of this Class
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P HA 1
Class : M-8
Assumed Maturity Date : March 2035
A-12-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class M-8
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-8 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-8
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-8 Certificate (obtained by
dividing the Denomination of this Class M-8 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2004 (the "Agreement") among the
Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the "Servicer"), and Deutsche
Bank National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class M-8 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-8 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class M-8
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-8 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-12-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-12-3
[Reverse of Class M-8 Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-12-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-12-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-12-6
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.
A-12-7
EXHIBIT A-14
FORM OF CLASS M-9 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS I-A1 CERTIFICATES, THE CLASS I-A2
CERTIFICATES, THE CLASS II-A1 CERTIFICATES, THE CLASS II-A2 CERTIFICATES, THE
CLASS II-A3 CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2
CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE CLASS M-4 CERTIFICATES, THE CLASS
M-5 CERTIFICATES, THE CLASS M-6 CERTIFICATES, CLASS M-7 CERTIFICATES AND THE M-8
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.
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 : December 1, 2004
First Distribution Date : January 25, 2005
Initial Certificate Principal Balance of this : $10,800,000.00
Certificate ("Denomination")
Original Class Certificate Principal Balance : $10,800,000.00
of this Class
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P HB 9
Class : M-9
Assumed Maturity Date : March 2035
A-13-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class M-9
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-9 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-9
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-9 Certificate (obtained by
dividing the Denomination of this Class M-9 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2004 (the "Agreement") among the
Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the "Servicer"), and Deutsche
Bank National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class M-9 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-9 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class M-9
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-9 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-13-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-13-3
[Reverse of Class M-9 Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-13-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-13-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-13-6
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.
A-13-7
EXHIBIT A-15
FORM OF CLASS M-10 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS I-A1 CERTIFICATES, THE CLASS I-A2
CERTIFICATES, THE CLASS II-A1 CERTIFICATES, THE CLASS II-A2 CERTIFICATES, THE
CLASS II-A3 CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2
CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE CLASS M-4 CERTIFICATES, THE CLASS
M-5 CERTIFICATES, THE CLASS M-6 CERTIFICATES, CLASS M-7 CERTIFICATES, THE CLASS
M-8 CERTIFICATES AND THE M-9 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.
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 : December 1, 2004
First Distribution Date : January 25, 2005
Initial Certificate Principal Balance of this : $8,100,000.00
Certificate ("Denomination")
Original Class Certificate Principal Balance : $8,100,000.00
of this Class
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P HC 7
Class : M-10
Assumed Maturity Date : March 2035
A-13-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class M-10
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-10 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-9
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-9 Certificate (obtained by
dividing the Denomination of this Class M-9 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2004 (the "Agreement") among the
Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the "Servicer"), and Deutsche
Bank National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class M-9 Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-9 Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class M-10
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-10 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-13-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-13-3
[Reverse of Class M-9 Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-13-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-13-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-13-6
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.
A-13-7
EXHIBIT A-16
FORM OF CLASS B CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS I-A1 CERTIFICATES, THE CLASS I-A2
CERTIFICATES, THE CLASS II-A1 CERTIFICATES, THE CLASS II-A2 CERTIFICATES, THE
CLASS II-A3 CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2
CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE CLASS M-4 CERTIFICATES, THE CLASS
M-5 CERTIFICATES, THE CLASS M-6 CERTIFICATES, CLASS M-7 CERTIFICATES, THE CLASS
M-8 CERTIFICATES AND THE M-9 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.
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 : December 1, 2004
First Distribution Date : January 25, 2005
Initial Certificate Principal Balance of this : $13,500,000.00
Certificate ("Denomination")
Original Class Certificate Principal Balance : $13,500,000.00
of this Class
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 35729P HD 5
Class : B
Assumed Maturity Date : March 2035
A-14-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class B
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class B
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class B
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class B Certificate (obtained by dividing
the Denomination of this Class B Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of December 1, 2004 (the "Agreement") among the
Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the "Servicer"), and Deutsche
Bank National Trust Company, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class B Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Class B Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class B
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class B Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-14-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-14-3
[Reverse of Class B Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-14-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-14-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-14-6
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.
A-14-7
EXHIBIT A-17
FORM OF CLASS C CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS I-A1 CERTIFICATES, THE CLASS I-A2
CERTIFICATES, THE CLASS II-A1 CERTIFICATES, THE CLASS II-A2 CERTIFICATES, THE
CLASS II-A3 CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2
CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE CLASS M-4 CERTIFICATES, THE CLASS
M-5 CERTIFICATES, THE CLASS M-6 CERTIFICATES, THE CLASS M-7 CERTIFICATES, THE
CLASS M-8 CERTIFICATES, THE CLASS M-9 CERTIFICATES, THE CLASS M-10 CERTIFICATES
AND THE CLASS B CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : December 1, 2004
First Distribution Date : January 25, 2005
Initial Certificate Principal Balance : $13,499,899.55
of this Certificate ("Denomination")
Original Class Certificate : $13,499,899.55
Principal Balance of this Class
Percentage Interest : 100.00%
Class : C
A-16-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class C
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the Trust
consisting of first lien adjustable rate and fixed rate mortgage loans (the
"Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class C
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class C
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Greenwich Capital Financial Products, Inc. is the
registered owner of the Percentage Interest evidenced by this Class C
Certificate (obtained by dividing the Denomination of this Class C Certificate
by the Original Class Certificate Principal Balance) in certain distributions
with respect to a Trust consisting primarily of the Mortgage Loans deposited by
Financial Asset Securities Corp. (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of December 1, 2004 (the
"Agreement") among the Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the
"Servicer"), and Deutsche Bank National Trust Company, a national banking
association, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Class C Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class C
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
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
A-16-2
Assets to acquire this Certificate shall be made except in accordance with
Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class C
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class C Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-16-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-16-4
[Reverse of Class C Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-16-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-16-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-16-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
___________________________________________________________________________
______________________________________________________________________________
for the account of
_______________________________________________________________ account number
______________, or, if mailed by check, to ________________________
______________________________________________________________________________
Applicable statements should be mailed to
__________________________________________
________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
A-16-8
EXHIBIT A-18
FORM OF CLASS P CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : December 1, 2004
First Distribution Date : January 25, 2005
Initial Certificate Principal Balance : $100.00
of this Certificate ("Denomination")
Original Class Certificate : $100.00
Principal Balance of this Class
Percentage Interest : 100.00%
Class : P
A-17-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class P
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class P
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class P
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Greenwich Capital Financial Products, Inc. is the
registered owner of the Percentage Interest evidenced by this Class P
Certificate (obtained by dividing the Denomination of this Class P Certificate
by the Original Class Certificate Principal Balance) in certain distributions
with respect to a Trust consisting primarily of the Mortgage Loans deposited by
Financial Asset Securities Corp. (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of December 1, 2004 (the
"Agreement") among the Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the
"Servicer"), and Deutsche Bank National Trust Company, a national banking
association, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Class P Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class P
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.
This Certificate does not have a pass-through rate and will be entitled
to distributions only to the extent set forth in the Agreement.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
A-17-2
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class P
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class P Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-17-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-17-4
[Reverse of Class P Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-17-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-17-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-17-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
___________________________________________________________________________
______________________________________________________________________________
for the account of
_______________________________________________________________ account number
______________, or, if mailed by check, to ________________________
______________________________________________________________________________
Applicable statements should be mailed to
__________________________________________
________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
A-17-8
EXHIBIT A-19
FORM OF CLASS R CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : December 1, 2004
First Distribution Date : January 25, 2005
Percentage Interest : [50.00%]
Class : R
A-18-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class R
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting primarily of a pool of first lien adjustable rate and
fixed rate mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that Residual Interest Investments, LP is the registered
owner of the Percentage Interest evidenced by this Certificate specified above
in the interest represented by all Certificates of the Class to which this
Certificate belongs in a Trust consisting primarily of the Mortgage Loans
deposited by Financial Asset Securities Corp. (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of December 1,
2004 (the "Agreement") among the Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as
servicer (the "Servicer"), and Deutsche Bank National Trust Company, a national
banking association, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Office or the office or agency maintained by the Trustee.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
A-18-2
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest in
this Certificate may be transferred without delivery to the Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Agreement, (iii) each person holding or acquiring any Ownership Interest in this
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee. Pursuant to the Agreement, The Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R
Certificate in violation of the restrictions mentioned above.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trustee.
A-18-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-18-4
[Reverse of Class R Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-18-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-18-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-18-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
___________________________________________________________________________
______________________________________________________________________________
for the account of
_______________________________________________________________ account number
______________, or, if mailed by check, to ________________________
______________________________________________________________________________
Applicable statements should be mailed to
__________________________________________
________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
A-18-8
EXHIBIT A-20
FORM OF CLASS R-X CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R-X CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : December 1, 2004
First Distribution Date : January 25, 2005
Percentage Interest : 100.00%
Class : R-X
A-19-1
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
Class R-X
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting primarily of a pool of first lien adjustable rate and
fixed rate mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that Greenwich Capital Markets, Inc. is the registered
owner of the Percentage Interest evidenced by this Certificate specified above
in the interest represented by all Certificates of the Class to which this
Certificate belongs in a Trust consisting primarily of the Mortgage Loans
deposited by Financial Asset Securities Corp. (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of December 1,
2004 (the "Agreement") among the Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as
servicer (the "Servicer"), and Deutsche Bank National Trust Company, a national
banking association, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Office or the office or agency maintained by the Trustee.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
A-19-2
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest in
this Certificate may be transferred without delivery to the Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Agreement, (iii) each person holding or acquiring any Ownership Interest in this
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee. Pursuant to the Agreement, The Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R-X
Certificate in violation of the restrictions mentioned above.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trustee.
A-19-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: December __, 2004
FREMONT HOME LOAN TRUST ▇▇▇▇-▇
▇▇▇▇▇▇▇▇ BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:_________________________________
This is one of the Certificates referenced
in the within-mentioned Agreement
By:__________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-19-4
[Reverse of Class R-X Certificate]
Fremont Home Loan Trust 2004-4
Asset-Backed Certificates,
Series 2004-4
This Certificate is one of a duly authorized issue of Certificates
designated as Fremont Home Loan Trust 2004-4, Asset-Backed Certificates, Series
2004-4 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee or the Trustee's agent specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-19-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the offices or agencies of the Trustee as provided
in the Pooling and Servicing Agreement accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Original Mortgage Loans as of the Cut-off
Date, the Servicer may purchase, in whole, from the Trust the Mortgage Loans at
a purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase
by the Servicer of the Mortgage Loans as described in the Agreement and (iv) the
Distribution Date in March 2035.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-19-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______
______________________________________________________________________________
Dated:_________________
A-19-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
___________________________________________________________________________
______________________________________________________________________________
for the account of
_______________________________________________________________ account number
______________, or, if mailed by check, to ________________________
______________________________________________________________________________
Applicable statements should be mailed to
__________________________________________
________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
A-19-8
EXHIBIT B
[RESERVED]
B-1
EXHIBIT C
FORM OF ASSIGNMENT AGREEMENT
C-1
ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated December 16,
2004, ("AGREEMENT") among Greenwich Capital Financial Products, Inc.
("ASSIGNOR"), Financial Asset Securities Corp. ("ASSIGNEE") and Fremont
Investment & Loan (the "COMPANY"):
For and in consideration of the sum of TEN DOLLARS ($10.00)
and other valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
ASSIGNMENT AND CONVEYANCE
-------------------------
1. The Assignor hereby conveys, sells, grants, transfers
and assigns to the Assignee (x) all of the right, title and interest of the
Assignor, as purchaser, in, to and under (a) those certain Mortgage Loans listed
as being originated by the Company on the schedule (the "MORTGAGE LOAN
SCHEDULE") attached hereto as Exhibit A (the "MORTGAGE LOANS") and (b) except as
described below, that certain Master Mortgage Loan Purchase and Interim
Servicing Agreement dated as of March 1, 2004, as amended (the "PURCHASE
AGREEMENT"), between the Assignor, as initial purchaser (the "PURCHASER"), and
the Company, as seller and interim servicer, solely insofar as the Purchase
Agreement relates to the Mortgage Loans and (y) other than as provided below
with respect to the enforcement of representations and warranties, none of the
obligations of the Assignor under the Purchase Agreement.
The Assignor specifically reserves and does not assign to the
Assignee hereunder any and all right, title and interest in, to and under and
any obligations of the Assignor with respect to any mortgage loans subject to
the Purchase Agreement which are not the mortgage loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement.
RECOGNITION OF THE COMPANY
--------------------------
2. From and after the date hereof, the Company shall and
does hereby recognize that the Assignee will transfer the Mortgage Loans and
assign its rights under the Purchase Agreement (solely to the extent set forth
herein) and this Agreement to Fremont Home Loan Trust 2004-4 (the "Trust")
created pursuant to a Pooling and Servicing Agreement, dated as of December 1,
2004 (the "Pooling Agreement"), among the Assignee, ▇▇▇▇▇▇ Loan Servicing LP as
servicer (including its successors in interest and any successor servicers under
the Pooling Agreement, the "Servicer") and Deutsche Bank National Trust Company,
as trustee (including its successors in interest and any successor trustees
under the Pooling Agreement, the "Trustee"). The Company hereby acknowledges and
agrees that from and after the date hereof (i) the Trust will be the owner of
the Mortgage Loans, (ii) the Company shall look solely to the Trust for
performance of any obligations of the Assignor insofar as they relate to the
enforcement of the representations, warranties and covenants with respect to the
Mortgage Loans, (iii) the Trust (including the Trustee and the Servicer acting
on the Trust's behalf) shall have all the rights and remedies available to the
Assignor, insofar as they relate to the Mortgage Loans, under the Purchase
Agreement, including, without limitation, the enforcement of the document
delivery requirements and remedies with respect to breaches of representations
and warranties set forth in
the Purchase Agreement, and shall be entitled to enforce all of the obligations
of the Company thereunder insofar as they relate to the Mortgage Loans, and (iv)
all references to the Purchaser (insofar as they relate to the rights, title and
interest and, with respect to obligations of the Purchaser, only insofar as they
relate to the enforcement of the representations, warranties and covenants of
the Company) or the Custodian under the Purchase Agreement insofar as they
relate to the Mortgage Loans, shall be deemed to refer to the Trust (including
the Trustee and the Servicer acting on the Trust's behalf). Neither the Company
nor the Assignor shall amend or agree to amend, modify, waiver, or otherwise
alter any of the terms or provisions of the Purchase Agreement which amendment,
modification, waiver or other alteration would in any way affect the Mortgage
Loans or the Company's performance under the Purchase Agreement with respect to
the Mortgage Loans without the prior written consent of the Trustee.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
3. The Company warrants and represents to the Assignor,
the Assignee and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation;
(b) The Company has full power and authority to execute,
deliver and perform its obligations under this Agreement and has full
power and authority to perform its obligations under the Purchase
Agreement. The execution by the Company of this Agreement is in the
ordinary course of the Company's business and will not conflict with,
or result in a breach of, any of the terms, conditions or provisions of
the Company's charter or bylaws or any legal restriction, or any
material agreement or instrument to which the Company is now a party or
by which it is bound, or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Company or its
property is subject. The execution, delivery and performance by the
Company of this Agreement have been duly authorized by all necessary
corporate action on part of the Company. This Agreement has been duly
executed and delivered by the Company, and, upon the due authorization,
execution and delivery by the Assignor and the Assignee, will
constitute the valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms except as
enforceability may be limited by bankruptcy, reorganization,
insolvency, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and by general principles of
equity regardless of whether enforceability is considered in a
proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is
required to be obtained or made by the Company in connection with the
execution, delivery or performance by the Company of this Agreement;
(d) There is no action, suit, proceeding or investigation
pending or threatened against the Company, before any court,
administrative agency or other tribunal, which would draw into question
the validity of this Agreement or the Purchase
-2-
Agreement, or which, either in any one instance or in the aggregate,
would result in any material adverse change in the ability of the
Company to perform its obligations under this Agreement or the Purchase
Agreement, and the Company is solvent;
(e) No Mortgage Loans originated on or before October 1,
2002 through March 6, 2003 is governed by the Georgia Fair Lending Act;
(f) With respect any Mortgage Loan originated on or after
August 1, 2004, neither the related Mortgage nor the related Mortgage
Note requires the borrower to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan
transaction; and
(g) No Mortgage Loan is a "high cost home", "covered"
(excluding home loans defined as "covered home loans" in the New Jersey
Home Ownership Security Act of 2002 that were originated between
November 26, 2003 and July 7, 2004), "high risk home" or "predatory"
mortgage loan or any other comparable term, no matter how defined under
any applicable federal, state or local law (or a similarly classified
loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential
mortgage loans having high interest rates, points and/or fees).
4. Pursuant to Section 12 of the Purchase Agreement, the
Company hereby represents and warrants, for the benefit of the Assignor, the
Assignee and the Trust, that the representations and warranties set forth in
Sections 7.01 and 7.02 of the Purchase Agreement, are true and correct as of the
date hereof as if such representations and warranties were made on such date,
except that the representation and warranty set forth in Section 7.02(a) shall,
for purposes of this Agreement, relate to the Mortgage Loan Schedule attached
hereto and except for the limitations and qualifications set forth on Schedule 1
hereto.
5. The Assignor hereby makes the following
representations and warranties as of the date hereof:
(a) Each Mortgage Loan at the time it was made complied
in all material respects with applicable local, state, and federal
laws, including, but not limited to, all applicable predatory and
abusive lending laws;
(b) None of the mortgage loans are High Cost as defined
by any applicable predatory and abusive lending laws; and
(c) No Mortgage Loan is a high cost loan or a covered
loan, as applicable (as such terms are defined in Standard & Poor's
LEVELS Version 5.6 Glossary Revised, Appendix E).
REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES
-----------------------------------------------------
6. The Company hereby acknowledges and agrees that the
remedies available to the Assignor, the Assignee and the Trust (including the
Trustee and the Servicer acting on the Trust's behalf) in connection with any
breach of the representations and warranties
-3-
made by the Company set forth in Sections 3 and 4 hereof shall be as set forth
in Subsection 7.03 of the Purchase Agreement as if they were set forth herein
(including without limitation the repurchase and indemnity obligations set forth
therein).
The Assignor hereby acknowledges and agrees that the remedies
available to the Assignee and the Trust (including the Trustee and the Servicer
acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Assignor set forth in Section 5
hereof shall be as set forth in Section 2.03 of the Pooling Agreement as if they
were set forth herein.
MISCELLANEOUS
-------------
7. This Agreement shall be construed in accordance with
the laws of the State of New York, without regard to conflicts of law
principles, and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
8. No term or provision of this Agreement may be waived
or modified unless such waiver or modification is in writing and signed by the
party against whom such waiver or modification is sought to be enforced, with
the prior written consent of the Trustee.
9. This Agreement shall inure to the benefit of (i) the
successors and assigns of the parties hereto and (ii) the Trust (including the
Trustee and the Servicer acting on the Trust's behalf). Any entity into which
Assignor, Assignee or Company may be merged or consolidated shall, without the
requirement for any further writing, be deemed Assignor, Assignee or Company,
respectively, hereunder.
10. Each of this Agreement and the Purchase Agreement
shall survive the conveyance of the Mortgage Loans and the assignment of the
Purchase Agreement (to the extent assigned hereunder) by Assignor to Assignee
and by Assignee to the Trust and nothing contained herein shall supersede or
amend the terms of the Purchase Agreement.
11. This Agreement may be executed simultaneously in any
number of counterparts. Each counterpart shall be deemed to be an original and
all such counterparts shall constitute one and the same instrument.
12. In the event that any provision of this Agreement
conflicts with any provision of the Purchase Agreement with respect to the
Mortgage Loans, the terms of this Agreement shall control.
13. Capitalized terms used in this Agreement (including
the exhibits hereto) but not defined in this Agreement shall have the meanings
given to such terms in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
-4-
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized officers as of the date first above
written.
Greenwich Capital Financial
Products, Inc.
By: __________________________________
Name:
Title:
FINANCIAL ASSET SECURITIES CORP.
By: __________________________________
Name:
Title:
FREMONT INVESTMENT & LOAN
By: __________________________________
Name:
Title:
-5-
EXHIBIT D
MORTGAGE LOAN SCHEDULE
[FILED BY PAPER]
D-1
EXHIBIT E
REQUEST FOR RELEASE
To: Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Pooling and Servicing Agreement dated as of December
1, 2004, among Financial Asset Securities Corp. as
Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as Servicer, and
Deutsche Bank National Trust Company, a national
BANKING ASSOCIATION, AS TRUSTEE
In connection with the administration of the Mortgage Loans held by you
as Trustee pursuant to the above-captioned Pooling and Servicing Agreement, we
request the release, and hereby acknowledge receipt of the Trustee's Mortgage
File Or the Mortgage Loan described below, for the reason indicated.
Mortgage Loan Number:
---------------------
Mortgagor Name, Address & Zip Code:
-----------------------------------
Reason for Requesting Documents (check pne):
--------------------------------------------
_________1. Mortgage Paid in Full
_________2. Foreclosure
_________3. Substitution
_________4. Other Liquidation (Repurchases, etc.)
_________5. Nonliquidation Reason:_____________________
Address to which Trustee should deliver the Trustee's Mortgage File:
________________________________________________________________________________
________________________________________________________________________________
E-1
By:_____________________________________
(authorized signer)
Issuer:_________________________________
Address:________________________________
________________________________
Date:___________________________________
Trustee
Deutsche Bank National Trust Company
Please acknowledge the execution of the above request by your signature
and date below:
____________________________ __________________
Signature Date
Documents returned to Trustee:
______________________________ __________________
Trustee Date
E-2
EXHIBIT F-1
FORM OF TRUSTEE'S INITIAL CERTIFICATION
December __, 2004
Financial Asset Securities Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement dated as of December
1, 2004, among Financial Asset Securities Corp. as
Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as Servicer, and
Deutsche Bank National Trust Company, a national
BANKING ASSOCIATION, AS TRUSTEE
Ladies and Gentlemen:
Attached is the Trustee's preliminary exception report delivered in
accordance with Section 2.02 of the referenced Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in the Mortgage File pertaining to the Mortgage Loans
identified on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan or (iii) whether any
Mortgage File includes any of the documents specified in clause (vi) of Section
2.01 of the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
By:_____________________________________
Name:
Title:
F-1-1
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
________________
[Date]
Financial Asset Securities Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of December 1, 2004
among Financial Asset Securities Corp., as Depositor,
▇▇▇▇▇▇ Loan Servicing LP, as Servicer and Deutsche
Bank National Trust Company, as Trustee with respect
to Fremont Home Loan Trust 2004-4, Asset-Backed
Certificates, Series 2004-4
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement,
the undersigned, as Trustee, hereby certifies that as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage loan paid in full
or listed on Schedule I hereto) it (or its custodian) has received the
applicable documents listed in Section 2.01 of the Pooling and Servicing
Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed on
Schedule I hereto, it has reviewed the documents listed above and has determined
that each such document appears to be complete and, based on an examination of
such documents, the information set forth in items 1, 3, 10, 11 and 15 of the
definition of Mortgage Loan Schedule in the Pooling and Servicing Agreement
accurately reflects information in the Mortgage File.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
By:_____________________________________
Name:
Title:
F-2-1
EXHIBIT F-3
FORM OF RECEIPT OF MORTGAGE NOTE
Financial Asset Securities Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Fremont Home Loan Trust 2004-4, ASSET-BACKED
CERTIFICATES SERIES 2004-4
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of December 1, 2004 among Financial
Asset Securities Corp., as Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as Servicer and
Deutsche Bank National Trust Company, as Trustee, we hereby acknowledge the
receipt of the original Mortgage Notes (a copy of which is attached hereto as
Exhibit 1) with any exceptions thereto listed on Exhibit 2.
DEUTSCHE BANK NATIONAL TRUST COMPANY
By:_____________________________________
Name:
Title:
F-3-1
EXHIBIT G
[RESERVED]
G-1
EXHIBIT H
FORM OF LOST NOTE AFFIDAVIT
Personally appeared before me the undersigned authority to administer
oaths, __________________ who first being duly sworn deposes and says: Deponent
is __________________________ of ____________________________, successor by
merger to _________________________ ("Seller") and who has personal knowledge of
the facts set out in this affidavit.
On _________________________________, _________________________________ did
execute and deliver a promissory note in the principal amount of
$____________________.
That said note has been misplaced or lost through causes unknown and is
presently lost and unavailable after diligent search has been made. Seller's
records show that an amount of principal and interest on said note is still
presently outstanding, due, and unpaid, and Seller is still owner and holder in
due course of said lost note.
Seller executes this Affidavit for the purpose of inducing Deutsche
Bank National Trust Company, as trustee on behalf of Fremont Home Loan Trust
2004-4, Asset-Backed Certificates Series 2004-4, to accept the transfer of the
above described loan from Seller.
Seller agrees to indemnify Deutsche Bank National Trust Company and
Financial Asset Securities Corp. harmless for any losses incurred by such
parties resulting from the above described promissory note has been lost or
misplaced.
By: _______________________
_______________________
STATE OF )
) SS:
COUNTY OF )
On this ______ day of ______________, 20_, before me, a Notary Public,
in and for said County and State, appeared , who acknowledged the extension of
the foregoing and who, having been duly sworn, states that any representations
therein contained are true.
Witness my hand and Notarial Seal this _________ day of 20__.
____________________________
____________________________
My commission expires __________________________.
H-1
EXHIBIT I
FORM OF LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that [NAME OF MORTGAGEE, ASSIGNEE OR LAST
ENDORSEE, AS APPLICABLE], [a ___________________ corporation][a national banking
organization], having its principal place of business at
__________________________, (the "Undersigned"), pursuant to that Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") among Financial
Asset Securities Corp. (the "Owner"), Deutsche Bank National Trust Company and
▇▇▇▇▇▇ Loan Servicing LP ("▇▇▇▇▇▇"), hereby constitutes and appoints ▇▇▇▇▇▇, by
and through Litton's officers, the Undersigned's true and lawful
Attorney-in-Fact, in the Undersigned's name, place and stead, as their interests
may appear, and for the Undersigned's respective benefit, in connection with all
Mortgage Loans serviced by ▇▇▇▇▇▇ pursuant to the Pooling and Servicing
Agreement, for the purpose of performing all acts and executing all documents in
the name of the Undersigned as may be customarily and reasonably necessary and
appropriate to effectuate the following enumerated transactions in respect of
any of the mortgages, deeds of trust or security instrument (each a "Mortgage"
or a "Deed of Trust" respectively) and promissory notes secured thereby (each a
"Mortgage Note") for which the Undersigned is acting as Servicer pursuant to the
Pooling and Servicing Agreement (whether the Undersigned is named therein as
mortgagee or beneficiary or has become mortgagee by virtue of endorsement of the
Mortgage Note secured by any such Mortgage or Deed of Trust) all subject to the
terms of the related Pooling and Servicing Agreement.
This appointment shall apply to the following enumerated transactions only:
1. The modification or re-recording of a Mortgage or Deed of Trust, where
said modification or re-recording is for the purpose of correcting the Mortgage
or Deed of Trust to conform same to the original intent of the parties thereto
or to correct title errors discovered after such title insurance was issued and
said modification or re-recording, in either instance, does not adversely affect
the lien of the Mortgage or Deed of Trust as insured.
2. The subordination of the lien of a Mortgage or Deed of Trust to an
easement in favor of a public utility company or a governmental agency or
authority thereunder with powers of eminent domain; this section shall include,
without limitation, the execution of partial satisfaction/release, partial
reconveyances or the execution of requests to trustees to accomplish same.
3. The conveyance of the properties to the mortgage insurer, or the
closing of the title to the property to be acquired as real estate owned, or
conveyance of title to real estate owned.
4. The completion of loan assumption agreements.
5. The full satisfaction/release of a Mortgage or Deed of Trust or full
reconveyance upon payment and discharge of all sums secured thereby, including,
without limitation, cancellation of the related Mortgage Note.
6. The assignment of any Mortgage or Deed of Trust and the related
Mortgage Note, in connection with the repurchase of the mortgage loan secured
and evidenced thereby.
I-1
7. The full assignment of a Mortgage or Deed of Trust upon payment and
discharge of all sums secured thereby in conjunction with the refinancing
thereof, including, without limitation, the assignment of the related Mortgage
Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure, the
taking of a deed in lieu of foreclosure, or the completion of judicial or
non-judicial foreclosure or termination, cancellation or rescission of any such
foreclosure, including, without limitation, any and all of the following acts:
a) the substitution of trustee(s) serving under a Deed of Trust, in
accordance with state law and the Deed of Trust;
b) the preparation and issuance of statements of breach or
non-performance;
c) the preparation and filing of notices of default and/or notices of
sale;
d) the cancellation/rescission of notices of default and/or notices of
sale;
e) the taking of a deed in lieu of foreclosure; and
f) the preparation and execution of such other documents and performance
of such other actions as may be necessary under the terms of the Mortgage, Deed
of Trust or state law to expeditiously complete said transactions in paragraphs
8(a) through 8(e) above.
9. The full assignment of a Mortgage or Deed of Trust upon sale
of a loan pursuant to a mortgage loan sale agreement for the sale of a loan or
pool of loans, including, without limitation, the assignment of the related
Mortgage Note.
The Undersigned gives said Attorney-in-Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney, each subject to the terms and conditions set forth in the
related Pooling and Servicing Agreement and in accordance with the standard of
care applicable to servicers in the Pooling and Servicing Agreement as fully as
the undersigned might or could do, and hereby does ratify and confirm to all
that said Attorney-in-Fact shall lawfully do or cause to be done by authority
hereof. This Limited Power of Attorney shall be effective as of [SERVICING
TRANSFER EFFECTIVE DATE].
Nothing contained herein shall (i) limit in any manner any indemnification
provided by ▇▇▇▇▇▇ to the Owner under the Pooling and Servicing Agreement, or
(ii) be construed to ▇▇▇▇▇ ▇▇▇▇▇▇ the power to initiate or defend any suit,
litigation or proceeding in the name of the Undersigned except as specifically
provided for herein or under the Pooling and Servicing Agreement.
The Owner hereby agrees to indemnify and hold the Undersigned and its directors,
officers, employees and agents harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever incurred by
reason or result of or in connection with the exercise by ▇▇▇▇▇▇ of the powers
granted to it hereunder. The foregoing indemnity shall survive the termination
of this Limited Power of Attorney and the Pooling and Servicing Agreement or the
earlier resignation or removal of the Undersigned under the Pooling and
Servicing Agreement.
I-2
Any third party without actual notice of fact to the contrary may rely upon the
exercise of the power granted under this Limited Power of Attorney; and may be
satisfied that this Limited Power of Attorney shall continue in full force and
effect and has not been revoked unless an instrument of revocation has been made
in writing by the undersigned, and such third party put on notice thereof. This
Limited Power of Attorney shall be in addition to and shall not revoke or in any
way limit the authority granted by any previous power of attorney executed by
the Undersigned.
IN WITNESS WHEREOF, ____________________ pursuant to the Pooling and Servicing
Agreement, has caused its corporate seal to be hereto affixed and these presents
to be signed and acknowledged in its name and behalf by ______________________,
its duly elected and authorized _________________________ this ___ day of
_________________, 2004.
By:_____________________________________
Name: ______________________
Title: ___________________________
Acknowledged and Agreed
▇▇▇▇▇▇ Loan Servicing LP
By:_________________________
Name:
Title:
I-3
EXHIBIT J
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Financial Asset Securities Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company
Re: Fremont Home Loan Trust 2004-4, ASSET-BACKED CERTIFICATES
SERIES 2004-4
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned Certificates,
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan that is subject to Section 4975 of the Internal Revenue Code of 1986, as
amended, nor are we acting on behalf of any such plan, (e) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with clause
(g) below), (f) we have not offered or sold any Certificates to, or solicited
offers to buy any Certificates from, any person, or otherwise approached or
negotiated with any person with respect thereto, or taken any other action which
would result in a violation of Section 5 of the Act, and (g) we will not sell,
transfer or otherwise dispose of any Certificates unless (1) such sale, transfer
or other disposition is made pursuant to an effective registration statement
under the Act or is exempt from such registration requirements, and if
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this Certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Certificate has executed and delivered to you a certificate
to substantially the same effect as this certificate, and (3) the purchaser or
transferee has otherwise complied with any conditions for transfer set forth in
the Pooling and Servicing Agreement.
J-1
Very truly yours,
[NAME OF TRANSFEREE]
By:_____________________________________
[Authorized Officer,
if a corporate entity]
J-2
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
Financial Asset Securities Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Fremont Home Loan Trust 2004-4, ASSET-BACKED CERTIFICATES
SERIES 2004-4
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have had the
opportunity to ask questions of and receive answers from the Depositor
concerning the purchase of the Certificates and all matters relating thereto or
any additional information deemed necessary to our decision to purchase the
Certificates, (c) we are not an employee benefit plan that is subject to the
Employee Retirement Income Security Act of 1974, as amended, or a plan that is
subject to Section 4975 of the Internal Revenue Code of 1986, as amended, nor
are we acting on behalf of any such plan, (d) we have not, nor has anyone acting
on our behalf offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security to,
or solicited any offer to buy or accept a transfer, pledge or other disposition
of the Certificates, any interest in the Certificates or any other similar
security from, or otherwise approached or negotiated with respect to the
Certificates, any interest in the Certificates or any other similar security
with, any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Certificates under the Securities Act or
that would render the disposition of the Certificates a violation of Section 5
of the Securities Act or require registration pursuant thereto, nor will act,
nor has authorized or will authorize any person to act, in such manner with
respect to the Certificates, (e) we are a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act and have completed
either of the forms of certification to that effect attached hereto as Annex 1
or Annex 2. We are aware that the sale to us is being made in reliance on Rule
144A. We are acquiring the Certificates for our own account or for resale
pursuant to Rule 144A and further, understand that such Certificates may be
resold, pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in
J-3
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,
if a corporate entity]
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.
________________________
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
_________ BROKER-DEALER. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934.
_________ 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.
J-6
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.
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
J-8
owned but subject to a repurchase agreement and (vii) currency, interest rate
and commodity swaps.
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
FORM OF TRANSFER AFFIDAVIT FOR RESIDUAL CERTIFICATES
PURSUANT TO SECTION 5.02(d)
FREMONT HOME LOAN TRUST 2004-4
ASSET-BACKED CERTIFICATES, SERIES 2004-4
STATE OF )
) ss:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned [is an officer of __________], the proposed
Transferee of an Ownership Interest in Class R[-X] Certificates (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement"), relating to the above-referenced Certificates, among Financial
Asset Securities Corp., as Depositor, ▇▇▇▇▇▇ Loan Servicing LP, as Servicer (the
"Servicer") and Deutsche Bank National Trust Company, as Trustee (the
"Trustee"). Capitalized terms used, but not defined herein shall have the
meanings ascribed to such terms in the Agreement. The Transferee has authorized
the undersigned to make this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof and will be, as of
the date of the Transfer, a Permitted Transferee. The Transferee is acquiring
its Ownership Interest in the Certificate either (i) for its own account or (ii)
as nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) to a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass- through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a
K-1
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person).
5. The Transferee has reviewed the provisions of Section 5.02(d)
of the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(d) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit K to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate.
8. The Transferee's taxpayer identification number is
_____________.
9. The Transferee is a U.S. Person as defined in Code Section
7701-(a)(30).
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
11. The Transferee is not an employee benefit plan that is subject
to ERISA or a plan that is subject to Section 4975 of the Code, nor is it acting
on behalf of such a plan.
K-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed [on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested,] this ___ day of __________, ___.
[NAME OF TRANSFEREE]
By:_____________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
__________________________
[Assistant Secretary]
Personally appeared before me the above-named , known or proved to me
to be the same person who executed the foregoing instrument and to be the of the
Transferee, and acknowledged that he executed the same as his free act and deed
and the free act and deed of the Transferee.
Subscribed and sworn before me this __ day of _______, ___.
________________________________________
NOTARY PUBLIC
My Commission expires the ____
day of ____, __
K-3
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Financial Asset Securities Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Fremont Home Loan Trust 2004-4, ASSET-BACKED
CERTIFICATES SERIES 2004-4
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify
that (a) we understand that the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are being disposed by us in
a transaction that is exempt from the registration requirements of the Act, (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act, (c) to
the extent we are disposing of a Class [ ] Certificate, we have no knowledge the
Transferee is not a Permitted Transferee and (d) no purpose of the proposed
disposition of a Class [ ] Certificate is to impede the assessment or collection
of tax.
Very truly yours,
TRANSFEROR
By:_____________________________________
Name:
Title:
L-1
EXHIBIT M
FORM OF ERISA REPRESENTATION LETTER
_____________, 20__
Financial Asset Securities Corp. Deutsche Bank National Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Fremont Home Loan Trust 2004-4, ASSET-BACKED
CERTIFICATES SERIES 2004-4
Dear Sirs:
_______________________ (the "Transferee") intends to acquire
from _____________________ (the "Transferor") $____________ Initial Certificate
Principal Balance Fremont Home Loan Trust 2004-4, Asset-Backed Certificates
Series 2004-4, Class [C][P][R[-X]] (the "Certificates"), issued pursuant to a
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement") dated as
of December 1, 2004 among Financial Asset Securities Corp. as depositor (the
"Depositor"), ▇▇▇▇▇▇ Loan Servicing LP as servicer (the "Servicer") and Deutsche
Bank National Trust Company as trustee (the "Trustee"). Capitalized terms used
herein and not otherwise defined shall have the meanings assigned thereto in the
Pooling and Servicing Agreement. The Transferee hereby certifies, represents and
warrants to, and covenants with the Depositor, the Trustee and the Servicer the
following:
The Certificates (i) are not being acquired by, and will not
be transferred to, any employee benefit plan within the meaning of section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
other retirement arrangement, including individual retirement accounts and
annuities, ▇▇▇▇▇ 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 ▇.▇.▇.▇▇.
2510.3-101.
Very truly yours,
[Transferee]
By:______________________________
Name:
Title:
M-1
EXHIBIT N-1
FORM CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K
Re: Fremont Home Loan Trust, Series 2004-4
ASSET BACKED CERTIFICATES, SERIES 2004-4
I, [identify the certifying individual], certify that:
l. I have reviewed this annual report on Form 10-K, and
all reports on Form 8-K containing Distribution Date reports filed in respect of
periods included in the year covered by this annual report, of Financial Asset
Securities Corp. (the "Registrant");
2. Based on my knowledge, the information in these
reports, taken as a whole, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading
as of the last day of the period covered by this annual report;
3. Based on my knowledge, the servicing information
required to be provided to the Trustee by the Servicer under the Pooling and
Servicing Agreement is included in these reports;
4. I am responsible for reviewing the activities
performed by the Servicer under the Pooling and Servicing Agreement and based
upon the review required under the Pooling and Servicing Agreement, and except
as disclosed in the report, the Servicer has fulfilled its obligations under the
Pooling and Servicing Agreement; and
5. I have disclosed to the Registrant's certified public
accountants all significant deficiencies relating to the Servicer's compliance
with the minimum servicing standards in accordance with a review conducted in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
similar standard as set forth in the Pooling and Servicing Agreement.
Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated December
1, 2004 (the "Pooling and Servicing Agreement"), among the Registrant as
Depositor, ▇▇▇▇▇▇ Loan Servicing L.P. as servicer and Deutsche Bank National
Trust Company as trustee.
FINANCIAL ASSET SECURITIES CORP.
By:______________________________
Name:
Title:
Date:
N-1-1
EXHIBIT N-2
FORM CERTIFICATION TO BE
PROVIDED TO THE DEPOSITOR BY THE TRUSTEE
Re: Fremont Home Loan Trust 2004-4 (the "Trust")
ASSET-BACKED CERTIFICATES, SERIES 2004-4
I, [identify the certifying individual], a [title] of Deutsche
Bank National Trust Company, as Trustee of the Trust, hereby certify to
Financial Asset Securities Corp. (the "Depositor"), and its officers, directors
and affiliates, and with the knowledge and intent that they will rely upon this
certification, that:
1. I have reviewed the annual report on Form 10-K for
the fiscal year [___], and all reports on Form 8-K containing distribution
reports filed in respect of periods included in the year covered by that annual
report, of the Depositor relating to the above-referenced trust;
2. Based on my knowledge, the information in these
distribution reports prepared by the Trustee, taken as a whole, does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading as of the last day of the period
covered by that annual report; and
3. Based on my knowledge, the distribution information
required to be provided by the Trustee under the Pooling and Servicing Agreement
is included in these reports.
Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated December
1, 2004 (the "Pooling and Servicing Agreement"), among the Depositor as
depositor, ▇▇▇▇▇▇ Loan Servicing LP as servicer and Deutsche Bank National Trust
Company as trustee.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:______________________________
Name:
Title:
Date:
N-2-1
EXHIBIT N-3
FORM CERTIFICATION TO BE
PROVIDED TO THE DEPOSITOR BY THE SERVICER
Re: Fremont Home Loan Trust, Series 2004-4 Asset Backed
Certificates, Series 2004-4
I, [identify the certifying individual], certify to Financial
Asset Securities Corp. (the "Depositor"), the Trustee and their respective
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:
1. I have reviewed the information provided to the
Trustee by the Servicer pursuant to the Pooling and Servicing Agreement and
information correctly derived by the Trustee from such information and included
in the annual report on Form 10-K for the fiscal year [___] and on all reports
on Form 8-K filed in respect of periods included in the year covered by that
annual report, of the Depositor relating to the Trust Fund (the "Servicing
Information");
2. Based on my knowledge, the Servicing Information in
these reports, taken as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading as of the last day of the period covered by that annual report;
3. Based on my knowledge, the Servicing Information is
correct;
4. I am responsible for reviewing the activities
performed by the Servicer under the Pooling and Servicing Agreement and based
upon the review required under the Pooling and Servicing Agreement, and except
as disclosed to the Depositor and the Trustee, the Servicer has fulfilled its
obligations under the Pooling and Servicing Agreement; and
5. I have disclosed to the Servicer's certified public
accountants and the Depositor all significant deficiencies relating to the
Servicer's compliance with the minimum servicing standards in accordance with a
review conducted in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or similar standard as set forth in the Pooling and Servicing
Agreement.
N-3-1
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated December 1, 2004
(the "Pooling and Servicing Agreement"), among the Depositor, ▇▇▇▇▇▇ Loan
Servicing L.P. as servicer and Deutsche Bank National Trust Company as trustee.
▇▇▇▇▇▇ LOAN SERVICING L.P.
By:______________________________
Name:
Title:
Date:
N-3-2
EXHIBIT O
FORM OF CAP CONTRACT
Available Upon Request
O-1
EXHIBIT P
FORM OF ANNUAL STATEMENT AS TO COMPLIANCE
___________________ Trust, Series 200_-___
_______________ Pass-Through Certificates
I, _____________________, hereby certify that I am a duly
appointed __________________________ of _______________________________ (the
"[Master Servicer]"), and further certify as follows:
1. This certification is being made pursuant to the
terms of the Pooling and Servicing Agreement, dated as of ____________, _____
(the "Agreement"), among ______________________, as depositor, the [Master
Servicer], as [master servicer] and ________________, as trustee.
2. I have reviewed the activities of the [Master
Servicer] during the preceding year and the [Master Servicer's] performance
under the Agreement and to the best of my knowledge, based on such review, the
[Master Servicer] has fulfilled all of its obligations under the Agreement
throughout the year.
Capitalized terms not otherwise defined herein have the
meanings set forth in the Agreements.
Dated: _________________
P-1
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of _____________.
By:______________________________
Name:
Title:
I, _________________________, a (an) __________________ of the
[Master Servicer], hereby certify that _________________ is a duly elected,
qualified, and acting _______________________ of the [Master Servicer] and that
the signature appearing above is his/her genuine signature.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of ______________.
By:______________________________
Name:
Title:
P-2
EXHIBIT Q
FORM OF ADDITION NOTICE
[Date]
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Pooling and Servicing Agreement dated as of December 1, 2004
among Financial Asset Securities Corp., as Depositor, ▇▇▇▇▇▇
Loan Servicing LP, as Servicer and Deutsche Bank National
Trust Company, as Trustee
Ladies and Gentlemen:
Pursuant to Section 2.08 of the referenced Pooling and Servicing
Agreement, Financial Asset Securities Corp. has designated Subsequent Mortgage
Loans to be sold to the Trust on __________, 2005, with an aggregate principal
balance of $ . Capitalized terms not otherwise defined herein have the meaning
set forth in the Pooling and Servicing Agreement.
Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.
Very truly yours,
FINANCIAL ASSET SECURITIES CORP.
By:
------------------------------
Name:
Title:
Acknowledged and Agreed:
DEUTSCHE BANK NATIONAL TRUST COMPANY as trustee
By:
--------------------------------------------------
Name:
Title:
Q-1
EXHIBIT R
FORM OF SUBSEQUENT TRANSFER INSTRUMENT
Pursuant to this Subsequent Transfer Instrument, dated ________, 2005
(the "Instrument"), between Financial Asset Securities Corp. as seller (the
"Depositor"), and Deutsche Bank National Trust Company as trustee of the Fremont
Home Loan Trust 2004-4, Asset-Backed Certificates, Series 2004-4, as purchaser
(the "Trustee"), and pursuant to the Pooling and Servicing Agreement, dated as
of December 1, 2004 (the "Pooling and Servicing Agreement"), among the
Depositor, ▇▇▇▇▇▇ Loan Servicing LP as servicer and the Trustee, the Depositor
and the Trustee agree to the sale by the Depositor and the purchase by the
Trustee in trust, on behalf of the Trust, of the Mortgage Loans listed on the
attached Schedule of Mortgage Loans (the "Subsequent Mortgage Loans").
Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Pooling and Servicing Agreement.
Section 1. Conveyance of Subsequent Mortgage Loans.
(a) The Depositor does hereby sell, transfer, assign, set over and
convey to the Trustee in trust, on behalf of the Trust, without recourse, all of
its right, title and interest in and to the Subsequent Mortgage Loans, and
including all amounts due on the Subsequent Mortgage Loans after the related
Subsequent Cut-off Date, and all items with respect to the Subsequent Mortgage
Loans to be delivered pursuant to Section 2.01 of the Pooling and Servicing
Agreement; provided, however that the Depositor reserves and retains all right,
title and interest in and to amounts due on the Subsequent Mortgage Loans on or
prior to the related Subsequent Cut-off Date. The Depositor, contemporaneously
with the delivery of this Agreement, has delivered or caused to be delivered to
the Trustee each item set forth in Section 2.01 of the Pooling and Servicing
Agreement. The transfer to the Trustee by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule shall be absolute and is
intended by the Depositor, the Servicer, the Trustee and the Certificateholders
to constitute and to be treated as a sale by the Depositor to the Trust Fund.
(b) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee
without recourse for the benefit of the Certificateholders all the right, title
and interest of the Depositor, in, to and under the Subsequent Mortgage Loan
Purchase Agreement, dated the date hereof, between the Depositor as purchaser
and the Servicer as seller, to the extent of the Subsequent Mortgage Loans.
(c) Additional terms of the sale are set forth on Attachment A hereto.
Section 2. Representations and Warranties; Conditions Precedent.
(a) The Depositor hereby confirms that each of the conditions and the
representations and warranties set forth in Section 2.08 of the Pooling and
Servicing Agreement are satisfied as of the date hereof.
R-1
(b) All terms and conditions of the Pooling and Servicing Agreement are
hereby ratified and confirmed; provided, however, that in the event of any
conflict, the provisions of this Instrument shall control over the conflicting
provisions of the Pooling and Servicing Agreement.
Section 3. Recordation of Instrument.
To the extent permitted by applicable law, this Instrument, or a
memorandum thereof if permitted under applicable law, is subject to recordation
in all appropriate public offices for real property records in all of the
counties or other comparable jurisdictions in which any or all of the properties
subject to the Mortgages are situated, and in any other appropriate public
recording office or elsewhere, such recordation to be effected by the Servicer
at the Certificateholders' expense on direction of the related
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.
Section 4. Governing Law.
This Instrument 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, without giving
effect to principles of conflicts of law.
Section 5. Counterparts.
This Instrument may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same instrument.
Section 6. Successors and Assigns.
This Instrument shall inure to the benefit of and be binding upon the
Depositor and the Trustee and their respective successors and assigns.
R-2
FINANCIAL ASSET SECURITIES CORP.
By:______________________________
Name:
Title:
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Trustee for Fremont
Home Loan Trust 2004-4, Asset-Backed
Certificates, Series 2004-4
By:______________________________
Name:
Title:
Attachments
-----------
A. Additional terms of sale.
B. Schedule of Subsequent Mortgage Loans.
R-3
EXHIBIT S
FORM OF SERVICING SIDE LETTER
▇▇▇▇▇▇ Loan Servicing LP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
December 7, 2004
Fremont Investment & Loan
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Greenwich Capital Financial Products, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter will confirm the agreement among Deutsche Bank
National Trust Company ("DBNT"), Greenwich Capital Financial Products, Inc.
("Greenwich"), ▇▇▇▇▇▇ Loan Servicing LP ("▇▇▇▇▇▇") and Fremont Investment & Loan
("Fremont") in connection with the securitization of certain whole mortgage
loans purchased or to be purchased from Fremont by Greenwich and identified on
the Mortgage Loan Schedules attached hereto as Schedules I-A and I-B
(collectively, the "Mortgage Loans"). Greenwich intends to securitize these
Mortgage Loans whereby Fremont will be the interim servicer of the securitized
Mortgage Loans until such loans are transferred to ▇▇▇▇▇▇ on 3/1/2005 and
4/1/2005 respectively (each, a "Securitization Transaction"). Capitalized terms
used, but not defined herein shall have the meanings set forth in the Master
Mortgage Loan Purchase and Interim Servicing Agreement (the "Purchase
Agreement"), dated as of March 1, 2004, between Fremont and Greenwich, which is
attached hereto as Exhibit A. Only if agreed to by all the parties
1.) Role of Fremont. Fremont is currently servicing the Mortgage Loans
identified on the Mortgage Loan Schedule on the behalf of Greenwich. Upon the
closing of the Securitization Transaction, Fremont agrees to service the
Mortgage Loans in accordance with the terms defined in the Purchase Agreement on
behalf of the trust created under the Securitization Transaction, subject to the
following:
a) Remittance Reports - pursuant to Section 11.15 of the Purchase
Agreement, Fremont shall deliver a copy of the remittance
report to ▇▇▇▇▇▇ at the notice
S-1
information provided in Section 4(i) below and a copy of the
remittance report to DBNT at the following e-mail address:
▇▇▇▇.▇▇▇▇▇▇▇@▇▇.▇▇▇. Fremont shall prepare reports for each
collection period it is servicing some or all of the Mortgage
Loans. The remittance report from Fremont for a month shall be
delivered to ▇▇▇▇▇▇ and DBNT no later than the 10th calendar
day of the following month.
b) Distributions - with respect to the January 18, 2005,
February 18, 2005, March 18, 2005, and April 18, 2005
Distribution Dates, remittances on the mortgage loans that
have not transferred to ▇▇▇▇▇▇ by the 1st of the month shall
be made scheduled/scheduled, together with any compensating
interest as required under the pooling and servicing agreement
("PSA") dated as of December 1, 2004 among Financial Asset
Securities Corp., ▇▇▇▇▇▇ Loan Servicing LP, and Deutsche Bank
National Trust Company, for the Mortgage Loans serviced by
Fremont. Remittances on loans that transfer to ▇▇▇▇▇▇ on the
1st of each month will be actual collections, along with any
compensating interest on those loans as required under the
PSA. All funds shall be remitted to the following ▇▇▇▇▇▇
account information, no later than the 10th calendar day of
the month:
▇▇▇▇▇▇ ACCOUNT INFORMATION
ABA# -- ▇▇▇▇▇▇▇▇▇
ACCT# -- 2000022992453
BANK -- WACHOVIA BANK
CHARLOTTE, NC
FOR CREDIT TO-- ▇▇▇▇▇▇ LOAN SERVICING
INVESTOR 541
c) ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certificate - Fremont shall provide a
servicer certification to ▇▇▇▇▇▇ in the form set forth in
Exhibit B to the Mortgage Loan Purchase Agreement, dated as of
TBA, among Greenwich, ▇▇▇▇▇▇ and Fremont, which covers the
time period Fremont is subservicing the Mortgage Loans for the
security.
d) Servicing Transfer - Fremont shall transfer the Mortgage
Loans identified on the Schedule I-A and I-B on March 1, 2005
and April 1, 2005 respectively pursuant to procedures
previously established between Fremont and ▇▇▇▇▇▇ which shall
include standard and customary P&I and T&I advance
reimbursements.
e) Fee for Services - Fremont shall be entitled to receive the
fee set forth in the pooling and servicing agreement in
exchange for servicing the Mortgage Loans as set forth in the
Purchase Agreement and in this Letter Agreement.
2.) Role of ▇▇▇▇▇▇. Upon the closing of the Securitization
Transaction, ▇▇▇▇▇▇ agrees to service the Mortgage Loans in accordance with the
related Pooling and Servicing
Agreement, among ▇▇▇▇▇▇, DBNT as trustee and Financial Asset Securities Corp.,
on behalf of the trust created under the Securitization Transaction, subject to
the following:
Distributions - ▇▇▇▇▇▇ shall remit to DBNT the funds on the Mortgage Loans
identified within the Mortgage Loan Schedule for the January 18th, February
18th, and March 18th Distribution Dates; provided however, that Fremont
will provide ▇▇▇▇▇▇ with all scheduled/scheduled remittances on the
mortgage loans that have not transferred to ▇▇▇▇▇▇ by the 1st of the month,
together with any compensating interest
funds due to the Trust, for the January, February, and March distributions.
Furthemore, ▇▇▇▇▇▇ shall remit funds identified within the Mortgage Loan
Schedule for the April 18th Distribution Date; provided however, that
Fremont will provide ▇▇▇▇▇▇ with actual collections on the loans that
transfer on 4/1/2005, along with any compensating interest due on those
loans as required under the PSA.
3.) Role of Greenwich and C-BASS. With respect to the Distribution
Dates in January 2005, February 2005, March 2005, and April 2005, Greenwich and
C-BASS, jointly shall no later than 30 days upon receipt of information provided
to them by Fremont, remit to Fremont any amounts in respect of compensating
interest expenses incurred by Fremont.
4.) Further Assurances. In the event it is agreed to by all parties
herein not to transfer the loans as described above due to re-purchase issues,
or any other issue otherwise not yet contemplated in this agreement, each party
shall continue with their roles as required in Sections 1 through 3 above.
5.) General Provisions.
(a) Amendment or Waiver. This Letter Agreement may not
be amended or modified except in writing signed by each of the parties hereto.
(b) Counterparts. This Letter Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
to be an original, and all such counterparts shall constitute one and the same
instrument.
(c) Severability Clause. Any part, provision,
representation or warranty of this Letter Agreement which is prohibited or which
is held to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Letter Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, 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. If the invalidity of any part, provision, representation or
warranty of this Letter Agreement shall deprive any party of the economic
benefit intended to be
conferred by this Letter Agreement, the parties shall negotiate, in good-faith,
to develop a structure the economic effect of which is nearly as possible the
same as the economic effect of this Letter Agreement without regard to such
invalidity.
(d) No Partnership. Nothing herein contained shall be
deemed or construed to create a co-partnership or joint venture between the
parties hereto.
(e) Cooperation. Each of the parties hereunder shall
cooperate fully with in connection with its engagement hereunder.
(f) Confidential Information. Each party shall keep
confidential and shall not divulge to any party, without the other party's prior
written consent, the amount paid for the Mortgage Loans, except to the extent
that it is appropriate for such party to do so in working with legal counsel,
auditors, taxing authorities and/or other governmental agencies. Each party
shall keep this letter confidential unless otherwise required by law or any
governmental agency, unless otherwise agreed to by the other party.
(g) Governing Law. THIS AGREEMENT SHALL BE INTERPRETED
AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK.
(h) Non-Assignable. This Letter Agreement may not be
assigned by any party hereto without the prior written consent of the other
parties hereto.
(i) Notices.
▇▇▇▇▇▇ Loan Servicing LP
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, SVP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇-▇▇▇▇.▇▇▇
Fremont Investment & Loan
▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ VP Treasurer
▇▇▇-▇▇▇-▇▇▇▇
This letter contains the entire agreement relating to the
subject matter hereof between the parties hereto and supersedes any prior oral
or written agreement. This letter may only be amended by a written document
signed by each party hereto.
Very truly yours,
▇▇▇▇▇▇ LOAN SERVICING LP
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Confirmed and Agreed to:
FREMONT INVESTMENT & LOAN
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SCHEDULE I
MORTGAGE LOAN SCHEDULE
(ii) EXHIBIT A
SERVICING ADDENDUM
SECTION 1. DEFINITIONS.
For purposes of this Agreement the following capitalized terms
shall have the respective meanings set forth below.
ADJUSTABLE RATE MORTGAGE LOAN: A Mortgage Loan which provides
for the adjustment of the Mortgage Interest Rate payable in respect thereto.
ADJUSTMENT DATE: With respect to each Adjustable Rate Mortgage
Loan, the date set forth in the related Mortgage Note on which the Mortgage
Interest Rate on such Adjustable Rate Mortgage Loan is adjusted in accordance
with the terms of the related Mortgage Note and Mortgage.
AGREEMENT: This Master Mortgage Loan Purchase and Servicing
Agreement including all exhibits, schedules, amendments and supplements hereto.
APPRAISED 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 satisfied the standards of FIRREA, 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 satisfied the standards of FIRREA.
ASSIGNMENT AND CONVEYANCE: An assignment and conveyance of the
Mortgage Loans purchased on a Closing Date in the form annexed hereto as Exhibit
4.
ASSIGNMENT OF MORTGAGE: With respect to each Mortgage Loan
which is not a MERS Loan, an individual assignment of the Mortgage, notice of
transfer or equivalent instrument blank, and otherwise in recordable form,
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to give record notice of the sale of the Mortgage to the
Purchaser.
BUSINESS DAY: Any day other than a Saturday or Sunday, or a
day on which banking and savings and loan institutions in the State of
California or the State of New York are authorized or obligated by law or
executive order to be closed.
CASH-OUT REFINANCING: A Refinanced Mortgage Loan the proceeds
of which were in excess of the principal balance of any existing first mortgage
on the related Mortgaged
Property and related closing costs, and were used to pay any such existing first
mortgage, related closing costs and subordinate mortgages on the related
Mortgaged Property.
CLOSING DATE: The date or dates on which the Purchaser from
time to time shall purchase and the Seller from time to time shall sell to the
Purchaser, the Mortgage Loans listed on the related Mortgage Loan Schedule with
respect to the related Mortgage Loan Package.
CLOSING DOCUMENTS: With respect to any Closing Date, the
documents required pursuant to Section 9.
CODE: The Internal Revenue Code of 1986, or any successor
statute thereto.
COMBINED LOAN-TO-VALUE RATIO OR CLTV: With respect to any
Mortgage Loan as of any date of determination, the ratio on such date of the
outstanding principal amount of the Mortgage Loan and any other mortgage loan
which is secured by a lien on the related Mortgaged Property to the Appraised
Value of the Mortgaged Property.
CONDEMNATION PROCEEDS: All awards, compensation and
settlements in respect of a taking of all or part of a Mortgaged Property by
exercise of the power of condemnation or the right of eminent domain.
CONFIRMATION: With respect to any Mortgage Loan Package
purchased and sold on any Closing Date, the letter agreement between the
Purchaser and the Seller (including any exhibits, schedules and attachments
thereto), setting forth the terms and conditions of such transaction and
describing the Mortgage Loans to be purchased by the Purchaser on such Closing
Date. A Confirmation may relate to more than one Mortgage Loan Package to be
purchased on one or more Closing Dates hereunder.
CONVERTIBLE MORTGAGE LOAN: A Mortgage Loan that by its terms
and subject to certain conditions contained in the related Mortgage or Mortgage
Note allows the Mortgagor to convert the adjustable Mortgage Interest Rate on
such Mortgage Loan to a fixed Mortgage Interest Rate.
CUSTODIAL ACCOUNT: The separate account or accounts, each of
which shall be an Eligible Account, created and maintained pursuant to this
Agreement, which shall be entitled "Fremont Investment & Loan, as servicer, in
trust for the Purchaser and various Mortgagors, Fixed and Adjustable Rate
Mortgage Loans", established at a financial institution acceptable to the
Purchaser.
CUSTODIAL AGREEMENT: The agreement governing the retention of
the originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents, a form of which agreement is annexed hereto as Exhibit
6.
CUSTODIAN: The custodian under the Custodial Agreement, or its
successor in interest or assigns, or any successor to the Custodian under the
Custodial Agreement, as therein provided.
CUT-OFF DATE: With respect to each Closing Date, the date as
of which the related Mortgage Loan balances are sold to the Purchaser.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.
DETERMINATION DATE: With respect to each Distribution Date,
the fifteenth (15th) day of the calendar month in which such Distribution Date
occurs or, if such fifteenth (15th) day is not a Business Day, the Business Day
immediately preceding such fifteenth (15th) day.
DISTRIBUTION DATE: The eighteenth (18th) day of each month,
commencing on the eighteenth day of the month next following the month in which
the related Cut-off Date occurs, or if such eighteenth (18th) day is not a
Business Day, the first Business Day immediately following such eighteenth
(18th) day.
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 on which the Monthly Payment is due on a Mortgage Loan, exclusive of any
days of grace.
ELIGIBLE ACCOUNT: Either (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company) are
rated A-1 by S&P or Prime-1 by Moody's (or a comparable rating if another rating
agency is specified by the Initial Purchaser by written notice to the Seller) at
the time any amounts are held on deposit therein, (ii) an account or accounts
the deposits in which are fully insured by the FDIC or (iii) a trust account or
accounts maintained with a federal or state chartered depository institution or
trust company acting in its fiduciary capacity. Eligible Accounts may bear
interest.
ESCROW ACCOUNT: The separate trust account or accounts created
and maintained pursuant to this Agreement which shall be entitled "Fremont
Investment & Loan, as servicer, in trust for the Purchaser and various
Mortgagors, Fixed and Adjustable Rate Mortgage Loans," established at a
financial institution acceptable to the Purchaser.
ESCROW PAYMENTS: The amounts constituting ground rents, taxes,
assessments, water charges, sewer rents, fire and hazard insurance premiums and
other payments required to be escrowed by the Mortgagor with the Mortgagee
pursuant to the terms of any Mortgage Note or Mortgage.
EVENT OF DEFAULT: Any one of the events enumerated in
Subsection 14.01.
▇▇▇▇▇▇ MAE: ▇▇▇▇▇▇ ▇▇▇ or any successor thereto.
FDIC: The 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
pursuant to this Agreement), a determination made by the Seller that all
Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which
the Seller, in its reasonable good faith judgment, expects to be finally
recoverable in respect thereof have been so recovered. The Seller shall maintain
records, prepared by a servicing officer of the Seller, of each Final Recovery
Determination.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement Act of 1989.
FIXED RATE MORTGAGE LOAN: A Mortgage Loan with respect to
which the Mortgage Interest Rate set forth in the Mortgage Note is fixed for the
term of such Mortgage Loan.
FLOOD ZONE SERVICE CONTRACT: A transferable contract
maintained for the Mortgaged Property with a nationally recognized flood zone
service provider for the purpose of obtaining the current flood zone status
relating to such Mortgaged Property.
▇▇▇▇▇▇▇ MAC: ▇▇▇▇▇▇▇ Mac or any successor thereto.
GROSS MARGIN: With respect to any Adjustable Rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage Note and the
related Mortgage Loan Schedule that is added to the Index on each Adjustment
Date in accordance with the terms of the related Mortgage Note to determine the
new Mortgage Interest Rate for such Mortgage Loan.
HUD: The United States Department of Housing and Urban
Development or any successor thereto.
INDEX: With respect to any Adjustable Rate Mortgage Loan, the
index identified on the Mortgage Loan Schedule and set forth in the related
Mortgage Note for the purpose of calculating the interest rate thereon.
INITIAL CLOSING DATE: The Closing Date on which the Initial
Purchaser purchases and the Seller sells the first Mortgage Loan Package
hereunder.
INITIAL PURCHASER: Greenwich Capital Financial Products, Inc.,
or any successor.
INSURANCE PROCEEDS: With respect to each Mortgage Loan,
proceeds of insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
INTERIM SERVICING PERIOD: With respect to any Mortgage Loan,
the period commencing on the related Closing Date and ending on the date
specified in the related Confirmation, provided, however that the Interim
Servicing Period may be extended for additional periods of thirty days by mutual
agreement of the parties.
LIQUIDATION PROCEEDS: Amounts, other than Insurance Proceeds
and Condemnation Proceeds, received in connection with the liquidation of a
defaulted Mortgage Loan through trustee's sale, foreclosure sale or otherwise.
LOAN-TO-VALUE RATIO OR LTV: With respect to any Mortgage Loan
as of any date of determination, the ratio on such date of the outstanding
principal amount of the Mortgage Loan, to the Appraised Value of the Mortgaged
Property.
MAXIMUM MORTGAGE INTEREST RATE: With respect to each
Adjustable Rate Mortgage Loan, a rate that is set forth on the related Mortgage
Loan Schedule and in the related Mortgage Note and is the maximum interest rate
to which the Mortgage Interest Rate on such Mortgage Loan may be increased on
any Adjustment Date.
MINIMUM MORTGAGE INTEREST RATE: With respect to each
Adjustable Rate Mortgage Loan, a rate that is set forth on the related Mortgage
Loan Schedule and in the related Mortgage Note and is the minimum interest rate
to which the Mortgage Interest Rate on such Mortgage Loan may be decreased on
any Adjustment Date.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number of Mortgage Loans
registered with MERS on the MERS(R) System.
MOM LOAN: Any Mortgage Loan where MERS acts as the mortgagee
of record of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.
MONTHLY ADVANCE: The aggregate of the advances made by the
Seller on any Distribution Date pursuant to Section 11.21 of the Servicing
Addendum.
MONTHLY PAYMENT: With respect to any Mortgage Loan, the
scheduled combined payment of principal and interest payable by a Mortgagor
under the related Mortgage Note on each Due Date.
MOODY'S: ▇▇▇▇▇'▇ Investors Service, Inc. or its successor in
interest.
MORTGAGE: The mortgage, deed of trust or other instrument
creating a first or second lien on Mortgaged Property securing the Mortgage
Note.
MORTGAGE FILE: The items pertaining to a particular Mortgage
Loan referred to in Exhibit 5 annexed hereto, and any additional documents
required to be added to the Mortgage File pursuant to this Agreement or the
related Confirmation.
MORTGAGE INTEREST RATE: With respect to each Fixed Rate
Mortgage Loan, the fixed annual rate of interest provided for in the related
Mortgage Note and, with respect to each Adjustable Rate Mortgage Loan, the
annual rate that interest accrues on such Adjustable Rate Mortgage Loan from
time to time in accordance with the provisions of the related Mortgage Note.
MORTGAGE LOAN: Each first or second lien, residential mortgage
loan, sold, assigned and transferred to the Purchaser pursuant to this Agreement
and the related Confirmation and identified on the Mortgage Loan Schedule
annexed to this Agreement on such Closing Date, which Mortgage Loan includes
without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments (including Prepayment Charges), Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, REO Disposition proceeds, and all other rights,
benefits, proceeds and obligations arising from or in connection with such
Mortgage Loan.
MORTGAGE LOAN DOCUMENTS: The documents listed in Section 2 of
the Custodial Agreement pertaining to any Mortgage Loan.
MORTGAGE LOAN PACKAGE: The Mortgage Loans listed on a Mortgage
Loan Schedule, delivered to the Custodian and the Purchaser at least five (5)
Business Days prior to the related Closing Date and attached to this Agreement
as Schedule I on the related Closing Date.
MORTGAGE LOAN SCHEDULE: With respect to each Mortgage Loan
Package, the schedule of Mortgage Loans to be annexed hereto as Schedule I (or a
supplement thereto) on each Closing Date for the Mortgage Loan Package delivered
on such Closing Date in both hard copy and floppy disk, such schedule setting
forth the following information with respect to each Mortgage Loan in the
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's first and last name; (3) the street address of the Mortgaged
Property including the state and zip code; (4) a code indicating whether the
Mortgaged Property is owner-occupied; (5) the type of Residential Dwelling
constituting the Mortgaged Property; (6) the original months to maturity; (7)
the original date of the Mortgage Loan and the remaining months to maturity from
the Cut-off Date, based on the original amortization schedule; (8) the
Loan-to-Value Ratio or Combined Loan-to-Value Ratio at origination; (9) the
Mortgage Interest Rate in effect immediately following the Cut-off Date; (10)
the date on which the first Monthly Payment was due on the Mortgage Loan; (11)
the stated maturity date; (12) the amount of the Monthly Payment at origination;
(13) the amount of the Monthly Payment as of the Cut-off Date; (14) the last Due
Date on which a Monthly Payment was actually applied to the unpaid Stated
Principal Balance; (15) the original principal amount of the Mortgage Loan and
with respect to second liens the principal amount of the related first lien on
the Mortgaged Property as of the date of origination of the related Mortgage
Loan; (16) the Stated Principal Balance of the Mortgage Loan and with respect to
second liens the principal balance of the related first lien on the Mortgaged
Property, if available, as of the close of business on the Cut-off Date; (17)
with respect to each Adjustable Rate Mortgage Loan, the first Adjustment Date;
(18) with respect to each Adjustable Rate Mortgage Loan, the Gross Margin; (19)
a code indicating the purpose of the loan (i.e., purchase financing, Rate/Term
Refinancing, Cash-Out Refinancing); (20) with respect to each Adjustable Rate
Mortgage Loan, the Maximum Mortgage Interest Rate under the terms of the
Mortgage Note; (21) with respect to each Adjustable Rate Mortgage Loan, the
Minimum Mortgage Interest Rate under the terms of the Mortgage Note; (22) the
Mortgage Interest Rate at origination; (23) with respect to each Adjustable Rate
Mortgage Loan, the Periodic Rate Cap; (24) with respect to each Adjustable Rate
Mortgage Loan, the first Adjustment Date immediately following the Cut-off Date;
(25) with respect to each Adjustable Rate Mortgage Loan, the Index; (26) the
date on which the first Monthly Payment was due on the Mortgage Loan and, if
such date is not consistent with the Due Date currently in effect, such
Due Date; (27) a code indicating whether the Mortgage Loan is an Adjustable Rate
Mortgage Loan or a Fixed Rate Mortgage Loan; (28) a code indicating the
documentation style (i.e., full (providing two years employment verification - 2
years W-2's and current paystub or 2 years 1040's for self employed borrowers),
full (using personal or business bank statements), stated or easy); (29) the
Appraised Value of the Mortgaged Property; (30) the sale price of the Mortgaged
Property, if applicable; (31) a code indicating the terms of any related
Prepayment Charge; (32) a code indicating if the Mortgaged Property is owner
occupied; (33) a code indicating whether the Mortgage Loan is a first or second
lien mortgage loan; and (34) with respect to each MOM Loan, the MIN. With
respect to the Mortgage Loan Package in the aggregate, the Mortgage Loan
Schedule shall set forth the following information, as of the related Cut-off
Date: (1) the number of Mortgage Loans; (2) the current principal balance of the
Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; and (4) the weighted average maturity of the Mortgage Loans. Schedule I
hereto shall be supplemented as of each Closing Date to reflect the addition of
the Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
MORTGAGE NOTE: The original executed note or other evidence of
the Mortgage Loan indebtedness of a Mortgagor.
MORTGAGED PROPERTY: The Mortgagor's real property securing
repayment of a related Mortgage Note, consisting of a fee simple interest in a
single parcel of real property improved by a Residential Dwelling.
MORTGAGEE: The mortgagee or beneficiary named in the Mortgage
and the successors and assigns of such mortgagee or beneficiary.
MORTGAGOR: The obligor on a Mortgage Note, the owner of the
Mortgaged Property and the grantor or mortgagor named in the related Mortgage
and such grantor's or mortgagor's successor's in title to the Mortgaged
Property.
NET MORTGAGE INTEREST 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 Interest Rate for such
Mortgage Loan minus the Servicing Fee Rate.
NONRECOVERABLE MONTHLY ADVANCE: Any Monthly 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 Seller, will not, or,
in the case of a proposed Monthly 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.
OFFICER'S CERTIFICATE: A certificate signed by the Chairman of
the Board or the Vice Chairman of the Board or a President or a Vice President
and by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Person on behalf of whom such certificate is being
delivered.
OPINION OF COUNSEL: A written opinion of counsel, who may be
salaried counsel for the Person on behalf of whom the opinion is being given,
reasonably acceptable to each Person to whom such opinion is addressed.
PASS-THROUGH TRANSFER: The sale or transfer of some or all of
the Mortgage Loans by the Purchaser to a trust to be formed as part of a
publicly issued or privately placed mortgage-backed securities transaction.
PERIODIC RATE CAP: With respect to each Adjustable Rate
Mortgage Loan and any Adjustment Date therefor, a number of percentage points
per annum that is set forth in the related Mortgage Loan Schedule and in the
related Mortgage Note, which is the maximum amount by which the Mortgage
Interest Rate for such Adjustable Rate Mortgage Loan may increase (without
regard to the Maximum Mortgage Interest Rate) or decrease (without regard to the
Minimum Mortgage Interest Rate) on such Adjustment Date from the Mortgage
Interest Rate in effect immediately prior to such Adjustment Date.
PERSON: An individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
PREMIUM: With respect to each prepaid Mortgage Loan, an amount
equal to the product of (x) the excess of the Purchase Price percentage used to
determine the purchase price over 100%, times (y) the outstanding principal
balance of such prepaid Mortgage Loan as of the Cut-off Date, times (z) a
fraction, the numerator of which is twelve (12) minus the number of full months
which has passed following the related Closing Date, and the denominator of
which is twelve (12).
PREPAYMENT CHARGE: With respect to any Mortgage Loan, any
prepayment penalty or premium thereon payable in connection with a principal
prepayment on such Mortgage Loan pursuant to the terms of the related Mortgage
Note and Mortgage.
PREPAYMENT CHARGE SCHEDULE: With respect to each Mortgage Loan
Package, the schedule to be annexed hereto as Schedule II indicating whether a
Mortgage Loan is subject to a Prepayment Charge and if so, the amount and term
of such Prepayment Charge.
PRINCIPAL PREPAYMENT: Any payment or other recovery of
principal on a Mortgage Loan which is received in advance of its scheduled Due
Date, including any Prepayment Charge, which is not accompanied by an amount of
interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment.
PURCHASE PRICE: The price paid on the related Closing Date by
the Purchaser to the Seller pursuant to the related Confirmation in exchange for
the Mortgage Loans purchased on such Closing Date as calculated as provided in
Section 4.
QUALIFIED SUBSTITUTE MORTGAGE LOAN: A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
which must, on the date of such substitution, (i) have an outstanding 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 the Stated
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
Interest Rate not less than (and not more than one percentage point in excess
of) the Mortgage Interest Rate of the Deleted
Mortgage Loan, (iii) have a remaining term to maturity not greater than (and not
more than one year less than) that of the Deleted Mortgage Loan, (iv) have the
same Due Date as the Due Date on the Deleted Mortgage Loan, (v) have a
Loan-to-Value Ratio, or in the case of second liens a Combined Loan-to-Value
Ratio as of the date of substitution equal to or lower than the Loan-to-Value
Ratio or Combined Loan-to-Value Ratio of the Deleted Mortgage Loan as of such
date, (vi) conform to each representation and warranty set forth in Subsection
7.02 of this Agreement, and (vii) be the same type of mortgage loan (i.e. fixed
or adjustable rate with the same Gross Margin and Index as the Deleted Mortgage
Loan). In the event that one or more mortgage loans are substituted for one or
more Deleted Mortgage Loans, the amounts described in clause (i) hereof shall be
determined on the basis of aggregate principal balances, the Mortgage Interest
Rates described in clause (ii) hereof shall be determined on the basis of
weighted average Mortgage Interest Rates and shall be satisfied as to each such
mortgage loan, the terms described in clause (iii) shall be determined on the
basis of weighted average remaining terms to maturity, the Loan-to-Value Ratios
or in the case of second liens a Combined Loan-to-Value Ratios described in
clause (v) hereof shall be satisfied as to each such mortgage loan and, except
to the extent otherwise provided in this sentence, the representations and
warranties described in clause (vii) hereof must be satisfied as to each
Qualified Substitute Mortgage Loan or in the aggregate, as the case may be.
RATE/TERM REFINANCING: A Refinanced Mortgage Loan, the
proceeds of which are not in excess of the existing first mortgage loan on the
related Mortgaged Property and related closing costs, and were used exclusively
to satisfy the then existing first mortgage loan of the Mortgagor on the related
Mortgaged Property and to pay related closing costs.
RECONSTITUTION AGREEMENT: Any assignment, assumption and
recognition agreement substantially in the form attached hereto as Exhibit 10 or
mortgage loan purchase agreement in a form substantially similar to those
previously entered into by the Seller and the Purchaser on the Reconstitution
Date or Dates with respect to any or all of the Mortgage Loans serviced
hereunder, in connection with a Whole Loan Transfer or a Pass-Through Transfer
as provided in Section 12.
RECONSTITUTION DATE: The date or dates on which any or all of
the Mortgage Loans serviced under this Agreement shall be removed from this
Agreement and reconstituted as part of a Whole Loan Transfer or Pass-Through
Transfer pursuant to Section 12 hereof.
RECORD DATE: With respect to each Distribution Date, the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs.
REFINANCED MORTGAGE LOAN: A Mortgage Loan the proceeds of
which were not used to purchase the related Mortgaged Property.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REO ACCOUNT: The separate trust account or accounts created
and maintained pursuant to this Agreement which shall be entitled "Fremont
Investment & Loan, in trust for the Purchaser, as of [date of acquisition of
title], Fixed and Adjustable Rate Mortgage Loans".
REO DISPOSITION: The final sale by the Seller of any REO
Property.
REO PROPERTY: A Mortgaged Property acquired as a result of the
liquidation of a Mortgage Loan.
REPURCHASE PRICE: With respect to any Mortgage Loan, a price
equal to (i)(A) prior to the Reconstitution Date with respect to such Mortgage
Loan, the product of the Stated Principal Balance of such Mortgage Loan times
the greater of (x) the Purchase Price percentage as stated in the related
Confirmation and (y) 100%, and (B) thereafter, the Stated Principal Balance of
such Mortgage Loan, plus (ii) interest on such Stated Principal Balance at the
Mortgage Interest Rate from and including the last Due Date through which
interest has been paid by or on behalf of the Mortgagor to the day of
repurchase, less amounts received in respect of such repurchased Mortgage Loan
which are being held in the Custodial Account for distribution in connection
with such Mortgage Loan, plus (iii) any unreimbursed servicing advances and any
unpaid servicing fees allocable to such Mortgage Loan paid by any party other
than the Seller, plus (iv) any costs and expenses incurred by the Purchaser, the
servicer, master servicer or any trustee in respect of the breach or defect
giving rise to the repurchase obligation including, without limitation, any
costs and damages incurred by any such party in connection with any violation by
any such Mortgage Loan of any predatory or abusive lending law.
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 condominium project, or (iv) a detached one-family
dwelling in a planned unit development, none of which is a co-operative, mobile
or manufactured home.
SERVICING ADDENDUM: The terms and conditions attached hereto
as Exhibit 9 which will govern the servicing of the Mortgage Loans by Seller
during the Interim Servicing Period.
SERVICING ADVANCES: All customary, reasonable and necessary
"out-of-pocket" costs and expenses incurred by the Seller in the performance of
its servicing obligations, including, but not limited to, the cost of (i)
preservation, restoration and repair of a Mortgaged Property, (ii) any
enforcement or judicial proceedings with respect to a Mortgage Loan, including
foreclosure actions and (iii) the management and liquidation of REO Property.
SERVICING FEE: With respect to each Mortgage Loan, the amount
of the monthly fee, if any, specified in the related Confirmation as the
servicing fee. Such amount shall be payable monthly, in arrears. If the Interim
Servicing Period includes any partial month, the Servicing Fee for such month
shall be pro rated at a per diem rate based upon a 30-day month.
SERVICING FILE: With respect to each Mortgage Loan, the file
retained by the Seller consisting of originals of all documents in the Mortgage
File which are not delivered to the Purchaser or the Custodian and copies of the
Mortgage Loan Documents set forth in Section 2 of the Custodial Agreement.
S&P: Standard & Poor's Ratings Group or its successor in
interest.
STATED PRINCIPAL BALANCE: As to each Mortgage Loan as of any
date of determination, (i) the principal balance of the Mortgage Loan as of the
Cut-off Date after giving effect to payments of principal due on or before such
date, whether or not received, minus (ii) all amounts previously distributed to
the Purchaser with respect to the related Mortgage Loan representing payments or
recoveries of principal including any Monthly Advances in respect thereof.
TAX SERVICE CONTRACT: A transferable contract maintained for
the Mortgaged Property with a tax service provider for the purpose of obtaining
current information from local taxing authorities relating to such Mortgaged
Property.
WHOLE LOAN TRANSFER: Any sale or transfer of some or all of
the Mortgage Loans by the Purchaser to a third party, which sale or transfer is
not a Pass-Through Transfer.
Subsection 11.01 SELLER TO ACT AS SERVICER.
The Seller, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement during the
Interim Servicing Period and shall have full power and authority, acting alone,
to do or cause to be done any and all things in connection with such servicing
and administration which the Seller may deem necessary or desirable and
consistent with the terms of this Agreement.
Consistent with the terms of this Agreement, the Seller may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in the Seller's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser; provided, however, that the Seller shall not permit any modification
with respect to any Mortgage Loan that would change the Mortgage Interest Rate,
defer or forgive the payment thereof or of any principal or interest payments,
reduce the outstanding principal amount (except for actual payments of
principal), make additional advances of additional principal or extend the final
maturity date on such Mortgage Loan. Without limiting the generality of the
foregoing, the Seller shall continue, and is hereby authorized and empowered, to
execute and deliver on behalf of itself, and the Purchaser, all instruments of
satisfaction or cancellation, or of partial or full release, discharge and all
other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Property. If reasonably required by the Seller, the
Purchaser shall furnish the Seller with any powers of attorney and other
documents necessary or appropriate to enable the Seller to carry out its
servicing and administrative duties under this Agreement.
Seller shall notify MERS of the ownership interest of Purchaser in each
MOM Loan through any system acceptable to MERS. At any time during the term of
this Agreement, Purchaser may direct Seller to cause any MOM Loan to be
deactivated from the MERS System.
In servicing and administering the Mortgage Loans, the Seller shall
employ procedures including collection procedures and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due
consideration to accepted mortgage servicing practices of prudent lending
institutions and the Purchaser's reliance on the Seller.
Subsection 11.02 COLLECTION OF MORTGAGE LOAN PAYMENTS.
Continuously from the date hereof until the principal and
interest on all Mortgage Loans are paid in full, the Seller shall proceed
diligently to collect all payments due under each Mortgage Loan when the same
shall become due and payable and shall, to the extent such procedures shall be
consistent with this Agreement, follow such collection procedures as it follows
with respect to mortgage loans comparable to the Mortgage Loans and held for its
own account. Further, the Seller shall take special care in ascertaining and
estimating annual ground rents, taxes, assessments, water rates, fire and hazard
insurance premiums, and all other charges that, as provided in the Mortgage,
will become due and payable to the end that the installments payable by the
Mortgagors will be sufficient to pay such charges as and when they become due
and payable.
Subsection 11.03 REALIZATION UPON DEFAULTED MORTGAGE LOANS.
(a) The Seller shall use its best efforts, consistent
with the procedures that the Seller would use in servicing loans for its own
account, to foreclose upon or otherwise comparably convert the ownership of such
Mortgaged Properties as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Subsection 11.01. The Seller shall use its best efforts to realize
upon defaulted Mortgage Loans in such a manner as will maximize the receipt of
principal and interest by the Purchaser, taking into account, among other
things, the timing of foreclosure proceedings. The foregoing is subject to the
provisions that, in any case in which Mortgaged Property shall have suffered
damage, the Seller shall not be required to expend its own funds toward the
restoration of such property unless it shall determine in its discretion (i)
that such restoration will increase the proceeds of liquidation of the related
Mortgage Loan to Purchaser after reimbursement to itself for such expenses, and
(ii) that such expenses will be recoverable by the Seller through Insurance
Proceeds or Liquidation Proceeds from the related Mortgaged Property, as
contemplated in Subsection 11.05. In the event that any payment due under any
Mortgage Loan is not paid when the same becomes due and payable, or in the event
the Mortgagor fails to perform any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace period, the
Seller shall take such action as it shall deem to be in the best interest of the
Purchaser. In the event that any payment due under any Mortgage Loan remains
delinquent for a period of 90 days or more, the Seller shall evaluate the
Mortgagor's situation, provide notice to purchaser and, if appropriate, propose
actions, and if requested by Purchaser, commence foreclosure proceedings. The
Seller shall notify the Purchaser in writing of the commencement of foreclosure
proceedings. In such connection, the Seller shall be responsible for all costs
and expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof from the related Mortgaged Property,
as contemplated in Subsection 11.05.
(b) Notwithstanding the foregoing provisions of this
Subsection 11.03, with respect to any Mortgage Loan as to which the Seller has
received actual notice of, or has actual knowledge of, the presence of any toxic
or hazardous substance on the related Mortgaged Property the Seller shall not
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
Purchaser 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 Seller has
also previously determined, based on its reasonable judgment and a prudent
report prepared by a Person who regularly conducts environmental audits using
customary industry standards, that:
(1) such Mortgaged Property is in compliance with
applicable environmental laws or, if not, that it would be in the best
economic interest of the Purchaser to take such actions as are
necessary to bring the Mortgaged Property into compliance therewith;
and
(2) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based
materials for which investigation, testing, monitoring, containment,
clean-up or remediation could be required under any federal, state or
local law or regulation, or that if any such materials are present for
which such action could be required, that it would be in the best
economic interest of the Purchaser to take such actions with respect to
the affected Mortgaged Property.
The cost of the environmental audit report contemplated by
this Subsection 11.03 shall be advanced by the Seller, subject to the Seller's
right to be reimbursed therefor from the Custodial Account as provided in
Subsection 11.05(vii).
If the Seller determines, as described above, that it is in
the best economic interest of the Purchaser 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 Seller shall take such action as it deems to be in the best economic
interest of the Purchaser. The cost of any such compliance, containment, cleanup
or remediation shall be advanced by the Seller, subject to the Seller's right to
be reimbursed therefor from the Custodial Account as provided in Subsection
11.05(vii).
(c) Proceeds received in connection with any Final
Recovery Determination, as well as any recovery resulting from a partial
collection of Insurance Proceeds or Liquidation Proceeds in respect of any
Mortgage Loan, will be applied in the following order of priority: first, to
reimburse the Seller for any related unreimbursed Servicing Advances, pursuant
to Subsection 11.05(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 Seller 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 Seller pursuant
to Subsection 11.05(iv).
Subsection 11.04 ESTABLISHMENT OF CUSTODIAL ACCOUNTS; DEPOSITS
IN CUSTODIAL ACCOUNTS.
The Seller shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Custodial
Accounts, in the form of time deposit or demand accounts. The creation of any
Custodial Account shall be evidenced by a Custodial Account Letter Agreement in
the form of Exhibit 7.
The Seller shall deposit in the Custodial Account on a daily
basis, and retain therein the following payments and collections received by it
subsequent to the Cut-off Date, or received by it prior to the Cut-off Date but
allocable to a period subsequent thereto, other than in respect of principal and
interest on the Mortgage Loans due on or before the Cut-off Date:
(i) all payments on account of principal on the Mortgage
Loans;
(ii) all payments on account of interest on the Mortgage
Loans;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to
be deposited pursuant to Subsections 11.10 and 11.11, other than
proceeds to be held in the Escrow Account and applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the Seller's normal servicing procedures,
the loan documents or applicable law;
(v) all Condemnation Proceeds affecting any Mortgaged
Property which are not released to the Mortgagor in accordance with the
Seller's normal servicing procedures, the loan documents or applicable
law;
(vi) all Monthly Advances
(vii) all proceeds of any Mortgage Loan repurchased in
accordance with Subsections 7.03 and 7.04 and all amounts required to
be deposited by the Seller in connection with shortfalls in principal
amount of Qualified Substitute Mortgage Loans pursuant to Subsection
7.03;
(viii) any amounts required to be deposited by the Seller
pursuant to Subsection 11.11 in connection with the deductible clause
in any blanket hazard insurance policy. Such deposit shall be made from
the Seller's own funds, without reimbursement therefor;
(ix) any amounts required to be deposited by the Seller in
connection with any REO Property pursuant to Subsection 11.13; and
(x) any amounts required to be deposited in the Custodial
Account pursuant to Subsections 11.19 or 11.20.
The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Subsection 11.01, need not be deposited by the
Seller in the Custodial Account. Such Custodial Account shall be an Eligible
Account. Any interest or earnings on funds deposited in the Custodial Account by
the depository institution shall accrue to the benefit of the Seller and the
Seller shall be entitled to retain and withdraw such interest from the Custodial
Account pursuant to Subsection 11.05(iv). The Seller shall give notice to the
Purchaser of the location of the Custodial Account when established and prior to
any change thereof.
If the balance on deposit in the Custodial Account exceeds
$75,000 as of the commencement of business on any Business Day and the Custodial
Account constitutes an Eligible Account solely pursuant to clause (ii) of the
definition of Eligible Account, the Seller shall, on or before twelve o'clock
noon Pacific time on such Business Day, withdraw from the Custodial Account any
and all amounts payable to the Purchaser and remit such amounts to the Purchaser
by wire transfer of immediately available funds.
Subsection 11.05 PERMITTED WITHDRAWALS FROM THE CUSTODIAL
ACCOUNT.
The Seller may, from time to time, withdraw from the Custodial
Account for the following purposes:
(i) to make distributions to the Purchaser in the amounts
and in the manner provided for in Subsection 11.14;
(ii) to reimburse itself for Monthly Advances, the
Seller's right to reimburse itself pursuant to this subclause (ii)
being limited to amounts received on the related Mortgage Loan which
represent late collections (net of the related Servicing Fees) with
respect to which any such advance was made it being understood that, in
the case of such reimbursement, the Seller's right thereto shall be
prior to the rights of Purchaser, except that, where the Seller is
required to repurchase a Mortgage Loan, pursuant to Subsection 7.03,
the Seller's right to such reimbursement shall be subsequent to the
payment to the Purchaser of the Repurchase Price pursuant to Subsection
7.03, and all other amounts required to be paid to the Purchaser with
respect to such Mortgage Loans;
(iii) to reimburse itself for unreimbursed Servicing
Advances, the Seller's right to reimburse itself pursuant to this
subclause (iii) with respect to any Mortgage Loan being limited to
related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds
and such other amounts as may be collected by the Seller from the
Mortgagor or otherwise relating to the Mortgage Loan, it being
understood that, in the case of such reimbursement, the Seller's right
thereto shall be prior to the rights of the Purchaser, except that,
where the Seller is required to repurchase a Mortgage Loan, pursuant to
Subsection 7.03, the Seller's right to such reimbursement shall be
subsequent to the payment to the Purchaser of the Repurchase Price
pursuant to Subsection 7.03 and all other amounts required to be paid
to the Purchaser with respect to such Mortgage Loans;
(iv) to pay to itself pursuant to Subsection 11.22 as
servicing compensation (a) any interest earned on funds in the
Custodial Account (all such interest to be withdrawn monthly not later
than each Distribution Date), and (b) the Servicing Fee from that
portion of any payment or recovery as to interest on a particular
Mortgage Loan;
(v) to pay to itself with respect to each Mortgage Loan
that has been repurchased pursuant to Subsection 7.03 all amounts
received thereon and not distributed as of the date on which the
related Repurchase Price is determined;
(vi) to reimburse the Seller for any Monthly Advance
previously made which the Seller has determined to be a Nonrecoverable
Monthly Advance;
(vii) to pay, or to reimburse the Seller for advances in
respect of, expenses incurred in connection with any Mortgage Loan
pursuant to Subsection 11.03(b), but only to the extent of amounts
received in respect of the Mortgage Loans to which such expense is
attributable; and
(viii) to clear and terminate the Custodial Account on the
termination of this Agreement.
The Seller shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Custodial Account pursuant to such subclauses (ii), (iii),
(iv), (v) and (vi) above.
Subsection 11.06 ESTABLISHMENT OF ESCROW ACCOUNTS; DEPOSITS IN
ESCROW ACCOUNTS.
The Seller shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan which constitute Escrow Payments
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Escrow Accounts, in the form of time deposit
or demand accounts. The creation of any Escrow Account shall be evidenced by
Escrow Account Letter Agreement in the form of Exhibit 8.
The Seller shall deposit in the Escrow Account or Accounts on
a daily basis, and retain therein, (i) all Escrow Payments collected on account
of the Mortgage Loans, for the purpose of effecting timely payment of any such
items as required under the terms of this Agreement, and (ii) all Insurance
Proceeds which are to be applied to the restoration or repair of any Mortgaged
Property. The Seller shall make withdrawals therefrom only to effect such
payments as are required under this Agreement, and for such other purposes as
shall be as set forth or in accordance with Subsection 11.08. The Seller shall
be entitled to retain any interest paid on funds deposited in the Escrow Account
by the depository institution other than interest on escrowed funds required by
law to be paid to the Mortgagor and, to the extent required by law, the Seller
shall pay interest on escrowed funds to the Mortgagor notwithstanding that the
Escrow Account is non-interest bearing or that interest paid thereon is
insufficient for such purposes.
Subsection 11.07 PERMITTED WITHDRAWALS FROM ESCROW ACCOUNT.
Withdrawals from the Escrow Account may be made by the Seller (i) to
effect timely payments of ground rents, taxes, assessments, water rates, hazard
insurance premiums, if applicable, and comparable items, (ii) to reimburse the
Seller for any Servicing Advance made by the Seller with respect to a related
Mortgage Loan but only from amounts received on the related Mortgage Loan which
represent late payments or collections of Escrow Payments thereunder, (iii) to
refund to the Mortgagor any funds as may be determined to be overages, (iv) for
transfer to the Custodial Account in accordance with the terms of this
Agreement, (v) for application to restoration or repair of the Mortgaged
Property, (vi) to pay to the Seller, or to the Mortgagor to the extent required
by law, any interest paid on the funds deposited in the Escrow Account, or (vii)
to clear and terminate the Escrow Account on the termination of this Agreement.
Subsection 11.08 PAYMENT OF TAXES, INSURANCE AND OTHER CHARGES
With respect to each first lien Mortgage Loan, the Seller
shall maintain accurate records reflecting the status of ground rents, taxes,
assessments, water rates and other charges which are or may become a lien upon
the Mortgaged Property and the status of fire and hazard insurance coverage and
shall obtain, from time to time, all bills for the payment of such charges,
including insurance renewal premiums and shall effect payment thereof prior to
the applicable penalty or termination date and at a time appropriate for
securing maximum discounts allowable, employing for such purpose deposits of the
Mortgagor in the Escrow Account which shall have been estimated and accumulated
by the Seller in amounts sufficient for such purposes, as allowed under the
terms of the Mortgage and applicable law. To the extent that the Mortgage does
not provide for Escrow Payments, the Seller shall determine that any such
payments are made by the Mortgagor at the time they first become due. The Seller
assumes full responsibility for the timely payment of all such bills and shall
effect timely 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.
Subsection 11.09 TRANSFER OF ACCOUNTS.
The Seller may transfer the Custodial Account or the Escrow
Account to a different depository institution from time to time. Such transfer
shall be made only upon obtaining the consent of the Purchaser, which consent
shall not be unreasonably withheld. In any case, the Custodial Account and
Escrow Account shall be Eligible Accounts.
Subsection 11.10 MAINTENANCE OF HAZARD INSURANCE.
The Seller shall cause to be maintained for each Mortgage Loan
fire and hazard insurance with extended coverage as is customary in the area
where the Mortgaged Property is located in an amount which is at least equal to
the lesser of (i) the amount necessary to fully compensate for any damage or
loss to the improvements which are a part of such property on a replacement cost
basis or (ii) the sum of the outstanding principal balance of the Mortgage Loan
and the outstanding principal balance of the related first lien mortgage loan,
in each case in an amount not less than such amount as is necessary to prevent
the Mortgagor and/or the Mortgagee from becoming a co-insurer. If the Mortgaged
Property is in an area identified on a Flood Hazard Boundary Map or Flood
Insurance Rate Map issued by the Flood Emergency Management Agency as having
special flood hazards and such flood insurance has been made available, the
Seller will cause to be maintained a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
with a generally acceptable insurance carrier, in an amount representing
coverage not less than the lesser of (i) the outstanding principal balance of
the Mortgage Loan or (ii) the maximum amount of insurance which is available
under the National Flood Insurance Act of 1968 or the Flood Disaster Protection
Act of 1973, as amended. The Seller also shall maintain on any REO Property,
fire and hazard insurance with extended coverage 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 Interest Rate and related Servicing Advances, liability
insurance and, to the extent required and available under the National Flood
Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended,
flood insurance in an amount as provided above. Pursuant to Subsection 11.04,
any amounts collected by the Seller under any such policies other than amounts
to be deposited in the Escrow Account and applied to the restoration or repair
of the Mortgaged Property or REO Property, or released to the Mortgagor in
accordance with the Seller's normal servicing procedures, shall be deposited in
the Custodial Account, subject to withdrawal pursuant to Subsection 11.05. Any
cost incurred by the Seller in maintaining any such insurance shall not, for the
purpose of calculating distributions to the Purchaser, 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 need be required by the Seller of the Mortgagor or
maintained on property acquired in respect of the Mortgage Loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. All such policies shall be
endorsed with standard mortgagee clauses with loss payable to the Seller, or
upon request to the Purchaser, and shall provide for at least thirty days prior
written notice of any cancellation, reduction in the amount of, or material
change in, coverage to the Seller. The Seller shall not interfere with the
Mortgagor's freedom of choice in selecting either his insurance carrier or
agent, provided, however, that the Seller shall not accept any such insurance
policies from insurance companies unless such companies currently reflect a
General Policy Rating of A:VI or better in Best's Key Rating Guide and are
licensed to do business in the state wherein the property subject to the policy
is located.
Subsection 11.11 MAINTENANCE OF MORTGAGE IMPAIRMENT INSURANCE
POLICY.
In the event that the Seller shall obtain and maintain a
mortgage impairment or blanket policy issued by an issuer that has a Best rating
of A:VI insuring against hazard losses on all of Mortgaged Properties securing
the Mortgage Loans, then, to the extent such policy provides coverage in an
amount equal to the amount required pursuant to Subsection 11.10 and otherwise
complies with all other requirements of Subsection 11.10, the Seller shall
conclusively be deemed to have satisfied its obligations as set forth in
Subsection 11.10, it being understood and agreed that such policy may contain a
deductible clause, in which case the Seller shall, in the event that there shall
not have been maintained on the related Mortgaged Property or REO Property a
policy complying with Subsection 11.10, and there shall have been one or more
losses which would have been covered by such policy, deposit in the Custodial
Account the amount not otherwise payable under the blanket policy because of
such deductible clause. In connection with its activities as servicer of the
Mortgage Loans, the Seller agrees to prepare and present, on behalf of the
Purchaser, claims under any such blanket policy in a timely fashion in
accordance with the terms of such policy. Upon request of the Purchaser, the
Seller shall cause to be
delivered to the Purchaser a certified true copy of such policy and a statement
from the insurer thereunder that such policy shall in no event be terminated or
materially modified without thirty days prior written notice to the Purchaser.
Subsection 11.12 FIDELITY BOND, ERRORS AND OMISSIONS
INSURANCE.
The Seller shall maintain, at its own expense, a blanket
fidelity bond and an errors and omissions insurance policy, with broad coverage
with responsible companies that would meet the requirements of ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac on all officers, employees or other persons acting in any capacity
with regard to the Mortgage Loans to handle funds, money, documents and papers
relating to the Mortgage Loans. The fidelity bond and errors and omissions
insurance shall be in the form of the Mortgage Banker's Blanket Bond and shall
protect and insure the Seller against losses, including forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of such persons.
Such fidelity bond shall also protect and insure the Seller against losses in
connection with the failure to maintain any insurance policies required pursuant
to this Agreement and the release or satisfaction of a Mortgage Loan without
having obtained payment in full of the indebtedness secured thereby. No
provision of this Subsection 11.12 requiring the fidelity bond and errors and
omissions insurance shall diminish or relieve the Seller from its duties and
obligations as set forth in this Agreement. The minimum coverage under any such
bond and insurance policy shall be at least equal to $10,000,000.00 per
occurrence. Upon request of the Purchaser, the Seller shall cause to be
delivered to the Purchaser a certified true copy of the fidelity bond and
insurance policy and a statement from the surety and the insurer that such
fidelity bond or insurance policy shall in no event be terminated or materially
modified without thirty days' prior written notice to the Purchaser.
Subsection 11.13 TITLE, MANAGEMENT AND DISPOSITION OF REO
PROPERTY.
In the event that title to the Mortgaged Property is acquired in foreclosure or
by deed in lieu of foreclosure, the deed or certificate of sale shall be taken
in the name of the person designated by the Purchaser, or in the event such
person is not authorized or permitted to hold title to real property in the
state where the REO Property is located, or would be adversely affected under
the "doing business" or tax laws of such state by so holding title, the deed or
certificate of sale shall be taken in the name of such Person or Persons as
shall be consistent with an opinion of counsel obtained by the Seller from an
attorney duly licensed to practice law in the state where the REO Property is
located. Any Person or Persons holding such title other than the Purchaser shall
acknowledge in writing that such title is being held as nominee for the benefit
of the Purchaser.
The Seller shall either itself or through an agent selected by
the Seller, manage, conserve, protect and operate each REO Property (and may
temporarily rent the same) in the same manner that it manages, conserves,
protects and operates other foreclosed property for its own account, and in the
same manner that similar property in the same locality as the REO Property is
managed. If a REMIC election is or is to be made with respect to the arrangement
under which the Mortgage Loans and any REO Property are held, the Seller shall
manage, conserve, protect and operate each REO Property 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 such
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" within
the meaning of Section 860G(c)(2) of the Code. The Seller shall cause each REO
Property to be
inspected promptly upon the acquisition of title thereto and shall cause each
REO Property to be inspected at least annually thereafter. The Seller shall make
or cause to be made a written report of each such inspection. Such reports shall
be retained in the Mortgage File and copies thereof shall be forwarded by the
Seller to the Purchaser. The Seller shall use its best efforts to dispose of the
REO Property as soon as possible and shall sell such REO Property in any event
within one year after title has been taken to such REO Property, unless the
Seller determines, and gives appropriate notice to the Purchaser, that a longer
period is necessary for the orderly liquidation of such REO Property. If a
period longer than one year is necessary to sell any REO property, (i) the
Seller shall report monthly to the Purchaser as to the progress being made in
selling such REO Property and (ii) if, with the written consent of the
Purchaser, a purchase money mortgage is taken in connection with such sale, such
purchase money mortgage shall name the Seller as mortgagee, and a separate
servicing agreement between the Seller and the Purchaser shall be entered into
with respect to such purchase money mortgage. Notwithstanding the foregoing, if
a REMIC election is made with respect to the arrangement under which the
Mortgage Loans and the REO Property are held, such REO Property shall be
disposed of within two years or such other period as may be permitted under
Section 860G(a)(8) of the Code.
With respect to each REO Property, the Seller shall segregate
and hold all funds collected and received in connection with the operation of
the REO Property separate and apart from its own funds or general assets and
shall establish and maintain a separate REO Account for each REO Property in the
form of a non-interest bearing demand account, unless an Opinion of Counsel is
obtained by the Seller to the effect that the classification as a grantor trust
or REMIC for federal income tax purposes of the arrangement under which the
Mortgage Loans and the REO Property is held will not be adversely affected by
holding such funds in another manner. Each REO Account shall be established with
the Seller or, with the prior consent of the Purchaser, with a commercial bank,
a mutual savings bank or a savings association. The creation of any REO Account
shall be evidenced by a letter agreement substantially in the form of the
Custodial Account Letter Agreement attached as Exhibit 7 hereto. An original of
such letter agreement shall be furnished to any Purchaser upon request.
The Seller shall deposit or cause to be deposited, on a daily
basis in each REO Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property, including the cost of
maintaining any hazard insurance pursuant to Subsection 11.10 hereof and the
fees of any managing agent acting on behalf of the Seller. The Seller shall not
be entitled to retain interest paid or other earnings, if any, on funds
deposited in such REO Account. On or before each Determination Date, the Seller
shall withdraw from each REO Account and deposit into the Custodial Account the
net income from the REO Property on deposit in the REO Account.
The Seller shall furnish to the Purchaser on each Distribution
Date, an operating statement for each REO Property covering the operation of
each REO Property for the previous month. Such operating statement shall be
accompanied by such other information as the Purchaser shall reasonably request.
Each REO Disposition shall be carried out by the Seller at
such price and upon such terms and conditions as the Seller deems to be in the
best interest of the Purchaser only with the prior written consent of the
Purchaser. If as of the date title to any REO Property was acquired
by the Seller there were outstanding unreimbursed Servicing Advances with
respect to the REO Property, the Seller, upon an REO Disposition of such REO
Property, shall be entitled to reimbursement for any related unreimbursed
Servicing Advances from proceeds received in connection with such REO
Disposition. The proceeds from the REO Disposition, net of any payment to the
Seller as provided above, shall be deposited in the REO Account and shall be
transferred to the Custodial Account on the Determination Date in the month
following receipt thereof for distribution on the succeeding Distribution Date
in accordance with Subsection 11.14.
Subsection 11.14 DISTRIBUTIONS.
On each Distribution Date, the Seller shall distribute to the
Purchaser all amounts credited to the Custodial Account as of the close of
business on the preceding Determination Date, net of charges against or
withdrawals from the Custodial Account pursuant to Subsection 11.05; plus (ii)
all Monthly Advances, if any, which the Seller is obligated to distribute
pursuant to Section 11.21, minus (iii) any amounts attributable to Principal
Prepayments received after the last day of the Calendar month immediately
preceding the related Distribution Date and (iv) any amounts attributable to
Monthly Prepayments collected but due on a Due Date or Dates subsequent to the
preceding Determination Date.
All distributions made to the Purchaser on each Distribution
Date will be made to the Purchaser of record on the preceding Record Date, and
shall be based on the Mortgage Loans owned and held by the Purchaser, and shall
be made by wire transfer of immediately available funds to the account of the
Purchaser at a bank or other entity having appropriate facilities therefor, if
the Purchaser shall have so notified the Seller or by check mailed to the
address of the Purchaser.
With respect to any remittance received by the Purchaser on or
after the second Business Day following the Business Day on which such payment
was due, the Seller shall pay to the Purchaser interest on any such late payment
at an annual rate equal to the rate of interest as is publicly announced from
time to time at its principal office by JPMorgan Chase Bank, New York, New York,
as its prime lending rate, adjusted as of the date of each change, plus three
percentage points, but in no event greater than the maximum amount permitted by
applicable law. Such interest shall be paid by the Seller to the Purchaser on
the date such late payment is made and shall cover the period commencing with
the day following such second Business Day and ending with the Business Day on
which such payment is made, both inclusive. Such interest shall be remitted
along with such late payment. The payment by the Seller of any such interest
shall not be deemed an extension of time for payment or a waiver of any Event of
Default by the Seller.
Subsection 11.15 REMITTANCE REPORTS.
No later than the fifth Business Day of each month, the Seller
shall furnish to the Purchaser or its designee a computer tape containing, and a
hard copy of, the monthly data. On the Business Day following each Determination
Date, the Seller shall deliver to the Purchaser or its designee by telecopy (or
by such other means as the Seller and the Purchaser may agree from time to time)
a computer tape containing, and a hard copy of, the determination data with
respect to the related Distribution Date, together with such other information
with respect to the Mortgage Loans as the Purchaser may reasonably require to
allocate distributions made pursuant
to this Agreement and provide appropriate statements with respect to such
distributions. On the same date, the Seller shall forward to the Purchaser by
overnight mail a computer readable magnetic tape containing the information set
forth in the Remittance Report with respect to the related Distribution Date.
Subsection 11.16 STATEMENTS TO THE PURCHASER.
Not later than fifteen days after each Distribution Date, the
Seller shall forward to the Purchaser or its designee a statement prepared by
the Seller setting forth the status of the Custodial 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
Custodial Account of each category of deposit specified in Subsection 11.04 and
each category of withdrawal specified in Subsection 11.05.
In addition, not more than sixty days after the end of each
calendar year, the Seller shall furnish to each Person who was the Purchaser at
any time during such calendar year, (i) as to the aggregate of remittances for
the applicable portion of such year, an annual statement in accordance with the
requirements of applicable federal income tax law, and (ii) listing of the
principal balances of the Mortgage Loans outstanding at the end of such calendar
year.
The Seller shall prepare and file any and all tax returns,
information statements or other filings required to be delivered to any
governmental taxing authority or to any Purchaser pursuant to any applicable law
with respect to the Mortgage Loans and the transactions contemplated hereby. In
addition, the Seller shall provide the Purchaser with such information
concerning the Mortgage Loans as is necessary for the Purchaser to prepare its
federal income tax return as any Purchaser may reasonably request from time to
time.
Subsection 11.17 REAL ESTATE OWNED REPORTS.
Together with the statement furnished pursuant to Subsection
11.02, with respect to any REO Property, the Seller shall furnish to the
Purchaser a statement covering the Seller's efforts in connection with the sale
of such REO Property and any rental of such REO Property incidental to the sale
thereof for the previous month, together with the operating statement. Such
statement shall be accompanied by such other information as the Purchaser shall
reasonably request.
Subsection 11.18 LIQUIDATION REPORTS.
Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Purchaser pursuant to a deed-in-lieu of foreclosure,
the Seller shall submit to the Purchaser a liquidation report with respect to
such Mortgaged Property.
Subsection 11.19 ASSUMPTION AGREEMENTS.
The Seller shall, to the extent it has knowledge of any
conveyance or prospective conveyance by any Mortgagor of the Mortgaged Property
(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 any "due-on-sale" clause applicable thereto; provided,
however, that the Seller shall not exercise any such rights if prohibited by law
from doing so. If the Seller reasonably believes it is unable under applicable
law to enforce such "due-on-sale" clause, the Seller shall enter into an
assumption agreement with the person to whom the Mortgaged 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. Where an assumption is allowed
pursuant to this Subsection 11.19, the Seller is authorized to enter into a
substitution of liability agreement with the person to whom the Mortgaged
Property has been conveyed or is proposed to be conveyed pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the related Mortgage Note. Any such
substitution of liability agreement shall be in lieu of an assumption agreement.
In connection with any such assumption or substitution of
liability, the Seller shall follow its Underwriting Guidelines. With respect to
an assumption or substitution of liability, Mortgage Interest Rate, the amount
of the Monthly Payment, and the final maturity date of such Mortgage Note may
not be changed. The Seller shall notify the Purchaser that any such substitution
of liability or assumption agreement has been completed by forwarding to the
Purchaser the original of any such substitution of liability 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. Any fee
collected by the Seller for entering into an assumption or substitution of
liability agreement in excess of 1% of the outstanding principal balance of the
Mortgage Loan shall be deposited in the Custodial Account pursuant to Subsection
11.04.
Notwithstanding the foregoing paragraphs of this Subsection or
any other provision of this Agreement, the Seller 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 any assumption which
the Seller may be restricted by law from preventing, for any reason whatsoever.
For purposes of this Subsection 11.19, 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.
Subsection 11.20 SATISFACTION OF MORTGAGES AND RELEASE OF
MORTGAGE FILES.
Upon the payment in full of any Mortgage Loan, or the receipt
by the Seller of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Seller will immediately notify the
Purchaser by a certification of a servicing officer of the Seller (a "Servicing
Officer"), 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 Custodial Account pursuant to Subsection 11.04
have been or will be so deposited, and shall request execution of any document
necessary to satisfy the Mortgage Loan and delivery to it of the portion of the
Mortgage File held by the Purchaser or the Purchaser's designee. Upon receipt of
such certification and request, the Purchaser, shall promptly release the
related mortgage documents to the Seller and the Seller shall prepare and
process any satisfaction or release. No expense incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
Custodial Account or the Purchaser.
In the event the Seller satisfies or releases a Mortgage
without having obtained payment in full of the indebtedness secured by the
Mortgage or should it otherwise prejudice any right the Purchaser may have under
the mortgage instruments, the Seller, upon written demand, shall remit to the
Purchaser the then outstanding principal balance of the related Mortgage Loan by
deposit thereof in the Custodial Account. The Seller shall maintain the fidelity
bond insuring the Seller against any loss it may sustain with respect to any
Mortgage Loan not satisfied in accordance with the procedures set forth herein.
From time to time and as appropriate for the servicing or
foreclosure of the Mortgage Loan, the Purchaser shall, upon request of the
Seller and delivery to the Purchaser of a servicing receipt signed by a
Servicing Officer, release the requested portion of the Mortgage File held by
the Purchaser to the Seller. Such servicing receipt shall obligate the Seller to
return the related Mortgage documents to the Purchaser when the need therefor by
the Seller no longer exists, unless the Mortgage Loan has been liquidated and
the Liquidation Proceeds relating to the Mortgage Loan have been deposited in
the Custodial 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 Seller has delivered to the Purchaser a certificate of a
Servicing Officer 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 Officer stating that
such Mortgage Loan was liquidated, the servicing receipt shall be released by
the Purchaser to the Seller.
Section 11.21 MONTHLY ADVANCES BY THE SELLER.
(a) Not later than the close of business on the Business
Day preceding each Distribution Date, the Seller shall deposit in the Custodial
Account an amount equal to all payments not previously advanced by the Seller,
whether or not deferred pursuant to Section 11.01, of principal (due after the
Cut-off Date) and interest not allocable to the period prior to the Cut-off
Date, at the Mortgage Interest Rate net of the Servicing Fee, which were due on
a Mortgage Loan and delinquent at the close of business on the related
Determination Date.
(b) The obligation of the Seller to make such Monthly
Advances is mandatory, notwithstanding any other provision of this Agreement,
and, with respect to any Mortgage Loan or REO Property, shall continue until the
earlier to occur of a Final Recovery Determination or the Servicing Transfer
Date in connection therewith; provided that, notwithstanding anything herein to
the contrary, no Monthly Advance shall be required to be made hereunder by the
Seller if such Monthly Advance would, if made, constitute a Nonrecoverable
Monthly Advance. The determination by the Seller that it has made a
Nonrecoverable Monthly Advance or that any proposed Monthly Advance, if made,
would constitute a Nonrecoverable Monthly Advance, shall be evidenced by an
Officers' Certificate delivered to the Purchaser.
Subsection 11.22 SERVICING COMPENSATION.
As compensation for its services hereunder, the Seller shall
be entitled to withdraw from the Custodial Account or to retain from interest
payments on the Mortgage Loans the amounts provided for as the Seller's
Servicing Fee. Additional servicing compensation in the form of assumption fees,
as provided in Subsection 11.19, and late payment charges or otherwise shall be
retained by the Seller to the extent not required to be deposited in the
Custodial Account. The Seller shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder and shall not be
entitled to reimbursement therefor except as specifically provided for.
Upon the transfer of the servicing of the Mortgage Loans at
the end of the Interim Servicing Period, the successor servicer shall reimburse
the Seller for amounts the Seller actually expended as servicer pursuant to this
Agreement which the successor is entitled to retain hereunder, including any
Servicing Advances, Monthly Advances and any unpaid Servicing Fees, and which
would otherwise have been recovered by the Seller pursuant to this Agreement but
for the appointment of the successor servicer.
Subsection 11.23 NOTIFICATION OF ADJUSTMENTS.
On each Adjustment Date, the Seller shall make interest rate
adjustments for each Adjustable Rate Mortgage Loan in compliance with the
requirements of the related Mortgage and Mortgage Note. The Seller shall execute
and deliver the notices required by each Mortgage and Mortgage Note regarding
interest rate adjustments. The Seller also shall provide timely notification to
the Purchaser of all applicable data and information regarding such interest
rate adjustments and the Seller's methods of implementing such interest rate
adjustments. Upon the discovery by the Seller or the Purchaser that the Seller
has failed to adjust a Mortgage Interest
Rate or a Monthly Payment pursuant to the terms of the related Mortgage Note and
Mortgage, the Seller shall immediately deposit in the Custodial Account from its
own funds the amount of any interest loss caused thereby without reimbursement
therefor.
Subsection 11.24 STATEMENT AS TO COMPLIANCE.
The Seller will deliver to the Purchaser not later than 90
days following the end of each fiscal year of the Seller, which as of the
Closing Date ends on the last day in December in each calendar year, an
Officers' Certificate stating, as to each signatory thereof, that (i) a review
of the activities of the Seller 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 Seller 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 such statement shall be provided by the Purchaser to any
Person identified as a prospective purchaser of the Mortgage Loans.
Subsection 11.25 INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING
REPORT.
Not later than 90 days following the end of each fiscal year
of the Seller, the Seller at its expense shall cause a firm of independent
public accountants (which may also render other services to the Seller) which is
a member of the American Institute of Certified Public Accountants to furnish a
statement to the Purchaser or its designee to the effect that such firm has
examined certain documents and records relating to the servicing of the Mortgage
Loans under this Agreement or of mortgage loans under pooling and servicing
agreements (including the Mortgage Loans and this Agreement) substantially
similar one to another (such statement to have attached thereto a schedule
setting forth the pooling and servicing agreements covered thereby) and that, on
the basis of such examination conducted substantially in compliance with the
Uniform Single Attestation Program for Mortgage Bankers, such firm confirms that
such servicing has been conducted in compliance with such pooling and servicing
agreements except for such significant exceptions or errors in records that, in
the opinion of such firm, the Uniform Single Attestation Program for Mortgage
Bankers requires it to report. Copies of such statement shall be provided by the
Purchaser to any Person identified as a prospective purchaser of the Mortgage
Loans.
Subsection 11.26 ACCESS TO CERTAIN DOCUMENTATION.
The Seller 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 the Purchaser access to the
documentation regarding the Mortgage Loans serviced by the Seller 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 Seller. In addition, access to the documentation will be provided to the
Purchaser and any Person identified to the Seller by the Purchaser without
charge, upon reasonable request during normal business hours at the offices of
the Seller.
Subsection 11.27 REPORTS AND RETURNS TO BE FILED BY THE
SELLER.
The Seller shall file information reports with respect to the
receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of any Mortgaged Property and information returns
relating to cancellation of indebtedness income with respect to any Mortgaged
Property as required by Sections 6050H, 6050J and 6050P of the Code. 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.
Subsection 11.28 SUPERIOR LIENS.
With respect to each second lien Mortgage, the Seller shall,
for the protection of the Purchaser's interest, file (or cause to be filed) of
record a request for notice of any action by a superior lienholder where
permitted by local law and whenever applicable state law does not require that a
junior lienholder be named as a party defendant in foreclosure proceedings in
order to foreclose such junior lienholder's equity of redemption. The Seller
shall also notify any superior lienholder in writing of the existence of the
Mortgage Loan and request notification of any action (as described below) to be
taken against the Borrower or the Mortgaged Property by the superior lienholder.
If the Seller is notified that any superior lienholder has
accelerated or intends to accelerate the obligations secured by the superior
lien, or has declared or intends to declare a default under the superior
mortgage or the promissory note secured thereby, or has filed or intends to file
an election to have the Mortgaged Property sold or foreclosed, the Seller shall
take whatever actions are prudent to protect the interests of the Purchaser,
and/or to preserve the security of the related Mortgage Loan, subject to any
requirements applicable to real estate mortgage investment conduits pursuant to
the Internal Revenue Code. The Seller shall make a Servicing Advance of the
funds necessary to cure the default or reinstate the superior lien if the Seller
determines that such Servicing Advance is in the best interests of the Purchaser
and otherwise in accordance with accepted servicing practices. The Seller shall
not make such a Servicing Advance except to the extent that it determines that
such advance would not be a Nonrecoverable Servicing Advance from Liquidation
Proceeds on the related Mortgage Loan. The Seller shall thereafter take such
action as is necessary to recover the amount so advanced.
SCHEDULE I
PREPAYMENT CHARGE SCHEDULE
Available Upon Request
Schedule I-1